AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
the 29th day of October, 2004, by and between Pioneer Variable Contracts Trust,
a Delaware statutory trust (the "Acquiring Trust"), on behalf of its series
Pioneer Bond VCT Portfolio (the "Acquiring Portfolio"), with its principal place
of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and Safeco Resource
Series Trust, a Delaware statutory trust (the "Safeco Trust"), on behalf of its
series Safeco Bond Portfolio (the "Acquired Portfolio"), with its principal
place of business at 0000 000xx Xxxxx X.X., Xxxxxxx, Xxxxxxxxxx 00000. The
Acquiring Portfolio and the Acquired Portfolio are sometimes referred to
collectively herein as the "Portfolios" and individually as a "Portfolio."
This Agreement is intended to be and is adopted as a plan of a
"reorganization" as defined in Section 368(a)(1)(F) of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations thereunder. The reorganization (the "Reorganization") will consist
of (1) the transfer of all of the assets of the Acquired Portfolio to the
Acquiring Portfolio in exchange solely for (A) the issuance of Class I shares of
beneficial interest of the Acquiring Portfolio (collectively, the "Acquiring
Portfolio Shares" and each, an "Acquiring Portfolio Share") to the Acquired
Portfolio, and (B) the assumption by the Acquiring Portfolio of the liabilities
of the Acquired Portfolio (collectively, the "Assumed Liabilities"), and (2) the
distribution by the Acquired Portfolio, on or promptly after the closing date of
the Reorganization (the "Closing Date") as provided herein, of the Acquiring
Portfolio Shares to the shareholders of the Acquired Portfolio in liquidation
and dissolution of the Acquired Portfolio, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Trust and the Safeco Trust are each registered
investment companies classified as management companies of the open-end type.
WHEREAS, the Acquiring Portfolio is authorized to issue shares of
beneficial interest.
WHEREAS, the Board of Trustees of the Safeco Trust has determined that the
Reorganization is in the best interests of the Acquired Portfolio shareholders
and is not dilutive of the interests of those shareholders.
NOW, THEREFORE, in consideration of the premises of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED PORTFOLIO IN EXCHANGE FOR THE
ACQUIRING PORTFOLIO SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES;
LIQUIDATION AND TERMINATION OF THE ACQUIRED PORTFOLIO.
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Portfolio
will transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired
Assets") to the Acquiring Portfolio free and clear of all liens and encumbrances
(other than those arising under the Securities Act of 1933, as amended (the
"Securities Act"), liens for taxes not yet due and contractual restrictions on
the transfer of the Acquired Assets) and the Acquiring Portfolio agrees in
exchange therefor: (i) to issue to the Acquired Portfolio the number of
Acquiring Portfolio Shares, including fractional Acquiring Portfolio Shares,
equal to the number of shares, including fractional shares, of beneficial
interest of the Acquired Portfolio (the "Acquired Portfolio Shares") then
outstanding (which Acquiring Portfolio Shares shall have the same net asset
value ("NAV") per share as such Acquired Portfolio Shares); and (ii) to assume
the Assumed Liabilities. Such transactions shall take place at the Closing (as
defined in Paragraph 3.1 below).
1.2(a) The Acquired Assets shall consist of all of the Acquired Portfolio's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights of the Acquired Portfolio or the Safeco Trust in respect of the Acquired
Portfolio, all other intangible property owned by the Acquired Portfolio,
originals or copies of all books and records of the Acquired Portfolio, and all
other assets of the Acquired Portfolio on the Closing Date. The Acquiring
Portfolio shall also be entitled to receive (or, to the extent agreed upon
between the Safeco Trust and the Acquiring Trust, be provided access to) copies
of all records that the Safeco Trust is required to maintain under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
the rules of the Securities and Exchange Commission (the "Commission")
thereunder to the extent such records pertain to the Acquired Portfolio.
(b) The Acquired Portfolio has provided the Acquiring Portfolio with a list
of all of the Acquired Portfolio's securities and other assets as of the date of
execution of this Agreement, and the Acquiring Portfolio has provided the
Acquired Portfolio with a copy of the current fundamental investment policies
and restrictions and fair value procedures applicable to the Acquiring
Portfolio. The Acquired Portfolio reserves the right to sell any of such
securities or other assets before the Closing Date (except to the extent sales
may be limited by representations of the Acquired Portfolio contained herein and
made in connection with the issuance of the tax opinion provided for in
Paragraph 8.5 hereof).
1.3 The Acquired Portfolio will endeavor to discharge all of its known
liabilities and obligations that are or will become due prior to the Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable
(the "Liquidation Date"), the Safeco Trust shall liquidate the Acquired
Portfolio and distribute pro rata to its shareholders of record, determined as
of the close of regular trading on the New York Stock Exchange on the Closing
Date (the "Acquired Portfolio Shareholders"), the Acquiring Portfolio Shares
received by the Acquired Portfolio pursuant to Paragraph 1.1 hereof. Each
Acquired Portfolio Shareholder shall receive the number of Acquiring Portfolio
Shares equal to the number of Acquired Portfolio Shares held of record by such
Acquired Portfolio Shareholder on the Closing Date. Such liquidation and
distribution will be accomplished by the Safeco Trust instructing the Acquiring
Trust to transfer the Acquiring Portfolio Shares then credited to the account of
the Acquired Portfolio on the books of the Acquiring Portfolio to open accounts
on the share records of the Acquiring Portfolio established and maintained by
the Acquiring Portfolio's transfer agent in the names of the Acquired Portfolio
Shareholders and representing the respective pro rata number of the Acquiring
Portfolio Shares due the Acquired Portfolio Shareholders. The Safeco Trust shall
promptly provide the Acquiring Trust with evidence of such liquidation and
distribution. All issued and outstanding Acquired Portfolio Shares will
simultaneously be cancelled on the books of the Acquired Portfolio, and the
Acquired Portfolio will be dissolved. The Acquiring Portfolio shall not issue
certificates representing the Acquiring Portfolio Shares in connection with such
exchange.
1.5 Ownership of Acquiring Portfolio Shares will be shown on the books of
the Acquiring Portfolio's transfer agent for its Class I shares. Any
certificates representing ownership of Acquired Portfolio Shares that remain
outstanding on the Closing Date shall be deemed to be cancelled and shall no
longer evidence ownership of Acquired Portfolio Shares.
1.6 Any transfer taxes payable upon issuance of Acquiring Portfolio Shares
in a name other than the registered holder of the Acquired Portfolio Shares on
the books of the Acquired Portfolio as of that time shall, as a condition of
such issuance and transfer, be paid by the person to whom such Acquiring
Portfolio Shares are to be issued and transferred.
1.7 Any reporting responsibility of the Safeco Trust with respect to the
Acquired Portfolio for taxable periods ending on or before the Closing Date,
including, but not limited to, the responsibility for filing of regulatory
reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the
Commission, any state securities commissions, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Safeco Trust.
2. VALUATION
2.1 The NAV per Acquired Portfolio Share shall be determined as of the
close of business (4:00 p.m., Boston time) on the Closing Date (the "Valuation
Time") by Symetra Asset Management Company (the "Acquired Portfolio
Administrator") by calculating the value of the Acquired Assets and by
subtracting therefrom the amount of the liabilities of the Acquired Portfolio on
the Closing Date included on the Statement of Assets and Liabilities of the
Acquired Portfolio delivered pursuant to Paragraph 5.7 (the "Statement of Assets
and Liabilities"), said assets and liabilities to be valued in the manner set
forth in the Acquired Portfolio's then current prospectus and statement of
additional information. Pioneer Investment Management, Inc. (the "Acquiring
Portfolio Adviser") shall confirm to the Acquiring Fund the NAV per Acquired
Portfolio Share.
2.2 The Acquired Portfolio shall cause the Acquired Portfolio Administrator
to deliver a copy of its valuation report to the Acquiring Portfolio at Closing.
All computations of value shall be made by the Acquired Portfolio Administrator
in accordance with its regular practice as pricing agent for the Acquired
Portfolio.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be December 10, 2004, or such later date as the
parties may agree to in writing. All acts necessary to consummation the
Reorganization (the "Closing") shall be deemed to take place simultaneously as
of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise provided. The
Closing shall be held at the offices of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx
LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, or at such other place as the
parties may agree.
