Exhibit 4.e
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated as of October 26, 2000 by
and among Liberty Funds Trust V (the "Trust"), a Massachusetts business trust
established under a Declaration of Trust dated January 21, 1987, as amended, on
behalf of Liberty North Carolina Tax-Exempt Fund (the "Acquired Fund"), a series
of the Trust, Liberty Funds Trust IV (the "Acquiring Trust"), a
Massachusetts business trust established under a Declaration of Trust dated
August 29, 1978, as amended, on behalf of Liberty Tax-Exempt Fund (the
"Acquiring Fund"), a series of the Acquiring Trust, and Liberty Financial
Companies, Inc.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), and any
successor provision. The reorganization will consist of the transfer of all of
the assets of the Acquired Fund in exchange solely for Class A, B and C shares
of beneficial interest of the Acquiring Fund ("Acquiring Shares") and the
assumption by Acquiring Fund of the liabilities of the Acquired Fund (other than
certain expenses of the reorganization contemplated hereby) and the distribution
of such Acquiring Shares to the shareholders of the Acquired Fund in liquidation
of the Acquired Fund, all upon the terms and conditions set forth in this
Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF ACQUIRED FUND IN EXCHANGE FOR ASSUMPTION OF
LIABILITIES AND ACQUIRING SHARES AND LIQUIDATION OF ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein,
(a) The Trust, on behalf of the Acquired Fund, will transfer and
deliver to the Acquiring Fund, and the Acquiring Fund will
acquire, all the assets of the Acquired Fund as set forth in
paragraph 1.2.
(b) The Acquiring Fund will assume all of the Acquired Fund's
liabilities and obligations of any kind whatsoever, whether
absolute, accrued, contingent or otherwise in existence on the
Closing Date (as defined in paragraph 1.2 hereof) (the
"Obligations"), except that expenses of reorganization
contemplated hereby to be paid by the Acquired Fund pursuant to
paragraphs 1.5 and 9.2 shall not be assumed or paid by the
Acquiring Fund, and
(c) The Acquiring Fund will issue and deliver to the Acquired Fund
in exchange for such assets the number of Acquiring Shares
(including fractional shares, if any) determined by dividing
the net asset value of the Acquired Fund, computed in the
manner and as of the time and date set forth in paragraph 2.1,
by the net asset value of one Acquiring Share, computed in the
manner and as of the time and date set forth in paragraph 2.2.
Such transactions shall take place at the closing provided for
in paragraph 3.1 (the "Closing").
1.2 The assets of the Acquired Fund to be acquired by the Acquiring Fund
shall consist of all cash, securities, dividends and interest
receivable, receivables for shares sold and all other assets which
are owned by the Acquired Fund on the closing date provided in
paragraph 3.1 (the "Closing Date") and any deferred expenses, other
than unamortized organizational expenses, shown as an asset on the
books of the Acquired Fund on the Closing Date.
1.3 As provided in paragraph 3.4, as soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), the Acquired Fund
will liquidate and distribute pro rata to its shareholders of record
("Acquired Fund Shareholders"), determined as of the close of
business on the Valuation Date (as defined in paragraph 2.1), the
Acquiring Shares received by the Acquired Fund pursuant to paragraph
1.1. Such liquidation and distribution will be accomplished by the
transfer of the Acquiring Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on
the share records of Acquiring Fund in the names of the Acquired
Fund Shareholders and representing the respective pro rata number of
Acquiring Shares due such shareholders. The Acquiring Fund shall not
be obligated to issue certificates representing Acquiring Shares in
connection with such exchange.
1.4 With respect to Acquiring Shares distributable pursuant to paragraph
1.3 to an Acquired Fund Shareholder holding a certificate or
certificates for shares of the Acquired Fund, if any, on the
Valuation Date, the Acquiring Trust will not permit such shareholder
to receive Acquiring Share certificates therefor, exchange such
Acquiring Shares for shares of other investment companies, effect an
account transfer of such Acquiring Shares, or pledge or redeem such
Acquiring Shares until the Acquiring Trust has been notified by the
Acquired Fund or its agent that such Shareholder has surrendered all
his or her outstanding certificates for Acquired Fund shares or, in
the event of lost certificates, posted adequate bond.
1.5 [RESERVED]
1.6 As promptly as possible after the Closing Date, the Acquired Fund
shall be terminated pursuant to the provisions of the laws of the
Commonwealth of Massachusetts, and, after the Closing Date, the
Acquired Fund shall not conduct any business except in connection
with its liquidation.
2. VALUATION.
2.1 For the purpose of paragraph 1, the value of the Acquired Fund's
assets to be acquired by the Acquiring Fund hereunder shall be the
net asset value computed as of the close of regular trading on the
New York Stock Exchange on the business day next preceding the
Closing (such time and date being herein called the "Valuation
Date") using the valuation procedures set forth in the Declaration
of Trust of the Acquiring Trust and the then current prospectus or
statement of additional information of the Acquiring Fund, after
deduction for the expenses of the reorganization contemplated hereby
to be paid by the Acquired Fund pursuant to paragraphs 1.5, and
shall be certified by the Acquired Fund.
