AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION
("Agreement") is made as of February 15, 2002,
between Hartford Advisers HLS Fund, Inc., a
Maryland corporation ("Acquiring Fund") and
Fortis Series Fund, Inc., a Minnesota
corporation ("Fortis"), on behalf of its
series Fortis Asset Allocation Series
("Target Fund"). (Acquiring Fund and Target
Fund are sometimes referred to herein
individually as a "Fund" and collectively
as the "Funds.") All agreements,
representations and warranties, actions, and
obligations described herein made or to be
taken or undertaken by Target Fund are made
and shall be taken or undertaken by Fortis on
behalf of Target Fund.
The parties intend this Agreement to be, and
adopt it as, a "plan of reorganization" within
the meaning of the regulations under section
368 of the Code ("Regulations"). Target Fund
has a single class of shares and Acquiring Fund
has two classes of shares, Class IA shares and
Class IB shares. The reorganization will
involve the transfer of the assets of Target
Fund, subject to the liabilities of Target Fund,
to Acquiring Fund, in exchange solely for Class
IA shares of common stock of Acquiring Fund
("Acquiring Fund Shares"), followed by the
constructive distribution of those shares pro
rata to the holders of shares of Target Fund
("Target Fund Shares"), all on the terms and
conditions set forth herein. (All such
transactions are referred to herein as the
"Reorganization.")
In consideration of the mutual promises
contained herein, the parties agree as follows:
1. PLAN OF REORGANIZATION
1.1. Subject to the requisite approval
by Target Fund shareholders and to the other
terms and conditions set forth herein and on
the basis of the representations and warranties
contained herein, Target Fund agrees to assign,
sell, convey, transfer, and deliver all of its
assets described in paragraph 1.2 ("Assets")
to Acquiring Fund and Acquiring Fund agrees in
exchange therefor (a) to assume all of the
liabilities of Target Fund described in
paragraph 1.3 ("Liabilities"), and (b) to
issue and deliver to Target Fund the number
of full and fractional (rounded to the third
decimal place) Acquiring Fund Shares determined
by dividing the value of the Assets of the
Target Fund less the Liabilities of the Target
Fund by the net asset value ("NAV") of an
Acquiring Fund Share (both computed as set
forth in paragraph 2.1). Such transactions
shall take place at the Closing (as defined
in paragraph 3.1).
1.2. The Assets shall include all cash,
cash equivalents, securities, receivables
(including interest and dividends receivable),
claims and rights of action, rights to register
shares under applicable securities laws, books
and records, deferred and prepaid expenses shown
as assets on Target Fund's books, and other
property owned by Target Fund at the Effective
Time (as defined in paragraph 3.1).
1.3. The Liabilities shall include all
liabilities, debts, obligations, and duties
of whatever kind or nature of the Target Fund
at the Effective Time, whether absolute,
accrued, contingent, or otherwise, whether or
not arising in the ordinary course of business,
and whether or not specifically referred to in
this Agreement, including any obligation to
indemnify the directors of Fortis, acting in
their capacities as such, to the fullest extent
permitted by law and the amended and restated
articles of incorporation ("Articles of
Incorporation") and bylaws of Fortis
(collectively "Liabilities").
1.4. In order to bind all holders of
Target Fund shares to the transactions
contemplated hereby, and in particular in order
to bind them to the cancellation and retirement
of the outstanding Target Fund shares held by
them, Fortis shall, prior to the Effective Time,
(a) obtain approval pursuant to Minnesota law of
an amendment substantially in the form attached
hereto as Schedule A (the "Amendment") to its
Articles of Incorporation, and (b) file the
Amendment with the Secretary of State of
Minnesota.
1.5. At or immediately before the
Effective Time, Target Fund shall declare and
pay to its shareholders a dividend and/or other
distribution in an amount large enough so that
it will have distributed all of its investment
company taxable income (as defined in section
852(b)(2) of the Code but computed without
regard to any deduction for dividends paid)
and substantially all of its net capital gain
(as defined in section 852(b)(3) of the Code,
but computed without regard to any deduction
for capital gain dividends) for the current
taxable year through the Effective Time.
1.6. At the Effective Time (or as
soon thereafter as is reasonably practicable),
Target Fund shall distribute the Acquiring Fund
Shares it receives pursuant to paragraph 1.1 to
Target Fund's shareholders of record,
determined as of the Effective Time (each, a
"Shareholder"), in constructive exchange for
their Target Fund Shares. Such distribution
shall be accomplished by Acquiring Fund's
transfer agent's opening accounts on Acquiring
Fund's share transfer books in the
Shareholders' names and transferring such
Acquiring Fund Shares thereto.
Each Shareholder's account shall be credited
with the respective pro rata number of full
and fractional (rounded to the third decimal
place) Acquiring Fund Shares due that
Shareholder. All outstanding Target Fund
Shares, including any represented by
certificates, shall simultaneously be canceled
on Target Fund's share transfer books.
Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares issued
in connection with the Reorganization.
1.7. As soon as reasonably practicable
after distribution of the Acquiring Fund
Shares pursuant to paragraph 1.6, Fortis shall
wind up the affairs of Target Fund and shall
file any required final regulatory reports,
including but not limited to any Form N-SAR
and Rule 24f-2 filings with respect to Target
Fund.
1.8. Any transfer taxes payable on
issuance of Acquiring Fund Shares in a name
other than that of the registered holder on
Target Fund's books of the Target Fund Shares
constructively exchanged therefor shall be
paid by the person to whom such Acquiring Fund
Shares are to be issued, as a condition of such
transfer.
2. VALUATION
2.1. For purposes of paragraph 1.1(b),
the value of the Assets and the Liabilities
and the NAV of an Acquiring Fund Share shall
be computed as of the close of business on
the date of the Closing ("Valuation Time").
