AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN (the "Agreement") is made as of September
3, 1996, by and between: The ▇▇▇▇▇▇▇ Covenant Fund (hereinafter
referred to as "LCF"), an Indiana Business Trust; ▇▇▇▇▇▇▇ Holdings
Asset Management, Inc. (hereinafter referred to as "▇▇▇▇▇▇▇"), a New
York corporation; The Vintage Funds (hereinafter referred to as
"Vintage"), an Indiana Business Trust on behalf of the Fiduciary Value
Fund (hereinafter referred to as "Portfolio"), a series and sub-trust
of Vintage; and Vintage Advisers, Inc. (hereinafter referred to as
"Advisers"), an Indiana corporation which serves as the investment
adviser to the Portfolio.
WITNESSETH:
WHEREAS, this Agreement is intended to be and is adopted as a
"plan of reorganization", within the meaning of Treasury Reg. Sec.
1.368-2 (g), for a reorganization under Section 368 (a) (1) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the reorganization (the "Reorganization") will consist
of the transfer to the Portfolio of all of the assets of LCF in
exchange for the assumption by Portfolio of all the stated liabilities
of LCF and the issuance by Portfolio of shares of beneficial interest,
without par value, (the "Portfolio Shares"), to be distributed pro
rata, after the Closing Date hereinafter defined, to the shareholders
of LCF in complete liquidation and dissolution of LCF as provided for
herein, all upon the terms and conditions hereinafter set forth in
this Agreement; and
WHEREAS, it is intended that the transactions contemplated herein
shall qualify as a tax-free reorganization under Section 368(a) (1)
(D) of the Code; and
WHEREAS, the Board of Trustees of Vintage, on behalf of the
Portfolio, and the Board of Trustees of LCF, each a registered open-
end management investment company, deem it advisable that the parties
enter into this Agreement, and that this Agreement and the
transactions contemplated herein are in the best interests of the LCF
and the Portfolio shareholders; and
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements hereinafter set forth and herein contained,
the parties hereto covenant and agree as follows:
1.0 The Reorganization and Liquidation of LCF.
On the Closing Date (as hereinafter defined), Portfolio will
issue to LCF the number of Portfolio Shares, taken at their then net
asset value, having an aggregate net asset value equal to the
aggregate value of the net assets of LCF, and shall provide evidence
satisfactory to LCF that Portfolio has credited such Portfolio Shares
on the books of Portfolio to the account of LCF. The aggregate value
of the net assets of LCF and Portfolio shall be determined in
accordance with their then currently effective registration statements
as of the close of the New York Stock Exchange on the Valuation Date,
using consistently applied accounting principles, as approved and
agreed to by officers of LCF and Portfolio.
1.1 Subject to the terms and conditions herein set forth and on
the basis of the representations and warranties contained herein, on
the Closing Date (as hereinafter defined), LCF will assign, deliver
and otherwise transfer its assets as set forth in paragraph 1.2 (the
"LCF Assets") to Portfolio, and Portfolio will in exchange therefore,
assume all the stated LCF liabilities determined as set forth in
paragraph 1.3 and deliver to LCF the number of Portfolio Shares,
including fractional Portfolio Shares, determined by dividing the
value of the LCF Assets, net of such stated liabilities, computed in
the manner and as of the time and date set forth in paragraph 2.1, by
the net asset value of one full Portfolio Share, computed in the
manner and as of the time and date set forth in paragraph 2.2 herein.
Such transactions shall take place at the closing provided for in
paragraph 3.1 (the "Closing").
Based on the respective representations, warranties, and
agreements, and subject to the terms and conditions contained herein,
LCF agrees to transfer to Portfolio and Portfolio agrees to accept
from LCF, all of the assets of LCF on the Closing Date in exchange for
the assumption by Portfolio of all of the stated liabilities of LCF
shown on the list to be delivered to Portfolio pursuant to paragraph
1.3 and the issuance of the number of Portfolio Shares provided in
Section 2. Portfolio will assume only those liabilities shown on such
financial statements and shall not assume any others, whether absolute
or contingent, known or unknown, accrued or unaccrued. Such Portfolio
Shares subsequently shall be distributed pro rata to the shareholders
of LCF in complete liquidation and dissolution of LCF and in exchange
for all of the outstanding shares of beneficial interest, without par
value, of LCF (the "LCF Shares"). LCF shall not issue, sell or
transfer any LCF Shares after the Closing Date, and only redemption
requests received by LCF in proper form no later than seven days
before the Closing Date shall be fulfilled by LCF. Redemption
requests received by LCF thereafter shall be treated as requests for
redemption of those Portfolio Shares allocable to the shareholder in
question as provided in Section 1.5 of this Agreement.
1.2 (a) .The LCF Assets shall include all property, including
without limitation, all cash, cash equivalents, securities and
dividends and interest receivable owned by LCF, and any deferred or
prepaid expenses shown as an asset on LCF's books on the Closing
Date;
(b) .Subsequent to the execution of this Agreement and prior
to the Closing Date, LCF shall deliver to Portfolio a list setting
forth the assets to be assigned, delivered and transferred to
Portfolio, including the securities then owned by LCF and the
respective Federal income tax bases (on an identified cost basis)
thereof, and the liabilities to be assumed by Portfolio pursuant to
this Agreement;
1.3 (a) .LCF will endeavor to discharge all of it liabilities
and obligations when and as due prior to the Closing Date;
(b) .On the Closing Date, Portfolio will assume all stated
liabilities, expenses, costs, charges and reserves reflected on an
unaudited Statement of Assets and Liabilities (the "Statement of
Assets and Liabilities") of LCF, prepared by the Treasurer of LCF, and
agreed to by the parties as of the Valuation Date, and prepared in
conformity with generally accepted accounting principles and
consistently applied from the prior audited period. Said Statement of
Assets and Liabilities shall be attached hereto as Schedule 1.3(b);
(c) .Portfolio shall only assume the liabilities that are
listed and included as part of the LCF Statement of Assets and
Liabilities. Portfolio shall not be responsible for nor shall it
assume any liabilities which are not included on the aforementioned
LCF Statement of Assets and Liabilities.
(d) .After the Closing Date, any refunds relating to
expenditures paid by LCF or ▇▇▇▇▇▇▇ shall inure to the benefit of
Portfolio, except for those otherwise agreed between the parties and
attached hereto as Schedule 1.3 (d);
(e) .Any deferred organizational costs and/or any prepaid
filing and registration fees of LCF and/or ▇▇▇▇▇▇▇ shall be 100%
expensed at or prior to the Closing Date along with any known
additional fees and/or expenses due and payable for the unwinding of
LCF's activities in the states in which LCF was registered; and
(f) .All receivables due LCF from ▇▇▇▇▇▇▇ shall be paid in
full prior to Closing.
1.4 In order for LCF to comply with Section 852 (a) (1) of the
Code and to avoid having any investment company taxable income or net
capital gain (as defined in Sections 852 (b) (2) and 1222 (11) of the
Code, respectively) in the short taxable year ending with its
liquidation, LCF will, on or before the Closing Date, (a) declare a
dividend in an amount large enough so that it will have declared
dividends of all of its investment company taxable income and net
capital gain, if any, for such taxable year (determined without regard
to any deduction for dividends paid) and (b) distribute such dividend
in shares or cash, as applicable and provided for in LCF's currently
effective registration statement.
