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US1DOCS 5308619v2
US1DOCS 5308619v2
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of the 26th day of September, 2005, by and between Pioneer Variable Contracts
Trust, a Delaware statutory trust (the "Acquiring Trust"), on behalf of its
series Pioneer Value VCT Portfolio (the "Acquiring Portfolio"), with its
principal place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
Variable Insurance Funds, a Massachusetts business trust (the "AmSouth Trust"),
on behalf of its series AmSouth Value Fund (the "Acquired Portfolio"), with its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇. The
Acquiring Portfolio and the Acquired Portfolio are sometimes referred to
collectively herein as the "Portfolios" and individually as a "Portfolio."
This Agreement is intended to be and is adopted as a plan of a
"reorganization" as defined in Section 368(a)(1)(D) of the United States
Internal Revenue Code of 1986, as amended (the "Code") and the Treasury
Regulations thereunder. The reorganization (the "Reorganization") will consist
of (1) the transfer of all of the assets of the Acquired Portfolio to the
Acquiring Portfolio in exchange solely for (A) the issuance of Class II shares
of beneficial interest of the Acquiring Portfolio (collectively, the "Acquiring
Portfolio Shares" and each, an "Acquiring Portfolio Share") to the Acquired
Portfolio, and (B) the assumption by the Acquiring Portfolio of the liabilities
of the Acquired Portfolio that are both set forth on the Statements of Assets
and Liabilities (as defined below) and also included in the calculation of net
asset value ("NAV") on the closing date of the Reorganization (the "Closing
Date") (collectively, the "Assumed Liabilities"), and (2) the distribution by
the Acquired Portfolio, on or promptly after the Closing Date as provided
herein, of the Acquiring Portfolio Shares to the shareholders of the Acquired
Portfolio in liquidation and dissolution of the Acquired Portfolio, all upon the
terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Trust and the AmSouth Trust are each registered
investment companies classified as management companies of the open-end type.
WHEREAS, the Acquiring Portfolio is authorized to issue shares of
beneficial interest.
WHEREAS, the Board of Trustees of the AmSouth Trust and the Board of
Trustees of the Acquiring Trust have determined that the Reorganization is in
the best interests of the Acquired Portfolio shareholders and the Acquiring
Portfolio shareholders, respectively, and is not dilutive of the interests of
those shareholders.
NOW, THEREFORE, in consideration of the premises of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND
TERMINATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the basis of the
representations and warranties contained herein, the Acquired Portfolio will
transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets")
to the Acquiring Portfolio free and clear of all liens and encumbrances (other
than those arising under the Securities Act of 1933, as amended (the "Securities
Act"), liens for taxes not yet due and contractual restrictions on the transfer
of the Acquired Assets) and the Acquiring Portfolio agrees in exchange therefor:
(i) to issue to the Acquired Portfolio the number of Acquiring Portfolio Shares,
including fractional Acquiring Portfolio Shares, with an aggregate NAV equal to
the NAV of the Acquired Portfolio attributable to the Acquired Portfolio's
shares, as determined in the manner set forth in Paragraphs 2.1 and 2.2; and
(ii) to assume the Assumed Liabilities. Such transactions shall take place at
the Closing (as defined in Paragraph 3.1 below).
1.2 (a) The Acquired Assets shall consist of all of the Acquired Portfolio's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights and choses in action of the Acquired Portfolio or the AmSouth Trust in
respect of the Acquired Portfolio, all other intangible property owned by the
Acquired Portfolio, originals or copies of all books and records of the Acquired
Portfolio, and all other assets of the Acquired Portfolio on the Closing Date.
The Acquiring Portfolio shall also be entitled to receive (or, to the extent
agreed upon between the AmSouth Trust and the Acquiring Trust, be provided
access to) copies of all records that the AmSouth Trust is required to maintain
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the rules of the Securities and Exchange Commission (the
"Commission") thereunder to the extent such records pertain to the Acquired
Portfolio.
(b) The Acquired Portfolio has provided the Acquiring Portfolio with a list of
all of the Acquired Portfolio's securities and other assets as of the date of
execution of this Agreement, and the Acquiring Portfolio has provided the
Acquired Portfolio with a copy of the current fundamental investment policies
and restrictions and fair value procedures applicable to the Acquiring
Portfolio. The Acquired Portfolio reserves the right to sell any of such
securities or other assets before the Closing Date (except to the extent sales
may be limited by representations of the Acquired Portfolio contained herein and
made in connection with the issuance of the tax opinion provided for in
Paragraph 8.5 hereof) and agrees not to hold on the Closing Date any portfolio
security that would violate an investment policy or restriction of the Acquiring
Portfolio identified in writing to the Acquired Portfolio by the Acquiring
Portfolio or its agent.
1.3 The Acquired Portfolio will endeavor to discharge all of its known
liabilities and obligations that are or will become due prior to the Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the AmSouth Trust shall liquidate the Acquired Portfolio
and distribute pro rata to its shareholders of record, determined as of the
close of regular trading on the New York Stock Exchange on the Closing Date (the
"Acquired Portfolio Shareholders"), the Acquiring Portfolio Shares received by
the Acquired Portfolio pursuant to Paragraph 1.1 hereof. Each Acquired Portfolio
Shareholder shall receive the number of Acquiring Portfolio Shares corresponding
to the class of shares of beneficial interest in the Acquired Portfolio (the
"Acquired Portfolio Shares") held by such Acquired Portfolio Shareholder that
have an aggregate NAV equal to the aggregate NAV of the Acquired Portfolio
Shares held of record by such Acquired Portfolio Shareholder on the Closing
Date. Such liquidation and distribution will be accomplished by the AmSouth
Trust instructing the Acquiring Trust to transfer the Acquiring Portfolio Shares
then credited to the account of the Acquired Portfolio on the books of the
Acquiring Portfolio to open accounts on the share records of the Acquiring
Portfolio established and maintained by the Acquiring Portfolio's transfer agent
in the names of the Acquired Portfolio Shareholders and representing the
respective pro rata number of the Acquiring Portfolio Shares due the Acquired
Portfolio Shareholders. All issued and outstanding Acquired Portfolio Shares
will simultaneously be cancelled on the books of the Acquired Portfolio, and the
Acquired Portfolio will be dissolved. The Acquiring Portfolio shall not issue
certificates representing the Acquiring Portfolio Shares in connection with such
exchange.
1.5 Ownership of Acquiring Portfolio Shares will be shown on the books of the
Acquiring Portfolio's transfer agent. Any certificates representing ownership of
Acquired Portfolio Shares that remain outstanding on the Closing Date shall be
deemed to be cancelled and shall no longer evidence ownership of Acquired
Portfolio Shares.
1.6 Any transfer taxes payable upon issuance of Acquiring Portfolio Shares in a
name other than the registered holder of the Acquired Portfolio Shares on the
books of the Acquired Portfolio as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Portfolio
Shares are to be issued and transferred.
1.7 Any reporting responsibility of the AmSouth Trust with respect to the
Acquired Portfolio for taxable periods ending on or before the Closing Date,
including, but not limited to, the responsibility for filing of regulatory
reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the
Commission, any state securities commissions, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the AmSouth Trust.
