Exhibit 9(f)
Agreement and Plan of Reorganization and Liquidation
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION, dated as of
December 18, 1995 (this "Agreement") between THE HANOVER INVESTMENT FUNDS, INC.
("Hanover"), a Maryland corporation comprised of separate investment portfolios
which include The Hanover Short Term U.S. Government Fund, The Hanover U.S.
Government Securities Fund, The Hanover Blue Chip Growth Fund, The Hanover Small
Capitalization Growth Fund and The Hanover American Value Fund (each, a "Hanover
Portfolio") and MUTUAL FUND GROUP ("MFG"), a Massachusetts business trust
comprised of separate investment portfolios which include Vista Short Term Bond
Fund, Vista Equity Fund and Vista Small Cap Equity Fund, and which is expected
to include, at the Effective Time of the Reorganization (as defined herein),
Vista U.S. Government Securities Fund and Vista American Value Fund (each, an
"MFG Portfolio").
In consideration of the mutual promises herein contained, the parties
hereto agree as follows:
SECTION 1. SHAREHOLDER APPROVAL
(a) Hanover Meeting of Shareholders. A meeting of the
shareholders of each Hanover Portfolio shall be called and held for the
purpose of acting upon this Agreement and the transactions contemplated
herein. MFG shall furnish to Hanover such data and information relating
to MFG as shall be reasonably requested by Hanover for inclusion in the
information to be furnished to such shareholders in connection with the
meeting for the purpose of acting upon this Agreement and the
transactions contemplated herein.
(b) MFG Meeting of Shareholders. A meeting of the shareholders
of MFG shall be called and held for the purpose of all of the
shareholders of MFG acting upon the matters referred to in clause (i)
of Section 7(f) of this Agreement, the shareholders of each MFG
Portfolio acting upon the matters referred to in clauses (ii) and (v)
of Section 7(f) of this Agreement, and the shareholders (or sole
shareholder, in the case of Vista American Value Fund) of the MFG
Portfolios referred to in each of clauses (iii) and/or (iv) of this
Agreement acting upon the matters referred to therein.
SECTION 2. REORGANIZATION
The transactions described in this section are hereinafter referred to
as the "Reorganization." For the avoidance of doubt, MFG's investment portfolios
other than the MFG Portfolios (consisting of Vista U.S. Government Income Fund,
Vista Balanced Fund, Vista Bond Fund, Vista Equity Income Fund, Vista IEEE
Balanced Fund, Vista Growth and Income Fund, Vista Capital Growth Fund, Vista
International Equity Fund, Vista Global Fixed Income Fund, Vista Southeast Asian
Fund, Vista European Fund and Vista Japan Fund) and Hanover's investment
portfolios other than the Hanover Portfolios (consisting of The Tax Free Income
Fund, The New York Tax Free Income Fund, The New Jersey Tax Free Income
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Fund, The International Equity Fund and The International Bond Fund, each of
which has not to date commenced investment operations) are not parties to the
Reorganization.
(a) Plan of Reorganization and Liquidation.
(1) Hanover will cause each Hanover Portfolio to
convey, transfer and deliver to the MFG Portfolio set forth
opposite its name in the table attached hereto as Schedule I
(each such MFG Portfolio being the "Corresponding MFG
Portfolio" of the Hanover Portfolio set forth opposite its
name, and each such Hanover Portfolio being the "Corresponding
Hanover Portfolio" of the MFG Portfolio set forth opposite its
name) at the closing provided for in Section 2(b) hereof (the
"Closing") all of the then existing assets of such Hanover
Portfolio. In consideration thereof, MFG agrees at the Closing
to cause each MFG Portfolio (i) to assume and pay, to the
extent that they exist on or after the Effective Time of the
Reorganization (as defined in Section 2(b) hereof), all of the
obligations and liabilities of its Corresponding Hanover
Portfolio and (ii) to issue and deliver to the Corresponding
Hanover Portfolio, full and fractional shares of beneficial
interest of the Corresponding MFG Portfolio as follows: (1) to
The Hanover Short Term U.S. Government Fund, Class A shares of
Vista Short Term Bond Fund; (2) to The Hanover U.S. Government
Fund, Institutional Class shares of Vista U.S. Government
Fund; (3) to the Hanover Blue Chip Growth Fund, Institutional
Class shares of Vista Equity Fund (to be renamed Vista Large
Cap Equity Fund in connection with the Reorganization); (4) to
The Hanover Small Capitalization Growth Fund, Class A Shares
and Institutional Class shares, as described in paragraph (2)
below, of Vista Small Cap Equity Fund; and (5) to the Hanover
American Value Fund, shares of Vista American Value Fund (the
shares of the MFG Portfolios to be received by the Hanover
Portfolios in connection with the Reorganization are referred
to collectively as the "MFG Portfolio Shares"), with respect
to each class of each MFG Portfolio equal to that number of
full and fractional MFG Portfolio Shares as determined in
Section 2(c) hereof. Any shares of capital stock, par value
$.001 per share, of the Hanover Portfolios ("Hanover Portfolio
Shares") held in the treasury of Hanover on the Effective Time
of the Reorganization (as defined in Section 2(b) hereof)
shall thereupon be retired.
(2) At the Effective Time of the Reorganization, each
Hanover Portfolio will liquidate and distribute pro rata to
its holders of Hanover Portfolio Shares as of the Effective
Time of the Reorganization the MFG Portfolio Shares of the
Corresponding MFG Portfolio received by such Hanover Portfolio
pursuant to this Section 2(a). In the case of each Hanover
Portfolio other than The Hanover Small Capitalization Growth
Fund, all shareholders of such Hanover Portfolios will receive
the MFG Portfolio Shares of the Corresponding MFG Portfolio
identified in Section 2(a)(1) above. In the case of the
Hanover Small Capitalization Growth Fund, shareholders of both
the "Investor Shares" and the "Advisor Shares" thereof will
receive Class A shares of the Vista Small Cap Equity Fund and
shareholders of "CBC Benefit Shares"
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thereof will receive Institutional Class shares of the Vista
Small Cap Equity Fund. Such liquidation and distribution will
be accompanied by the establishment of an account on the
respective share records of each MFG Portfolio in the name of
each record holder of Hanover Portfolio Shares of the
Corresponding Hanover Portfolio and representing the
respective pro rata number of MFG Portfolio Shares due such
shareholder. Fractional MFG Portfolio Shares will be carried
to the third decimal place. Simultaneously with such crediting
of MFG Portfolio Shares to the shareholders, the Hanover
Portfolio Shares held by such shareholders shall be cancelled.
(3) As soon as practicable after the Effective Time
of the Reorganization, Hanover shall take all the necessary
steps under Maryland law and Hanover's Articles of
Incorporation, as amended and supplemented, to effect a
complete dissolution of Hanover and to deregister Hanover
under the Investment Company Act of 1940, as amended (the
"Act").
