SUB-ITEM Q(1)(g)
ANNEX A-2 - FORM OF AGREEMENT AND PLAN OF
REORGANIZATION, NON-MONEY MARKET FUNDS
THIS AGREEMENT AND PLAN OF
REORGANIZATION (the "Agreement") is made as of this
[14th] day of [July], 2011, by and between Federated Asset
Allocation Fund, a Massachusetts business trust, with its
principal place of business at 0000 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx, 00000 (the "Federated Trust"), with
respect to its Federated Asset Allocation Fund (the "Acquiring
Fund"), a series of the Federated Trust, and EquiTrust Series
Fund, Inc., a Maryland Corporation, with its principal place of
business at 0000 Xxxxxxxxxx Xxxxxx, Xxxx Xxx Xxxxxx, Xxxx
00000 (the "EquiTrust Fund"), with respect to its Managed
Portfolio, a series of the EquiTrust Fund (the "Acquired Fund"
and, collectively with the Acquiring Fund, the "Funds").
This Agreement is intended to be, and is adopted as, a
plan of reorganization within the meaning of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Internal Revenue Code of 1986, as
amended (the "Code") and the Treasury Regulations
promulgated thereunder. The reorganization will consist of:
(i) the transfer of substantially all of the assets of the Acquired
Fund to the Acquiring Fund in exchange solely for Class A
and Institutional Shares, no par value per share, of the
Acquiring Fund ("Acquiring Fund Shares"); (ii) the distribution
of Class A Shares of the Acquiring Fund to the holders of
Class A and Class B Shares of the Acquired Fund; (iii) the
distribution of Institutional Shares of the Acquiring Fund to
the holders of Class I Shares of the Acquired Fund; and
(iv) the liquidation of the Acquired Fund as provided herein,
all upon the terms and conditions set forth in this Agreement
(the "Reorganization").
WHEREAS, the Acquiring Fund and the Acquired Fund
are separate series of the Federated Trust and the EquiTrust
Fund, respectively, and the Federated Trust and the EquiTrust
Fund are open-end, registered management investment
companies and the Acquired Fund owns securities that
generally are assets of the character in which the Acquiring
Fund is permitted to invest;
WHEREAS, the Acquiring Fund and the Acquired Fund
are authorized to issue their shares of beneficial interests and
common stock, respectively;
WHEREAS, the Trustees of the Federated Trust have
determined that the Reorganization, with respect to the
Acquiring Fund, is in the best interests of the Acquiring Fund
and that the interests of the existing shareholders of the
Acquiring Fund will not be diluted as a result of the
Reorganization;
WHEREAS, the Directors of the EquiTrust Fund have
determined that the Reorganization, with respect to the
Acquired Fund, is in the best interests of the Acquired Fund;
NOW, THEREFORE, in consideration of the premises
and of the covenants and agreements hereinafter set forth,
the parties hereto covenant and agree as follows:
ARTICLE I
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN
EXCHANGE FOR ACQUIRING FUND
SHARES AND LIQUIDATION OF THE ACQUIRED FUND
1.1 THE EXCHANGE. Subject to the terms and
conditions contained herein and on the basis of the
representations and warranties contained herein, the Acquired
Fund agrees to transfer substantially all of its assets, as set
forth in paragraph 1.2, to the Acquiring Fund. In exchange,
the Acquiring Fund agrees: (i) to deliver to the Acquired Fund
the number of each class of full and fractional Acquiring
Fund Shares, determined by (a) multiplying the shares
outstanding of each class of shares of the Acquired Fund (the
"Acquired Fund Shares") by (b) the ratio computed by
dividing (x) the net asset value per share of such class of
Acquired Fund Shares computed in the manner and as of the
time and date set forth in paragraph 2.1 by (y) the net asset
value per share of the corresponding class of Acquiring Fund
Shares computed in the manner and as of the time and date
set forth in paragraph 2.2. Holders of Class A and Class B
Shares of the Acquired Fund will receive Class A Shares of the
Acquiring Fund. Holders of the Class I Shares of the Acquired
Fund will receive Institutional Shares of the Acquiring Fund.
Such transactions shall take place at the closing on the
Closing Date provided for in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of the
Acquired Fund to be acquired by the Acquiring Fund shall
consist of all the assets of the Acquired Fund, including,
without limitation, cash, securities, commodities, interests in
futures and dividends or interest receivable, owned by the
Acquired Fund, other than any deferred or prepaid expenses
shown as an asset on the books of the Acquired Fund on the
Closing Date. Such assets not acquired by the Acquiring Fund
shall be excluded from the calculation of net asset value per
share of each class of the Acquired Fund Shares under this
Agreement.
The Acquired Fund has provided the Acquiring Fund
with its most recent audited financial statements, which
contain a list of all of the Acquired Fund's assets as of the
date of such statements. The Acquired Fund hereby represents
that as of the date of the execution of this Agreement, there
have been no changes in its financial position as reflected in
such financial statements other than those occurring in the
ordinary course of business in connection with the purchase
and sale of securities, the issuance and redemption of
Acquired Fund Shares and the payment of normal operating
expenses, dividends and capital gains distributions.