2. VALUATION
2.1 The NAV of the Acquiring Portfolio Shares and the NAV of the Acquired
Portfolio shall, in each case, be determined as of the close of regular trading
on the New York Stock Exchange (generally, 4:00 p.m., Boston time) on the
Closing Date (the "Valuation Time"). The NAV of each Acquiring Portfolio Share
shall be computed by Pioneer Investment Management, Inc. (the "Acquiring
Portfolio Adviser") in the manner set forth in the Acquiring Trust's Declaration
of Trust (the "Declaration"), or By-Laws, and the Acquiring Portfolio's
then-current prospectus and statement of additional information. The NAV of the
Acquired Portfolio shall be computed by BISYS Fund Services Ohio, Inc. (the
"Acquired Portfolio Administrator") in the manner set forth in the Acquiring
Trust's Declaration or By-laws, and the Acquiring Portfolio's then-current
prospectus and statement of additional information. The Acquiring Portfolio
Adviser shall confirm to the Acquiring Portfolio the NAV of the Acquired
Portfolio.
2.2 The number of Acquiring Portfolio Shares to be issued (including fractional
shares, if any) in exchange for the Acquired Assets and the assumption of the
Assumed Liabilities shall be determined by the Acquiring Portfolio Adviser by
dividing the NAV of the Acquired Portfolio, as determined in accordance with
Paragraph 2.1, by the NAV of each Acquiring Portfolio Share, as determined in
accordance with Paragraph 2.1.
2.3 The Acquiring Portfolio and the Acquired Portfolio shall cause the Acquiring
Portfolio Adviser and the Acquired Portfolio Administrator, respectively, to
deliver a copy of its valuation report to the other party at Closing. All
computations of value shall be made by the Acquiring Portfolio Adviser and the
Acquired Portfolio Administrator in accordance with its regular practice as
pricing agent for the Acquiring Portfolio and the Acquired Portfolio,
respectively.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be November 4, 2005, or such later date as the
parties may agree to in writing. All acts necessary to consummation the
Reorganization (the "Closing") shall be deemed to take place simultaneously as
of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise provided. The
Closing shall be held at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇
LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, or at such other place as the
parties may agree.
3.2 Portfolio securities that are held other than in book-entry form in the name
of AmSouth Bank (the "Acquired Portfolio Custodian") as record holder for the
Acquired Portfolio shall be presented by the Acquired Portfolio to ▇▇▇▇▇
Brothers ▇▇▇▇▇▇▇▇ & Co. (the "Acquiring Portfolio Custodian") for examination no
later than three business days preceding the Closing Date. Such portfolio
securities shall be delivered by the Acquired Portfolio to the Acquiring
Portfolio Custodian for the account of the Acquiring Portfolio on the Closing
Date, duly endorsed in proper form for transfer, in such condition as to
constitute good delivery thereof in accordance with the custom of brokers, and
shall be accompanied by all necessary federal and state stock transfer stamps or
a check for the appropriate purchase price thereof. Portfolio securities held of
record by the Acquired Portfolio Custodian in book-entry form on behalf of the
Acquired Portfolio shall be delivered by the Acquired Portfolio Custodian
through the Depository Trust Company to the Acquiring Portfolio Custodian and by
the Acquiring Portfolio Custodian recording the beneficial ownership thereof by
the Acquiring Portfolio on the Acquiring Portfolio Custodian's records. Any cash
shall be delivered by the Acquired Portfolio Custodian transmitting immediately
available funds by wire transfer to the Acquiring Portfolio Custodian the cash
balances maintained by the Acquired Portfolio Custodian and the Acquiring
Portfolio Custodian crediting such amount to the account of the Acquiring
Portfolio.
3.3 The Acquiring Portfolio Custodian shall deliver within one business day
after the Closing a certificate of an authorized officer stating that: (a) the
Acquired Assets have been delivered in proper form to the Acquiring Portfolio on
the Closing Date, and (b) all necessary transfer taxes including all applicable
federal and state stock transfer stamps, if any, have been paid, or provision
for payment has been made in conjunction with the delivery of portfolio
securities as part of the Acquired Assets.
3.4 If on the Closing Date (a) the New York Stock Exchange is closed to trading
or trading thereon shall be restricted or (b) trading or the reporting of
trading on such exchange or elsewhere is disrupted so that accurate appraisal of
the NAV of the Acquiring Portfolio Shares or the Acquired Portfolio Shares
pursuant to Paragraph 2.1 is impracticable, the Closing Date shall be postponed
until the first business day after the day when trading shall have been fully
resumed and reporting shall have been restored.
3.5 The Acquired Portfolio shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding and
nonresident alien withholding status and certificates of the Acquired Portfolio
Shareholders and the number and percentage ownership of outstanding Acquired
Portfolio Shares owned by each Acquired Portfolio Shareholder as of the
Valuation Time, certified by an authorized officer of AmSouth Trust (the
"Shareholder List") as being an accurate record of the information (a) provided
by the Acquired Portfolio Shareholders, (b) provided by the Acquired Portfolio
Custodian, or (c) derived from the AmSouth Trust's records by such officers or
one of the AmSouth Trust's service providers. The Acquiring Portfolio shall
issue and deliver to the Acquired Portfolio a confirmation evidencing the
Acquiring Portfolio Shares to be credited on the Closing Date, or provide
evidence satisfactory to the Acquired Portfolio that such Acquiring Portfolio
Shares have been credited to the Acquired Portfolio's account on the books of
the Acquiring Portfolio. At the Closing, each party shall deliver to the other
such bills of sale, checks, assignments, stock certificates, receipts or other
documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 Except as set forth on a disclosure schedule previously provided by the
AmSouth Trust to the Acquiring Trust, the AmSouth Trust, on behalf of the
Acquired Portfolio, represents, warrants and covenants to the Acquiring
Portfolio, which representations, warranties and covenants will be true and
correct on the date hereof and on the Closing Date as though made on and as of
the Closing Date, as follows:
(a) The Acquired Portfolio is a series of the AmSouth Trust. The AmSouth Trust
is a business trust validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to own all of its properties and
assets and, subject to approval by the Acquired Portfolio's shareholders, to
perform its obligations under this Agreement. The Acquired Portfolio is not
required to qualify to do business in any jurisdiction in which it is not so
qualified or where failure to qualify would subject it to any material liability
or disability. Each of the AmSouth Trust and the Acquired Portfolio has all
necessary federal, state and local authorizations to own all of its properties
and assets and to carry on its business as now being conducted;
(b) The AmSouth Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in full
force and effect;
(c) The AmSouth Trust is not in violation of, and the execution and delivery of
this Agreement and the performance of its obligations under this Agreement in
respect of the Acquired Portfolio will not result in a violation of, any
provision of the AmSouth Trust's Trust Instrument or By-Laws or any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquired Portfolio to which the AmSouth Trust is a party or by
which the Acquired Portfolio or any of its assets are bound;
(d) No litigation or administrative proceeding or investigation of or before any
court or governmental body is currently pending or to its knowledge threatened
against the Acquired Portfolio or any of the Acquired Portfolio's properties or
assets. The Acquired Portfolio knows of no facts which might form the basis for
the institution of such proceedings. Neither the AmSouth Trust nor the Acquired
Portfolio is a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially adversely affects
the Acquired Portfolio's business or its ability to consummate the transactions
contemplated herein or would be binding upon the Acquiring Portfolio as the
successor to the Acquired Portfolio;
(e) The Acquired Portfolio has no material contracts or other commitments (other
than this Agreement or agreements for the purchase and sale of securities
entered into in the ordinary course of business and consistent with its
obligations under this Agreement) which will not be terminated at or prior to
