SUB-ITEM 77Q1(G)(I): COPIES OF ANY MERGER OR CONSOLIDATION AGREEMENT, AND OTHER
DOCUMENTS RELEVANT TO THE INFORMATION SOUGHT IN SUB-ITEM 77M, ABOVE.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 1st day of August 2004, by and between Federated Equity Funds, a
Massachusetts business trust, with its principal place of business at 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX, 00000 (the "Federated Trust"), with respect to
its Federated Capital Appreciation Fund (the "Acquiring Fund"), a series of the
Federated Trust, and Banknorth Funds, a Delaware statutory trust, with its
principal place of business at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000 (the "Trust"), with respect to its Banknorth Large Cap Core Fund, a series
of the Trust ("Acquired Fund" and, collectively with the Acquiring Fund, the
"Funds").
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal
Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations
promulgated thereunder. The reorganization will consist of: (i) the transfer of
all of the assets of the Acquired Fund in exchange for Class A Shares, no par
value per share, of the Acquiring Fund ("Acquiring Fund Shares"); and (ii) the
distribution of Class A Shares of the Acquiring Fund to the holders of Shares of
the Acquired Fund and the liquidation of the Acquired Fund as provided herein,
all upon the terms and conditions set forth in this Agreement (the
"Reorganization").
WHEREAS, the Acquiring Fund and the Acquired Fund is a separate series
of the Federated Trust and the Trust, respectively, and the Federated Trust and
the Trust are open-end, registered management investment companies and the
Acquired Fund owns securities that generally are assets of the character in
which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund and the Acquired Fund are authorized to
issue their shares of beneficial interests;
WHEREAS, the Trustees of the Federated Trust have determined that the
Reorganization, with respect to the Acquiring Fund, is in the best interests of
the Acquiring Fund and that the interests of the existing shareholders of the
Acquiring Fund will not be diluted as a result of the Reorganization;
WHEREAS, the Trustees of the Trust have determined that the
Reorganization, with respect to the Acquired Fund, is in the best interests of
the Acquired Fund and that the interests of the existing shareholders of the
Acquired Fund will not be diluted as a result of the Reorganization;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING
FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND
THE EXCHANGE. Subject to the terms and conditions contained herein and
on the basis of the representations and warranties contained herein, the
Acquired Fund agrees to transfer all of its assets, as set forth in paragraph
1.2, to the Acquiring Fund. In exchange, the Acquiring Fund agrees: (i) to
deliver to the Acquired Fund the number of full and fractional Acquiring Fund
Shares, determined by (a) multiplying the shares outstanding of the Acquired
Fund by (b) the ratio computed by dividing (x) the net asset value per share of
the Acquired Fund by (y) the net asset value per share of the Acquiring Fund
Shares computed in the manner and as of the time and date set forth in paragraph
2.2. Holders of the Acquired Fund will receive Class A Shares of the Acquiring
Fund. Such transactions shall take place at the closing on the Closing Date
provided for in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of the Acquired Fund to
be acquired by the Acquiring Fund shall consist of property having a value equal
to the total net assets of the Acquired Fund, including, without limitation,
cash, securities, commodities, interests in futures and dividends or interest
receivable, owned by the Acquired Fund and any deferred or prepaid expenses
shown as an asset on the books of the Acquired Fund on the Closing Date.
The Acquired Fund has provided the Acquiring Fund with its most recent
audited financial statements, which contain a list of all of the Acquired Fund's
assets as of the date of such statements. The Acquired Fund hereby represents
that as of the date of the execution of this Agreement, there have been no
changes in its financial
position as reflected in such financial statements other than those occurring in
the ordinary course of business in connection with the purchase and sale of
securities, the issuance and redemption of Acquired Fund shares and the payment
of normal operating expenses, dividends and capital gains distributions.
1.3 LIABILITIES TO BE DISCHARGED. The Acquired Fund will discharge
all of its liabilities and obligations prior to the Closing Date.
1.4 LIQUIDATION AND DISTRIBUTION. On or as soon after the
Closing Date as is conveniently practicable: (a) the Acquired Fund will
distribute in complete liquidation of the Acquired Fund, pro rata to its
shareholders of record, determined as of the close of business on the Closing
Date (the "Acquired Fund Shareholders"), all of the Acquiring Fund Shares
received by the Acquired Fund pursuant to paragraph 1.1; and (b) the Acquired
Fund will thereupon proceed to dissolve and terminate as set forth in paragraph
1.8 below. Such distribution will be accomplished by the transfer of Acquiring
Fund Shares credited to the account of the Acquired Fund on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the name of the Acquired Fund Shareholders, and representing the respective pro
rata number of Acquiring Fund Shares due such shareholders. All issued and
outstanding shares of the Acquired Fund (the "Acquired Fund Shares") will
simultaneously be canceled on the books of the Acquired Fund. The Acquiring Fund
shall not issue certificates representing Acquiring Fund Shares in connection
with such transfer. After the Closing Date, the Acquired Fund shall not conduct
any business except in connection with its termination.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares
will be shown on the books of the Acquiring Fund's transfer agent. Acquiring
Fund Shares will be issued simultaneously to the Acquired Fund, in an amount
equal in value to the aggregate net asset value of the Acquired Fund Shares, to
be distributed to Acquired Fund Shareholders.
1.6 TRANSFER TAXES. Any transfer taxes payable upon the
issuance of Acquiring Fund Shares in a name other than the registered holder of
the Acquired Fund shares on the books of the Acquired Fund as of that time
shall, as a condition of such issuance and transfer, be paid by the person to
whom such Acquiring Fund Shares are to be issued and transferred.
1.7 REPORTING RESPONSIBILITY. Any reporting responsibility of the
Acquired Fund is and shall remain the responsibility of the Acquired Fund.
1.8 TERMINATION. The Acquired Fund shall be terminated promptly
following the Closing Date and the making of all distributions pursuant to
paragraph 1.4.
1.9 BOOKS AND RECORDS. All books and records of the Acquired
Fund, including all books and records required to be maintained under the
Investment Company Act of 1940 (the "1940 Act"), and the rules and regulations
thereunder, shall be available to the Acquiring Fund from and after the Closing
Date and shall be turned over to the Acquiring Fund as soon as practicable
following the Closing Date.
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Acquired Fund's assets to be
acquired by the Acquiring Fund hereunder shall be the value of such assets at
the closing on the Closing Date, using the valuation procedures set forth in the
Trust's Declaration of Trust and the Acquiring Fund's then current prospectus
and statement of additional information or such other valuation procedures as
shall be mutually agreed upon by the parties.
2.2 VALUATION OF SHARES. The net asset value per share of
Acquiring Fund Shares shall be the net asset value per share computed at the
closing on the Closing Date, using the valuation procedures set forth in the
Federated Trust's Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information, or such other valuation
procedures as shall be mutually agreed upon by the parties.
2.3 SHARES TO BE ISSUED. The number of the Acquiring Fund's
shares to be issued (including fractional shares, if any) in exchange for the
Acquired Fund's assets, shall be determined by (a) multiplying the shares
outstanding of the Acquired Fund by (b) the ratio computed by (x) dividing the
net asset value per share of
the Acquired Fund by (y) the net asset value per share of the Acquiring Fund
Shares determined in accordance with paragraph 2.2.
2.4 DETERMINATION OF VALUE. All computations of value shall be made by
State Street Bank and Trust Company, on behalf of the Acquiring Fund and by
Citigroup on behalf of the Acquired Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The closing shall occur on or about August 27, 2004,
or such other date(s) as the parties may agree to in writing (the "Closing
Date"). All acts taking place at the closing shall be deemed to take place at
4:00 p.m. Eastern Time on the Closing Date unless otherwise provided herein. The
closing shall be held at the offices of Federated Services Company, 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or at such other time and/or place
as the parties may agree.
3.2 CUSTODIAN'S CERTIFICATE. Citigroup, as custodian for the
Acquired Fund (the "Custodian"), shall deliver at the Closing a certificate of
an authorized officer stating that: (a) the Acquired Fund's portfolio
securities, cash, and any other assets have been delivered in proper form to the
Acquiring Fund on the Closing Date; and (b) all necessary taxes including all
applicable federal and state stock transfer stamps, if any, shall have been
paid, or provision for payment shall have been made, in conjunction with the
delivery of portfolio securities by the Acquired Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. In the event that on the
scheduled Closing Date, either: (a) the NYSE or another primary exchange on
which the portfolio securities of the Acquiring Fund or the Acquired Fund are
purchased or sold, shall be closed to trading or trading on such exchange shall
be restricted; or (b) trading or the reporting of trading on the NYSE or
elsewhere shall be disrupted so that accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day when trading
is fully resumed and reporting is restored.
3.4 TRANSFER AGENT'S CERTIFICATE. Boston Financial Data
Services, as transfer agent for the Acquired Fund as of the Closing Date, shall
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of Acquired Fund Shareholders, and the
number and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund shall issue and
deliver or cause, State Street Bank and Trust Company, its transfer agent, to
issue and deliver a confirmation evidencing Acquiring Fund Shares to be credited
on the Closing Date to the Secretary of the Trust or provide evidence
satisfactory to the Acquired Fund that the Acquiring Fund Shares have been
credited to the Acquired Fund's account on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, receipts and other documents, if any, as such
other party or its counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE ACQUIRED FUND. The Trust, on behalf of the
Acquired Fund, represents and warrants to the Federated Trust, on behalf of the
Acquiring Fund, as follows:
a) The Acquired Fund is a legally designated, separate series of a
statutory trust duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
b) The Trust is registered as an open-end management investment company
under the 1940 Act, and the Trust's registration with the Securities
and Exchange Commission (the "Commission") as an investment company
under the 1940 Act is in full force and effect.
c) The current prospectus and statement of additional information of the
Acquired Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933 (the "1933 Act") and the
1940 Act, and the rules and regulations thereunder, and do not include
any untrue statement of a material fact or omit to state any material
fact required to be stated or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
d) The Acquired Fund is not, and the execution, delivery, and performance
of this Agreement (subject to shareholder approval) will not, result in
the violation of any provision of the Trust's Declaration of Trust or
By-Laws or of any material agreement, indenture, instrument, contract,
lease, or other undertaking to which the Acquired Fund is a party or by
which it is bound.
e) The Acquired Fund has no material contracts or other commitments (other
than this Agreement) that will be terminated with liability to it
before the Closing Date, except for liabilities, if any, to be
discharged as provided in paragraph 1.3 hereof.
f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquired Fund or
any of its properties or assets, which, if adversely determined, would
materially and adversely affect its financial condition, the conduct
of its business, or the ability of the Acquired Fund to carry out the
transactions contemplated by this Agreement. The Acquired Fund knows
of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects its business or its ability to
consummate the transactions contemplated herein.
g) The financial statements of the Acquired Fund as of August 31, 2003,
and for the fiscal year then ended have been prepared in accordance
with generally accepted accounting principles, and such statements
(copies of which have been furnished to the Acquiring Fund) fairly
reflect the financial condition of the Acquired Fund as of such date,
and there are no known contingent liabilities of the Acquired Fund as
of such date that are not disclosed in such statements.
h) The unaudited financial statements of the Acquired Fund as of February
29, 2004, and for the six months then ended have been prepared in
accordance with generally accepted accounting principles, and such
statements (copies of which have been furnished to the Acquiring Fund)
fairly reflect the financial condition of the Acquired Fund as of such
date, and there are no known contingent liabilities of the Acquired
Fund as of such date that are not disclosed in such statements.
i) Since the date of the financial statements referred to in paragraph (h)
above, there have been no material adverse changes in the Acquired
Fund's financial condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or any
incurrence by the Acquired Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund. For the purposes of
this paragraph (i), a decline in the net asset value of the Acquired
Fund shall not constitute a material adverse change.
j) All federal and other tax returns and reports of the Acquired Fund
required by law to be filed, have been filed, and all federal and other
taxes shown due on such returns and reports have been paid, or
provision shall have been made for the payment thereof. To the best of
the Acquired Fund's knowledge, no such return is currently under audit,
and no assessment has been asserted with respect to such returns.
k) All issued and outstanding shares of the Acquired Fund are duly and
validly issued and outstanding, fully paid and non-assessable by the
Acquired Fund. All of the issued and outstanding shares of the Acquired
Fund will, at the time of the Closing Date, be held by the persons and
in the amounts set forth in the records of the Acquired Fund's transfer
agent as provided in paragraph 3.4. The Acquired Fund has no
outstanding options, warrants, or other rights to subscribe for or
purchase any of the Acquired Fund shares, and has no outstanding
securities convertible into any of the Acquired Fund shares.
l) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Fund's assets to be transferred to the Acquiring
Fund pursuant to paragraph 1.2, and full right, power, and authority to
sell, assign, transfer, and deliver such assets hereunder, free of any
lien or other encumbrance, except those liens or encumbrances to which
the Acquiring Fund has received notice, and, upon delivery and payment
for such assets, and the filing of any articles, certificates or other
documents under the laws of the State of Delaware, the Acquiring Fund
will acquire good and marketable title, subject to no restrictions on
the full transfer of such assets, other than such restrictions as might
arise under the 1933 Act, and other than as disclosed to and accepted
by the Acquiring Fund.
m) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquired
Fund. Subject to approval by the Acquired Fund Shareholders, this
Agreement constitutes a valid and binding obligation of the Acquired
Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights and to general
equity principles.
n) The information to be furnished by the Acquired Fund for use in
no-action letters, applications for orders, registration statements,
proxy materials, and other documents that may be necessary in
connection with the transactions contemplated herein shall be accurate
and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations.
o) From the effective date of the Registration Statement (as defined in
paragraph 5.7), through the time of the meeting of the Acquired Fund
Shareholders and on the Closing Date, any written information furnished
by the Trust with respect to the Acquired Fund for use in the Proxy
Materials (as defined in paragraph 5.7), or any other materials
provided in connection with the Reorganization, does not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated or necessary to make the
statements, in light of the circumstances under which such statements
were made, not misleading.
p) The Acquired Fund has elected to qualify and has qualified as a
"regulated investment company" under the Code (a "RIC"), as of and
since its first taxable year; has been a RIC under the Code at all
times since the end of its first taxable year when it so qualified; and
qualifies and will continue to qualify as a RIC under the Code for its
taxable year ending upon its liquidation.
q) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the Securities Exchange Act of 1934 (the
"1934 Act"), the 1940 Act or Delaware law for the execution of this
Agreement by the Trust, for itself and on behalf of the Acquired Fund,
except for the effectiveness of the Registration Statement, and the
filing of any articles, certificates or other documents that may be
required under Delaware law, and except for such other consents,
approvals, authorizations and filings as have been made or received,
and such consents, approvals, authorizations and filings as may be
required subsequent to the Closing Date, it being understood, however,
that this Agreement and the transactions contemplated herein must be
approved by the shareholders of the Acquired Fund as described in
paragraph 5.2.