The NAV of an Acquiring Fund Share shall be
computed using the valuation procedures set
forth in the Acquiring Fund's then current
prospectus and statement of additional
information ("SAI"). The value of the Assets
and Liabilities shall be computed using the
valuation procedures set forth in the Target
Fund's then current prospectus and SAI, subject
to adjustment by the amount, if any, agreed to
by Acquiring Fund and Fortis. Acquiring Fund
and Fortis agree to use all commercially
reasonable efforts to resolve any material
differences between the value of the Assets
and Liabilities determined in accordance with
the valuation procedures of the Target Fund and
the value of the Assets and Liabilities
determined in accordance with the valuation
procedures of the Acquiring Fund prior to the
Valuation Time.
2.2. All computations pursuant to
paragraph 2.1 shall be made by or under the
direction of Hartford Administrative
Services Company.
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with
related acts necessary to consummate the same
("Closing"), shall occur at the offices of
Xxxxxx & Xxxxxxx LLP, 00 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, on or about April
30, 2002, or at such other place and/or on such
other date as to which the parties hereto may
agree. All acts taking place at the Closing
shall be deemed to take place simultaneously as
of the close of business on the date thereof or
at such other time as to which the parties
hereto may agree ("Effective Time"). If,
immediately before the Valuation Time, (a)
the New York Stock Exchange is closed to
trading or trading thereon is restricted or
(b) trading or the reporting of trading on
that exchange or elsewhere is disrupted, so
that accurate appraisal of the value of the
Assets and Liabilities and the NAV of an
Acquiring Fund Share is impracticable, the
Effective Time shall be postponed until the
first business day after the day when such
trading has fully resumed and such reporting
has been restored.
3.2. Fortis shall deliver to Acquiring
Fund at the Closing a schedule of the Assets
and Liabilities as of the Effective Time,
which shall set forth for all portfolio
securities included therein and all other
Assets, their adjusted basis and holding period,
by lot, for federal income tax purposes.
Fortis' custodian shall deliver at the Closing
a certificate of an authorized officer stating
that (a) the Assets held by the custodian will
be transferred to Acquiring Fund at the
Effective Time and (b) all necessary taxes in
conjunction with the delivery of the Assets,
including all applicable federal and state
stock transfer stamps, if any, have been paid
or provision for payment has been made.
3.3. Fortis' transfer agent shall deliver
to Acquiring Fund at the Closing a statement
of an authorized officer thereof certifying that
its records contain the names and addresses of
the Shareholders and the number and percentage
ownership of outstanding Target Fund Shares
owned by each Shareholder, all as of the
Effective Time. Acquiring Fund's transfer
agent shall deliver at the Closing a
certificate as to the opening on Acquiring
Fund's share transfer books of accounts in the
Shareholders' names. Acquiring Fund shall
issue and deliver a confirmation to Fortis
evidencing the Acquiring Fund Shares to be
credited to Target Fund at the Effective Time
or provide evidence satisfactory to Fortis that
such Acquiring Fund Shares have been credited to
Target Fund's account on Acquiring Fund's books.
At the Closing, Acquiring Fund and Fortis each
shall deliver to the other bills of sale, checks,
assignments, stock certificates, receipts, or
other documents the other party or its counsel
reasonably requests.
3.4. Acquiring Fund and Fortis each shall
deliver to the other at the Closing a
certificate executed in its name by its
President or a Vice President in form and
substance satisfactory to the recipient
and dated the Effective Time, to the effect
that the representations and warranties it
made in this Agreement are true and correct
at the Effective Time except as they may
be affected by the transactions contemplated
by this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1. Fortis represents and warrants as
follows:
4.1.1. Fortis is a corporation
that is duly organized, validly existing, and
in good standing under the laws of the State of
Minnesota; and its Articles of Incorporation are
on file with the Secretary of the State of
Minnesota;
4.1.2. Fortis is duly
registered as an open-end management investment
company under the Investment Company Act of 1940,
as amended ("1940 Act"), and such registration
is in full force and effect;
4.1.3. Target Fund is a duly
established and designated series of Fortis; and
all Target Fund Shares outstanding at the
Effective Time will have been duly authorized
and duly and validly issued and outstanding
shares of Target Fund, fully paid and
non-assessable;
4.1.4. At the Closing, Target
Fund will have good and marketable title to
the Assets and full right, power, and authority
to sell, assign, transfer, and deliver the
Assets free of any liens or other
encumbrances; and on delivery and payment
for the Assets, Acquiring Fund will acquire
good and marketable title thereto;
4.1.5. Target Fund's current
prospectus and SAI conform in all material
respects to the applicable requirements of
the Securities Act of 1933, as amended
("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 therein or necessary to make the
statements therein, in light of the
circumstances under which they were made,
not misleading;
4.1.6. Target Fund is not in
violation of, and the execution and delivery
of this Agreement and consummation of the
transactions contemplated hereby will not
conflict with or violate, applicable law or
any provision of Fortis' Articles of
Incorporation or By-Laws or of any agreement,
instrument, lease, or other undertaking to
which Target Fund is a party or by which it
is bound or result in the acceleration of any
obligation, or the imposition of any penalty,
under any agreement, judgment, or decree to
which Target Fund is a party or by which it
is bound, except as previously disclosed in
writing to and accepted by Acquiring Fund;
4.1.7. Except as otherwise
disclosed in writing to and accepted by
Acquiring Fund, all material contracts and
other commitments of or applicable to Target
Fund (other than this Agreement and investment
contracts, including options, futures, and
forward contracts) will be terminated, or
provision for discharge of any liabilities of
Target Fund thereunder will be made, at or
prior to the Effective Time, without either
Fund's incurring any liability or penalty
with respect thereto and without diminishing
or releasing any rights Target Fund may have
had with respect to actions taken or omitted
or to be taken by any other party thereto
prior to the Closing;
4.1.8. Except as otherwise
Disclosed in writing to and accepted by