3.2 Portfolio securities that are held other than in book-entry form in the
name of State Street Bank and Trust Company (the "Acquired Portfolio Custodian")
as record holder for the Acquired Portfolio shall be presented by the Acquired
Portfolio to Xxxxx Brothers Xxxxxxxx & Co. (the "Acquiring Portfolio Custodian")
for examination no later than three business days preceding the Closing Date.
Such portfolio securities shall be delivered by the Acquired Portfolio to the
Acquiring Portfolio Custodian for the account of the Acquiring Portfolio on the
Closing Date, duly endorsed in proper form for transfer, in such condition as to
constitute good delivery thereof in accordance with the custom of brokers, and
shall be accompanied by all necessary federal and state stock transfer stamps or
a check for the appropriate purchase price thereof. Portfolio securities held of
record by the Acquired Portfolio Custodian in book-entry form on behalf of the
Acquired Portfolio shall be delivered by the Acquired Portfolio Custodian
through the Depository Trust Company to the Acquiring Portfolio Custodian and by
the Acquiring Portfolio Custodian recording the beneficial ownership thereof by
the Acquiring Portfolio on the Acquiring Portfolio Custodian's records. Any cash
shall be delivered by the Acquired Portfolio Custodian transmitting immediately
available funds by wire transfer to the Acquiring Portfolio Custodian the cash
balances maintained by the Acquired Portfolio Custodian and the Acquiring
Portfolio Custodian crediting such amount to the account of the Acquiring
Portfolio.
3.3 The Acquiring Portfolio Custodian shall deliver within one business day
after the Closing a certificate of an authorized officer stating that: (a) the
Acquired Assets have been delivered in proper form to the Acquiring Portfolio on
the Closing Date, and (b) all necessary transfer taxes including all applicable
federal and state stock transfer stamps, if any, have been paid, or provision
for payment has been made in conjunction with the delivery of portfolio
securities as part of the Acquired Assets.
3.4 If on the Closing Date (a) the New York Stock Exchange is closed to
trading or trading thereon shall be restricted, or (b) trading or the reporting
of trading on such exchange or elsewhere is disrupted so that accurate appraisal
of the NAV of the Acquired Portfolio Shares pursuant to Paragraph 2.1 is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
3.5 The Acquired Portfolio shall deliver at the Closing a list of the
names, addresses, federal taxpayer identification numbers and backup withholding
and nonresident alien withholding status and certificates of the Acquired
Portfolio Shareholders and the number and percentage ownership of outstanding
Acquired Portfolio Shares owned by each Acquired Portfolio Shareholder as of the
Valuation Time, certified by the President or a Secretary of the Safeco Trust
and its Treasurer, Secretary or other authorized officer (the "Shareholder
List") as being an accurate record of the information (a) provided by the
Acquired Portfolio Shareholders, (b) provided by the Acquired Portfolio
Custodian, or (c) derived from the Safeco Trust's records by such officers or
one of the Safeco Trust's service providers. The Acquiring Portfolio shall issue
and deliver to the Acquired Portfolio a confirmation evidencing the Acquiring
Portfolio Shares to be credited on the Closing Date, or provide evidence
satisfactory to the Acquired Portfolio that such Acquiring Portfolio Shares have
been credited to the Acquired Portfolio's account on the books of the Acquiring
Portfolio. At the Closing, each party shall deliver to the other such bills of
sale, checks, assignments, stock certificates, receipts or other documents as
such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Safeco Trust, on behalf of the Acquired Portfolio, represents,
warrants and covenants to the Acquiring Portfolio, which representations,
warranties and covenants will be true and correct on the date hereof and on the
Closing Date as though made on and as of the Closing Date, as follows:
(a) The Acquired Portfolio is a series of the Safeco Trust. The Safeco
Trust is a statutory trust validly existing and in good standing under the
laws of the State of Delaware and has the power to own all of its
properties and assets and, subject to approval by the Acquired Portfolio's
shareholders, to perform its obligations under this Agreement. The Acquired
Portfolio is not required to qualify to do business in any jurisdiction in
which it is not so qualified or where failure to qualify would subject it
to any material liability or disability. Each of the Safeco Trust and the
Acquired Portfolio has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Safeco 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 Investment Company Act is in
full force and effect;
(c) The Safeco Trust is not in violation of, and the execution and
delivery of this Agreement and the performance of its obligations under
this Agreement in respect of the Acquired Portfolio will not result in a
violation of, any provision of the Safeco Trust's Trust Instrument or
By-Laws or any material agreement, indenture, instrument, contract, lease
or other undertaking with respect to the Acquired Portfolio to which the
Safeco Trust is a party or by which the Acquired Portfolio or any of its
assets are bound;
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its
knowledge threatened against the Acquired Portfolio or any of the Acquired
Portfolio's properties or assets. The Acquired Portfolio knows of no facts
which might form the basis for the institution of such proceedings. Neither
the Safeco Trust nor the Acquired Portfolio is a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially adversely affects the Acquired Portfolio's business
or its ability to consummate the transactions contemplated herein or would
be binding upon the Acquiring Portfolio as the successor to the Acquired
Portfolio;
(e) The Acquired Portfolio has no material contracts or other
commitments (other than this Agreement or agreements for the purchase and
sale of securities entered into in the ordinary course of business and
consistent with its obligations under this Agreement) which will not be
terminated at or prior to the Closing Date and no such termination will
result in liability to the Acquired Portfolio (or the Acquiring Portfolio);
(f) The statement of assets and liabilities of the Acquired Portfolio,
and the related statements of income and changes in NAV, as of and for the
fiscal year ended December 31, 2003, have been audited by Ernst & Young
LLP, independent registered public accounting firm, and are in accordance
with generally accepted accounting principles ("GAAP") consistently applied
and fairly reflect, in all material respects, the financial condition of
the Acquired Portfolio as of such date and the results of its operations
for the period then ended, and all known liabilities, whether actual or
contingent, of the Acquired Portfolio as of the date thereof are disclosed
therein. The Statement of Assets and Liabilities will be in accordance with
GAAP consistently applied and will fairly reflect, in all material
respects, the financial condition of the Acquired Portfolio as of such date
and the results of its operations for the period then ended. Except for the
Assumed Liabilities, the Acquired Portfolio will not have any known or
contingent liabilities on the Closing Date. No significant deficiency,
material weakness, fraud, significant change or other factor that could
significantly affect the internal controls of the Acquired Portfolio has
been disclosed or is required to be disclosed in the Acquired Portfolio's
reports on Form N-CSR to enable the chief executive officer and chief
financial officer or other officers of the Acquired Portfolio to make the
certifications required by the Xxxxxxxx-Xxxxx Act, and no deficiency,
weakness, fraud, change, event or other factor exists that will be required
to be disclosed in the Acquiring Portfolio's Form N-CSR after the Closing
Date;
(g) Since the most recent fiscal year end, except as specifically
disclosed in the Acquired Portfolio's prospectus, its statement of
additional information as in effect on the date of this Agreement, or its
semi-annual report for the period ended June 30, 2004, there has not been
any material adverse change in the Acquired Portfolio's financial
condition, assets, liabilities, business or prospects, or any incurrence by
the Acquired Portfolio of indebtedness, except for normal contractual
obligations incurred in the ordinary course of business or in connection
with the settlement of purchases and sales of portfolio securities. For the
purposes of this subparagraph (g) (but not for any other purpose of this
Agreement), a decline in NAV per Acquired Portfolio Share arising out of
its normal investment operations or a decline in market values of
securities in the Acquired Portfolio's portfolio or a decline in net assets
of the Acquired Portfolio as a result of redemptions shall not constitute a
material adverse change;
(h) (A) For each taxable year of its operation since its inception,
the Acquired Portfolio has met, and for the current taxable year it will
meet, the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and will qualify as such as of
the Closing Date and will satisfy the diversification requirements of
Section 851(b)(3) of the Code without regard to the last sentence of
Section 851(d) of the Code. The Acquired Portfolio has not taken any
action, caused any action to be taken or caused any action to fail to be
taken which action or failure could cause the Acquired Portfolio to fail to
qualify as a regulated investment company under the Code. To the knowledge
of Safeco Trust, (i) the Acquired Portfolio does not have, and has not ever
had, any shareholder that is not a segregated asset account within the
meaning of Treasury Regulation Section 1.817-5(e) or an entity referred to
in (and holding its shares in compliance with the terms of) Treasury
Regulation Section 1.817-5(f)(3)(i), (ii), or (iii); (ii) no public
investor is participating or has ever participated in the Acquired
Portfolio through such a segregated asset account other than through
purchase of a variable contract within the meaning of Treasury Regulation
Section 1.817-5(f)(2)(i)(B); and (iii) the Acquired Portfolio satisfies,
and at all times during its existence has satisfied, the diversification
requirements contained in Treasury Regulation Section 1.817-5(b)(1), (2),
or (3);
(B) Within the times and in the manner prescribed by law, the
Acquired Portfolio has properly filed on a timely basis all Tax
Returns (as defined below) that it was required to file, and all such