4.2 REPRESENTATIONS OF THE ACQUIRING FUND. The Federated Trust, on
behalf of the Acquiring Fund, represents and warrants to the Trust, on behalf of
the Acquired Fund, as follows:
a) The Acquiring Fund is a legally designated, separate series of a
business trust, duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts.
b) The Federated Trust is registered as an open-end management investment
company under the 1940 Act, and the Federated Trust's registration with
the Commission as an investment company under the 1940 Act is in full
force and effect.
c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations thereunder, and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
or necessary to make such statements therein, in light of the
circumstances under which they were made, not misleading.
d) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not, result in a violation of the Federated
Trust's Declaration of Trust or By-Laws or of any material agreement,
indenture, instrument, contract, lease, or other undertaking to which
the Acquiring Fund is a party or by which it is bound.
e) Except as otherwise disclosed in writing to and accepted by the
Acquired Fund, no litigation, administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquiring Fund or
any of its properties or assets, which, if adversely determined, would
materially and adversely affect its financial condition, the conduct
of its business or the ability of the Acquiring Fund to carry out the
transactions contemplated by this Agreement. The Acquiring Fund knows
of no facts that might form the basis for the institution of such
proceedings and it is not a party to or subject to the provisions of
any order, decree, or judgment of any court or governmental body that
materially and adversely affects its business or its ability to
consummate the transaction contemplated herein.
f) The financial statements of the Acquiring Fund as of October 31, 2003
and for the fiscal year then ended have been prepared in accordance
with generally accepted accounting principles, and such statements
(copies of which have been furnished to the Acquired Funds) fairly
reflect the financial condition of the Acquiring Fund as of such date,
and there are no known contingent liabilities of the Acquiring Fund as
of such date that are not disclosed in such statements.
g) The unaudited financial statements of the Acquiring Fund as of April
30, 2004, and for the six months then ended have been prepared in
accordance with generally accepted accounting principles, and such
statements (copies of which have been furnished to the Acquired Fund)
fairly reflect the financial condition of the Acquiring Fund as of such
date, and there are no known contingent liabilities of the Acquiring
Fund as of such date that are not disclosed in such statements.
h) Since the date of the financial statements referred to in paragraph (g)
above, there have been no material adverse changes in the Acquiring
Fund's financial condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or any
incurrence by the Acquiring Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquired Fund. For the purposes of
this paragraph (h), a decline in the net asset value of the Acquiring
Fund shall not constitute a material adverse change.
i) All federal and other tax returns and reports of the Acquiring Fund
required by law to be filed, have been filed. All federal and other
taxes shown due on such returns and reports have been paid or provision
shall have been made for their payment. To the best of the Acquiring
Fund's knowledge, no such return is currently under audit, and no
assessment has been asserted with respect to such returns.
j) All issued and outstanding Acquiring Fund Shares are duly and validly
issued and outstanding, fully paid and non-assessable by the Acquiring
Fund. The Acquiring Fund has no outstanding options, warrants, or other
rights to subscribe for or purchase any Acquiring Fund Shares, and
there are no outstanding securities convertible into any Acquiring Fund
Shares.
k) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquiring
Fund, and this Agreement constitutes a valid and binding obligation of
the Acquiring Fund, enforceable in accordance with its terms, subject
as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights
and to general equity principles.
l) Acquiring Fund Shares to be issued and delivered to the Acquired Fund
for the account of the Acquired Fund Shareholders pursuant to the terms
of this Agreement will, at the Closing Date, have been duly authorized.
When so issued and delivered, such shares will be duly and validly
issued Acquiring Fund Shares, and will be fully paid and
non-assessable.
m) The information to be furnished by the Acquiring Fund for use in
no-action letters, registration statements, proxy materials, and other
documents that may be necessary in connection with the transactions
contemplated herein shall be accurate and complete in all material
respects and shall comply in all material respects with federal
securities and other laws and regulations.
n) From the effective date of the Registration Statement (as defined in
paragraph 5.7), through the time of the meeting of the Acquired Fund
Shareholders and on the Closing Date, any written information furnished
by the Federated Trust with respect to the Acquiring Fund for use in
the Proxy Materials (as defined in paragraph 5.7), or any other
materials provided in connection with the Reorganization, does not and
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated or necessary to make the
statements, in light of the circumstances under which such statements
were made, not misleading.
o) The Acquiring Fund has elected to qualify and has qualified as a RIC
under the Code as of and since its first taxable year; has been a RIC
under the Code at all times since the end of its first taxable year
when it so qualified; and qualifies and shall continue to qualify as a
RIC under the Code for its current taxable year.
p) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the 1934 Act, the 1940 Act or
Massachusetts law for the execution of this Agreement by the Federated
Trust, for itself and on behalf of the Acquiring Fund, or the
performance of the Agreement by the Federated Trust, for itself and on
behalf of the Acquiring Fund, except for the effectiveness of the
Registration Statement, and
the filing of any articles, certificates or other documents that may
be required under Massachusetts law, and such other consents,
approvals, authorizations and filings as have been made or received,
and except for such consents, approvals, authorizations and filings as
may be required subsequent to the Closing Date.
q) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act,
and any state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 OPERATION IN ORDINARY COURSE. The Acquiring Fund and the
Acquired Fund will each operate its respective business in the ordinary course
between the date of this Agreement and the Closing Date, it being understood
that such ordinary course of business will include customary dividends and
shareholder purchases and redemptions.
5.2 APPROVAL OF SHAREHOLDERS. The Trust will call a special
meeting of the Acquired Fund Shareholders to consider and act upon this
Agreement and to take all other appropriate action necessary to obtain approval
of the transactions contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Acquired Fund covenants
that the Acquiring Fund Shares to be issued pursuant to this Agreement are not
being acquired for the purpose of making any distribution, other than in
connection with the Reorganization and in accordance with the terms of this
Agreement.
5.4 ADDITIONAL INFORMATION. The Acquired Fund will assist the
Acquiring Fund in obtaining such information as the Acquiring Fund reasonably
requests concerning the beneficial ownership of the Acquired Fund's shares.
5.5 FURTHER ACTION. Subject to the provisions of this
Agreement, the Acquiring Fund and the Acquired Fund will each take or cause to
be taken, all action, and do or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including any actions required to be taken after
the Closing Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as
practicable, but in any case within sixty days after the Closing Date, the
Acquired Fund shall furnish the Acquiring Fund, in such form as is reasonably
satisfactory to the Acquiring Fund, a statement of the earnings and profits of
the Acquired Fund for federal income tax purposes that will be carried over by
the Acquiring Fund as a result of Section 381 of the Code, and which will be
certified by the Trust's Treasurer.
5.7 PREPARATION OF REGISTRATION STATEMENT AND SCHEDULE 14A
PROXY STATEMENT. The Federated Trust will prepare and file with the Commission a
registration statement on Form N-14 relating to the Acquiring Fund Shares to be
issued to shareholders of the Acquired Fund (the "Registration Statement"). The
Registration Statement on Form N-14 shall include a proxy statement and a
prospectus of the Acquiring Fund relating to the transaction contemplated by
this Agreement. The Registration Statement shall be in compliance with the 1933
Act, the 1934 Act and the 1940 Act, as applicable. Each party will provide the
other party with the materials and information necessary to prepare the
registration statement on Form N-14 (the "Proxy Materials"), for inclusion
therein, in connection with the meeting of the Acquired Fund's Shareholders to
consider the approval of this Agreement and the transactions contemplated
herein.
5.8 The Acquired Fund shall have declared and paid a dividend
or dividends which, together with all previous such dividends, shall have the
effect of distributing to its shareholders all of the Acquired Fund's investment
company taxable income (computed without regard to any deduction for dividends
paid), if any, plus the excess, if any, of its interest income excludible from
gross income under Section 103(a) of the Code over its deductions disallowed
under Sections 265 and 171(a)(2) of the Code for all taxable periods or years
ending on or before the Closing Date, and all of its net capital gains realized
(after reduction for any capital loss carry forward), if any, in all taxable
periods or years ending on or before the Closing Date.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by the Acquiring Fund
pursuant to this Agreement on or before the Closing Date, and, in addition,
subject to the following conditions:
All representations, covenants, and warranties of the
Acquiring Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and as of the Closing Date, with the
same force and effect as if made on and as of the Closing Date. The Acquiring
Fund shall have delivered to the Acquired Fund a certificate executed in the
Acquiring Fund's name by the Federated Trust's President or Vice President and
its Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Acquired Fund and dated as of the Closing Date, to such effect and as to such
other matters as the Acquired Fund shall reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by the Acquired Fund
pursuant to this Agreement, on or before the Closing Date and, in addition,
shall be subject to the following conditions:
All representations, covenants, and warranties of the Acquired
Fund contained in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date, with the same force
and effect as if made on and as of such Closing Date. The Acquired Fund shall
have delivered to the Acquiring Fund on such Closing Date a certificate executed
in the Acquired Fund's name by the Trust's President or Vice President and the
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Acquiring Fund and dated as of such Closing Date, to such effect and as to such
other matters as the Acquiring Fund shall reasonably request.
The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, together with a list of
the Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the Closing
Date, certified by the Treasurer of the Trust.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRING FUND AND ACQUIRED FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein,
with respect to the Acquired Fund, shall have been approved by the requisite
vote of the holders of the outstanding shares of the Acquired Fund in accordance
with applicable law and the provisions of the Trust's Declaration of Trust and
By-Laws. Certified copies of the resolutions evidencing such approval shall have
been delivered to the Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this paragraph 8.1.
8.2 On the Closing Date, the Commission shall not have issued
an unfavorable report under Section 25(b) of the 1940 Act, or instituted any
proceeding seeking to enjoin the consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act. Furthermore, no action,
suit or other proceeding shall be threatened or pending before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with this Agreement or the transactions
contemplated herein.
8.3 All required consents of other parties and all other
consents, orders, and permits of federal, state and local regulatory authorities
(including those of the Commission and of State securities authorities,
including any
necessary "no-action" positions and exemptive orders from such federal and state
authorities) to permit consummation of the transactions contemplated herein
shall have been obtained, except where failure to obtain any such consent,
order, or permit would not involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or the Acquired Fund, provided that
either party hereto may waive any such conditions for itself.
8.4 The Registration Statement shall have become effective
under the 1933 Act, and no stop orders suspending the effectiveness thereof
shall have been issued. To the best knowledge of the parties to this Agreement,
no investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 0000 Xxx.
8.5 The parties shall have received an opinion of Xxxxxxxxx
Xxxxxxx Xxxxx & Xxxxxxxx substantially to the effect that for federal income tax
purposes:
a) The transfer of all of the Acquired Fund's assets to the Acquiring Fund
solely in exchange for Acquiring Fund Shares (followed by the
distribution of Acquiring Fund Shares to the Acquired Fund Shareholders
in dissolution and liquidation of the Acquired Fund) will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and
the Acquiring Fund and the Acquired Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code.
b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for
Acquiring Fund Shares.
c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund solely in
exchange for Acquiring Fund Shares or upon the distribution (whether
actual or constructive) of Acquiring Fund Shares to Acquired Fund
Shareholders in exchange for their Selling Fund Shares.
d) No gain or loss will be recognized by any Acquired Fund Shareholder
upon the exchange of its Acquired Fund Shares for Acquiring Fund
Shares.
e) The aggregate tax basis of the Acquiring Fund Shares received by each
Acquired Fund Shareholder pursuant to the Reorganization will be the
same as the aggregate tax basis of the Acquired Fund Shares held by it
immediately prior to the Reorganization. The holding period of
Acquiring Fund Shares received by each Acquired Fund Shareholder will
include the period during which the Acquired Fund Shares exchanged
therefor were held by such shareholder, provided the Acquired Fund
Shares are held as capital assets at the time of the Reorganization.
f) The tax basis of the Acquired Fund's assets acquired by the Acquiring
Fund will be the same as the tax basis of such assets to the Acquired
Fund immediately prior to the Reorganization. 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.