(b) Closing and Effective Time of the Reorganization. Subject
to the satisfaction of the conditions to the Closing specified in this
Agreement, the Closing shall occur at 4:00 p.m., New York City time, on
the day which is the later of (i) the final adjournment of the meeting
of the holders of Hanover Portfolio Shares at which this Agreement will
be considered, (ii) the declaration by the Securities and Exchange
Commission (the "Commission") of the effectiveness of the First N-1A
Amendment and the Second N-1A Amendment (each as defined in Section
5(b) hereof), (iii) July 31, 1996, and (iv) such later day as the
parties may mutually agree (the "Effective Time of the
Reorganization").
(c) Valuation. The number of full and fractional shares of
each class of an MFG Portfolio to be issued pursuant to Section 2(a)
hereof to holders of shares of each class of the Corresponding Hanover
Portfolio that will be exchanged for such MFG Portfolio Shares shall be
determined by multiplying the number of shares of such class of the
Corresponding Hanover Portfolio that will be exchanged for such MFG
Portfolio Shares by the appropriate exchange ratio computed as set
forth below, the product of such multiplication to be rounded to the
nearest one thousandth of a full share. For each class of shares of
each Hanover Portfolio and the class of shares of the Corresponding MFG
Portfolio that will be issued to the holders of such Hanover Portfolio
Shares in connection with the Reorganization, the exchange ratio shall
be the number determined by dividing the net asset value per share of
the class of Hanover shares being surrendered by the net asset value
per share of the class of shares of the Corresponding MFG Portfolio
being issued to the holders of such class of such Hanover Portfolio, in
each case such values to be determined on a consistent basis by the
valuation procedures that have been adopted by the Board of Trustees of
MFG, as of the Effective Time of the Reorganization; provided, that in
the case of Vista U.S. Government Securities Fund and Vista American
Value Fund, and The Hanover U.S. Government Securities Fund and The
Hanover American Value Fund, respectively, the exchange ratio shall be
one. Each such exchange ratio shall be rounded to the nearest ten
thousandth.
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All computations of value shall be made in accordance with the regular
practice of the MFG Portfolios as of the Effective Time by the agent then
responsible for pricing shares of the MFG Portfolios.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF MFG
MFG represents and warrants to Hanover as follows:
(a) Organization, Existence, etc. MFG is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to carry on its
business as it is now being conducted, and each MFG Portfolio is a
validly existing series of shares of such business trust representing
interests therein under the laws of Massachusetts. MFG has all
necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being
conducted.
(b) Registration as Investment Company. MFG is registered
under the Act as an open-end investment company of the management type;
such registration has not been revoked or rescinded and is in full
force and effect.
(c) Current Offering Documents. The current prospectuses and
statements of additional information of MFG, dated March 1, 1995 with
respect to each of Vista Equity Fund and Vista Short Term Bond Fund and
June 19, 1995 with respect to Vista Small Cap Equity Fund, and included
in MFG's registration statement on Form N-1A filed with Commission,
comply in all material respects with the requirements of the Securities
Act of 1933, as amended (the "Securities Act") and the Act, and do not
contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements herein, in light of the
circumstances under which they were made, not misleading.
(d) Capitalization. MFG has an unlimited number of authorized
shares of beneficial interest, currently without par value, of which as
of ________, 1995 there were outstanding the following numbers of
shares of the MFG Portfolios: ________ shares of Vista Short Term Bond
Fund (consisting of a single class of shares), ________ shares of Vista
Equity Fund (consisting of a single class of shares) and _______ shares
of Vista Small Cap Equity Fund (consisting of __________ "Class A"
shares, __________ "Class B" Shares and ______ "Institutional" Shares)
and no shares were held in the treasury of MFG. There are no
outstanding shares of Vista U.S. Government Securities Fund and Vista
American Value Fund. All of the outstanding shares of MFG have been
duly authorized and are validly issued, fully paid and nonassessable.
Because MFG is an open-end investment company engaged in the continuous
offering and redemption of its shares, the number of outstanding shares
may change prior to the Effective Time of the Reorganization. All of
each MFG Portfolio's issued and outstanding shares have been offered
and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable state
securities laws.
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(e) Financial Statements. The financial statements of MFG for
the fiscal year ended October 31, 1995, which have been audited by
Price Waterhouse LLP, (the "MFG Financial Statements"), previously
delivered to Hanover, fairly present the financial position of MFG as
of the dates thereof and the results of its operations and changes in
its net assets for each of the periods indicated, in accordance with
GAAP.
(f) Shares to be Issued Upon Reorganization. The MFG Portfolio
Shares to be issued in connection with the Reorganization will be duly
authorized and upon consummation of the Reorganization will be validly
issued, fully paid and nonassessable (except as disclosed in the MFG
Portfolios' Prospectuses and recognizing that under Massachusetts law,
shareholders of an MFG Portfolio could, under certain circumstances, be
held personally liable for the obligations of such MFG Portfolio).
(g) Authority Relative to this Agreement. MFG has the power to
enter into this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by MFG's
Board of Trustees and no other proceedings by MFG other than those
contemplated under this Agreement are necessary to authorize its
officers to effectuate this Agreement and the transactions contemplated
hereby. MFG is not a party to or obligated under any charter, by-law,
indenture or contract provision or any other commitment or obligation,
or subject to any order or decree, which would be violated by or which
would prevent its execution and performance of this Agreement in
accordance with its terms.
(h) Liabilities. There are no liabilities of MFG or the MFG
Portfolios, whether actual or contingent and whether or not determined
or determinable, other than liabilities disclosed or provided for in
the MFG Financial Statements and liabilities incurred in the ordinary
course of business subsequent to October 31, 1995 or otherwise
previously disclosed to Hanover, none of which has been materially
adverse to the business, assets or results of operations of MFG.
(i) No Material Adverse Change. Since October 31, 1995, there
has been no material adverse change in the financial condition, results
of operations, business, properties or assets of MFG, other than those
occurring in the ordinary course of business (for these purposes, a
decline in net asset value and a decline in net assets due to
redemptions do not constitute a material adverse change).
(j) Litigation. There are no claims, actions, suits or
proceedings pending or, to the knowledge of MFG, threatened which would
adversely affect MFG or the MFG Portfolios or MFG's assets or business
or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for
the institution of administrative proceedings against MFG and, to the
knowledge of MFG, there are no regulatory investigations of MFG pending
or threatened, other than routine inspections and audits.
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(k) Contracts. Except for contracts and agreements disclosed
to Hanover on Schedule II hereto under which no default exists, MFG is
not a party to or subject to any material contract, debt instrument,
plan, lease, franchise, license or permit of any kind or nature
whatsoever with respect to the MFG Portfolios. As of the Effective Time
of the Reorganization, MFG will have no liability in respect of any of
the contracts referred to in Section 5(f) with respect to which MFG is
to receive releases.