1.3 LIABILITIES TO BE DISCHARGED. The Acquired
Fund will discharge all of its liabilities and obligations prior to
the Closing Date.
1.4 LIQUIDATION AND DISTRIBUTION. On or as
soon after the Closing Date as is conveniently practicable:
(a) the Acquired Fund will distribute in complete liquidation of
the Acquired Fund, pro rata to its shareholders of record,
determined as of the close of business on the Closing Date
(the "Acquired Fund Shareholders"), all of the Acquiring Fund
Shares received by the Acquired Fund pursuant to
paragraph 1.1; and (b) the Acquired Fund will thereupon
proceed to dissolve and terminate as set forth in
paragraph 1.8 below. Such distribution will be accomplished
by the transfer of Acquiring Fund Shares 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 in the name of the Acquired Fund Shareholders, and
representing the respective pro rata number of Acquiring Fund
Shares due such shareholders. All issued and outstanding
Acquired Fund Shares will simultaneously be canceled on the
books of the Acquired Fund. The Acquiring Fund shall not
issue certificates representing Acquiring Fund Shares in
connection with such transfer. After the Closing Date, the
Acquired Fund shall not conduct any business except in
connection with its termination.
1.5 OWNERSHIP OF SHARES. Ownership of Acquiring
Fund Shares will be shown on the books of the Acquiring
Fund's transfer agent. Acquiring Fund Shares will be issued
simultaneously to the Acquired Fund, in an amount
determined under paragraph 2.3, to be distributed to Acquired
Fund Shareholders.
1.6 TRANSFER TAXES. Any transfer taxes payable
upon the 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.
1.7 REPORTING RESPONSIBILITY. Any reporting
responsibility of the Acquired Fund is and shall remain the
responsibility of the Acquired Fund.
1.8 TERMINATION. The Acquired Fund shall be
terminated promptly following the Closing Date and the
making of all distributions pursuant to paragraph 1.4.
1.9 BOOKS AND RECORDS. All books and records of
the Acquired Fund, including all books and records required to
be maintained under the Investment Company Act of 1940
(the "1940 Act"), and the rules and regulations thereunder,
shall be available to the Acquiring Fund from and after the
Closing Date and shall be turned over to the Acquiring Fund
as soon as practicable following the Closing Date.
1.10 SALES CHARGES. Holders of Class A, Class B or
Class I Shares of the Acquired Fund as of the Closing Date
shall not be subject to any front end or contingent deferred
sales load of the Acquiring Fund on shares received on the
Closing Date.
ARTICLE II
VALUATION
2.1 VALUATION OF ACQUIRED FUND SHARES. The
net asset value per share of each class of Acquired Fund
Shares shall be the net asset value per share of such class of
Acquired Fund Shares (excluding any assets excluded from
the net asset value calculation under paragraph 2.1)
computed at the closing of the Closing Date, using the
valuation procedures set forth in the Federated Trust's
Declaration of Trust and the Acquiring Fund's then current
prospectus and statement of additional information, or such
other valuation procedures as shall be mutually agreed upon
by the parties.
2.2 VALUATION OF ACQUIRING FUND SHARES.
The net asset value per share of each class of Acquiring Fund
Shares shall be the net asset value per share of such class of
Acquiring Fund Shares computed at the closing on the Closing
Date, using the valuation procedures set forth in the Federated
Trust's Declaration of Trust and the Acquiring Fund's then
current prospectus and statement of additional information,
or such other valuation procedures as shall be mutually
agreed upon by the parties.
2.3 SHARES TO BE ISSUED. The number of each class
of Acquiring Fund Shares to be issued (including fractional
shares, if any) in exchange for the Acquired Fund's assets,
shall be determined by (a) multiplying the shares outstanding
of each class of Acquired Fund Shares by (b) the ratio
computed by (x) dividing the net asset value per share of such
class of Acquired Fund Shares determined in accordance with
paragraph 2.1 by (y) the net asset value per share of the
corresponding class of Acquiring Fund Shares determined in
accordance with paragraph 2.2.
2.4 DETERMINATION OF VALUE. All computations
of value shall be made by State Street Bank and Trust
Company, on behalf of the Acquiring Fund and the Acquired
Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The closing shall occur on or
about [July 15], 2011, or such other date(s) as the parties may
agree to in writing (the "Closing Date"). All acts taking place at
the closing shall be deemed to take place at 4:00 p.m. Eastern
Time on the Closing Date unless otherwise provided herein.
The closing shall be held at the offices of Federated Services
Company, 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000-0000, or at such other time and/or place as the parties
may agree.