Acquiring Fund, no litigation, administrative
proceeding, or investigation of or before any
court or governmental body is presently
pending or (to Fortis' knowledge) threatened
against Fortis or any of its properties or
assets that, if adversely determined,
would materially and adversely affect Target
Fund's financial condition or the conduct of
its business; and Fortis knows of no facts
that might form the basis for the institution
of any such litigation, proceeding, or
investigation 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 or adversely affects its
business or its ability to consummate the
transactions contemplated hereby;
4.1.9. The execution, delivery,
and performance of this Agreement have been
duly authorized and the Amendment shall have
been duly approved as of the date hereof by all
necessary action on the part of Fortis' board
of directors; and, subject to approval by Target
Fund's shareholders, this Agreement constitutes
a valid and legally binding obligation of Target
Fund, enforceable in accordance with its terms,
except as the same may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or
affecting creditors' rights and by general
principles of equity;
4.1.10. At the Effective Time,
the performance of this Agreement shall have
been duly authorized and the Amendment shall
have been duly approved by all necessary action
by Target Fund's shareholders;
4.1.11. No governmental consents,
approvals, authorizations, or filings are
required under the 1933 Act, the Securities
Exchange Act of 1934, as amended ("1934 Act"),
the 1940 Act, or applicable state securities
laws for the execution or performance of this
Agreement by Fortis, except for (a) the filing
with the Securities and Exchange Commission
("SEC") of a registration statement by Acquiring
Fund on Form N-14 relating to the Acquiring Fund
Shares issuable hereunder, and any supplement
or amendment thereto ("Registration Statement"),
including therein a prospectus/proxy statement
("Proxy Statement"), and (b) such consents,
approvals, authorizations, and filings as have
been made or received or as may be required
subsequent to the Effective Time;
4.1.12. On the effective date of
the Registration Statement, at the time of the
shareholders' meeting referred to in paragraph
5.2, and at the Effective Time, the Proxy
Statement will (a) comply in all material
respects with the applicable provisions of the
1933 Act, the 1934 Act, and the 1940 Act and
the rules and regulations thereunder and (b)
not contain any untrue statement of a material
fact or omit to state a material fact required
to be stated therein or necessary to make the
statements therein, in light of the
circumstances under which such statements were
made, not misleading; provided that the
foregoing shall not apply to statements in or
omissions from the Proxy Statement made in
reliance on and in conformity with information
furnished by Acquiring Fund for use therein;
4.1.13. There are no Liabilities
other than Liabilities disclosed or provided
for in Fortis' financial statements referred to
in paragraph 4.1.16 and Liabilities incurred by
Target Fund in the ordinary course of its
business subsequent to December 31, 2001, or
otherwise previously disclosed to Acquiring Fund,
none of which has been materially adverse to the
business, assets, or results of Target Fund's
operations;
4.1.14. Target Fund is a "fund"
as defined in section 851(g)(2) of the Code; it
qualified for treatment as a regulated
investment company under Subchapter M of the
Code ("RIC") for each past taxable year since
it commenced operations and will continue to
meet all the requirements for such
qualification for its current taxable year;
the Assets will be invested at all times
through the Effective Time in a manner that
ensures compliance with the foregoing; and
Target Fund has no earnings and profits
accumulated in any taxable year in which the
provisions of Subchapter M did not apply to it;
4.1.15. Target Fund's federal
income tax returns, and all applicable state
and local tax returns, for all taxable years
through and including the taxable year ended
December 31, 2000 have been timely filed and all
taxes payable pursuant to such returns have
been timely paid; and
4.1.16. Fortis' financial
statements for the year ended December 31,
2001 to be delivered to Acquiring Fund,
fairly represent Target Fund's financial
position as of such date and the results
of its operations and changes in its net
assets for the period then ended.
4.2. Acquiring Fund represents
and warrants as follows:
4.2.1. Acquiring Fund is a
corporation that is duly organized, validly
existing, and in good standing under the
laws of the State of Maryland; and its
articles of incorporation ("Articles of
Incorporation") are on file with the
Secretary of the State of Maryland;
4.2.2. Acquiring Fund is duly
registered as an open-end management
investment company under the 1940 Act, and
such registration will be in full force and
effect at the Effective Time;
4.2.3. No consideration other
than Acquiring Fund Shares will be issued in
exchange for the Assets in the Reorganization;
4.2.4. The Acquiring Fund
Shares to be issued and delivered to Target
Fund hereunder will, at the Effective Time,
have been duly authorized and, when issued and
delivered as provided herein, will be duly and
validly issued and outstanding shares of
Acquiring Fund, fully paid and non-assessable;
4.2.5. Acquiring Fund's current
prospectus and SAI 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
therein or necessary to make the statements
therein, in light of the circumstances under
which they were made, not misleading;
4.2.6. Acquiring Fund is not in
violation of, and the execution and delivery of
this Agreement and consummation of the
transactions contemplated hereby will not
conflict with or violate, applicable law or any
provision of Acquiring Fund's Articles of
Incorporation or By-Laws or of any provision of
any agreement, instrument, lease, or other
undertaking to which Acquiring Fund is a
party or by which it is bound or result in
the acceleration of any obligation, or the
imposition of any penalty, under any agreement,
judgment, or decree to which Acquiring Fund is
a party or by which it is bound, except as
previously disclosed in writing to and accepted
by Fortis;
4.2.7. Except as otherwise
disclosed in writing to and accepted by Fortis,
no litigation, administrative proceeding, or
investigation of or before any court or
governmental body is presently pending or
(to Acquiring Fund's knowledge) threatened
against Acquiring Fund or any of its properties
or assets that, if adversely determined, would
materially and adversely affect Acquiring
Fund's financial condition or the conduct of
its business; and Acquiring Fund knows of no
facts that might form the basis for the
institution of any such litigation, proceeding,
or investigation 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 or adversely affects its
