AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this 18th
day of January, 2005, by and between Pioneer Series Trust III, a Delaware
statutory trust (the "Acquiring Trust") on behalf of its series Pioneer Cullen
Value Fund (the "Acquiring Fund"), with its principal place of business at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Cullen Funds Trust, a Delaware
statutory trust ("Cullen Trust"), on behalf of its series, Cullen Value Fund
(the "Acquired Fund"), a series of Cullen Trust with its principal place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Acquiring Fund and
the Acquired Fund are sometimes referred to collectively herein as the "Funds"
and individually as a "Fund."
This Agreement is intended to be and is adopted as a plan of "reorganization" as
such term is defined in Section 368(a) (1)(F) of the United States Internal
Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of (1) the transfer of all of the assets of the
Acquired Fund to the Acquiring Fund in exchange solely for (A) the issuance of
Class A shares of beneficial interest of the Acquiring Fund (collectively, the
"Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired
Fund, and (B) the assumption by the Acquiring Fund of all liabilities of the
Acquired Fund or the Cullen Trust attributable to the Acquired Fund, whether
accrued, absolute, contingent or otherwise (collectively, the "Assumed
Liabilities"), and (2) the distribution by the Acquired Fund, on or promptly
after the closing date of the Reorganization as provided herein (the "Closing
Date"), of the Acquiring Fund Shares to the shareholders of the Acquired Fund in
liquidation and termination of the Acquired Fund, all upon the terms and
conditions hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Trust and Cullen Trust are each registered investment
companies classified as management companies of the open-end type, and the
Acquired Fund owns securities that are generally assets of the character in
which the Acquiring Fund is permitted to invest.
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest.
WHEREAS, the Board of Trustees of Cullen Trust has determined that the exchange
of all of the assets of the Acquired Fund for Acquiring Fund Shares, and the
assumption of the Assumed Liabilities of the Acquired Fund by the Acquiring Fund
are in the best interests of the Acquired Fund shareholders.
WHEREAS, the Board of Trustees of Acquiring Trust has determined that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares,
and the assumption of the Assumed Liabilities of the Acquired Fund by the
Acquiring Fund are in the best interests of the Acquiring Fund 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 Fund will
transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets")
to the Acquiring Fund free and clear of all liens and encumbrances (other than
those arising under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to privately placed or other restricted securities the
Acquired Fund may have acquired, liens for taxes not yet due and contractual
restrictions on the transfer of the Acquired Assets) and the Acquiring Fund
agrees in exchange therefor: (i) to issue to the Acquired Fund the number of
Acquiring Fund Shares, including fractional Acquiring Fund Shares, determined in
the manner set forth in Paragraph 2.2; and (ii) to assume the Assumed
Liabilities, as set forth in Paragraph 1.3. 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 Fund's
property, including, without limitation, all portfolio securities and
instruments, dividends and interest receivables, cash, goodwill, contractual
rights of the Acquired Fund (to the extent transferable) or Cullen Trust in
respect of the Acquired Fund, all other intangible property owned by the
Acquired Fund, originals or copies of all books and records of the Acquired
Fund, and all other assets of the Acquired Fund on the Closing Date. The
Acquiring Fund shall also be entitled to receive (or to the extent agreed upon
between Cullen Trust and the Acquiring Trust, be provided access to) copies of
all records that Cullen 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 Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of
all of the Acquired Fund's securities and other assets as of the date of
execution of this Agreement, and the Acquiring Fund has provided the Acquired
Fund with a copy of the current fundamental investment policies and restrictions
and fair value procedures applicable to the Acquiring Fund. The Acquired Fund
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 Fund contained herein and made in connection with the issuance of
the tax opinion provided for in Paragraph 8.5 hereof), but will not, without the
prior approval of the Acquiring Fund, acquire any additional securities of the
type in which the Acquiring Fund is not permitted to invest in accordance with
its fundamental investment policies and restrictions. The Acquired Fund will
notify the Acquiring Fund on the fifth day prior to the Closing Date if the
Acquired Fund has purchased since the date of this Agreement any securities that
are valued at "fair value" under the valuation procedures of the Acquired Fund
and will promptly notify the Acquiring Fund if between said fifth day prior to
the Closing date and the Closing Date if the Acquired Fund purchases any
securities that are valued at "fair value."
1.3 The Acquired Fund will use commercially reasonable efforts to
discharge all the Acquired Fund's known liabilities and obligations that are or
will become due prior to the Closing. The Acquiring Fund shall assume all of the
Assumed Liabilities at Closing.
1.4 On or as soon after the Closing Date as is conveniently practicable
(the "Liquidation Date"), Cullen Trust shall liquidate the Acquired Fund and
distribute pro rata to its shareholders of record (the "Acquired Fund
Shareholders"), determined as of the close of regular trading on the New York
Stock Exchange on the Closing Date, the Acquiring Fund Shares received by the
Acquired Fund pursuant to Paragraph 1.1 hereof. Such liquidation and
distribution will be accomplished by Cullen Trust instructing the Acquiring Fund
to transfer the Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on the share
records of the Acquiring Fund established and maintained by the Acquiring Fund's
transfer agent in the names of the Acquired Fund Shareholders and representing
the respective pro rata number of the Acquiring Fund Shares due such Acquired
Fund Shareholders. Fractional shares shall be carried to the third decimal
place. Cullen Trust shall promptly provide the Acquiring Fund with evidence of
such liquidation and distribution. All issued and outstanding shares of the
Acquired Fund will simultaneously be cancelled on the books of the Acquired
Fund. The Acquiring Fund shall not issue certificates representing the Acquiring
Fund Shares in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent for its Class A shares. The Acquired Fund
Shareholders holding certificates representing their ownership of common shares
of the Acquired Fund shall be entitled to surrender such certificates to the
transfer agent for the Acquiring Fund or deliver to the transfer agent for the
Acquiring Fund an affidavit with respect to lost certificates in such form and
accompanied by such surety bonds as the Acquired Fund may require (collectively,
an "Affidavit"), to Pioneer Investment Management Shareholder Services, Inc.
prior to the Closing Date. Any Acquired Fund Share certificate which remains
outstanding on the Closing Date shall be deemed to be cancelled, shall no longer
evidence ownership of shares of beneficial interest of the Acquired Fund.
1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a
name other than the registered holder of the Acquired Fund Shares on the books
of the Acquired Fund as of that time shall, as a condition of such issuance and
transfer, be paid by the person to whom such Acquiring Fund Shares are to be
issued and transferred.
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1.7 The Acquired Fund shall effect, following the Closing Date, the
transfer of the Acquired Assets by the Acquired Fund to the Acquiring Fund, the
assumption of the Assumed Liabilities by the Acquiring Fund, and the
distribution of the Acquiring Fund Shares by the Acquired Fund to the Acquired
Fund Shareholders pursuant to Paragraph 1.4, and the Acquired Fund, as soon as
reasonably practicable thereafter, shall be terminated as a series of Cullen
Trust under the laws of the State of Delaware and in accordance with Cullen
Trust's Declaration of Trust and By-Laws.