3.2 CUSTODIAN'S CERTIFICATE. XX Xxxxxx Xxxxx
Bank, N.A., as custodian for the Acquired Fund (the
"Custodian"), shall deliver at the Closing a certificate of an
authorized officer stating that: (a) the Acquired Fund's
portfolio securities, cash, and any other assets have been
delivered in proper form to the Acquiring Fund on the Closing
Date; and (b) all necessary taxes including all applicable
federal and state stock transfer stamps, if any, shall have
been paid, or provision for payment shall have been made, in
conjunction with the delivery of portfolio securities by the
Acquired Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. In the
event that on the scheduled Closing Date, either: (a) the NYSE
or another primary exchange on which the portfolio securities
of the Acquiring Fund or the Acquired Fund are purchased or
sold, shall be closed to trading or trading on such exchange
shall be restricted; or (b) trading or the reporting of trading on
the NYSE or elsewhere shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquiring Fund
or the Acquired Fund is impracticable, the Closing Date shall
be postponed until the first Friday on which the NYSE is open
following the business day on which trading is fully resumed
and reporting is restored, or such other business day as the
parties hereto shall agree.
3.4 TRANSFER AGENT'S CERTIFICATE. EquiTrust
Investment Management Services, Inc., as transfer agent for
the Acquired Fund as of the Closing Date, shall deliver at the
Closing a certificate of an authorized officer stating that its
records contain the names and addresses of Acquired Fund
Shareholders, and the number and percentage ownership of
outstanding shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall
issue and deliver, or cause EquiTrust Investment
Management Services, Inc., its transfer agent, to issue and
deliver, a confirmation evidencing Acquiring Fund Shares to
be credited on the Closing Date to the Secretary of the
EquiTrust Fund or provide evidence satisfactory to the
Acquired Fund that the 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, share certificates,
receipts and other documents, if any, as such other party or its
counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE ACQUIRED FUND.
The EquiTrust Fund, on behalf of the Acquired Fund,
represents and warrants to the Federated Trust, on behalf of
the Acquiring Fund, as follows:
a)
The Acquired Fund is a separate series of the EquiTrust
Fund, a corporation duly organized, validly existing, and
in good standing under the laws of the State of
Maryland. The EquiTrust Fund is registered as an open-
end management investment company under the 1940
Act, and the EquiTrust Fund's registration with the
Securities and Exchange Commission (the
"Commission") as an investment company under the
1940 Act is in full force and effect.
b)
The current prospectus and statement of additional
information of the EquiTrust Fund conform in all
material respects to the applicable requirements of the
Securities Act of 1933 (the "1933 Act") and the 1940
Act, and the rules and regulations thereunder, and do not
include any untrue statement of a material fact or omit
to state any material fact required to be stated or
necessary to make the statements therein, in light of the
circumstances under which they were made, not
misleading.
c)
The Acquired Fund is not, and the execution, delivery,
and performance of this Agreement (subject to
shareholder approval) will not result, in violation of any
provision of the EquiTrust Fund's Articles of
Incorporation or By-Laws or of any material agreement,
indenture, instrument, contract, lease, or other
undertaking to which the Acquired Fund is a party or by
which it is bound.
d)
The Acquired Fund has no material contracts or other
commitments (other than this Agreement) that will be
terminated with liability to it before the Closing Date,
except for liabilities, if any, to be discharged as provided
in paragraph 1.3 hereof.
e)
Except as otherwise disclosed in writing to and accepted
by the Acquiring Fund, no litigation, administrative
proceeding, or investigation of or before any court or
governmental body is presently pending or to its
knowledge threatened against the Acquired Fund or any
of its properties or assets, which, if adversely determined,
would materially and adversely affect its financial
condition, the conduct of its business, or the ability of the
Acquired Fund to carry out the transactions
contemplated by this Agreement. The Acquired Fund
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 affects its business or its ability
to consummate the transactions contemplated herein.
f)
The audited financial statements of the Acquired Fund
as of July 31 2010, and for the fiscal year then ended
have been prepared in accordance with United States
generally accepted accounting principles, and such
statements (copies of which have been furnished to the
Acquiring Fund) fairly reflect the financial condition of
the Acquired Fund as of such date, and there are no
known contingent liabilities of the Acquired Fund as of
such date that are not disclosed in such statements.
g)
The unaudited financial statements of the Acquired
Fund as of January 31, 2011, and for the six months
then ended have been prepared in accordance with
United States generally accepted accounting principles,
and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the
financial condition of the Acquired Fund as of such date,
and there are no known contingent liabilities of the
Acquired Fund as of such date that are not disclosed in
such statements.
h)
Since the date of the financial statements referred to in
paragraph (g) above, there have been no material
adverse changes in the Acquired Fund's financial
condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or
any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date such
indebtedness was incurred, except as
otherwise disclosed to and accepted by the Acquiring
Fund. For the purposes of this paragraph (h), a decline
in the net asset
value of the Acquired Fund shall not constitute a
material adverse change.
i)
As of the date hereof, except as previously disclosed to
the Acquiring Fund in writing, and except as have been
corrected as required by applicable law, and to the best
of the Acquired Fund's knowledge, there have been no
material miscalculations of the net asset value of the
Acquired Fund or the net asset value per share of any
class of shares during the twelve-month period preceding
the date hereof and preceding the Closing Date, and all
such calculations have been made in accordance with
the applicable provisions of the 1940 Act.
