1
EXHIBIT (4)
Form of Agreement and Plan of Reorganization
2
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as
of DATE, by and between AmSouth Funds ("AmSouth"), a Massachusetts business
trust, and The Infinity Mutual Funds, Inc. ("Infinity"), a Maryland corporation,
on behalf of the ISG Funds. The capitalized terms used herein shall have the
meaning ascribed to them in this Agreement.
PLAN OF REORGANIZATION
(a) Infinity will sell, assign, convey, transfer and deliver to
AmSouth, and AmSouth will acquire, on the Exchange Date, all of the properties
and assets existing at the Valuation Time in the following funds:
ISG Current Income Portfolio ("ISG Current Income")
ISG Treasury Money Market Fund ("ISG Treasury Money Market")
ISG Moderate Growth & Income Portfolio ("ISG Moderate Growth & Income")
ISG Growth & Income Portfolio ("ISG Growth & Income")
ISG Growth Portfolio ("ISG Growth")
ISG Aggressive Growth Portfolio ("ISG Aggressive Growth")
ISG Mid-Cap Fund ("ISG Mid-Cap")
ISG Large-Cap Equity Fund ("ISG Large-Cap Equity")
ISG International Equity Fund ("ISG International Equity")
ISG Capital Growth Fund ("ISG Capital Growth")
ISG Tennessee Tax-Exempt Fund ("ISG Tennessee Tax-Exempt")
ISG Limited Term Tennessee Tax-Exempt Fund ("ISG Limited Term Tennessee
Tax-Exempt")
ISG Limited Term U.S. Government Fund ("ISG Limited Term U.S. Government")
ISG Limited Term Income Fund ("ISG Limited Term Income")
ISG Equity Income Fund ("ISG Equity Income")
ISG Municipal Income Fund ("ISG Municipal Income")
ISG Small-Cap Opportunity Fund ("ISG Small-Cap Opportunity")
ISG Tax-Exempt Money Market Fund ("ISG Tax-Exempt Money Market")
ISG Prime Money Market Fund ("ISG Prime Money Market")
ISG Government Income Fund ("ISG Government Income")
ISG Income Fund ("ISG Income")
(such funds each are an "ISG Fund" and are collectively the "ISG Funds").
Such acquisition is to be made by the following funds:
AmSouth Strategic Portfolios: Current Income Portfolio ("AmSouth
Current Income")
AmSouth Treasury Reserve Money Market Fund ("AmSouth Treasury Reserve
Money
A-1
3
Market")
AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio
("AmSouth Moderate Growth and Income")
AmSouth Strategic Portfolios: Growth and Income Portfolio ("AmSouth
Growth and Income")
AmSouth Strategic Portfolios: Growth Portfolio ("AmSouth Growth")
AmSouth Strategic Portfolios: Aggressive Growth Portfolio ("AmSouth
Aggressive Growth")
AmSouth Mid Cap Fund ("AmSouth Mid Cap")
AmSouth Large Cap Fund ("AmSouth Large Cap")
AmSouth International Equity Fund ("AmSouth International Equity")
AmSouth Capital Growth Fund ("AmSouth Capital Growth")
AmSouth Tennessee Tax-Exempt Fund ("AmSouth Tennessee Tax-Exempt")
AmSouth Limited Term Tennessee Tax-Exempt Fund ("AmSouth Limited Term
Tennessee Tax-Exempt")
AmSouth Limited Term U.S. Government Fund ("AmSouth Limited Term U.S.
Government")
AmSouth Government Income Fund ("AmSouth Government Income")
AmSouth Limited Term Bond Fund ("AmSouth Limited Term Bond")
AmSouth Equity Income Fund ("AmSouth Equity Income")
AmSouth Municipal Bond Fund ("AmSouth Municipal Bond")
AmSouth Small Cap Fund ("AmSouth Small Cap")
AmSouth Tax-Exempt Money Market Fund ("AmSouth Tax-Exempt Money
Market")
AmSouth Prime Money Market Fund ("AmSouth Prime Money Market")
AmSouth Bond Fund ("AmSouth Bond")
(such funds each are an "AmSouth Fund" and are collectively the
"AmSouth Funds").