1.5 . .As soon as practicable after the Closing Date, (a) LCF
shall distribute on a pro rata basis to the shareholders of record of
LCF at the close of business on the Valuation Date in exchange for all
of the outstanding LCF Shares, (each shareholder of LCF being entitled
to receive that proportion of the Portfolio Shares to be received by
LCF that the number of LCF Shares owned by each such shareholder bears
to the number of outstanding LCF Shares) and (b) LCF shall be
liquidated and dissolved in accordance with applicable law and its
Declaration of Trust. Upon liquidation, all issued and outstanding
LCF Shares will be canceled on LCF's books and LCF shareholders will
have no further rights as such shareholders. Portfolio will not issue
certificates representing Portfolio Shares in connection with such
exchange.
For purpose of distribution of the Portfolio Shares to
shareholders of LCF, Portfolio shall credit on the books of Portfolio
an appropriate number of Portfolio Shares to the account of each
shareholder of LCF, and shall provide evidence satisfactory to LCF
that such Portfolio Shares have been so credited. After the Closing
Date, each outstanding certificate which, prior to the Closing Date,
represented LCF Shares, shall be deemed void. Portfolio will pay the
registration or qualification fees as are necessary under applicable
securities laws to qualify the Portfolio Shares to be issued in
connection with this Agreement.
1.6 After the Closing, LCF shall not conduct any business except
in connection with the winding up of its affairs and shall file at no
expense to Portfolio or Advisers, or make provision for the filing of,
all reports it is required by law to file. ▇▇▇▇▇▇▇ and LCF shall
prepare and cause to be filed, at no expense to Portfolio or Advisers,
the final 1120 RIC for LCF, which form shall make the proper election
of tax-free reorganization as approved by and coordinated with
Portfolio and Vintage.
1.7 Copies of all books and records maintained on behalf of LCF
in connection with its obligations under the Investment Company Act of
1940, as amended, (the "1940 Act"), the Code, state blue sky laws or
otherwise in connection with this Agreement will promptly after the
Closing be delivered to officers of Portfolio or their designee and
Portfolio or its designee shall comply with applicable record
retention requirements to which LCF is subject under the ▇▇▇▇ ▇▇▇.
1.8 Any effective insurance policies for LCF, and any other LCF
insurance policies required under the law to effect the transactions
contemplated herein, shall be maintained or acquired and shall be in
full force and effect as of the Closing Date.
1.9 At Closing, or as soon as practicable thereafter under the
law, Portfolio shall change its name from the Fiduciary Value Fund to
the ▇▇▇▇▇▇▇ Fund, or such other name as may be mutually agreed upon
between the parties. Portfolio and Vintage agree to take all
requisite actions necessary to effect such name change, including but
not limited to the amendment of its Declaration of Trust.
2.0 The Calculation of Net Asset Value.
2.1 The value of the LCF Assets shall be the value of such
assets computed as of 4:00 p.m. on the Friday immediately following
the satisfaction of the condition set forth in paragraph 8.1, or as
otherwise mutually agreed upon in writing by the parties (such time
and date being hereinafter called the "Valuation Date"), using the
valuation procedures set forth in paragraph 1.0.
2.2 The net asset value of a Portfolio Share shall be the net
asset value per share computed on the Valuation Date, using the
valuation procedures set forth in Paragraph 1.0.
2.3 The number of Portfolio Shares (including fraction thereof,
if any) to be issued hereunder shall be determined by dividing the
value of the LCF Assets, net of the liabilities assumed by Portfolio
pursuant to paragraph 1.1, determined in accordance with paragraph
2.1, by the net asset value of a Portfolio Share determined in
accordance with paragraph 2.2.
2.4 All computations of value shall be made by Unified Advisers,
Inc. Portfolio shall cause Unified Advisers, Inc. to deliver a copy
of its valuation report at Closing.
3.0 Closing and Closing Date.
3.1 The closing date (the "Closing Date") shall be the next
business day following the Valuation Date. All acts taking place at
the Closing shall be deemed to take place simultaneously as of 9:00
a.m. Eastern time on the Closing Date unless otherwise agreed by the
parties. The Closing shall be held at the offices of the transfer
agent, Unified Advisers, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
3.2 LCF securities held by LCF and represented by a certificate
or written instrument shall be made available by it or on its behalf
to Star Bank, N.A., the custodian bank for Portfolio (the "Portfolio
Custodian") for examination no later than five business days preceding
the Valuation Date. Such LCF securities (together with any cash or
other assets) shall be delivered by LCF to the Portfolio Custodian for
the account of Portfolio on or before the Closing Date in conformity
with applicable custody provisions under the 1940 Act and duly
endorsed in proper form for transfer in such condition as to
constitute good delivery thereof in accordance with the custom of
brokers. LCF securities and instruments deposited with a securities
depository, as defined in Rule 17f-4 under the 1940 Act, shall be
delivered on or before the Closing Date by book entry in accordance
with customary practices of such depositories and the Portfolio
Custodian. The cash delivered shall be in the form of a Federal Funds
wire payable to the order of "Star Bank, NA, Custodian for the
Fiduciary Value Fund".
If on the Closing Date LCF is unable to make good delivery
pursuant to this Section to the Portfolio Custodian of any of LCF's
portfolio securities because such securities have not yet been
delivered to LCF's custodian by its brokers or by the transfer agent
for such securities, then the delivery requirement of this Section
with respect to such securities shall be waived, and LCF shall deliver
to the Portfolio Custodian on or by said Closing Date with respect to
said undelivered securities executed copies of an agreement or
assignment in a form satisfactory to the Portfolio Custodian, together
with such other documents including brokers' confirmations, as may be
reasonably requested by Portfolio.
3.3 In the event that on the Valuation Date (a) the New York
Stock Exchange shall be closed to trading or trading thereon shall be
restricted or (b) trading or the reporting of trading on such Exchange
or elsewhere shall be disrupted so that, in the judgment of both
Portfolio and LCF, accurate appraisal of the value of the net assets
of Portfolio or LCF is impracticable, the Valuation Date shall be
postponed until the first business day after the day when trading
shall have been fully resumed without restriction or disruption and
reporting shall have been restored.
3.4 LCF shall deliver to Portfolio or its designee (a) at the
Closing, a list, certified by LCF's Secretary, of the names, addresses
and taxpayer identification numbers of LCF's shareholders and the
number of outstanding LCF Shares owned by each such shareholder, all
as of the Valuation Date, and (b) as soon as practicable after the
Closing, all original documentation (including Internal Revenue
Service forms, certificates, certifications and correspondence)
relating to the LCF shareholders' taxpayer identification numbers and
their liability for or exemption from back-up withholding. Portfolio
shall issue and deliver to LCF a confirmation evidencing delivery of
the Portfolio Shares to be credited on the Closing Date to the LCF
shareholders. At the Closing, each party shall deliver to the other
such bills of sale, assignments, assumption agreements, receipts or
other documentation as such other party or its counsel may reasonably
request to effect the consummation of the transactions contemplated by
this Agreement.
4.0 Covenants of Portfolio, ▇▇▇▇▇▇▇ and LCF.
4.1 Portfolio and LCF each will operate its business in the
ordinary course between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include
customary dividends and other distributions.