j)
The minute books and other similar records of the
EquiTrust Fund as made available to the Acquiring Fund
prior to the execution of this Agreement contain a true
and complete record of all action taken at all meetings
and by all written consents in lieu of meetings of the
shareholders of the Acquired Fund, the EquiTrust Fund's
Board of Directors and committees of the EquiTrust
Fund's Board of Directors. The stock transfer ledgers and
other similar records of the Acquired Fund as made
available to the Acquiring Fund prior to the execution of
this Agreement, and as existing on the Closing Date,
accurately reflect all record transfers prior to the
execution of this Agreement, or the Closing Date, as
applicable, in the shares of the Acquired Fund.
k)
The EquiTrust Fund has maintained, or caused to be
maintained on its behalf, all books and records required
of a registered investment company in compliance with
the requirements of Section 31 of the 1940 Act and rules
thereunder.
l)
All federal and other tax returns and reports of the
Acquired Fund required by law to be filed, have been
filed, and all federal and other taxes shown due on such
returns and reports have been paid, or provision shall
have been made for the payment thereof. To the best of
the Acquired Fund's knowledge, no such return is
currently under audit, and no assessment has been
asserted with respect to such returns.
m)
All issued and outstanding shares of the Acquired Fund
are duly and validly issued and outstanding, fully paid
and non-assessable by the Acquired Fund. All of the
issued and outstanding shares of the Acquired Fund will,
at the time of the Closing Date, be held by the persons
and in the amounts set forth in the records of the
Acquired Fund's transfer agent as provided in
paragraph 3.4. The Acquired Fund has no outstanding
options, warrants, or other rights to subscribe for or
purchase any of the Acquired Fund Shares, and has no
outstanding securities convertible into any of the
Acquired Fund Shares.
n)
At the Closing Date, the Acquired Fund will have good
and marketable title to the Acquired Fund's assets to be
transferred to the Acquiring Fund pursuant to
paragraph 1.2, and full right, power, and authority to sell,
assign, transfer, and deliver such assets hereunder, free of
any lien or other encumbrance, except those liens or
encumbrances to which the Acquiring Fund has received
notice, and, upon delivery and payment for such assets,
and the filing of any articles, certificates or other
documents under the laws of the State of Maryland, the
Acquiring Fund will acquire good and marketable title,
subject to no restrictions on the full transfer of such
assets, other than such restrictions as might arise under
the 1933 Act, and other than as disclosed to and
accepted by the Acquiring Fund.
o)
The execution, delivery and performance of this
Agreement have been duly authorized by all necessary
action on the part of the Acquired Fund. Subject to
approval by the Acquired Fund shareholders, this
Agreement constitutes a valid and binding obligation of
the Acquired Fund, 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.
p)
The information to be furnished by the Acquired Fund
for use in no-action letters, applications for orders,
registration statements, proxy materials, and other
documents that may be necessary in connection with the
transactions contemplated herein shall be accurate and
complete in all material respects and shall comply in all
material respects with federal securities and other
applicable laws and regulations.
q)
From the effective date of the Registration Statement (as
defined in paragraph 5.7), through the time of the
meeting of the Acquired Fund shareholders and on the
Closing Date, any written information furnished by the
EquiTrust Fund with respect to the Acquired Fund for use
in the Proxy Materials (as defined in paragraph 5.7), or
any other materials provided in connection with the
Reorganization, does not and will not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated or necessary to make the
statements, in light of the circumstances under which
such statements were made, not misleading.
r)
The Acquired Fund has qualified and elected to be
treated as a "regulated investment company" under the
Code (a "RIC"), as of and since its first taxable year of
operations; and qualifies and will continue to qualify as
a RIC under the Code for its taxable year ending upon its
liquidation.
s)
No governmental consents, approvals, authorizations or
filings are required under the 1933 Act, the Securities
Exchange Act of 1934 (the "1934 Act"), the 1940 Act or
Maryland law for the execution of this Agreement by the
EquiTrust Fund, for itself and on behalf of the Acquired
Fund, except for the effectiveness of the Registration
Statement, and the filing of any articles, certificates or
other documents that may be required under Maryland
law, and except for such other consents, approvals,
authorizations and filings as have been made or
received, and such consents, approvals, authorizations
and filings as may be required subsequent to the Closing
Date, it being understood, however, that this Agreement
and the transactions contemplated herein must be
approved by the shareholders of the Acquired Fund as
described in paragraph 5.2.
4.2 REPRESENTATIONS OF THE ACQUIRING
FUND. The Federated Trust, on behalf of the Acquiring Fund,
represents and warrants to the EquiTrust Fund, on behalf of
the Acquired Fund, as follows:
a)
The Acquiring Fund is a separate series of a business
trust, duly organized, validly existing and in good
standing under the laws of the Commonwealth of
Massachusetts.
b)
The Federated Trust is registered as an open-end
management investment company under the 1940 Act,
and the Federated Trust's registration with the
Commission as an investment company under the 1940
Act is in full force and effect.
c)
The current prospectus and statement of additional
information of the Acquiring Fund conform in all
material respects to the applicable requirements of the
1933 Act and the 1940 Act and the rules and regulations
thereunder, and do not include any untrue statement of a
material fact or omit to state any material fact required
to be stated or necessary to make such statements
therein, in light of the circumstances under which they
were made, not misleading.