Tax Returns were complete and accurate in all respects. The Acquired
Portfolio has not been informed by any jurisdiction that the
jurisdiction believes that the Acquired Portfolio was required to file
any Tax Return that was not filed; and the Acquired Portfolio does not
know of any basis upon which a jurisdiction could assert such a
position;
(C) The Acquired Portfolio has timely paid, in the manner
prescribed by law, all Taxes (as defined below), which were due and
payable or which were claimed to be due;
(D) All Tax Returns filed by the Acquired Portfolio constitute
complete and accurate reports of the respective Tax liabilities and
all attributes of the Acquired Portfolio or, in the case of
information returns and payee statements, the amounts required to be
reported, and accurately set forth all items required to be included
or reflected in such returns;
(E) The Acquired Portfolio has not waived or extended any
applicable statute of limitations relating to the assessment or
collection of Taxes;
(F) The Acquired Portfolio has not been notified that any
examinations of the Tax Returns of the Acquired Portfolio are
currently in progress or threatened, and no deficiencies have been
asserted or assessed against the Acquired Portfolio as a result of any
audit by the Internal Revenue Service or any state, local or foreign
taxing authority, and, to its knowledge, no such deficiency has been
proposed or threatened;
(G) The Acquired Portfolio has no actual or potential liability
for any Tax obligation of any taxpayer other than itself. The Acquired
Portfolio is not and has never been a member of a group of
corporations with which it has filed (or been required to file)
consolidated, combined or unitary Tax Returns. The Acquired Portfolio
is not a party to any Tax allocation, sharing, or indemnification
agreement;
(H) The unpaid Taxes of the Acquired Portfolio for tax periods
through the Closing Date do not exceed the accruals and reserves for
Taxes (excluding accruals and reserves for deferred Taxes established
to reflect timing differences between book and Tax income) set forth
on the Statement of Assets and Liabilities, rather than in any notes
thereto (the "Tax Reserves"). All Taxes that the Acquired Portfolio is
or was required by law to withhold or collect have been duly withheld
or collected and, to the extent required, have been timely paid to the
proper governmental agency;
(I) The Acquired Portfolio has delivered to the Acquiring
Portfolio or made available to the Acquiring Portfolio complete and
accurate copies of all Tax Returns of the Acquired Portfolio, together
with all related examination reports and statements of deficiency for
all periods not closed under the applicable statutes of limitations
and complete and correct copies of all private letter rulings, revenue
agent reports, information document requests, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing
agreements, settlement agreements, pending ruling requests and any
similar documents submitted by, received by or agreed to by or on
behalf of the Acquired Portfolio. The Acquired Portfolio has disclosed
on its federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal income Tax
within the meaning of Section 6662 of the Code;
(J) The Acquired Portfolio has not undergone, has not agreed to
undergo, and is not required to undergo (nor will it be required as a
result of the transactions contemplated in this Agreement to undergo)
a change in its method of accounting resulting in an adjustment to its
taxable income pursuant to Section 481 of the Code. The Acquired
Portfolio will not be required to include any item of income in, or
exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result
of any (i) change in method of accounting for a taxable period ending
on or prior to the Closing Date under Section 481(c) of the Code (or
any corresponding or similar provision of state, local or foreign
income Tax law); (ii) "closing agreement" as described in Section 7121
of the Code (or any corresponding or similar provision of state, local
or foreign income Tax law) executed on or prior to the Closing Date;
(iii) installment sale or open transaction disposition made on or
prior to the Closing Date; or (iv) prepaid amount received on or prior
to the Closing Date;
(K) The Acquired Portfolio has not taken or agreed to take any
action, and is not aware of any agreement, plan or other circumstance,
that is inconsistent with the representations set forth in Annex B;
(L) There are (and as of immediately following the Closing there
will be) no liens on the assets of the Acquired Portfolio relating to
or attributable to Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquired Portfolio are
accurately reflected on the Acquired Portfolio's Tax books and
records;
(N) The Acquired Portfolio has not incurred (or been allocated) an
"overall foreign loss" as defined in Section 904(f)(2) of the Code
which has not been previously recaptured in full as provided in
Sections 904(f)(2) and/or 904(f)(3) of the Code;
(O) The Acquired Portfolio is not a party to a gain recognition
agreement under Section 367 of the Code;
(P) The Acquired Portfolio does not own any interest in an entity
that is characterized as a partnership for income tax purposes;
(Q) The Acquired Portfolio's Tax attributes are not limited under
the Code (including but not limited to any capital loss carry forward
limitations under Sections 382 or 383 of the Code and the Treasury
Regulations thereunder) or comparable provisions of state law; and
(R) For purposes of this Agreement, "Taxes" or "Tax" shall mean
all taxes, charges, fees, levies or other similar assessments or
liabilities, including without limitation income, gross receipts, ad
valorem, premium, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, unemployment,
insurance, social security, business license, business organization,
environmental, workers compensation, payroll, profits, license, lease,
service, service use, severance, stamp, occupation, windfall profits,
customs, duties, franchise and other taxes imposed by the United
States of America or any state, local or foreign government, or any
agency thereof, or other political subdivision of the United States or
any such government, and any interest, fines, penalties, assessments
or additions to tax resulting from, attributable to or incurred in
connection with any tax or any contest or dispute thereof; and "Tax
Returns" shall mean all reports, returns, declarations, statements or
other information required to be supplied to a governmental or
regulatory authority or agency, or to any other person, in connection
with Taxes and any associated schedules or work papers produced in
connection with such items;
(i) All issued and outstanding Acquired Portfolio Shares are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
paid and nonassessable by the Acquired Portfolio. All of the issued and
outstanding Acquired Portfolio Shares will, at the time of Closing, be held
of record by the persons and in the amounts set forth in the Shareholder
List submitted to the Acquiring Portfolio pursuant to Paragraph 3.5 hereof.
The Acquired Portfolio does not have outstanding any options, warrants or
other rights to subscribe for or purchase any Acquired Portfolio Shares,
nor is there outstanding any security convertible into any Acquired
Portfolio Shares;
(j) At the Closing Date, the Acquired Portfolio will have good and
marketable title to the Acquired Assets, and full right, power and
authority to sell, assign, transfer and deliver the Acquired Assets to the
Acquiring Portfolio, and, upon delivery and payment for the Acquired
Assets, the Acquiring Portfolio will acquire good and marketable title
thereto, subject to no restrictions on the full transfer thereof, except
such restrictions as might arise under the Securities Act;
(k) The Safeco Trust has the trust power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement have been duly authorized by all
necessary action on the part of the Safeco Trust's Board of Trustees, and,
subject to the approval of the Acquired Portfolio's shareholders, assuming
due authorization, execution and delivery by the Acquiring Portfolio, this
Agreement will constitute a valid and binding obligation of the Acquired
Portfolio, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general equity
principles;
(l) The information to be furnished by the Acquired Portfolio to the
Acquiring Portfolio for use in applications for orders, registration
statements, proxy materials and other documents which may be necessary in
connection with the transactions contemplated hereby and any information
necessary to compute the total return of the Acquired Portfolio shall be
accurate and complete and shall comply in all material respects with
federal securities and other laws and regulations applicable thereto;
(m) The information included in the proxy statement (the "Proxy
Statement") forming part of the Acquiring Portfolio's Registration
Statement on Form N-14 filed in connection with this Agreement (the
"Registration Statement") that has been furnished in writing by the
Acquired Portfolio to the Acquiring Portfolio for inclusion in the
Registration Statement, on the effective date of that Registration
Statement and on the Closing Date, will conform in all material respects to
the applicable requirements of the Securities Act, the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the Investment Company
Act and the rules and regulations of the Commission thereunder and will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading;
(n) Upon the effectiveness of the Registration Statement, no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by the Safeco Trust or the Acquired Portfolio
of the transactions contemplated by this Agreement;
(o) All of the issued and outstanding Acquired Portfolio Shares have
been offered for sale and sold in conformity with all applicable federal
and state securities laws, except as may have been previously disclosed in
writing to the Acquiring Portfolio;
(p) The prospectus and statement of additional information of the
Acquired Portfolio and any amendments or supplements thereto, furnished to
the Acquiring Portfolio, did not as of their dates or the dates of their
distribution to the public contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which such
statements were made, not misleading;
(q) The Acquired Portfolio currently complies in all material respects
with, and since its organization has complied in all material respects
with, the requirements of, and the rules and regulations under, the
Investment Company Act, the Securities Act, the Exchange Act, state "Blue
Sky" laws and all other applicable federal and state laws or regulations.