4.2 LCF, or ▇▇▇▇▇▇▇ on behalf of LCF, at no expense to
Portfolio or Advisers, will assist Portfolio in the preparation of the
registration statement on Form N-14 under the Securities Act of 1933,
as amended (the "1933 Act") relating to the Portfolio Shares to be
exchanged pursuant to paragraph 1.0 and including the Proxy Materials
described in paragraph 4.3 below (the "Registration Statement"), and
Portfolio shall then file the Registration Statement with the
Securities and Exchange Commission (the "Commission") pursuant to
filing requirements and deadlines. Both LCF and Portfolio agree to
provide the other with such other information and documentation as are
reasonably necessary for the preparation of the Registration
Statement. The legal fees and expenses of ▇▇▇▇▇, Cummins & ▇▇▇▇▇,
Co., L.P.A. in preparing the Registration Statement shall be borne by
▇▇▇▇▇▇▇ up to $25,000.
4.3 LCF will call a meeting of its shareholders to consider and
act upon this Agreement and to take all other actions necessary to
obtain approval of the transactions contemplated herein. LCF will
assist Portfolio in the preparation of the notice of the meeting, form
of proxy and proxy statement (collectively "Proxy Materials") to be
used in connection with such meeting) it being understood that
Portfolio will furnish a currently effective prospectus relating to
the Portfolio for inclusion in the Proxy Materials and with such other
information relating to Portfolio as is reasonably necessary for the
preparation of the Proxy Materials, including the currently effective
registration statement of the Portfolio.
4.4 Prior to the Closing Date, LCF will assist Portfolio in
obtaining such information as Portfolio reasonably requests concerning
the beneficial ownership of the LCF Shares.
4.5 Subject to the provisions in this Agreement, Portfolio and
LCF will each take, or cause to be taken, all actions, and do or cause
to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this
Agreement.
4.6 As promptly as practicable, but in any case within sixty
(60) calendar days after the Closing Date, LCF shall furnish, or cause
to be furnished, to Portfolio such information as Portfolio reasonably
requests to enable Portfolio to determine LCF's earnings and profits
for Federal income tax purposes that will be carried over to Portfolio
pursuant to Section 381 of the Code.
4.7 As soon after the Closing Date as is reasonably practicable,
LCF (a) shall prepare and file all Federal and other tax returns and
reports of LCF required by law to be filed with respect to all periods
ending on or before the Closing Date but not theretofore filed and (b)
shall submit to Portfolio for payment all Federal and other taxes
shown as due thereon which were not required to be paid on or before
the Closing Date, provision for the payment of which was made as of
the Closing Date on the unaudited LCF Statement of Assets and
Liabilities referred to in paragraph 1.2.
4.8 Portfolio agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
4.9 The parties agree that ▇▇▇▇▇▇▇ shall be retained to provide
certain consulting services to Portfolio's sub-adviser, Fiduciary
Counsel (the "Sub-Adviser") pursuant to and more fully described in a
consulting agreement, (the"Consulting Agreement"), the material terms
of which are described in Schedule 4.9 attached hereto. The
Consulting Agreement will define the specific nature of the services
and duties to be provided by ▇▇▇▇▇▇▇, which include, among others,
▇▇▇▇▇▇▇'▇ consulting arrangement with the Sub-Adviser and the
preparation and delivery by ▇▇▇▇▇▇▇ to Sub-Adviser of ▇▇▇▇▇▇▇'▇
recommended list of socially conscious companies, investment in which
would be consistent with the Portfolio prospectus and statement of
additional information. The parties agree that Portfolio's
registration statement will be modified to reflect that Portfolio will
be a "socially conscious" fund.
5.0 Representations and Warranties of Portfolio, LCF and ▇▇▇▇▇▇▇.
5.1 Portfolio represents and warrants to LCF as follows:
(a) .Portfolio is a series and sub-trust of a business trust
validly existing and in good standing under the laws of the State of
Indiana and has the power and authority to own its properties and to
carry on its business as it is now conducted. The beneficial interest
in Portfolio is divided into an unlimited number of transferable
shares, without par value.
(b) . . Portfolio is, or at the Closing Date will be, a
duly registered, open-end management investment company, and its
registration with the Commission as an investment company under the
1940 Act and the registration of its shares under the 1933 Act are, or
at the Closing Date will be, in full force and effect;
(c) . . All of the issued and outstanding Portfolio Shares
have been offered and sold in compliance in all material respects with
applicable registration requirements of the 1933 Act and state
securities laws. Portfolio Shares are and will at the Closing be
registered in all jurisdictions in which they are and will at the
Closing be required to be registered under state securities laws and
other laws, and said registrations, including any periodic reports or
supplemental filings, are and will at the Closing be complete and
current, all fees required to be paid have been and shall be paid, and
Portfolio is not and at the Closing will not be subject to any stop
order and is and will be fully qualified to sell Portfolio Shares in
each state in which its shares have been registered;
(d) .The currently effective prospectus and statement of
additional information of Portfolio conform in all material respects
to the applicable requirements of the 1933 Act and the 1940 Act and
the regulations thereunder and do not include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(e) .At the Closing Date, Portfolio will have title to its
assets, subject to no liens, security interests or other encumbrances;
(f) .No litigation or administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against Portfolio or any of its
properties or assets, except as previously disclosed in writing to
LCF. Portfolio knows of no facts that might form the basis for the
institution of such proceedings and is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business
or its ability to consummate the transactions contemplated herein;
(g) .All issued and outstanding Portfolio Shares are, and at
the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable with no personal liability attaching to
ownership thereof; the Portfolio Shares to be issued and delivered to
LCF for the accounts of the LCF shareholders, pursuant to the terms of
this Agreement, will at the Closing Date have been duly authorized
and, when issued and delivered, will be validly issued Portfolio
Shares, and will be fully paid and non-assessable, and no shareholder
of Portfolio will have any preemptive right or right of subscription
or purchase in respect thereof; Portfolio does not have outstanding
any options, warrants or other rights to subscribe for or purchase any
of its shares, nor is there outstanding any security convertible into
any of its shares;
(h) .Portfolio has the power to enter into this Agreement
and carry out its obligations hereunder. The execution, delivery and
performance of this Agreement have been duly authorized by all
necessary actions on the part of Portfolio under its Declaration of
Trust and Code of Regulations, and this Agreement constitutes a valid
and binding obligation of Portfolio enforceable in accordance with its
terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors rights and to general equity principles;
(i) .The financial statements of Portfolio as of and for the
fiscal year ended September 30, 1995, examined by Price Waterhouse,
Portfolio's independent accountants, and Semi-Annual Report of
Portfolio as of March 31, 1996 (copies of which have been or will be
furnished to LCF) fairly represent, in all material respects,
Portfolio's financial condition as of their respective dates
indicated, results of operations for such periods and changes in net
assets for such periods in conformity with generally accepted
accounting principles applied on a consistent basis, and as of such
dates there were no known liabilities of Portfolio (contingent or
otherwise) not disclosed therein that would be required in conformity
with generally accepted accounting principles to be disclosed therein;
(j) .Since the date of Portfolio's most recent audited
financial statements, there has not been any material adverse change
in Portfolio's financial condition, assets, liabilities or business,
other than changes occurring in the ordinary course of business, or
any occurrence by Portfolio of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed in writing to LCF prior to the Closing Date. For the
purposes of this subparagraph (j) neither a decline in Portfolio's net
asset value per share nor a decrease in Portfolio's size due to