Such opinion shall be based on customary assumptions and such
representations Xxxx Xxxxx LLP may reasonably request, and the Acquired
Fund and Acquiring Fund will cooperate to make and certify the accuracy
of such representations. The foregoing opinion may state that no
opinion is expressed as to the effect of the Reorganization on the
Acquiring Fund, the Acquired Fund or any Acquired Fund Shareholder with
respect to any asset as to which unrealized gain or loss is required to
be reorganized for federal income tax purposes at the end of a taxable
year (or on the termination or transfer thereof) under a xxxx-to-market
system of accounting. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this paragraph 8.5.
ARTICLE IX
EXPENSES
Federated Investment Management Company or its affiliates will pay all
expenses associated with Acquiring Fund's and Acquired Fund's participation in
the Reorganization, provided, however, that Acquiring Fund shall bear expenses
associated with the qualification of Acquiring Fund Shares for sale in the
various states. Reorganization expenses include, without limitation: (a)
expenses associated with the preparation and filing of the
Proxy Materials; (b) postage; (c) printing; (d) accounting fees; (e) legal fees
incurred by each Fund; (f) solicitation costs of the transaction; and (g) other
related administrative or operational costs.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Federated Trust, on behalf of the Acquiring Fund, and the
Trust, on behalf of the Acquired Fund, agree that neither party has made to the
other party any representation, warranty and/or covenant not set forth herein,
and that this Agreement constitutes the entire agreement between the parties.
10.2 Except as specified in the next sentence set forth in
this paragraph 10.2, the representations, warranties, and covenants contained in
this Agreement or in any document delivered pursuant to or in connection with
this Agreement, shall not survive the consummation of the transactions
contemplated hereunder. The covenants to be performed after the Closing Date,
shall continue in effect beyond the consummation of the transactions
contemplated hereunder.
ARTICLE XI
TERMINATION
This Agreement may be terminated by the mutual agreement of the
Federated Trust and the Trust. In addition, either the Federated Trust or the
Trust may at its option terminate this Agreement at or before the Closing Date
due to:
a) a breach by the other of any representation, warranty, or agreement
contained herein to be performed at or before the Closing Date, if not
cured within 30 days;
b) a condition herein expressed to be precedent to the obligations of the
terminating party that has not been met and it reasonably appears that
it will not or cannot be met; or
c) a determination by a party's Board of Trustees, as appropriate, that
the consummation of the transactions contemplated herein is not in the
best interest of the Trust or the Federated Trust, respectively, and
notice given to the other party hereto.
In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either the
Acquiring Fund, the Acquired Fund, the Federated Trust, the Trust, or their
respective Trustees or officers, to the other party or its Trustees or officers.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified, or supplemented in such manner
as may be mutually agreed upon in writing by the officers of the Trust and the
Federated Trust as specifically authorized by their respective Board of
Trustees; provided, however, that following the meeting of the Acquired Fund
Shareholders called by the Acquired Fund pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be issued to the Acquired
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns, but, except as
provided in this paragraph, no assignment or transfer hereof or of any rights or
obligations hereunder shall be made by any party without the written consent of
the other party. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, firm, or corporation, other than
the parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
It is expressly agreed that the obligations of the Acquiring
Fund hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents, or employees of the Federated Trust personally, but
shall bind only the trust property of the Acquiring Fund, as provided in the
Declaration of Trust of the Federated Trust. The execution and delivery of this
Agreement have been authorized by the Trustees of the Federated Trust on behalf
of the Acquiring Fund and signed by authorized officers of the Federated Trust,
acting as such. Neither the authorization by such Trustees nor the execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Acquiring Fund as provided in the Federated
Trust's Declaration of Trust.
It is expressly agreed that the obligations of the Acquired
Fund hereunder shall not be binding upon any of the Trustees, shareholders,
nominees, officers, agents, or employees of the Trust personally, but shall bind
only the trust property of the Acquired Fund, as provided in the Declaration of
Trust of the Trust. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust on behalf of the Acquired Fund and
signed by authorized officers of the Trust, acting as such. Neither the
authorization by such Trustees nor the execution and delivery by such officers
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Acquired Fund as provided in the Trust's Declaration of Trust.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement, all as of the date first written above.
BANKNORTH FUNDS
on behalf of its portfolio,
Banknorth Large Cap Core Fund
Xxxx X. XxXxxxxxx, Secretary
FEDERATED EQUITY FUNDS
on behalf of its portfolio,
Federated Capital Appreciation Fund
Xxxx X. XxXxxxxxx, Secretary
SUB-ITEM 77Q1(G)(II): COPIES OF ANY MERGER OR CONSOLIDATION AGREEMENT, AND OTHER
DOCUMENTS RELEVANT TO THE INFORMATION SOUGHT IN SUB-ITEM 77M, ABOVE.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 1st day of August 2004, by and between Federated Equity Funds, a
Massachusetts business trust, with its principal place of business at 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX, 00000 (the "Federated Trust"), with respect to
its Federated Xxxxxxxx Fund (the "Acquiring Fund"), a series of the Federated
Trust, and Banknorth Funds, a Delaware statutory trust, with its principal place
of business at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (the
"Trust"), with respect to its Banknorth Small/Mid Cap Core Fund, a series of the
Trust ("Acquired Fund" and, collectively with the Acquiring Fund, the "Funds").
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal
Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations
promulgated thereunder. The reorganization will consist of: (i) the transfer of
all of the assets of the Acquired Fund in exchange for Class A Shares, no par
value per share, of the Acquiring Fund ("Acquiring Fund Shares"); and (ii) the
distribution of Class A Shares of the Acquiring Fund to the holders of Shares of
the Acquired Fund and the liquidation of the Acquired Fund as provided herein,
all upon the terms and conditions set forth in this Agreement (the
"Reorganization").
WHEREAS, the Acquiring Fund and the Acquired Fund is a separate series
of the Federated Trust and the Trust, respectively, and the Federated Trust and
the Trust are open-end, registered management investment companies and the
Acquired Fund owns securities that generally are assets of the character in
which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund and the Acquired Fund are authorized to
issue their shares of beneficial interests;
WHEREAS, the Trustees of the Federated Trust have determined that the
Reorganization, with respect to the Acquiring Fund, is in the best interests of
the Acquiring Fund and that the interests of the existing shareholders of the
Acquiring Fund will not be diluted as a result of the Reorganization;
WHEREAS, the Trustees of the Trust have determined that the
Reorganization, with respect to the Acquired Fund, is in the best interests of
the Acquired Fund and that the interests of the existing shareholders of the
Acquired Fund will not be diluted as a result of the Reorganization;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND
SHARES AND LIQUIDATION OF THE ACQUIRED FUND
THE EXCHANGE. Subject to the terms and conditions contained herein and
on the basis of the representations and warranties contained herein, the
Acquired Fund agrees to transfer all of its assets, as set forth in paragraph
1.2, to the Acquiring Fund. In exchange, the Acquiring Fund agrees: (i) to
deliver to the Acquired Fund the number of full and fractional Acquiring Fund
Shares, determined by (a) multiplying the shares outstanding of the Acquired
Fund by (b) the ratio computed by dividing (x) the net asset value per share of
the Acquired Fund by (y) the net asset value per share of the Acquiring Fund
Shares computed in the manner and as of the time and date set forth in paragraph
2.2. Holders of the Acquired Fund will receive Class A Shares of the Acquiring
Fund. Such transactions shall take place at the closing on the Closing Date
provided for in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of the Acquired Fund to be
acquired by the Acquiring Fund shall consist of property having a value equal to
the total net assets of the Acquired Fund, including, without limitation, cash,
securities, commodities, interests in futures and dividends or interest
receivable, owned by the Acquired Fund and any deferred or prepaid expenses
shown as an asset on the books of the Acquired Fund on the Closing Date.
The Acquired Fund has provided the Acquiring Fund with its most recent
audited financial statements, which contain a list of all of the Acquired Fund's
assets as of the date of such statements. The Acquired Fund hereby represents
that as of the date of the execution of this Agreement, there have been no
changes in its financial position as reflected in such financial statements
other than those occurring in the ordinary course of business in connection with
the purchase and sale of securities, the issuance and redemption of Acquired
Fund shares and the payment of normal operating expenses, dividends and capital
gains distributions.
1.3 LIABILITIES TO BE DISCHARGED. The Acquired Fund will
discharge all of its liabilities and obligations prior to the Closing Date.
1.4 LIQUIDATION AND DISTRIBUTION. On or as soon after the
Closing Date as is conveniently practicable: (a) the Acquired Fund will
distribute in complete liquidation of the Acquired Fund, pro rata to its
shareholders of record, determined as of the close of business on the Closing
Date (the "Acquired Fund Shareholders"), all of the Acquiring Fund Shares
received by the Acquired Fund pursuant to paragraph 1.1; and (b) the Acquired
Fund will thereupon proceed to dissolve and terminate as set forth in paragraph
1.8 below. Such distribution will be accomplished by the transfer of Acquiring
Fund Shares credited to the account of the Acquired Fund on the books of the
Acquiring Fund to open accounts on the share records of the Acquiring Fund in
the name of the Acquired Fund Shareholders, and representing the respective pro
rata number of Acquiring Fund Shares due such shareholders. All issued and
outstanding shares of the Acquired Fund (the "Acquired Fund Shares") will
simultaneously be canceled on the books of the Acquired Fund. The Acquiring Fund
shall not issue certificates representing Acquiring Fund Shares in connection
with such transfer. After the Closing Date, the Acquired Fund shall not conduct
any business except in connection with its termination.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares
will be shown on the books of the Acquiring Fund's transfer agent. Acquiring
Fund Shares will be issued simultaneously to the Acquired Fund, in an amount
equal in value to the aggregate net asset value of the Acquired Fund Shares, to
be distributed to Acquired Fund Shareholders.
1.6 TRANSFER TAXES. Any transfer taxes payable upon the
issuance of Acquiring Fund Shares in a name other than the registered holder of
the Acquired Fund shares on the books of the Acquired Fund as of that time
shall, as a condition of such issuance and transfer, be paid by the person to
whom such Acquiring Fund Shares are to be issued and transferred.
1.7 REPORTING RESPONSIBILITY. Any reporting responsibility
of the Acquired Fund is and shall remain the responsibility of the Acquired
Fund.
1.8 TERMINATION. The Acquired Fund shall be terminated
promptly following the Closing Date and the making of all distributions pursuant
to paragraph 1.4.
1.9 BOOKS AND RECORDS. All books and records of the Acquired
Fund, including all books and records required to be maintained under the
Investment Company Act of 1940 (the "1940 Act"), and the rules and regulations
thereunder, shall be available to the Acquiring Fund from and after the Closing
Date and shall be turned over to the Acquiring Fund as soon as practicable
following the Closing Date.
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Acquired Fund's
assets to be acquired by the Acquiring Fund hereunder shall be the value of such
assets at the closing on the Closing Date, using the valuation procedures set
forth in the Trust's Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information or such other valuation
procedures as shall be mutually agreed upon by the parties.
2.2 VALUATION OF SHARES. The net asset value per share of
Acquiring Fund Shares shall be the net asset value per share computed at the
closing on the Closing Date, using the valuation procedures set forth in the
Federated Trust's Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information, or such other valuation
procedures as shall be mutually agreed upon by the parties.
2.3 SHARES TO BE ISSUED. The number of the Acquiring Fund's
shares to be issued (including fractional shares, if any) in exchange for the
Acquired Fund's assets, shall be determined by (a) multiplying the shares
outstanding of the Acquired Fund by (b) the ratio computed by (x) dividing the
net asset value per share of the Acquired Fund by (y) the net asset value per
share of the Acquiring Fund Shares determined in accordance with paragraph 2.2.
2.4 DETERMINATION OF VALUE. All computations of value shall be
made by State Street Bank and Trust Company, on behalf of the Acquiring Fund and
by Citigroup on behalf of the Acquired Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The closing shall occur on or about August
27, 2004, or such other date(s) as the parties may agree to in writing (the
"Closing Date"). All acts taking place at the closing shall be deemed to take
place at 4:00 p.m. Eastern Time on the Closing Date unless otherwise provided
herein. The closing shall be held at the offices of Federated Services Company,
0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or at such other time
and/or place as the parties may agree.
3.2 CUSTODIAN'S CERTIFICATE. Citigroup, as custodian for the
Acquired Fund (the "Custodian"), shall deliver at the Closing a certificate of
an authorized officer stating that: (a) the Acquired Fund's portfolio
securities, cash, and any other assets have been delivered in proper form to the
Acquiring Fund on the Closing Date; and (b) all necessary taxes including all
applicable federal and state stock transfer stamps, if any, shall have been
paid, or provision for payment shall have been made, in conjunction with the
delivery of portfolio securities by the Acquired Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. In the event that on the
scheduled Closing Date, either: (a) the NYSE or another primary exchange on
which the portfolio securities of the Acquiring Fund or the Acquired Fund are
purchased or sold, shall be closed to trading or trading on such exchange shall
be restricted; or (b) trading or the reporting of trading on the NYSE or
elsewhere shall be disrupted so that accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day when trading
is fully resumed and reporting is restored.