business or its ability to consummate the
transactions contemplated hereby;
4.2.8. The execution, delivery,
and performance of this Agreement have been
duly authorized as of the date hereof by all
necessary action on the part of Acquiring
Fund's board of directors (together with
Fortis' board of directors, the "Boards");
no approval of this Agreement by Acquiring
Fund's shareholders is required under Acquiring
Fund's Articles of Incorporation or By-Laws, or
applicable law; and this Agreement constitutes
a valid and legally binding obligation of
Acquiring Fund, enforceable in accordance with
its terms, except as the same may be limited
by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws
relating to or affecting creditors' rights and
by general principles of equity;
4.2.9. No governmental consents,
approvals, authorizations, or filings are
required under the 1933 Act, the 1934 Act, the
1940 Act, or applicable state securities laws
for the execution or performance of this
Agreement by Acquiring Fund, except for (a) the
filing with the SEC of the Registration
Statement and (b) such consents, approvals,
authorizations, and filings as have been made
or received or as may be required subsequent
to the Effective Time;
4.2.10. On the effective date of
the Registration Statement, at the time of the
shareholders' meeting referred to in paragraph
5.2, and at the Effective Time, the Proxy
Statement will (a) comply in all material
respects with the applicable provisions of the
1933 Act, the 1934 Act, and the 1940 Act and
the rules and regulations thereunder and (b)
not contain any untrue statement of a material
fact or omit to state a material fact required
to be stated therein or necessary to make the
statements therein, in light of the
circumstances under which such statements were
made, not misleading; provided that the
foregoing shall not apply to statements in
or omissions from the Proxy Statement made
in reliance on and in conformity with
information furnished by Fortis for use therein;
4.2.11. Acquiring Fund is a
"fund" as defined in section 851(g)(2) of the
Code; it qualified for treatment as a RIC for
each past taxable year since it commenced
operations and will continue to meet all the
requirements for such qualification for its
current taxable year; Acquiring Fund intends
to continue to meet all such requirements for
the next taxable year; and it has no earnings
and profits accumulated in any taxable year in
which the provisions of Subchapter M of the Code
did not apply to it;
4.2.12. Acquiring Fund's federal
income tax returns, and all applicable state and
local tax returns, for all taxable years through
and including the taxable year ended December 31,
2000 have been timely filed and all taxes
payable pursuant to such returns have been
timely paid; and
4.2.13. Acquiring Fund's
financial statements for the year ended
December 31, 2001 to be delivered to Fortis,
fairly represent Acquiring Fund's financial
position as of that date and the results of
its operations and changes in its net assets
for the year then ended.
4.3. Acquiring Fund and Fortis each
represent and warrant as follows:
4.3.1. The fair market value
of the Acquiring Fund Shares received by each
Shareholder will be approximately equal to
the fair market value of its Target Fund
Shares constructively surrendered in exchange
therefor;
4.3.2. The Shareholders will
pay their own expenses, if any, incurred in
connection with the Reorganization;
4.3.3. There is no intercompany
indebtedness between the Funds that was issued
or acquired, or will be settled, at a discount.
5. COVENANTS
5.1. Each Fund covenants to operate
its respective business in the ordinary
course between the date hereof and the
Closing, it being understood that such
ordinary course will include declaring and
paying customary dividends and other
distributions (including the dividend
and/or other distribution referred to in
paragraph 1.4) and changes in operations
contemplated by each Fund's normal
business activities.
5.2. Target Fund covenants to call a
shareholders' meeting to consider and act on
this Agreement and the Amendment and to take
all other action necessary to obtain approval
of the transactions contemplated hereby.
5.3. Target Fund covenants that the
Acquiring Fund Shares to be delivered
hereunder are not being acquired for the
purpose of making any distribution thereof,
other than in accordance with the terms hereof.
5.4. Target Fund covenants that it will
assist Acquiring Fund in obtaining information
Acquiring Fund reasonably requests concerning
the beneficial ownership of Target Fund Shares.
5.5. Target Fund covenants that its books
and records (including all books and records
required to be maintained under the 1940 Act
and the rules and regulations thereunder) will
be turned over to Acquiring Fund at the Closing.
5.6. Each Fund covenants to cooperate in
preparing the Proxy Statement in compliance
with applicable federal and state securities
laws.
5.7. Each Fund covenants that it will,
from time to time, as and when requested by
the other Fund, execute and deliver or cause
to be executed and delivered all such
assignments and other instruments, and will
take or cause to be taken such further action,
as the other Fund may deem necessary or
desirable in order to vest in, and confirm to,
(a) Acquiring Fund, title to and possession of
all the Assets, and (b) Target Fund, title to
and possession of the Acquiring Fund Shares to
be delivered hereunder, and otherwise to carry
out the intent and purpose hereof.
5.8. Acquiring Fund covenants to use
all reasonable efforts to obtain the
approvals and authorizations required by the
1933 Act, the 1940 Act, and state securities
laws it deems appropriate to continue its
operations after the Effective Time.
5.9. Subject to this Agreement, each
Fund covenants to take or cause to be taken
all actions, and to do or cause to be done
all things, reasonably necessary, proper, or
advisable to consummate and effectuate the
transactions contemplated hereby.
6. CONDITIONS PRECEDENT
Each Fund's obligations hereunder shall
be subject to (a) performance by the
corresponding Fund of all its obligations to
be performed hereunder at or before the
Effective Time, (b) all representations and
warranties of the corresponding Fund
contained herein being true and correct in
all material respects as of the date hereof
and, except as they may be affected by the
transactions contemplated hereby, as of the
Effective Time, with the same force and effect
as if made at and as of the Effective Time,
and (c) the following further conditions that,
at or before the Effective Time:
6.1. This Agreement and the transactions
contemplated hereby shall have been duly
adopted and approved by each Board and shall
have been approved by Target Fund's shareholders
in accordance with Fortis' Articles of
Incorporation and By-Laws and applicable law.