d)
The Acquiring Fund is not, and the execution, delivery
and performance of this Agreement will not, result in a
violation of the Federated Trust's Declaration of Trust or
By-Laws or of any material agreement, indenture,
instrument, contract, lease, or other undertaking to which
the Acquiring Fund is a party or by which it is bound.
e)
Except as otherwise disclosed in writing to and accepted
by the Acquired Fund, no litigation, administrative
proceeding or investigation of or before any court or
governmental body is presently pending or to its
knowledge threatened against the Acquiring Fund or any
of its properties or assets, which, if adversely determined,
would materially and adversely affect its financial
condition, the conduct of its business or the ability of the
Acquiring Fund to carry out the transactions
contemplated by this Agreement. The Acquiring Fund
knows of no facts that might form the basis for the
institution of such proceedings and it is not a party to or
subject to the provisions of any order, decree, or
judgment of any court or governmental body that
materially and adversely affects its business or its ability
to consummate the transaction contemplated herein.
f)
The financial statements of the Acquiring Fund as of
July 31, 2010 and for the fiscal year then ended have
been prepared in accordance with United States generally
accepted accounting principles, and such
statements (copies of which have been furnished to the
Acquired Funds) fairly reflect the financial condition of
the Acquiring Fund as of such date, and there are no
known contingent liabilities of the Acquiring Fund as of
such date that are not disclosed in such statements.
g)
The unaudited financial statements of the Acquired
Fund as of January 31, 2011, and for the six months
then ended have been prepared in accordance with
United States generally accepted accounting principles,
and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the
financial condition of the Acquired Fund as of such date,
and there are no known contingent liabilities of the
Acquired Fund as of such date that are not disclosed in
such statements.
h)
Since the date of the financial statements referred to in
paragraph (g) above, there have been no material
adverse changes in the Acquiring Fund's financial
condition, assets, liabilities or business (other than
changes occurring in the ordinary course of business), or
any incurrence by the Acquiring Fund of indebtedness
maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquired Fund. For the purposes
of this paragraph (h), a decline in the net asset value of
the Acquiring Fund shall not constitute a material
adverse change.
i)
All federal and other tax returns and reports of the
Acquiring Fund required by law to be filed, have been
filed, and all federal and other taxes shown due on such
returns and reports have been paid, or provision shall
have been made for the payment thereof. To the best of
the Acquiring Fund's knowledge, no such return is
currently under audit, and no assessment has been
asserted with respect to such returns.
j)
All issued and outstanding Acquiring Fund Shares are
duly and validly issued and outstanding, fully paid and
non-assessable by the Acquiring Fund. The Acquiring
Fund has no outstanding options, warrants, or other
rights to subscribe for or purchase any Acquiring Fund
Shares, and there are no outstanding securities
convertible into any Acquiring Fund Shares.
k)
The execution, delivery and performance of this
Agreement have been duly authorized by all necessary
action on the part of the Acquiring Fund, and this
Agreement constitutes a valid and binding obligation of
the Acquiring Fund, enforceable in accordance with its
terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights and to general
equity principles.
l)
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, at the Closing Date, have been duly authorized.
When so issued and delivered, such shares will be duly
and validly issued Acquiring Fund Shares, and will be
fully paid and non-assessable.
m)
The information to be furnished by the Acquiring Fund
for use in no-action letters, registration statements, proxy
materials, and other documents that may be necessary in
connection with the transactions contemplated herein
shall be accurate and complete in all material respects
and shall comply in all material respects with federal
securities and other laws and regulations.
n)
From the effective date of the Registration Statement (as
defined in paragraph 5.7), through the time of the
meeting of the Acquired Fund shareholders and on the
Closing Date, any written information furnished by the
Federated Trust with respect to the Acquiring Fund for
use in the Proxy Materials (as defined in paragraph 5.7),
or any other materials provided in connection with the
Reorganization, does not and will not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated or necessary to make the
statements, in light of the circumstances under which
such statements were made, not misleading.
o)
The Acquiring Fund has qualified and elected to be
treated as a RIC under the Code as of and since its first
taxable year of operations; and qualifies and shall
continue to qualify as a RIC under the Code for its
current taxable year.
p)
No governmental consents, approvals, authorizations or
filings are required under the 1933 Act, the 1934 Act, the
1940 Act or Massachusetts law for the execution of this
Agreement by the Federated Trust, for itself and on
behalf of the Acquiring Fund, or the performance of the
Agreement by the Federated Trust, for itself and on
behalf of the Acquiring Fund, except for the
effectiveness of the Registration Statement, and the
filing of any articles, certificates or other documents that
may be required under Massachusetts law, and such
other consents, approvals, authorizations and filings as
have been made or received, and except for such
consents, approvals, authorizations and filings as may be
required subsequent to the Closing Date.
q)
The Acquiring Fund agrees to use all reasonable efforts
to obtain the approvals and authorizations required by
the 1933 Act, the 1940 Act, and any state Blue Sky or
securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
5.1 OPERATION IN ORDINARY COURSE. The
Acquiring Fund and the Acquired Fund will each operate its
respective business in the ordinary course between the date of
this Agreement and the Closing Date, it being understood that
such ordinary course of business will include customary
dividends and shareholder purchases and redemptions.