The Acquired Portfolio currently complies in all material respects with,
and since its organization has complied in all material respects with, all
investment objectives, policies, guidelines and restrictions and any
compliance procedures established by the Safeco Trust with respect to the
Acquired Portfolio. All advertising and sales material used by the Acquired
Portfolio complies in all material respects with and has complied in all
material respects with the applicable requirements of the Securities Act,
the Investment Company Act, the rules and regulations of the Commission,
and, to the extent applicable, the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD") and any applicable
state regulatory authority. All registration statements, prospectuses,
reports, proxy materials or other filings required to be made or filed with
the Commission, the NASD or any state securities authorities by the
Acquired Portfolio have been duly filed and have been approved or declared
effective, if such approval or declaration of effectiveness is required by
law. Such registration statements, prospectuses, reports, proxy materials
and other filings under the Securities Act, the Exchange Act and the
Investment Company Act (i) are or were in compliance in all material
respects with the requirements of all applicable statutes and the rules and
regulations thereunder and (ii) do not or did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not false or misleading;
(r) The Acquired Portfolio has previously provided to the Acquiring
Portfolio (and at the Closing will provide an update through the Closing
Date of such information) data which supports a calculation of the Acquired
Portfolio's total return for all periods since the organization of the
Acquired Portfolio. Such data has been prepared in accordance in all
material respects with the requirements of the Investment Company Act and
the regulations thereunder and the rules of the NASD;
(s) Neither the Acquired Portfolio nor, to the knowledge of the
Acquired Portfolio, any "affiliated person" of the Acquired Portfolio has
been convicted of any felony or misdemeanor, described in Section 9(a)(1)
of the Investment Company Act, nor, to the knowledge of the Acquired
Portfolio, has any affiliated person of the Acquired Portfolio been the
subject, or presently is the subject, of any proceeding or investigation
with respect to any disqualification that would be a basis for denial,
suspension or revocation of registration as an investment adviser under
Section 203(e) of the Investment Advisers Act of 1940, as amended (the
"Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a
broker-dealer under Section 15 of the Exchange Act, or for disqualification
as an investment adviser, employee, officer or director of an investment
company under Section 9 of the Investment Company Act; and
(t) The tax representation certificate to be delivered by Safeco Trust
on behalf of the Acquired Portfolio to the Acquiring Trust and Xxxxxx
Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP at the Closing pursuant to Paragraph 7.4
(the "Acquired Portfolio Tax Representation Certificate") will not on the
Closing Date contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not
misleading.
4.2 The Acquiring Trust, on behalf of the Acquiring Portfolio, represents,
warrants and covenants to the Acquired Portfolio, which representations,
warranties and covenants will be true and correct on the date hereof and on the
Closing Date as though made on and as of the Closing Date, as follows:
(a) The Acquiring Portfolio is a series of the Acquiring Trust. The
Acquiring Portfolio has not commenced operations and will not do so until
the Closing. The Acquiring Trust is a statutory trust duly organized,
validly existing and in good standing under the laws of the State of
Delaware. The Acquiring Trust has the power to own all of its properties
and assets and to perform the obligations under this Agreement. The
Acquiring Portfolio is not required to qualify to do business in any
jurisdiction in which it is not so qualified or where failure to qualify
would subject it to any material liability or disability. Each of the
Acquiring Trust and the Acquiring Portfolio has all necessary federal,
state and local authorizations to own all of its properties and assets and
to carry on its business as now being conducted;
(b) The Acquiring 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 Investment Company Act is in
full force and effect;
(c) The Acquiring Portfolio's registration statement on Form N-1A that
will be in effect on the Closing Date, and the prospectus and statement of
additional information of the Acquiring Portfolio included therein, will
conform in all material respects with the applicable requirements of the
Securities Act and the Investment Company Act and the rules and regulations
of the Commission thereunder, and did not as of the effective date thereof
and will not as of the Closing Date contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(d) The Registration Statement, the Proxy Statement and statement of
additional information with respect to the Acquiring Portfolio, and any
amendments or supplements thereto in effect on or prior to the Closing Date
included in the Registration Statement (other than written information
furnished by the Acquired Portfolio for inclusion therein, as covered by
the Acquired Portfolio's warranty in Paragraph 4.1(m) hereof) will conform
in all material respects to the applicable requirements of the Securities
Act and the Investment Company Act and the rules and regulations of the
Commission thereunder. Neither the Registration Statement nor the Proxy
Statement (other than written information furnished by the Acquired
Portfolio for inclusion therein, as covered by the Acquired Portfolio's
warranty in Paragraph 4.1(m) hereof) includes or will include any untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(e) The Acquiring Trust is not in violation of, and the execution and
delivery of this Agreement and performance of its obligations under this
Agreement will not result in a violation of, any provisions of the
Declaration of Trust or by-laws of the Acquiring Trust or any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquiring Portfolio to which the Acquiring Trust is a party
or by which the Acquiring Portfolio or any of its assets is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or threatened
against the Acquiring Portfolio or any of the Acquiring Portfolio's
properties or assets. The Acquiring Portfolio knows of no facts which might
form the basis for the institution of such proceedings. Neither the
Acquiring Trust nor the Acquiring Portfolio is a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially adversely affects the Acquiring Portfolio's business
or its ability to consummate the transactions contemplated herein;
(g) The Acquiring Portfolio has no actual or potential liability for
any Tax obligation of any taxpayer other than itself. Acquiring Portfolio
is not and has never been a member of a group of corporations with which it
has filed (or been required to file) consolidated, combined or unitary Tax
Returns. The Acquiring Portfolio is not a party to any Tax allocation,
sharing, or indemnification agreement;
(h) The Acquiring Portfolio has not taken or agreed to take any
action, and is not aware of any agreement, plan or other circumstance, that
is inconsistent with the representations set forth in Annex A;
(i) The Acquiring Portfolio currently complies, and at all times since
its organization has complied, in all material respects with the
requirements of, and the rules and regulations under, the Investment
Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws
and all other applicable federal and state laws or regulations. The
Acquiring Portfolio currently complies in all material respects with, and
since its organization has complied in all material respects with, all
investment objectives, policies, guidelines and restrictions and any
compliance procedures established by the Acquiring Trust with respect to
the Acquiring Portfolio. All advertising and sales material used by the
Acquiring Portfolio complies in all material respects with and has complied
in all material respects with the applicable requirements of the Securities
Act, the Investment Company Act, the rules and regulations of the
Commission, and, to the extent applicable, the Conduct Rules of the NASD
and any applicable state regulatory authority. All registration statements,
prospectuses, reports, proxy materials or other filings required to be made
or filed with the Commission, the NASD or any state securities authorities
by the Acquiring Portfolio have been duly filed and have been approved or
declared effective, if such approval or declaration of effectiveness is
required by law. Such registration statements, prospectuses, reports, proxy
materials and other filings under the Securities Act, the Exchange Act and
the Investment Company Act (i) are or were in compliance in all material
respects with the requirements of all applicable statutes and the rules and
regulations thereunder and (ii) do not or did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not false or misleading;
(j) The authorized capital of the Acquiring Portfolio consists of an
unlimited number of shares of beneficial interest, no par value per share.