1.8 Any reporting responsibility of Cullen Trust with respect to the
Acquired Fund 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 Cullen Trust.
2. VALUATION
2.1 The net asset value (the "NAV") of the Acquiring Fund Shares and the
NAV of the Acquired Assets shall, in each case, be determined as of the close of
business (4:00 p.m., Eastern time) on the Closing Date (the "Valuation Time").
The NAV of each Acquiring Fund Share shall be computed by Pioneer Investment
Management, Inc. (the "Acquiring Fund Adviser") in the manner set forth in the
Acquiring Fund's Declaration of Trust (the "Declaration"), or By-Laws, and the
Acquiring Fund's then-current prospectus and statement of additional
information; provided, however, if the Acquiring Fund has no assets as of the
Closing Date (other than a nominal amount of assets represented by shares issued
to the Acquiring Fund Adviser, or its affiliate, as the initial shareholder of
the Acquiring Fund), the NAV of each Acquiring Fund Share shall be the same as
the NAV of each share of the Acquired Fund. The NAV of the Acquired Assets shall
be computed by U.S. Bank, National Association (the "Acquired Fund Custodian")
by calculating the value of the Acquired Assets and by subtracting therefrom the
amount of the liabilities of the Acquired Fund on the Closing Date included on
the face of the Statement of Assets and Liabilities of the Acquired Fund
delivered pursuant to Section 5.7 (the "Statement of Assets and Liabilities"),
said assets and liabilities to be valued in the manner set forth in the Acquired
Fund's then current prospectus and statement of additional information. The
Acquiring Fund Adviser shall confirm the NAV of the Acquired Assets.
2.2 The number of Acquiring Fund 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 Fund Adviser by
dividing the NAV of the Acquired Assets, as determined in accordance with
Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in
accordance with Paragraph 2.1.
2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring
Fund Adviser and the Acquired Fund Custodian, respectively, to deliver a copy of
its valuation report, reviewed by its independent accountants, to the other
party at Closing. All computations of value shall be made by the Acquiring Fund
Custodian (as defined below) and the Acquired Fund Custodian in accordance with
its regular practice as custodian and pricing agent for the Acquiring Fund and
the Acquired Fund, respectively.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be February 25, 2005 or such later date as the
parties may agree to in writing. All acts taking place at 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"). 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 not held in book-entry form in the name
of the Acquired Fund Custodian as record holder for the Acquired Fund shall be
presented by the Acquired Fund to ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & Co. (the "Acquiring
Fund Custodian") for examination no later than three business days preceding the
Closing Date. Portfolio securities which are not held in book-entry form shall
be delivered by the Acquired Fund to the Acquiring Fund Custodian for the
account of the Acquiring Fund on the Closing Date, duly endorsed in proper
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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 Fund
Custodian in book-entry form on behalf of the Acquired Fund shall be delivered
to the Acquiring Fund by the Acquired Fund Custodian by recording the transfer
of beneficial ownership thereof on the Acquired Fund Custodian's records.
3.3 The Acquiring Fund 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 Fund 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 shall have been made in conjunction with the delivery of portfolio
securities as part of the Acquired Assets. Any cash delivered shall be in the
form of currency or by the Acquired Fund Custodian crediting the Acquiring
Fund's account maintained with the Acquiring Fund Custodian with immediately
available funds by wire transfer pursuant to instruction delivered prior to
Closing.
3.4 In the event that 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 Fund Shares or the Acquired
Assets 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 Fund shall deliver at the Closing a list (which may be in
electronic form) of the names, addresses, federal taxpayer identification
numbers and backup withholding and nonresident alien withholding status and
certificates of the Acquired Fund Shareholders and the number and percentage
ownership of outstanding shares of beneficial interest of the Acquired Fund
owned by each such Acquired Fund Shareholder as of the Valuation Time, certified
by the President or a Secretary of Cullen Trust and its Treasurer, Secretary or
other authorized officer (the "Shareholder List") as being an accurate record of
the information (a) provided by the Acquired Fund Shareholders, (b) provided by
the Acquired Fund Custodian, or (c) derived from Cullen Trust's records by such
officers or one of Cullen Trust's service providers. The Acquiring Fund shall
issue and deliver to the Acquired Fund a confirmation evidencing the Acquiring
Fund Shares to be credited on the Closing Date, or provide evidence satisfactory
to the Acquired Fund that such Acquiring Fund Shares have been credited to the
Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each
party shall deliver to the other such bills of sale, checks, assignments, 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 Schedule 4.1 hereto, Cullen Trust, on behalf of
the Acquired Fund, represents, warrants and covenants to the Acquiring Fund,
which representations, warrantees 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 Fund is a duly established and designated series of
Cullen Trust. Cullen Trust is a Delaware statutory trust duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the statutory trust power to own all of its properties and assets and, subject
to approval by the Acquired Fund Shareholders, to perform its obligations under
this Agreement. The Acquired Fund 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 Cullen Trust
and the Acquired Fund 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) Cullen 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 and on
the Closing Date will be in full force and effect. The Acquired Fund is a
diversified investment company under the Investment Company Act;
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(c) Cullen Trust is not in violation of, and the execution, delivery
and (subject to the approval of this Agreement by the Acquired Fund
Shareholders) performance of its obligations under this Agreement in respect of
the Acquired Fund will not result in a violation of, any provision of Cullen
Trust's Declaration of Trust or By-Laws or any material agreement, indenture,
instrument, contract, lease or other undertaking with respect to the Acquired
Fund to which Cullen Trust is a party or by which the Acquired Fund or 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 Cullen Trust or the Acquired Fund or any of the Acquired
Fund's properties or assets. Cullen Trust knows of no facts which might form the
basis for the institution of such proceedings. Except as disclosed on Schedule
4.1 to this Agreement (the "Disclosure Schedule"), neither Cullen Trust nor the
Acquired Fund 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 Fund's business or its ability to consummate the transactions
herein contemplated or would be binding upon the Acquiring Fund as the successor
to the Acquired Fund and that could be reasonably expected to have an adverse
effect on the Acquired Fund;
(e) The Acquired Fund has no material contracts or other commitments
(other than this Agreement, the Cullen Trust's constituent documents 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 Fund (or the Acquiring
Fund);
(f) The statement of assets and liabilities of the Acquired Fund, and
the related statements of income and changes in net asset value as of and for
the fiscal year ended June 30, 2004 has been audited by PricewaterhouseCoopers,
independent certified public accountants, and are in accordance with GAAP
consistently applied and fairly reflect, in all material respects, the financial
condition of the Acquired Fund as of such dates and the results of its
operations for the periods indicated. The Statement of Assets and Liabilities of
the Acquired Fund to be delivered as of the Closing Date pursuant to Paragraph
5.7 will be in accordance with GAAP consistently applied and will fairly
reflect, in all material respects, the financial condition of the Acquired Fund
as of such date and the results of its operations for the period then ended.