ordinary redemption activity shall constitute a material adverse
change;
(k) .The information furnished or to be furnished by
Portfolio for use in registrations, 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. Any information furnished by Portfolio for use in
the Registration Statement or in any other manner that may be
necessary in connection with the transactions contemplated herein
shall be accurate and complete and shall comply in all material
respects with applicable Federal securities and other laws and all
regulations thereunder;
(l) .The Registration Statement and the proxy materials
(only insofar as they relate to Portfolio, Vintage, Advisers and any
of its affiliates) will, on the effective date of the Registration
Statement, at the time of the meeting of LCF's shareholders and on the
Closing Date, not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which such statements were made, not materially
misleading;
(m) .Portfolio has filed all tax returns required to be
filed and has no liability for any unpaid taxes. Portfolio has made a
proper election to be treated as a regulated investment company under
Subchapter M of the Code and has qualified to be treated as a
regulated investment company during all previous taxable years;
(n) . Portfolio is not in violation of, and the execution
and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby will not, violate Portfolio's
Declaration of Trust or By-Laws or any provision of any agreement to
which Portfolio is a party or by which it is bound, or result in the
acceleration of any obligation or the imposition of any penalty under
any agreement, judgment or decree to which Portfolio is a party or by
which it is bound. Portfolio has not material contracts or other
commitments (other than this Agreement) that will be terminated with
liability to it prior to or on the Closing Date;
(o) .Portfolio has maintained or has caused to be maintained
on its behalf all books and accounts as required of a registered
investment company in compliance with the requirements of Section 31
of the 1940 Act and the Rules thereunder. The books and records of
Portfolio made available to LCF and/or its counsel, accurately
summarize the accounting data represented and contain no material
omissions with respect to the business and operation of Portfolio;
(p) .There are no unresolved or outstanding shareholder
claims or inquiries related to Portfolio and there will be no such
claims or inquiries as of the Closing Date other than as disclosed by
Portfolio in writing to LCF prior to the Closing Date. There are no
anticipated, outstanding or unresolved investigations examinations or
inquires relating to Portfolio by the Commission, or any other
governmental authority having jurisdiction over the business and
affairs of Portfolio;
(q) . . No consent, approval authorization or order of any
court or governmental authority of the United States or any state is
required for the consummation by Portfolio of the transactions
contemplated herein; except such as may be required under the 1933
Act, the Securities Exchange Act of 1934 (the "1934 Act"), the 1940
Act and state securities laws;
(r) .There are and will be no legal or governmental
proceedings or other agreements, only insofar as they relate to
Portfolio, existing on or before the date of mailing of the Proxy
Materials or the Closing Date that will have been required to be
described in the Registration Statement or in any documents that are
required to be filed as exhibits to the Registration Statement that
will not have been described as required;
(s) .Except as described in paragraph 4.9, as of the Closing
Date, there shall have been no material change in the investment
objective, policies and restrictions nor any increase in the
investment management fees, fees payable pursuant to Portfolio's 12b-1
Plan or shareholder services plan from those described in Portfolio's
currently effective prospectus and statement of additional
information; and
(t) .To the best knowledge of Portfolio, the operations of
Portfolio (and the operations of Vintage with respect to Portfolio's
operations) as heretofore and as now conducted have complied and
comply in all material respects with all applicable laws, statutes,
legislation, acts, rules and regulations.
5.2 Except as provided in schedule 5.2 attached hereto, LCF
represents and warrants to Portfolio as follows:
(a) .LCF is an Indiana business trust validly existing and
in good standing under the laws of the State of Indiana and has the
power and authority to own properties and to carry on LCF's business
as it is now conducted;
(b) .LCF is a duly registered, open-end, management
investment company, and its registration with the Commission as an
investment company under the 1940 Act is in full force and effect and
such registration has not been revoked or rescinded. LCF's current
prospectus and statement of additional information conform in all
material respects to the requirements of the 1933 Act and the 1940
Act;
(c) .All of the issued and outstanding shares of LCF have
been offered and sold in compliance in all material respects with
applicable registration requirements of the 1933 Act and state
securities laws. Shares of LCF are registered in all jurisdictions in
which they are required to be registered under state securities laws
and other laws.
(d) .LCF has no material contracts or other commitments
(other than this Agreement) that will be terminated with liability to
it prior to or on the Closing Date;
(e) .No litigation or administrative proceeding or
investigation of or before any court or governmental body is presently
pending or to its knowledge threatened against LCF, ▇▇▇▇▇▇▇ or any of
LCF's properties or assets. LCF knows of no facts that might form the
basis for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any
court or governmental body that materially and adversely affect its
business or its ability to consummate the transactions herein
contemplated;
(f) .The financial statements of LCF as of and for the
fiscal year ended December 31, 1995, examined by Coopers & ▇▇▇▇▇▇▇,
LCF's independent accountants, and Semi-Annual Report of LCF as of
June 30, 1996 (copies of which have been or will be furnished to
Portfolio) fairly represent, in all material respects, LCF's financial
condition as of the respective dates indicated, results of operations
for such periods and changes in net assets for such periods in
conformity with generally accepted accounting principles applied on a
consistent basis, and as of such dates there were no known liabilities
of LCF (contingent or otherwise) not disclosed therein that would be
required in conformity with generally accepted accounting principles
to be disclosed therein. All liabilities (contingent and otherwise)
as of the Closing Date known to LCF will be reflected in conformity
with generally accepted accounting principles on the unaudited
Statement of Assets and Liabilities referred to in paragraph 1.3;
(g) .Since the date of LCF's most recent audited financial
statements, there has not been any material adverse change in LCF's
financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any
incurrence by LCF of indebtedness maturing more than one year from the
date such indebtedness was incurred, except as otherwise disclosed in
writing to Portfolio prior to the Closing Date. All liabilities of
LCF (contingent or otherwise) are reflected in the unaudited statement
described in paragraph 1.3 above. For the purposes of this
subparagraph (h), neither a decline in LCF's net asset value per share
nor a decrease in LCF's size due to ordinary redemption activity shall
constitute a material adverse change;
(h) .At the Closing Date, all Federal and other tax returns
and reports of LCF required by law to be filed on or before the
Closing Date shall have been filed, and all Federal and other taxes
shall have been paid in full as due, and to the best of LCF's
knowledge no such return is currently under audit and no assessment
has been asserted with respect to any such return;
(i) .For each taxable year since its inception, LCF has met
all the requirements of Subchapter M of the Code for qualification and
treatment as a "registered investment company" as defined therein;
(j) .All issued and outstanding LCF Shares are, and at the
Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof. All such shares will, at the time of Closing, be
held by persons and in the amounts set forth in the list of
shareholders submitted to Portfolio pursuant to paragraph 3.4. LCF
does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of its shares, nor is there outstanding
any security convertible into any of its shares;
(k) .At the Closing Date, LCF will have title to the LCF
Assets, subject to no liens, security interests or other encumbrances,
and full right, power and authority to assign, deliver and otherwise