the Closing Date and no such termination will result in liability to the
Acquired Portfolio (or the Acquiring Portfolio);
(f) The Statement of Assets and Liabilities of the Acquired Portfolio delivered
pursuant to Paragraph 5.7 (the "Statement of Assets and Liabilities"), and the
related statements of operations and changes in net assets, as of and for the
fiscal year ended December 31, 2004, have been audited by Ernst & Young LLP,
independent registered public accounting firm, and are in accordance with
generally accepted accounting principles ("GAAP") consistently applied and
fairly reflect, in all material respects, the financial condition of the
Acquired Portfolio as of such date and the results of its operations for the
period then ended, and all known liabilities, whether actual or contingent, of
the Acquired Portfolio as of the date thereof are disclosed therein. The
Statement of Assets and Liabilities will be in accordance with GAAP consistently
applied and will fairly reflect, in all material respects, the financial
condition of the Acquired Portfolio as of such date and the results of its
operations for the period then ended. The Acquired Portfolio will not have any
known or contingent liabilities required to be reflected on its Statement of
Assets and Liabilities on the Closing Date other than those disclosed on its
Statement of Assets and Liabilities on the Closing Date. No significant
deficiency, material weakness, fraud, significant change or other factor that
could significantly affect the internal controls of the Acquired Portfolio has
been disclosed or is required to be disclosed in the Acquired Portfolio's
reports on Form N-CSR to enable the chief executive officer and chief financial
officer or other officers of the Acquired Portfolio to make the certifications
required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and no deficiency, weakness, fraud, change,
event or other factor exists that will be required to be disclosed in the
Acquiring Portfolio's Form N-CSR after the Closing Date;
(g) Since the most recent fiscal year end, except as specifically disclosed in
the Acquired Portfolio's prospectus or its statement of additional information
as in effect on the date of this Agreement, there has not been any material
adverse change in the Acquired Portfolio's financial condition, assets,
liabilities, business or prospects, or any incurrence by the Acquired Portfolio
of indebtedness, except for normal contractual obligations incurred in the
ordinary course of business or in connection with the settlement of purchases
and sales of portfolio securities. For the purposes of this subparagraph (g)
(but not for any other purpose of this Agreement), a decline in NAV per Acquired
Portfolio Share arising out of its normal investment operations or a decline in
market values of securities in the Acquired Portfolio's portfolio or a decline
in net assets of the Acquired Portfolio as a result of redemptions shall not
constitute a material adverse change;
(h) (A) For each taxable year of its operation since its inception, the Acquired
Portfolio has satisfied, and for the current taxable year it will satisfy, the
requirements of Subchapter M of the Code for qualification and treatment as a
regulated investment company. The Acquired Portfolio will qualify as such as of
the Closing Date and will satisfy the diversification requirements of Section
851(b)(3) of the Code without regard to the last sentence of Section 851(d) of
the Code. The Acquired Portfolio has not taken any action, caused any action to
be taken or caused any action to fail to be taken which action or failure could
cause the Acquired Portfolio to fail to qualify as a regulated investment
company under the Code. To the knowledge of the AmSouth Trust, (i) the Acquired
Portfolio does not have, and has not ever had, any shareholder that is not a
segregated asset account within the meaning of Treasury Regulation Section
1.817-5(e) or an entity referred to in (and holding its shares in compliance
with the terms of) Treasury Regulation Section 1.817-5(f)(3)(i), (ii), or (iii);
(ii) no public investor is participating or has ever participated in the
Acquired Portfolio through such a segregated asset account other than through
purchase of a variable contract within the meaning of Treasury Regulation
Section 1.817-5(f)(2)(i)(B); and (iii) the Acquired Portfolio satisfies, and at
all time during its existence has satisfied, the diversification requirements
contained in Treasury Regulation Section 1.817-5(b)(1), (2), or (3);
(B) Within the times and in the manner prescribed by law, the Acquired Portfolio
has properly filed on a timely basis all Tax Returns (as defined below) that it
was required to file, and all such Tax Returns were complete and accurate in all
material respects. The Acquired Portfolio has not been informed by any
jurisdiction that the jurisdiction believes that the Acquired Portfolio was
required to file any Tax Return that was not filed; and the Acquired Portfolio
does not know of any basis upon which a jurisdiction could assert such a
position;
(C) The Acquired Portfolio has timely paid, in the manner prescribed by law, all
Taxes (as defined below), which were due and payable or which were claimed to be
due;
(D) All Tax Returns filed by the Acquired Portfolio constitute complete and
accurate reports of the respective Tax liabilities and all attributes of the
Acquired Portfolio or, in the case of information returns and payee statements,
the amounts required to be reported, and accurately set forth all items required
to be included or reflected in such returns;
(E) The Acquired Portfolio has not waived or extended any applicable statute of
limitations relating to the assessment or collection of Taxes;
(F) The Acquired Portfolio has not been notified that any examinations of the
Tax Returns of the Acquired Portfolio are currently in progress or threatened,
and no deficiencies have been asserted or assessed against the Acquired
Portfolio as a result of any audit by the Internal Revenue Service or any state,
local or foreign taxing authority, and, to its knowledge, no such deficiency has
been proposed or threatened;
(G) The Acquired Portfolio has no actual or potential liability for any Tax
obligation of any taxpayer other than itself. The Acquired Portfolio is not and
has never been a member of a group of corporations with which it has filed (or
been required to file) consolidated, combined or unitary Tax Returns. The
Acquired Portfolio is not a party to any Tax allocation, sharing, or
indemnification agreement;
(H) The unpaid Taxes of the Acquired Portfolio for tax periods through the
Closing Date do not exceed the accruals and reserves for Taxes (excluding
accruals and reserves for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the Statement of Assets
and Liabilities, rather than in any notes thereto (the "Tax Reserves"). All
Taxes that the Acquired Portfolio is or was required by law to withhold or
collect have been duly withheld or collected and, to the extent required, have
been timely paid to the proper governmental agency;
(I) The Acquired Portfolio has delivered to the Acquiring Portfolio or made
available to the Acquiring Portfolio complete and accurate copies of all Tax
Returns of the Acquired Portfolio, together with all related examination reports
and statements of deficiency for all periods not closed under the applicable
statutes of limitations and complete and correct copies of all private letter
rulings, revenue agent reports, information document requests, notices of
proposed deficiencies, deficiency notices, protests, petitions, closing
agreements, settlement agreements, pending ruling requests and any similar
documents submitted by, received by or agreed to by or on behalf of the Acquired
Portfolio. The Acquired Portfolio has disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Section 6662 of the
Code;
(J) The Acquired Portfolio has not undergone, has not agreed to undergo, and is
not required to undergo (nor will it be required as a result of the transactions
contemplated in this Agreement to undergo) a change in its method of accounting
resulting in an adjustment to its taxable income pursuant to Section 481 of the
Code. The Acquired Portfolio will not be required to include any item of income
in, or exclude any item of deduction from, taxable income for any taxable period
(or portion thereof) ending after the Closing Date as a result of any (i) change
in method of accounting for a taxable period ending on or prior to the Closing
Date under Section 481(c) of the Code (or any corresponding or similar provision
of state, local or foreign income Tax law); (ii) "closing agreement" as
described in Section 7121 of the Code (or any corresponding or similar provision
of state, local or foreign income Tax law) executed on or prior to the Closing
