AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of
November 13, 2003 by and between Nations Funds Trust ("Funds Trust"), a Delaware
statutory trust, for itself and on behalf of its Nations Capital Growth Fund
(the "Target Fund") and Funds Trust, for itself and on behalf of its Nations
Xxxxxxx Growth Fund (the "Acquiring Fund").
WHEREAS, Funds Trust is an open-end management investment company
registered with the Securities and Exchange Commission (the "SEC") under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the parties desire that the Fund Assets and Liabilities (as
defined below) of the Target Fund be conveyed to and assumed by the Acquiring
Fund in exchange for shares of equal U.S. dollar value of such Acquiring Fund
which shall thereafter promptly be distributed to the shareholders of the Target
Fund in connection with its liquidation as described in this Agreement and set
forth in Schedule A attached hereto (the acquisition and assumption of the
Target Fund's Fund Assets and Liabilities by the Acquiring Fund is the
"Reorganization"); and
WHEREAS, the parties intend that the Reorganization qualify as a
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that the Acquiring Fund and Target
Fund will each be a "party to a reorganization," within the meaning of Section
368(b) of the Code, with respect to the Reorganization.
NOW, THEREFORE, in accordance with the terms and conditions described
herein, the Target Fund and Acquiring Fund shall be consolidated as follows:
1. Conveyance of Fund Assets and Liabilities of the Target Fund.
(a) Except as provided below, at the Effective Time of the
Reorganization (as defined in Section 8) all assets of every
kind, and all interests, rights, privileges and powers of the
Target Fund (the "Fund Assets"), subject to all liabilities of
the Target Fund existing as of the Effective Time of the
Reorganization (the "Liabilities"), shall be transferred by
the Target Fund to the Acquiring Fund and shall be accepted
and assumed by such Acquiring Fund, as more particularly set
forth in this Agreement, such that at and after the Effective
Time of the Reorganization: (i) all Fund Assets of the Target
Fund shall become the assets of the Acquiring Fund; and (ii)
all Liabilities of the Target Fund shall attach to the
Acquiring Fund, enforceable against the Acquiring Fund to the
same extent as if originally incurred by the Acquiring Fund.
(b) It is understood and agreed that the Fund Assets shall include
all property and assets of any nature whatsoever, including,
without limitation, all cash, cash equivalents, securities,
claims (whether absolute or contingent, known or unknown,
accrued or unaccrued) and receivables (including dividend and
interest receivables) owned or exercisable by the Target Fund,
and any deferred or prepaid expenses shown as an asset on such
Target Fund's books, that the Liabilities of the Target Fund
shall include all liabilities, whether known or unknown,
accrued or unaccrued, absolute or contingent, in all cases,
existing at the Effective Time of the Reorganization.
(c) At least fifteen (15) business days prior to the Closing Date
(as defined in Section 8), the Target Fund will provide to, or
cause to be provided to, the Acquiring Fund, a schedule of its
securities, other assets and its known liabilities. It is
understood and agreed that the Target Fund may sell any of the
securities or other assets shown on such schedule prior to the
Effective Time of the Reorganization but will not, without the
prior approval of the Acquiring Fund, acquire any additional
securities other than securities that such
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Acquiring Fund is permitted to purchase in accordance with its
stated investment objective and policies. At least ten (10)
business days prior to the Closing Date, the Acquiring Fund
will advise the Target Fund of any investments of the Target
Fund shown on such schedule that the Acquiring Fund would not
be permitted to hold, pursuant to its stated investment
objective and policies or otherwise. The Target Fund, if
requested by the Acquiring Fund, will dispose of any such
securities prior to the Closing Date to the extent practicable
and consistent with applicable legal requirements. In
addition, if it is determined that the investment portfolios
of the Target Fund and its Acquiring Fund, when aggregated,
would contain investments exceeding certain percentage
limitations applicable to the Acquiring Fund, the Target Fund,
if requested by the Acquiring Fund, will dispose of a
sufficient amount of such investments as may be necessary to
avoid violating such limitations as of the Effective Time of
the Reorganization.
