AGREEMENT AND PLAN OF
REORGANIZATION
BY AND BETWEEN
GALAXY FUND II
AND
THE PILLAR FUNDS
DATED AS OF APRIL 6, 2001
TABLE OF CONTENTS
PAGE
----
1. Certain Definitions 2
2. The Reorganization 3
3. Calculations 5
4. Valuation of Assets 6
5. Valuation Times 8
6. Effective Time of the Reorganization 8
7. Termination of Pillar 9
8. Certain Representations, Warranties, Covenants and Agreements of Pillar 9
9. Certain Representations, Warranties, Covenants and Agreements of Galaxy II 15
10. Shareholder Action on Behalf of the Pillar Fund 19
11. N-14 Registration Statement 20
12. Galaxy II Conditions 21
13. Pillar Conditions 25
14. Tax Opinion 28
15. Further Assurances 30
16. Termination and Survival of Representations and Warranties 30
17. Termination of Agreement 31
18. Amendment and Waiver 31
19. Governing Law 32
20. Successors and Assigns 32
21. Beneficiaries 32
22. Notices 32
23. Expenses and Waivers 33
TABLE OF CONTENTS
(continued)
PAGE
----
24. Entire Agreement 34
25. Counterparts 34
26. No Brokers or Finders 34
27. Validity 34
28. Effect of Facsimile Signature 34
29. Headings 34
30. Galaxy II Liability 35
31. Pillar Liability 35
ii
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") made as of the
6th day of April, 2001 by Galaxy Fund II ("Galaxy II"), a Massachusetts business
trust organized under the laws of the Commonwealth of Massachusetts on February
22, 1990, and The Pillar Funds ("Pillar"), a Massachusetts business trust
organized under the laws of the Commonwealth of Massachusetts on September 9,
1991.
BACKGROUND
WHEREAS, each of the parties hereto is an open-end management investment
company registered with the Securities and Exchange Commission (the "SEC") under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, Pillar currently offers, among others, an investment portfolio
known as the Equity Index Fund (the "Pillar Fund").
WHEREAS, Galaxy II currently offers, among others, an investment portfolio
known as the Large Company Index Fund (the "Galaxy Fund");
WHEREAS, each of the parties hereto desires, upon the terms and subject to
the conditions set forth herein, to enter into and perform the reorganization
described herein (the
1
"Reorganization"), pursuant to which, among other things, at the time
hereinafter set forth, (1) the Pillar Fund shall transfer substantially all of
its Assets (as hereinafter defined), subject to substantially all of its
Liabilities (as hereinafter defined), to the Galaxy Fund, in exchange for shares
("Shares") issued by the Galaxy Fund (the Shares issued to the Pillar Fund by
the Galaxy Fund in exchange for substantially all of the Assets subject to
substantially all of the Liabilities of the Pillar Fund in connection with the
Reorganization, collectively, "Galaxy Fund Shares"), and (2) the Pillar Fund
shall then distribute to its shareholders of record the Galaxy Fund Shares
received by or on behalf of the Pillar Fund;
WHEREAS, the parties intend that in connection with the Reorganization,
Pillar shall be deregistered and terminated as described in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. CERTAIN DEFINITIONS. As used herein,
(a) The term "Assets" shall mean all property and assets of every
description and of any nature whatsoever including, without limitation, cash,
cash equivalents, securities, claims (whether absolute or contingent, known or
unknown, accrued or unaccrued), receivables (including dividend and interest
receivables), deferred or prepaid expenses, good will and other
2
intangible property, books and records, and all interests, rights, privileges
and powers, other than with respect to Pillar and the Pillar Fund, cash in an
amount necessary to pay any unpaid dividends and distributions as provided in
Section 2(c) hereof.
(b) The term "Liabilities" shall mean all existing and future
liabilities and obligations of any nature, whether accrued, absolute, contingent
or otherwise. Included in Liabilities shall be the amount of any tax payable
pursuant to Section 852(b)(3)(A) of the Internal Revenue Code of 1986, as
amended (the "Code") for the taxable year of the Pillar Fund that ends at the
Effective Time of the Reorganization (as hereinafter defined).
2. THE REORGANIZATION.
(a) At the Effective Time of the Reorganization (as hereinafter
defined), (i) the Pillar Fund shall transfer, assign and convey to the Galaxy
Fund substantially all of the Assets, subject to substantially all of the
Liabilities, of the Pillar Fund, and (ii) the Galaxy Fund shall accept all such
Assets and assume all such Liabilities, such that at and after the Effective
Time of the Reorganization (as hereinafter defined): (A) substantially all of
the Assets of the Pillar Fund shall become and be Assets of the Galaxy Fund, (B)
substantially all of the Liabilities of the Pillar Fund shall become and be
Liabilities of, and shall attach to, the Galaxy Fund, and (C) such Liabilities
of the Pillar Fund may thenceforth be enforced only against the Galaxy Fund to
the same extent as if such Liabilities had been incurred by the Galaxy Fund,
subject to any defense and/or set off that Pillar or the Pillar Fund was
entitled to assert immediately prior to the Effective Time of the Reorganization
(as hereinafter defined) with respect to any such Liability,
3
and subject to any defense and/or set off that Galaxy II or the Galaxy Fund may
from time to time be entitled to assert against the creditor thereof.
(b) In exchange for the transfer of substantially all of the Assets
of the Pillar Fund to the Galaxy Fund as provided in paragraph (a) above, the
Galaxy Fund shall assume substantially all of the Liabilities of the Pillar Fund
as provided in paragraph (a) above and shall also simultaneously issue, at the
Effective Time of the Reorganization (as hereinafter defined), to the Pillar
Fund, the number of full and fractional (to the third decimal place) Galaxy Fund
Shares, determined and adjusted as provided in Section 3 hereof.
(c) Immediately upon receipt of the Galaxy Fund Shares in accordance
with paragraph (b) above, the Pillar Fund shall distribute, in complete
liquidation, pro rata to the shareholders of record of the Pillar Fund at the
Effective Time of the Reorganization (as hereinafter defined) (such shareholders
of record of the Pillar Fund as of such time, collectively, the "Recordholders")
the Galaxy Fund Shares that have been so received as follows:
(1) Recordholders of Class A Shares, Class B Shares and Class I
Shares of the Pillar Fund shall be credited with full and fractional Shares of
the Galaxy Fund; and
(2) In addition, each Recordholder of the Pillar Fund shall have
the right to receive any unpaid dividends or other distributions which were
declared with respect to his/her or its shares of the Pillar Fund before the
Effective Time of the Reorganization.