3.4 TRANSFER AGENT'S CERTIFICATE. Boston Financial Data
Services, as transfer agent for the Acquired Fund as of the Closing Date, shall
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of Acquired Fund Shareholders, and the
number and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund shall issue and
deliver or cause, State Street Bank and Trust Company, its transfer agent, to
issue and deliver a confirmation evidencing Acquiring Fund Shares to be credited
on the Closing Date to the Secretary of the Trust or provide evidence
satisfactory to the Acquired Fund that the Acquiring Fund Shares have been
credited to the Acquired Fund's account on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, receipts and other documents, if any, as such
other party or its counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE ACQUIRED FUND. The Trust, on behalf
of the Acquired Fund, represents and warrants to the Federated Trust, on behalf
of the Acquiring Fund, as follows:
a) The Acquired Fund is a legally designated, separate series of a
statutory trust duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
b) The Trust is registered as an open-end management investment company
under the 1940 Act, and the Trust's registration with the Securities
and Exchange Commission (the "Commission") as an investment company
under the 1940 Act is in full force and effect.
c) The current prospectus and statement of additional information of the
Acquired Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933 (the "1933 Act") and the
1940 Act, and the rules and regulations thereunder, and do not include
any untrue statement of a material fact or omit to state any material
fact required to be stated or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
d) The Acquired Fund is not, and the execution, delivery, and performance
of this Agreement (subject to shareholder approval) will not, result in
the violation of any provision of the Trust's Declaration of Trust or
By-Laws or of any material agreement, indenture, instrument, contract,
lease, or other undertaking to which the Acquired Fund is a party or by
which it is bound.
e) The Acquired Fund has no material contracts or other commitments (other
than this Agreement) that will be terminated with liability to it
before the Closing Date, except for liabilities, if any, to be
discharged as provided in paragraph 1.3 hereof.
f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquired Fund or
any of its properties or assets, which, if adversely determined, would
materially and adversely affect its financial condition, the conduct
of its business, or the ability of the Acquired Fund to carry out the
transactions contemplated by this Agreement. The Acquired Fund knows
of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects its business or its ability to
consummate the transactions contemplated herein.
g) The financial statements of the Acquired Fund as of August 31, 2003,
and for the fiscal year then ended have been prepared in accordance
with generally accepted accounting principles, and such statements
(copies of which have been furnished to the Acquiring Fund) fairly
reflect the financial condition of the Acquired Fund as of such date,
and there are no known contingent liabilities of the Acquired Fund as
of such date that are not disclosed in such statements.
h) The unaudited financial statements of the Acquired Fund as of February
29, 2004, and for the six months then ended have been prepared in
accordance with generally accepted accounting principles, and such
statements (copies of which have been furnished to the Acquiring Fund)
fairly reflect the financial condition of the Acquired Fund as of such
date, and there are no known contingent liabilities of the Acquired
Fund as of such date that are not disclosed in such statements.
i) Since the date of the financial statements referred to in paragraph (h)
above, there have been no material adverse changes in the Acquired
Fund's financial condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or any
incurrence by the Acquired Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund. For the purposes of
this paragraph (i), a decline in the net asset value of the Acquired
Fund shall not constitute a material adverse change.
j) All federal and other tax returns and reports of the Acquired Fund
required by law to be filed, have been filed, and all federal and other
taxes shown due on such returns and reports have been paid, or
provision shall have been made for the payment thereof. To the best of
the Acquired Fund's knowledge, no such return is currently under audit,
and no assessment has been asserted with respect to such returns.
k) All issued and outstanding shares of the Acquired Fund are duly and
validly issued and outstanding, fully paid and non-assessable by the
Acquired Fund. All of the issued and outstanding shares of the Acquired
Fund will, at the time of the Closing Date, be held by the persons and
in the amounts set forth in the records of the Acquired Fund's transfer
agent as provided in paragraph 3.4. The Acquired Fund has no
outstanding options, warrants, or other rights to subscribe for or
purchase any of the Acquired Fund shares, and has no outstanding
securities convertible into any of the Acquired Fund shares.
l) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Fund's assets to be transferred to the Acquiring
Fund pursuant to paragraph 1.2, and full right, power, and authority to
sell, assign, transfer, and deliver such assets hereunder, free of any
lien or other encumbrance, except those liens or encumbrances to which
the Acquiring Fund has received notice, and, upon delivery and payment
for such assets, and the filing of any articles, certificates or other
documents under the laws of the State of Delaware, the Acquiring Fund
will acquire good and marketable title, subject to no restrictions on
the full
transfer of such assets, other than such restrictions as might
arise under the 1933 Act, and other than as disclosed to and accepted
by the Acquiring Fund.
m) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquired
Fund. Subject to approval by the Acquired Fund Shareholders, this
Agreement constitutes a valid and binding obligation of the Acquired
Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights and to general
equity principles.
n) The information to be furnished by the Acquired Fund for use in
no-action letters, applications for orders, registration statements,
proxy materials, and other documents that may be necessary in
connection with the transactions contemplated herein shall be accurate
and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations.
o) From the effective date of the Registration Statement (as defined in
paragraph 5.7), through the time of the meeting of the Acquired Fund
Shareholders and on the Closing Date, any written information furnished
by the Trust with respect to the Acquired Fund for use in the Proxy
Materials (as defined in paragraph 5.7), or any other materials
provided in connection with the Reorganization, does not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated or necessary to make the
statements, in light of the circumstances under which such statements
were made, not misleading.
p) The Acquired Fund has elected to qualify and has qualified as a
"regulated investment company" under the Code (a "RIC"), as of and
since its first taxable year; has been a RIC under the Code at all
times since the end of its first taxable year when it so qualified; and
qualifies and will continue to qualify as a RIC under the Code for its
taxable year ending upon its liquidation.
q) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the Securities Exchange Act of 1934 (the
"1934 Act"), the 1940 Act or Delaware law for the execution of this
Agreement by the Trust, for itself and on behalf of the Acquired Fund,
except for the effectiveness of the Registration Statement, and the
filing of any articles, certificates or other documents that may be
required under Delaware law, and except for such other consents,
approvals, authorizations and filings as have been made or received,
and such consents, approvals, authorizations and filings as may be
required subsequent to the Closing Date, it being understood, however,
that this Agreement and the transactions contemplated herein must be
approved by the shareholders of the Acquired Fund as described in
paragraph 5.2.
4.2 REPRESENTATIONS OF THE ACQUIRING FUND. The Federated Trust, on
behalf of the Acquiring Fund, represents and warrants to the Trust, on behalf of
the Acquired Fund, as follows:
a) The Acquiring Fund is a legally designated, separate series of a
business trust, duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts.
b) The Federated Trust is registered as an open-end management investment
company under the 1940 Act, and the Federated Trust's registration with
the Commission as an investment company under the 1940 Act is in full
force and effect.
c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations thereunder, and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
or necessary to make such statements therein, in light of the
circumstances under which they were made, not misleading.
d) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not, result in a violation of the Federated
Trust's Declaration of Trust or By-Laws or of any material agreement,
indenture, instrument, contract, lease, or other undertaking to which
the Acquiring Fund is a party or by which it is bound.
e) Except as otherwise disclosed in writing to and accepted by the
Acquired Fund, no litigation, administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquiring Fund or
any of its properties or assets, which, if adversely determined, would
materially and adversely affect its financial condition, the conduct
of its business or the
ability of the Acquiring Fund to carry out the transactions
contemplated by this Agreement. The Acquiring Fund knows of no facts
that might form the basis for the institution of such proceedings and
it is not a party to or subject to the provisions of any order,
decree, or judgment of any court or governmental body that materially
and adversely affects its business or its ability to consummate the
transaction contemplated herein.
f) The financial statements of the Acquiring Fund as of October 31, 2003
and for the fiscal year then ended have been prepared in accordance
with generally accepted accounting principles, and such statements
(copies of which have been furnished to the Acquired Funds) fairly
reflect the financial condition of the Acquiring Fund as of such date,
and there are no known contingent liabilities of the Acquiring Fund as
of such date that are not disclosed in such statements.
g) The unaudited financial statements of the Acquiring Fund as of April
30, 2004, and for the six months then ended have been prepared in
accordance with generally accepted accounting principles, and such
statements (copies of which have been furnished to the Acquired Fund)
fairly reflect the financial condition of the Acquiring Fund as of such
date, and there are no known contingent liabilities of the Acquiring
Fund as of such date that are not disclosed in such statements.
h) Since the date of the financial statements referred to in paragraph (g)
above, there have been no material adverse changes in the Acquiring
Fund's financial condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or any
incurrence by the Acquiring Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquired Fund. For the purposes of
this paragraph (h), a decline in the net asset value of the Acquiring
Fund shall not constitute a material adverse change.
i) All federal and other tax returns and reports of the Acquiring Fund
required by law to be filed, have been filed. All federal and other
taxes shown due on such returns and reports have been paid or provision
shall have been made for their payment. To the best of the Acquiring
Fund's knowledge, no such return is currently under audit, and no
assessment has been asserted with respect to such returns.
j) All issued and outstanding Acquiring Fund Shares are duly and validly
issued and outstanding, fully paid and non-assessable by the Acquiring
Fund. The Acquiring Fund has no outstanding options, warrants, or other
rights to subscribe for or purchase any Acquiring Fund Shares, and
there are no outstanding securities convertible into any Acquiring Fund
Shares.
k) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquiring
Fund, and this Agreement constitutes a valid and binding obligation of
the Acquiring Fund, enforceable in accordance with its terms, subject
as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights
and to general equity principles.
l) Acquiring Fund Shares to be issued and delivered to the Acquired Fund
for the account of the Acquired Fund Shareholders pursuant to the terms
of this Agreement will, at the Closing Date, have been duly authorized.
When so issued and delivered, such shares will be duly and validly
issued Acquiring Fund Shares, and will be fully paid and
non-assessable.
m) The information to be furnished by the Acquiring Fund for use in
no-action letters, registration statements, proxy materials, and other
documents that may be necessary in connection with the transactions
contemplated herein shall be accurate and complete in all material
respects and shall comply in all material respects with federal
securities and other laws and regulations.
n) From the effective date of the Registration Statement (as defined in
paragraph 5.7), through the time of the meeting of the Acquired Fund
Shareholders and on the Closing Date, any written information furnished
by the Federated Trust with respect to the Acquiring Fund for use in
the Proxy Materials (as defined in paragraph 5.7), or any other
materials provided in connection with the Reorganization, does not and
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated or necessary to make the
statements, in light of the circumstances under which such statements
were made, not misleading.
o) The Acquiring Fund has elected to qualify and has qualified as a RIC
under the Code as of and since its first taxable year; has been a RIC
under the Code at all times since the end of its first taxable year
when it so qualified; and qualifies and shall continue to qualify as a
RIC under the Code for its current taxable year.
p) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the 1934 Act, the 1940 Act or
Massachusetts law for the execution of this Agreement by the Federated
Trust, for itself and on behalf of the Acquiring Fund, or the
performance of the Agreement by the Federated Trust, for itself and on
behalf of the Acquiring Fund, except for the effectiveness of the
Registration Statement, and the filing of any articles, certificates or
other documents that may be required under Massachusetts law, and such
other consents, approvals, authorizations and filings as have been made
or received, and except for such consents, approvals, authorizations
and filings as may be required subsequent to the Closing Date.
q) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act,
and any state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 OPERATION IN ORDINARY COURSE. The Acquiring Fund and the Acquired
Fund will each operate its respective business in the ordinary course between
the date of this Agreement and the Closing Date, it being understood that such
ordinary course of business will include customary dividends and shareholder
purchases and redemptions.
5.2 APPROVAL OF SHAREHOLDERS. The Trust will call a special meeting of
the Acquired Fund Shareholders to consider and act upon this Agreement and to
take all other appropriate action necessary to obtain approval of the
transactions contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Acquired Fund covenants that the
Acquiring Fund Shares to be issued pursuant to this Agreement are not being
acquired for the purpose of making any distribution, other than in connection
with the Reorganization and in accordance with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. The Acquired Fund will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Acquired Fund's shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, the
Acquiring Fund and the Acquired Fund will each take or cause to be taken, all
action, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, including any actions required to be taken after the Closing Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but
in any case within sixty days after the Closing Date, the Acquired Fund shall
furnish the Acquiring Fund, in such form as is reasonably satisfactory to the
Acquiring Fund, a statement of the earnings and profits of the Acquired Fund for
federal income tax purposes that will be carried over by the Acquiring Fund as a
result of Section 381 of the Code, and which will be certified by the Trust's
Treasurer.
5.7 PREPARATION OF REGISTRATION STATEMENT AND SCHEDULE 14A PROXY
STATEMENT. The Federated Trust will prepare and file with the Commission a
registration statement on Form N-14 relating to the Acquiring Fund Shares to be
issued to shareholders of the Acquired Fund (the "Registration Statement"). The
Registration Statement on Form N-14 shall include a proxy statement and a
prospectus of the Acquiring Fund relating to the transaction contemplated by
this Agreement. The Registration Statement shall be in compliance with the 1933
Act, the 1934 Act and the 1940 Act, as applicable. Each party will provide the
other party with the materials and information necessary to prepare the
registration statement on Form N-14 (the "Proxy Materials"), for inclusion
therein, in connection with the meeting of the Acquired Fund's Shareholders to
consider the approval of this Agreement and the transactions contemplated
herein.