As of the Closing Date, the Acquiring Portfolio will be authorized to issue
an unlimited number of shares of beneficial interest, no par value per
share. The Acquiring Portfolio Shares to be issued and delivered to the
Acquired Portfolio for the account of the Acquired Portfolio Shareholders
pursuant to the terms of this Agreement will have been duly authorized on
the Closing Date and, when so issued and delivered, will be duly and
validly issued, fully paid and non-assessable. The Acquiring Portfolio does
not have outstanding any options, warrants or other rights to subscribe for
or purchase any Acquiring Portfolio shares, nor is there outstanding any
security convertible into any Acquiring Portfolio shares, nor will the
Acquiring Portfolio have any issued or outstanding shares on or before the
Closing Date other than those issued to the Acquiring Portfolio Adviser or
one of its affiliates, which shares shall be redeemed, for an amount equal
to the price paid therefor, at or before the Closing;
(k) The Acquiring Trust has the trust power and authority to enter
into and perform its obligations under this Agreement. The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary action on the part of the Acquiring Trust's Board of Trustees,
and, assuming due authorization, execution and delivery by the Acquired
Portfolio, this Agreement will constitute a valid and binding obligation of
the Acquiring Portfolio, enforceable in accordance with its terms, subject
as to enforcement, to bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights and to general
equity principles;
(l) The information to be furnished in writing by the Acquiring
Portfolio or the Acquiring Portfolio Adviser for use in applications for
orders, registration statements, proxy materials and other documents which
may be necessary in connection with the transactions contemplated hereby
shall be accurate and complete in all material respects and shall comply in
all material respects with federal securities and other laws and
regulations applicable thereto or the requirements of any form for which
its use is intended, and shall not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
information provided not misleading;
(m) No consent, approval, authorization or order of or filing with any
court or governmental authority is required for the execution of this
Agreement or the consummation of the transactions contemplated by the
Agreement by the Acquiring Portfolio, except for the registration of the
Acquiring Portfolio Shares under the Securities Act and the Investment
Company Act;
(n) The prospectus and statement of additional information of the
Acquiring Portfolio and any amendments or supplements thereto, furnished to
the Acquired Portfolio, did not as of their dates or the dates of their
distribution to the public contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which such
statements were made, not misleading;
(o) Neither the Acquiring Portfolio nor, to the knowledge of the
Acquiring Portfolio, any "affiliated person" of the Acquiring Portfolio has
been convicted of any felony or misdemeanor, described in Section 9(a)(1)
of the Investment Company Act, nor, to the knowledge of the Acquiring
Portfolio, has any affiliated person of the Acquiring Portfolio been the
subject, or presently is the subject, of any proceeding or investigation
with respect to any disqualification that would be a basis for denial,
suspension or revocation of registration as an investment adviser under
Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b)
thereunder or of a broker-dealer under Section 15 of the Exchange Act, or
for disqualification as an investment adviser, employee, officer or
director of an investment company under Section 9 of the Investment Company
Act; and
(p) The tax representation certificate to be delivered by the
Acquiring Trust on behalf of the Acquiring Portfolio to the Safeco Trust
and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP at Closing pursuant to
Section 6.3 (the "Acquiring Portfolio Tax Representation Certificate") will
not on the Closing Date contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not
misleading.
5. COVENANTS OF THE PORTFOLIOS
5.1 The Acquired Portfolio will operate the Acquired Portfolio's business
in the ordinary course of business between the date hereof and the Closing Date.
It is understood that such ordinary course of business will include the
declaration and payment of customary dividends and other distributions and any
other dividends and other distributions necessary or advisable (except to the
extent dividends or other distributions that are not customary may be limited by
representations made in connection with the issuance of the tax opinion
described in Paragraph 8.5 hereof), in each case payable either in cash or in
additional shares.
5.2 The Safeco Trust will call a special meeting of the Acquired
Portfolio's shareholders to consider approval of this Agreement and act upon the
matters set forth in the Proxy Statement.
5.3 The Acquiring Portfolio will prepare the notice of meeting, form of
proxy and Proxy Statement (collectively, "Proxy Materials") to be used in
connection with such meeting, and will promptly prepare and file with the
Commission the Registration Statement. The Safeco Trust will provide the
Acquiring Portfolio with information reasonably requested for the preparation of
the Registration Statement in compliance with the Securities Act, the Exchange
Act, and the Investment Company Act.
5.4 The Acquired Portfolio covenants that the Acquiring Portfolio Shares to
be issued hereunder are not being acquired by the Acquired Portfolio for the
purpose of making any distribution thereof other than in accordance with the
terms of this Agreement.
5.5 The Acquired Portfolio will assist the Acquiring Portfolio in obtaining
such information as the Acquiring Portfolio reasonably requires concerning the
beneficial ownership of the Acquired Portfolio Shares.
5.6 Subject to the provisions of this Agreement, each Portfolio will take,
or cause to be taken, all actions, and do or cause to be done, all things
reasonably necessary, proper or advisable to consummate the transactions
contemplated by this Agreement.
5.7 The Acquired Portfolio shall furnish to the Acquiring Portfolio on the
Closing Date a Statement of Assets and Liabilities of the Acquired Portfolio as
of the Closing Date setting forth the NAV of the Acquired Portfolio as of the
Valuation Time, which statement shall be prepared in accordance with GAAP
consistently applied and certified by the Safeco Trust's Treasurer or Assistant
Treasurer. As promptly as practicable, but in any case within 30 days after the
Closing Date, the Safeco Trust shall furnish to the Acquiring Trust, in such
form as is reasonably satisfactory to the Acquiring Trust, a statement of the
earnings and profits of the Acquired Portfolio for federal income tax purposes,
and of any capital loss carryovers and other items that will be carried over to
the Acquiring Portfolio under the Code, and which statement will be certified by
the Treasurer of the Safeco Trust.
5.8 Neither Portfolio shall take any action that is inconsistent with the
representations set forth in, with respect to the Acquired Portfolio, the
Acquired Portfolio Tax Representation Certificate and, with respect to the
Acquiring Portfolio, the Acquiring Portfolio Tax Representation Certificate.
5.9 From and after the date of this Agreement and until the Closing Date,
each of the Portfolios and the Safeco Trust and the Acquiring Trust shall use
its commercially reasonable efforts to cause the Reorganization to qualify, and
will not knowingly take any action, cause any action to be taken, fail to take
any action or cause any action to fail to be taken, which action or failure to
act could prevent the Reorganization from qualifying, as a reorganization under
the provisions of Section 368(a) of the Code. The parties hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the
Code. Unless otherwise required pursuant to a "determination" within the meaning
of Section 1313(a) of the Code, the parties hereto shall treat and report the
transactions contemplated hereby as a reorganization within the meaning of
Section 368(a)(1)(F) of the Code and shall not take any position inconsistent
with such treatment.
5.10 From and after the date of this Agreement and through the time of the
Closing, each Portfolio shall use its commercially reasonable efforts to cause
it to qualify, and will not knowingly take any action, cause any action to be
taken, fail to take any action or cause any action to fail to be taken, which
action or failure to act could prevent it from qualifying, as a regulated
investment company under the provisions of Subchapter M of the Code.