6.2. The Amendment shall have been duly
approved by Fortis' board of directors and
shall have been approved by Target Fund's
shareholders in accordance with Fortis'
Articles of Incorporation and By-Laws and
applicable law, and the Amendment shall have
been duly filed with the Minnesota Secretary
of State.
6.3. All necessary filings shall have
been made with the SEC and state securities
authorities, and no order or directive shall
have been received that any other or further
action is required to permit the parties to
carry out the transactions contemplated hereby.
The Registration Statement shall have become
effective under the 1933 Act, no stop orders
suspending the effectiveness thereof shall have
been issued, and the SEC shall not have issued
an unfavorable report with respect to the
Reorganization under section 25(b) of the 1940
Act nor instituted any proceedings seeking to
enjoin consummation of the transactions
contemplated hereby under section 25(c) of the
1940 Act. All consents, orders, and permits of
federal, state, and local regulatory authorities
(including the SEC and state securities
authorities) deemed necessary by either
Acquiring Fund or Fortis to permit consummation,
in all material respects, of the transactions
contemplated hereby shall have been obtained,
except where failure to obtain same would not
involve a risk of a material adverse effect
on either Fund's assets or properties, provided
that either Acquiring Fund or Fortis may for
itself waive any of such conditions.
6.4. At the Effective Time, no action,
suit, or other proceeding shall be pending
before any court or governmental agency in
which it is sought to restrain or prohibit,
or to obtain damages or other relief in
connection with, the transactions
contemplated hereby.
6.5. Fortis shall have received an
opinion of counsel to Acquiring Fund
substantially to the effect that:
6.5.1. Acquiring Fund is a
corporation duly organized, validly existing,
and in good standing under the laws of the
State of Maryland with power under its
Articles of Incorporation to own all its
properties and assets and, to the knowledge
of such counsel, to carry on its business
as presently conducted;
6.5.2. This Agreement has been
duly authorized, executed, and delivered by
Aquiring Fund; no approval of this Agreement by
Acquiring Fund's shareholders is required under
Acquiring Fund's Articles or Incorporation or
By-Laws, or applicable law; and assuming due
authorization, execution, and delivery of this
Agreement by Fortis on behalf of Target Fund,
this Agreement is a valid and legally binding
obligation of Acquiring Fund, enforceable in
accordance with its terms, except as the same
may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium,
and similar laws relating to or affecting
creditors' rights and by general principles of
equity;
6.5.3. The Acquiring Fund
Shares to be issued and distributed to the
Shareholders under this Agreement, assuming
their due delivery as contemplated by this
Agreement, will be duly authorized, validly I
ssued and outstanding, and fully paid and
non-assessable;
6.5.4. The execution and
delivery of this Agreement did not, and the
consummation of the transactions contemplated
hereby will not, violate Acquiring Fund's
Articles of Incorporation or By-Laws or
any provision of any agreement (known to
such counsel, without any independent inquiry
or investigation) to which Acquiring Fund is
a party or by which it is bound or (to the
knowledge of such counsel, without any
independent inquiry or investigation) result
in the acceleration of any obligation, or the
imposition of any penalty, under any agreement,
judgment, or decree to which Acquiring Fund is
a party or by which it is bound, except as set
forth in such opinion or as previously
disclosed in writing to and accepted by Fortis;
6.5.5. No consent, approval,
authorization, or order of any court or
governmental authority is required for the
consummation by Acquiring Fund of the
transactions contemplated herein, except
those obtained under the 1933 Act, the 1934
Act, and the 1940 Act and those that may be
required under state securities laws;
6.5.6. Acquiring Fund is
registered with the SEC as an investment
company, and to the knowledge of such counsel
no order has been issued or proceeding
instituted to suspend such registration;
and
6.5.7. To the knowledge of
such counsel (without any independent
inquiry or investigation), (a) no litigation,
administrative proceeding, or investigation of
or before any court or governmental body is
pending or threatened as to Acquiring Fund or
any of its properties or assets attributable or
allocable to Acquiring Fund and (b) Acquiring
Fund 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 Acquiring
Fund's business, except as set forth in such
opinion or as otherwise disclosed in writing to
and accepted by Fortis.
In rendering such opinion, such counsel may
(1) rely, as to matters governed by the laws
of the State of Maryland, on an opinion of
competent Maryland counsel, (2) make
assumptions regarding the authenticity,
genuineness, and/or conformity of documents
and copies thereof without independent
verification thereof, (3) limit such opinion
to applicable federal and state law, and (4)
define the word "knowledge" and related terms
to mean the knowledge of attorneys then with
such counsel who have devoted substantive
attention to matters directly related to
this Agreement and the Reorganization.