2.2 For the purpose of paragraph 2.1, the net asset value of an
Acquiring Share shall be the net asset value per share computed as
of the close of regular trading on the New York
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Stock Exchange on the Valuation Date, using the valuation procedures
set forth in the Declaration of Trust of the Acquiring Trust and the
then current prospectus or prospectuses and the statement of
additional information or statements of additional information of
the Acquiring Fund (collectively, as from time to time amended and
supplemented, the "Acquiring Fund Prospectus").
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be on January 22, 2001, or on such other date
as the parties may agree in writing. The Closing shall be held at
9:00 a.m. at the offices of Colonial Management Associates, Inc.,
Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other
time and/or place as the parties may agree.
3.2 The portfolio securities of the Acquired Fund shall be made
available by the Acquired Fund to The Chase Manhattan Bank, as
custodian for the Acquiring Fund (the "Custodian"), for examination
no later than five business days preceding the Valuation Date. On
the Closing Date, such portfolio securities and all the Acquired
Fund's cash shall be delivered by the Acquired Fund to the Custodian
for the account of the Acquiring Fund, such portfolio securities to
be duly endorsed in proper form for transfer in such manner and
condition as to constitute good delivery thereof in accordance with
the custom of brokers or, in the case of portfolio securities held
in the U.S. Treasury Department's book-entry system or by the
Depository Trust Company, Participants Trust Company or other third
party depositories, by transfer to the account of the Custodian in
accordance with Rule 17f-4 or Rule 17f-5, as the case may be, under
the Investment Company Act of 1940 (the "1940 Act") and accompanied
by all necessary federal and state stock transfer stamps or a check
for the appropriate purchase price thereof. The cash delivered shall
be in the form of currency or certified or official bank checks,
payable to the order of "The Chase Manhattan Bank, custodian for
Acquiring Fund."
3.3 In the event that on the Valuation Date (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall be
restricted, or (b) trading or the reporting of trading on said
Exchange or elsewhere shall be disrupted so that accurate appraisal
of the value of the net assets of the Acquired Fund or the Acquiring
Fund is impracticable, the Closing Date shall be postponed until the
first business day after the day when trading shall have been fully
resumed and reporting shall have been restored; provided that if
trading shall not be fully resumed and reporting restored within
three business days of the Valuation Date, this Agreement may be
terminated by either of the Trust or the Acquiring Trust upon the
giving of written notice to the other party.
3.4 At the Closing, the Acquired Fund or its transfer agent shall
deliver to the Acquiring Fund or its designated agent a list of the
names and addresses of the Acquired Fund Shareholders and the number
of outstanding shares of beneficial interest of the Acquired Fund
owned by each Acquired Fund Shareholder, all as of the close of
business on the Valuation Date, certified by the Secretary or
Assistant Secretary of the Trust. The Acquiring Trust will provide
to the Acquired Fund evidence satisfactory to the Acquired Fund that
the Acquiring Shares issuable pursuant to paragraph 1.1 have been
credited to the Acquired Fund's account on the books of the
Acquiring Fund. On the Liquidation Date, the Acquiring Trust will
provide to the Acquired Fund evidence satisfactory to the Acquired
Fund that such Acquiring Shares have been credited pro rata to open
accounts in the names of the Acquired Fund shareholders as provided
in paragraph 1.3.
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3.5 At the Closing each party shall deliver to the other such bills of
sale, instruments of assumption of liabilities, checks, assignments,
stock certificates, receipts or other documents as such other party
or its counsel may reasonably request in connection with the
transfer of assets, assumption of liabilities and liquidation
contemplated by paragraph 1.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Trust, on behalf of the Acquired Fund, represents and warrants
the following to the Acquiring Trust and to the Acquiring Fund as of
the date hereof and agrees to confirm the continuing accuracy and
completeness in all material respects of the following on the
Closing Date:
(a) The Trust is a business trust duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Massachusetts;
(b) The Trust is a duly registered investment company classified as
a management company of the open-end type and its registration
with the Securities and Exchange Commission as an investment
company under the 1940 Act is in full force and effect, and the
Acquired Fund is a separate series thereof duly designated in
accordance with the applicable provisions of the Declaration of
Trust of the Trust and the 1940 Act;
(c) The Trust is not in violation in any material respect of any
provision of its Declaration of Trust or By-laws or of any
agreement, indenture, instrument, contract, lease or other
undertaking to which the Trust is a party or by which the
Acquired Fund is bound, and the execution, delivery and
performance of this Agreement will not result in any such
violation;
(d) The Trust has no material contracts or other commitments (other
than this Agreement and such other contracts as may be entered
into in the ordinary course of its business) which if
terminated may result in material liability to the Acquired
Fund or under which (whether or not terminated) any material
payments for periods subsequent to the Closing Date will be due
from the Acquired Fund;
(e) No litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending
or threatened against the Acquired Fund, any of its properties
or assets, or any person whom the Acquired Fund may be
obligated to indemnify in connection with such litigation,
proceeding or investigation. The Acquired Fund knows of no
facts which might form the basis for the institution of such