(d) The Fund Assets shall be transferred and conveyed to the
Acquiring Fund on the following basis:
(1) In exchange for the transfer of the Fund Assets, the
Acquiring Fund shall simultaneously issue to the Target
Fund at the Effective Time of the Reorganization full and
fractional shares of such Acquiring Fund, as set forth in
Schedule A attached hereto, having an aggregate net asset
value equal to the net value of the Fund Assets minus
Liabilities so conveyed and assumed, all determined in
accordance with this Agreement. In this regard, the number
of full and fractional shares of the Acquiring Fund
delivered to the Target Fund shall be determined by
dividing the value of the Fund Assets minus Liabilities,
computed in the manner and as of the time and date set
forth in this Agreement, by the net asset value of one
Acquiring Fund share of such designated class, computed in
the manner and as of the time and date set forth in this
Agreement.
(2) The net asset value of shares to be delivered by the
Acquiring Fund, and the net value of the Fund Assets minus
Liabilities to be conveyed by the Target Fund and assumed
by the Acquiring Fund, shall, in each case, be determined
as of the Valuation Time as defined in Section 3. The net
asset value of shares of the Acquiring Fund shall be
computed in accordance with its then current valuation
procedures. In determining the value of the Fund Assets,
each security to be included in the Fund Assets shall be
priced in accordance with the Acquiring Fund's then
current valuation procedures.
2. Liquidation of the Target Fund. At the Effective Time of the
Reorganization, the Target Fund shall make a liquidating
distribution to its shareholders as follows: Shareholders of
record of the Target Fund shall be credited with full and
fractional shares of the respective shares that are issued by the
Acquiring Fund in connection with the Reorganization corresponding
to the Target Fund shares that are held of record by the
shareholder at the Effective Time of the Reorganization. Each such
shareholder also shall have the right to receive any unpaid
dividends or other distributions which were declared before the
Effective Time of the Reorganization with respect to the Target
Fund shares that are held of record by the shareholder at the
Effective Time of the Reorganization, and Funds Trust shall record
on its books the ownership of the Acquiring Fund shares by such
shareholders (the "Transferor Record Holders"). All of the issued
and outstanding shares of the Target Fund at the Effective Time of
the Reorganization shall be redeemed and canceled on the books of
Funds Trust at such time. As soon as reasonably possible after the
Effective Time of the Reorganization, shall wind up the affairs of
the Target Fund and shall file any final regulatory reports,
including but not limited to any Form N-SAR and Rule 24f-2
filings, with respect to the Target Fund, and also shall take all
other steps as are necessary and proper to effect the termination
or declassification of the Target Fund in accordance with all
applicable laws.
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3. Valuation Time. The "Valuation Time" shall be the time as of which
the net asset value of each class of shares of the Target Fund and
the Acquiring Fund is determined pursuant to their respective
valuation procedures on the Closing Date or such earlier or later
time as may be mutually agreed to in writing by the parties
hereto.
4. Certain Representations, Warranties and Agreements of Funds Trust
on behalf of the Target Fund. Funds Trust, for itself and, where
appropriate, on behalf of the Target Fund, represents and warrants
to, and agrees with, Funds Trust, on behalf of the Acquiring Fund
as follows, with such representations, warranties and agreements
made on behalf of the Target Fund on a several (and not joint, or
joint and several) basis:
(a) Funds Trust is a statutory trust, duly formed, validly
existing and in good standing under the laws of the State of
Delaware. Funds Trust is registered with the SEC as an
open-end management investment company under the 1940 Act, and
such registration is in full force and effect.
(b) Funds Trust has the power to own all of its properties and
assets and to consummate the transactions contemplated herein,
and has all necessary federal, state and local authorizations
to carry on its business as now being conducted and to
consummate the transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of
Trustees of Funds Trust on behalf of the Target Fund, and has
been executed and delivered by duly authorized officers of
Funds Trust, and represents a valid and binding contract,
enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium, and other similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles. The execution and delivery of
this Agreement does not, and the consummation of the
transactions contemplated by this Agreement will not, violate
the Amended and Restated Declaration of Trust of Funds Trust,
or any material agreement or arrangement to which Funds Trust
is a party or by which it is bound.