5.8 The Acquired Fund shall have declared and paid a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to its shareholders all of the Acquired Fund's
investment company taxable income (computed without regard to any deduction for
dividends paid), if any, plus the excess, if any, of its interest income
excludible from gross income under Section 103(a) of the Code over its
deductions disallowed under Sections 265 and 171(a)(2) of the Code for all
taxable periods or years ending on or before the Closing Date, and all of its
net capital gains realized (after reduction for any capital loss carry forward),
if any, in all taxable periods or years ending on or before the Closing Date.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by the Acquiring Fund
pursuant to this Agreement on or before the Closing Date, and, in addition,
subject to the following conditions:
All representations, covenants, and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of the Closing Date. The Acquiring Fund shall have
delivered to the Acquired Fund a certificate executed in the Acquiring Fund's
name by the Federated Trust's President or Vice President and its Treasurer or
Assistant Treasurer, in form and substance satisfactory to the Acquired Fund and
dated as of the Closing Date, to such effect and as to such other matters as the
Acquired Fund shall reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by the Acquired Fund
pursuant to this Agreement, on or before the Closing Date and, in addition,
shall be subject to the following conditions:
All representations, covenants, and warranties of the Acquired Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of such Closing Date. The Acquired Fund shall have
delivered to the Acquiring Fund on such Closing Date a certificate executed in
the Acquired Fund's name by the Trust's President or Vice President and the
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Acquiring Fund and dated as of such Closing Date, to such effect and as to such
other matters as the Acquiring Fund shall reasonably request.
The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, together with a list of
the Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the Closing
Date, certified by the Treasurer of the Trust.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRING FUND AND ACQUIRED FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein, with
respect to the Acquired Fund, shall have been approved by the requisite vote of
the holders of the outstanding shares of the Acquired Fund in accordance with
applicable law and the provisions of the Trust's Declaration of Trust and
By-Laws. Certified copies of the resolutions evidencing such approval shall have
been delivered to the Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this paragraph 8.1.
8.2 On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, or instituted any
proceeding seeking to enjoin the consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act. Furthermore, no action,
suit or other
proceeding shall be threatened or pending before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain damages or other
relief in connection with this Agreement or the transactions contemplated
herein.
8.3 All required consents of other parties and all other consents,
orders, and permits of federal, state and local regulatory authorities
(including those of the Commission and of State securities authorities,
including any necessary "no-action" positions and exemptive orders from such
federal and state authorities) to permit consummation of the transactions
contemplated herein shall have been obtained, except where failure to obtain any
such consent, order, or permit would not involve a risk of a material adverse
effect on the assets or properties of the Acquiring Fund or the Acquired Fund,
provided that either party hereto may waive any such conditions for itself.
8.4 The Registration Statement shall have become effective under the
1933 Act, and no stop orders suspending the effectiveness thereof shall have
been issued. To the best knowledge of the parties to this Agreement, no
investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 0000 Xxx.
8.5 The parties shall have received an opinion of Xxxxxxxxx Xxxxxxx
Xxxxx & Xxxxxxxx substantially to the effect that for federal income tax
purposes:
a) The transfer of all of the Acquired Fund's assets to the Acquiring Fund
solely in exchange for Acquiring Fund Shares (followed by the
distribution of Acquiring Fund Shares to the Acquired Fund Shareholders
in dissolution and liquidation of the Acquired Fund) will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and
the Acquiring Fund and the Acquired Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code.
b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for
Acquiring Fund Shares.
c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund solely in
exchange for Acquiring Fund Shares or upon the distribution (whether
actual or constructive) of Acquiring Fund Shares to Acquired Fund
Shareholders in exchange for their Selling Fund Shares.
d) No gain or loss will be recognized by any Acquired Fund Shareholder
upon the exchange of its Acquired Fund Shares for Acquiring Fund
Shares.
e) The aggregate tax basis of the Acquiring Fund Shares received by each
Acquired Fund Shareholder pursuant to the Reorganization will be the
same as the aggregate tax basis of the Acquired Fund Shares held by it
immediately prior to the Reorganization. The holding period of
Acquiring Fund Shares received by each Acquired Fund Shareholder will
include the period during which the Acquired Fund Shares exchanged
therefor were held by such shareholder, provided the Acquired Fund
Shares are held as capital assets at the time of the Reorganization.
f) The tax basis of the Acquired Fund's assets acquired by the Acquiring
Fund will be the same as the tax basis of such assets to the Acquired
Fund immediately prior to the Reorganization. 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.
Such opinion shall be based on customary assumptions and such
representations Xxxx Xxxxx LLP may reasonably request, and the Acquired
Fund and Acquiring Fund will cooperate to make and certify the accuracy
of such representations. The foregoing opinion may state that no
opinion is expressed as to the effect of the Reorganization on the
Acquiring Fund, the Acquired Fund or any Acquired Fund Shareholder with
respect to any asset as to which unrealized gain or loss is required to
be reorganized for federal income tax purposes at the end of a taxable
year (or on the termination or transfer thereof) under a xxxx-to-market
system of accounting. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this paragraph 8.5.
ARTICLE IX
EXPENSES
Federated Investment Management Company or its affiliates will pay all
expenses associated with Acquiring Fund's and Acquired Fund's participation in
the Reorganization, provided, however, that Acquiring Fund shall bear expenses
associated with the qualification of Acquiring Fund Shares for sale in the
various states. Reorganization expenses include, without limitation: (a)
expenses associated with the preparation and filing of the Proxy Materials; (b)
postage; (c) printing; (d) accounting fees; (e) legal fees incurred by each
Fund; (f) solicitation costs of the transaction; and (g) other related
administrative or operational costs.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Federated Trust, on behalf of the Acquiring Fund, and the
Trust, on behalf of the Acquired Fund, agree that neither party has made to the
other party any representation, warranty and/or covenant not set forth herein,
and that this Agreement constitutes the entire agreement between the parties.
10.2 Except as specified in the next sentence set forth in this
paragraph 10.2, the representations, warranties, and covenants contained in this
Agreement or in any document delivered pursuant to or in connection with this
Agreement, shall not survive the consummation of the transactions contemplated
hereunder. The covenants to be performed after the Closing Date, shall continue
in effect beyond the consummation of the transactions contemplated hereunder.
ARTICLE XI
TERMINATION
This Agreement may be terminated by the mutual agreement of the
Federated Trust and the Trust. In addition, either the Federated Trust or the
Trust may at its option terminate this Agreement at or before the Closing Date
due to:
a) a breach by the other of any representation, warranty, or agreement
contained herein to be performed at or before the Closing Date, if not
cured within 30 days;
b) a condition herein expressed to be precedent to the obligations of the
terminating party that has not been met and it reasonably appears that
it will not or cannot be met; or
c) a determination by a party's Board of Trustees, as appropriate, that
the consummation of the transactions contemplated herein is not in the
best interest of the Trust or the Federated Trust, respectively, and
notice given to the other party hereto.
In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either the
Acquiring Fund, the Acquired Fund, the Federated Trust, the Trust, or their
respective Trustees or officers, to the other party or its Trustees or officers.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified, or supplemented in such manner
as may be mutually agreed upon in writing by the officers of the Trust and the
Federated Trust as specifically authorized by their respective Board of
Trustees; provided, however, that following the meeting of the Acquired Fund
Shareholders called by the Acquired Fund pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be issued to the Acquired
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but, except as provided in
this paragraph, no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of the other
party. Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation, other than the parties
hereto and their respective successors and assigns, any rights or remedies under
or by reason of this Agreement.
It is expressly agreed that the obligations of the Acquiring Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Federated Trust personally, but shall bind
only the trust property of the Acquiring Fund, as provided in the Declaration of
Trust of the Federated Trust. The execution and delivery of this Agreement have
been authorized by the Trustees of the Federated Trust on behalf of the
Acquiring Fund and signed by authorized officers of the Federated Trust, acting
as such. Neither the authorization by such Trustees nor the execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Acquiring Fund as provided in the Federated
Trust's Declaration of Trust.
It is expressly agreed that the obligations of the Acquired Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of the Acquired Fund, as provided in the Declaration of Trust of
the Trust. The execution and delivery of this Agreement have been authorized by
the Trustees of the Trust on behalf of the Acquired Fund and signed by
authorized officers of the Trust, acting as such. Neither the authorization by
such Trustees nor the execution and delivery by such officers shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Acquired Fund as
provided in the Trust's Declaration of Trust.
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all
as of the date first written above.
BANKNORTH FUNDS
on behalf of its portfolio,
Banknorth Small/Mid Cap Core Fund
Xxxx X. XxXxxxxxx, Secretary
FEDERATED EQUITY FUNDS
on behalf of its portfolio,
Federated Xxxxxxxx Fund
Xxxx X. XxXxxxxxx, Secretary
SUB-ITEM 77Q1(G)(III): COPIES OF ANY MERGER OR CONSOLIDATION AGREEMENT, AND
OTHER DOCUMENTS RELEVANT TO THE INFORMATION SOUGHT IN SUB-ITEM 77M, ABOVE.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 1st day of August 2004, by and between Federated Total Return Series,
Inc., a Maryland corporation, with its principal place of business at 0000
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX, 00000 (the "Corporation"), with respect to its
Federated Total Return Bond Fund (the "Acquiring Fund"), a series of the
Corporation, and Banknorth Funds, a Delaware statutory trust, with its principal
place of business at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (the
"Trust"), with respect to its Banknorth Intermediate Bond Fund, a series of the
Trust ("Acquired Fund" and, collectively with the Acquiring Fund, the "Funds").
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal
Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations
promulgated thereunder. The reorganization will consist of: (i) the transfer of
all of the assets of the Acquired Fund in exchange for Institutional Service
Shares, no par value per share, of the Acquiring Fund ("Acquiring Fund Shares");
and (ii) the distribution of Institutional Service Shares of the Acquiring Fund
to the holders of Shares of the Acquired Fund and the liquidation of the
Acquired Fund as provided herein, all upon the terms and conditions set forth in
this Agreement (the "Reorganization").
WHEREAS, the Acquiring Fund and the Acquired Fund is a separate series
of the Corporation and the Trust, respectively, and the Corporation and the
Trust are open-end, registered management investment companies and the Acquired
Fund owns securities that generally are assets of the character in which the
Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund and the Acquired Fund are authorized to
issue their shares of capital stock and shares of beneficial interests,
respectively;
WHEREAS, the Directors of the Corporation have determined that the
Reorganization, with respect to the Acquiring Fund, is in the best interests of
the Acquiring Fund and that the interests of the existing shareholders of the
Acquiring Fund will not be diluted as a result of the Reorganization;
WHEREAS, the Trustees of the Trust have determined that the
Reorganization, with respect to the Acquired Fund, is in the best interests of
the Acquired Fund and that the interests of the existing shareholders of the
Acquired Fund will not be diluted as a result of the Reorganization;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND
SHARES AND LIQUIDATION OF THE ACQUIRED FUND
THE EXCHANGE. Subject to the terms and conditions contained herein and
on the basis of the representations and warranties contained herein, the
Acquired Fund agrees to transfer all of its assets, as set forth in paragraph
1.2, to the Acquiring Fund. In exchange, the Acquiring Fund agrees: (i) to
deliver to the Acquired Fund the number of full and fractional Acquiring Fund
Shares, determined by (a) multiplying the shares outstanding of the Acquired
Fund by (b) the ratio computed by dividing (x) the net asset value per share of
the Acquired Fund by (y) the net asset value per share of the Acquiring Fund
Shares computed in the manner and as of the time and date set forth in paragraph
2.2. Holders of the Acquired Fund will receive Institutional Service Shares of
the Acquiring Fund. Such transactions shall take place at the closing on the
Closing Date provided for in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of the Acquired Fund to be
acquired by the Acquiring Fund shall consist of property having a value equal to
the total net assets of the Acquired Fund, including, without limitation, cash,
securities, commodities, interests in futures and dividends or interest
receivable, owned by the Acquired Fund and any deferred or prepaid expenses
shown as an asset on the books of the Acquired Fund on the Closing Date.
The Acquired Fund has provided the Acquiring Fund with its most recent
audited financial statements, which contain a list of all of the Acquired Fund's
assets as of the date of such statements. The Acquired Fund hereby represents
that as of the date of the execution of this Agreement, there have been no
changes in its financial
position as reflected in such financial statements other than those occurring in
the ordinary course of business in connection with the purchase and sale of
securities, the issuance and redemption of Acquired Fund shares and the payment
of normal operating expenses, dividends and capital gains distributions.
1.3 LIABILITIES TO BE DISCHARGED. The Acquired Fund will discharge
all of its liabilities and obligations prior to the Closing Date.
1.4 STATE FILINGS. Prior to the Closing Date, the Corporation
shall make any filings with the State of Maryland that may be required under the
laws of the State of Maryland, effective as of the Closing Date.
1.5 LIQUIDATION AND DISTRIBUTION. On or as soon after the Closing Date
as is conveniently practicable: (a) the Acquired Fund will distribute in
complete liquidation of the Acquired Fund, pro rata to its shareholders of
record, determined as of the close of business on the Closing Date (the
"Acquired Fund Shareholders"), all of the Acquiring Fund Shares received by the
Acquired Fund pursuant to paragraph 1.1; and (b) the Acquired Fund will
thereupon proceed to dissolve and terminate as set forth in paragraph 1.9 below.