4
(d) In accordance with instructions Galaxy II receives from Pillar,
Galaxy II shall record on its books the ownership, by the Recordholders, of the
number and type of the Galaxy Fund Shares distributed to the Recordholders.
(c) Pillar shall promptly cancel on its books all of the shares
(including, without limitation, any treasury shares) of the Pillar Fund that has
so liquidated, and any such shares issued and outstanding prior to such
cancellation shall thereafter represent only the right to receive the Galaxy
Fund Shares issued to the Pillar Fund in accordance with paragraph (b) above.
(f) The transfer books of Pillar with respect to the Pillar Fund
shall be permanently closed.
3. CALCULATIONS.
(a) The number of Galaxy Fund Shares issued to the Pillar Fund
pursuant to Section 2(b) hereof will be determined as follows: the value of the
Pillar Fund's Assets that are so conveyed, less the Liabilities that are
assumed, at the Effective Time of the Reorganization (as hereinafter defined),
and that are attributable to either Class A Shares, Class B Shares or Class I
Shares of the Pillar Fund shall be divided by the net asset value of one Galaxy
Fund Share that is to be delivered with respect thereto; and
(b) The net asset value of the Galaxy Fund Shares shall be computed
at the Valuation Time (as hereinafter defined) in the manner set forth in the
Galaxy Fund's then current prospectus under the Securities Act of 1933, as
amended (the "1933 Act"). The net asset value
5
of each class of the Pillar Fund shall be computed at the Valuation Time (as
hereinafter defined) in the manner set forth in the Pillar Fund's then current
prospectuses under the 1933 Act.
4. VALUATION OF ASSETS.
(a) With respect to the Pillar Fund, the value of its Assets shall be
the value of such Assets computed as of the time at which its net asset value is
calculated at the Valuation Time (as hereinafter defined). The net asset value
of the Pillar Fund Assets to be transferred to the Galaxy Fund shall be computed
by Pillar and shall be subject to adjustment by the amount, if any, agreed to by
Galaxy II, its board of trustees, and the Galaxy Fund and Pillar, its board of
trustees, and the Pillar Fund. In determining the value of the securities
transferred by the Pillar Fund to the Galaxy Fund, each security shall be priced
in accordance with the pricing policies and procedures of the Pillar Fund as
described in its then current prospectuses and statement of additional
information. For such purposes, price quotations and the security
characteristics relating to establishing such quotations shall be determined by
Pillar, provided that such determination shall be subject to the approval of
Galaxy II. Galaxy II and Pillar agree to use all commercially reasonable efforts
to resolve, prior to the Valuation Time (as hereinafter defined), any material
pricing differences between the prices of portfolio securities determined in
accordance with the pricing policies and procedures of the Galaxy Fund and those
determined in accordance with the pricing policies and procedures of the Pillar
Fund.
(b) At least fifteen (15) business days prior to the Effective Time
of the Reorganization (as hereinafter defined), the Pillar Fund will provide the
Galaxy Fund with a schedule of its securities and other Assets and Liabilities
of which it is aware, and the Galaxy
6
Fund will provide the Pillar Fund with a copy of the current investment
objective and policies applicable to the Galaxy Fund. The Pillar Fund reserves
the right to sell any of the securities or other Assets shown on the list of the
Fund's Assets prior to the Effective Time of the Reorganization (as hereinafter
defined) but will not, without the prior approval of Galaxy II, acquire any
additional securities other than securities which the Galaxy Fund is permitted
to purchase in accordance with its stated investment objective and policies. At
least ten (10) business days prior to the Effective Time of the Reorganization
(as hereinafter defined), the Galaxy Fund will advise the Pillar Fund of any
investments of such Pillar Fund shown on such schedule which the Galaxy Fund
would not be permitted to hold, pursuant to its stated investment objective and
policies or otherwise. In the event that the Pillar Fund holds any investments
that the Galaxy Fund would not be permitted to hold under its stated investment
objective or policies, the Pillar Fund, if requested by the Galaxy Fund and, to
the extent permissible and consistent with the Pillar Fund's own investment
objective and policies, will dispose of such securities prior to the Effective
Time of the Reorganization (as hereinafter defined). In addition, if it is
determined that the portfolios of the Pillar Fund and the Galaxy Fund, when
aggregated, would contain investments exceeding certain percentage limitations
to which the Galaxy Fund is or will be subject with respect to such investments,
the Pillar Fund, if requested by the Galaxy Fund and, to the extent permissible
and consistent with the Pillar Fund's own investment objective and policies,
will dispose of and/or reinvest a sufficient amount of such investments as may
be necessary to avoid violating such limitations as of the Effective Time of the
Reorganization (as hereinafter defined).
7
5. VALUATION TIMES. The valuation time shall be 4:00 p.m., Eastern time,
on August 10, 2001, or such earlier or later date and time as may be mutually
agreed to in writing by an authorized officer of each of the parties (the
"Valuation Time"). Notwithstanding anything herein to the contrary, in the event
that at the Valuation Time, (a) the New York Stock Exchange shall be closed to
trading or trading thereon shall be restricted or (b) trading or the reporting
of trading on such exchange or elsewhere shall be disrupted so that, in the
judgment of Galaxy II or Pillar, accurate appraisal of the value of the net
assets of the Galaxy Fund or the Pillar Fund is impracticable, such Valuation
Time shall be postponed until the first business day after the day when trading
shall have been fully resumed without restriction or disruption, reporting shall
have been restored and accurate appraisal of the value of the net assets of the
Galaxy Fund and the Pillar Fund is practicable in the judgment of Galaxy II and
Pillar.
6. EFFECTIVE TIME OF THE REORGANIZATION.
Delivery by the Pillar Fund of its Assets to the Galaxy Fund, delivery
by the Galaxy Fund of the Galaxy Fund Shares to the Pillar Fund, and liquidation
of the Pillar Fund, in each case, pursuant to Section 2 hereof, shall occur at
the opening of business on the next business day following the Valuation Time
(or on such other date, following the Valuation Time as is agreed to in writing
by an authorized officer of each of the parties). The date and time at which the
above-described actions are taken shall be the "Effective Time of the
Reorganization" with respect to the Galaxy Fund and the Pillar Fund. To the
extent any Assets of the Pillar Fund are, for any reason, not transferred to the
Galaxy Fund at the Effective Time of the
8
Reorganization, Pillar shall cause such Assets to be transferred in accordance
with this Agreement at the earliest practicable date thereafter.