(l) Taxes. The federal income tax returns of MFG and each MFG
Portfolio, and all other income tax returns required to be filed by MFG
and any MFG Portfolio, have been filed for all taxable years to and
including October 31, 1995, and all taxes payable pursuant to such
returns have been paid. To the knowledge of MFG, no such return is
under audit and no assessment has been asserted in respect of any such
return. All federal and other taxes owed by MFG or any MFG Portfolio
have been paid so far as due. Each portfolio of MFG, other than Vista
U.S. Government Securities Fund and Vista American Value Fund, which
have not yet commenced operations, is qualified as a regulated
investment company under the Internal Revenue Code of 1986, as amended
(the "Code"), in respect of each taxable year since commencement of its
operations.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF HANOVER
Hanover represents and warrants to MFG as follows:
(a) Organization, Existence, etc. Hanover is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Maryland and has the power to carry on its business as it
is now being conducted, and each Hanover Portfolio is a validly
existing series of shares of such corporation representing interests
therein under the laws of Maryland. Hanover has all necessary federal,
state and local authorization to own all of its properties and assets
and to carry on its business as now being conducted.
(b) Registration as Investment Company. Hanover is registered
under the Act as an open-end diversified investment company of the
management type; such registration has not been revoked or rescinded
and is in full force and effect.
(c) Current Offering Documents. The current prospectuses and
statement of additional information of Hanover, each dated March 30,
1995 (except for the current prospectus and statement of additional
information of The American Value Fund which is dated November 1, 1994)
and included in Hanover's registration statement on Form N-1A filed
with the Commission, comply in all material respects with the
requirements of the Securities Act and the Act, and do not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) Capitalization. The authorized capital stock of Hanover
consists of 200,000,000 shares of Common Stock, each having a par
value $.001 per share. As of
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________, 1995, there were outstanding _______ shares of The Hanover
Short Term U.S. Government Fund (consisting of ______ "Investor Shares"
and ____ "Advisor Shares"), _______ shares of The Hanover U.S.
Government Securities Fund (consisting of ______ "Investor Shares" and
___ "Advisor Shares"), ________ shares of The Hanover Blue Chip Growth
Fund (consisting of ______ "Investor Shares" and ___ "Advisor Shares"),
________ shares of The Hanover Small Capitalization Growth Fund
(consisting of ______ "Investor Shares", ___ "Advisor Shares" and
______ "CBC Benefit" Shares) and ______ shares of The Hanover American
Value Fund (consisting of ______ "Investor Shares" and ___ "Advisor
Shares"), and no shares were held in the treasury of Hanover. All of
the outstanding shares of Hanover have been duly authorized and are
validly issued, fully paid and nonassessable. Because Hanover is an
open-end investment company engaged in the continuous offering and
redemption of its shares, the number of outstanding shares may change
prior to the Effective Time of the Reorganization. All such shares
will, at the time of the Closing, be held by the shareholders of record
of the Hanover Portfolios as set forth on the books and records of
Hanover's transfer agent (and in the amounts set forth therein) and as
set forth in any list of shareholders of record provided to MFG for
purposes of the Closing, and no such shareholders of record will have
any preemptive rights to purchase any of such shares, and Hanover does
not have outstanding any options, warrants or other rights to subscribe
for or purchase any shares (other then dividend reinvestment plans of
the Hanover Portfolios or as set forth in this Agreement), nor are
there outstanding any securities convertible into any shares of the
Hanover Portfolios (except pursuant to exchange privileges described in
the current Prospectus and Statement of Additional Information of
Hanover). All of each Hanover Portfolio's issued and outstanding shares
have been offered and sold in compliance in all material respects with
applicable registration requirements of the Securities Act and
applicable state securities laws.
(e) Financial Statements. The financial statements of Hanover
for the year ended November 30, 1994, which have been audited by KPMG
Peat Marwick LLP, and the unaudited financial statements of Hanover for
the six months ended May 31, 1995 (collectively, the "Hanover Financial
Statements"), previously delivered to MFG, fairly present the financial
position of Hanover as of the date thereof, and the results of its
operations and changes in its net assets for the periods indicated, in
accordance with GAAP.
(f) Authority Relative to this Agreement. Hanover has the
power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by its Board of Directors, and, except for approval by the
shareholders of Hanover, no other proceedings by Hanover are necessary
other than those contemplated by this Agreement to authorize its
officers to effectuate this Agreement and the transactions contemplated
hereby. Hanover is not a party to or obligated under any charter,
by-law, indenture or contract provision or any other commitment or
obligation, or subject to any order or decree, which would be violated
8
by or which would prevent its execution and performance of this
Agreement in accordance with its terms.
(g) Liabilities. There are no liabilities of Hanover, whether
actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Hanover
Financial Statements and liabilities incurred in the ordinary course of
business subsequent to May 31, 1995 or otherwise previously disclosed
to MFG, none of which has been materially adverse to the business,
assets or results of Hanover.
(h) No Material Adverse Change. Since May 31, 1995, there has
been no material adverse change in the financial condition, results of
operations, business, properties or assets of Hanover, other than those
occurring in the ordinary course of business (for these purposes, a
decline in net asset value and a decline in net assets due to
redemptions do not constitute a material adverse change).
(i) Litigation. There are no claims, actions, suits or
proceedings pending or, to the knowledge of Hanover, threatened which
would adversely affect Hanover or its assets or business or which would
prevent or hinder consummation of the transactions contemplated hereby,
there are no facts which would form the basis for the institution of
administrative proceedings against Hanover and, to the knowledge of
Hanover, there are no regulatory investigations of Hanover pending or
threatened, other than routine inspections and audits.
(j) Contracts. Except for contracts and agreements disclosed
to MFG on Schedule II hereto under which no default exists, Hanover is
not a party to or subject to any material contract, debt instrument,
plan, lease, franchise, license or permit of any kind or nature
whatsoever. As of the Effective Time of the Reorganization, Hanover
will have no liability in respect of any of the contracts referred to
in Section 6(e) with respect to which Hanover is to receive releases.
(k) Taxes. The federal income tax returns of Hanover and each
Hanover Portfolio, and all other income tax returns required to be
filed by Hanover, have been filed for all taxable years to and
including the taxable year ended November 30, 1994, and all taxes
payable pursuant to such returns have been paid. To the knowledge of
Hanover, no such return is under audit and no assessment has been
asserted in respect of any such return. All federal and other taxes
owed by Hanover or any Hanover Portfolio have been paid so far as due.
Each Hanover Portfolio has qualified as a regulated investment company
under the Code in respect of each taxable year since commencement of
its operations.