Date; (iii) installment sale or open transaction disposition made on or prior to
the Closing Date; or (iv) prepaid amount received on or prior to the Closing
Date;
(K) The Acquired Portfolio has not taken or agreed to take any action, and is
not aware of any agreement, plan or other circumstance, that is inconsistent
with the representations set forth in the tax representation certificate to be
delivered by AmSouth Trust on behalf of the Acquired Portfolio to the Acquiring
Trust and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP at the Closing pursuant to
Paragraph 7.4 (the "Acquired Portfolio Tax Representation Certificate");
(L) There are (and as of immediately following the Closing there will be) no
liens on the assets of the Acquired Portfolio relating to or attributable to
Taxes, except for Taxes not yet due and payable;
(M) The Tax basis of the assets of the Acquired Portfolio are accurately
reflected on the Acquired Portfolio's Tax books and records;
(N) The Acquired Portfolio's Tax attributes are not limited under the Code
(including but not limited to any capital loss carry forward limitations under
Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or
comparable provisions of state law; and
(O) For purposes of this Agreement, "Taxes" or "Tax" shall mean all taxes,
charges, fees, levies or other similar assessments or liabilities, including
without limitation income, gross receipts, ad valorem, premium, value-added,
excise, real property, personal property, sales, use, transfer, withholding,
employment, unemployment, insurance, social security, business license, business
organization, environmental, workers compensation, payroll, profits, license,
lease, service, service use, severance, stamp, occupation, windfall profits,
customs, duties, franchise and other taxes imposed by the United States of
America or any state, local or foreign government, or any agency thereof, or
other political subdivision of the United States or any such government, and any
interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any tax or any contest or dispute
thereof; and "Tax Returns" shall mean all reports, returns, declarations,
statements or other information required to be supplied to a governmental or
regulatory authority or agency, or to any other person, in connection with Taxes
and any associated schedules or work papers produced in connection with such
items;
(i) All issued and outstanding Acquired Portfolio Shares are, and at the Closing
Date will be, legally issued and outstanding, fully paid and nonassessable by
the AmSouth Trust. All of the issued and outstanding Acquired Portfolio Shares
will, at the time of Closing, be held of record by the persons and in the
amounts set forth in the Shareholder List submitted to the Acquiring Portfolio
pursuant to Paragraph 3.5 hereof. The Acquired Portfolio does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Acquired Portfolio Shares, nor is there outstanding any security convertible
into any Acquired Portfolio Shares;
(j) At the Closing Date, the Acquired Portfolio will have good and marketable
title to the Acquired Assets, and full right, power and authority to sell,
assign, transfer and deliver the Acquired Assets to the Acquiring Portfolio,
and, upon delivery and payment for the Acquired Assets, the Acquiring Portfolio
will acquire good and marketable title thereto, subject to no restrictions on
the full transfer thereof, except such restrictions as might arise under the
Securities Act;
(k) The AmSouth Trust has the trust power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of the AmSouth Trust's Board of Trustees, and, subject to the
approval of the Acquired Portfolio's shareholders, assuming due authorization,
execution and delivery by the Acquiring Portfolio, this Agreement will
constitute a valid and binding obligation of the Acquired Portfolio, enforceable
in accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general equity principles;
(l) The information to be furnished by the Acquired Portfolio to the Acquiring
Portfolio for use in applications for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby and any information necessary to compute the
total return of the Acquired Portfolio shall be accurate and complete and shall
comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(m) The information included in the proxy statement (the "Proxy Statement")
forming part of the Acquiring Portfolio's Registration Statement on Form N-14
filed in connection with this Agreement (the "Registration Statement") that has
been furnished in writing by the Acquired Portfolio to the Acquiring Portfolio
for inclusion in the Registration Statement, on the effective date of that
Registration Statement and on the Closing Date, will conform in all material
respects to the applicable requirements of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Investment
Company Act and the rules and regulations of the Commission thereunder and will
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
not misleading;
(n) Upon the effectiveness of the Registration Statement, no consent, approval,
authorization or order of any court or governmental authority is required for
the consummation by the AmSouth Trust or the Acquired Portfolio of the
transactions contemplated by this Agreement;
(o) All of the issued and outstanding Acquired Portfolio Shares have been
offered for sale and sold in conformity in all material respects with all
applicable federal and state securities laws, except as may have been previously
disclosed in writing to the Acquiring Portfolio;
(p) The prospectus and statement of additional information of the Acquired
Portfolio and any amendments or supplements thereto, furnished to the Acquiring
Portfolio, did not as of their dates or the dates of their distribution to the
public 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 in which such statements were made, not
materially misleading;
(q) The Acquired Portfolio currently complies in all material respects with, and
since its organization has complied in all material respects with, the
requirements of, and the rules and regulations under, the Investment Company
Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other
applicable federal and state laws or regulations. The Acquired Portfolio
currently complies in all material respects with, and since its organization has
complied in all material respects with, all investment objectives, policies,
guidelines and restrictions and any compliance procedures established by the
AmSouth Trust with respect to the Acquired Portfolio. All advertising and sales
material used by the Acquired Portfolio complies in all material respects with
and has complied in all material respects with the applicable requirements of
the Securities Act, the Investment Company Act, the rules and regulations of the
Commission, and, to the extent applicable, the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD") and any applicable state
regulatory authority. All registration statements, prospectuses, reports, proxy
materials or other filings required to be made or filed with the Commission, the
NASD or any state securities authorities by the Acquired Portfolio have been
duly filed and have been approved or declared effective, if such approval or
declaration of effectiveness is required by law. Such registration statements,
prospectuses, reports, proxy materials and other filings under the Securities
Act, the Exchange Act and the Investment Company Act (i) are or were in
compliance in all material respects with the requirements of all applicable
statutes and the rules and regulations thereunder and (ii) do not or did 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 in which they were made, not false or misleading;
(r) Neither the Acquired Portfolio nor, to the knowledge of the Acquired
Portfolio, any "affiliated person" of the Acquired Portfolio has been convicted
of any felony or misdemeanor, described in Section 9(a)(1) of the Investment
Company Act, nor, to the knowledge of the Acquired Portfolio, has any affiliated
person of the Acquired Portfolio been the subject, or presently is the subject,
of any proceeding or investigation with respect to any disqualification that
would be a basis for denial, suspension or revocation of registration as an
investment adviser under Section 203(e) of the Investment Advisers Act of 1940,
as amended (the "Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of
a broker-dealer under Section 15 of the Exchange Act, or for disqualification as
an investment adviser, employee, officer or director of an investment company
under Section 9 of the Investment Company Act; and
(s) The Acquired Portfolio Tax Representation Certificate will not on the
Closing Date contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading.