7. TERMINATION OF PILLAR. Promptly following the Effective Time of the
Reorganization, Pillar shall file an application pursuant to Section 8(f) of the
1940 Act for an order declaring that Pillar has ceased to be an investment
company; provided that, until such order is granted, Pillar shall continue to
comply with all of its obligations as a registered investment company under the
1940 Act and under any and all other state and federal securities laws
(including, in the case of each of the foregoing, the rules and regulations
thereunder). Pillar shall, promptly after the Effective Time of the
Reorganization, file any final regulatory reports, including, but not limited
to, any Form N-SAR and Rule 24f-2 Notice, with respect to such Pillar Fund. All
reporting and other obligations of Pillar shall remain the exclusive
responsibility of Pillar up to and including the date on which the Pillar Fund
is deregistered and terminated. In addition, promptly following the Effective
Time of the Reorganization, Pillar shall be terminated pursuant to Article IX,
Section 4 of its Declaration of Trust and shall take all other steps necessary
and proper to effect its complete termination. Without limiting the generality
of the foregoing, (a) the affairs of Pillar shall be immediately wound up, its
contracts discharged and its business liquidated; and (b) the trustees of Pillar
shall execute and Galaxy II shall lodge among the records of Pillar an
instrument in writing setting forth the fact of such termination.
8. CERTAIN REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF
PILLAR. Pillar, on behalf of itself and the Pillar Fund, represents, warrants,
covenants and agrees as follows:
9
(a) Pillar is a Massachusetts business trust duly created pursuant to
its Declaration of Trust for the purpose of acting as a management investment
company under the 1940 Act and is validly existing under the laws of, and duly
authorized to transact business in, the Commonwealth of Massachusetts.
(b) Pillar is duly and appropriately registered with the SEC as an
open-end, management investment company under the 1940 Act and its registration
with the SEC as such an investment company is in full force and effect as of the
date hereof.
(c) Pillar currently has the power (i) to own all of its Assets, and
(ii) subject to the approval of shareholders referred to in Section 10 hereof,
to carry out and consummate the transactions contemplated herein. Pillar has all
necessary federal, state and local authorizations, licenses and approvals
necessary or desirable to carry on its business as such business is now being
conducted and upon receipt by Pillar of an exemptive order under Section 17 of
the 1940 Act, to consummate the transactions contemplated by this Agreement.
(d) This Agreement has been duly and validly authorized, executed and
delivered by Pillar, and represents the legal, valid and binding obligation of
Pillar, enforceable against Pillar in accordance with the terms hereof, subject
as to enforcement to the effect of bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent transfer or conveyance, and other similar
laws of general applicability relating to or affecting creditors' rights and to
general equity principles and provided that the provisions of this Agreement
intended to limit liability for particular matters to an investment portfolio
and its assets, including but not limited to Section 32 of this Agreement, may
not be enforceable. The
10
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated by this Agreement will not, violate the Declaration of
Trust or By-laws or any other organizational document of Pillar or any material
agreement, contract or other arrangement to which Pillar is a party or by which
Pillar or its properties or Assets may be bound, subject or affected.
(e) The Pillar Fund has elected to qualify, and has qualified as of
and since its first taxable year, as a regulated investment company under Part I
of Subchapter M of Subtitle A, Chapter 1, of the Code, and the Pillar Fund
currently qualifies, and shall continue to qualify, as a regulated investment
company under such Part of the Code for its taxable year ending on the date on
which the Effective Time of the Reorganization occurs. The Pillar Fund has been
a regulated investment company under such Part of the Code at all times since
the end of the first taxable year when it first so qualified, and shall continue
to be a regulated investment company under such Part of the Code at all times
until the Effective Time of the Reorganization occurs with respect to the Pillar
Fund.
(f) All federal, state, local and foreign income, profits, franchise,
sales, withholding, customs, transfer and other taxes, including, without
limitation, interest, additions to tax, and penalties thereon, (collectively,
"Taxes") that relate to the Assets of Pillar or of the Pillar Fund, and that are
either due or properly shown to be due on any return filed by Pillar or by the
Pillar Fund have been (or as of the Effective Time of the Reorganization shall
have been) fully and timely paid or provided for, and to Pillar's knowledge,
there are no levies, liens, or other encumbrances relating to Taxes existing,
threatened or pending with respect to the Assets
11
of Pillar (or with respect to any Assets of the Pillar Fund). All federal and
other tax returns and reports of Pillar and the Pillar Fund required by law to
be filed on or before the Effective Time of the Reorganization have been or will
be filed in a timely manner, and all federal and other taxes owed by Pillar on
behalf of the Pillar Fund have been or will be timely paid so far as due, and to
the best of Pillar's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any such return.
(g) The financial statements of the Pillar Fund for its fiscal year
ended December 31, 2000, audited by Xxxxxx Xxxxxxxx LLP, copies of which have
been previously furnished to Galaxy, present fairly (i) the financial condition
of such Pillar Fund as of the date indicated therein and (ii) the results of
operations of the Pillar Fund for the periods indicated, in the case of both (i)
and (ii), in conformity with generally accepted accounting principles
consistently applied.
(h) Prior to or as of the Valuation Time, the Pillar Fund shall have
declared a dividend or dividends, with a record date and ex-dividend date prior
to or as of the Valuation Time, which, together with all previous dividends,
shall have the effect of distributing to its shareholders all of its net
investment company income, if any, for the taxable periods or years ended on or
before December 31, 2000 and for the period from said date to and including the
Effective Time of the Reorganization (computed without regard to any deduction
for dividends paid), and all of its net capital gain, if any, realized in
taxable periods or years ended on or before December 31, 2000 and in the period
from said date to and including the Effective Time of the Reorganization.
12
(i) At the Valuation Time and the Effective Time of the
Reorganization, all Liabilities of the Pillar Fund which are required to be
reflected in the net asset value per share of such Pillar Fund in accordance
with law are reflected in the net asset value per share of such Pillar Fund.
(j) To Pillar's knowledge, there are currently, and at the Valuation
Time and the Effective Time of the Reorganization with respect to the Pillar
Fund there shall be, no legal, administrative or other proceedings or
investigations pending or threatened against or otherwise involving Pillar or
the Pillar Fund which could result in liability on the part of Pillar or the
Pillar Fund.