6.6. Acquiring Fund shall have
received an opinion of Xxxxxx & Xxxxxxx LLP,
counsel to Fortis, substantially to the effect
that:
6.6.1. Target Fund is a duly
established series of Fortis, a corporation
duly organized, validly existing, and in good
standing under the laws of the State of
Minnesota with power under its Articles of
Incorporation to own all its properties and
assets and, to the knowledge of such counsel,
to carry on its business as presently
conducted.;
6.6.2. This Agreement (a) has
been duly authorized, executed, and delivered by
Fortis on behalf of Target Fund and (b) assuming
due authorization, execution, and delivery of
this Agreement by Acquiring Fund, is a valid and
legally binding obligation of Fortis with
respect to Target Fund, enforceable in
accordance with its terms, except as the same
may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium,
and similar laws relating to or affecting
creditors' rights and by general principles
of equity;
6.6.3. The execution and
delivery of this Agreement did not, and the
consummation of the transactions contemplated
hereby will not, violate Fortis' Articles of
Incorporation or By-Laws or any provision of
any agreement (known to such counsel, without
any independent inquiry or investigation) to
which Fortis (with respect to Target Fund) is
a party or by which it is bound or (to the
knowledge of such counsel, without any
independent inquiry or investigation) result
in the acceleration of any obligation, or the
imposition of any penalty, under any agreement,
judgment, or decree to which Fortis (with
respect to Target Fund) is a party or by which
it is bound, except as set forth in such
opinion or as previously disclosed in writing
to and accepted by Acquiring Fund;
6.6.4. No consent, approval,
authorization, or order of any court or
governmental authority is required for the
consummation by Fortis (on behalf of Target
Fund) of the transactions contemplated herein,
except those obtained under the 1933 Act,
the 1934 Act, and the 1940 Act and those that
may be required under state securities laws;
6.6.5. Fortis is registered
with the SEC as an investment company, and to
the knowledge of such counsel no order has been
issued or proceeding instituted to suspend such
registration; and
6.6.6. To the knowledge of such
counsel (without any independent inquiry or
investigation), (a) no litigation,
administrative proceeding, or investigation of
or before any court or governmental body is
pending or threatened as to Fortis (with respect
to Target Fund) or any of its properties or
assets attributable or allocable to Target Fund
and (b) Fortis (with respect to Target Fund) 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 Target Fund's business, except as set
forth in such opinion or as otherwise disclosed
in writing to and accepted by Acquiring Fund.
In rendering such opinion, such counsel may (1)
make assumptions regarding the authenticity,
genuineness, and/or conformity of documents and
copies thereof without independent verification
thereof, (2) limit such opinion to applicable
federal and state law, and (3) define the word
"knowledge" and related terms to mean the
knowledge of attorneys then with such counsel
who have devoted substantive attention to
matters directly related to this Agreement and
the Reorganization.
6.7. Acquiring Fund and Fortis each
shall have received an opinion of Xxxxxx &
Whitney LLP, addressed to and in form and
substance reasonably satisfactory to it, as
to the federal income tax consequences mentioned
below ("Tax Opinion"). In rendering the Tax
Opinion, such counsel may rely as to factual
matters, exclusively and without independent
verification, on the representations and
warranties made in this Agreement, which such
counsel may treat as representations and
warranties made to it, and in separate letters
addressed to such counsel and the certificates
delivered pursuant to paragraph 3.4. The Tax
Opinion shall be substantially to the effect
that, based on the facts and assumptions stated
therein and conditioned on consummation of the
Reorganization in accordance with this Agreement,
for federal income tax purposes:
6.7.1. Acquiring Fund's
acquisition of the Assets in exchange solely
for Acquiring Fund Shares, followed by Target
Fund's distribution of those shares pro rata
to the Shareholders in exchange for their
Target Fund Shares, will qualify as a
reorganization within the meaning of section
368(a)(1) of the Code, and each Fund will be
"a party to a reorganization" within the meaning
of section 368(b) of the Code;
6.7.2. Target Fund will
recognize no gain or loss on the transfer of the
Assets to Acquiring Fund in exchange solely for
Acquiring Fund Shares or on the subsequent
distribution of those shares to the Shareholders
in exchange for their Target Fund Shares;
6.7.3. Acquiring Fund will
recognize no gain or loss on its receipt of
the Assets in exchange solely for Acquiring
Fund Shares and the assumption by Acquiring
Fund of the liabilities of Target Fund;
6.7.4. Acquiring Fund's basis
in the Assets will be the same as Target Fund's
basis therein immediately before the
Reorganization, and Acquiring Fund's holding
period for the Assets will include Target Fund's
holding period therefor;
6.7.5. A Shareholder will
recognize no gain or loss on the exchange of
all its Target Fund Shares solely for Acquiring
Fund Shares pursuant to the Reorganization.
Shareholders subject to taxation will recognize
income upon receipt of any net investment
income or net capital gains of Target Fund
which are distributed by Target Fund prior to
the Closing;
6.7.6. A Shareholder's
aggregate basis in the Acquiring Fund Shares
to be received by it in the Reorganization
will be the same as the aggregate basis in its
Target Fund Shares to be constructively
surrendered in exchange for those Acquiring Fund
Shares, and its holding period for those
Acquiring Fund Shares will include its holding
period for those Target Fund Shares, provided
the Shareholder held them as capital assets at
the Effective Time; and
6.7.7. Acquiring Fund will
succeed to and take into account the items of
Target Fund described in Section 381(c) of the
Code. Acquiring Fund will take these items into
account subject to the conditions and
limitations specified in Sections 381, 382, 383
and 384 of the Code and the Regulations
thereunder.
Notwithstanding subparagraphs 6.7.2 and 6.7.4,
the Tax Opinion may state that no opinion is
expressed as to the effect of the Reorganization
on the Funds or any Shareholder with respect to
any asset as to which any unrealized gain or
loss is required to be recognized for federal
income tax purposes at the end of a taxable
year (or on the termination or transfer
thereof) under a xxxx-to-market system
of accounting.
At any time before the Closing, either Acquiring
Fund or Fortis may waive any of the foregoing
conditions (except those set forth in paragraphs
6.1 and 6.2) if, in the judgment of its Board,
such waiver will not have a material adverse
effect on its Fund's shareholders' interests.
7. BROKERAGE FEES
Acquiring Fund and Fortis each represent
and warrant to the other that there are no
brokers or finders entitled to receive any
payments in connection with the transactions
provided for herein.
8. EXPENSES; INDEMNIFICATION
8.1 The parties hereto understand and
agree that the cost of the transactions
contemplated by this Agreement are being borne
by Hartford Life and Accident Insurance Company
and/or its affiliates, to the extent not borne
by Acquiring Fund.