(d) The Target Fund has qualified as a "regulated investment
company" under Part I of Subchapter M of Subtitle A, Chapter
1, of the Code (a "RIC"), in respect of each taxable year
since the commencement of its operations, and will continue to
so qualify until the Effective Time.
(e) Funds Trust has valued, and will continue to value, the
portfolio securities and other assets of the Target Fund in
accordance with applicable legal requirements.
(f) All of the issued and outstanding shares of the Target Fund
have been validly issued and are fully paid and
non-assessable, and were offered for sale and sold in
conformity with the registration requirements of all
applicable federal and state securities laws.
(g) Funds Trust shall operate the business of the Target Fund in
the ordinary course between the date hereof and the Effective
Time of the Reorganization, except that Funds Trust shall
complete all measures in respect of the Target Fund prior to
the Effective Time of the Reorganization to ensure that each
Reorganization qualifies as a "reorganization" within the
meaning of Section 368(a) of the Code, regardless of whether
such measures are in the ordinary course. It is understood
that such ordinary course of business will include the
declaration and payment of customary dividends and
distributions and any other dividends and distributions deemed
advisable in anticipation of the Reorganization.
Notwithstanding anything herein to the contrary, Funds Trust
shall take all appropriate action necessary in order for it to
receive the opinion provided for in Sections 7(f) and 8(d).
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(h) At the Effective Time of the Reorganization, the Target Fund
will have good and marketable title to the Fund Assets and
full right, power and authority to assign, deliver and
otherwise transfer such assets.
(i) At the Effective Time of the Reorganization, all federal and
other tax returns and reports of the Target Fund required by
law to have been filed by such time shall have been filed, and
all federal and other taxes shall have been paid so far as
due, or provision shall have been made for the payment thereof
and, to the best knowledge of management of Funds Trust, no
such return or report shall be currently under audit and no
assessment shall have been asserted with respect to such
returns or reports.
5. Certain Representations, Warranties and Agreements of Funds Trust
on behalf of the Acquiring Fund. Funds Trust, on behalf of itself
and where appropriate, on behalf of the Acquiring Fund, represents
and warrants to, and agrees with, Funds Trust on behalf of the
Target Fund as follows:
(a) Funds Trust is a statutory business trust duly formed, validly
existing and in good standing under the laws of the State of
Delaware and is registered with the SEC as an open-end
management investment company under the 1940 Act and such
registration is in full force and effect.
(b) Funds Trust has the power to own all of its properties and
assets and to consummate the transactions contemplated herein,
and has all necessary federal, state and local authorizations
to carry on its business as now being conducted and to
consummate the transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of
Trustees of Funds Trust on behalf of the Acquiring Fund, and
executed and delivered by duly authorized officers of Funds
Trust, and represents a valid and binding contract,
enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles. The execution and delivery of
this Agreement does not, and the consummation of the
transactions contemplated by this Agreement will not, violate
the Amended and Restated Declaration of Trust of Funds Trust
or any material agreement or arrangement to which it is a
party or by which it is bound.
(d) The Acquiring Fund has qualified as a RIC in respect of each
taxable year since the commencement of its operations and will
continue to so qualify for its current taxable year.
(e) Funds Trust has valued, and will continue to value, the
portfolio securities and other assets of the Acquiring Fund in
accordance with applicable legal requirements.
(f) The shares of the Acquiring Fund to be issued and delivered to
the Target Fund for the account of the shareholders of the
Target Fund, pursuant to the terms hereof, shall have been
duly authorized as of the Effective Time of the Reorganization
and, when so issued and delivered, shall be duly and validly
issued, fully paid and non-assessable, and no shareholder of
the Acquiring Fund shall have any preemptive right of
subscription or purchase in respect thereto.