proceedings, and is not a party to or subject to the provisions
of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its
ability to consummate the transactions contemplated hereby;
(f) The statement of assets and liabilities, the statement of
operations, the statement of changes in net assets, and the
schedule of investments as at and for the two years ended
January 31, 2000 of the Acquired Fund, audited by
PricewaterhouseCoopers LLP, and the statement of assets, the
statement of changes in net assets and the schedule of
investments for the six months ended July 31, 2000, copies of
which have been furnished to the Acquiring Fund, fairly reflect
the
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financial condition and results of operations of the Acquired
Fund as of such dates and for the periods then ended in
accordance with generally accepted accounting principles
consistently applied, and the Acquired Fund has no known
liabilities of a material amount, contingent or otherwise,
other than those shown on the statements of assets referred to
above or those incurred in the ordinary course of its business
since July 31, 2000;
(g) Since July 31, 2000, there has not been any material adverse
change in the Acquired Fund's financial condition, assets,
liabilities or business (other than changes occurring in the
ordinary course of business), or any incurrence by the Acquired
Fund of indebtedness, except as disclosed in writing to the
Acquiring Fund. For the purposes of this subparagraph (g),
distributions of net investment income and net realized capital
gains, changes in portfolio securities, changes in the market
value of portfolio securities or net redemptions shall be
deemed to be in the ordinary course of business;
(h) By the Closing Date, all federal and other tax returns and
reports of the Acquired Fund required by law to have been filed
by such date (giving effect to extensions) shall have been
filed, and all federal and other taxes shown to be due on said
returns and reports shall have been paid so far as due, or
provision shall have been made for the payment thereof, and to
the best of the Acquired Fund's knowledge no such return is
currently under audit and no assessment has been asserted with
respect to such returns;
(i) For all taxable years and all applicable quarters of such years
from the date of its inception, the Acquired Fund has met the
requirements of subchapter M of the Code, for treatment as a
"regulated investment company" within the meaning of Section
851 of the Code. Neither the Trust nor the Acquired Fund has at
any time since its inception been liable for nor is now liable
for any material excise tax pursuant to Section 852 or 4982 of
the Code. The Acquired Fund has duly filed all federal, state,
local and foreign tax returns which are required to have been
filed, and all taxes of the Acquired Fund which are due and
payable have been paid except for amounts that alone or in the
aggregate would not reasonably be expected to have a material
adverse effect. The Acquired Fund is in compliance in all
material respects with applicable regulations of the Internal
Revenue Service pertaining to the reporting of dividends and
other distributions on and redemptions of its capital stock and
to withholding in respect of dividends and other distributions
to shareholders, and is not liable for any material penalties
which could be imposed thereunder;
(j) The authorized capital of the Trust consists of an unlimited
number of shares of beneficial interest with no par value, of
multiple series and classes. All issued and outstanding shares
of the Acquired Fund are, and at the Closing Date will be, duly
and validly issued and outstanding, fully paid and (except as
set forth in the Acquired Fund's then current prospectus or
prospectuses and statement of additional information or
statements of additional information (collectively, as amended
or supplemented from time to time, the "Acquired Fund
Prospectus")),non-assessable by the Acquired Fund and will have
been issued in compliance with all applicable registration or
qualification requirements of federal and state securities
laws. No options, warrants or other rights to subscribe for or
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purchase, or securities convertible into, any shares of
beneficial interest of the Acquired Fund are outstanding and
none will be outstanding on the Closing Date (except that Class
B shares of the Acquired Fund convert automatically into Class
A shares, as set forth in the Acquired Fund Prospectus);
(k) The Acquired Fund's investment operations from inception to the
date hereof have been in compliance in all material respects
with the investment policies and investment restrictions set
forth in its prospectus and statement of additional information
as in effect from time to time, except as previously disclosed
in writing to the Acquiring Fund;
(l) The execution, delivery and performance of this Agreement has
been duly authorized by the Trustees of the Trust, and, upon
approval thereof by the required majority of the shareholders
of the Acquired Fund, this Agreement will constitute the valid
and binding obligation of the Acquired Fund enforceable in
accordance with its terms except as the same may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and
other equitable principles;
(m) The Acquiring Shares to be issued to the Acquired Fund pursuant
to paragraph 1 will not be acquired for the purpose of making
any distribution thereof other than to the Acquired Fund
Shareholders as provided in paragraph 1.3; and
(n) The information provided by the Acquired Fund for use in the
Registration Statement and Proxy Statement referred to in
paragraph 5.3 shall be accurate and complete in all material
respects and shall comply with federal securities and other
laws and regulations applicable thereto.
(o) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquired Fund of the transactions contemplated by this
Agreement, except such as may be required under the Securities
Act of 1933, as amended (the "1933 Act"), the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the 1940
Act and state insurance, securities or blue sky laws (which
term as used herein shall include the laws of the District of
Columbia and of Puerto Rico).