5.2 APPROVAL OF SHAREHOLDERS. The EquiTrust
Fund will call a special meeting of the Acquired Fund
shareholders to consider and act upon this Agreement and to
take all other appropriate action necessary to obtain approval
of the transactions contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Acquired
Fund covenants that the Acquiring Fund Shares to be issued
pursuant to this Agreement are not being acquired for the
purpose of making any distribution, other than in connection
with the Reorganization and in accordance with the terms of
this Agreement.
5.4 ADDITIONAL INFORMATION. The Acquired
Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Acquired Fund's
shares.
5.5 FURTHER ACTION. Subject to the provisions of
this Agreement, the Acquiring Fund and the Acquired Fund
will each take or cause to be taken, all action, 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, including any
actions required to be taken after the Closing Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As
promptly as practicable, but in any case within sixty days
after the Closing Date, the Acquired Fund shall furnish 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 that will
be carried over by the Acquiring Fund as a result of
Section 381 of the Code, and which will be certified by the
EquiTrust Fund's Treasurer.
5.7 PREPARATION OF REGISTRATION
STATEMENT AND SCHEDULE 14A PROXY STATEMENT.
The Federated Trust will prepare and file with the Commission
a registration statement on Form N-14 relating to the
Acquiring Fund Shares to be issued to shareholders of the
Acquired Fund (the "Registration Statement"). The
Registration Statement on Form N-14 shall include a proxy
statement and a prospectus of the Acquiring Fund relating to
the transaction contemplated by this Agreement. The
Registration Statement shall be in compliance with the 1933
Act, the 1934 Act and the 1940 Act, as applicable. Each party
will provide the other party with the materials and information
necessary to prepare the registration statement on Form N-14
(the "Proxy Materials"), for inclusion therein, in connection
with the meeting of the Acquired Fund's shareholders to
consider the approval of this Agreement and the transactions
contemplated herein.
5.8 On or before the Closing Date, the Acquired Fund
shall have declared and paid a dividend or dividends which,
together with all previous such dividends, shall have the effect
of distributing to its shareholders all of the Acquired Fund's
investment company taxable income (computed without
regard to any deduction for dividends paid), if any, plus the
excess, if any, of its interest income excludible from gross
income under Section 103(a) of the Code over its deductions
disallowed under Sections 265 and 171(a)(2) of the Code for
all taxable periods or years ending on or before the Closing
Date, and all of its net capital gains realized (after reduction
for any capital loss carry forward), if any, in all taxable
periods or years ending on or before the Closing Date.
5.9 It is the intention of the parties that the transaction
will qualify as a reorganization within the meaning of
Section 368(a) of the Code. None of the Federated Trust,
EquiTrust, the Acquiring Funds or the Acquired Fund shall
take any action or cause and action to be taken (including,
without limitation, the filing of any tax return) that is
inconsistent with such treatment or that results in the failure of
the transaction to qualify as a reorganization within the
meaning of Section 368(a) of the Code. At or prior to the
Closing Date, the parties to this Agreement will take such
reasonable action, or cause such action to be taken, as is
reasonably necessary to enable K&L Gates LLP to render the
tax opinion contemplated in this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRED FUND
The obligations of the Acquired Fund to consummate
the transactions provided for herein shall be subject, at its
election, to the performance by the Acquiring Fund of all the
obligations to be performed by the Acquiring Fund pursuant
to this Agreement on or before the Closing Date, and, in
addition, subject to the following conditions:
All representations, covenants, and warranties of the
Acquiring Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and as of
the Closing Date, with the same force and effect as if made
on and as of the Closing Date. The Acquiring Fund shall have
delivered to the Acquired Fund a certificate executed in the
Acquiring Fund's name by the Federated Trust's President or
Vice President and its Treasurer, in form and substance
satisfactory to the Acquired Fund and dated as of the Closing
Date, to such effect and as to such other matters as the
Acquired Fund shall reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRING FUND
The obligations of the Acquiring Fund to consummate
the transactions provided for herein shall be subject, at its
election, to the performance by the Acquired Fund of all the
obligations to be performed by the Acquired Fund pursuant to
this Agreement, on or before the Closing Date and, in addition,
shall be subject to the following conditions:
All representations, covenants, and warranties of the
Acquired Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and as of
the Closing Date, with the same force and effect as if made
on and as of such Closing Date. The Acquired Fund shall have
delivered to the Acquiring Fund on such Closing Date a
certificate executed in the Acquired Fund's name by the
EquiTrust Fund's President or Vice President and the
Treasurer, in form and substance satisfactory to the Acquiring
Fund and dated as of such Closing Date, to such effect and as
to such other matters as the Acquiring Fund shall reasonably
request.