5.11 The Acquired Portfolio shall prepare, or cause to be prepared, all Tax
Returns of the Acquired Portfolio for taxable periods that end on or before the
Closing Date and shall timely file, or cause to be timely filed, all such Tax
Returns. The Acquired Portfolio shall make any payments of Taxes required to be
made by such Portfolio with respect to any such Tax Returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED PORTFOLIO
The obligations of the Acquired Portfolio to complete the transactions
provided for herein shall be, at its election, subject to the performance by the
Acquiring Portfolio of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions, unless waived by the Acquired Portfolio in writing:
6.1 All representations and warranties by the Acquiring Trust on behalf of
the Acquiring Portfolio contained in this Agreement shall be true and correct 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 Acquiring Trust shall have delivered to the Safeco Trust on the
Closing Date a certificate of the Acquiring Trust on behalf of the Acquiring
Portfolio executed in its name by its President or Vice President and its
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Safeco Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Trust made in this Agreement are
true and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, that each of the conditions
to Closing in this Article 6 have been met, and as to such other matters as the
Safeco Trust shall reasonably request;
6.3 The Acquiring Trust on behalf of the Acquiring Portfolio shall have
delivered to the Safeco Trust and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP an
Acquiring Portfolio Tax Representation Certificate, satisfactory to the Safeco
Trust and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, substantially in the form
attached to this Agreement as Annex A, concerning certain tax-related matters
with respect to the Acquiring Portfolio;
6.4 With respect to the Acquiring Portfolio, the Board of Trustees of the
Acquiring Trust shall have determined that the Reorganization is in the best
interests of the Acquiring Portfolio and, based upon such determination, shall
have approved this Agreement and the transactions contemplated hereby; and
6.5 The Safeco Trust shall have received at the Closing a favorable opinion
as to the due authorization of this Agreement by the Acquiring Trust and related
matters of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, dated as of the Closing
Date, in a form reasonably satisfactory to the Safeco Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO
The obligations of the Acquiring Portfolio to complete the transactions
provided for herein shall be, at its election, subject to the performance by the
Acquired Portfolio of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions, unless waived by the Acquiring Portfolio in writing:
7.1 All representations and warranties of the Safeco Trust on behalf of the
Acquired Portfolio contained in this Agreement shall be true and correct 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 Safeco Trust shall have delivered to the Acquiring Portfolio the
Statement of Assets and Liabilities of the Acquired Portfolio pursuant to
Paragraph 5.7, together with a list of its portfolio securities showing the
federal income tax bases and holding periods of such securities, as of the
Closing Date, certified by the Safeco Trust's Treasurer or Assistant Treasurer;
7.3 The Safeco Trust shall have delivered to the Acquiring Trust on the
Closing Date a certificate of the Safeco Trust on behalf of the Acquired
Portfolio executed in its name by its President or Vice President and a
Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory
to the Acquiring Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the Safeco Trust contained in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, that each of the
conditions to Closing in this Article 7 have been met, and as to such other
matters as the Acquiring Trust shall reasonably request;
7.4 The Safeco Trust on behalf of the Acquired Portfolio shall have
delivered to the Acquiring Trust and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
an Acquired Portfolio Tax Representation Certificate, satisfactory to the
Acquiring Trust and Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, substantially in
the form attached to this Agreement as Annex B, concerning certain tax-related
matters with respect to the Acquired Portfolio;
7.5 The Acquiring Trust shall have received at the Closing a favorable
opinion as to the due authorization of this Agreement by the Safeco Trust and
related matters of Xxxxxxxxxxx & Xxxxxxxx LLP, dated as of the Closing Date, in
a form reasonably satisfactory to the Acquiring Trust; and
7.6 With respect to the Acquired Portfolio, the Board of Trustees of the
Safeco Trust shall have determined that the Reorganization is in the best
interests of the Acquired Portfolio and, based upon such determination, shall
have approved this Agreement and the transactions contemplated hereby.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the Acquired Portfolio's shareholders in
accordance with the provisions of the Safeco Trust's Trust Instrument and
By-Laws, and certified copies of the resolutions evidencing such approval by the
Acquired Portfolio's shareholders shall have been delivered by the Acquired
Portfolio to the Acquiring Portfolio. Notwithstanding anything herein to the
contrary, neither party hereto may waive the conditions set forth in this
Paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities) deemed
necessary by either party hereto to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of
either party hereto, provided that either party may waive any such conditions
for itself;
8.4 The Acquiring Trust's Registration Statement on Form N-14 shall have
become effective under the Securities Act and no stop orders suspending the
effectiveness of such Registration Statement shall have been issued and, to the
best knowledge of the parties hereto, no investigation or proceeding for that
purpose shall have been instituted or be pending, threatened or contemplated
under the Securities Act; and
8.5 The parties shall have received an opinion of Xxxxxx Xxxxxx Xxxxxxxxx
Xxxx and Xxxx LLP, satisfactory to the Safeco Trust and the Acquiring Trust and
subject to customary assumptions and qualifications, substantially to the effect
that for federal income tax purposes the acquisition by the Acquiring Portfolio
of the Acquired Assets solely in exchange for the issuance of Acquiring
Portfolio Shares to the Acquired Portfolio and the assumption of the Assumed
Liabilities by the Acquiring Portfolio, followed by the distribution by the
Acquired Portfolio, in liquidation of the Acquired Portfolio, of Acquiring
Portfolio Shares to the Acquired Portfolio Shareholders in exchange for their
Acquired Portfolio Shares and the termination of the Acquired Portfolio, will
constitute a "reorganization" within the meaning of Section 368(a) of the Code.
9. BROKERAGE FEES AND EXPENSES
9.1 Each party hereto represents and warrants to the other party hereto
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
9.2 The parties have been informed by Symetra Financial Corporation and the
Acquiring Portfolio Adviser -- and the parties have entered into this Agreement
in reliance on such information -- that such non-parties will pay (with each of
Symetra Financial Corporation and the Acquiring Portfolio Adviser being
responsible for 50% of such amounts) all expenses of the Portfolios associated
with the Reorganization including, but not limited to, the expenses associated
with the preparation, printing and mailing of any and all shareholder notices,
communications, proxy statements, and necessary filings with the SEC or any
other governmental authority in connection with the transactions contemplated by
this Agreement, the fees and expenses of any proxy solicitation firm retained in
connection with the Reorganization, the fees and expenses of counsel to the
independent trustees of the Safeco Trust in connection with the Reorganization,
and the trustees' fees and expenses as a result of the Reorganization. Except
for the foregoing, the Acquiring Portfolio and the Acquired Portfolio shall each
bear its own expenses in connection with the transactions contemplated by this
Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Trust and the Safeco Trust each agrees that neither
party has made any representation, warranty or covenant not set forth herein or
referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes
the entire agreement between the parties.
10.2 The representations and warranties contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith shall not
survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Trust and the Safeco Trust. In addition, either party may at its
option terminate this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed at or
prior to the Closing Date;
(b) because of a condition herein expressed to be precedent to the
obligations of the terminating party which has not been met and which
reasonably appears will not or cannot be met;
(c) by resolution of the Acquiring Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such Board,
make proceeding with the Agreement not in the best interests of the
Acquiring Portfolio's shareholders;
(d) by resolution of the Safeco Trust's Board of Trustees if
circumstances should develop that, in the good faith opinion of such Board,
make proceeding with the Agreement not in the best interests of the
Acquired Portfolio's shareholders; or
(e) if the transactions contemplated by this Agreement shall not have
occurred on or prior to December 31, 2004 or such other date as the parties
may mutually agree upon in writing.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Portfolio, the Acquiring Trust, the Safeco
Trust or the Acquired Portfolio, or the trustees or officers of the Safeco
Trust, or the Acquiring Trust, but, subject to Paragraph 9.2, each party shall
bear the expenses incurred by it incidental to the preparation and carrying out
of this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the Safeco
Trust and the Acquiring Trust; provided, however, that following the meeting of
the Acquired Portfolio's shareholders called by the Safeco Trust pursuant to
Paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions regarding the method for determining the number of
Acquiring Portfolio Shares to be received by the Acquired Portfolio Shareholders
under this Agreement to their detriment without their further approval; provided
that nothing contained in this Section 12 shall be construed to prohibit the
parties from amending this Agreement to change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any provisions
of this Agreement shall be in writing and shall be given by prepaid telegraph,
telecopy or certified mail addressed to the Acquired Portfolio, c/o Symetra
Financial Corporation, 0000 000xx Xxxxx, X.X., Xxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxx, with copies to R. Xxxxxxx Xxxxxx, Xxxxxxxxxxx &
Xxxxxxxx LLP, 0000 Xxxxxxxxxxxxx Xxxxxx, X.X., Xxxxxx Xxxxx, Xxxxxxxxxx, XX
00000-0000, and to the Acquiring Portfolio, c/o Pioneer Investment Management,
Inc., 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X.