(p) At the Closing Date, the Trust, on behalf of the Acquired Fund
will have good and marketable title to its assets to be
transferred to the Acquiring Fund pursuant to paragraph 1.1
and will have full right, power and authority to sell, assign,
transfer and deliver the Investments (as defined below) and
any other assets and liabilities of the Acquired Fund to be
transferred to the Acquiring Fund pursuant to this Agreement.
At the Closing Date, subject only to the delivery of the
Investments and any such other assets and liabilities and
payment therefor as contemplated by this Agreement, the
Acquiring Fund will acquire good and marketable title thereto
and will acquire the Investments and any such other assets and
liabilities subject to no encumbrances, liens or security
interests whatsoever and without any restrictions upon the
transfer thereof, except as previously disclosed to the
Acquiring Fund. As used in this Agreement, the term
"Investments" shall mean the Acquired Fund's investments shown
on the schedule of its investments as of July 31, 2000 referred
to in Section 4.1(f) hereof, as supplemented with such
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changes in the portfolio as the Acquired Fund shall make, and
changes resulting from stock dividends, stock split-ups,
mergers and similar corporate actions through the Closing
Date.
(q) At the Closing Date, the Acquired Fund will have sold such of
its assets, if any, as are necessary to assure that, after
giving effect to the acquisition of the assets of the Acquired
Fund pursuant to this Agreement, the Acquiring Fund will
remain in compliance with such mandatory investment
restrictions as are set forth in the Acquiring Fund
Prospectus, as amended through the Closing Date.
(r) No registration of any of the Investments would be required if
they were, as of the time of such transfer, the subject of a
public distribution by either of the Acquiring Fund or the
Acquired Fund, except as previously disclosed by the Acquired
Fund to the Acquiring Fund.
4.2 The Acquiring Trust, on behalf of the Acquiring Fund, represents and
warrants the following to the Trust and to the Acquired Fund as of
the date hereof and agrees to confirm the continuing accuracy and
completeness in all material respects of the following on the
Closing Date:
(a) The Acquiring Trust is a business trust duly organized, validly
existing and in good standing under the laws of The
Commonwealth of Massachusetts;
(b) The Acquiring Trust is a duly registered investment company
classified as a management company of the open-end type and its
registration with the Securities and Exchange Commission as an
investment company under the 1940 Act is in full force and
effect, and the Acquiring Fund is a separate series thereof
duly designated in accordance with the applicable provisions of
the Declaration of Trust of the Acquiring Trust and the 1940
Act;
(c) The Acquiring Fund Prospectus conforms in all material respects
to the applicable requirements of the 1933 Act and the rules
and regulations of the Securities and Exchange Commission
thereunder and does not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, and there are no material contracts to which the
Acquiring Fund is a party that are not referred to in such
Prospectus or in the registration statement of which it is a
part;
(d) At the Closing Date, the Acquiring Fund will have good and
marketable title to its assets;
(e) The Acquiring Trust is not in violation in any material respect
of any provisions of its Declaration of Trust or By-laws or of
any agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquiring Trust is a party or by which
the Acquiring Fund is bound, and the execution, delivery and
performance of this Agreement will not result in any such
violation;
(f) No litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending
or threatened against the Acquiring
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Fund or any of its properties or assets. The Acquiring Fund
knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or
subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely
affects its business or its ability to consummate the
transactions contemplated hereby;
(g) The statement of assets, the statement of operations, the
statement of changes in assets and the schedule of investments
as at and for the two years ended November 30, 1999 of the
Acquiring Fund, audited by PricewaterhouseCoopers LLP, and the
statement of assets, the statement of changes in net assets and
the schedule of investments for the six months ended May 31,
2000, copies of which have been furnished to the Acquired Fund,
fairly reflect the financial condition and results of
operations of the Acquiring Fund as of such dates and the
results of its operations for the periods then ended in
accordance with generally accepted accounting principles
consistently applied, and the Acquiring Fund has no known
liabilities of a material amount, contingent or otherwise,
other than those shown on the statements of assets referred to
above or those incurred in the ordinary course of its business
since May 31, 2000;
(h) Since May 31, 2000, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets,
liabilities or business (other than changes occurring in the
ordinary course of business), or any incurrence by the
Acquiring Fund of indebtedness. For the purposes of this
subparagraph (h), changes in portfolio securities, changes in
the market value of portfolio securities or net redemptions
shall be deemed to be in the ordinary course of business;
(i) By the Closing Date, all federal and other tax returns and
reports of the Acquiring Fund required by law to have been
filed by such date (giving effect to extensions) shall have
been filed, and all federal and other taxes shown to be due on
said returns and reports shall have been paid so far as due, or
provision shall have been made for the payment thereof, and 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) For each fiscal year of its operation, the Acquiring Fund has
met the requirements of Subchapter M of the Code for
qualification as a regulated investment company;
(k) The authorized capital of the Acquiring Trust consists of an