(k) Subject to the approval of shareholders referred to in Section
10, at both the Valuation Time and the Effective Time of the Reorganization,
Pillar, on behalf of the Pillar Fund, shall have full right, power and authority
to sell, assign, transfer and deliver the Pillar Fund's Assets. Upon delivery
and payment for the Assets of the Pillar Fund as contemplated in Section 2(b)
above, the Galaxy Fund shall acquire good and marketable title to the Assets of
the Pillar Fund, free and clear of all liens and encumbrances, and subject to no
restrictions on the ownership or transfer thereof (except as imposed by federal
or state securities laws).
(l) No consent, approval, authorization or order of any court or
governmental authority, or of any other person or entity, is required for the
consummation by Pillar and by the Pillar Fund of the transactions contemplated
by this Agreement, except as may be required by the 1933 Act, the Securities
Exchange Act of 1934, as amended ("1934 Act"), the 1940 Act, or state
13
securities laws (including, in the case of each of the foregoing, the rules and
regulations thereunder).
(m) On the effective date of the N-14 Registration Statement (as
hereinafter defined), at the time of the shareholders' meeting referred to in
Section 10 hereof and at the Effective Time of the Reorganization, the
registration statement filed by Galaxy II on Form N-14 relating to the shares of
the Galaxy Fund that will be registered with the SEC pursuant to this Agreement,
together with any and all supplements and amendments thereto and the documents
contained or incorporated therein by reference, as supplemented and amended,
including, without limitation, the proxy statement of Pillar and the
prospectuses of Pillar and Galaxy II with respect to the transactions
contemplated by this Agreement (such registration statement, together with such
supplements and amendments and the documents contained therein or incorporated
therein by reference, as supplemented and amended, the "N-14 Registration
Statement") shall with respect to Pillar or the Pillar Fund: (i) comply in all
material respects with the provisions of the 1933 Act, the 1934 Act, the 1940
Act, and applicable state securities laws (including, in the case of each of the
foregoing, the rules and regulations thereunder), and (ii) not contain any
untrue statement of a material fact or omit to state a material fact that is
required to be stated therein or that is necessary to make the statements
therein not misleading.
(n) All of the issued and outstanding shares of the Pillar Fund have
been duly and validly issued, are fully paid and non-assessable by Pillar
(except that shareholders of the Pillar Fund may under certain circumstances be
held personally liable for its obligations), and were offered for sale and sold
in conformity with all applicable federal and state securities laws
14
(including, in the case of each of the foregoing, the rules and regulations
thereunder). All shares of the Pillar Fund issued on or after the date hereof
shall be duly and validly issued, fully paid and non-assessable by Pillar
(except that shareholders of the Pillar Fund may under certain circumstances be
held personally liable for its obligations) and offered for sale and sold in
conformity with all applicable federal and state securities laws (including, in
the case of each of the foregoing, the rules and regulations thereunder). No
shareholder of the Pillar Fund currently has, or will hereafter have, any
statutory or contractual preemptive right of subscription or purchase in respect
of any shares of the Pillar Fund.
(o) Pillar shall not sell or otherwise dispose of any Galaxy Fund
Shares received in the transactions contemplated herein, except in distribution
to the Recordholders as contemplated herein.
9. CERTAIN REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF
GALAXY II. Galaxy II, on behalf of itself and the Galaxy Fund, represents,
warrants, covenants and agrees as follows:
(a) Galaxy II is a Massachusetts business trust duly created pursuant
to its Declaration of Trust for the purpose of acting as a management investment
company under the 1940 Act and is validly existing under the laws of, and duly
authorized to transact business in, the Commonwealth of Massachusetts.
(b) Galaxy II is duly and appropriately registered with the SEC as an
open-end, management investment company under the 1940 Act and its registration
with the SEC as such an investment company is in full force and effect as of the
date hereof.
15
(c) Galaxy II currently has the power to own all of its Assets and to
carry out and consummate the transactions contemplated herein. Galaxy II has all
necessary federal, state and local authorizations, licenses and approvals
necessary or desirable to carry on its business as such business is now being
conducted and upon receipt by Galaxy II of an exemptive order under Section 17
of the 1940 Act, to consummate the transactions contemplated by this Agreement.
(d) This Agreement has been duly and validly authorized, executed and
delivered by Galaxy II, and represents the legal, valid and binding obligation
of Galaxy II, enforceable against Galaxy II in accordance with the terms hereof,
subject as to enforcement to the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent transfer or conveyance, and
other similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles and provided that the provisions of this
Agreement intended to limit liability for particular matters to an investment
portfolio and its assets, including but not limited to Section 31of this
Agreement, may not be enforceable. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated by this
Agreement will not, violate the Declaration of Trust or By-Laws or any other
organizational document of Galaxy II, or any material agreement, contract or
other arrangement to which Galaxy II is a party or by which Galaxy II or its
properties or Assets may be bound, subject or affected.
(e) The Galaxy Fund has elected to qualify, and has qualified as of
and since its first taxable year, as a regulated investment company under Part I
of Subchapter M of Subtitle A, Chapter 1, of the Code, and the Galaxy Fund has
been a regulated investment company under
16
such Part of the Code at all times since the end of its first taxable year when
it so qualified. The Galaxy Fund currently qualifies, and shall continue to
qualify, as a regulated investment company under the Code.
(f) All Taxes that relate to the Assets of Galaxy II or of the Galaxy
Fund, and that are either due or properly shown to be due on any return filed by
Galaxy II or by the Galaxy Fund have been (or as of the Effective Time of the
Reorganization shall have been) fully and timely paid or provided for, and to
Galaxy II's knowledge, there are no levies, liens, or other encumbrances
relating to Taxes existing, threatened or pending with respect to the Assets of
Galaxy II (or with respect to any Assets of the Galaxy Fund). All federal and
other tax returns and reports of Galaxy II and the Galaxy Fund required by law
to be filed on or before the Effective Time of the Reorganization have been or
will be filed in a timely manner, and all federal and other taxes owed by Galaxy
II on behalf of the Galaxy Fund have been or will be timely paid so far as due,
and to the best of Galaxy II's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to any such return.
(g) The financial statements of the Galaxy Fund for its fiscal year
ended March 31, 2000, audited by Ernst & Young LLP, and the unaudited financial
statements of the Galaxy Fund for the six-month period ended September 30, 2000,
copies of which have been previously furnished to Pillar, present fairly (i) the
financial condition of the Galaxy Fund as of the dates indicated therein and
(ii) the results of operations of the Galaxy Fund for the periods indicated, in
the case of both (i) and (ii), in conformity with generally accepted accounting
principles consistently applied.