SECTION 5. COVENANTS OF MFG
MFG covenants to Hanover as follows:
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(a) Portfolio Securities. All securities owned by MFG as of
the Effective Time of the Reorganization will be owned by MFG free and
clear of any liens, claims, charges, options and encumbrances, except
as may be indicated in a schedule delivered by MFG to Hanover
immediately prior to the Effective Time of the Reorganization or as may
be permitted under the Act.
(b) Formation of New Portfolios; Amendment of Registration
Statement on Form N-1A. Prior to the Effective Time of the
Reorganization, MFG will take all steps necessary to cause the
formation and registration of Vista U.S. Government Securities Fund and
Vista American Value Fund, including filing an amendment or amendments
to MFG's registration statement on Form N-1A (collectively, the "First
N-1A Amendment") with the Commission relating to the registration of
shares of Vista U.S. Government Securities Fund and Vista American
Value Fund. The investment objective and policies of Vista U.S.
Government Securities Fund and Vista American Value Fund will conform
with the descriptions thereof contained in the Prospectus and Statement
of Additional Information in the form presented to the Hanover Board of
Directors. MFG will not issue any shares of Vista U.S. Government
Securities Fund and Vista American Value Fund prior to the Effective
Time of the Reorganization except as contemplated by this Agreement.
Prior to the Effective Time of the Reorganization, MFG will also file
an amendment to MFG's registration statement on Form N-1A (the "Second
N-1A Amendment") with the Commission to conform the descriptions of the
MFG Portfolios in such registration statement with the descriptions of
the MFG Portfolios in the Registration Statement (as defined in Section
5(c) hereof), as the Registration Statement may be amended or
supplemented prior to the Effective Time of the Reorganization.
(c) Registration Statement. MFG shall file with the Commission
a Registration Statement on Form N-14 (the "Registration Statement")
under the Securities Act relating to the MFG Portfolio Shares issuable
hereunder. At the time the Registration Statement becomes effective,
the Registration Statement (i) will comply in all material respects
with the provisions of the Securities Act and the rules and regulations
of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and at the time the Registration
Statement becomes effective, at the time of the shareholders' meeting
referred to in Section 1(a) hereof, and at the Effective Time of the
Reorganization, the prospectus/proxy statement (the "Prospectus") and
statement of additional information included therein (the "Statement of
Additional Information"), as amended or supplemented by any amendments
or supplements filed by MFG, will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that none of the
representations and warranties in this subsection shall apply to
statements in or omissions from a Registration Statement, Prospectus or
Statement of Additional Information made in reliance upon and in
conformity with information furnished by Hanover for use in the
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Registration Statement, Prospectus or Statement of Additional
Information as provided in Section 6(b) hereof.
(d) Cooperation in Effecting Reorganization. MFG agrees to use
all reasonable efforts (by taking such actions as may be necessary or
advisable) to effectuate the Reorganization, to continue in operation
thereafter, and to obtain any necessary regulatory approvals. MFG will
cooperate fully with Hanover in preparing and effecting any filings
with the Federal Trade Commission required under federal antitrust laws
with respect to the proposed Reorganization.
(e) Operations in the Ordinary Course. Except as otherwise
contemplated by this Agreement, MFG shall conduct its business in the
ordinary course until the consummation of the Reorganization.
(f) Interim Advisory Arrangements. Each portfolio of MFG shall
enter into an interim advisory agreement with The Chase Manhattan Bank,
N.A. that will be effective beginning at the time the merger of
Chemical Banking Corporation and The Chase Manhattan Corporation is
consummated, and each such agreement shall have been approved by the
Board of Trustees of MFG. MFG shall have obtained from the Commission
exemptive relief from Section 15(a) of the Act enabling it to enter
into the interim advisory agreements referred to above without
obtaining prior shareholder approval, and shall comply with all
representations and conditions contained in the Commission's order
issued in connection therewith.
SECTION 6. COVENANTS OF HANOVER
Hanover covenants to MFG as follows:
(a) Portfolio Securities. With respect to the assets to be
transferred in accordance with Section 1(a), each Hanover Portfolio's
assets shall consist of all property and assets of any nature
whatsoever, including, without limitation, all cash, cash equivalents,
securities, claims and receivables (including dividend and interest
receivables) owned, and any deferred or prepaid expenses shown as an
asset on Hanover's books. At least five (5) business days prior to the
Closing, each Hanover Portfolio will provide MFG with a list of its
assets and a list of its stated Liabilities. Each Hanover Portfolio
shall have the right to sell any of the securities or other assets
shown on the list of assets prior to the Closing but will not, without
the prior approval of MFG, acquire any additional securities other
than securities which the Corresponding MFG Portfolio is permitted to
purchase, pursuant to its investment objective and policies or
otherwise (taking into consideration its own portfolio composition as
of such date). In the event that MFG informs Hanover that a Hanover
Portfolio holds any investments that its Corresponding MFG Portfolio
would not be permitted to hold, the Hanover Portfolio will dispose of
such securities prior to the Closing to the extent practicable and to
the extent that its shareholders would not be materially affected in
an adverse manner by such a disposition. In addition, Hanover will
prepare and deliver to MFG, immediately prior to the Effective Time of
the
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Reorganization, a Schedule of Investments (the "Schedule") listing all
the securities owned by each Hanover Portfolio as of the Effective Time
of the Reorganization. All securities to be listed in the Schedule as
of the Effective Time of the Reorganization will be owned by Hanover
free and clear of any liens, claims, charges, options and encumbrances,
except as indicated in the Schedule or as permitted by the Act, and,
except as so indicated, none of such securities is or, after the
Reorganization as contemplated hereby, will be subject to any
restrictions, legal or contractual, on the disposition thereof
(including restrictions as to the public offering or sale thereof under
the Securities Act) and, except as so indicated, all such securities
are or will be readily marketable.
(b) Registration Statement. In connection with the
Registration Statement, Hanover will cooperate with MFG and will
furnish to MFG the information relating to Hanover required by the
Securities Act and the Regulations to be set forth in the Registration
Statement (including the Prospectuses and Statements of Additional
Information). At the time the Registration Statement becomes effective,
the Registration Statement, insofar as it relates to Hanover, (i) will
comply in all material respects with the provisions of the Securities
Act and the Regulations and (ii) will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes
effective, at the time of the shareholders' meeting referred to in
Section 1(a) hereof and at the Effective Time of the Reorganization,
the Prospectus and Statement of Additional Information, as amended or
supplemented by any amendments or supplements filed by MFG, insofar as
they relate to Hanover, will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this subsection shall apply only to statements in or
omissions from the Registration Statement, Prospectus or Statement of
Additional Information made in reliance upon and in conformity with
information furnished by Hanover for use in the Registration Statement,
Prospectus or Statement of Additional Information as provided in this
Section 6(b).