unlimited number of shares of beneficial interest, no par
value, of such number of different series as the Board of
Trustees may authorize from time to time. The outstanding
shares of beneficial interest in the Acquiring Fund are, and at
the Closing Date will be, divided into Class A shares, Class B
shares and Class C shares each having the characteristics
described in the Acquiring Fund Prospectus. All issued and
outstanding shares of the Acquiring Fund are, and at the
Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable (except as set forth in the
Acquiring Fund Prospectus) by the Acquiring Trust, and will
have been issued in compliance with all applicable registration
or qualification requirements of federal and state securities
laws. Except for Class B shares which convert to Class A shares
after the expiration of a period of time, no options, warrants
or other rights to subscribe for or purchase, or securities
convertible into,
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any shares of beneficial interest in the Acquiring Fund of any
class are outstanding and none will be outstanding on the
Closing Date;
(l) The Acquiring Fund's investment operations from inception to
the date hereof have been in compliance in all material
respects with the investment policies and investment
restrictions set forth in its prospectus and statement of
additional information as in effect from time to time;
(m) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of the
Acquiring Trust, and this Agreement constitutes the valid and
binding obligation of the Acquiring Trust and the Acquiring
Fund enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors'
rights generally and other equitable principles;
(n) The Acquiring Shares to be issued and delivered to the Acquired
Fund pursuant to the terms of this Agreement will at the
Closing Date have been duly authorized and, when so issued and
delivered, will be duly and validly issued Class A shares,
Class B shares and Class C shares of beneficial interest in the
Acquiring Fund, and will be fully paid and non-assessable
(except as set forth in the Acquiring Fund Prospectus) by the
Acquiring Trust, and no shareholder of the Acquiring Trust will
have any preemptive right of subscription or purchase in
respect thereof; and
(o) The information to be furnished by the Acquiring Fund for use
in the Registration Statement and Proxy Statement referred to
in paragraph 5.3 shall be accurate and complete in all material
respects and shall comply with federal securities and other
laws and regulations applicable thereto.
(p) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated by this
Agreement, except such as may be required under 1933 Act, the
1934 Act, the 1940 Act and state insurance, securities or blue
sky laws (which term as used herein shall include the laws of
the District of Columbia and of Puerto Rico).
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5. COVENANTS OF THE ACQUIRED FUND AND THE ACQUIRING FUND.
The Acquiring Trust, on behalf of the Acquiring Fund, and the Trust, on
behalf of the Acquired Fund, each hereby covenants and agrees with the other as
follows:
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of
business will include regular and customary periodic dividends and
distributions.
5.2 The Acquired Fund will call a meeting of its shareholders to be held
prior to the Closing Date to consider and act upon this Agreement
and take all other reasonable action necessary to obtain the
required shareholder approval of the transactions contemplated
hereby.
5.3 In connection with the Acquired Fund shareholders' meeting referred
to in paragraph 5.2, the Acquired Fund will prepare a Proxy
Statement for such meeting, to be included in a Registration
Statement on Form N-14 (the "Registration Statement") which the
Acquiring Trust will prepare and file for the registration under the
1933 Act of the Acquiring Shares to be distributed to the Acquired
Fund shareholders pursuant hereto, all in compliance with the
applicable requirements of the 1933 Act, the 1934 Act, and the 0000
Xxx.
5.4 The information to be furnished by the Acquired Fund for use in the
Registration Statement and the information to be furnished by the
Acquiring Fund for use in the Proxy Statement, each as referred to
in paragraph 5.3, shall be accurate and complete in all material
respects and shall comply with federal securities and other laws and
regulations thereunder applicable thereto.
5.5 The Acquiring Fund will advise the Acquired Fund promptly if at any
time prior to the Closing Date the assets of the Acquired Fund
include any securities which the Acquiring Fund is not permitted to
acquire.
5.6 Subject to the provisions of this Agreement, the Acquired Fund and
the Acquiring 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 cause the conditions to the other party's
obligations to consummate the transactions contemplated hereby to be
met or fulfilled and otherwise to consummate and make effective such
transactions.
5.7 The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state securities or "Blue Sky" laws as it may deem
appropriate in order to continue its operations after the Closing
Date.
6. 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 Trust and the
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Acquiring Fund of all the obligations to be performed by them
hereunder on or before the Closing Date and, in addition thereto, to
the following further conditions:
6.1 The Acquiring Trust, on behalf of the Acquiring Fund, shall have
delivered to the Trust a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant
Treasurer, in form satisfactory to the Trust and dated as of the
Closing Date, to the effect that the representations and warranties
of the Acquiring Trust on behalf of the Acquiring Fund made in this
Agreement are true and correct at and as of the Closing Date, except
as they may be affected by the transactions contemplated by this
Agreement, and that the Acquiring Trust and the Acquiring Fund have
complied with all the covenants and agreements and satisfied all of
the conditions on their parts to be performed or satisfied under
this Agreement at or prior to the Closing Date.