Except for the Assumed Liabilities, the Acquired Fund will not have any known or
contingent liabilities on the Closing Date. As of the date hereof, no
significant deficiency, material weakness, fraud, significant change or other
factor that could significantly affect the internal controls of the Acquired
Fund has been disclosed or is required to be disclosed in the Acquired Fund's
reports on Form N-SAR or Form N-CSR to enable the chief executive officer and
chief financial officer or other officers of Cullen Trust to make the
certifications required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, and no deficiency,
weakness, fraud, change, event or other factor exists that will be required to
be disclosed in the Acquiring Fund's Form N-CSR after the Closing Date;
(g) Since June 30, 2004, except as specifically disclosed in the
Acquired Fund's prospectus, statement of additional information as in effect on
the date of this Agreement, there has not been any material adverse change in
the Acquired Fund's financial condition, assets, liabilities, business or
prospects, or any incurrence by the Acquired Fund 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 including Paragraph 7.4), a change in NAV per share of the Acquired
Fund arising out of its normal investment operations or a change in market
values of securities in the Acquired Fund's portfolio or a change in net assets
of the Acquired Fund as a result of redemptions shall not constitute a material
adverse change;
(h) (A) For each taxable year of its operation since its inception
(including the current taxable year), the Acquired Fund has met the requirements
of Subchapter M of the Code for qualification and treatment as a regulated
investment company and has elected to be treated as such 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 Acquired Fund 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 Fund to fail to qualify as a regulated
investment company under the Code;
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(B) Within the times and in the manner prescribed by law, the
Acquired Fund 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 Acquired Fund has not been informed by any jurisdiction
that the jurisdiction believes that the Acquired Fund was required to file any
Tax Return that was not filed; and the Acquired Fund does not know of any basis
upon which a jurisdiction could assert such a position;
(C) The Acquired Fund 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 (or adequate provision for such payment has been
made in its financial statements in accordance with GAAP);
(D) All Tax Returns filed by the Acquired Fund constitute
complete and accurate reports of the respective Tax liabilities in all material
respects and all attributes of the Acquired Fund 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 in all material respects;
(E) Except as set forth on the Disclosure Schedule, the
Acquired Fund has not waived or extended any applicable statute of limitations
relating to the assessment or collection of Taxes;
(F) The Acquired Fund has not been notified that any
examinations of the Tax Returns of the Acquired Fund are currently in progress
or threatened, and no deficiencies have been asserted or assessed against the
Acquired Fund as a result of any audit by the Internal Revenue Service or any
state, local or foreign taxing authority, and no such deficiency has been
proposed or threatened;
(G) The Acquired Fund has no actual or potential liability for
any Tax obligation of any taxpayer other than itself. The Acquired Fund 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 Fund is not a party to any Tax allocation, sharing, or indemnification
agreement;
(H) The unpaid Taxes of the Acquired Fund 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 Fund 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 Fund has delivered to the Acquiring Fund or
made available to the Acquiring Fund complete and accurate copies of all Tax
Returns of the Acquired Fund, 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
Fund. The Acquired Fund 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 Fund 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 Fund 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;
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(K) The Acquired Fund has not taken or agreed to take any
action that would prevent the Reorganization from constituting a reorganization
qualifying under Section 368(a)(1)(F) of the Code. The Acquired Fund is not
aware of any agreement, plan or other circumstance that would prevent the
Reorganization from qualifying as a reorganization under Section 368(a)(1)(F) of
the Code;
(L) There are (and as of immediately following the Closing
there will be) no liens on the assets of the Acquired Fund relating to or
attributable to Taxes, except for Taxes not yet due and payable and those that
are being contested in good faith;
(M) The Tax bases of the assets of the Acquired Fund are
accurately reflected on the Acquired Fund's Tax books and records;
(N) The Acquired Fund has not incurred (or been allocated) an
"overall foreign loss" as defined in Section 904(f)(2) of the Code which has not
been previously recaptured in full as provided in Sections 904(f)(2) and/or
904(f)(3) of the Code;
(O) The Acquired Fund is not a party to a gain recognition
agreement under Section 367 of the Code;
(P) The Acquired Fund does not own any interest in an entity
that is characterized as a partnership for income tax purposes;
(Q) The Acquired Fund's Tax attributes are not limited, and
will not be limited as a result of the Reorganization, 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
(R) For purposes of this Agreement, "Taxes" 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) The authorized capital of the Acquired Fund consists of an
unlimited number of shares of beneficial interest, $.001 par value per share.
All issued and outstanding shares of beneficial interest of the Acquired Fund
are, and at the Closing Date will be, duly and validly issued and outstanding
and fully paid, and have full voting rights and will be freely transferable. All
of the issued and outstanding shares of beneficial interest of the Acquired Fund
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 Fund
pursuant to Paragraph 3.5 hereof. The Acquired Fund does not have outstanding
any options, warrants or other rights to subscribe for or purchase any of its
shares of the Acquired Fund, nor is there outstanding any security convertible
into any of its shares of beneficial interest of the Acquired Fund;
(j) At the Closing Date, the Acquired Fund 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 Fund,
and, upon delivery and payment for the Acquired Assets, the Acquiring Fund 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 with respect to privately placed or otherwise restricted
securities that the Acquired Fund
7
may have acquired and such imperfections of title or encumbrances that do not
detract from the value or use of the Acquired Assets subject thereto;
(k) Subject to approval by the Acquired Fund Shareholders, Cullen
Trust has the statutory trust power and authority to enter into and perform its
obligations under this Agreement. The execution, delivery and performance of
this Agreement has been duly authorized by all necessary action on the part of
Cullen Trust's Board of Trustees, and, subject to the approval of the Acquired
Fund Shareholders, assuming due authorization, execution and delivery by the
Acquiring Fund, this Agreement will constitute a valid and binding obligation of
the Acquired Fund, enforceable in accordance with its terms, subject as to
enforcement, to the effect of 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 Fund to the
Acquiring Fund 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 Fund shall be accurate and complete and shall
comply in all material respects with federal securities and other laws and
regulations thereunder applicable thereto;
(m) The information included in the proxy statement (the "Proxy
Statement") forming part of the Acquiring Fund's Registration Statement on Form
N-14 filed in connection with this Agreement (the "Registration Statement") that
has been furnished by the Acquired Fund to the Acquiring Fund 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 Cullen Trust or the Acquired Fund of the
transactions contemplated by this Agreement;
(o) To Cullen Trust's knowledge, all of the issued and outstanding
shares of beneficial interest of the Acquired Fund have been offered for sale
and sold in conformity with all applicable federal and state securities laws,
except as may have been previously disclosed in writing to the Acquiring Fund;
(p) The prospectus and statement of additional information of the
Acquired Fund, each dated October 28, 2003 (collectively, the "Acquired Fund
Prospectus"), and any amendments or supplements thereto, furnished to the
Acquiring Fund, 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
misleading;
(q) The Acquired Fund 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 Fund 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 Cullen Trust with