17
(h) At the Valuation Time and the Effective Time of the
Reorganization, all Liabilities of the Galaxy Fund which are required to be
reflected in the net asset value per share of the Galaxy Fund Shares issued by
the Galaxy Fund pursuant to this Agreement in accordance with law are reflected
in the net asset value per share of the Galaxy Fund.
(i) To Galaxy II's knowledge, there are currently, and at the
Valuation Time and the Effective Time of the Reorganization with respect to the
Galaxy Fund there shall be, no legal, administrative or other proceedings or
investigations pending or threatened against or otherwise involving Galaxy II or
the Galaxy Fund which could result in liability on the part of Galaxy II or the
Galaxy Fund.
(j) No consent, approval, authorization or order of any court or
governmental authority, or of any other person or entity, is required for the
consummation by Galaxy II and by the Galaxy Fund of the transactions
contemplated by this Agreement except as may be required by the 1933 Act, 1934
Act, the 1940 Act or state securities laws (including, in the case of each of
the foregoing, the rules and regulations thereunder).
(k) On the effective date of the N-14 Registration Statement, at the
time of the shareholders' meeting referred to in Section 10 hereof and at the
Effective Time of the Reorganization, the N-14 Registration Statement shall: (i)
comply in all material respects with the provisions of the 1933 Act, the 1934
Act, the 1940 Act, and applicable state securities laws (including, in the case
of each of the foregoing, the rules and regulations thereunder), and (ii) not
contain any untrue statement of a material fact or omit to state a material fact
that is required to be stated therein or that is necessary to make the
statements therein not misleading.
18
(l) The Galaxy Fund Shares to be issued and delivered to the Pillar
Fund pursuant to the terms hereof shall have been duly authorized as of the
Effective Time of the Reorganization, and, when so issued and delivered, shall
be registered under the 1933 Act, duly and validly issued, and fully paid and
non-assessable by Galaxy II (except that shareholders of the Galaxy Fund may
under certain circumstances be held personally liable for its obligations), and
no shareholder of the Galaxy Fund shall have any statutory or contractual
preemptive right of subscription or purchase in respect thereof.
(m) For the period beginning at the Effective Time of the
Reorganization and ending not less than six years thereafter, Galaxy II shall
provide or cause to be provided, liability coverage for the officers and
trustees of Pillar which covers the actions of such trustees and officers of
Pillar for the period they served as such and is at least comparable to the
liability coverage currently applicable to the trustees and officers of Pillar.
Galaxy II agrees that all rights to indemnification existing in favor of the
Pillar trustees, acting in their capacities as such, under Pillar's Declaration
of Trust as in effect as of the date of this Agreement shall survive the
Reorganization as obligations of Galaxy II, shall continue in full force and
effect without any amendment thereto, and shall constitute rights which may be
asserted against Galaxy II.
10. SHAREHOLDER ACTION ON BEHALF OF THE PILLAR FUND. As soon as
practicable after the effective date of the N-14 Registration Statement, but in
any event prior to the Effective Time of the Reorganization, and as a condition
to the consummation of the transactions contemplated hereby, the Board of
Trustees of Pillar shall call, and subject to obtaining any
19
necessary quorum, Pillar shall hold, a meeting of the shareholders of the Pillar
Fund for the purpose of considering and voting upon:
(a) Approval of this Agreement and the transactions contemplated
hereby, including, without limitation, the transfer by the Pillar Fund to the
Galaxy Fund of the Assets belonging to the Pillar Fund and the assumption by the
Galaxy Fund of the Liabilities of the Pillar Fund in exchange for the Galaxy
Fund Shares issued by the Galaxy Fund to the Pillar Fund, in accordance with,
and at the time set forth in, Section 2 hereof;
(b) The liquidation of the Pillar Fund through the distribution of
the Galaxy Fund Shares received by the Pillar Fund to the Recordholders of the
Pillar Fund as described in this Agreement;
(c) The deregistration of Pillar under the 1940 Act and the
termination of Pillar under state law;
(d) Approval of an Investment Advisory Agreement between Pillar and
Fleet Investment Advisors Inc. with respect to the Pillar Fund; and
(e) Such other matters as may be determined by the Boards of Trustees
of the parties.
11. N-14 REGISTRATION STATEMENT. Galaxy II shall file the N-14
Registration Statement. Galaxy II and Pillar have cooperated and shall continue
to cooperate with each other, and have furnished and shall continue to furnish
each other with the information relating to themselves that is required by the
1933 Act, the 1934 Act, the 1940 Act and applicable state
20
securities laws (including, in the case of each of the foregoing, the rules and
regulations thereunder) to be included in the N-14 Registration Statement (or
that is necessary to ensure that the N-14 Registration Statement does not
contain any untrue statement of a material fact and/or to ensure that the N-14
Registration Statement does not omit to state a material fact that is required
to be stated therein or that is necessary to make the statements therein not
misleading).
12. GALAXY II CONDITIONS. The obligations of Galaxy II (and of the Galaxy
Fund) hereunder shall be subject to the following conditions precedent:
(a) This Agreement and the transactions contemplated by this
Agreement shall have been approved by the Board of Trustees of Pillar (including
the determinations required by Rule 17a-8(a) under the 0000 Xxx) and by the
shareholders of the Pillar Fund, in each case, in the manner required by law.
(b) Pillar shall have redeemed its interest in the SEI Index Funds
S&P 500 Index Portfolio (the "Portfolio") in exchange for securities and cash
held by such Portfolio.
(c) Pillar shall have duly executed and delivered to Galaxy II, on
behalf of the Pillar Fund, such bills of sale, assignments, certificates and
other instruments of transfer ("Transfer Documents") as Galaxy II may reasonably
deem necessary or desirable to transfer to the Galaxy Fund all of the right,
title and interest of the Pillar Fund in and to the Assets of the Pillar Fund.
The Assets of the Pillar Fund shall be accompanied by all necessary state stock
transfer stamps or cash for the appropriate purchase price therefor.