4.2 Except as set forth on a disclosure schedule previously provided by the
Acquiring Trust to the AmSouth Trust, the Acquiring Trust, on behalf of the
Acquiring Portfolio, represents, warrants and covenants to the Acquired
Portfolio, which representations, warranties and covenants will be true and
correct on the date hereof and on the Closing Date as though made on and as of
the Closing Date, as follows:
(a) The Acquiring Portfolio is a series of the Acquiring Trust. The Acquiring
Trust is a statutory trust duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Acquiring Trust has the power to
own all of its properties and assets and to perform the obligations under this
Agreement. The Acquiring Portfolio is not required to qualify to do business in
any jurisdiction in which it is not so qualified or where failure to qualify
would subject it to any material liability or disability. Each of the Acquiring
Trust and the Acquiring Portfolio has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Acquiring Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in full
force and effect;
(c) The current prospectus and statement of additional information for the
Acquiring Portfolio and each prospectus and statement of additional information
for the Acquiring Portfolio used during the three years previous to the date of
this Agreement conforms or conformed at the time of its use in all material
respects to the applicable requirements of the Securities Act and the Investment
Company Act and the rules and regulations of the Commission thereunder and do
not or did not at the time of their distribution to the public 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 materially misleading;
(d) The Acquiring Portfolio's registration statement on Form N-1A that will be
in effect on the Closing Date, and the prospectus and statement of additional
information of the Acquiring Portfolio included therein, will conform in all
material respects with the applicable requirements of the Securities Act and the
Investment Company Act and the rules and regulations of the Commission
thereunder, and did not as of the effective date thereof and will not as of the
Closing Date contain 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 in which they were made, not
misleading;
(e) The Registration Statement, including the Proxy Statement and any amendments
or supplements thereto in effect on or prior to the Closing Date (other than
written information furnished by the Acquired Portfolio for inclusion therein,
as covered by the Acquired Portfolio's warranty in Paragraph 4.1(m) hereof) will
conform in all material respects to the applicable requirements of the
Securities Act, the Exchange Act and the Investment Company Act and the rules
and regulations of the Commission thereunder. Neither the Registration Statement
nor the Proxy Statement (other than written information furnished by the
Acquired Portfolio for inclusion therein, as covered by the Acquired Portfolio's
warranty in Paragraph 4.1(m) hereof) includes or will include any untrue
statement of a material fact or omits 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;
(f) The Acquiring Trust is not in violation of, and the execution and delivery
of this Agreement and performance of its obligations under this Agreement will
not result in a violation of, any provisions of the Declaration of Trust or
by-laws of the Acquiring Trust or any material agreement, indenture, instrument,
contract, lease or other undertaking with respect to the Acquiring Portfolio to
which the Acquiring Trust is a party or by which the Acquiring Portfolio or any
of its assets is bound;
(g) No litigation or administrative proceeding or investigation of or before any
court or governmental body is currently pending or threatened against the
Acquiring Portfolio or any of the Acquiring Portfolio's properties or assets.
The Acquiring Portfolio knows of no facts which might form the basis for the
institution of such proceedings. Neither the Acquiring Trust nor the Acquiring
Portfolio is a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially adversely affects
the Acquiring Portfolio's business or its ability to consummate the transactions
contemplated herein;
(h) The statement of assets and liabilities of the Acquiring Portfolio, and the
related statements of operations and changes in net assets, as of and for the
fiscal year ended December 31, 2004 have been audited by Ernst & Young LLP,
independent registered public accounting firm, and are in accordance with GAAP
consistently applied and fairly reflect, in all material respects, the financial
condition of the Acquiring Portfolio as of such date and the results of its
operations for the period then ended, and all known liabilities, whether actual
or contingent, of the Acquiring Portfolio as of the date thereof are disclosed
therein;
(i) Since the most recent fiscal year end, except as specifically disclosed in
the Acquiring Portfolio's prospectus or its statement of additional information
as in effect on the date of this Agreement, there has not been any material
adverse change in the Acquiring Portfolio's financial condition, assets,
liabilities, business or prospects, or any incurrence by the Acquiring Portfolio
of indebtedness, except for normal contractual obligations incurred in the
ordinary course of business or in connection with the settlement of purchases
and sales of portfolio securities. For the purposes of this subparagraph (i)
(but not for any other purpose of this Agreement), a decline in NAV per
Acquiring Portfolio Share arising out of its normal investment operations or a
decline in market values of securities in the Acquiring Portfolio's portfolio or
a decline in net assets of the Acquiring Portfolio as a result of redemptions
shall not constitute a material adverse change;
(j) (A) For each taxable year of its operation since its inception, the
Acquiring Portfolio has satisfied, and for the current taxable year it will
satisfy, the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and will qualify as such as of the
Closing Date and will satisfy the diversification requirements of Section
851(b)(3) of the Code without regard to the last sentence of Section 851(d) of
the Code. The Acquiring Portfolio has not taken any action, caused any action to
be taken or caused any action to fail to be taken which action or failure could
cause the Acquiring Portfolio to fail to qualify as a regulated investment
company under the Code. To the knowledge of the Acquiring Trust, (i) the
Acquiring Portfolio does not have, and has not ever had, any shareholder that is
not a segregated asset account within the meaning of Treasury Regulation Section
1.817-5(e) or an entity referred to in (and holding its shares in compliance
with the terms of) Treasury Regulation Section 1.817-5(f)(3)(i),(ii), or (iii);
(ii) no public investor is participating or has ever participated in the
Acquiring Portfolio through such a segregated asset account other than through
purchase of a variable contract within the meaning of Treasury Regulation
Section 1.817-5(f)(2)(i)(B); and (iii) the Acquiring Portfolio satisfies, and at
all times during its existence has satisfied, the diversification requirements
contained in Treasury Regulation Section 1.817-5(b)(1), (2), or (3);
(B) Within the times and in the manner prescribed by law, the Acquiring
Portfolio has properly filed on a timely basis all Tax Returns that it was
required to file, and all such Tax Returns were complete and accurate in all
material respects. The Acquiring Portfolio has not been informed by any
jurisdiction that the jurisdiction believes that the Acquiring Portfolio was
required to file any Tax Return that was not filed; and the Acquiring Portfolio
does not know of any basis upon which a jurisdiction could assert such a
position;
(C) The Acquiring Portfolio has timely paid, in the manner prescribed by law,
all Taxes that were due and payable or that were claimed to be due;
(D) All Tax Returns filed by the Acquiring Portfolio constitute complete and
accurate reports of the respective liabilities for Taxes and all attributes of
the Acquiring Portfolio or, in the case of information returns and payee
statements, the amounts required to be reported, and accurately set forth all
items required to be included or reflected in such returns;
(E) The Acquiring Portfolio has not waived or extended any applicable statute of
limitations relating to the assessment or collection of Taxes;
(F) The Acquiring Portfolio has not been notified that any examinations of the
Tax Returns of the Acquiring Portfolio are currently in progress or threatened,
and no deficiencies have been asserted or assessed against the Acquiring
Portfolio as a result of any audit by the Internal Revenue Service or any state,
local or foreign taxing authority, and, to its knowledge, no such deficiency has
been proposed or threatened;
(G) The Acquiring Portfolio has no actual or potential liability for any Tax
obligation of any taxpayer other than itself. The Acquiring Portfolio is not and
has never been a member of a group of corporations with which it has filed (or
been required to file) consolidated, combined or unitary Tax Returns. The
Acquiring Portfolio is not a party to any Tax allocation, sharing, or
indemnification agreement;
(H) The unpaid Taxes of the Acquiring Portfolio for tax periods through the