6.2 The Trust shall have received a favorable opinion from Ropes & Xxxx,
counsel to the Acquiring Trust for the transactions contemplated
hereby, dated the Closing Date and, in a form satisfactory to the
Trust, to the following effect:
(a) The Acquiring Trust is a business trust duly organized and
validly existing under the laws of The Commonwealth of
Massachusetts and has power to own all of its properties and
assets and to carry on its business as presently conducted, and
the Acquiring Fund is a separate series thereof duly
constituted in accordance with the applicable provisions of the
1940 Act and the Declaration of Trust and By-laws of the
Acquiring Trust; (b) this Agreement has been duly authorized,
executed and delivered on behalf of the Acquiring Fund and,
assuming the Prospectus and Registration Statement referred to
in paragraph 5.3 complies with applicable federal securities
laws and assuming the due authorization, execution and delivery
of this Agreement by the Trust on behalf of the Acquired Fund,
is the valid and binding obligation of the Acquiring Fund
enforceable against the Acquiring Fund in accordance with its
terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and other equitable
principles; (c) the Acquiring Fund has the power to assume the
liabilities to be assumed by it hereunder and upon consummation
of the transactions contemplated hereby the Acquiring Fund will
have duly assumed such liabilities; (d) the Acquiring Shares to
be issued for transfer to the shareholders of the Acquired Fund
as provided by this Agreement are duly authorized and upon such
transfer and delivery will be validly issued and outstanding
and fully paid and nonassessable Class A shares, Class B shares
and Class C shares of beneficial interest in the Acquiring
Fund, and no shareholder of the Acquiring Fund has any
preemptive right of subscription or purchase in respect
thereof; (e) the execution and delivery of this Agreement did
not, and the performance by the Acquiring Trust and the
Acquiring Fund of their respective obligations hereunder will
not, violate the Acquiring Trust's Declaration of Trust or
By-laws, or any provision of any agreement known to such
counsel to which the Acquiring Trust or the Acquiring Fund is a
party or by which either of them is bound or, to the knowledge
of such counsel, result in the acceleration of any obligation
or the imposition of any penalty under any agreement, judgment,
or decree to which the Acquiring Trust or the Acquiring Fund is
a party or by which either of them is bound; (f) to the
knowledge of such counsel, no consent, approval, authorization
or order of any court or governmental authority is required for
the consummation by the Acquiring Trust or the Acquiring Fund
of the
11
Transactions contemplated by this Agreement except such as may
be required under state securities or "Blue Sky" laws or such
as have been obtained; (g) except as previously disclosed,
pursuant to section 4.2(f) above, such counsel does not know
of any legal or governmental proceedings relating to the
acquiring Trust or the Acquiring Fund existing on or before
the date of mailing of the Prospectus referred to in paragraph
5.3 or the Closing Date required to be described in the
Registration Statement referred to in paragraph 5.3 which are
not described as required; (h) the Acquiring Trust is
registered with the Securities and Exchange Commission as an
investment company under the 1940 Act; and (i) to the best
knowledge of such counsel, no litigation or administrative
proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to the
acquiring Trust or the Acquiring Fund or any of their
properties or assets and neither the Acquiring Trust nor the
acquiring Fund is a party to or subject to the provisions of
any order, decree or judgment of any court or governmental
body, which materially and adversely affects its business.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete 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 it hereunder on or before the Closing Date and, in
addition thereto, to the following further conditions:
7.1 The Trust, on behalf of the Acquired Fund, shall have delivered to
the Acquiring Trust a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to the Acquiring Trust
and dated the Closing Date, to the effect that the representations
and warranties of the Acquired Fund made in this Agreement are true
and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, and
that the Trust and the Acquired Fund have complied with all the
covenants and agreements and satisfied all of the conditions on its
part to be performed or satisfied under this Agreement at or prior
to the Closing Date;
7.2 The Acquiring Trust shall have received a favorable opinion from
Ropes & Xxxx, counsel to the Trust, dated the Closing Date and in a
form satisfactory to the Acquiring Trust, to the following effect:
(a) The Trust is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts
and has corporate power to own all of its properties and assets
and to carry on its business as presently conducted, and the
Acquired Fund is a separate series thereof duly constituted in
accordance with the applicable provisions of the 1940 Act and
the Declaration of Trust of the Trust; (b) this Agreement has
been duly authorized, executed and delivered on behalf of the
Acquired Fund and, assuming the Proxy Statement referred to in
paragraph 5.3 complies with applicable federal securities laws
and assuming the due authorization, execution and delivery of
this Agreement by the Acquiring Trust on behalf of the
Acquiring Fund, is the valid and binding obligation of the
Acquired Fund enforceable against the Acquired Fund in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and
other
12
equitable principles; (c) the Acquired Fund has the power to
sell, assign, transfer and deliver the assets to be
transferred by it hereunder, and, upon consummation of the
transactions contemplated hereby, the Acquired Fund will have
duly transferred such assets to the Acquiring Fund; (d) the
execution and delivery of this Agreement did not, and the
performance by the Trust and the Acquired Fund of their
respective obligations hereunder will not, violate the Trust's
Declaration of Trust or By-laws, or any provision of any
agreement known to such counsel to which the Trust or the
Acquired Fund is a party or by which either of them is bound
or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any
penalty under any agreement, judgment, or decree to which the
Trust or the Acquired Fund is a party or by which either of
them is bound; (e) to the knowledge of such counsel, no
consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Trust or the Acquired Fund of the transactions contemplated by
this Agreement, except such as may be required under state
securities or "Blue Sky" laws or such as have been obtained;
(f) such counsel does not know of any legal or governmental
proceedings relating to the Trust or the Acquired Fund
existing on or before the date of mailing of the Prospectus
referred to in paragraph 5.3 or the Closing Date required to
be described in the Registration Statement referred to in
paragraph 5.3 which are not described as required; (g) the
Trust is registered with the Securities and Exchange
Commission as an investment company under the 1940 Act; and
(h) to the best knowledge of such counsel, no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or threatened
as to the Trust or the Acquired Fund or any of its properties
or assets and neither the Trust nor the Acquired Fund is a
party to or subject to the provisions of any order, decree or
judgment of any court or governmental body, which materially
and adversely affects its business.