(g) All of the issued and outstanding shares of the Acquiring Fund
have been validly issued and are fully paid and
non-assessable, and were offered for sale and sold in
conformity with the registration requirements of all
applicable federal and state securities laws.
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(h) Funds Trust shall operate the business of the Acquiring Fund
in the ordinary course between the date hereof and the
Effective Time of the Reorganization, it being understood
that such ordinary course of business will include the
declaration and payment of customary dividends and
distributions and any other dividends and distributions
deemed advisable in anticipation of the Reorganization.
Notwithstanding anything herein to the contrary, Funds Trust
shall take all appropriate action necessary in order for
Funds Trust to receive the opinion provided for in Section
8(d).
(i) At the Effective Time of the Reorganization, all federal and
other tax returns and reports of the Acquiring Fund required
by law to have been filed by such time shall have been
filed, and all federal and other taxes shall have been paid
so far as due, or provision shall have been made for the
payment thereof and, to the best knowledge of management of
Funds Trust, no such return or report shall be currently
under audit and no assessment shall have been asserted with
respect to such returns or reports.
6. Closing Date, Effective Time of the Reorganization. The "Closing
Date" shall be December 12, 2003, or, such earlier or later date
as may be mutually agreed in writing by the parties hereto.
Delivery of the Fund Assets and each class of shares of the
Acquiring Fund to be issued pursuant to Section 1 and the
liquidation of the Target Fund pursuant to Section 2 shall occur
on the day following the Closing Date, whether or not such day is
a business day, or on such other date, and at such place and time,
as may be mutually agreed in writing, by the parties hereto. The
date and time at which such actions are taken are referred to
herein as the "Effective Time of the Reorganization." To the
extent any Fund Assets are, for any reason, not transferred at the
Effective Time of the Reorganization, Funds Trust shall cause such
Fund Assets to be transferred in accordance with this Agreement at
the earliest practicable date thereafter.
7. Conditions to Funds Trust's Obligations on Behalf of the Acquiring
Fund. The obligations of Funds Trust hereunder shall be subject to
the following conditions precedent:
(a) This Agreement and the Reorganization shall have been
approved by the Board of Trustees of Funds Trust in the
manner required by Funds Trust's Amended and Restated
Declaration of Trust, applicable law and this Agreement.
(b) All representations and warranties of Funds Trust made in
this Agreement shall be true and correct in all material
respects as if made at and as of the Valuation Time and the
Effective Time of the Reorganization.
(c) Funds Trust shall have delivered to Funds Trust, on behalf
of the Acquiring Fund, a statement of assets and liabilities
of the Target Fund, showing the tax basis of such assets for
federal income tax purposes by lot and the holding periods
of such assets, as of the Valuation Time.
(d) Funds Trust shall have duly executed and delivered to Funds
Trust, on behalf of the Acquiring Fund, such bills of sale,
assignments, certificates and other instruments of transfer
("Transfer Documents") as Funds Trust may deem necessary or
desirable to transfer all of the Target Fund's rights, title
and interest in and to the Fund Assets.
(e) Funds Trust shall have delivered a certificate executed in
its name executed by an appropriate officer, in a form
reasonably satisfactory to Funds Trust, on behalf of the
Acquiring Fund, and dated as of the Closing Date, to the
effect that the representations and warranties of Funds
Trust on behalf of the Target Fund made in this Agreement
are true and correct at and as of the Valuation Time and
that, to the best of its knowledge, the Fund Assets include
only assets which the Acquiring Fund may properly acquire
under its investment objective, policies and limitations.
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(f) Funds Trust shall have received an opinion of Xxxxxxxx &
Xxxxxxxx LLP dated as of the Closing Date in a form
reasonably satisfactory to it, upon which the Acquiring Fund
and its shareholders may rely, based upon representations
reasonably acceptable to Xxxxxxxx & Xxxxxxxx LLP made in
certificates provided by Funds Trust, its affiliates and/or
principal shareholders to Xxxxxxxx & Xxxxxxxx LLP,
substantially to the effect that, although not free from
doubt, the Reorganization should qualify as a
"reorganization," within the meaning of Section 368(a) of
the Code, and the Acquiring Fund and Target Fund should each
be a "party to a reorganization," within the meaning of
Section 368(b) of the Code, with respect to the
Reorganization.