(c) Cooperation in Effecting Reorganization. Hanover agrees to
use all reasonable efforts (by taking such actions as may be necessary
or advisable) to effectuate the Reorganization, including calling the
meeting of shareholders referred to in Section 1(a) of this Agreement,
and to obtain any necessary regulatory approvals. Hanover will
cooperate fully with MFG in preparing and effecting any filings with
the Federal Trade Commission required under federal antitrust laws with
respect to the proposed Reorganization. Hanover will assist MFG in
obtaining such information as MFG reasonably requests concerning the
beneficial ownership of the shares of the Hanover Portfolios.
(d) Operations in the Ordinary Course. Except as otherwise
contemplated by this Agreement, Hanover shall conduct its business in
the ordinary course until the consummation of the Reorganization.
12
(e) Contract Terminations. Hanover shall, prior to the
consummation of the Reorganization, terminate its agreements with The
Portfolio Group, Inc. (with respect to The Hanover U.S. Government
Securities Fund and The Hanover Blue Chip Growth Fund), Chemical Bank
New Jersey, National Association (with respect to The Hanover Small
Capitalization Growth Fund), Texas Commerce Bank, National Association
(with respect to The Hanover Short Term U.S. Government Fund) and Van
Deventer & Xxxx (with respect to The Hanover American Value Fund),
Chemical Bank, Xxxxxx Xxxx Incorporated, Hanover Funds Distributor,
Inc., and each of the financial institutions with whom Hanover has
entered into a shareholder servicing agreement (as set forth in
Schedule II hereto) for Investment Advisory, Administration,
Administration and Fund Accounting, Custody, Distribution, Transfer
Agency, SubTransfer Agency and Shareholder Servicing services, as the
case may be, such terminations to be effective as of the Effective Time
of the Reorganization.
SECTION 7. CONDITIONS TO OBLIGATIONS OF HANOVER
The obligations of Hanover hereunder with respect to the consummation
of the Reorganization as it relates to each Hanover Portfolio are subject to the
satisfaction of the following conditions:
(a) Approval by Hanover Shareholders. This Agreement and the
transactions contemplated by the Reorganization, including, when
necessary, a temporary amendment of the investment restrictions that
might otherwise preclude the consummation of the Reorganization, shall
have been approved by the requisite vote of the shares of each Hanover
Portfolio entitled to vote in the matter.
(b) Covenants, Warranties and Representations. MFG shall have
complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all
material respects as of the Effective Time of the Reorganization
(except as otherwise contemplated herein), there shall have been no
material adverse change (as defined in Section 3(i) in the financial
condition, results of operations, business, properties or assets of the
MFG Portfolios since October 31, 1995, and Hanover shall have received
a certificate of the President of MFG satisfactory in form and
substance to Hanover so stating. Hanover shall also have received
certificates of (i) The Chase Manhattan Bank, N.A., in its capacity as
investment adviser to MFG and as MFG's administrator, and (ii) Vista
Broker-Dealer Services, Inc., in its capacity as MFG's distributor, in
each case to the effect that, as of the Effective Time of the
Reorganization, such entity is not aware that any of the
representations and warranties of MFG herein is not true in all
material respects.
(c) Regulatory Approval. The Registration Statement, the First
N-1A Amendment and the Second N-1A Amendment shall each have been
declared effective by the Commission, no stop orders under the
Securities Act pertaining thereto shall have been issued and all
approvals, registrations, and exemptions under federal and state laws
considered to be necessary shall have been obtained.
13
(d) Tax Opinion. Hanover shall have received the opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx dated on or before the date of the Closing,
addressed to and in form and substance satisfactory to Hanover, as to
certain of the federal income tax consequences under the Code of the
Reorganization, insofar as it relates to each Hanover Portfolio and its
Corresponding MFG Portfolio, and to shareholders of each Hanover
Portfolio. For purposes of rendering their opinion, Xxxxxxx Xxxxxxx &
Xxxxxxxx may rely exclusively and without independent verification, as
to factual matters, upon the statements made in this Agreement, the
prospectus/proxy statement which will be distributed to the
shareholders of the Hanover Portfolios in connection with the
Reorganization, and upon such other written representations as the
President of each of Hanover and MFG will have verified as of the
Effective Time of the Reorganization. The opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx will be to the effect that, based on the facts and assumptions
stated therein, for federal income tax purposes: (i) the Reorganization
will constitute a reorganization within the meaning of section
368(a)(1) of the Code with respect to each Hanover Portfolio and its
Corresponding MFG Portfolio; (ii) no gain or loss will be recognized by
any of the Hanover Portfolios or the Corresponding MFG Portfolios upon
the transfer of all the assets and liabilities, if any, of each Hanover
Portfolio to its Corresponding MFG Portfolio solely in exchange for MFG
Portfolio Shares or upon the distribution of the MFG Portfolio Shares
to the holders of Hanover Portfolio Shares solely in exchange for all
of their Hanover Portfolio Shares; (iii) no gain or loss will be
recognized by shareholders of any of the Hanover Portfolios upon the
exchange of such Hanover Portfolio Shares solely for MFG Portfolio
Shares; (iv) the holding period and tax basis of the MFG Portfolio
Shares received by each holder of Hanover Portfolio Shares pursuant to
the Reorganization will be the same as the holding period (provided the
Hanover Portfolio Shares were held as a capital asset on the date of
the Reorganization) and tax basis of the Hanover Portfolio Shares held
by the shareholder immediately prior to the Reorganization; and (v) the
holding period and tax basis of the assets of each of the Hanover
Portfolios acquired by its Corresponding MFG Portfolio will be the same
as the holding period and tax basis of those assets to each of the
Hanover Portfolios immediately prior to the Reorganization.
The payment by Chemical Banking Corporation and/or The Chase
Manhattan Corporation of the related Reorganization expenses referred
to in Section 10 hereof will not affect the opinions set forth above
regarding the tax consequences of the exchanges by Hanover and the
shareholders of Hanover; however, Xxxxxxx Xxxxxxx & Xxxxxxxx will
express no opinion as to any federal income tax consequences to any of
the parties of the payment of such expenses by Chemical Banking
Corporation and/or The Chase Manhattan Corporation.