transfer the LCF Assets hereunder, and upon delivery of the LCF Assets
and exchange of the Portfolio Shares to LCF's shareholders for the LCF
Assets, Portfolio will attain good title thereto, free and clear of
all liens, claims, charges, options, and encumbrances and subject to
no restriction on the full transfer thereof, including such
restrictions as might arise under the 1933 Act;
(l) .Subject to the approval of this Agreement by LCF's
shareholders, the execution, delivery and performance of this
Agreement will have been duly authorized by all necessary action on
the part of LCF and ▇▇▇▇▇▇▇, and this Agreement will constitute a
valid and binding obligation of LCF, enforceable in accordance with
its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors rights and to general equity principles. No other consents,
authorizations or approvals are necessary in connection with the
performance of this Agreement, except such as may be required under
the 1933 Act, the 1934 Act, the 1940 Act and state securities laws;
(m) .On the effective date of the Registration Statement, at
the time of the meeting of LCF's shareholders and on the Closing Date,
the Proxy Materials (exclusive of information relating to Portfolio,
Advisers and any of their affiliates, and the currently effective
Prospectus of Portfolio and the Statement of Additional Information
incorporated therein) will (i) comply in all material respects with
the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the
regulations thereunder and (ii) not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
Any other information furnished by LCF for use in the Registration
Statement or in any other manner that may be necessary in connection
with the transactions contemplated herein shall be accurate and
complete and shall comply in all material respects with applicable
Federal securities and other laws and all regulations thereunder;
(n) .LCF will, on or prior to the Closing Date, declare one
or more dividends or other distributions to its shareholders that,
together with all previous dividends and other distributions to
shareholders, shall have the effect of distributing to the
shareholders all of its investment company taxable income and net
realized capital gains, if any, through the Closing Date (computed
without regard to any deduction for dividends paid);
(o) .LCF has maintained or has caused to be maintained on
its behalf all books and accounts as required of a registered
investment company in compliance with the requirements of Section 31
of the 1940 Act and the Rules thereunder. The books and records of
LCF made available to Portfolio and/or its counsel, accurately
summarize the accounting data represented and contain no material
omissions with respect to the business and operation of LCF;
(p) .LCF is not receiving the Portfolio Shares to be issued
hereunder for the purpose of making any distributions thereof other
than in accordance with this Agreement;
(q) .LCF is not in violation of, and the execution and
delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby will not, violate LCF's Declaration
of Trust or Code of Regulations or any provision of any agreement to
which LCF is a party or by which it is bound, or result in the
acceleration of any obligation or the imposition of any penalty under
any agreement, judgment or decree to which LCF is a party or by which
it is bound;
(r) . As of the Closing Date, there shall have been no
material change in the investment objective, policies and restrictions
nor any increase in the investment management fees, fees payable
pursuant to LCF's 12b-1 Plan, Distribution Plan or Shareholder
Services Plan, if any, from those described in LCF's currently
effective prospectus and statement of additional information; and
(s) .To the best knowledge of LCF, the operations of LCF as
heretofore and as now conducted have complied and comply in all
material respects with all applicable laws, statutes, legislation,
acts, rules and regulations.
5.3 ▇▇▇▇▇▇▇ represents and warrants to Portfolio as follows:
(a) .As of the Closing Date, no violation of applicable
federal, state and local statute, law or regulation exists that
individually, or in the aggregate, would have a material adverse
effect on the business or operations of LCF, except as provided in
Schedule 5.2 attached hereto;
(b) .Assuming fulfillment of the conditions precedent to the
consummation of the Reorganization, LCF has the right, power, legal
capacity and authority to enter into the Reorganization contemplated
by this Agreement;
(c) .As of the Closing Date the affairs of LCF are in
compliance with the terms of its currently effective registration
statement, and LCF is in compliance with its investment policies and
restrictions as described in such documents;
(d) .As of the Closing Date, there are no outstanding
breaches by LCF of any contract to which it is a party, including but
not limited to any contract with a custodian, transfer agent or
pricing agent, and there are no outstanding breaches by LCF of any
plan of distribution it has adopted pursuant to Rule 12b-1 under the
1940 Act;
(e) .There are no unresolved or outstanding shareholder
claims or inquiries related to LCF and there will be no such claims or
inquiries as of the Closing Date other than as disclosed by ▇▇▇▇▇▇▇ in
writing to Portfolio prior to the Closing Date;
(f) .There are no anticipated, outstanding or unresolved
investigations, examinations or inquiries relating to LCF by the
Commission, or any other governmental authority having jurisdiction
over the business and affairs of LCF;
(g) .There are no any outstanding or threatened private
claims or litigation relating to LCF and knows of no facts that might
form the basis for such proceedings;
(h) .Except as previously disclosed to Portfolio in writing
and except as will have been fully corrected prior to the Closing
Date, there have been no miscalculations of the net asset value of LCF
during the twelve-month period preceding the Closing Date and all such
calculations have been done in accordance with the provisions of Rule
2a-4 under the 1940 Act;
(i) .The Federal and state income tax returns of LCF for the
fiscal year ended December 31, 1995 properly reflect, in all material
respects, the Federal and state income tax liabilities of LCF for the
periods covered thereby;
(j) .There are no claims, levies or liabilities for
corporate, excise, income or other Federal, state or local taxes
outstanding or threatened against LCF, other than those reflected in
its most recent audited and unaudited financial statements. ▇▇▇▇▇▇▇
knows of no facts that might form the basis for such proceedings; and
(k) .There have been no material adverse changes in LCF's
financial condition, assets, liabilities or business, other than those
reflected in its most recent audited and unaudited financial
statements; and all liabilities of LCF (contingent or otherwise) known
to ▇▇▇▇▇▇▇ have been reported in writing to and accepted by Portfolio
prior to the Closing Date. A reduction in net assets due to ordinary
shareholder redemption activity will not be deemed to be a material
adverse change.
6.0 Conditions to Obligations of LCF.
The obligations of LCF to consummate the transactions provided
for herein shall be subject to the performance by Portfolio of all
obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following conditions:
6.1 All representations and warranties of Portfolio contained in
this Agreement shall have been true and correct in all material
respects as of the date hereof and except as they may be affected by
the transactions contemplated by this Agreement, shall be true and
correct in all material respects as of the Closing Date with the same
force and effect as if made on and as of the Closing Date;
6.2 Portfolio shall have delivered to LCF a certificate executed
in Portfolio's name by the President and Treasurer of Vintage, in a
form reasonably satisfactory to LCF and dated as of the Closing Date,
to the effect that the representations and warranties of Portfolio
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, and as to such other matters as LCF shall
reasonably request;
6.3 Portfolio shall have delivered to LCF copies of the
Declaration of Trust, By-laws and other Trust documents of Vintage, as
currently in effect, together with copies of the resolutions adopted
by the Board of Trustees of Vintage authorizing the execution of this
Agreement and the transactions contemplated herein, in each case
certified by the Secretary or Assistant Secretary of Vintage;
6.4 Portfolio shall have delivered to LCF a certificate of the
Secretary or Assistant Secretary of Vintage as to the signatures and
incumbency of its officers who executed this Agreement on behalf of
Vintage and Portfolio, and any other documents delivered in connection
with the transactions contemplated herein on behalf of Portfolio.