7.3 The Acquired Fund shall have furnished to the Acquiring Fund tax
returns, signed by a partner of PricewaterhouseCoopers LLP for the
fiscal year ended January 31, 2000 and signed pro forma tax returns
for the period from February 1, 2000 to the Closing Date (which pro
forma tax returns shall be furnished promptly after the Closing
Date).
7.4 Prior to the Closing Date, the Acquired Fund shall have declared a
dividend or dividends which, together with all previous dividends,
shall have the effect of distributing all of the Acquired Fund's
investment company taxable income for its taxable years ending on or
after January 31, 2000 and on or prior to the Closing Date (computed
without regard to any deduction for dividends paid), and all of its
net capital gains realized in each of its taxable years ending on or
after January 31, 2000 and on or prior to the Closing Date.
7.5 The Acquired Fund shall have furnished to the Acquiring Fund a
certificate, signed by the President (or any Vice President) and the
Treasurer of the Trust, as to the adjusted tax basis in the hands of
the Acquired Fund of the securities delivered to the Acquiring Fund
pursuant to this Agreement.
7.6 The custodian of the Acquired Fund shall have delivered to the
Acquiring Fund a certificate identifying all of the assets of the
Acquired Fund held by such custodian as of the Valuation Date.
13
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE
ACQUIRING FUND AND THE ACQUIRED FUND.
The respective obligations of the Trust and the Acquiring Trust hereunder
are each subject to the further conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the vote of the required majority of the holders of
the outstanding shares of the Acquired Fund of record on the record
date for the meeting of its shareholders referred to in paragraph
5.2;
8.2 On the Closing Date no action, suit or other preceding 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
hereby;
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 Securities and Exchange Commission and of
state Blue Sky and securities authorities) deemed necessary by the
Trust or the Acquiring Trust to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or
permit would not involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or the Acquired Fund.
8.4 The Registration Statement referred to in paragraph 5.3 shall have
become effective under the 1933 Act and no stop order suspending the
effectiveness thereof shall have been issued and, to the best
knowledge of the parties hereto, no investigation or proceeding for
that purpose shall have been instituted or be pending, threatened or
contemplated under the 1933 Act;
8.5 The Trust shall have received a favorable opinion of Ropes & Xxxx
satisfactory to the Trust and the Acquiring Trust shall have
received a favorable opinion of Ropes & Xxxx satisfactory to the
Acquiring Trust, each substantially to the effect that, for federal
income tax purposes:
(a) The acquisition by the Acquiring Fund of the assets of the
Acquired Fund in exchange for the Acquiring Fund's assumption
of the Obligations of the Acquired Fund and issuance of the
Acquiring Shares, followed by the distribution by the Acquired
Fund of such the Acquiring Shares to the shareholders of the
Acquired Fund in exchange for their shares of the Acquired
Fund, all as provided in paragraph 1 hereof, will constitute a
reorganization within the meaning of Section 368(a) of the
Code, and the Acquired Fund and the Acquiring 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 to the Acquired Fund (i)
upon the transfer of its assets to the Acquiring Fund in
exchange for the Acquiring Shares or (ii) upon the distribution
of the Acquiring Shares to the shareholders of the Acquired
Fund as contemplated in paragraph 1 hereof;
14
(c) No gain or loss will be recognized to the Acquiring Fund upon
the receipt of the assets of the Acquired Fund in exchange for
the assumption of the Obligations and issuance of the Acquiring
Shares as contemplated in paragraph 1 hereof;
(d) The tax basis of the assets of the Acquired Fund acquired by
the Acquiring Fund will be the same as the basis of those
assets in the hands of the Acquired Fund immediately prior to
the transfer, and the holding period of the assets of the
Acquired Fund in the hands of the Acquiring Fund will include
the period during which those assets were held by the Acquired
Fund;
(e) The shareholders of the Acquired Fund will recognize no gain or
loss upon the exchange of their shares of the Acquired Fund for
the Acquiring Shares;
(f) The tax basis of the Acquiring Shares to be received by each
shareholder of the Acquired Fund will be the same in the
aggregate as the aggregate tax basis of the shares of the
Acquired Fund surrendered in exchange therefor;
(g) The holding period of the Acquiring Shares to be received by
each shareholder of the Acquired Fund will include the period
during which the shares of the Acquired Fund surrendered in
exchange therefor were held by such shareholder, provided such
shares of the Acquired Fund were held as a capital asset on the
date of the exchange.