Such distribution will be accomplished by the transfer of Acquiring Fund Shares
credited to the account of the Acquired Fund on the books of the Acquiring Fund
to open accounts on the share records of the Acquiring Fund in the name of the
Acquired Fund Shareholders, and representing the respective pro rata number of
Acquiring Fund Shares due such shareholders. All issued and outstanding shares
of the Acquired Fund (the "Acquired Fund Shares") will simultaneously be
canceled on the books of the Acquired Fund. The Acquiring Fund shall not issue
certificates representing Acquiring Fund Shares in connection with such
transfer. After the Closing Date, the Acquired Fund shall not conduct any
business except in connection with its termination.
1.6 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be
shown on the books of the Acquiring Fund's transfer agent. Acquiring Fund Shares
will be issued simultaneously to the Acquired Fund, in an amount equal in value
to the aggregate net asset value of the Acquired Fund Shares, to be distributed
to Acquired Fund Shareholders.
1.7 TRANSFER TAXES. Any transfer taxes payable upon the issuance of
Acquiring Fund Shares in a name other than the registered holder of the Acquired
Fund shares on the books of the Acquired Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Shares are to be issued and transferred.
1.8 REPORTING RESPONSIBILITY. Any reporting responsibility of the
Acquired Fund is and shall remain the responsibility of the Acquired Fund.
1.9 TERMINATION. The Acquired Fund shall be terminated promptly
following the Closing Date and the making of all distributions pursuant to
paragraph 1.5.
1.10 BOOKS AND RECORDS. All books and records of the Acquired Fund,
including all books and records required to be maintained under the Investment
Company Act of 1940 (the "1940 Act"), and the rules and regulations thereunder,
shall be available to the Acquiring Fund from and after the Closing Date and
shall be turned over to the Acquiring Fund as soon as practicable following the
Closing Date.
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Acquired Fund's assets to be
acquired by the Acquiring Fund hereunder shall be the value of such assets at
the closing on the Closing Date, using the valuation procedures set forth in the
Trust's Declaration of Trust and the Acquiring Fund's then current prospectus
and statement of additional information or such other valuation procedures as
shall be mutually agreed upon by the parties.
2.2 VALUATION OF SHARES. The net asset value per share of Acquiring
Fund Shares shall be the net asset value per share computed at the closing on
the Closing Date, using the valuation procedures set forth in the Corporation's
Articles of Incorporation and the Acquiring Fund's then current prospectus and
statement of additional information, or such other valuation procedures as shall
be mutually agreed upon by the parties.
2.3 SHARES TO BE ISSUED. The number of the Acquiring Fund's shares to
be issued (including fractional shares, if any) in exchange for the Acquired
Fund's assets, shall be determined by (a) multiplying the shares outstanding of
the Acquired Fund by (b) the ratio computed by (x) dividing the net asset value
per share of the Acquired Fund by (y) the net asset value per share of the
Acquiring Fund determined in accordance with paragraph 2.2.
2.4 DETERMINATION OF VALUE. All computations of value shall be made by
State Street Bank and Trust Company, on behalf of the Acquiring Fund and by
Citigroup on behalf of the Acquired Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The closing shall occur on or about August 27, 2004,
or such other date(s) as the parties may agree to in writing (the "Closing
Date"). All acts taking place at the closing shall be deemed to take place at
4:00 p.m. Eastern Time on the Closing Date unless otherwise provided herein. The
closing shall be held at the offices of Federated Services Company, 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or at such other time and/or place
as the parties may agree.
3.2 CUSTODIAN'S CERTIFICATE. Citigroup, as custodian for the Acquired
Fund (the "Custodian"), shall deliver at the Closing a certificate of an
authorized officer stating that: (a) the Acquired Fund's portfolio securities,
cash, and any other assets have been delivered in proper form to the Acquiring
Fund on the Closing Date; and (b) all necessary taxes including all applicable
federal and state stock transfer stamps, if any, shall have been paid, or
provision for payment shall have been made, in conjunction with the delivery of
portfolio securities by the Acquired Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. In the event that on the scheduled
Closing Date, either: (a) the NYSE or another primary exchange on which the
portfolio securities of the Acquiring Fund or the Acquired Fund are purchased or
sold, shall be closed to trading or trading on such exchange shall be
restricted; or (b) trading or the reporting of trading on the NYSE or elsewhere
shall be disrupted so that accurate appraisal of the value of the net assets of
the Acquiring Fund or the Acquired Fund is impracticable, the Closing Date shall
be postponed until the first business day after the day when trading is fully
resumed and reporting is restored.
3.4 TRANSFER AGENT'S CERTIFICATE. Boston Financial Data Services, as
transfer agent for the Acquired Fund as of the Closing Date, shall deliver at
the Closing a certificate of an authorized officer stating that its records
contain the names and addresses of Acquired Fund Shareholders, and the number
and percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver or
cause, State Street Bank and Trust Company, its transfer agent, to issue and
deliver a confirmation evidencing Acquiring Fund Shares to be credited on the
Closing Date to the Secretary of the Trust or provide evidence satisfactory to
the Acquired Fund that the Acquiring Fund Shares have been credited to the
Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each
party shall deliver to the other such bills of sale, checks, assignments, share
certificates, receipts and other documents, if any, as such other party or its
counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE ACQUIRED FUND. The Trust, on behalf
of the Acquired Fund, represents and warrants to the Corporation, on behalf of
the Acquiring Fund, as follows:
a) The Acquired Fund is a legally designated, separate series of a
statutory trust duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
b) The Trust is registered as an open-end management investment company
under the 1940 Act, and the Trust's registration with the Securities
and Exchange Commission (the "Commission") as an investment company
under the 1940 Act is in full force and effect.
c) The current prospectus and statement of additional information of the
Acquired Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933 (the "1933 Act") and the
1940 Act, and the rules and regulations thereunder, and do not include
any untrue statement of a material fact or omit to state any material
fact required to be stated or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
d) The Acquired Fund is not, and the execution, delivery, and performance
of this Agreement (subject to shareholder approval) will not, result in
the violation of any provision of the Trust's Declaration of Trust or
By-Laws or of any material agreement, indenture, instrument, contract,
lease, or other undertaking to which the Acquired Fund is a party or by
which it is bound.
e) The Acquired Fund has no material contracts or other commitments (other
than this Agreement) that will be terminated with liability to it
before the Closing Date, except for liabilities, if any, to be
discharged as provided in paragraph 1.3 hereof.
f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquired Fund or
any of its properties or assets, which, if adversely determined, would
materially and adversely affect its financial condition, the conduct
of its business, or the ability of the Acquired Fund to carry out the
transactions contemplated by this Agreement. The Acquired Fund knows
of no facts that might form the basis for the institution of such
proceedings and is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially and adversely affects its business or its ability to
consummate the transactions contemplated herein.
g) The financial statements of the Acquired Fund as of August 31, 2003,
and for the fiscal year then ended have been prepared in accordance
with generally accepted accounting principles, and such statements
(copies of which have been furnished to the Acquiring Fund) fairly
reflect the financial condition of the Acquired Fund as of such date,
and there are no known contingent liabilities of the Acquired Fund as
of such date that are not disclosed in such statements.
h) The unaudited financial statements of the Acquired Fund as of February
29, 2004, and for the six months then ended have been prepared in
accordance with generally accepted accounting principles, and such
statements (copies of which have been furnished to the Acquiring Fund)
fairly reflect the financial condition of the Acquired Fund as of such
date, and there are no known contingent liabilities of the Acquired
Fund as of such date that are not disclosed in such statements.
i) Since the date of the financial statements referred to in paragraph (h)
above, there have been no material adverse changes in the Acquired
Fund's financial condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or any
incurrence by the Acquired Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Fund. For the purposes of
this paragraph (i), a decline in the net asset value of the Acquired
Fund shall not constitute a material adverse change.
j) All federal and other tax returns and reports of the Acquired Fund
required by law to be filed, have been filed, and all federal and other
taxes shown due on such returns and reports have been paid, or
provision shall have been made for the payment thereof. To the best of
the Acquired Fund's knowledge, no such return is currently under audit,
and no assessment has been asserted with respect to such returns.
k) All issued and outstanding shares of the Acquired Fund are duly and
validly issued and outstanding, fully paid and non-assessable by the
Acquired Fund. All of the issued and outstanding shares of the Acquired
Fund will, at the time of the Closing Date, be held by the persons and
in the amounts set forth in the records of the Acquired Fund's transfer
agent as provided in paragraph 3.4. The Acquired Fund has no
outstanding options, warrants, or other rights to subscribe for or
purchase any of the Acquired Fund shares, and has no outstanding
securities convertible into any of the Acquired Fund shares.
l) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Fund's assets to be transferred to the Acquiring
Fund pursuant to paragraph 1.2, and full right, power, and authority to
sell, assign, transfer, and deliver such assets hereunder, free of any
lien or other encumbrance, except those liens or encumbrances to which
the Acquiring Fund has received notice, and, upon delivery and payment
for such assets, and the filing of any articles, certificates or other
documents under the laws of the State of Delaware, the Acquiring Fund
will acquire good and marketable title, subject to no restrictions on
the full
transfer of such assets, other than such restrictions as might arise
under the 1933 Act, and other than as disclosed to and accepted by the
Acquiring Fund.
m) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquired
Fund. Subject to approval by the Acquired Fund Shareholders, this
Agreement constitutes a valid and binding obligation of the Acquired
Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors' rights and to general
equity principles.
n) The information to be furnished by the Acquired Fund for use in
no-action letters, applications for orders, registration statements,
proxy materials, and other documents that may be necessary in
connection with the transactions contemplated herein shall be accurate
and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations.
o) From the effective date of the Registration Statement (as defined in
paragraph 5.7), through the time of the meeting of the Acquired Fund
Shareholders and on the Closing Date, any written information furnished
by the Trust with respect to the Acquired Fund for use in the Proxy
Materials (as defined in paragraph 5.7), or any other materials
provided in connection with the Reorganization, does not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated or necessary to make the
statements, in light of the circumstances under which such statements
were made, not misleading.
p) The Acquired Fund has elected to qualify and has qualified as a
"regulated investment company" under the Code (a "RIC"), as of and
since its first taxable year; has been a RIC under the Code at all
times since the end of its first taxable year when it so qualified; and
qualifies and will continue to qualify as a RIC under the Code for its
taxable year ending upon its liquidation.
q) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the Securities Exchange Act of 1934 (the
"1934 Act"), the 1940 Act or Delaware law for the execution of this
Agreement by the Trust, for itself and on behalf of the Acquired Fund,
except for the effectiveness of the Registration Statement, and the
filing of any articles, certificates or other documents that may be
required under Delaware law, and except for such other consents,
approvals, authorizations and filings as have been made or received,
and such consents, approvals, authorizations and filings as may be
required subsequent to the Closing Date, it being understood, however,
that this Agreement and the transactions contemplated herein must be
approved by the shareholders of the Acquired Fund as described in
paragraph 5.2.
4.2 REPRESENTATIONS OF THE ACQUIRING FUND. The Corporation, on behalf
of the Acquiring Fund, represents and warrants to the Trust, on behalf of the
Acquired Fund, as follows:
a) The Acquiring Fund is a legally designated, separate series of a
corporation, duly organized, validly existing and in good standing
under the laws of the State of Maryland.
b) The Corporation is registered as an open-end management investment
company under the 1940 Act, and the Corporation's registration with the
Commission as an investment company under the 1940 Act is in full force
and effect.
c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations thereunder, and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
or necessary to make such statements therein, in light of the
circumstances under which they were made, not misleading.
d) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not, result in a violation of the Corporation's
Articles of Incorporation or By-Laws or of any material agreement,
indenture, instrument, contract, lease, or other undertaking to which
the Acquiring Fund is a party or by which it is bound.
e) Except as otherwise disclosed in writing to and accepted by the
Acquired Fund, no litigation, administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against the Acquiring Fund or
any of its properties or assets, which, if adversely determined, would
materially and adversely affect its financial condition, the conduct
of its business or the
ability of the Acquiring Fund to carry out the transactions
contemplated by this Agreement. The Acquiring Fund knows of no facts
that might form the basis for the institution of such proceedings and
it is not a party to or subject to the provisions of any order,
decree, or judgment of any court or governmental body that materially
and adversely affects its business or its ability to consummate the
transaction contemplated herein.
f) The financial statements of the Acquiring Fund as of November 30, 2003
and for the fiscal year then ended have been prepared in accordance
with generally accepted accounting principles, and such statements
(copies of which have been furnished to the Acquired Funds) fairly
reflect the financial condition of the Acquiring Fund as of such date,
and there are no known contingent liabilities of the Acquiring Fund as
of such date that are not disclosed in such statements.
g) The unaudited financial statements of the Acquiring Fund as of May 31,
2004, and for the six months then ended have been prepared in
accordance with generally accepted accounting principles, and such
statements (copies of which have been furnished to the Acquired Fund)
fairly reflect the financial condition of the Acquiring Fund as of such
date, and there are no known contingent liabilities of the Acquiring
Fund as of such date that are not disclosed in such statements.
h) Since the date of the financial statements referred to in paragraph (g)
above, there have been no material adverse changes in the Acquiring
Fund's financial condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or any
incurrence by the Acquiring Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquired Fund. For the purposes of
this paragraph (h), a decline in the net asset value of the Acquiring
Fund shall not constitute a material adverse change.
i) All federal and other tax returns and reports of the Acquiring Fund
required by law to be filed, have been filed. All federal and other
taxes shown due on such returns and reports have been paid or provision
shall have been made for their payment. To the best of the Acquiring
Fund's knowledge, no such return is currently under audit, and no
assessment has been asserted with respect to such returns.
j) All issued and outstanding Acquiring Fund Shares are duly and validly
issued and outstanding, fully paid and non-assessable by the Acquiring
Fund. The Acquiring Fund has no outstanding options, warrants, or other
rights to subscribe for or purchase any Acquiring Fund Shares, and
there are no outstanding securities convertible into any Acquiring Fund
Shares.
k) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Acquiring
Fund, and this Agreement constitutes a valid and binding obligation of
the Acquiring Fund, enforceable in accordance with its terms, subject
as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights
and to general equity principles.
l) Acquiring Fund Shares to be issued and delivered to the Acquired Fund
for the account of the Acquired Fund Shareholders pursuant to the terms
of this Agreement will, at the Closing Date, have been duly authorized.