6.5 Between the date hereof and the Closing Date, Portfolio
shall have provided LCF and its representatives reasonable access
during regular business hours and upon reasonable notice to the books
and records of Portfolio, as LCF may reasonably request. All such
information obtained by LCF and its representatives shall be held in
confidence and may not be used for any purpose other than in
connection with the transaction contemplated herein. In the event
that the transaction contemplated by this Agreement is not
consummated, LCF and its representatives will promptly return to
Portfolio all documents and copies thereof with respect to Portfolio
obtained during the course of such investigation;
6.6 Portfolio shall have delivered to Portfolio, pursuant to
paragraph 5.1(i), copies of the most recent financial statements of
Portfolio certified by Price Waterhouse, Portfolio's accountants;
6.7 All proceedings taken by Portfolio in connection with the
transactions contemplated by this Agreement and all documents
incidental thereto shall be reasonably satisfactory in form and
substance to LCF.
7.0 Conditions to Obligations of Portfolio.
The obligations of Portfolio to complete the transactions
provided for herein shall be subject to the performance by LCF of all
the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of LCF and ▇▇▇▇▇▇▇
contained in this Agreement shall be true and correct in all material
respects 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 LCF shall have delivered to Portfolio a statement of LCF's
assets and its liabilities, together with a list of the LCF's
securities and other assets showing the respective adjusted bases and
holding periods thereof for income tax purposes, as of the Valuation
Date, certified by the Treasurer of LCF;
7.3 LCF shall have delivered to Portfolio at the Closing a
certificate executed in LCF's name by the President and the Treasurer
of LCF, in form and substance satisfactory to Portfolio and dated as
of the Closing Date, to effect that the representations and warranties
of LCF 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, and as such other matters as Portfolio
shall reasonably request;
7.4 LCF shall have delivered to Portfolio copies of its
Declaration of Trust, Code of Regulations and other Trust documents,
as currently in effect, together with copies of the resolutions
adopted by the Board of Trustees of LCF and by its shareholders
authorizing the execution of this Agreement by LCF and the
transactions contemplated herein, certified in each case by the
Secretary or Assistant Secretary of LCF;
7.5 LCF shall have delivered to Portfolio a certificate of the
Secretary or Assistant Secretary of LCF as to the signatures and
incumbency of it officers who executed this Agreement on behalf of LCF
and any other documents delivered in connection with the transactions
contemplated herein on behalf of LCF;
7.6 Between the date hereof and the Closing Date, LCF shall have
provided Portfolio and its representatives reasonable access during
regular business hours and upon reasonable notice to the books and
records of LCF, as Portfolio may reasonably request. All such
information obtained by Portfolio and its representatives shall be
held in confidence and may not be used for any purpose other than in
connection with the transaction contemplated herein. In the event
that the transaction contemplated by this Agreement is not
consummated, Portfolio and its representatives will promptly return to
LCF all documents and copies thereof with respect to LCF obtained
during the course of such investigation;
7.7 LCF shall have delivered to Portfolio, pursuant to paragraph
5.2(g), copies of financial statements of LCF for the fiscal year
ended December 31, 1995, certified by Coopers & ▇▇▇▇▇▇▇, LCF's
independent accountants;
7.8 On the Closing Date, LCF Assets shall include no assets that
Portfolio, by reason of charter limitations or otherwise, may not
properly receive; and
7.9 All proceedings taken by LCF in connection with the
transactions contemplated by this Agreement and all documents
incidental thereto shall be reasonably satisfactory in form and
substance to Portfolio.
8.0 Further Conditions Precedent to Obligations of LCF and Portfolio.
The obligations of LCF and Portfolio are each subject to the
further conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders of the
outstanding LCF Shares and certified copies of the resolutions
evidencing such approvals shall have been delivered to Portfolio;
8.2 On the Closing Date, no action, suit or other proceeding
shall be pending before any court or governmental agency in which it
is sought to restrain or prohibit, or obtain damages or other relief
in connection with this Agreement or the transactions contemplated
herein;
8.3 All consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities
(including those of the Securities and Exchange Commission and of
state securities authorities) deemed necessary by Portfolio or LCF to
permit the consummation, in all material respects, of the transactions
contemplated herein shall have been obtained, except where failure to
obtain any such consent, order or permit would not involve risk or a
material adverse effect on the assets or properties of Portfolio or
LCF;
8.4 The Registration Statement shall have become effective under
the 1933 Act, no stop orders suspending the effectiveness thereof
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
1933 Act;
8.5 LCF shall have declared and paid a dividend or dividends
and/or other distributions that, together with all previous such
dividends or distributions, shall have the effect of distributing to
LCF's shareholders all of LCF's investment company taxable income
(computed without regard to any deduction for dividends paid) and all
of it net capital gain (after reduction for any capital loss carry-
forward and computed without regard to any deduction for dividends
paid) for all taxable years ending or before the Closing Date; and
8.6 The parties shall have received a favorable opinion of
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ Co., L.P.A. (based upon such representations as
such law firm shall reasonably request), addressed to Portfolio and
LCF, which opinion may be relied upon by the shareholders of LCF that,
for Federal income tax purposes:
(a) .The transfer of all of the LCF Assets in exchange for
the Portfolio Shares and the assumption by Portfolio of certain
identified liabilities of LCF followed by the distribution by LCF of
the Portfolio Shares to LCF's shareholders in exchange for their LCF
Shares will constitute a "reorganization" within the meaning of
Section 368 (a) (1) of the Code, and LCF and Portfolio will each be a
"party to a reorganization" within the meaning of Section 368 (b) of
the Code, and that the transaction contemplated herein qualifies as a
tax-free reorganization under Section 368 (a) (1) of the Internal
Revenue Code of 1986;
(b) .No gain or loss will be recognized by LCF or Portfolio
on the transfer of the LCF Assets to Portfolio solely in exchange for
the Portfolio Shares and the assumption by Portfolio of the identified
liabilities of LCF;
(c) .No gain or loss will be recognized by LCF's
shareholders upon the exchange of the LCF Shares for the Portfolio
Shares and no gain or loss will be recognized by LCF on the
distribution of the Portfolio Shares to LCF's shareholders in exchange
for their LCF Shares;
(d) .The aggregate tax basis for the Portfolio Shares
received by each LCF shareholder pursuant to the reorganization will
be the same as the aggregate tax basis of the LCF Shares held by each
such LCF shareholder immediately prior to the reorganization;
(e) .The holding period of the Portfolio Shares to be
received by each LCF shareholder will include the period during which
the LCF shares surrendered in exchange therefor were held (provided
such LCF Shares were held as capital assets on the date of the
Reorganization);
(f) .The tax basis of the LCF Assets attained by Portfolio
will be the same as the tax basis of the LCF Assets to LCF immediately
prior to the Reorganization; and
(g) .The holding period of the LCF Assets in the hands of
Portfolio will include the period during which those assets were held
by LCF.
Notwithstanding anything herein to the contrary, neither
Portfolio nor LCF may waive the conditions set forth in this paragraph
8.6.