Closing Date do not exceed the Tax Reserves. All Taxes that the Acquiring
Portfolio is or was required by law to withhold or collect have been duly
withheld or collected and, to the extent required, have been timely paid to the
proper governmental agency;
(I) The Acquiring Trust has delivered to AmSouth Trust or made available to
AmSouth Trust complete and accurate copies of all Tax Returns of the Acquiring
Portfolio, together with all related examination reports and statements of
deficiency for all periods not closed under the applicable statutes of
limitations and complete and correct copies of all private letter rulings,
revenue agent reports, information document requests, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements,
settlement agreements, pending ruling requests and any similar documents
submitted by, received by or agreed to by or on behalf of the Acquiring
Portfolio. The Acquiring Portfolio has disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax within the meaning of Section 6662 of the
Code;
(J) The Acquiring Portfolio has not undergone, has not agreed to undergo, and is
not required to undergo (nor will it be required as a result of the transactions
contemplated in this Agreement to undergo) a change in its method of accounting
resulting in an adjustment to its taxable income pursuant to Section 481 of the
Code. The Acquiring Portfolio will not be required to include any item of income
in, or exclude any item of deduction from, taxable income for any taxable period
(or portion thereof) ending after the Closing Date as a result of any (i) change
in method of accounting for a taxable period ending on or prior to the Closing
Date under Section 481(c) of the Code (or any corresponding or similar provision
of state, local or foreign income Tax law); (ii) "closing agreement" as
described in Section 7121 of the Code (or any corresponding or similar provision
of state, local or foreign income Tax law) executed on or prior to the Closing
Date; (iii) installment sale or open transaction disposition made on or prior to
the Closing Date; or (iv) prepaid amount received on or prior to the Closing
Date;
(K) The Acquiring Portfolio has not taken or agreed to take any action, and is
not aware of any agreement, plan or other circumstance, that is inconsistent
with the representations set forth in the tax representation certificate to be
delivered by the Acquiring Trust on behalf of the Acquiring Portfolio to the
AmSouth Trust and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP at Closing pursuant
to Section 6.3 (the "Acquiring Portfolio Tax Representation Certificate");
(L) There are (and as of immediately following the Closing there will be) no
liens on the assets of the Acquiring Portfolio relating to or attributable to
Taxes, except for Taxes not yet due and payable;
(M) The Tax bases of the assets of the Acquiring Portfolio are accurately
reflected on the Acquiring Portfolio's Tax books and records;
(N) The Acquiring Portfolio's Tax attributes are not limited under the Code
(including but not limited to any capital loss carry forward limitations under
Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or
comparable provisions of state law, except as set forth on Schedule 4.2;
(k) The authorized capital of the Acquiring Portfolio consists of an unlimited
number of shares of beneficial interest, no par value per share. As of the
Closing Date, the Acquiring Portfolio will be authorized to issue an unlimited
number of shares of beneficial interest, no par value per share. The Acquiring
Portfolio Shares to be issued and delivered to the Acquired Portfolio for the
account of the Acquired Portfolio Shareholders pursuant to the terms of this
Agreement will have been duly authorized on the Closing Date and, when so issued
and delivered, will be legally issued and outstanding, fully paid and
non-assessable. The Acquiring Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Acquiring Portfolio
shares, nor is there outstanding any security convertible into any Acquiring
Portfolio shares;
(l) All issued and outstanding Acquiring Portfolio Shares are, and on the
Closing Date will be, legally issued and outstanding, fully paid and
non-assessable and have been offered and sold in every state and the District of
Columbia in compliance in all material respects with all applicable federal and
state securities laws;
(m) The Acquiring Trust has the trust power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of the Acquiring Trust's Board of Trustees, and, assuming due
authorization, execution and delivery by the Acquired Portfolio, this Agreement
will constitute a valid and binding obligation of the Acquiring Portfolio,
enforceable in accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(n) The information to be furnished in writing by the Acquiring Portfolio or the
Acquiring Portfolio Adviser for use in applications for orders, registration
statements, proxy materials and other documents which may be necessary in
connection with the transactions contemplated hereby shall be accurate and
complete in all material respects and shall comply in all material respects with
federal securities and other laws and regulations applicable thereto or the
requirements of any form for which its use is intended, and shall not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the information provided not misleading;
(o) No consent, approval, authorization or order of or filing with any court or
governmental authority is required for the execution of this Agreement or the
consummation of the transactions contemplated by the Agreement by the Acquiring
Portfolio, except for the registration of the Acquiring Portfolio Shares under
the Securities Act and the Investment Company Act;
(p) The Acquiring Portfolio currently complies in all material respects with,
and since its organization has complied in all material respects with, the
requirements of, and the rules and regulations under, the Investment Company
Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other
applicable federal and state laws or regulations. The Acquiring Portfolio
currently complies in all material respects with, and since its organization has
complied in all material respects with, all investment objectives, policies,
guidelines and restrictions and any compliance procedures established by the
Acquiring Trust with respect to the Acquiring Portfolio. All advertising and
sales material used by the Acquiring Portfolio complies in all material respects
with and has complied in all material respects with the applicable requirements
of the Securities Act, the Investment Company Act, the rules and regulations of
the Commission, and, to the extent applicable, the Conduct Rules of the NASD and
any applicable state regulatory authority. All registration statements,
prospectuses, reports, proxy materials or other filings required to be made or
filed with the Commission, the NASD or any state securities authorities by the
Acquiring Portfolio have been duly filed and have been approved or declared
effective, if such approval or declaration of effectiveness is required by law.
Such registration statements, prospectuses, reports, proxy materials and other
filings under the Securities Act, the Exchange Act and the Investment Company
Act (i) are or were in compliance in all material respects with the requirements
of all applicable statutes and the rules and regulations thereunder and (ii) do
not or did 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 in which they were made, not
false or misleading;
(q) Neither the Acquiring Portfolio nor, to the knowledge of the Acquiring
Portfolio, any "affiliated person" of the Acquiring Portfolio has been convicted
of any felony or misdemeanor, described in Section 9(a)(1) of the Investment
Company Act, nor, to the knowledge of the Acquiring Portfolio, has any
affiliated person of the Acquiring Portfolio been the subject, or presently is
the subject, of any proceeding or investigation with respect to any
disqualification that would be a basis for denial, suspension or revocation of
registration as an investment adviser under Section 203(e) of the Investment
Advisers Act or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section
15 of the Exchange Act, or for disqualification as an investment adviser,
employee, officer or director of an investment company under Section 9 of the
Investment Company Act; and
(r) The Acquiring Portfolio Tax Representation Certificate will not on the
Closing Date contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading.
5. COVENANTS OF THE FUNDS
5.1 The Acquired Portfolio will operate the Acquired Portfolio's business in the
ordinary course of business between the date hereof and the Closing Date. It is
understood that such ordinary course of business will include the declaration
and payment of customary dividends and other distributions and any other
dividends and other distributions necessary or advisable (except to the extent
dividends or other distributions that are not customary may be limited by
representations made in connection with the issuance of the tax opinion
described in Paragraph 8.5 hereof), in each case payable either in cash or in
additional shares.
5.2 The AmSouth Trust will call a special meeting of the Acquired Portfolio's
shareholders to consider approval of this Agreement and act upon the matters set
forth in the Proxy Statement.