respect to the Acquired Fund. All advertising and sales material used by the
Acquired Fund 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 Fund 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 at the appropriate date 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 at the appropriate
date contain any untrue
8
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) The Acquired Fund has previously provided to the Acquiring Fund
(and at the Closing will provide an update through the Closing Date of such
information) data which supports a calculation of the Acquired Fund's total
return for all periods since the organization of the Acquired Fund. Such data
has been prepared in accordance in all material respects with the requirements
of the Investment Company Act and the regulations thereunder and the rules of
the NASD;
(s) Neither the Acquired Fund nor, to the knowledge of Cullen Trust,
any "affiliated person" of the Acquired Fund 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 Fund, has any affiliated person of the Acquired
Fund 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
(t) The Acquired Fund Tax Representation Certificate to be delivered
by the Acquired Trust on behalf of the Acquired Fund to the Acquiring Fund and
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP at the Closing pursuant to Paragraph
7.4 (the "Acquired Fund 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 Schedule 4.2 hereto, the Acquiring Trust on
behalf of the Acquiring Fund represents, warrants and covenants to the Acquired
Fund and Cullen Trust, 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 Trust is a Delaware statutory trust duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Acquiring Fund is a duly established and designated series of the Acquiring
Trust and has the power to own all of its properties and assets and to perform
the obligations under this Agreement. The Acquiring Fund 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. The Acquiring Fund 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. The Acquiring Fund will have no issued or
outstanding shares prior to the Closing Date other than those issued to Pioneer
Investment Management, Inc. (or one of its affiliates) and will have no
investment operations prior to the Closing Date;
(b) The Acquiring Fund 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 and on
the Closing Date will be in full force and effect;
(c) The Acquiring Fund'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 Fund 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 its date 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;
(d) The statement of assets and liabilities of the Acquiring Fund as
the Valuation Time to be delivered pursuant to Paragraph 5.8 of this Agreement
by the Acquiring Trust for the purpose of determining the number of Acquiring
Fund shares to be issued pursuant to Section 2.2 hereof will fairly and
accurately reflect the net assets of the Acquiring Fund and outstanding shares
of beneficial interest as of such date, in conformity with GAAP applied on such
date;
9
(e) At the Closing, the Acquiring Trust will have good and marketable
title to all of the securities and other assets shown on the statement of assets
and liabilities referred to in Paragraph 5.8 of this Agreement, free and clear
of all liens or encumbrances of any nature whatsoever except such imperfections
of title or encumbrances as do not materially detract from the value or use of
the assets subject thereto or materially affect title thereto;
(f) The Registration Statement, the Proxy Statement and statement of
additional information with respect to the Acquiring Fund and any amendments or
supplements thereto on or prior to the Closing Date included in the Registration
Statement (other than written information furnished by the Acquired Fund for
inclusion therein, as covered by the Acquired Fund's warranty in Paragraph
4.1(m) hereof) will conform 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. Neither the Registration Statement
nor the Proxy Statement (other than written information furnished by the
Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty
in Paragraph 4.1(m) hereof) includes 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;
(g) Neither the Acquiring Fund nor the Acquiring Trust is 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 or by-laws of the Acquiring Trust or any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to which the Acquiring Trust is a party or by which the Acquiring Fund
or any of its assets is bound;
(h) No litigation, administrative or other proceeding or investigation
of or before any court or governmental body is currently pending or threatened
against the Acquiring Fund or any of the Acquiring Fund's properties or assets.
The Acquiring Fund knows of no facts which might form the basis for the
institution of such proceedings. The Acquiring Fund is not 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 Fund's business or
prospects or its ability to consummate the transactions contemplated herein;
(i) The Acquiring Trust will elect to treat the Acquiring Fund as a
regulated investment company ("RIC") for federal income tax purposes under Part
I of Subchapter M of the Code. The Acquiring Fund 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 Fund 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 Fund with respect to the Acquiring Fund. All
advertising and sales material used by the Acquired Fund 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 Fund 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;
(j) The authorized capital of the Acquiring Fund consists of an
unlimited number of shares of beneficial interest, no par value per share. On
the Closing Date, the Acquiring Fund will be authorized to issue an unlimited
number of shares of beneficial interest, no par value per share, which will be
divided into Class A, B, C, Y and R shares, each having the characteristics
described in the Acquiring Fund's prospectuses. The Acquiring Fund Shares to be
issued and delivered to the Acquired Fund for the account of the Acquired Fund
Shareholders pursuant to the terms of this Agreement, will have been duly
authorized on the Closing Date and, when so issued and delivered, will be duly
and validly issued, fully paid and non-assessable, and have full voting rights
and be freely
10
transferable. No shareholders of the Acquiring Fund shall have any statutory or
constructive preemptive rights of subscription or purchase in respect thereto.
The Acquiring Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any Acquiring Fund Shares, nor is there
outstanding any security convertible into any of the Acquiring Fund Shares;
(k) The Acquiring Fund has the power and authority, trust and
otherwise, to enter into and perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement by the Acquiring Fund has
been duly authorized by all necessary action on the part of the Acquiring Fund
and its Board of Trustees, and, assuming due authorization, execution and
delivery by the Acquired Fund, this Agreement will constitute a valid and
binding obligation of the Acquiring Fund, enforceable in accordance with its
terms, subject as to enforcement, to the effect of bankruptcy, insolvency,
reorganization, moratorium and other laws of general application relating to or
affecting creditors' rights and to general equity principles;
(l) The information to be furnished by the Acquiring Fund or the
Acquiring Fund 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;
(m) No consent, approval, authorization or order of or filing with any
court or governmental authority or any other person is required for the
execution of this Agreement or the consummation of the transactions contemplated
by this Agreement by the Acquiring Fund, except for the registration of the
Acquiring Fund Shares under the Securities Act and the Investment Company Act;
(n) Neither the Acquiring Fund nor, to the knowledge of the Acquiring
Fund, any "affiliated person" of the Acquiring Fund 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 Fund, has any affiliated person of
the Acquiring Fund 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
(o) The Acquiring Fund Tax Representation Certificate to be delivered
by the Acquiring Trust on behalf of the Acquiring Fund to Cullen Trust and
Acquired Fund and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP at Closing pursuant
to Section 6.3 (the "Acquiring Fund 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 EACH OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 The Acquired Fund will operate the Acquired Fund's business in the
ordinary course as presently conducted 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 distributions and any other
dividends and distributions necessary or advisable (except to the extent
dividends or 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 Cullen Trust will call a special meeting of Acquired Fund Shareholders
to consider approval of this Agreement and act upon the matters set forth in the
Proxy Statement.