The Acquired Fund shall have delivered to the Acquiring
Fund a statement of the Acquired Fund's assets and liabilities,
together with a list of the Acquired Fund's portfolio securities
showing the tax costs of such securities by lot and the holding
periods of such securities, as of the Closing Date, certified by
the Treasurer of the EquiTrust Fund.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO
OBLIGATIONS OF THE
ACQUIRING FUND AND ACQUIRED FUND
If any of the conditions set forth below do not exist on
or before the Closing Date with respect to the Acquired Fund
or the Acquiring Fund, the other party to this Agreement shall,
at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated
herein, with respect to the Acquired Fund, shall have been
approved by the requisite vote of the holders of the
outstanding shares of the Acquired Fund in accordance with
applicable law and the provisions of the EquiTrust Fund's
Articles of Incorporation and By-Laws. Certified copies of the
resolutions evidencing such approval shall have been
delivered to the Acquiring Fund. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the
Acquired Fund may waive the conditions set forth in this
paragraph 8.1.
8.2 On the Closing Date, the Commission shall not have
issued an unfavorable report under Section 25(b) of the 1940
Act, or instituted any proceeding seeking to enjoin the
consummation of the transactions contemplated by this
Agreement under Section 25(c) of the 1940 Act. Furthermore,
no action, suit or other proceeding shall be threatened or
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 required 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 securities authorities, including any necessary "no-
action" positions and exemptive orders from such federal and
state authorities) to permit consummation of the transactions
contemplated herein shall have been obtained, except where
failure to obtain any such consent, order, or permit would not
involve a risk of a material adverse effect on the assets or
properties of the Acquiring Fund or the Acquired Fund,
provided that either party hereto may waive any such
conditions for itself.
8.4 The Registration Statement shall have become
effective under the 1933 Act, and no stop orders suspending
the effectiveness thereof shall have been issued. To the best
knowledge of the parties to this Agreement, no investigation or
proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 0000 Xxx.
8.5 The parties shall have received an opinion of K&L
Gates LLP to the effect that for federal income tax purposes:
a)
The transfer of substantially all of the Acquired Fund's
assets to the Acquiring Fund solely in exchange for
Acquiring Fund Shares (followed by the distribution of
Acquiring Fund Shares to the Acquired Fund
Shareholders in dissolution and liquidation of the
Acquired Fund) will constitute a "reorganization" within
the meaning of Section 368(a) of the Code, and the
Acquiring Fund and the Acquired Fund will each be a
"party to a reorganization" within the meaning of
Section 368(b) of the Code.
b)
No gain or loss will be recognized by the Acquiring Fund
upon the receipt of substantially all the assets of the
Acquired Fund solely in exchange for Acquiring Fund
Shares.
c)
No gain or loss will be recognized by the Acquired Fund
upon the transfer of substantially all the Acquired Fund's
assets to the Acquiring Fund solely in exchange for
Acquiring Fund Shares or upon the distribution (whether
actual or constructive) of Acquiring Fund Shares to
Acquired Fund Shareholders in exchange for their
Acquired Fund Shares.
d)
No gain or loss will be recognized by any Acquired Fund
Shareholder upon the exchange of its Acquired Fund
Shares for Acquiring Fund Shares.
e)
The aggregate basis of the Acquiring Fund Shares
received by each Acquired Fund Shareholder pursuant to
the Reorganization will be the same as the aggregate
basis of the Acquired Fund Shares exchanged therefor.
The holding period of Acquiring Fund Shares received by
each Acquired Fund Shareholder will include the period
during which the Acquired Fund Shares exchanged
therefor were held by such shareholder, provided the
Acquired Fund Shares are held by such shareholder as
capital assets at the time of the Reorganization.
f)
The basis of the Acquired Fund's assets acquired by the
Acquiring Fund in the hands of the Acquiring Fund will
be the same as the basis of such assets in the hands of
the Acquired Fund immediately prior to the
Reorganization. The holding period of the assets of the
Acquired Fund acquired by the Acquiring Fund in the
hands of the Acquiring Fund will include the period
during which those assets were held by the Acquired
Fund.
Such opinion shall be based on customary assumptions
and such representations K&L Gates LLP may
reasonably request, and the Acquired Fund and
Acquiring Fund will cooperate to make and certify the
accuracy of such representations. The foregoing opinion
may state that no opinion is expressed as to the effect of
the Reorganization on the Acquiring Fund, the Acquired
Fund or any Acquired Fund Shareholder with respect to
any asset as to which unrealized gain or loss is required to
be recognized for federal income tax purposes at the end
of a taxable year (or on the termination or transfer
thereof) under a xxxx-to-market system of accounting.
Notwithstanding anything herein to the contrary, neither
the Acquiring Fund nor the Acquired Fund may waive
the conditions set forth in this paragraph 8.5.