(g) The N-14 Registration Statement shall have become effective
and no stop order suspending the effectiveness shall have
been instituted, or to the knowledge of Funds Trust,
contemplated by the SEC.
(h) 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.
(i) The SEC shall not have issued any unfavorable advisory
report under Section 25(b) of the 1940 Act nor instituted
any proceeding seeking to enjoin consummation of the
transactions contemplated by this Agreement under Section
25(c) of the 1940 Act.
(j) Funds Trust, on behalf of the Target Fund, shall have
performed and complied in all material respects with each of
its agreements and covenants required by this Agreement to
be performed or complied with by it prior to or at the
Valuation Time and the Effective Time of the Reorganization.
(k) Funds Trust shall have received a duly executed instrument
whereby the Acquiring Fund assumes all of the liabilities of
the Target Fund.
(l) Except to the extent prohibited by Rule 19b-1 under the 1940
Act, prior to the Valuation Time, the Target Fund shall have
declared a dividend or dividends, with a record date and
ex-dividend date prior to the Valuation Time, which,
together with all previous dividends, shall have the effect
of distributing to the Target Fund shareholders all of its
previously undistributed (i) "investment company taxable
income" within the meaning of Section 852(b) of the Code
(determined without regard to Section 852(b)(2)(D) of the
Code), (ii) excess of (A) the amount specified in Section
852(a)(1)(B)(i) of the Code over (B) the amount specified in
Section 852(a)(1)(B)(ii) of the Code, and (iii) "net capital
gain" (within the meaning of Section 1222(11) of the Code),
if any, realized in taxable periods or years ending on or
before the Effective Time.
8. Conditions to Funds Trust's Obligations on behalf of the Target
Fund. The obligations of Funds Trust hereunder shall be subject to
the following conditions precedent:
(a) This Agreement and the Reorganization shall have been
approved by the Board of Trustees of Funds Trust on behalf
of the Acquiring Fund.
(b) All representations and warranties of Funds Trust made in
this Agreement shall be true and correct in all material
respects as if made at and as of the Valuation Time and the
Effective Time of the Reorganization.
(c) Funds Trust shall have delivered a certificate executed in
its name by an appropriate officer, in a form reasonably
satisfactory to Funds Trust, on behalf of the Target Fund,
and dated as of the Closing Date, to the effect that the
representations and warranties of
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the Acquiring Fund made in this Agreement are true and
correct at and as of the Valuation Time.
(d) Funds Trust shall have received an opinion of Xxxxxxxx &
Xxxxxxxx LLP dated as of the Closing Date in a form
reasonably satisfactory to it, upon which the Target Fund
and its shareholders may rely, based upon representations
reasonably acceptable to Xxxxxxxx & Xxxxxxxx LLP made in
certificates provided by Funds Trust, its affiliates and/or
principal shareholders to Xxxxxxxx & Xxxxxxxx LLP, with
respect to the tax matters specified in Subsection 9(f)
(e) The N-14 Registration Statement shall have become effective
and no stop order suspending such effectiveness shall have
been instituted or, to the knowledge of Funds Trust,
contemplated by the SEC.
(f) 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.
(g) The SEC shall not have issued any unfavorable advisory
report under Section 25(b) of the 1940 Act nor instituted
any proceeding seeking to enjoin consummation of the
transactions contemplated by this Agreement under Section
25(c) of the 1940 Act.
(h) Funds Trust on behalf of the Acquiring Fund shall have
performed and complied in all material respects with each of
its agreements and covenants required by this Agreement to
be performed or complied with by it prior to or at the
Valuation Time and the Effective Time of the Reorganization.
9. Tax Matters
(a) Funds Trust hereby represents and warrants that it shall use
its best efforts to cause the Reorganization to qualify, and
will not (whether before or after consummation of the
Reorganization) take any actions that could prevent the
Reorganization from qualifying, as a "reorganization" under
the provisions of Section 368 of the Code.