5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy
and Proxy Statement (collectively, "Proxy Materials") to be used in connection
with such meeting, such Proxy Materials to be satisfactory to Cullen Trust and
shall comply materially with the requirements of the Securities Act, the
Exchange
11
Act and the Investment Company Act. The Acquiring Trust will promptly prepare
and file with the Commission the Registration Statement on Form N-14 relating to
the Reorganization. At the time such Registration Statement becomes effective,
it (i) will comply in all material respects with the applicable provisions of
the Securities Act, the Exchange Act and the Investment Company Act and the
rules and regulations promulgated thereunder; and (ii) will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading. At
the time the Registration Statement becomes effective, the prospectus and
statement of additional information included in the Registration Statement will
not contain an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. Cullen Trust will provide the
Acquiring Fund with information reasonably necessary 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 Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired by the Acquired Fund for the purpose of
making any distribution thereof other than in accordance with the terms of this
Agreement.
5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requires concerning the beneficial
ownership of the Acquired Fund's shares.
5.6 Subject to the provisions of this Agreement, each of the Acquired Fund
and the Acquiring 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 Fund shall furnish to the Acquiring Fund on the Closing
Date the Statement of Assets and Liabilities of the Acquired Fund as of the
Closing Date setting forth the NAV of the Acquired Assets as of the Valuation
Time, which statement shall be prepared in accordance with GAAP consistently
applied and certified by Cullen Trust's chief financial officer. As promptly as
practicable, but in any case within 30 days after the Closing Date, Cullen Trust
shall furnish to the Acquiring Fund, in such form as is reasonably satisfactory
to the Acquiring Fund, a statement of the earnings and profits of the Acquired
Fund for federal income tax purposes, and of any capital loss carryovers and
other items that will be carried over to the Acquiring Fund under the Code, and
which statement will be certified by the chief financial officer of Cullen
Trust.
5.8 The Acquiring Fund shall furnish to the Acquired Fund on the Closing
Date the statement of assets and liabilities of the Acquiring Fund as of the
Valuation Time to be used for purposes of determining the number of Acquiring
Fund Shares to be issued pursuant to Section 2.2 hereof, which statement shall
be prepared in accordance with GAAP consistently applied and certified by the
Treasurer of the Acquiring Trust.
5.9 Neither the Acquired Fund nor the Acquiring Fund shall take any action
that is inconsistent with the representations set forth in, with respect to the
Acquired Fund, the Acquired Fund Tax Representation Certificate, and with
respect to the Acquiring Fund, the Acquiring Fund Tax Representation
Certificate.
5.10 Cullen Trust shall maintain errors and omissions insurance covering
management of the Acquired Fund prior to and including the Closing Date.
5.11 From and after the date of this Agreement and until the Closing Date,
each of the Funds, the Acquiring Trust and Cullen 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)(F) of the Code, and shall not take any position inconsistent
with such treatment.
12
5.12 From and after the date of this Agreement and through the time of the
Closing on the Closing Date, the Acquired Fund shall use its commercially
reasonable efforts to cause the Acquired Fund 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
Acquired Fund from qualifying as a RIC under the provisions of Subchapter M of
the Code.
5.13 The Acquiring Trust shall used its commercially reasonable efforts to
cause the Acquiring Fund, when organized, 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
Acquiring Fund from qualifying as a RIC.
5.14 The Acquired Fund shall prepare, or cause to be prepared all Tax
Returns of the Acquired Fund 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. The Acquired Fund shall pay or provide adequate liability reserves for
payment of Taxes with respect to any such Tax Returns.
5.15 The Acquiring Trust shall cause the Acquiring Fund Shares to be issued
pursuant to this Agreement to be eligible for offering to the public in those
states of the United States and jurisdictions in which the shares of the
Acquired Fund are presently eligible for offering.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to complete the transactions provided for
herein shall be, at its election, subject to the performance by the Acquiring
Fund 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 Fund in writing:
6.1 All representations and warranties by the Acquiring Trust on behalf of
the Acquiring Fund contained in this Agreement shall be true and correct as of
the date hereof 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 and the Acquiring Trust and
Acquiring Fund shall have performed all obligations required by this Agreement
to be performed at or prior to the Closing;
6.2 The Acquiring Trust on behalf of the Acquiring Fund shall have
delivered to the Acquired Fund a certificate executed in its name by the
Acquiring Trust's President or Vice President and its Treasurer or Assistant
Treasurer, in form and substance satisfactory to the Acquired Fund and dated as
of the Closing Date, to the effect that the representations and warranties of
the Acquiring Fund 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 Paragraph 6 have
been met, and as to such other matters as the Acquired Fund shall reasonably
request (it being agreed that such certificate is provided to confirm the
representations and warranties as of the Closing Date and shall not be a source
of liability, separate from this Agreement, to the Acquired Fund);
6.3 The Acquiring Fund shall have delivered to the Acquired Fund and
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP an Acquiring Fund Tax Representation
Certificate satisfactory to the Acquired Fund and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
and ▇▇▇▇ LLP substantially in the form attached to this Agreement as Annex A,
concerning certain tax-related matters with respect to the Acquiring Fund; and
6.4 The Acquired Fund shall have received at the Closing a favorable
opinion of counsel, who may be an employee or officer of Pioneer Investment
Management, Inc. (based upon or subject to such representations, assumptions and
limitations as such counsel may deem appropriate or necessary), dated as of the
Closing Date, in a form reasonably satisfactory to Acquired Fund, including,
without limitation, opinions substantially to the effect that (a) the Acquiring
Fund Shares to be issued to the Acquired Fund Shareholders pursuant to this
Agreement are duly registered under the Securities Act on the appropriate form,
and are duly authorized and upon such issuance will be validly issued and
outstanding and fully paid and non-assessable, and no shareholder of the
Acquiring Fund has any preemptive rights to subscription or purchase in respect
thereof, and (b) the Registration Statement has become
13
effective with the Commission and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or threatened.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete the transactions provided for
herein shall be, at its election, subject to the performance by Cullen Trust and
Acquired Fund 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 Fund in writing:
7.1 All representations and warranties of the Acquired Fund contained in
this Agreement by or on behalf of Cullen Trust and Acquired Fund shall be true
and correct as of the date hereof 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 Cullen Trust shall have delivered to the Acquiring Fund the Statement
of Assets and Liabilities of the Acquired Fund 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 Cullen Trust's chief financial officer;
7.3 The Acquired Trust on behalf of the Acquired Fund, shall have
delivered to the Acquiring Fund on the Closing Date a certificate of Cullen
Trust on behalf of the Acquired Fund by its President or Secretary and a chief
financial officer, in form and substance reasonably satisfactory to the
Acquiring Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquired Fund 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 and as to such other
matters as the Acquiring Fund shall reasonably request (it being agreed that
such certificate is provided to confirm the representations and warranties as of
the Closing Date and shall not be a source of liability separate from this
Agreement, to the Acquiring Fund.)