Xxxxxxxx, Esq., with copies to Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware, without giving effect to conflict of
laws principles (other than Delaware Code Title 6 ss. 2708); provided that, in
the case of any conflict between those laws and the federal securities laws, the
latter shall govern.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the prior written consent of the other party hereto.
Nothing herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, or other entity, other than the
parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
14.5 It is expressly agreed that the obligations of the Acquiring Trust and
the Safeco Trust shall not be binding upon any of their respective trustees,
shareholders, nominees, officers, agents or employees personally, but bind only
to the property of the Acquiring Portfolio or the Acquired Portfolio, as the
case may be, as provided in the trust instruments of the Acquiring Trust and the
Instrument of Trust of the Safeco Trust, respectively. The execution and
delivery of this Agreement have been authorized by the trustees of the Acquiring
Trust and of the Safeco Trust and this Agreement has been executed by authorized
officers of the Acquiring Trust and the Safeco Trust, acting as such, and
neither such authorization by such trustees nor such execution and delivery by
such officers shall be deemed to have been made by any of them individually or
to imposed any liability on any of them personally, but shall bind only the
property of the Acquiring Portfolio and the Acquired Portfolio, as the case may
be, as provided in the trust instruments of the Acquiring Trust and the
Instrument of Trust of the Safeco Trust, respectively.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first set forth above by its President or Vice
President and attested by its Secretary or Assistant Secretary.
Attest: SAFECO RESOURCE SERIES TRUST
on behalf of
SAFECO BOND PORTFOLIO
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
----------------------- -------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxx
Title: Secretary Title: President
Attest: PIONEER VARIABLE CONTRACTS TRUST
on behalf of
PIONEER BOND VCT PORTFOLIO
By: /s/ Xxxxxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxx
------------------------- ------------------
Name: Xxxxxxxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: Assistant Secretary Title: Executive Vice President
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Annex A
TAX REPRESENTATION CERTIFICATE OF
PIONEER VARIABLE CONTRACTS TRUST
ON BEHALF OF PIONEER BOND VCT PORTFOLIO
This certificate is being delivered in connection with the transactions to
be effected pursuant to the Agreement and Plan of Reorganization made as of
October 29, 2004 between Pioneer Variable Contracts Trust, a Delaware statutory
trust (the "Acquiring Trust"), on behalf of its series Pioneer Bond VCT
Portfolio ("Acquiring Portfolio"), and Safeco Resource Series Trust, a Delaware
statutory trust, on behalf of its series Safeco Bond Portfolio ("Acquired
Portfolio") (the "Agreement"). Pursuant to the Agreement, Acquiring Portfolio
will acquire all of the assets of Acquired Portfolio in exchange solely for (i)
the assumption by Acquiring Portfolio of the Assumed Liabilities of Acquired
Portfolio, and (ii) the issuance of Class I shares of beneficial interest of
Acquiring Portfolio (the "Acquiring Portfolio Shares") to Acquired Portfolio,
followed by the distribution by Acquired Portfolio, in liquidation of Acquired
Portfolio, of the Acquiring Portfolio Shares to the shareholders of Acquired
Portfolio and the termination of Acquired Portfolio (the foregoing together
constituting the "transaction").
The undersigned officer of Acquiring Trust, after consulting with its
counsel, auditors and tax advisers regarding the meaning of and factual support
for the following representations on behalf of Acquiring Portfolio, hereby
certifies and represents that the following statements are true, complete and
correct and will be true, complete and correct on the date of the transaction
and thereafter as relevant. Unless otherwise indicated, all capitalized terms
used but not defined herein shall have the meanings ascribed to them in the
Agreement.
1. Acquiring Portfolio is a series of Acquiring Trust, a statutory trust
organized under the laws of the State of Delaware, and Acquiring Portfolio will
be treated after the Closing as a separate corporation for federal tax purposes.
Acquiring Portfolio was newly organized solely for the purpose of effecting the
transaction and continuing thereafter to operate as a regulated investment
company. Prior to the transaction, Acquiring Portfolio did not and will not
engage in any business activities. There shall be no shares of Acquiring
Portfolio issued and outstanding prior to the Closing Date other than those
issued to Pioneer Investment Management, Inc. or one of its affiliates in
connection with the creation of Acquiring Portfolio, which shares shall be
redeemed, for an amount equal to the price paid therefor, at or before the
Closing.
2. Neither Acquiring Portfolio nor any person "related" to Acquiring
Portfolio (as defined in Treasury Regulation Section 1.368-1(e)(3)), nor any
partnership of which Acquiring Portfolio or any such related person is a
partner, has any plan or intention to redeem or otherwise acquire any of the
Acquiring Portfolio Shares received by shareholders of Acquired Portfolio in the
transaction except in the ordinary course of Acquiring Portfolio's business in
connection with its legal obligation under Section 22(e) of the Investment
Company Act of 1940, as amended (the "1940 Act"), as a series of a registered
open-end investment company to redeem its own shares.
3. After the transaction, Acquiring Portfolio will continue the historic
business (as defined in Treasury Regulation Section 1.368-1(d)(2)) of Acquired
Portfolio or will use a significant portion of the historic business assets (as
defined in Treasury Regulation Section 1.368-1(d)(3)) of Acquired Portfolio in a
business.
4. Acquiring Portfolio has no plan or intention to sell or otherwise
dispose of any assets of Acquired Portfolio acquired in the transaction, except
for dispositions made in the ordinary course of its business or to maintain its
qualification as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended ("the "Code").
5. Any expenses of Acquired Portfolio incurred in connection with the
transaction which are paid or assumed by Acquiring Portfolio will be expenses of
Acquired Portfolio solely and directly related to the transaction in accordance
with Rev. Rul. 73-54, 1973-1 C.B. 187. Acquiring Portfolio will not pay or
assume the expenses, if any, incurred by any Acquired Portfolio Shareholders in
connection with the transaction.
6. There is no, and never has been any, indebtedness between Acquiring
Portfolio and Acquired Portfolio.
7. Acquiring Portfolio will qualify for the special tax treatment afforded
regulated investment companies under Subchapter M of the Code for all taxable
years ending after the date of the transaction.
8. Acquiring Portfolio meets the requirements of an "investment company" in
Section 368(a)(2)(F) of the Code.
9. Acquiring Portfolio is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
10. Acquiring Portfolio does not now own and has never owned, directly or
indirectly, any shares of Acquired Portfolio.
11. As of the date of the transaction, the fair market value of the
Acquiring Portfolio Shares issued to Acquired Portfolio will be approximately
equal to the fair market value of Acquired Assets minus the Assumed Liabilities.
Acquiring Portfolio will not furnish any consideration in connection with the
acquisition of the Acquired Assets other than the assumption of the Assumed
Liabilities and the issuance of such Acquiring Portfolio Shares.
12. Immediately following the transaction, the Acquired Portfolio
Shareholders will own all of the outstanding Acquiring Portfolio Shares and will
own such shares solely by reason of their ownership of the Acquired Portfolio
Shares immediately prior to the transaction. Acquiring Portfolio has no plan or
intention to issue as part of the transaction any shares of Acquiring Portfolio
other than the Acquiring Portfolio Shares issued in exchange for the Acquired
Assets.
13. The transaction is being undertaken for valid and substantial business
purposes, including facilitating Acquired Portfolio's becoming a member of the
Pioneer family of mutual funds, which, in the long term, is intended to result
in lower expenses and increased assets.
14. No Acquired Portfolio shareholder is acting as agent for Acquiring
Portfolio in connection with the transaction or approval thereof. Acquiring
Portfolio will not reimburse any Acquired Portfolio shareholder for Acquired
Portfolio Shares such shareholder may have purchased or for other obligations
such shareholder may have incurred.
15. Acquiring Portfolio has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in Acquiring Portfolio.
* * * * *
The undersigned officer of Acquiring Trust is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquiring Portfolio. The undersigned recognizes
that Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 8.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP a written notice to
that effect.