(e) Opinion of Counsel. Hanover shall have received the
opinion of Kramer, Levin, Naftalis, Nessen, Xxxxx & Xxxxxxx as counsel
for MFG, dated as of the Date of the Closing, addressed to and in form
and substance satisfactory to Hanover, to the effect that: (i) MFG is a
business trust duly organized and existing under the laws of the
Commonwealth of Massachusetts, and each MFG Portfolio is a validly
existing series of shares of such business trust; (ii) MFG is an
open-end investment company of
14
the management type registered under the Act; (iii) this Agreement and
the Reorganization provided for herein and the execution of this
Agreement have been duly authorized and approved by all requisite
action of MFG and this Agreement has been duly executed and delivered
by MFG and is a valid and binding obligation of MFG enforceable against
MFG in accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing; (iv) the Registration Statement has been declared effective
under the Securities Act and to the best of such counsel's knowledge
after reasonable investigation no stop order has been issued or
threatened suspending its effectiveness; (v) to the best of such
counsel's knowledge, no consent, approval, order or other authorization
of any federal or New York state or Massachusetts state court or
administrative or regulatory agency is required for MFG to enter into
this Agreement or carry out its terms that has not already been
obtained, other than where the failure to obtain any such consent,
approval, order or authorization would not have a material adverse
effect on the operations of MFG; (vi) to the best of such counsel's
knowledge, MFG is not in breach or violation of any material contract
listed on Schedule II hereto to which it is a party, which breach or
violation would (a) affect the ability of MFG to enter into this
Agreement or consummate the transactions contemplated hereby, including
the Reorganization, or (b) have a material adverse effect on the
business or financial condition of MFG; (vii) to the best of such
counsel's knowledge, no federal or New York state or Massachusetts
state administrative or regulatory proceeding is pending or threatened
against MFG which would (i) affect the ability of MFG to enter into
this Agreement or consummate the transactions contemplated hereby,
including the Reorganization, or (b) have a material adverse effect on
the business or financial condition of MFG; and (viii) the MFG
Portfolio Shares to be issued in the Reorganization have been duly
authorized and upon issuance thereof in accordance with this Agreement,
will be validly issued, fully paid and nonassessable. In rendering such
opinion, Kramer, Levin, Naftalis, Nessen, Xxxxx & Xxxxxxx may rely on
the opinion of Massachusetts counsel as to matters relating to
Massachusetts law and on certificates of officers and/or trustees of
MFG as to factual matters.
(f) Board of Trustees Approvals. The Board of Trustees of MFG
shall have taken the following action with respect to MFG or the MFG
Portfolios, as the case may be, at a meeting duly called for such
purposes:
(i) approval of the selection of Price Waterhouse LLP as
MFG's independent auditors for the fiscal year ending October
31, 1996, on terms acceptable to the Hanover Board of
Directors;
(ii) approval of an investment advisory agreement with
The Chase Manhattan Bank, N.A. with respect to each MFG
Portfolio, in each case in the form presented to the Hanover
Board of Directors;
15
(iii) approval of sub-investment advisory agreements
between The Chase Manhattan Bank, N.A. and Van Deventer & Xxxx
with respect to Vista American Value Fund, and between The
Chase Manhattan Bank, N.A. and Chase Asset Management, Inc.,
with respect to each other MFG Portfolio, in each case in the
form presented to the Hanover Board of Directors;
(iv) approval of the application of MFG's distribution
plan(s) pursuant to Rule 12b-1 under the Act to Class A shares
of Vista Short Term Bond Fund and shares of Vista American
Value Fund, to conform with the Prospectus and Statement of
Additional Information in the form presented to the Hanover
Board of Directors, as the Prospectus and Statement of
Additional Information may be amended or supplemented at the
time of the shareholders' meeting referred to in Section 1(a)
hereof;
(v) approval of the modification of certain fundamental
investment limitations of the MFG Portfolios and certain other
investment policies to conform with the descriptions thereof
contained in the Prospectus and Statement of Additional
Information in the form presented to the Hanover Board of
Directors or as may be amended or supplemented at the time of
the shareholder's meeting referred to in Section 1(a) hereof;
and
(vi) creation of Class A shares in Vista Short Term Bond
Fund, and creation of Institutional Class shares in Vista U.S.
Government Securities Fund, Vista Equity Fund and Vista Small
Cap Equity Fund, and authorization of the issuance by MFG,
immediately prior to the Effective Time of the Reorganization,
of one Institutional Class share of Vista U.S. Government
Securities Fund of MFG and one share of Vista American Value
Fund of MFG to ______________ in consideration for payment
equal to the net asset value per Investor Share of The Hanover
U.S. Government Securities Fund and The Hanover American Value
Fund, respectively, for the purpose of enabling
________________ to vote on the matters referred to in
paragraph (g) of Section 8.
(g) Trustees and Officers Insurance. Chemical Banking
Corporation and/or The Chase Manhattan Corporation shall have purchased
trustees and officers liability insurance coverage referred to in
Section 10(b) of this Agreement.
(h) Contract Terminations. Hanover shall have terminated the
agreements referred to in Section 6(e) of this Agreement as provided
therein.
(i) Bank Holding Company Merger. The merger of The Chase
Manhattan Corporation with and into Chemical Banking Corporation shall
have been consummated.
SECTION 8. CONDITIONS TO OBLIGATIONS OF MFG
16
The obligations of MFG hereunder with respect to the consummation of
the Reorganization as it relates to each MFG Portfolio are subject to the
satisfaction of the following conditions:
(a) Approval by Shareholders. This Agreement and the
transactions contemplated by the Reorganization, including, when
necessary, a temporary amendment of the investment restrictions that
might otherwise preclude the consummation of the Reorganization, shall
have been approved by the requisite vote of the shares of each Hanover
Portfolio entitled to vote on the matter.
(b) Covenants, Warranties and Representations. Hanover shall
have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all
material respects as of the Effective Time of the Reorganization
(except as otherwise contemplated herein), there shall have been no
material adverse change (as defined in Section 4(h)) in the financial
condition, results of operations, business, properties or assets of the
Hanover Portfolios since November, 1995, and MFG shall have received a
certificate of the President of Hanover satisfactory in form and
substance to MFG so stating. MFG shall also have received certificates
of (i) The Portfolio Group, Inc., in its capacity as investment adviser
to The Hanover U.S. Government Securities Fund and The Hanover Blue
Chip Growth Fund, (ii) Chemical Bank New Jersey, National Association
(formerly known as Princeton Bank and Trust, National Association) in
its capacity as investment adviser to The Hanover Small Capitalization
Growth Fund, (iii) Texas Commerce Bank, National Association in its
capacity as investment adviser to The Hanover Short Term U.S.
Government Fund, (iv) Van Deventer & Xxxx in its capacity as investment
advisor to The Hanover American Value Fund, (v) Xxxxxx Xxxx
Incorporated, in its capacity as Hanover's administrator and (vi)
Hanover Funds Distributor, Inc., in its capacity as Hanover's
distributor, in each case to the effect that, as of the Effective Time
of the Reorganization, such entity is not aware that any of the
representations and warranties of Hanover herein is not true in all
material respects.
(c) Portfolio Securities. All securities to be acquired by
each MFG Portfolio in the Reorganization shall have been approved for
acquisition by the investment adviser of such MFG Portfolio as
consistent with the investment policies of such MFG Portfolio and all
such securities on the books of the Corresponding Portfolio that are
not readily marketable shall be valued on the basis of an evaluation by
an independent appraiser acceptable to both Hanover and MFG at the
expense of Chemical Banking Corporation and/or The Chase Manhattan
Corporation, taking into account the information contained in the
Schedule.