7.4 The Acquired Fund shall have delivered to the Acquiring Fund and
▇▇▇▇▇▇ ▇▇▇▇▇▇ an Acquired Fund Tax Representation Certificate satisfactory to
the Acquiring Fund and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP substantially
in the form attached to this Agreement as Annex B, concerning certain
tax-related matters with respect to the Acquired Fund;
7.5 The Acquiring Fund shall have received at the Closing a favorable
opinion of counsel, dated as of the Closing Date, in a form reasonably
satisfactory to Acquiring Fund, including, without limitation, opinions
substantially to the effect that this Agreement has been duly authorized,
executed and delivered by Cullen Trust, on behalf of the Acquired Fund, and
constitutes a valid and legally binding obligation of Cullen Trust, on behalf of
the Acquired Fund; and
7.6 With respect to the Acquired Fund, the Board of Trustees of Cullen
Trust shall have determined that the Reorganization is in the best interests of
the Acquired Fund and that the interests of the existing the Acquired Fund
Shareholders would not be diluted as a result of the Reorganization.
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 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the Acquired Fund Shareholders in accordance
with the provisions of the Cullen Trust's Declaration of Trust and By-Laws and
the Investment Company Act and the rules and regulations thereunder, and
certified copies of the resolutions evidencing such approval by the Acquired
Fund's shareholders shall have been
14
delivered by the Acquired Fund to the Acquiring Fund. 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 or threatened 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 or that would
materially and adversely affect the financial condition or business of the other
party;
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 and
be in full force and effect, 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 Each of the Acquiring Fund's Registration Statement on Form N-14 and
the Registration Statement on Form N-1A (and reflecting the Acquiring Fund as
the accounting successor of the Acquired Fund) shall have become effective under
the Securities Act and no stop orders suspending the effectiveness of either of
such Registration Statements 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇,
satisfactory to the Acquired Fund and the Acquiring Fund and subject to
customary assumptions and qualifications, substantially to the effect that for
federal income tax purposes the acquisition by the Acquiring Fund of the
Acquired Assets solely in exchange for the issuance of Acquiring Fund Shares to
the Acquired Fund and the assumption of the Assumed Liabilities by the Acquiring
Fund, followed by the distribution by the Acquired Fund, in liquidation of the
Acquired Fund, of Acquiring Fund Shares to the Acquired Fund Shareholders in
exchange for their shares of beneficial interest of the Acquired Fund and the
termination of the Acquired Fund, will constitute a "reorganization" within the
meaning of Section 368(a) of the Code.
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 in writing by Pioneer Investment
Management, Inc. that it will pay for the expenses and costs of the Funds
associated with the preparation, printing and mailing of any and all shareholder
notices, communications, proxy statements, and necessary filings with the
Securities and Exchange Commission or any other governmental authority in
connection with the reorganization; provided that Pioneer Investment Management
will not be responsible for the costs and expenses associated with amending or
supplementing the Acquired Fund's registration statements or other Securities
and Exchange Commission filings. Such undertaking is attached as Schedule 9.
Except as set forth on Schedule 9, the Acquiring Fund and the Acquired Fund
shall each bear its own expenses in connection with the transactions
contemplated by this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Acquiring Fund and the Acquired Fund each agree 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, warranties and covenants contained in this Agreement
or in any document delivered pursuant hereto or in connection herewith shall
expire with and be terminated by consummation of the Transaction and neither
Cullen Trust nor the Acquiring Trust nor any of their respective officers,
directors, trustees,
15
agents or shareholder shall have any liability with respect to such
representations and warranties after the Closing. Notwithstanding any other
provision of this Agreement to the contrary, neither the Cullen Trust nor the
Acquired Fund nor any of the trustees, officers or agents thereof shall have any
liability for any damages that result from, arise out of or are connected with
any breach of any representation or warranty of the Cullen Trust made in
Paragraph 4.1 of this Agreement. Notwithstanding any other provision of this
Agreement to the contrary, neither the Acquiring Trust nor the Acquiring Fund
nor any of the trustees, officers or agents thereof shall have any liability for
any damages that result from, arise out of or are connected with any breach of
any representation or warranty of the Acquiring Trust made in Paragraph 4.2 of
this Agreement.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Acquiring Fund and the Acquired Fund. 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 Fund'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 Fund's
shareholders;
(d) by resolution of Cullen 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 Fund Shareholders;
(e) if the transactions contemplated by this Agreement shall not have
occurred on or prior to September 30, 2005 or such other date as the parties may
mutually agree upon in writing; or
(f) if the Sub-Advisory Agreement by and between Pioneer Investment
Management, Inc. and Cullen Capital Management LLC has not been approved in
accordance with Section 15 of the Investment Company Act and executed or is
otherwise not in full force and effect on the Closing Date.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Acquiring Fund, the Acquiring Trust, Cullen Trust or
the Acquired Fund, or the Trustees, officers, agents or shareholders of Cullen
Trust, Cullen 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 Cullen Trust and
the Acquiring Trust; provided, however, that following the meeting of the
Acquired Fund Shareholders called by Cullen 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 Fund Shares to be
received by the Acquired Fund Shareholders under this Agreement to the detriment
of the Acquired Fund Shareholders 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 Fund, c/o Cullen Funds
Trust, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, The ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇],
with copies to:
16
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇, and the Acquiring Fund c/o Pioneer Investment
Management, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., with copies to ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇
LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq.
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 laws of the State of Delaware.
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
Cullen Trust shall not be binding upon any of their respective directors,
trustees, shareholders, nominees, officers, agents or employees personally, but
bind only to the property of the Acquiring Fund or the Acquired Fund, as the
case may be, as provided in the trust instruments of the Acquiring Trust and the
Declaration of Trust of Cullen Trust, respectively. The execution and delivery
of this Agreement have been authorized by the Trustees of the Acquiring Trust
and the Trustees of Cullen Trust and this Agreement has been executed by
authorized officers of the Acquiring Fund and Cullen 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 have imposed any liability on any of them personally, but shall bind only the
property of the Acquiring Fund and the Acquired Fund, as the case may be, as
provided in the trust instruments of the Acquiring Fund and the Declaration of
Trust of Cullen Trust, respectively.