21
(d) All representations and warranties of Pillar made in this
Agreement shall be true and correct in all material respects on the date hereof,
at the Valuation Time and at the Effective Time of the Reorganization as if made
at and as of such date, and Pillar shall have complied, in all material
respects, with all of its covenants hereunder. As of the Valuation Time and at
the Effective Time of the Reorganization, there shall have been no material
adverse change in the financial position of the Pillar Fund or of Pillar since
the date of the financial statements referred to in Section 8(g), other than
those changes (including, without limitation, changes due to net redemptions)
incurred in the ordinary course of business as an investment company since the
date of the financial statements referred to in Section 8(g). At the Effective
Time of the Reorganization, Galaxy II shall have received a certificate from the
President or Vice President of Pillar, dated as of such date, certifying on
behalf of Pillar, that as of such date each of the conditions set forth in
Section 8 and in this Section 12 have been, and continue to be, met.
(e) Galaxy II shall have received an opinion of Xxxxxx, Xxxxx &
Xxxxxxx LLP, addressed to Galaxy II, in form and substance reasonably
satisfactory to Galaxy II, and dated the Effective Time of the Reorganization,
to the effect that as of the date of such opinion, and subject to qualifications
and conditions reasonably acceptable to Galaxy II: (i) Pillar is a Massachusetts
business trust duly organized and validly existing under the laws of the
Commonwealth of Massachusetts; (ii) the shares of the Pillar Fund outstanding at
the Effective Time of the Reorganization are duly authorized, validly issued,
fully paid and non-assessable by such Pillar Fund (except that shareholders of
the Pillar Fund may under certain circumstances be held personally liable for
its obligations), and to such counsel's knowledge, no shareholder of the
22
Pillar Fund has any statutory preemptive right to subscription or purchase in
respect thereof; (iii) this Agreement and the Transfer Documents have been duly
and validly authorized, executed and delivered by Pillar and represent the
legal, valid and binding obligations of Pillar, enforceable against Pillar in
accordance with their terms, subject to the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, marshalling, fraudulent transfer or
conveyance and similar laws relating to or affecting creditors' rights and
remedies generally and court decisions with respect thereto, and such counsel
shall express no opinion with respect to the application of equitable principles
in any proceeding, whether at law or in equity, as to the enforceability of any
provision of the Agreement relating to remedies after default, as to the
availability of any specific or equitable relief of any kind, or with respect to
the provisions of this Agreement intended to limit liability for particular
matters to the Pillar Fund and its Assets, including but not limited to Section
32 of this Agreement; (iv) the execution and delivery of this Agreement did not,
and the consummation of the transactions contemplated by this Agreement will
not, violate the Declaration of Trust or By-laws of Pillar or, except as may be
noted in such opinion, any material agreement known to counsel to which Pillar
is a party or by which Pillar may be bound; and (v) to such counsel's knowledge,
no consent, approval, authorization or order of any court, governmental
authority or agency is required for the consummation by Pillar of the
transactions contemplated by this Agreement, except such as have been obtained
under the 1933 Act, the 1934 Act, the 1940 Act, and Massachusetts state
securities laws (including, in the case of each of the foregoing, the rules and
regulations thereunder). Such opinion may rely on a certificate of a Pillar
trustee or the President or Vice President of Pillar as to factual matters.
23
(f) The N-14 Registration Statement shall have become effective under
the 1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of Galaxy II, contemplated by the SEC, and the
parties shall have received all permits, licenses and other authorizations
necessary under state securities laws to consummate the transactions
contemplated by this Agreement and all such permits, licenses and other
authorizations shall be in full force and effect at such time.
(g) At the Effective Time of the Reorganization, Pillar has, as of
such date, performed and complied in all material respects with each of its
agreements and covenants required by this Agreement to be performed or complied
with by Pillar prior to or at the Valuation Time and the Effective Time of the
Reorganization and Galaxy II shall have received a certificate from the
President or Vice President of Pillar, dated as of such date, certifying on
behalf of Pillar that the conditions set forth in clause (f) have been
satisfied.
(h) Pillar's agreements with each of its service contractors shall
have terminated at the Effective Time of the Reorganization or at such later
time as may be agreed to by the parties hereto, and each party has received
reasonable assurance that no claim for damages (liquidated or otherwise) will
arise as a result of such termination.
(i) Galaxy II shall have received the tax opinion provided for in
Section 14 hereof.
(j) Galaxy II shall have received any necessary exemptive relief from
the SEC with respect to Section 17(a) of the 1940 Act.
24
(k) The transactions contemplated by the Agreement and Plan of
Reorganization between The Galaxy Fund and Pillar shall be consummated
concurrently with the transactions contemplated by this Agreement or at such
other time as may be agreed to by the parties hereto.
13. PILLAR CONDITIONS. The obligations of Pillar (and of the Pillar Fund)
hereunder shall be subject to the following conditions precedent:
(a) This Agreement and the transactions contemplated by this
Agreement shall have been approved by the Board of Trustees of Galaxy II
(including the determinations required by Rule 17a-8(a) under the 0000 Xxx) and
by the shareholders of the Pillar Fund, in each case, in the manner required by
law.
(b) Pillar shall have redeemed its interest in the SEI Index Funds
S&P 500 Index Portfolio (the "Portfolio") in exchange for securities and cash
held by such Portfolio.
(c) All representations and warranties of Galaxy II made in this
Agreement shall be true and correct in all material respects on the date hereof,
at the Valuation Time and at the Effective Time of the Reorganization as if made
at and as of such date, and Galaxy II shall have complied, in all material
respects, with all of its covenants hereunder. As of the Valuation Time and at
the Effective Time of the Reorganization, there shall have been no material
adverse change in the financial position of the Galaxy Fund or of Galaxy II
since the date of the latest financial statements referred to in Section 9(g)
other than those changes (including, without limitation, changes due to net
redemptions) incurred in the ordinary course of business as an investment
company since the date of the latest financial statements referred to in Section
9(g).
25
At the Effective Time of the Reorganization, Pillar shall have received a
certificate from the President or Vice President of Galaxy II, dated as of such
date, certifying on behalf of Galaxy II, that as of such date each of the
conditions set forth in Section 9 and in this Section 13 have been, and continue
to be, met.