5.3 The Acquiring Portfolio will prepare the notice of meeting, form of proxy
and Proxy Statement (collectively, "Proxy Materials") to be used in connection
with such meeting, and will promptly prepare and file with the Commission the
Registration Statement. The AmSouth Trust will provide the Acquiring Portfolio
with information reasonably requested for the preparation of the Registration
Statement in compliance with the Securities Act, the Exchange Act, and the
Investment Company Act.
5.4 The Acquired Portfolio covenants that the Acquiring Portfolio Shares to be
issued hereunder are not being acquired by the Acquired Portfolio for the
purpose of making any distribution thereof other than in accordance with the
terms of this Agreement.
5.5 The Acquired Portfolio will assist the Acquiring Portfolio in obtaining such
information as the Acquiring Portfolio reasonably requires concerning the
beneficial ownership of the Acquired Portfolio Shares.
5.6 Subject to the provisions of this Agreement, each Fund will take, or cause
to be taken, all actions, and do or cause to be done, all things reasonably
necessary, proper or advisable to consummate the transactions contemplated by
this Agreement.
5.7 The Acquired Portfolio shall furnish to the Acquiring Portfolio on the
Closing Date a Statement of Assets and Liabilities of the Acquired Portfolio as
of the Closing Date setting forth the NAV (as computed pursuant to Paragraph
2.1) of the Acquired Portfolio as of the Valuation Time, which statement shall
be prepared in accordance with GAAP consistently applied and certified by the
AmSouth Trust's Treasurer or Assistant Treasurer. As promptly as practicable,
but in any case within 30 days after the Closing Date, the AmSouth Trust shall
furnish to the Acquiring Trust, in such form as is reasonably satisfactory to
the Acquiring Trust, a statement of the earnings and profits of the Acquired
Portfolio for federal income tax purposes, and of any capital loss carryovers
and other items that will be carried over to the Acquiring Portfolio under the
Code, and which statement will be certified by the Treasurer of the AmSouth
Trust.
5.8 Neither Fund shall take any action that is inconsistent with the
representations set forth in, with respect to the Acquired Portfolio, the
Acquired Portfolio Tax Representation Certificate and, with respect to the
Acquiring Portfolio, the Acquiring Portfolio Tax Representation Certificate.
5.9 From and after the date of this Agreement and until the Closing Date, each
of the Funds and the AmSouth Trust and the Acquiring Trust shall use its
commercially reasonable efforts to cause the Reorganization to qualify, and will
not knowingly take any action, cause any action to be taken, fail to take any
action or cause any action to fail to be taken, which action or failure to act
could prevent the Reorganization from qualifying, as a reorganization under the
provisions of Section 368(a) of the Code. The parties hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the
Code. Unless otherwise required pursuant to a "determination" within the meaning
of Section 1313(a) of the Code, the parties hereto shall treat and report the
transactions contemplated hereby as a reorganization within the meaning of
Section 368(a)(1)(D) of the Code and shall not take any position inconsistent
with such treatment.
5.10 From and after the date of this Agreement and through the time of the
Closing, each Fund shall use its commercially reasonable efforts to cause it to
qualify, and will not knowingly take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken, which action or
failure to act could prevent it from qualifying as a regulated investment
company under the provisions of Subchapter M of the Code.
5.11 Each Fund shall prepare, or cause to be prepared, all of its Tax Returns
for taxable periods that end on or before the Closing Date and shall timely
file, or cause to be timely filed, all such Tax Returns. Each Fund shall make
any payments of Taxes required to be made by it with respect to any such Tax
Returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Portfolio to complete the transactions
provided for herein shall be, at its election, subject to the performance by the
Acquiring Portfolio of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions, unless waived by the Acquired Portfolio in writing:
6.1 All representations and warranties by the Acquiring Trust on behalf of the
Acquiring Portfolio contained in this Agreement shall be true and correct in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date;
6.2 The Acquiring Trust shall have delivered to the AmSouth Trust on the Closing
Date a certificate of the Acquiring Trust on behalf of the Acquiring Portfolio
executed in its name by its President or Vice President and its Treasurer or
Assistant Treasurer, in form and substance satisfactory to the AmSouth Trust and
dated as of the Closing Date, to the effect that the representations and
warranties of the Acquiring Trust made in this Agreement are true and correct at
and as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, that each of the conditions to Closing in this
Article 6 have been met, and as to such other matters as the AmSouth Trust shall
reasonably request;
6.3 The Acquiring Trust on behalf of the Acquiring Portfolio shall have
delivered to the AmSouth Trust and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP an
Acquiring Portfolio Tax Representation Certificate, satisfactory to the AmSouth
Trust and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, in a form mutually
acceptable to the Acquiring Trust and the AmSouth Trust, concerning certain
tax-related matters with respect to the Acquiring Portfolio;
6.4 With respect to the Acquiring Portfolio, the Board of Trustees of the
Acquiring Trust shall have determined that the Reorganization is in the best
interests of the Acquiring Portfolio and, based upon such determination, shall
have approved this Agreement and the transactions contemplated hereby; and
6.5 The AmSouth Trust shall have received at the Closing a favorable opinion as
to the due authorization of this Agreement by the Acquiring Trust and related
matters of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, dated as of the Closing
Date, in a form reasonably satisfactory to the AmSouth Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Portfolio to complete the transactions
provided for herein shall be, at its election, subject to the performance by the
Acquired Portfolio of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions, unless waived by the Acquiring Portfolio in writing:
7.1 All representations and warranties of the AmSouth Trust on behalf of the
Acquired Portfolio contained in this Agreement shall be true and correct in all
material respects as of the date hereof (in each case, as such representations
and warranties would read as if all qualifications as to materiality were
deleted therefrom) and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date;
7.2 The AmSouth Trust shall have delivered to the Acquiring Portfolio the
Statement of Assets and Liabilities of the Acquired Portfolio pursuant to
Paragraph 5.7, together with a list of its portfolio securities showing the
federal income tax bases and holding periods of such securities, as of the
Closing Date, certified by the AmSouth Trust's Treasurer or Assistant Treasurer;
7.3 The AmSouth Trust shall have delivered to the Acquiring Trust on the Closing
Date a certificate of the AmSouth Trust on behalf of the Acquired Portfolio
executed in its name by its President or Vice President and a Treasurer or
Assistant Treasurer, in form and substance reasonably satisfactory to the
Acquiring Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the AmSouth Trust contained in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, that each of the
conditions to Closing in this Article 7 have been met, and as to such other
matters as the Acquiring Trust shall reasonably request;
7.4 The AmSouth Trust on behalf of the Acquired Portfolio shall have delivered
to the Acquiring Trust and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP an Acquired
Portfolio Tax Representation Certificate, satisfactory to the Acquiring Trust
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, in a form mutually acceptable to
the Acquiring Trust and the AmSouth Trust, concerning certain tax-related
matters with respect to the Acquired Portfolio;
7.5 The Acquiring Trust shall have received at the Closing a favorable opinion
as to the due authorization of this Agreement by the AmSouth Trust and related
matters of Dechert LLP, dated as of the Closing Date, in a form reasonably
satisfactory to the Acquiring Trust; and
7.6 With respect to the Acquired Portfolio, the Board of Trustees of the AmSouth
Trust shall have determined that the Reorganization is in the best interests of
the Acquired Portfolio and, based upon such determination, shall have approved
this Agreement and the transactions contemplated hereby.