17
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: CULLEN FUNDS TRUST on behalf of
CULLEN VALUE FUND
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------ --------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer Title: Vice President
PIONEER SERIES TRUST III on behalf of
Attest: PIONEER CULLEN VALUE FUND
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------- ------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary Title: Executive Vice President
18
Annex A
TAX REPRESENTATION CERTIFICATE OF
Pioneer Series Trust III on behalf of
Pioneer Cullen Value Fund
This certificate is being delivered in connection with the transaction to be
effected pursuant to the Agreement and Plan of Reorganization (the "Agreement")
made as of January 18, 2005 between Pioneer Series Trust III, a Delaware
statutory trust ("Acquiring Trust"), on behalf of its series Pioneer Cullen
Value Fund ("Acquiring Fund") and Cullen Funds Trust, a Delaware statutory
trust, on behalf of Cullen Value Fund ("Acquired Fund"). Pursuant to the
Agreement, Acquiring Fund will acquire all of the assets of Acquired Fund in
exchange solely for (i) the assumption by Acquiring Fund of the liabilities of
Acquired Fund (the "Acquired Fund Liabilities") and (ii) the issuance of shares
of beneficial interest of Acquiring Fund (the "Acquiring Fund Shares") to
Acquired Fund, followed by the distribution by Acquired Fund, in liquidation of
Acquired Fund, of the Acquiring Fund Shares to the shareholders of Acquired Fund
and the termination of Acquired Fund (the foregoing together constituting the
"transaction").
The undersigned officer of Acquiring Trust, after consulting with its counsel,
auditors and tax advisers regarding the meaning of and factual support for the
following representations on behalf of Acquiring Fund, hereby certifies and
represents that the following statements are true, complete and correct and will
be true, complete and correct on the date of the transaction and thereafter as
relevant. Unless otherwise indicated, all capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Agreement.
1. Acquiring Trust is a statutory trust established under the laws of the
State of Delaware, and Acquiring Fund is, and has been at all times, treated as
a separate corporation for federal income tax purposes. Acquiring Fund was newly
organized solely for the purpose of effecting the transaction and continuing
thereafter to operate as a regulated investment company. Prior to the
transaction, Acquiring Fund did not and will not engage in any business
activities. There shall be no shares of Acquiring Fund issued and outstanding
prior to the Closing Date other than those issued to Pioneer Investment
Management, Inc. or one of its affiliates in connection with the creation of
Acquiring Fund.
2. Neither Acquiring Fund nor any person treated as related to Acquiring
Fund under Treasury Regulation Section 1.368-1(e)(3) nor any partnership of
which Acquiring Fund or any such related person is a partner has any plan or
intention to redeem or otherwise acquire any of the Acquiring Fund Shares
received by shareholders of Acquired Fund in the transaction except in the
ordinary course of Acquiring Fund's business in connection with its legal
obligation under Section 22(e) of the Investment Company Act of 1940, as amended
(the "1940 Act"), as a registered open-end investment company to redeem its own
shares.
3. After the transaction, Acquiring Fund will continue the historic
business (as defined in Treasury Regulation Section 1.368-1(d)(2)) of Acquired
Fund or will use a significant portion of the historic business assets (as
defined in Treasury Regulation Section 1.368-1(d)(3)) acquired from Acquired
Fund in the ordinary course of a business.
4. Acquiring Fund has no plan or intention to sell or otherwise dispose
of any assets of Acquired Fund acquired in the transaction, except for
dispositions made in the ordinary course of its business or to maintain its
qualification as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended ("the "Code").
5. Any expenses of Acquired Fund incurred in connection with the
transaction which are paid or assumed by Acquiring Fund will be expenses of
Acquired Fund solely and directly related to the transaction in
19
accordance with Rev. Rul. 73-54, 1973-1 C.B. 187. Acquiring Fund will not pay or
assume expenses, if any, incurred by any Acquired Fund Shareholders in
connection with the transaction.
6. There is no, and never has been any, indebtedness between Acquiring
Fund and Acquired Fund.
7. Acquiring Fund will properly elect to be treated as a regulated
investment company under Subchapter M of the Code and will qualify for the
special tax treatment afforded regulated investment companies under Subchapter
M of the Code for all taxable years ending after the date of the transaction.
8. Acquiring Fund meets the requirements of a regulated investment
company in Section 368(a)(2)(F) of the Code.
9. Acquiring Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
10. Acquiring Fund does not now own and has never owned, directly or
indirectly, any shares of Acquired Fund.
11. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in exchange for the assets of
Acquired Fund will be approximately equal to the fair market value of the assets
of Acquired Fund received by Acquiring Fund, minus the Acquired Fund Liabilities
assumed by Acquiring Fund. Acquiring Fund will not furnish any consideration in
connection with the acquisition of Acquired Fund's assets other than the
assumption of such Acquired Fund Liabilities and the issuance of such Acquiring
Fund Shares.
12. Immediately following the transaction, Acquired Fund Shareholders will
own all of the outstanding Acquiring Fund Shares other than those issued to
Pioneer Investment Management, Inc. or one of its affiliates in connection with
the creation of the Acquiring Fund, which will represent less than 1% of the
outstanding shares, and will own such shares solely by reason of their ownership
of the Acquired Fund Shares immediately prior to the transaction. Acquiring Fund
has no plan or intention to issue as part of the transaction any shares of
Acquiring Fund other than the Acquiring Fund Shares issued in exchange for
Acquired Fund assets.
13. The transaction is being undertaken for valid and substantive business
purposes, including facilitating the Acquired Fund becoming a member of the
Pioneer family of mutual funds, which, in the long term, is intended to result
in lower expenses and increased assets.
14. No Acquired Fund Shareholder is acting as agent for Acquiring Fund in
connection with the transaction or approval thereof. Acquiring Fund will not
reimburse any Acquired Fund Shareholder for Acquired Fund Shares such
shareholder may have purchased or for other obligations such shareholder may
have incurred.
15. Acquiring Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in the Acquiring Fund.
* * * * *
20
The undersigned officer of Acquiring Trust is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquiring Fund. The undersigned recognizes that
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 8.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP a written notice to
that effect.
PIONEER SERIES TRUST III ON BEHALF OF
PIONEER CULLEN VALUE FUND
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Treasurer
Dated: February 25, 2005
21
Annex B
TAX REPRESENTATION CERTIFICATE OF
CULLEN FUNDS TRUST
ON BEHALF OF CULLEN VALUE FUND
This certificate is being delivered in connection with the transaction to be
effected pursuant to the Agreement and Plan of Reorganization (the "Agreement")
made as of January 18, 2005 between Pioneer Series Trust III, a Delaware
statutory trust on behalf of its series, Pioneer Cullen Value Fund ("Acquiring
Fund") and Cullen Funds Trust, a Delaware statutory trust ("Cullen Trust"), on
behalf of Cullen Value Fund ("Acquired Fund"). Pursuant to the Agreement,
Acquiring Fund will acquire all of the assets of Acquired Fund in exchange
solely for (i) the assumption by Acquiring Fund of the liabilities of Acquired
Fund (the "Acquired Fund Liabilities") and (ii) the issuance of shares of
beneficial interest of Acquiring Fund (the "Acquiring Fund Shares") to Acquired
Fund, followed by the distribution by Acquired Fund, in liquidation of Acquired
Fund, of the Acquiring Fund Shares to the shareholders of Acquired Fund and the
termination of Acquired Fund (the foregoing together constituting the
"transaction").