(d) Pillar shall have received an opinion of Drinker Xxxxxx & Xxxxx
LLP, addressed to Pillar in form and substance reasonably satisfactory to Pillar
and dated the Effective Time of the Reorganization, to the effect that as of the
date of such opinion, and subject to qualifications and conditions reasonably
acceptable to Pillar: (i) Galaxy is a Massachusetts business trust duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts; (ii) the Galaxy Fund Shares to be delivered to the Pillar Fund
are duly authorized and upon delivery will be validly issued, fully paid and
non-assessable by the Galaxy Fund (except that shareholders of the Galaxy Fund
may under certain circumstances be held personally liable for its obligations),
and, to such counsel's knowledge, no shareholder of the Galaxy Fund has any
statutory preemptive right to subscription or purchase in respect thereof; (iii)
this Agreement has been duly and validly authorized, executed and delivered by
Galaxy II and represents the legal, valid and binding obligation of Galaxy II,
enforceable against Galaxy II in accordance with the terms hereof, subject to
the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium,
marshalling, fraudulent transfer or conveyance and similar laws relating to or
affecting creditors' rights and remedies generally and court decisions with
respect thereto, and such counsel shall express no opinion with respect to the
application of equitable principles in any proceeding, whether at law or in
equity, as to the enforceability of any provision of the Agreement relating to
remedies after default, as to the availability of any
26
specific or equitable relief of any kind, or with respect to the provisions of
this Agreement intended to limit liability for particular matters to the Galaxy
Fund and its Assets, including but not limited to Section 31 of this Agreement;
(iv) the execution and delivery of this Agreement did not, and the consummation
of the transactions contemplated by this Agreement will not, violate the
Declaration of Trust or By-Laws of Galaxy II, or any material agreement known to
such counsel to which Galaxy II is a party or by which Galaxy II may be bound;
and (v) to such counsel's knowledge, no consent, approval, authorization or
order of any court, governmental authority or agency is required for the
consummation by Galaxy II of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934 Act, the 1940
Act, and Massachusetts state securities laws (including, in the case of each of
the foregoing, the rules and regulations thereunder). Such opinion may rely on
the opinion of Ropes & Xxxx to the extent set forth in such opinion.
(e) The N-14 Registration Statement shall have become effective under
the 1933 Act and no stop order suspending such effectiveness shall have been
instituted, or, to the knowledge of Pillar, contemplated by the SEC, and the
parties shall have received all permits, licenses and other authorizations
necessary under state securities laws to consummate the transactions
contemplated by this Agreement, and all such permits, licenses and other
authorizations shall be in full force and effect at such time.
(f) At the Effective Time of the Reorganization, Galaxy II has, as of
such date, performed and complied in all material respects with each of its
agreements and covenants required by this Agreement to be performed or complied
with by Galaxy II prior to or at the
27
Valuation Time and the Effective Time of the Reorganization and Pillar shall
have received a certificate from the President or Vice President of Galaxy II,
dated as of such date, certifying that the conditions set forth in this clause
(e) have been satisfied.
(g) Pillar shall have received the tax opinion provided for in
Section 14 hereof.
(h) Pillar shall have received any necessary exemptive relief from
the SEC with respect to Section 17(a) of the 1940 Act.
(i) The transactions contemplated by the Agreement and Plan of
Reorganization between The Galaxy Fund and Pillar shall be consummated
concurrently with the transactions contemplated by this Agreement or at such
other time as may be agreed to by the parties hereto.
14. TAX OPINION. Galaxy II and Pillar shall receive an opinion of Drinker
Xxxxxx & Xxxxx LLP addressed to both Galaxy II and Pillar in a form reasonably
satisfactory to them, and dated as of the Effective Time of the Reorganization,
substantially to the effect that on the basis of facts, representations, and
assumptions set forth in such opinion:
(a) The Reorganization will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and the Pillar Fund and the Galaxy Fund
will each be a "party to a reorganization" within the meaning of Section 368(b)
of the Code with respect to such Reorganization;
28
(b) In accordance with Section 354(a)(1) of the Code, no gain or loss
will be recognized by the shareholders of the Pillar Fund upon their receipt of
the Galaxy Fund Shares in exchange for such shareholders' shares of the Pillar
Fund;
(c) In accordance with Section 358(a)(1) of the Code, the basis of
the Galaxy Fund Shares received by the shareholders of the Pillar Fund will be
the same as the basis of the Pillar Fund shares surrendered by such shareholders
pursuant to the Reorganization;
(d) In accordance with Section 1223(1) of the Code, the holding
period for the Galaxy Fund Shares received by each Pillar Fund shareholder will
include the period during which such shareholder held the Pillar Fund shares
surrendered therefor, provided that such Pillar Fund shares are held as a
capital asset in the hands of such Pillar Fund shareholder on the date of the
exchange;
(e) In accordance with Section 1032(a) of the Code, no gain or loss
will be recognized by the Galaxy Fund upon the receipt of substantially all of
the Assets and assumption of substantially all of the Liabilities of the Pillar
Fund in exchange for the Galaxy Fund Shares;
(f) The basis of the Assets received by the Galaxy Fund will be their
fair market value as of the Valuation Time;
(g) The holding period of the Galaxy Fund with respect to the Assets
of the Pillar Fund received in the Reorganization will begin at the Effective
Time of the Reorganization; and
29
(h) The Galaxy Fund will succeed to and take into account the tax
attributes described in Section 381(c) of the Code of the Pillar Fund as of the
Effective Time of the Reorganization, subject to the conditions and limitations
specified in the Code.
In rendering such opinion described in this paragraph, Drinker Xxxxxx
& Xxxxx LLP may require and, to the extent it deems necessary and appropriate,
may rely, as to factual matters, upon representations made in certificates of
the Galaxy Fund and the Pillar Fund, their affiliates, and principal
shareholders.
15. FURTHER ASSURANCES. Subject to the terms and conditions herein
provided, each of the parties hereto shall use its best efforts to take, or
cause to be taken, such action, to execute and deliver, or cause to be executed
and delivered, such additional documents and instruments and to do, or cause to
be done, all things necessary, proper or advisable under the provisions of this
Agreement and under applicable law to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
delivering and/or causing to be delivered to the other party hereto each of the
items required under this Agreement as a condition to such party's obligations
hereunder. In addition, Pillar shall deliver or cause to be delivered to Galaxy
II, each account, book, record or other document of Pillar required to be
maintained by Pillar pursuant to Section 31(a) of the 1940 Act and Rules 31a-1
to 31a-3 thereunder (regardless of whose possession they are in) (the
"Records").
16. TERMINATION AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Pillar set forth in this Agreement shall
terminate upon the consummation of the transactions contemplated herein;
provided, however, that nothing
30
contained in this Section 17 shall be construed (a) to terminate the obligations
of the Galaxy Fund to discharge the Liabilities of the Pillar Fund assumed
pursuant to Section 2(b) hereof, or (b) to terminate the obligations of Galaxy
II to provide liability coverage for the trustees and officers of Pillar and to
indemnify the trustees of Pillar, in each case, pursuant to the covenants set
forth in Section 9(m) hereof.