(d) Regulatory Approval. The Registration Statement, the First
N-1A Amendment and the Second N-1A Amendment shall each have been
declared effective by the Commission, no stop orders under the
Securities Act pertaining thereto shall have been issued and all
approvals, registrations, and exemptions under federal and state laws
considered to be necessary shall have been obtained.
17
(e) Tax Opinion. MFG shall have received the opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx, dated on or before the date of the Closing,
addressed to and in form and substance satisfactory to MFG, as to
certain of the federal income tax consequences under the Code of the
Reorganization insofar as it relates to each Hanover Portfolio and its
Corresponding MFG Portfolio, and to shareholders of each Hanover
Portfolio. For purposes of rendering their opinion, Xxxxxxx Xxxxxxx &
Xxxxxxxx may rely exclusively and without independent verification as
to factual matters, upon the statements made in this Agreement, the
prospectus/proxy statement which will be distributed to the
shareholders of the Hanover Portfolios in connection with the
Reorganization, and upon such other written representations as the
President of each of Hanover and MFG will have verified as of the
Effective Time of the Reorganization. The opinion of Xxxxxxx Xxxxxxx &
Xxxxxxxx will be to the effect that, based on the facts and assumptions
stated therein, for federal income tax purposes: (i) the Reorganization
will constitute a reorganization within the meaning of section
368(a)(1) of Code with respect to each Hanover Portfolio and its
Corresponding MFG Portfolio; (ii) no gain or loss will be recognized by
any of the Hanover Portfolios or the Corresponding MFG Portfolios upon
the transfer of all the assets and liabilities, if any, of each Hanover
Portfolio to its Corresponding MFG Portfolio solely in exchange for MFG
Portfolio Shares or upon the distribution of the MFG Portfolios Shares
to the holders of Hanover Portfolio Shares solely in exchange for all
of their Hanover Portfolios Shares; (iii) no gain or loss will be
recognized by shareholders of any of the Hanover Portfolios upon the
exchange of such Hanover Portfolio Shares solely for MFG Portfolio
Shares; (iv) the holding period and tax basis of the MFG Portfolio
Shares received by each holder of Hanover Portfolio Shares pursuant to
the Reorganization will be the same as the holding period (provided the
Hanover Portfolio Shares were held as a capital asset on the date of
the Reorganization) and tax basis of the Hanover Portfolio Shares held
by the shareholder immediately prior to the Reorganization; and (v) the
holding period and tax basis of the assets of each of the Hanover
Portfolios acquired by its Corresponding MFG Portfolio will be the same
as the holding period and tax basis of those assets to each of the
Hanover Portfolios immediately prior to the Reorganization.
The payment by Chemical Banking Corporation and/or The Chase
Manhattan Corporation of the related Reorganization expenses referred
to in Section 10 hereof will not affect the opinions set forth above
regarding the tax consequences of the exchanges by Hanover and the
shareholders of Hanover; however, Xxxxxxx Xxxxxxx & Xxxxxxxx will
express no opinion as to any federal income tax consequences to any of
the parties of the payment of such expenses by Chemical Banking
Corporation and/or The Chase Manhattan Corporation.
(f) Opinion of Counsel. MFG shall have received the opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx, as counsel for Hanover, dated as of the
date of the Closing, addressed to and in form and substance
satisfactory to MFG, to the effect that (i) Hanover is a corporation
duly organized and validly existing under the laws of the State of
Maryland and each Hanover Portfolio is a validly existing series of
shares of such corporation; (ii) Hanover is an open-end investment
company of the management
18
type registered under the Act; (iii) this Agreement and the
Reorganization provided for herein and the execution of this Agreement
have been duly authorized and approved by all requisite corporate
action of Hanover and this Agreement has been duly executed and
delivered by Hanover and is a valid and binding obligation of Hanover
enforceable against Hanover in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing; (iv) to the best of such
counsel's knowledge, no consent, approval, order or other authorization
of any federal or New York state or Maryland state court or
administrative or regulatory agency is required for Hanover to enter
into this Agreement or carry out its terms that has not already been
obtained other than where the failure to obtain any such consent,
approval, order or authorization would not have a material adverse
effect on the operations of Hanover; (v) to the best of such counsel's
knowledge, Hanover is not in breach or violation of any material
contract listed on Schedule II hereto to which it is a party, which
breach or violation would (a) affect the ability of Hanover to enter
into this Agreement or consummate the transactions contemplated hereby,
including the Reorganization, or (b) have a material adverse effect on
the business or financial condition of Hanover; and (vi) to the best of
such counsel's knowledge, no federal or New York state or Maryland
state administrative or regulatory proceeding is pending or threatened
against Hanover which would (a) affect the ability of Hanover to enter
into this Agreement or consummate the transactions contemplated hereby,
including the Reorganization, or (b) have a material adverse effect on
the business or financial condition of Hanover. In rendering such
opinion, Xxxxxxx Xxxxxxx & Xxxxxxxx may rely on the opinion of Maryland
counsel as to matters relating to Maryland law, and on certificates of
officers and/or trustees of Hanover as to factual matters.
(g) Vote by the Sole Shareholder of Vista U.S. Government
Securities Fund and Vista American Value Fund. ____________ shall have
voted, immediately after becoming the sole shareholder of Institutional
Class shares of Vista U.S. Government Securities Fund of MFG, and prior
to the receipt by Hanover of any Vista U.S. Government Securities Fund
shares other than the shares purchased by _____________ pursuant to
Section 7(f) hereof, and ____________ shall have voted, immediately
after becoming the sole shareholder of shares of Vista American Value
Fund of MFG, and prior to the receipt by Hanover of any of Vista
American Value Fund shares other than the shares purchased by
_____________ pursuant to Section 7(f) hereof, to:
(i) approve the investment advisory agreement between MFG
and The Chase Manhattan Bank, N.A. with respect to Vista U.S.
Government Securities Fund and Vista American Value Fund as
contemplated by Section 7(f) hereof;
(ii) approve the investment sub-advisory agreement
between The Chase Manhattan Bank, N.A. and Van Deventer & Xxxx
as contemplated by
19
Section 7(f) hereof (to be voted on only in the case of the
sole shareholder of Vista American Value Fund) or the
investment sub-advisory agreement between The Chase Manhattan
Bank, N.A. and Chase Asset Management, Inc. as contemplated by
Section 7(f) hereof (to be voted on only in the case of the
sole shareholder of Vista U.S. Government Securities Fund);
(iii) approve MFG's distribution plan pursuant to Rule
12b-1 under the Act for shares of Vista American Value Fund as
contemplated by Section 7(f) hereof (to be voted on only in
the case of the sole shareholder of Vista American Value
Fund); (iv) approve all persons who are to be Trustees of MFG
effective upon consummation of the Reorganization as Trustees
of MFG; and
(v) approve the selection of Price Waterhouse LLP as
MFG's independent auditors for the fiscal year ending October
31, 1996.