The undersigned officer of Cullen Trust, after consulting with its counsel,
auditors and tax advisers regarding the meaning of and factual support for the
following representations, on behalf of Acquired Fund, hereby certifies and
represents that the following statements are true, complete and correct and will
be true, complete and correct on the date of the transaction and thereafter as
relevant. Unless otherwise indicated, all capitalized terms used but not defined
herein shall have the meaning ascribed to them in the Agreement.
1. Acquired Fund is a series of Cullen Funds Trust, a Delaware statutory
trust, and Acquired Fund is, and has been at all times, treated as a separate
corporation for federal income tax purposes.
2. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares received by each shareholder that holds shares of Acquired
Fund (the "Acquired Fund Shares") will be approximately equal to the fair market
value of the Acquired Fund Shares with respect to which such Acquiring Fund
Shares are received, and the aggregate consideration received by Acquired Fund
Shareholders in exchange for their Acquired Fund Shares will be approximately
equal to the fair market value of all of the outstanding Acquired Fund Shares
immediately prior to the transaction. No property other than Acquiring Fund
Shares will be distributed to shareholders of Acquired Fund in exchange for
their Acquired Fund Shares, nor will any such shareholder receive cash or other
property as part of the transaction.
3. Neither Acquired Fund nor any person "related" to Acquired Fund (as
defined in Treasury Regulation Section 1.368-1(e)(3)) nor any partnership in
which Acquired Fund or any such related person is a partner has redeemed,
acquired or otherwise made any distributions with respect to any shares of the
Acquired Fund as part of the transaction, or otherwise pursuant to a plan of
which the transaction is a part, other than redemptions and distributions made
in the ordinary course of Acquired Fund's business as an open-end investment
company. To the best knowledge of management of Acquired Fund, there is no plan
or intention on the part of shareholders of Acquired Fund to engage in any
transaction with Acquired Fund, the Acquiring Fund, or any person treated as
related to Acquired Fund or Acquiring Fund under Treasury Regulation Section
1.368-1(e)(3) or any partnership in which Acquired Fund, Acquiring Fund, or any
person treated as related to Acquired Fund or Acquiring Fund under Treasury
Regulation Section 1.368-1(e)(3) is a partner involving the sale, redemption or
exchange of any of the Acquired Fund Shares or any of the Acquiring Fund Shares
to be received in the transaction, as the case may be, other than in the
ordinary course of Acquired Fund's business as a series of an open-end
investment company.
4. In the transaction, Acquired Fund will transfer its assets and
Acquired Fund liabilities to Acquiring Fund such that immediately following the
transfer, Acquiring Fund will possess all of the same assets and liabilities as
were possessed by Acquired Fund immediately prior to the transaction, except for
assets used to pay
22
expenses incurred in connection with the transaction and assets distributed to
shareholders in redemption of their shares immediately preceding, or in
contemplation of, the transaction (other than redemptions and distributions made
in the ordinary course of Acquired Fund's business as an open-end investment
company) which assets, constitute less than 1% of the net assets of Acquired
Fund.
5. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in exchange for the assets of
Acquired Fund will be approximately equal to the fair market value of the assets
of Acquired Fund received by Acquiring Fund, minus the Acquired Fund Liabilities
assumed by Acquiring Fund. Acquired Fund will not receive any consideration from
Acquiring Fund in connection with the acquisition of Acquired Fund's assets
other than the assumption of such Acquired Fund Liabilities and the issuance of
such Acquiring Fund Shares.
6. The Acquired Fund Liabilities assumed by Acquiring Fund plus the
liabilities, if any, to which the transferred assets are subject were incurred
by Acquired Fund in the ordinary course of its business. Acquired Fund does not
have any liabilities of any kind other than the Acquired Fund Liabilities
assumed by the Acquiring Fund.
7. As of the date of the transaction, the adjusted basis and the fair
market value of the Acquired Fund assets transferred to Acquiring Fund will
equal or exceed the sum of the Acquired Fund Liabilities assumed by Acquiring
Fund within the meaning of Section 357(d) of the Internal Revenue Code of 1986,
as amended (the "Code").
8. Acquired Fund currently conducts its historic business within the
meaning of Treasury Regulation Section 1.368-1(d)(2), which provides that, in
general, a corporation's historic business is the business it has conducted most
recently, but does not include a business that the corporation enters into as
part of a plan of reorganization. The Acquired Fund assets transferred to
Acquiring Fund will be Acquired Fund's historic business assets within the
meaning of Treasury Regulation Section 1.368-1(d)(3), which provides that a
corporation's historic business assets are the assets used in its historic
business.
9. Acquired Fund will distribute to its shareholders the Acquiring Fund
Shares it receives pursuant to the transaction, and its other properties, if
any, and will be liquidated promptly thereafter.
10. The expenses of Acquired Fund incurred by it in connection with the
transaction which are to be assumed by Acquiring Fund, if any, will be only such
expenses that are solely and directly related to the transaction in accordance
with Rev. Rul. 73-54, 1973-1 C.B. 187. Acquired Fund will not pay any expenses
incurred by its shareholders in connection with the transaction.
11. There is no, and never has been any, indebtedness between Acquiring
Fund and Acquired Fund.
12. Acquired Fund has properly elected to be treated as a regulated
investment company under Subchapter M of the Code, has qualified for the special
tax treatment afforded regulated investment companies under Subchapter M of the
Code for each taxable year since inception, and qualifies as such as of the time
of the Closing on the Closing Date.
13. Acquired Fund meets the requirements of a regulated investment company
in Section 368(a)(2)(F) of the Code.
14. Acquired Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
15. Acquired Fund does not pay compensation to any shareholder-employee.
16. Immediately following the transaction, Acquired Fund Shareholders will
own all of the outstanding Acquiring Fund Shares issued to Acquired Fund
pursuant to the transaction and will own such shares solely by reason of their
ownership of the Acquired Fund Shares immediately prior to the transaction.
23
17. Acquired Fund Shareholders will not have dissenters' or appraisal
rights in the transaction.
18. The transaction is being undertaken for valid and substantial business
purposes, including facilitating the Acquired Fund becoming a member of the
Pioneer family of mutual funds, which, in the long term, is intended to result
in lower expenses and increased assets.
19. Acquired Fund has no outstanding warrants, options, convertible
securities or any other type of right pursuant to which any person could acquire
stock in the Acquired Fund.
* * * * *
24
The undersigned officer of Acquired Fund is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquired Fund. The undersigned recognizes that
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 8.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP a written notice to
that effect.
CULLEN FUNDS TRUST, ON BEHALF OF
CULLEN VALUE FUND
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Dated: February 25, 2005
25