PIONEER VARIABLE CONTRACTS TRUST
on behalf of PIONEER BOND VCT PORTFOLIO
By: /s/ Xxxxxxx Nave________
----------------
Name: Xxxxxxx Xxxx
Title: Treasurer
Dated: December 10, 2004
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Annex B
TAX REPRESENTATION CERTIFICATE OF
SAFECO RESOURCE SERIES TRUST
ON BEHALF OF SAFECO BOND PORTFOLIO
This certificate is being delivered in connection with the transactions to
be effected pursuant to the Agreement and Plan of Reorganization made as of
October 29, 2004 between Pioneer Variable Contracts Trust, a Delaware statutory
trust, on behalf of its series Pioneer Bond VCT Portfolio ("Acquiring
Portfolio"), and Safeco Resource Series Trust, a Delaware statutory trust
("Safeco Trust"), on behalf of its series Safeco Bond Portfolio ("Acquired
Portfolio") (the "Agreement"). Pursuant to the Agreement, Acquiring Portfolio
will acquire all of the assets of Acquired Portfolio in exchange solely for (i)
the assumption by Acquiring Portfolio of the Assumed Liabilities of Acquired
Portfolio and (ii) the issuance of Class I shares of beneficial interest of
Acquiring Portfolio (the "Acquiring Portfolio Shares") to Acquired Portfolio,
followed by the distribution by Acquired Portfolio, in liquidation of Acquired
Portfolio, of the Acquiring Portfolio Shares to the shareholders of Acquired
Portfolio and the termination of Acquired Portfolio (the foregoing together
constituting the "transaction").
The undersigned officer of Safeco Trust, after consulting with its counsel,
auditors and tax advisers regarding the meaning of and factual support for the
following representations, on behalf of Acquired Portfolio, hereby certifies and
represents that the following statements are true, complete and correct and will
be true, complete and correct on the date of the transaction and thereafter as
relevant. Unless otherwise indicated, all capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Agreement.
1. Acquired Portfolio is a series of Safeco Trust, a statutory trust
organized under the laws of the State of Delaware, and Acquired Portfolio is,
and has been at all times, treated as a separate corporation for federal tax
purposes.
2. As of the date of the transaction, the fair market value of the
Acquiring Portfolio Shares received by each shareholder that holds shares of
Acquired Portfolio (the "Acquired Portfolio Shares") will be approximately equal
to the fair market value of the Acquired Portfolio Shares with respect to which
such Acquiring Portfolio Shares are received, and the aggregate consideration
received by Acquired Portfolio shareholders in exchange for their Acquired
Portfolio Shares will be approximately equal to the fair market value of all of
the outstanding Acquired Portfolio Shares immediately prior to the transaction.
No property other than Acquiring Portfolio Shares will be distributed to
shareholders of Acquired Portfolio in exchange for their Acquired Portfolio
Shares, nor will any such shareholder receive cash or other property as part of
the transaction.
3. Neither Acquired Portfolio nor any person "related" to Acquired
Portfolio (as defined in Treasury Regulation Section 1.368-1(e)(3)), nor any
partnership in which Acquired Portfolio or any such related person is a partner,
has redeemed, acquired or otherwise made any distributions with respect to any
shares of Acquired Portfolio as part of the transaction, or otherwise pursuant
to a plan of which the transaction is a part, other than redemptions and
distributions made in the ordinary course of Acquired Portfolio's business as a
series of an open-end investment company. To the best knowledge of management of
Acquired Portfolio, there is no plan or intention on the part of the
shareholders of Acquired Portfolio to engage in any transaction with Acquired
Portfolio, Acquiring Portfolio, or any person treated as related to Acquired
Portfolio or Acquiring Portfolio under Treasury Regulation Section 1.368-1(e)(3)
or any partnership in which Acquired Portfolio, Acquiring Portfolio, or any
person treated as related to Acquired Portfolio or Acquiring Portfolio under
Treasury Regulation Section 1.368-1(e)(3) is a partner involving the sale,
redemption or exchange of any of the Acquired Portfolio Shares or any of the
Acquiring Portfolio Shares to be received in the transaction, as the case may
be, other than in the ordinary course of Acquired Portfolio's business as a
series of an open-end investment company.
4. In the transaction, Acquired Portfolio will transfer its assets to
Acquiring Portfolio, which will assume the Assumed Liabilities, such that
immediately following the transfer, Acquiring Portfolio will possess all of the
same assets and liabilities as were possessed by Acquired Portfolio immediately
prior to the transaction, except for assets used to pay expenses incurred in
connection with the transaction and assets distributed to shareholders in
redemption of their shares immediately preceding, or in contemplation of, the
transaction (other than redemptions and distributions made in the ordinary
course of Acquired Portfolio's business as an open-end investment company) which
assets constitute less than 1% of the net assets of Acquired Portfolio.
5. As of the date of the transaction, the fair market value of the
Acquiring Portfolio Shares issued to Acquired Portfolio will be approximately
equal to the fair market value of the Acquired Assets minus the Assumed
Liabilities. Acquired Portfolio will not receive any consideration from
Acquiring Portfolio in connection with the acquisition of the Acquired Assets
other than the assumption of the Assumed Liabilities and the issuance of such
Acquiring Portfolio Shares.
6. The Assumed Liabilities assumed by Acquiring Portfolio plus the Assumed
Liabilities, if any, to which the transferred assets are subject were incurred
by Acquired Portfolio in the ordinary course of its business. Acquired Portfolio
is not aware of any liabilities of any kind other than the Assumed Liabilities.
7. As of the Closing Date, the adjusted basis and the fair market value of
the Acquired Assets will equal or exceed the Assumed Liabilities assumed for
purposes of Section 357(d) of the Code.
8. Acquired Portfolio currently conducts its historic business within the
meaning of Treasury Regulation Section 1.368-1(d)(2), which provides that, in
general, a corporation's historic business is the business it has conducted most
recently, but does not include a business that the corporation enters into as
part of a plan of reorganization. All of the assets held by Acquired Portfolio
as of the opening of business on August 2, 2004 (the date the Acquiring
Portfolio Adviser became investment adviser to Acquired Portfolio) were Acquired
Portfolio's historic business assets within the meaning of Treasury Regulation
Section 1.368-1(d)(3) (which provides that a corporation's historic business
assets are the assets used in its historic business).
9. Acquired Portfolio will distribute to its shareholders the Acquiring
Portfolio Shares it receives pursuant to the transaction, and its other
properties, if any, and will be liquidated promptly thereafter.
10. The expenses of Acquired Portfolio incurred by it in connection with
the transaction, if any, will be only such expenses that are solely and directly
related to the transaction in accordance with Rev. Rul. 73-54, 1973-1 C.B. 187.
Acquired Portfolio will not pay any expenses incurred by its shareholders in
connection with the transaction.
11. There is no, and never has been any, indebtedness between Acquiring
Portfolio and Acquired Portfolio.
12. Acquired Portfolio has properly elected to be a regulated investment
company under Subchapter M of the Code, has qualified for the special tax
treatment afforded regulated investment companies under Subchapter M of the Code
for each taxable year since inception, and qualifies for such treatment as of
the time of the Closing.
13. Acquired Portfolio meets the requirements of an "investment company" in
Section 368(a)(2)(F) of the Code.
14. Acquired Portfolio is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
15. Acquired Portfolio does not pay compensation to any
shareholder-employee.
16. Immediately following the transaction, the Acquired Portfolio
Shareholders will own all of the outstanding Acquiring Portfolio Shares and will
own such shares solely by reason of their ownership of the Acquired Portfolio
Shares immediately prior to the transaction.
17. Acquired Portfolio shareholders will not have dissenters' or appraisal
rights in the transaction.
18. The transaction is being undertaken for valid and substantial business
purposes, including facilitating Acquired Portfolio's becoming a member of the
Pioneer family of mutual funds, which, in the long term, is intended to result
in lower expenses and increased assets.
19. Acquired Portfolio has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in Acquired Portfolio.
* * * * *
The undersigned officer of Safeco Trust is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquired Portfolio. The undersigned recognizes
that Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 8.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP a written notice to
that effect.
SAFECO RESOURCE SERIES TRUST
on behalf of SAFECO BOND PORTFOLIO
By: /s/ Xxxxx X. Evans__________
------------------
Name: Xxxxx X. Evans________
--------------
Title: Treasurer______________
Dated: December 10, 2004