When so issued and delivered, such shares will be duly and validly
issued Acquiring Fund Shares, and will be fully paid and
non-assessable.
m) The information to be furnished by the Acquiring Fund for use in
no-action letters, registration statements, proxy materials, and other
documents that may be necessary in connection with the transactions
contemplated herein shall be accurate and complete in all material
respects and shall comply in all material respects with federal
securities and other laws and regulations.
n) From the effective date of the Registration Statement (as defined in
paragraph 5.7), through the time of the meeting of the Acquired Fund
Shareholders and on the Closing Date, any written information furnished
by the Corporation with respect to the Acquiring Fund for use in the
Proxy Materials (as defined in paragraph 5.7), or any other materials
provided in connection with the Reorganization, does not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated or necessary to make the
statements, in light of the circumstances under which such statements
were made, not misleading.
o) The Acquiring Fund has elected to qualify and has qualified as a RIC
under the Code as of and since its first taxable year; has been a RIC
under the Code at all times since the end of its first taxable year
when it so qualified; and qualifies and shall continue to qualify as a
RIC under the Code for its current taxable year.
p) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the 1934 Act, the 1940 Act or Maryland law
for the execution of this Agreement by the Corporation, for itself and
on behalf of the Acquiring Fund, or the performance of the Agreement by
the Corporation, for itself and on behalf of the Acquiring Fund, except
for the effectiveness of the Registration Statement, and the filing of
any articles, certificates or other documents that may be required
under Maryland law, and such other consents, approvals, authorizations
and filings as have been made or received, and except for such
consents, approvals, authorizations and filings as may be required
subsequent to the Closing Date.
q) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act,
and any state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 OPERATION IN ORDINARY COURSE. The Acquiring Fund and the Acquired
Fund will each operate its respective business in the ordinary course between
the date of this Agreement and the Closing Date, it being understood that such
ordinary course of business will include customary dividends and shareholder
purchases and redemptions.
5.2 APPROVAL OF SHAREHOLDERS. The Trust will call a special meeting of
the Acquired Fund Shareholders to consider and act upon this Agreement and to
take all other appropriate action necessary to obtain approval of the
transactions contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Acquired Fund covenants that the
Acquiring Fund Shares to be issued pursuant to this Agreement are not being
acquired for the purpose of making any distribution, other than in connection
with the Reorganization and in accordance with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. The Acquired Fund will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Acquired Fund's shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, the
Acquiring Fund and the Acquired Fund will each take or cause to be taken, all
action, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, including any actions required to be taken after the Closing Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but
in any case within sixty days after the Closing Date, the Acquired Fund shall
furnish the Acquiring Fund, in such form as is reasonably satisfactory to the
Acquiring Fund, a statement of the earnings and profits of the Acquired Fund for
federal income tax purposes that will be carried over by the Acquiring Fund as a
result of Section 381 of the Code, and which will be certified by the Trust's
Treasurer.
5.7 PREPARATION OF REGISTRATION STATEMENT AND SCHEDULE 14A PROXY
STATEMENT. The Corporation will prepare and file with the Commission a
registration statement on Form N-14 relating to the Acquiring Fund Shares to be
issued to shareholders of the Acquired Fund (the "Registration Statement"). The
Registration Statement on Form N-14 shall include a proxy statement and a
prospectus of the Acquiring Fund relating to the transaction contemplated by
this Agreement. The Registration Statement shall be in compliance with the 1933
Act, the 1934 Act and the 1940 Act, as applicable. Each party will provide the
other party with the materials and information necessary to prepare the
registration statement on Form N-14 (the "Proxy Materials"), for inclusion
therein, in connection with the meeting of the Acquired Fund's Shareholders to
consider the approval of this Agreement and the transactions contemplated
herein.
5.8 The Acquired Fund shall have declared and paid a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to its shareholders all of the Acquired Fund's
investment company taxable income (computed without regard to any deduction for
dividends paid), if any, plus the excess, if any, of its interest income
excludible from gross income under Section 103(a) of the Code over its
deductions disallowed under Sections 265 and 171(a)(2) of the Code for all
taxable periods or years ending on or before the Closing Date, and all of its
net capital gains realized (after reduction for any capital loss carry forward),
if any, in all taxable periods or years ending on or before the Closing Date.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by the Acquiring Fund
pursuant to this Agreement on or before the Closing Date, and, in addition,
subject to the following conditions:
All representations, covenants, and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of the Closing Date. The Acquiring Fund shall have
delivered to the Acquired Fund a certificate executed in the Acquiring Fund's
name by the Corporation's President or Vice President and its Treasurer or
Assistant Treasurer, in form and substance satisfactory to the Acquired Fund and
dated as of the Closing Date, to such effect and as to such other matters as the
Acquired Fund shall reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by the Acquired Fund
pursuant to this Agreement, on or before the Closing Date and, in addition,
shall be subject to the following conditions:
All representations, covenants, and warranties of the Acquired Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of such Closing Date. The Acquired Fund shall have
delivered to the Acquiring Fund on such Closing Date a certificate executed in
the Acquired Fund's name by the Trust's President or Vice President and the
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Acquiring Fund and dated as of such Closing Date, to such effect and as to such
other matters as the Acquiring Fund shall reasonably request.
The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, together with a list of
the Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the Closing
Date, certified by the Treasurer of the Trust.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRING FUND AND ACQUIRED FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein, with
respect to the Acquired Fund, shall have been approved by the requisite vote of
the holders of the outstanding shares of the Acquired Fund in accordance with
applicable law and the provisions of the Trust's Declaration of Trust and
By-Laws. Certified copies of the resolutions evidencing such approval shall have
been delivered to the Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this paragraph 8.1.
8.2 On the Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, or instituted any
proceeding seeking to enjoin the consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act. Furthermore, no action,
suit or other
proceeding shall be threatened or pending before any court or governmental
agency in which it is sought to restrain or prohibit, or obtain damages or other
relief in connection with this Agreement or the transactions contemplated
herein.
8.3 All required consents of other parties and all other consents,
orders, and permits of federal, state and local regulatory authorities
(including those of the Commission and of State securities authorities,
including any necessary "no-action" positions and exemptive orders from such
federal and state authorities) to permit consummation of the transactions
contemplated herein shall have been obtained, except where failure to obtain any
such consent, order, or permit would not involve a risk of a material adverse
effect on the assets or properties of the Acquiring Fund or the Acquired Fund,
provided that either party hereto may waive any such conditions for itself.
8.4 The Registration Statement shall have become effective under the
1933 Act, and no stop orders suspending the effectiveness thereof shall have
been issued. To the best knowledge of the parties to this Agreement, no
investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 0000 Xxx.
8.5 The parties shall have received an opinion of Xxxxxxxxx Xxxxxxx
Xxxxx & Xxxxxxxx substantially to the effect that for federal income tax
purposes:
a) The transfer of all of the Acquired Fund's assets to the Acquiring Fund
solely in exchange for Acquiring Fund Shares (followed by the
distribution of Acquiring Fund Shares to the Acquired Fund Shareholders
in dissolution and liquidation of the Acquired Fund) will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and
the Acquiring Fund and the Acquired Fund will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code.
b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for
Acquiring Fund Shares.
c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund solely in
exchange for Acquiring Fund Shares or upon the distribution (whether
actual or constructive) of Acquiring Fund Shares to Acquired Fund
Shareholders in exchange for their Selling Fund Shares.
d) No gain or loss will be recognized by any Acquired Fund Shareholder
upon the exchange of its Acquired Fund Shares for Acquiring Fund
Shares.
e) The aggregate tax basis of the Acquiring Fund Shares received by each
Acquired Fund Shareholder pursuant to the Reorganization will be the
same as the aggregate tax basis of the Acquired Fund Shares held by it
immediately prior to the Reorganization. The holding period of
Acquiring Fund Shares received by each Acquired Fund Shareholder will
include the period during which the Acquired Fund Shares exchanged
therefor were held by such shareholder, provided the Acquired Fund
Shares are held as capital assets at the time of the Reorganization.
f) The tax basis of the Acquired Fund's assets acquired by the Acquiring
Fund will be the same as the tax basis of such assets to the Acquired
Fund immediately prior to the Reorganization. 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.
Such opinion shall be based on customary assumptions and such
representations Xxxx Xxxxx LLP may reasonably request, and the Acquired
Fund and Acquiring Fund will cooperate to make and certify the accuracy
of such representations. The foregoing opinion may state that no
opinion is expressed as to the effect of the Reorganization on the
Acquiring Fund, the Acquired Fund or any Acquired Fund Shareholder with
respect to any asset as to which unrealized gain or loss is required to
be reorganized for federal income tax purposes at the end of a taxable
year (or on the termination or transfer thereof) under a xxxx-to-market
system of accounting. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this paragraph 8.5.
ARTICLE IX
EXPENSES
Federated Investment Management Company or its affiliates will pay all
expenses associated with Acquiring Fund's and Acquired Fund's participation in
the Reorganization, provided, however, that Acquiring Fund shall bear expenses
associated with the qualification of Acquiring Fund Shares for sale in the
various states. Reorganization expenses include, without limitation: (a)
expenses associated with the preparation and filing of the Proxy Materials; (b)
postage; (c) printing; (d) accounting fees; (e) legal fees incurred by each
Fund; (f) solicitation costs of the transaction; and (g) other related
administrative or operational costs.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Corporation, on behalf of the Acquiring Fund, and the Trust,
on behalf of the Acquired Fund, agree that neither party has made to the other
party any representation, warranty and/or covenant not set forth herein, and
that this Agreement constitutes the entire agreement between the parties.
10.2 Except as specified in the next sentence set forth in this
paragraph 10.2, the representations, warranties, and covenants contained in this
Agreement or in any document delivered pursuant to or in connection with this
Agreement, shall not survive the consummation of the transactions contemplated
hereunder. The covenants to be performed after the Closing Date, shall continue
in effect beyond the consummation of the transactions contemplated hereunder.
ARTICLE XI
TERMINATION
This Agreement may be terminated by the mutual agreement of the
Corporation and the Trust. In addition, either the Corporation or the Trust may
at its option terminate this Agreement at or before the Closing Date due to:
a) a breach by the other of any representation, warranty, or agreement
contained herein to be performed at or before the Closing Date, if not
cured within 30 days;
b) a condition herein expressed to be precedent to the obligations of the
terminating party that has not been met and it reasonably appears that
it will not or cannot be met; or
c) a determination by a party's Board of Trustees, as appropriate, that
the consummation of the transactions contemplated herein is not in the
best interest of the Trust or the Corporation, respectively, and notice
given to the other party hereto.
In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either the
Acquiring Fund, the Acquired Fund, the Corporation, the Trust, or their
respective Trustees or officers, to the other party or its Trustees or officers.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified, or supplemented in such manner
as may be mutually agreed upon in writing by the officers of the Trust and the
Corporation as specifically authorized by their respective Board of Trustees or
Board of Directors, as the case may be; provided, however, that following the
meeting of the Acquired Fund Shareholders called by the Acquired Fund pursuant
to paragraph 5.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Acquiring Fund Shares to
be issued to the Acquired Fund Shareholders under this Agreement to the
detriment of such shareholders without their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
The Article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but, except as provided in
this paragraph, no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of the other
party. Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation, other than the parties
hereto and their respective successors and assigns, any rights or remedies under
or by reason of this Agreement.
It is expressly agreed that the obligations of the Acquired Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of the Acquired Fund, as provided in the Declaration of Trust of
the Trust. The execution and delivery of this Agreement have been authorized by
the Trustees of the Trust on behalf of the Acquired Fund and signed by
authorized officers of the Trust, acting as such. Neither the authorization by
such Trustees nor the execution and delivery by such officers shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Acquired Fund as
provided in the Trust's Declaration of Trust.
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all
as of the date first written above.