17. TERMINATION OF AGREEMENT. This Agreement may be terminated by a party
at any time at or prior to the Effective Time of the Reorganization by a vote of
a majority of such party's Board of Trustees, as provided below:
(a) By Galaxy II if the conditions set forth in Section 12 are not
satisfied as specified in said Section;
(b) By Pillar if the conditions set forth in Section 13 are not
satisfied as specified in said Section; or
(c) By mutual consent of both parties.
If a party terminates this Agreement because one or more of its conditions
have not been fulfilled, or if this Agreement is terminated by mutual consent,
this Agreement will become null and void insofar as it is so terminated without
any liability of any party to the other parties except as otherwise provided
herein.
18. AMENDMENT AND WAIVER. At any time prior to or (to the fullest extent
permitted by law) after approval of this Agreement by the shareholders of Pillar
in accordance with Section 10 hereof, (a) the parties hereto may, by written
agreement authorized by their respective Boards
31
of Trustees and with or without the approval of their shareholders, amend,
modify or terminate any of the provisions of this Agreement, and (b) any party
may waive any breach by any other party or any failure by any other party to
satisfy any of the conditions to the obligations of the waiving party (such
waiver to be in writing and authorized by an authorized officer of the waiving
party) with or without the approval of such party's shareholders.
19. GOVERNING LAW. This Agreement and the transactions contemplated hereby
shall be governed, construed and enforced in accordance with the internal laws
of the Commonwealth of Massachusetts, without giving effect to the conflicts of
law principles of such state.
20. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
respective successors and permitted assigns of the parties hereto. This
Agreement and the rights, obligations and liabilities hereunder may not be
assigned by any party without the prior written consent of all other parties.
21. BENEFICIARIES. Nothing contained in this Agreement shall be deemed to
create rights in persons not parties hereto (including, without limitation, any
shareholder of Galaxy II or Pillar) other than (a) the trustees of Pillar with
respect to the covenants of Galaxy II set forth in Section 9(m); and (b) the
successors and permitted assigns of the parties.
22. NOTICES. All notices required or permitted herein shall be in writing
and shall be deemed to be properly given when delivered personally or by
telecopier to the party entitled to receive the notice or when sent by certified
or registered mail, postage prepaid, or delivered to a recognized overnight
courier service, in each case, properly addressed to the party entitled to
receive such notice at the address or telecopier number stated below or to such
other address or
32
telecopier number as may hereafter be furnished in writing by notice similarly
given by one party to the other party hereto:
If to Galaxy II:
Galaxy Fund II
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
With copies to:
W. Xxxxx XxXxxxxx, III, Esq.
Drinker Xxxxxx & Xxxxx LLP
One Xxxxx Square
00xx & Xxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier Number: (000) 000-0000
If to Pillar:
The Pillar Funds
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
With copies to:
Xxxxxxx Xxxxx, Esq.
Xxxxxx Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
23. EXPENSES AND WAIVERS. With regard to the expenses incurred by Pillar
and Galaxy II in connection with this Agreement and the transactions
contemplated hereby, Fleet Investment Advisors Inc. shall bear such expenses.
33
24. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding of the parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to matters provided for herein.
25. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
26. NO BROKERS OR FINDERS. Galaxy II on behalf of the Galaxy Fund and
Pillar on behalf of the Pillar Fund hereby represent and warrant to each other
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
27. VALIDITY. Whenever possible, each provision and term of this Agreement
shall be interpreted in a manner to be effective and valid, but if any provision
or term of this Agreement is held to be prohibited by law or invalid, then such
provision or term shall be ineffective only in the jurisdiction or jurisdictions
so holding and only to the extent of such prohibition or invalidity, without
invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement.
28. EFFECT OF FACSIMILE SIGNATURE. A facsimile signature of an authorized
officer of a party hereto on this Agreement and/or any Transfer Document shall
have the same effect as if executed in the original by such officer.
29. HEADINGS. The headings contained herein are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
34
30. GALAXY II LIABILITY. The names "Galaxy Fund II" and "Trustees of
Galaxy Fund II" refer respectively to the trust created and the trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust dated February 22, 1990, as amended on April 6, 1990 and
June 30, 1994, which is hereby referred to and a copy of which is on file at the
office of the Secretary of State of the Commonwealth of Massachusetts and at the
principal office of Galaxy II. The obligations of Galaxy II entered into in the
name or on behalf thereof by any of the trustees, representatives or agents are
made not individually, but in such capacities, and are not binding upon any of
the trustees, shareholders or representatives of Galaxy II personally, but bind
only the trust property, and all persons dealing with any series of shares of
Galaxy II must look solely to the trust property belonging to such series for
the enforcement of any claims against Galaxy II.
Both parties specifically acknowledge and agree that any liability of
Galaxy II under this Agreement with respect to the Galaxy Fund, or in connection
with the transactions contemplated herein with respect to the Galaxy Fund, shall
be discharged only out of the assets of the Galaxy Fund and that no other
portfolio of Galaxy II shall be liable with respect thereto.
31. PILLAR LIABILITY. The names "The Pillar Funds" and "Trustees of The
Pillar Funds" refer respectively to the trust created and the trustees, as
trustees but not individually or personally, acting from time to time under an
Agreement and Declaration of Trust dated September 9, 1991, which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of the Commonwealth of Massachusetts and at the principal office of Pillar. The
obligations of Pillar entered into in the name or on behalf thereof by any of
the trustees,
35
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the trustees, shareholders or representatives of
Pillar personally, but bind only the trust property, and all persons dealing
with any series of shares of Pillar must look solely to the trust property
belonging to such series for the enforcement of any claims against Pillar.
Both parties specifically acknowledge and agree that any liability of
Pillar under this Agreement with respect to the Pillar Fund, or in connection
with the transactions contemplated herein with respect to the Pillar Fund, shall
be discharged only out of the assets of the Pillar Fund and that no other
portfolio of Pillar shall be liable with respect thereto.
36
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the date first
written above.
GALAXY FUND II
By:
-----------------------------------
Name:
Title:
THE PILLAR FUNDS
By:
-----------------------------------
Name:
Title:
FLEET INVESTMENT ADVISORS INC. hereby
joins in this agreement with respect to,
and agrees to be bound by, Section 24.
By:
-----------------------------------
Name:
Title:
37