ARTICLE IX
EXPENSES
All fees and expenses associated with the Acquiring
Fund's and Acquired Fund's participation in the
Reorganization contemplated in this Agreement will be paid
by Federated Investment Management Company, EquiTrust
Investment Management Services, Inc. and/or their affiliates,
as agreed separately among them. Reorganization expenses
include, without limitation: (a) expenses associated with the
preparation and filing of the Proxy Materials; (b) postage;
(c) printing; (d) accounting fees; (e) legal fees incurred by each
Fund; (f) solicitation costs of the transaction; (g) fees and
expenses incurred by the EquiTrust Fund's Trustees in
connection with any special Board meetings held in
contemplation of the Reorganizations; (h) tail insurance
coverage for the EquiTrust Fund's Directors; and (i) other
related administrative or operational costs. Notwithstanding
the foregoing, fees and expenses shall in any event be paid by
the party directly incurring such fees and expenses if and to
the extent that the payment of such fees and expenses by
Federated Investment Management Company, EquiTrust
Investment Management Services, Inc. and/or their affiliates
would result in disqualification of such party as a RIC.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Federated Trust, on behalf of the Acquiring
Fund, and the EquiTrust Fund, on behalf of the Acquired
Fund, agree that neither party has made to the other party
any representation, warranty and/or covenant not set forth
herein, and that this Agreement constitutes the entire
agreement between the parties.
10.2 Except as specified in the next sentence set forth in
this paragraph 10.2, the representations, warranties, and
covenants contained in this Agreement or in any document
delivered pursuant to or in connection with this Agreement,
shall not survive the consummation of the transactions
contemplated hereunder. The covenants to be performed
after the Closing Date, shall continue in effect beyond the
consummation of the transactions contemplated hereunder.
ARTICLE XI
TERMINATION
This Agreement may be terminated by the mutual
agreement of the Federated Trust and the EquiTrust Fund. In
addition, either the Federated Trust or the EquiTrust Fund
may at its option terminate this Agreement at or before the
Closing Date due to:
a)
a breach by the other of any representation, warranty, or
agreement contained herein to be performed at or before
the Closing Date, if not cured within 30 days;
b)
a condition herein expressed to be precedent to the
obligations of the terminating party that has not been
met and it reasonably appears that it will not or cannot
be met; or
c)
a determination by a party's Board, as appropriate, that
the consummation of the transactions contemplated
herein is not in the best interest of the EquiTrust Fund or
the Federated Trust, respectively, and notice given to the
other party hereto.
In the event of any such termination, in the absence of
willful default, there shall be no liability for damages on the
part of any of the Acquiring Fund, the Acquired Fund, the
Federated Trust, the EquiTrust Fund, or their respective
Trustees, Directors or officers, to the other party or its
Trustees, Directors or officers.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified, or
supplemented in such manner as may be mutually agreed
upon in writing by the officers of the EquiTrust Fund and the
Federated Trust as specifically authorized by their respective
Boards; provided, however, that following the meeting of the
Acquired Fund shareholders called by the Acquired Fund
pursuant to paragraph 5.2 of this Agreement, no such
amendment may have the effect of changing the provisions
for determining the number of Acquiring Fund Shares to be
issued to the Acquired Fund shareholders under this
Agreement to the detriment of such shareholders without their
further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW;
ASSIGNMENT;
LIMITATION OF LIABILITY
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.
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of
Pennsylvania.
This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns,
but, except as provided in this paragraph, 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
party. Nothing herein expressed or implied is intended or shall
be construed to confer upon or give any person, 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.
It is expressly agreed that the obligations of the
Acquiring Fund hereunder shall not be binding upon any of
the Trustees, shareholders, nominees, officers, agents, or
employees of the Federated Trust personally, but shall bind
only the Federated Trust property of the Acquiring Fund, as
provided in the Declaration of Trust of the Federated Trust.
The execution and delivery of this Agreement have been
authorized by the Trustees of the Federated Trust on behalf of
the Acquiring Fund and signed by authorized officers of the
Federated Trust, acting as such. Neither the authorization by
such Trustees nor the execution and delivery by such officers
shall be deemed to have been made by any of them
individually or to impose any liability on any of them
personally, but shall bind only the Federated Trust property of
the Acquiring Fund as provided in the Federated Trust's
Declaration of Trust.
It is expressly agreed that the obligations of the
Acquired Fund hereunder shall not be binding upon any of the
Directors, shareholders, nominees, officers, agents, or
employees of the EquiTrust Fund personally, but shall bind
only the property of the Acquired Fund, as provided in the
Articles of Incorporation of the EquiTrust Fund. The
execution and delivery of this Agreement have been
authorized by the Directors of the EquiTrust Fund on behalf
of the Acquired Fund and signed by authorized officers of the
EquiTrust Fund, acting as such. Neither the authorization by
such Directors nor the execution and delivery by such officers
shall be deemed to have been made by any of them
individually or to impose any liability on any of them
personally, but shall bind only the property of the Acquired
Fund as provided in the EquiTrust Fund's Articles of
Incorporation.
IN WITNESS WHEREOF, the parties have duly
executed this Agreement, all as of the date first written above.
INTERMEDIATE
MUNICIPAL TRUST
on behalf of its
portfolio,
Federated Intermediate
Municipal Trust
[Signature], [Title]
EQUITRUST SERIES
FUND, INC.
on behalf of its
portfolio,
Managed Portfolio
[Signature], [Title]
Current as of: 8/18/94