8.2 Acquiring Fund agrees to indemnify
and hold harmless Fortis, Target Fund and each
of Fortis' directors and officers from and
against any and all losses, claims, damages,
liabilities or expenses (including, without
limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which,
jointly or severally, Fortis, Target Fund or any
of Fortis' directors or officers may become
subject, insofar as any such loss, claim, damage,
liability or expense (or actions with respect
thereto) arises out of or is based on any breach
by Acquiring Fund of any of its representations,
warranties, covenants or agreements set forth in
this Agreement.
8.3 Fortis and Target Fund agree to
indemnify and hold harmless Acquiring Fund
and each of Acquiring Fund's directors and
officers from and against any and all losses,
claims, damages, liabilities or expenses
(including, without limitation, the payment of
reasonable legal fees and reasonable costs of
investigation) to which, jointly or severally,
Acquiring Fund or any of Acquiring Fund's
directors or officers may become subject, insofar
as any such loss, claim, damage, liability or
expense (or actions with respect thereto) arises
out of or is based on any breach by the Fortis or
Target Fund of any of their representations,
warranties, covenants or agreements set forth in
this Agreement.
9. ENTIRE AGREEMENT; NO SURVIVAL
Neither party has made any representation,
warranty, or covenant not set forth herein, and
this Agreement constitutes the entire agreement
between the parties. The representations,
warranties, and covenants contained herein or in
any document delivered pursuant hereto or in
connection herewith shall not survive the
Closing.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any
time at or prior to the Effective Time, whether
before or after approval by Target Fund's
shareholders:
10.1. By either Fund (a) in the event
of the other Fund's material breach of any
representation, warranty, or covenant contained
herein to be performed at or prior to the
Effective Time, (b) if a condition to its
obligations has not been met and it reasonably
appears that such condition will not or cannot
be met, or (c) if the Closing has not occurred
on or before December 31, 2002; or
10.2. By the parties' mutual agreement.
In the event of termination under paragraphs
10.1(c) or 10.2, there shall be no liability for
damages on the part of either Fund to the other
Fund.
11. AMENDMENT
This Agreement may be amended, modified,
or supplemented at any time, notwithstanding
approval thereof by Target Fund's shareholders,
in any manner mutually agreed on in writing by
the parties; provided that following such
approval no such amendment may have the effect
of changing the provisions for determining the
number of Acquiring Fund shares to be issued to
Target Fund shareholders under this Agreement
to the detriment of such shareholders without
their further approval.
12. MISCELLANEOUS
12.1. This Agreement shall be governed
by and construed in accordance with the internal
laws of the State of Minnesota; provided that,
in the case of any conflict between such laws
and the federal securities laws, the latter shall
govern.
12.2. Nothing expressed or implied herein
is intended or shall be construed to confer upon
or give any person, firm, trust, or corporation
other than the parties and their respective
successors and assigns any rights or remedies
under or by reason of this Agreement.
12.3. 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 each party hereto and
delivered to the other party 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.
IN WITNESS WHEREOF, each party has caused
this Agreement to be executed and delivered by
its duly authorized officers as of the day and
year first written above.
HARTFORD ADVISERS HLS FUND, INC.
By: /________________________________
Its: President
FORTIS SERIES FUND, INC.
on behalf of its series Fortis Asset Allocation
Series
By: _________________________________
Its: President
Schedule A
ARTICLES OF AMENDMENT TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF FORTIS SERIES FUND, INC.
The undersigned officer of Fortis Series
Fund, Inc. (the "Corporation"), a Minnesota
corporation which is subject to the provisions
of Minnesota Statutes, Chapter 302A, hereby
certifies that the following amendment to the
Corporation's amended and restated articles
of incorporation has been adopted by the
Board of Directors and by the requisite
vote of shareholders of the Corporation
pursuant to said Chapter 302A:
WHEREAS, the Corporation is registered as an
open end management investment company (i.e.,
a mutual fund) under the Investment Company Act
of 1940 and offers its shares to the public in
several series, each of which represents a
separate and distinct portfolio of assets; and
WHEREAS, it is desirable and in the best
interests of the holders of the Series C
("Money Market Series"), Series D ("Asset
Allocation Series"), Series E ("Diversified
Income Series"), Series F ("Global Growth
Series"), Series G ("High Yield Series"),
Series H ("Growth & Income Series") and
Series N ("S&P 500 Index Series") shares of
the Corporation (hereinafter, the "Acquired
Funds") that the assets belonging to each
Acquired Fund be sold to , in exchange for
Class IA shares of the respective Acquiring
Fund, which shares will be distributed pro
rata to the former shareholders of the
Acquired Funds; and
WHEREAS, it is desirable and in the best
interests of the holders of the Series C
shares of the Corporation (also known as the
"Money Market Series") that the assets
belonging to such Series be sold to Hartford
Money Market HLS Fund, Inc., a Maryland
Corporation ("Hartford Money Market Fund"),
in exchange for Class IA shares of Hartford
Money Market Fund, which shares will be
distributed pro rata to the former shareholders
of Money Market Series; and
WHEREAS, the Corporation and Hartford Money
Market Fund have entered into an Agreement and
Plan of Reorganization dated ______, 2002
providing for the foregoing transactions; and
WHEREAS, it is desirable and in the best
interests of the holders of the Series D shares
of the Corporation (also known as the "Asset
Allocation Series") that the assets belonging to
such Series be sold to Hartford Advisers HLS
Fund, Inc., a Maryland Corporation ("Hartford
Advisers Fund"), in exchange for Class IA shares
of Hartford Advisers Fund, which shares will be
distributed pro rata to the former shareholders