8. FURTHER CONDITIONS PRECEDENT
If any of the conditions set forth below does not exist on or before
the Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the Acquired Portfolio's shareholders in
accordance with the provisions of the AmSouth Trust's Trust Instrument and
By-Laws, and certified copies of the resolutions evidencing such approval by the
Acquired Portfolio's shareholders shall have been delivered by the Acquired
Portfolio to the Acquiring Portfolio. Notwithstanding anything herein to the
contrary, neither party hereto may waive the conditions set forth in this
Paragraph 8.1;
8.2 On the Closing Date, 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 obtain damages or other relief in connection with, this Agreement
or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and permits of
federal, state and local regulatory authorities (including those of the
Commission and of state Blue Sky and securities authorities) deemed necessary by
either party hereto to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of either party hereto,
provided that either party may waive any such conditions for itself;
8.4 The Acquiring Trust's Registration Statement on Form N-14 shall have become
effective under the Securities Act and no stop orders suspending the
effectiveness of such Registration Statement shall have been issued and, to the
best knowledge of the parties hereto, no investigation or proceeding for that
purpose shall have been instituted or be pending, threatened or contemplated
under the Securities Act;
8.5 The parties shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
and ▇▇▇▇ LLP, satisfactory to the AmSouth Trust and the Acquiring Trust and
subject to customary assumptions and qualifications, substantially to the effect
that for federal income tax purposes the acquisition by the Acquiring Portfolio
of the Acquired Assets solely in exchange for the issuance of Acquiring
Portfolio Shares to the Acquired Portfolio and the assumption of the Assumed
Liabilities by the Acquiring Portfolio, followed by the distribution by the
Acquired Portfolio, in liquidation of the Acquired Portfolio, of Acquiring
Portfolio Shares to the Acquired Portfolio Shareholders in exchange for their
Acquired Portfolio Shares and the termination of the Acquired Portfolio, will
constitute a "reorganization" within the meaning of Section 368(a) of the Code;
and
8.6 The Acquired Portfolio shall have distributed to its shareholders, in a
distribution or distributions qualifying for the deduction for dividends paid
under Section 561 of the Code, all of its investment company taxable income (as
defined in Section 852(b)(2) of the Code determined without regard to Section
852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all
of the excess of (i) its interest income excludable from gross income under
Section 103(a) of the Code over (ii) its deductions disallowed under Sections
265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date,
and all of its net capital gain (as such term is used in Sections 852(b)(3)(A)
and (C) of the Code), after reduction by any available capital loss
carryforward, for its taxable year ending on the Closing Date.
9. BROKERAGE FEES AND EXPENSES
9.1 Each party hereto represents and warrants to the other party hereto that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
9.2 The parties have been informed by AmSouth Asset Management Inc. ("AAMI") and
the Acquiring Portfolio Adviser -- and the parties have entered into this
Agreement in reliance on such information -- that certain non-parties will pay
(with each of AmSouth Bancorporation and the Acquiring Portfolio Adviser being
responsible for 50% of such amounts) all proxy statement and solicitation costs
of the Funds associated with the Reorganization including, but not limited to,
the expenses associated with the preparation, printing and mailing of any and
all shareholder notices, communications, proxy statements, and necessary filings
with the SEC or any other governmental authority in connection with the
transactions contemplated by this Agreement and the fees and expenses of any
proxy solicitation firm retained in connection with the Reorganization. Except
for the foregoing, AAMI shall bear the expenses of the Acquired Portfolio in
connection with the transactions contemplated by this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Trust and the AmSouth Trust each agrees that neither party
has made any representation, warranty or covenant not set forth herein or
referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes
the entire agreement between the parties.
10.2 The representations and warranties contained in this Agreement or in any
document delivered pursuant hereto or in connection herewith shall not survive
the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the Acquiring
Trust and the AmSouth Trust. In addition, either party may at its option
terminate this Agreement at or prior to the Closing Date:
(a) because of a material breach by the other of any representation, warranty,
covenant or agreement contained herein to be performed at or prior to the
Closing Date;
(b) because of a condition herein expressed to be precedent to the obligations
of the terminating party which has not been met and which reasonably appears
will not or cannot be met;
(c) by resolution of the Acquiring Trust's Board of Trustees if circumstances
should develop that, in the good faith opinion of such Board, make proceeding
with the Agreement not in the best interests of the Acquiring Portfolio's
shareholders;
(d) by resolution of the AmSouth Trust's Board of Trustees if circumstances
should develop that, in the good faith opinion of such Board, make proceeding
with the Agreement not in the best interests of the Acquired Portfolio's
shareholders; or
(e) if the transactions contemplated by this Agreement shall not have occurred
on or prior to December 31, 2005 or such other date as the parties may mutually
agree upon in writing.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Portfolio, the Acquiring Trust, the AmSouth
Trust or the Acquired Portfolio, or the trustees or officers of the AmSouth
Trust, or the Acquiring Trust, but, subject to Paragraph 9.2, each party shall
bear the expenses incurred by it incidental to the preparation and carrying out
of this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
AmSouth Trust and the Acquiring Trust; provided, however, that following the
meeting of the Acquired Portfolio's shareholders called by the AmSouth Trust
pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the
effect of changing the provisions regarding the method for determining the
number of Acquiring Portfolio Shares to be received by the Acquired Portfolio
Shareholders under this Agreement to their detriment without their further
approval; provided that nothing contained in this Section 12 shall be construed
to prohibit the parties from amending this Agreement to change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by
any provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy or certified mail addressed to the
Acquired Portfolio, c/o AmSouth Asset Management Inc., ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, with copies to
Dechert LLP, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and to the Acquiring Portfolio, c/o Pioneer Investment
Management, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., with copies to ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇
LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware, without giving effect to conflict of
laws principles (other than Delaware Code Title 6 ss. 2708); provided that, in
the case of any conflict between those laws and the federal securities laws, the
latter shall govern.
14.4 This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by either party
without the prior written consent of the other party hereto. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation, or other entity, other than the parties hereto
and their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
14.5 It is expressly agreed that the obligations of the Acquiring Trust and the
AmSouth Trust shall not be binding upon any of their respective trustees,
shareholders, nominees, officers, agents or employees personally, but bind only
to the property of the Acquiring Portfolio or the Acquired Portfolio, as the
case may be, as provided in the trust instruments of the Acquiring Trust and the
Instrument of Trust of the AmSouth Trust, respectively. The execution and
delivery of this Agreement have been authorized by the trustees of the Acquiring
Trust and of the AmSouth Trust and this Agreement has been executed by
authorized officers of the Acquiring Trust and the AmSouth Trust, acting as
such, and neither such authorization by such trustees nor such execution and
delivery by such officers shall be deemed to have been made by any of them
individually or to imposed any liability on any of them personally, but shall
bind only the property of the Acquiring Portfolio and the Acquired Portfolio, as
the case may be, as provided in the trust instruments of the Acquiring Trust and
the Instrument of Trust of the AmSouth Trust, respectively.
* * * * *
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first set forth above by its President
or Vice President and attested by its Secretary or Assistant Secretary.
Attest: VARIABLE INSURANCE FUNDS
on behalf of AMSOUTH VALUE FUND
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary Title: Vice President
Attest: PIONEER VARIABLE CONTRACTS TRUST on
behalf of PIONEER VALUE VCT PORTFOLIO
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary Title: Executive Vice President