(h) Contract Terminations. Hanover shall have terminated the
agreements referred to in Section 6(e) of this Agreement as provided
therein.
(i) Bank Holding Company Merger. The merger of The Chase
Manhattan Corporation with and into Chemical Banking Corporation shall
have been consummated.
SECTION 9. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS,
WARRANTIES AND REPRESENTATIONS
(a) Amendments. The parties hereto may, by agreement in
writing authorized by their respective Board of Trustees or Board of
Directors, amend this Agreement at any time before or after approval
hereof by the shareholders of Hanover or MFG or both, but after such
approval, no amendment shall be made which substantially changes the
terms hereof.
(b) Waivers. At any time prior to the Effective Time of the
Reorganization, either of the parties hereto may by written instrument
signed by it (i) waive any inaccuracies in the representations and
warranties made to it contained herein and (ii) waive compliance with
any of the covenants or conditions made for its benefit contained
herein, except that neither party may waive the conditions set forth in
Sections 7(c) or 8(d) hereof.
(c) Termination by Hanover. Hanover may terminate this
Agreement at any time prior to the Effective Time of the Reorganization
by notice to MFG and Chemical Banking Corporation if (i) a material
condition to its performance hereunder or a material covenant of MFG
contained herein shall not be fulfilled on or before the
20
date specified for the fulfillment thereof or (ii) a material default
or material breach of this Agreement shall be made by MFG.
(d) Termination by MFG. MFG may terminate this Agreement at
any time prior to the Effective Time of the Reorganization by notice to
Hanover and Chemical Banking Corporation if (i) a material condition to
its performance hereunder or a material covenant of Hanover contained
herein shall not be fulfilled on or before the date specified for the
fulfillment thereof or (ii) a material default or material breach of
this Agreement shall be made by Hanover.
(e) Termination by Either Hanover or MFG. This Agreement may
be terminated by Hanover or MFG at any time prior to the Effective Time
of the Reorganization, whether before or after approval of this
Agreement by the shareholders of Hanover, without liability on the part
of either party hereto, its respective Directors, Trustees, officers or
shareholders, or Chemical Banking Corporation, on notice to the other
parties in the event that such party's Board of Directors or Board of
Trustees, as the case may be, determines that proceeding with this
Agreement is not in the best interest of that party's shareholders.
Unless the parties hereto shall otherwise agree in writing, this
Agreement shall terminate without liability as of the close of business
on July 31, 1996 if the Effective Time of the Reorganization is not on
or prior to such date.
(f) Survival. No representations, warranties or covenants in
or pursuant to this Agreement (including certificates of officers),
except for the provisions of Section 10 of this Agreement, shall
survive the Reorganization.
SECTION 10. EXPENSES; INSURANCE
(a) Except as otherwise specified in this Section 10, the
expenses of the Reorganization will be borne by Chemical Banking
Corporation and/or The Chase Manhattan Corporation. Such expenses
include, without limitation, (i) expenses incurred in connection with
the entering into and the carrying out of the provisions of this
Agreement; (ii) expenses associated with the preparation and filing of
the Registration Statement under the Securities Act covering the MFG
Portfolio Shares to be issued pursuant to the provisions of this
Agreement (other than registration fees payable to the Commission in
respect of the registration of such shares, which shall be payable by
the respective MFG Portfolios in which such shares represent
interests); (iii) registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable state
securities laws to qualify the Corresponding MFG Portfolio Shares to be
issued in connection herewith in each state in which shareholders of
the Corresponding Hanover Portfolios are resident as of the date of the
mailing of the Prospectus to such shareholders; (iv) postage; (v)
printing; (vi) accounting fees; (vii) legal fees and (viii)
solicitation costs relating to the Reorganization.
21
(b) Chemical Banking Corporation and/or The Chase Manhattan
Corporation agrees to purchase, prior to the Effective Time of the
Reorganization, trustee and officers liability insurance coverage for
the benefit of the Board of Directors of Hanover for a period of one
year following the Closing, the coverage and policy limits to be no
less favorable than those of the Hanover insurance coverage currently
in existence.
SECTION 11. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by hand,
certified mail or by facsimile transmission, shall be deemed given when received
and shall be addressed to the parties hereto at their respective addresses
listed below or to such other persons or addresses as the relevant party shall
designate as to itself from time to time in writing delivered in like manner:
(a) if to Hanover, to it at:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) if to MFG, to it at:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxx
Facsimile: (212) ______________
with a copy to:
Kramer, Levin, Naftalis, Nessen, Xxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx, Esq.
Facsimile: (000) 000-0000
22
(c) if to Chemical Banking Corporation, to it at:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
c/o Chemical Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(d) if to The Chase Manhattan Corporation, to it at:
c/o Vista Capital Management
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
Facsimile: (000) 000-0000
x/x Xxx Xxxxx Xxxxxxxxx Xxxx, N.A.
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
SECTION 12. GENERAL
This Agreement supersedes all prior agreements between the parties
(written or oral), is intended as a complete and exclusive statement of the
terms of the Agreement between the parties and may not be changed or terminated
orally. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more counterparts have been executed by Hanover and MFG and delivered to
each of the parties hereto. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Nothing in this Agreement, expressed or
implied, is intended to confer upon any other person any rights or remedies
under or by reason of this Agreement.
23
Copies of the Declaration of Trust, as amended, establishing MFG are on
file with the Secretary of the Commonwealth of Massachusetts and with the City
Clerk for the City of Boston, and notice is hereby given that this Agreement and
Plan of Reorganization and Liquidation is executed on behalf of MFG by officers
of MFG as officers and not individually and that the obligations of or arising
out of this Agreement are not binding upon any of the Trustees, officers,
shareholders, employees or agents of MFG individually but are binding only upon
the assets and property of MFG.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
Attest: MUTUAL FUND GROUP
By:_________________________ By___________________________
Attest: THE HANOVER INVESTMENT FUNDS, INC.
By:_________________________ By___________________________
Accepted and agreed to as to Sections 8(c) and 10:
CHEMICAL BANKING CORPORATION
By:______________________
[ ]
Attorney-in-fact
THE CHASE MANHATTAN CORPORATION
By:______________________
[ ]
Attorney-in-fact
SCHEDULE I
to Agreement
CORRESPONDING PORTFOLIOS OF THE HANOVER INVESTMENT FUNDS, INC.
AND MUTUAL FUND GROUP
Hanover Portfolios Corresponding MFG Portfolios
The Hanover Short Term U.S. Vista Short Term Bond Fund
Government Fund
The Hanover U.S. Government Securities Fund Vista U.S. Government Securities
Fund
The Hanover Blue Chip Growth Fund Vista Equity Fund
The Hanover Small Capitalization Vista Small Cap Equity Fund
Growth Fund
The Hanover American Value Fund Vista American Value Fund
Corresponding MFG Portfolios