9.0 Brokerage Fees and Expenses.
9.1 Advisers, Portfolio, ▇▇▇▇▇▇▇ and LCF each represents and
warrants to the others that there are no brokers or finders entitled
to receive any payments in connection with the transactions provided
for herein.
9.2 (a) .Advisers shall bear all Portfolio expenses incurred in
connection with entering into and carrying out the provisions of this
Agreement, including legal, accounting and federal and state
registration fees and expenses. ▇▇▇▇▇▇▇ shall bear all LCF and
▇▇▇▇▇▇▇ expenses incurred in connection with entering into and
carrying out the provisions of this Agreement, including legal and
accounting fees, printing, filing and proxy solicitation expenses and
asset transfer taxes (if any) incurred in connection with the
consummation of the transactions contemplated herein. Notwithstanding
the foregoing, any legal fees and expenses of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇
Co., L.P.A. related to the preparation and filing of the Registration
Statement on Form N-14 shall be borne by ▇▇▇▇▇▇▇ up to an amount of
$25,000 and shall not be borne by LCF, Portfolio or Advisers, except
that Advisers shall bear any legal fees and expenses of ▇▇▇▇▇, ▇▇▇▇▇▇▇
& ▇▇▇▇▇ Co., L.P.A. related to the preparation and filing of the
Registration Statement on Form N-14 that exceed the $25,000 limit
borne by ▇▇▇▇▇▇▇.
(b) .In the event the transactions contemplated herein are
not consummated by reason of LCF's being either unwilling or unable to
go forward (other than by reason of nonfulfillment or failure of any
condition to LCF's obligations specified in the Agreement), this
Agreement shall terminate and LCF's only obligation hereunder shall
be to reimburse Portfolio for all reasonable out of pocket fees and
expenses incurred by Portfolio in connection with those transactions,
including legal, accounting and filing fees.
(c) .In the event the transactions contemplated herein are
not consummated by reason of Portfolio's being either unwilling or
unable to go forward (other than by reason of the nonfulfillment or
failure of any condition to Portfolio's obligations specified in the
Agreement), this Agreement shall terminate and Portfolio's only
obligation hereunder shall be to reimburse LCF for all reasonable out-
of-pocket fees and expenses incurred by LCF in connection with those
transactions including legal, accounting and filing fees, and to
comply with the provisions of paragraph 7.6 herein.
10. Entire Agreement: Survival of Warranties.
10.1 Portfolio, LCF, ▇▇▇▇▇▇▇, Advisers and Vintage agree that no
party has made any representation, warranty or covenant not set forth
herein and that this Agreement constitutes the entire agreement
between the parties.
11. Termination.
11.1 In addition to termination pursuant to paragraph 9.2(b) or
9.2(c), this Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing,
whether before or after action thereon by the shareholders of LCF and
notwithstanding favorable action by such shareholders:
(a) .by the mutual consent of the Board of Trustees of
Vintage and the Board of Trustees of LCF;
(b) .by either Portfolio or LCF by notice to the other,
without liability to the terminating party on account of such
termination (providing the terminating party is not otherwise in
default or in breach of this Agreement) if the Closing shall not have
occurred on or before December 31, 1996, or if later, two business
days after the date of any LCF Shareholders meeting called for the
purpose of approving this Agreement which was convened prior to
December 31, 1996 but adjourned to a date after; or
(c) .by either Portfolio or LCF, in writing without
liability to the terminating party on account of such termination
(provided the terminating party is not otherwise in default or breach
of this Agreement), if (i) the other party shall fail to perform in
any material respect its agreements contained herein required to be
performed prior to the Closing Date, (ii) the other party materially
breaches or shall have materially breached any of its representations,
warranties or covenants contained herein, (iii) LCF shareholders fail
to approve this Agreement at any meeting called for such purpose at
which a quorum was present or (iv) any other condition herein
expressed to be precedent to the obligations of the terminating party
has not been met and it reasonably appears that it will not or cannot
be met.
11.2 (a) .Termination of this Agreement pursuant to paragraphs
11.1(a) or (b) shall terminate all obligations of the parties
hereunder (other than Portfolio's obligations under paragraph 7.6) and
there shall be no liability for damages on the part of Portfolio, LCF,
Advisers or ▇▇▇▇▇▇▇ or the directors/trustees or officers of
Portfolio, LCF, ▇▇▇▇▇▇▇ or Vintage, or to any other party or its
directors/trustees or officers.
(b) .Termination of this Agreement pursuant to paragraph
11.1(c) shall terminate all obligations of the parties hereunder
(other than Portfolio's obligations under paragraph 7.6) and there
shall be no liability for damages on the part of Portfolio, LCF,
▇▇▇▇▇▇▇, Advisers or Vintage, or directors/trustees or officers of
Portfolio, LCF, ▇▇▇▇▇▇▇, Advisers or Vintage, to any other party or
its directors/trustees or officers, except that any party in breach of
this Agreement shall, upon demand, reimburse the non-breaching party
or parties for all reasonable out-of-pocket fees and expenses incurred
in connection with the transactions contemplated by this Agreement,
including legal, accounting and filing fees.
(c) .Notwithstanding the foregoing, the parties may extend
any dates herein upon the unanimous written consent of all of the
parties hereto.
12. Amendments.
This Agreement may be amended, modified or supplemented in such a
manner as may be mutually agreed upon in writing by the authorized
officers of Portfolio, LCF, ▇▇▇▇▇▇▇ and Vintage; provided, however,
that following the meeting of the LCF shareholders called by LCF
pursuant to paragraph 4.3, no such amendment may have the effect of
changing the provisions for determining the number of the Portfolio
Shares to be issued to the LCF shareholders under this Agreement to
the detriment of such shareholders without their further approval.
Furthermore, after the aforementioned approval by the LCF
shareholders, no amendment may be made with respect to this Agreement
which in the opinion of LCF's Board of Trustees materially adversely
affects the interests of the shareholders of LCF.
At any time either party hereto may, by written instrument by it
(i) waive any inaccuracies in the representations and warranties made
to it contained herein and (ii) waive compliance with any of the
covenants or conditions made for its benefit contained herein.
13. Indemnification.
13.1 Portfolio will indemnify and hold harmless ▇▇▇▇▇▇▇, its
directors, officers and shareholders against any and all claims to the
extent that such claims are based upon, arise out of or relate to any
untruthful or inaccurate representation made by Portfolio in this
Agreement or any breach by Portfolio of any warranty or any failure to
perform or comply with any of its obligations, covenants conditions or
agreements set forth in this Agreement.
13.2 ▇▇▇▇▇▇▇ will indemnify and hold harmless Portfolio, Vintage
and Advisers, their directors/trustees, officers and shareholders
against any and all claims to the extent that such claims are based
upon, arise out of or relate to any untruthful or inaccurate
representation made by ▇▇▇▇▇▇▇ or LCF in this Agreement or any breach
by ▇▇▇▇▇▇▇ or LCF of any warranty or any failure to perform or comply
with any of its obligations, covenants conditions or agreements set
forth in this Agreement.
13.3 Advisers will indemnify and hold harmless ▇▇▇▇▇▇▇, its
directors, officers and shareholders against any and all claims to the
extent that such claims are based upon, arise out of or relate to any
untruthful or inaccurate representation made by Advisers in this
Agreement or any breach by Advisers of any warranty or any failure to
perform or comply with any of its obligations, covenants conditions or
agreements set forth in this Agreement.