(b) Except where otherwise required by law, the parties shall
not take a position on any tax returns inconsistent with the
treatment of the Reorganization for tax purposes as a
"reorganization," within the meaning of Section 368(a) of
the Code and the Acquiring Fund and the Target Fund will
comply with the record keeping and information filing
requirements of Section 1.368-3 of the Treasury Regulation
in accordance therewith.
10. Survival of Representations and Warranties. The representations
and warranties of Funds Trust on behalf of the Acquiring Fund and
the Target Fund set forth in this Agreement shall survive the
delivery of the Fund Assets to the Acquiring Fund and the issuance
of the shares of the Acquiring Fund at the Effective Time of the
Reorganization to Target Fund shareholders.
11. Termination of Agreement. This Agreement may be terminated by a
party at or, in the case of Subsection 11(c), below, at any time
prior to, the Effective Time of the Reorganization by a vote of a
majority of its Board members as provided below:
(a) By Funds Trust on behalf of the Acquiring Fund if the
conditions set forth in Section 9 are not satisfied as
specified in said Section;
(b) By Funds Trust on behalf of the Target Fund if the
conditions set forth in Section 10 are not satisfied as
specified in said Section;
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(c) By mutual written consent of the parties.
12. Governing Law. This Agreement and the transactions contemplated
hereby shall be governed, construed and enforced in accordance
with the laws of the State of Delaware, except to the extent
preempted by federal law.
13. Brokerage Fees and Expenses.
(a) Funds Trust represents and warrants that there are no brokers
or finders entitled to receive any payments in connection with
the transactions provided for herein.
(b) The Target Fund will be responsible for the expenses related
to entering into and carrying out the provisions of this
Agreement, whether or not the transactions contemplated hereby
are consummated. To the extent that such expenses exceed
contractual total operating expense ratio caps in place for
the Target Fund, Banc of America Capital Management, LLC or
any of its affiliates will bear such excess expenses.
14. Amendments. This Agreement may be amended, modified or
supplemented in such manner as may be mutually agreed upon in
writing by the authorized officers of Funds Trust, acting on
behalf of the Target Fund or Funds Trust, acting on behalf of the
Acquiring Fund:
(a) Funds Trust on behalf of the Target Fund, may waive any breach
by Funds Trust, on behalf of the Acquiring Fund, or the
failure to satisfy any of the conditions to its obligations
(such waiver to be in writing and signed by an officer of such
registered investment company);
(b) Funds Trust, on behalf of the Acquiring Fund, may waive any
breach by Funds Trust on behalf of the Target Fund, or the
failure to satisfy any of the conditions to either of their
obligations (such waiver to be in writing and signed by an
officer of such registered investment company).
15. Miscellaneous. The Reorganization of the Target Fund into the
Acquiring Fund (including the representations and warranties and
conditions precedent made or required to occur in connection
therewith) shall not be conditioned on any other Reorganization
contemplated either under this Agreement or any other agreement
and plan of reorganization.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers designated below as of the date first
written above.
NATIONS FUNDS TRUST
On behalf of the Target Fund identified on Schedule A
By:_____________________________
Xxxxx Xxxxxx
Chief Financial Officer (interim) and Treasurer
NATIONS FUNDS TRUST
On behalf of the Acquiring Fund identified on Schedule A
By:_____________________________
Xxxxx Xxxxxx
Chief Financial Officer (interim) and Treasurer
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SCHEDULE A
SHAREHOLDERS OWNING SHARES OF THE WOULD RECEIVE SHARES OF THE FOLLOWING
FOLLOWING TARGET FUND AND CLASSES ACQUIRING FUND AND CLASSES OF FUNDS
OF FUNDS TRUST: TRUST:
Nations Capital Growth Fund Nations Xxxxxxx Growth Fund
Primary A Shares Primary A Shares
Investor A Shares Investor A Shares
Investor B Shares Investor B Shares
Investor C Shares Investor C Shares
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