of Asset Allocation Series; and
WHEREAS, the Corporation and Hartford Advisers
Fund have entered into an Agreement and Plan of
Reorganization dated ______, 2002 providing for
the foregoing transactions; and
WHEREAS, it is desirable and in the best
interests of the holders of the Series E shares
of the Corporation (also known as the
"Diversified Income Series") that the assets
belonging to such Series be sold to Hartford
Bond HLS Fund, Inc., a Maryland Corporation
("Hartford Bond Fund"), in exchange for Class
IA shares of Hartford Bond Fund, which shares
will be distributed pro rata to the former
shareholders of Diversified Income Series; and
WHEREAS, the Corporation and Hartford Bond
Fund have entered into an Agreement and Plan
of Reorganization dated ______, 2002 providing
for the foregoing transactions; and
WHEREAS, it is desirable and in the best
interests of the holders of the Series F,
Series G and Series H shares of the
Corporation (also known as "Global Growth Series,
" "High Yield Series" and "Growth & Income
Series," respectively) that the assets belonging
to such Series be sold to Hartford Global
Leaders HLS Fund ("Hartford Global Leaders
Fund"), Hartford High Yield HLS Fund
("Hartford High Yield Fund") and Hartford Growth
and Income HLS Fund ("Hartford Growth and Income
Fund"), respectively, each of which is a series
of Hartford Series Fund, Inc., a Maryland
Corporation ("Hartford Series Fund"), in
exchange for Class IA shares of Hartford Global
Leaders Fund, Hartford High Yield Fund or
Hartford Growth and Income Fund, as the case may
be, which shares will be distributed pro rata to
the former shareholders of Global Growth Series,
High Yield Series or Growth & Income Series, as
the case may be; and
WHEREAS, the Corporation and Hartford Series
Fund have entered into an Agreement and Plan
of Reorganization dated ______, 2002 providing
for the foregoing transactions; and
WHEREAS, it is desirable and in the best
interests of the holders of the Series N shares
of the Corporation (also known as the "S&P 500
Index Series") that the assets belonging to such
Series be sold to Hartford Index HLS Fund, Inc.,
a Maryland Corporation ("Hartford Index Fund"),
in exchange for Class IA shares of Hartford
Index Fund, which shares will be distributed
pro rata to the former shareholders of S&P 500
Index Series; and
WHEREAS, each Reorganization Agreement requires
that, in order to bind all holders of shares of
the respective series of the Corporation to the
foregoing transactions, and in particular to
bind such holders to the cancellation and
retirement of their outstanding shares of the
Corporation, it is necessary to adopt an
amendment to the Corporation's amended and
restated articles of incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the
Corporation's amended and restated articles of
incorporation be, and the same hereby are,
amended to add the following Article 5A
immediately following Article 5 thereof:
5A. (a) For purposes of this Article 5,
the following terms shall have the following
meanings:
"Acquired Funds" means the Series C, Series D,
Series E, Series F, Series G, Series H and
Series N shares of the Corporation (also known
as "Money Market Series," "Asset Allocation
Series," "Diversified Income Series," "Global
Growth Series," "High Yield Series," "Growth
& Income Series" and "S&P 500 Index Series,"
respectively).
"Acquiring Funds" means Hartford Money Market
HLS Fund, Inc., a Maryland corporation, with
respect to the Series C shares of the
Corporation; Hartford Advisers HLS Fund, Inc.,
a Maryland corporation, with respect to the
Series D shares of the Corporation; Hartford
Bond HLS Fund, Inc., a Maryland corporation,
with respect to the Series E shares of the
Corporation; Hartford Global Leaders HLS Fund,
Hartford High Yield HLS Fund and Hartford
Growth and Income HLS Fund, each a series of
Hartford Series Fund, Inc., a Maryland
corporation, with respect to the Series F,
Series G and Series H shares of the
Corporation, respectively; and Hartford Index
HLS Fund, Inc., a Maryland corporation, with
respect to the Series N shares of the
Corporation.
"Exchange Date" has the meaning set forth in
the Reorganization Agreements.
"Reorganization Agreements" means the five
Agreements and Plans of Reorganization
dated _________, 2002, to which the Corporation
and Hartford Money Market HLS Fund, Inc.,
Hartford Advisers HLS Fund, Inc., Hartford Bond
HLS Fund, Inc., Hartford Series Fund, Inc. or
Hartford Index HLS Fund, Inc. are parties,
each of which relates to one or more specific
Acquired Funds and the corresponding Acquiring
Fund or Funds. Each such agreement is referred
to as a "Reorganization Agreement."
(b) At the Exchange Date, the assets belonging
to each Acquired Fund, the Special Liabilities
associated therewith, and the General Assets
and General Liabilities allocated to such
Acquired Fund, shall be transferred to the
corresponding Acquiring Fund listed in the
applicable Reorganization Agreement in exchange
for shares of such Acquiring Fund, all as set
forth in the Reorganization Agreement. Such
Acquiring Fund shares shall be distributed to
Acquired Fund shareholders as set forth in (c)
below. For purposes of the foregoing, the
terms "assets belonging to," "Special
Liabilities," "General Assets" and "General
Liabilities" have the meanings assigned to
them in Articles 7(b), 7(c) and 7(d) of the
Corporation's amended and restated articles
of incorporation.
(c) At the Exchange Date, each issued and
outstanding share of each Acquired Fund shall
be, without further action, exchanged for that
number of the Class IA shares of the
corresponding Acquiring Fund determined in
accordance with Sections 3 and 4 of the
Reorganization Agreement, and such Acquired
Fund shares shall be cancelled and retired.
The distribution of such Acquiring Fund
shares to Acquired Fund shareholders shall be
accomplished in the manner set forth in
Section 4(a) of the applicable
Reorganization Agreement.(d) From and after
the Exchange Date, the Acquired Fund shares
cancelled and retired pursuant to (c) above
shall have the status of authorized and
unissued shares of the Corporation, without
designation as to series or class.
IN WITNESS WHEREOF, the undersigned officer
of the Corporation has executed these Articles
of Amendment on behalf of the Corporation
on ____________, 2002.
FORTIS SERIES FUND, INC.
By _______________________________
Its Secretary