(h) Acquiring Fund will succeed to and take into account the items
of Acquired Fund described in Section 381(c) of the Code,
subject to the conditions and limitations specified in Sections
381, 382, 383 and 384 of the Code and the regulations
thereunder.
8.6 At any time prior to the Closing, any of the foregoing conditions of
this Agreement may be waived jointly by the Board of Trustees of the
Trust and the Board of Trustees of the Acquiring Trust if, in their
judgment, such waiver will not have a material adverse effect on the
interests of the shareholders of the Acquired Fund and the Acquiring
Fund.
9. BROKERAGE FEES AND EXPENSES.
9.1 The Trust, on behalf of the Acquired Fund, and the Acquiring Trust,
on behalf of the Acquiring Fund, each represents and warrants to the
other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
9.2 The Acquiring Trust, on behalf of the Acquiring Fund, shall pay all
fees paid to governmental authorities for the registration or
qualification of the Acquiring Shares. The other expenses of the
transactions contemplated by this Agreement shall be borne by the
following parties in the percentages indicated: (a) the Trust, on
behalf of the Acquired Fund, __%, (b) the Acquiring Trust, on behalf
of the Acquiring Fund, __%, and (c) Liberty Financial Companies,
Inc. __%.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES.
10.1 The Trust on behalf of the Acquired Fund and the Acquiring Trust on
behalf of the Acquiring Fund agree that neither party has made any
representation, warranty or
15
covenant not set forth herein and that this Agreement constitutes
the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the
transactions contemplated hereunder except paragraphs 1.1, 1.3, 1.5,
1.6, 5.4, 9, 10, 13 and 14.
11. TERMINATION.
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Trust and the Trust. In addition, either the Acquiring
Trust or the Trust may at its option terminate this Agreement at or
prior to the Closing Date because:
(a) Of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be
performed by the other party at or prior to the Closing Date;
or
(b) A condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably
appears that it will not or cannot be met.
(c) If the transactions contemplated by this Agreement have not
been substantially completed by May 31, 2001 this Agreement
shall automatically terminate on that date unless a later date
is agreed to by both the Trust and the Acquiring Trust.
11.2 If for any reason the transactions contemplated by this Agreement
are not consummated, no party shall be liable to any other party for
any damages resulting therefrom, including without limitation
consequential damages.
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 Trust
on behalf of the Acquired Fund and the Acquiring Trust on behalf of the
Acquiring Fund; provided, however, that following the shareholders' meeting
called by the Acquired Fund pursuant to paragraph 5.2 no such amendment may have
the effect of changing the provisions for determining the number of the
Acquiring Shares to be issued to shareholders of the Acquired Fund under this
Agreement to the detriment of such shareholders without their further approval.
13. NOTICES.
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to: Liberty Funds Trust IV, Xxx
Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, attention Secretary, or to Liberty Funds
Trust V, Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000, attention Secretary.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT NON-RECOURSE.
16
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 domestic substantive laws of The Commonwealth of Massachusetts,
without giving effect to any choice or conflicts of law rule or
provision that would result in the application of the domestic
substantive laws of any other jurisdiction.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of
the other party. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of
this Agreement.
14.5 A copy of the Declaration of Trust of the Trust and the Declaration
of Trust of the Acquiring Trust are each on file with the Secretary
of State of the Commonwealth of Massachusetts, and notice is hereby
given that no trustee, officer, agent or employee of either the
Trust or the Acquiring Trust shall have any personal liability under
this Agreement, and that this Agreement is binding only upon the
assets and properties of the Acquired Fund and the Acquiring Fund.
17
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed as a sealed instrument by its President or Vice President and its
corporate seal to be affixed thereto and attested by its Secretary or Assistant
Secretary.
LIBERTY FUNDS TRUST V,
on behalf of Liberty North Carolina
Tax-Exempt Fund
By:
---------------------------------
Name:
------------------------------
Title:
------------------------------
ATTEST:
------------------------------------
Name:
------------------------------
Title:
------------------------------
LIBERTY FUNDS TRUST IV,
on behalf of Liberty Tax-Exempt Fund
By:
---------------------------------
Name:
------------------------------
Title:
------------------------------
ATTEST:
------------------------------------
Name:
------------------------------
Title:
------------------------------
Solely for purposes of Section 9.2
of the Agreement:
LIBERTY FINANCIAL COMPANIES, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ATTEST:
-----------------------------------
Name:
-----------------------------
Title:
----------------------------
18