BANKNORTH FUNDS
on behalf of its portfolio,
Banknorth Intermediate Bond Fund
Xxxx X. XxXxxxxxx, Secretary
FEDERATED TOTAL RETURN SERIES, INC.
on behalf of its portfolio,
Federated Total Return Bond Fund
Xxxx X. XxXxxxxxx, Secretary
SUB-ITEM 77Q1(G)(IV): COPIES OF ANY MERGER OR CONSOLIDATION AGREEMENT, AND OTHER
DOCUMENTS RELEVANT TO THE INFORMATION SOUGHT IN SUB-ITEM 77M, ABOVE.
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of August 1, 2004,
(the "Agreement") between Banknorth Funds, a Delaware Statutory trust
("Banknorth Funds), with its principal place of business at 0000 Xxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, with respect to its portfolio,
Banknorth Vermont Municipal Bond Fund (the "Fund") and Federated Municipal
Securities Income Trust, a Massachusetts business trust (the "Trust"), with its
principal place of business located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000, on behalf of its newly-organized portfolio, Federated
Vermont Municipal Income Fund (the "Successor Fund").
WHEREAS, the Board of Trustees of the Fund and the Board of
Trustees of the Trust have determined that it is in the best interests of the
Fund and the Trust, respectively, that the assets of the Fund be acquired by the
Successor Fund pursuant to this Agreement; and
WHEREAS, the parties desire to enter into a plan of exchange which
would constitute a reorganization within the meaning of Section 368(a)(1)(F) of
the Internal Revenue Code of 1986, as amended (the "Code"):
NOW THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. PLAN OF EXCHANGE.
(a) Subject to the terms and conditions set forth herein, the
Fund shall assign, transfer and convey its assets, including all securities and
cash held by the Fund (subject to the liabilities of the Fund that were incurred
in the ordinary course of business and which shall be assumed by the Successor
Fund) to the Successor Fund, and the Successor Fund shall acquire all of the
assets of the Fund (subject as aforesaid to the liabilities of the Fund) in
exchange for full and fractional shares of beneficial interest of the Successor
Fund (the "Successor Fund Shares"), to be issued by the Trust, having an
aggregate number equal to the number of shares of the Fund then outstanding, and
having an aggregate net asset value equal to the net assets of the Fund. The
value of the assets of the Fund and the net asset value per share of the
Successor Fund Shares shall be computed as of the close of the New York Stock
Exchange (normally 4:00 p.m. Eastern time) on the Exchange Date (such time and
date being hereinafter called the "Valuation Time") in accordance with the
procedures for determining the value of the Successor Fund's assets set forth in
the Successor Fund's organizational documents and the then-current prospectus
and statement of additional information for the Successor Fund that forms a part
of the Successor Fund's Registration Statement on Form N-1A (the "Registration
Statement"). Successor Fund will not issue certificates representing Successor
Fund Shares in connection with the Reorganization. In lieu of delivering
certificates for the Successor Fund Shares, the Trust shall credit the Successor
Fund Shares to the Fund's account on the share record books of the Trust and
shall deliver a confirmation thereof to the Fund. The Fund shall then deliver
written instructions to the Trust's transfer agent to establish accounts for the
shareholders on the share record books relating to the Successor Fund.
(b) When the Successor Fund Shares are distributed pursuant to
paragraph 1(a), all outstanding shares of the Fund, including any represented by
certificates, shall be canceled on the Fund's share transfer books. No
redemption or repurchase of Successor Fund Shares credited to a shareholder's
account in respect of shares of the Fund represented by unsurrendered share
certificates shall be permitted until such certificates have been surrendered to
the Trust for cancellation or, if such certificates are lost or misplaced, lost
certificate affidavits and/or such other documentation that is satisfactory to
the Trust or its transfer agent have been executed and delivered thereto.
(c) Delivery of the assets of the Fund to be transferred shall
be made on the Exchange Date (as defined herein). Assets transferred shall be
delivered to State Street Bank and Trust Company, the Trust's custodian (the
"Custodian"), for the account of the Trust and the Successor Fund with all
securities not in bearer or book entry form duly endorsed, or accompanied by
duly executed separate assignments or stock powers, in proper form for transfer,
with signatures guaranteed, and with all necessary stock transfer stamps,
sufficient to transfer good and marketable title thereto (including all accrued
interest and dividends and rights pertaining thereto) to the Custodian for the
account of the Trust and the Successor Fund free and clear of all liens,
encumbrances, rights,
restrictions and claims. All cash delivered shall be in the form of immediately
available funds payable to the order of the Custodian for the account of the
Trust and the Successor Fund.
(d) The Fund will pay or cause to be paid to the Trust any
interest received on or after the Exchange Date with respect to assets
transferred from the Fund to the Successor Fund hereunder and to the Trust and
any distributions, rights or other assets received by the Fund after the
Exchange Date as distributions on or with respect to the securities transferred
from the Fund to the Successor Fund hereunder. All such assets shall be deemed
included in assets transferred to the Successor Fund on the Exchange Date and
shall not be separately valued.
(e) The Exchange Date shall be August 27, 2004, or such
earlier or later date as may be mutually agreed upon by the parties.
(f) As soon as practicable after the Exchange Date, the
Fund shall distribute all of the Successor Fund Shares received by it
among the shareholders of shares of the Fund in numbers equal to the number of
shares that each such shareholder holds in the Fund, and shall take all
other steps necessary to effect its dissolution and termination. After the
Exchange Date, the Fund shall not conduct any business except in connection
with its dissolution and termination.
2. BANKNORTH FUNDS' REPRESENTATIONS AND WARRANTIES. Banknorth Funds, on
behalf of the Fund, represents and warrants to and agrees with the Trust on
behalf of the Successor Fund as follows:
(a) Banknorth Funds is a Delaware Statutory trust duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has power to own all of its properties and assets and, subject to
the approval of its shareholders as contemplated hereby, to carry out this
Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by Banknorth Funds and is valid and binding on Banknorth Funds,
enforceable in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. The execution and delivery of this Agreement does not and
will not, and the consummation of the transactions contemplated by this
Agreement will not, violate the Banknorth Funds' Declaration of Trust or By-Laws
or any agreement or arrangement to which it is a party or by which it is bound.
(c) Banknorth Funds is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end management investment
company, and such registration has not been revoked or rescinded and is in full
force and effect.
(d) Except as shown on the audited financial statements of the
Fund for its most recently completed fiscal period and as incurred in the
ordinary course of the Fund's business since then, the Fund has no known
liabilities of a material amount, contingent or otherwise, and there are no
legal, administrative or other proceedings pending or, to the Fund's knowledge,
threatened against the Fund.
(e) On the Exchange Date, the Fund will have full right, power
and authority to sell, assign, transfer and deliver the Fund's assets to be
transferred by it hereunder.
3. THE TRUST'S REPRESENTATIONS AND WARRANTIES. The Trust, on behalf of
the Successor Fund, represents and warrants to and agrees with Banknorth Funds,
on behalf of the Fund, as follows:
(a) The Trust is a business trust duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts; the Successor Fund is a duly organized portfolio of the Trust;
and the Trust has the power to carry on its business as it is now being
conducted and to carry out this Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by the Trust and is valid and binding on the Trust, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, and other similar laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity. The execution and delivery of this Agreement does not and
will not, and the consummation of the transactions contemplated by this
Agreement will not, violate the Trust's Declaration of Trust or By-Laws or any
agreement or arrangement to which it is a party or by which it is bound.
(c) The Trust is registered under the 1940 Act as an open-end
management investment company and such registration has not been revoked or
rescinded and is in full force and effect.
(d) The Successor Fund does not have any known liabilities of
a material amount, contingent or otherwise, and there are no legal,
administrative or other proceedings pending or, to the Trust's knowledge,
threatened against the Successor Fund. Other than organizational activities, the
Successor Fund has not engaged in any business activities.
(e) At the Exchange Date, the Successor Fund Shares to be
issued to the Fund (the only Successor Fund shares to be issued as of the
Exchange Date) will have been duly authorized and, when issued and delivered
pursuant to this Agreement, will be legally and validly issued and will be fully
paid and non-assessable by the Trust. No Trust or Successor Fund shareholder
will have any preemptive right of subscription or purchase in respect thereof.
4. THE TRUST'S CONDITIONS PRECEDENT. The obligations of the Trust
hereunder shall be subject to the following conditions:
(a) The Fund shall have furnished to the Trust a statement of
the Fund's assets, including a list of securities owned by the Fund with their
respective tax costs and values determined as provided in Section 1 hereof, all
as of the Exchange Date.
(b) As of the Exchange Date, all representations and
warranties of Banknorth Funds and the Fund made in this Agreement shall be true
and correct as if made at and as of such date, and Banknorth Funds and the Fund
shall have complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to such date.
(c) A vote of the shareholders of the Fund approving this
Agreement and the transactions and exchange contemplated hereby shall have been
adopted by the vote required by applicable law.
5. BANKNORTH FUNDS' CONDITIONS PRECEDENT. The obligations of the
Banknorth Funds hereunder with respect to the Fund shall be subject to the
condition that as of the Exchange Date all representations and warranties of the
Trust and the Successor Fund made in this Agreement shall be true and correct as
if made at and as of such date, and that the Trust and the Successor Fund shall
have complied with all of the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to such date.
6. THE TRUST'S AND THE FUND'S CONDITIONS PRECEDENT. The obligations of
both the Trust and the Fund hereunder shall be subject to the following
conditions:
(a) The post-effective amendment to the Trust's Registration
Statement on Form N-1A relating to the Successor Fund under the Securities Act
of 1933, as amended, and the 1940 Act, if applicable, shall have become
effective, and any additional post-effective amendments to such Registration
Statement as are determined by the Trustees of the Trust to be necessary and
appropriate shall have been filed with the Securities and Exchange Commission
and shall have become effective.
(b) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency which seeks to restrain or
prohibit, or obtain damages or other relief in connection with, this Agreement
or the transaction contemplated herein.
(c) Each party shall have received an opinion of Xxxxxxxxx
Xxxxxxx Xxxxx & Xxxxxxxx to the effect that the reorganization contemplated by
this Agreement qualifies as a "reorganization" under Section 368(a)(1)(F) of the
Code.
Provided, however, that at any time prior to the Exchange Date, any of
the foregoing conditions in this Section 6 may be waived by the parties if, in
the judgment of the parties, such waiver will not have a material adverse effect
on the benefits intended under this Agreement to the shareholders of the Fund.
7. TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby may be terminated and abandoned by resolution of the Board
of Trustees of Banknorth Funds or the Board of Trustees of the Trust at any time
prior to the Exchange Date (and notwithstanding any vote of the shareholders of
the Fund) if
circumstances should develop that, in the opinion of either the Board of
Trustees of Banknorth Funds or the Board of Trustees of the Trust, make
proceeding with this Agreement inadvisable.
If this Agreement is terminated and the exchange contemplated hereby is
abandoned pursuant to the provisions of this Section 7, this Agreement shall
become void and have no effect, without any liability on the part of any party
hereto or the Trustees, officers or shareholders of the Trust or the Directors,
officers or shareholders of Banknorth Funds, in respect of this Agreement.
8. WAIVER AND AMENDMENTS. At any time prior to the Exchange Date, any
of the conditions set forth in Section 4 may be waived by the Board of the
Trust, and any of the conditions set forth in Section 5 may be waived by the
Board of Banknorth Funds, if, in the judgment of the waiving party, such waiver
will not have a material adverse effect on the benefits intended under this
Agreement to the shareholders of the Fund or the shareholders of the Successor
Fund, as the case may be. In addition, prior to the Exchange Date, any provision
of this Agreement may be amended or modified by the Boards of Banknorth Funds
and the Trust if such amendment or modification would not have a material
adverse effect upon the benefits intended under this Agreement and would be
consistent with the best interests of shareholders of the Fund and the Successor
Fund.
9. NO SURVIVAL OF REPRESENTATIONS. None of the representations and
warranties included or provided for herein shall survive consummation of the
transactions contemplated hereby.
10. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to principles of conflict of laws.
11. CAPACITY OF TRUSTEES, ETC.
(a) The names "Federated Municipal Income Securities Trust"
and "Board of Trustees of Federated Municipal Income Securities Trust" refer,
respectively, to the trust created and the trustees, as trustees but not
individually or personally, acting from time to time under the Trust's
Declaration of Trust, which is hereby referred to and a copy of which is on file
at the office of the State Secretary of the Commonwealth of Massachusetts and at
the principal office of the Trust. The obligations of the Trust entered into in
the name or on behalf of the Successor Fund by any of the trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the trustees, shareholders or representatives of the
Trust personally, but bind only the Successor Fund's trust property, and all
persons dealing with any portfolio of shares of the Trust must look solely to
the trust property belonging to such portfolio for the enforcement of any claims
against the Trust.
(b) Both parties specifically acknowledge and agree that any
liability of the Trust under this Agreement, or in connection with the
transactions contemplated herein, shall be discharged only out of the assets of
the Successor Fund and that no other portfolio of the Trust shall be liable with
respect thereto.
12. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, Banknorth Funds and the Trust have caused this
Agreement and Plan of Reorganization to be executed as of the date above first
written.
BANKNORTH FUNDS,
on behalf of its portfolio,
Banknorth Vermont Municipal Bond Fund
By:
-----------------------------------
Title:
-----------------------------------
FEDERATED MUNICIPAL SECURITIES INCOME TRUST,
on behalf of its portfolio,
Federated Vermont Municipal Income Fund
By:
-----------------------------------
Title:
-----------------------------------