13.4 As used in this section 13, the word "claim" shall mean any
and all liabilities, obligations, losses, damages, deficiencies,
demands, claims, penalties, assessments, judgments, actions,
proceedings and suits of whatever kind and nature and all costs and
expenses (including, without limitation, reasonable attorney's fees
and expenses and cost of settlement ).
13.5 ▇▇▇▇▇▇▇ will indemnify and hold harmless Portfolio, Vintage
and their respective trustees, officers and shareholders against any
and all claims with respect to any actions, inactions, activities or
any other matters occurring prior to the Closing which in any way
relate to LCF.
13.6 Promptly after receipt by any party (the "Indemnified
Party") of notice of any claim by a third party which may give rise to
indemnification hereunder, the Indemnified Party shall notify the
party against whom a Claim for indemnification may be made hereunder
(the "Indemnifying Party"), in reasonable detail of the nature and
amount of the claim. The Indemnifying Party shall be entitled to
assume, at its sole cost and expense (unless it is subsequently
determined that the Indemnifying Party did not have the obligation to
indemnify the Indemnified party under such circumstances), in which
case the Indemnified party shall bear all costs and expenses relating
to such claim and shall reimburse the Indemnifying Party for any such
costs and expenses, and shall have sole control of the defense and
settlement of such action or claim; provided, however, that:
. . .(a). the Indemnified Party shall be entitled to
participate in the defense of such claim and , in connection
therewith, to employ counsel at its own expense; and
. . .(b). Without the prior written consent of the
Indemnified Party which shall not be unreasonably withheld, the
Indemnifying Party shall not consent to the entry of any judgment or
enter into any settlement that requires any action other than the
payment of money.
In the event the Indemnifying Party elects to assume control of
the defense of any action in accordance with the foregoing provisions,
(i) the Indemnifying Party shall not be liable to Indemnified Party
for any legal fees, costs and expenses incurred by the Indemnified
Party in connection with the defense thereof arising after the date
the Indemnifying Party elects to assume control of such defenses and
(ii) the Indemnified Party shall fully cooperate with the Indemnifying
Party in such defense. If the Indemnifying Party does not assume
control of the defense of such claim in accordance with the foregoing
provisions (except when it is subsequently determined that the
Indemnifying Party did not have the obligation to indemnify), the
Indemnified Party shall have the right to defend such claim, in which
case the Indemnifying Party shall pay all reasonable costs and
expenses of such defenses plus interest on the cost of defense from
the date paid at a rate equal to the prime rate of interest as in
effect from time to time at Citibank, N.A.. The Indemnified Party
shall conduct such defense in good faith and shall have the right to
settle the matter with the prior written consent of the Indemnifying
Party which shall not be unreasonably withheld.
14. 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, certified mail or overnight
express courier addressed to Portfolio and LCF as follows:
If to Portfolio,
Advisers or Vintage:. . . . . . . .If to LCF or ▇▇▇▇▇▇▇:
Vintage Advisers, Inc.. . . . .▇▇▇▇▇▇▇ Holdings Asset
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ . . .Management, Inc.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ . . . .100 Park Avenue. . .
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇. . .New York, N.Y. 10017
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to: . . . . . . . . . .with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire . . .▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ Co., L.P.A..Stradley, Ronon, ▇▇▇▇▇▇▇ & Young
3500 ▇▇▇▇▇ Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ .2600 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ . . . . . .Philadelphia, Pa. 19103
15. Headings: Counterparts: Governing Law: Assignment,
Limitation of Liability.
15.1 The section 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.
15.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
15.3 This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana.
15.4 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 any party without the written consent of
the other parties. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give any person, entity, firm or
corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of
this Agreement, except that, the persons designated in paragraphs
13.1, 13.2, 13.3, 13.4 and 13.5 hereof shall be entitled to the
benefits and may enforce the provisions of section 13 hereof.
15.5 The agreements, covenants, representations, warranties,
obligations and liabilities of Portfolio hereunder are solely those of
Portfolio and Vintage, acting on behalf of Portfolio. None of the
shareholders, nominees, officers, trustees, agents or employees of
Portfolio or Vintage shall be personally bound by or liable under this
Agreement nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder. The execution and
delivery of this Agreement by Portfolio and Vintage have been
authorized by the trustees of Vintage under the Declaration of Trust
of Vintage and signed by authorized officers of Vintage acting as
such, and neither such authorization by such trustees nor such
execution and delivery by such officers shall be deemed have been made
by them individually or to impose any liability on any of them
personally. Any obligations or claim relating to the assets of
Portfolio shall not be satisfied by assets of any class of shares of
Vintage other than Portfolio.
15.6 The obligations and liabilities of LCF hereunder are solely
those of LCF. None of the shareholders, nominees, officers, trustees,
agents or employees of LCF shall be personally bound by or liable
under this Agreement nor shall resort be had to their private property
for the satisfaction of any obligation or claim hereunder. The
execution and delivery of this Agreement have been authorized by the
trustees of LCF under the Declaration of Trust of LCF and signed by
authorized officers of LCF acting as such, and neither such
authorization by such trustees nor such execution and delivery by such
officers shall be deemed have been made by them individually or to
impose any liability on any of them personally. Any obligations or
claim relating to the assets of LCF shall not be satisfied by assets
of any portfolio of LCF other than that of LCF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by its duly authorized officers as of the date first
written above.
. . . . . . . . . . THE VINTAGE FUNDS, acting on behalf of
THE ▇▇▇▇▇▇▇ COVENANT FUND . . . . .FIDUCIARY VALUE FUND
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇ . . . . . . .By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ HOLDINGS ASSET. . . . . . .VINTAGE ADVISERS,INC.
MANAGEMENT, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇ . . . . . . .By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
. . . . . . . . . . . . .UNIFIED ADVISERS, INC. (for
purposes of Schedule 5.2 only)
. . . . . . . . . . . . .By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SCHEDULE 1.3 (d)
None
SCHEDULE 4.9
Advisers, the Sub-Adviser and ▇▇▇▇▇▇▇ shall enter into a
consulting agreement, terminable on at least 60 days' prior written
notice by any party, pursuant to which ▇▇▇▇▇▇▇ shall provide the Sub-
Adviser with a list of 200 "socially conscious" companies (the "List")
for purposes of possible investment on behalf of Portfolio. ▇▇▇▇▇▇▇
shall update the List at least on a quarterly basis, and more
frequently if necessary to eliminate companies which no longer qualify
as "socially conscious". For this purpose, "socially conscious"
companies shall be chosen by ▇▇▇▇▇▇▇ from the 1,000 largest U.S.
corporations on the basis of their responsible behavior, after
consideration of such issues as customer, community, employee,
competitor, supplier and shareholder relations, environmental and
social issues. The Sub-Adviser shall not be obligated to select any
securities for Portfolio from the List and, subject to the supervision
of Advisers, shall perform all investment advisory services to
Portfolio. ▇▇▇▇▇▇▇ shall not provide investment advisory services to
Portfolio. For its consulting services with respect to the List,
▇▇▇▇▇▇▇ shall be paid by Advisers a fee on a quarterly basis equal to
18 basis points (.18%) of the average daily net assets of Portfolio.