For purposes of this Agreement the respective ISG Funds correspond to the
AmSouth Funds as follows:
ISG Current Income AmSouth Current Income
ISG Treasury Money Market AmSouth Treasury Reserve Money Market
ISG Moderate Growth & Income AmSouth Moderate Growth and Income
ISG Growth & Income AmSouth Growth and Income
ISG Growth AmSouth Growth
ISG Aggressive Growth AmSouth Aggressive Growth
ISG Mid-Cap AmSouth Mid Cap
A-2
4
ISG Large-Cap Equity AmSouth Large Cap
ISG International Equity AmSouth International Equity
ISG Capital Growth AmSouth Capital Growth
ISG Tennessee Tax-Exempt AmSouth Tennessee Tax-Exempt
ISG Limited Term Tennessee Tax-Exempt AmSouth Limited Term Tennessee Tax-
Exempt
ISG Limited Term U.S. Government AmSouth Limited Term U.S. Government
ISG Government Income AmSouth Government Income
ISG Limited Term Income AmSouth Limited Term Bond
ISG Equity Income AmSouth Equity Income
ISG Municipal Income AmSouth Municipal Bond
ISG Small-Cap Opportunity AmSouth Small Cap
ISG Tax-Exempt Money Market AmSouth Tax-Exempt Money Market
ISG Prime Money Market AmSouth Prime Money Market
ISG Income AmSouth Bond
In consideration therefor, each AmSouth Fund shall, on the Exchange Date, assume
all of the liabilities of the corresponding ISG Fund and transfer to the
corresponding ISG Fund a number of full and fractional AmSouth Class A, Class B,
or Trust shares of the corresponding AmSouth Fund (collectively, "Shares")
having an aggregate net asset value equal to the value of all of the assets of
each ISG Fund transferred to the corresponding AmSouth Fund on such date less
the value of all of the liabilities of each ISG Fund assumed by the
corresponding AmSouth Fund on that date. It is intended that each reorganization
described in this Agreement shall be a tax-free reorganization under the
Internal Revenue Code of 1986, as amended (the "Code").
(b) Upon consummation of the transactions described in paragraph (a) of
this Agreement, each ISG Fund in complete liquidation shall distribute to its
respective shareholders of record as of the Exchange Date the Shares received by
it, each shareholder being entitled to receive that number of Shares equal to
the proportion which the number of shares of common stock of the ISG Fund held
by such shareholder bears to the number of such shares of the ISG Fund
outstanding on such date. ISG Fund shareholders of record holding Institutional
Class shares will receive AmSouth Trust shares; ISG Fund shareholders of record
A-3
5
holding Class B shares will receive AmSouth Class B shares; and ISG Fund
shareholders of record holding Class A shares will receive AmSouth Class A
shares.
AGREEMENT
AmSouth and Infinity represent, warrant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF INFINITY. Each of Infinity and
each ISG Fund represent and warrant to and agree with AmSouth and each AmSouth
Fund that:
(a) Infinity is a corporation duly established and validly existing
under the laws of the State of Maryland and has power to own all of its
properties and assets and to carry out its obligations under this Agreement.
Infinity and each ISG Fund is not required to qualify as a foreign association
in any jurisdiction. Infinity and each ISG Fund has all necessary federal, state
and local authorizations to carry on its business as now being conducted and to
fulfill the terms of this Agreement, except for shareholder approval and as
otherwise described in Section 1(l).
(b) Infinity is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company, and such
registration has not been revoked or rescinded and is in full force and effect.
Each ISG Fund has elected to qualify and has qualified as a regulated investment
company under Part I of Subchapter M of the Code, as of and since its first
taxable year, and qualifies and intends to continue to qualify as a regulated
investment company for its taxable year ending upon its liquidation. Each ISG
Fund has been a regulated investment company under such sections of the Code at
all times since its inception.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of portfolio investments
(indicating their market values) for each ISG Fund at and for the year ended
December 31, 1998, such statements and schedules having been audited by KPMG
LLP, independent accountants to Infinity, have been furnished to AmSouth. Such
statements of assets and liabilities and schedule fairly present the financial
position of each ISG Fund as of their respective dates and said statements of
operations and changes in net assets fairly reflect the results of operations
and changes in net assets for the periods covered thereby in conformity with
generally accepted accounting principles. The statements of assets and
liabilities, statements of operations, statements of changes in net assets and
schedules of investments (indicating their market values) for each ISG Fund for
the six-month period ended June 30, 1999, which are unaudited, have also been
furnished to AmSouth. Such statements of assets and liabilities and schedules
fairly present the financial position of the ISG Funds as of their respective
dates, and said statements of operations and changes in net assets fairly
reflect the results of its operations and changes in financial position for the
periods covered thereby in conformity with generally accepted accounting
principles.
(d) The prospectuses of the ISG Funds dated May 1, 1999 (the "ISG
Prospectuses") and the Statement of Additional Information for the ISG Funds
dated May 1, 1999 and on file
A-4
6
with the Securities and Exchange Commission, which have been previously
furnished to AmSouth, did not as of their dates and do not as of the date hereof
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 they were made, not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of Infinity or any ISG Fund, overtly threatened
against Infinity or any ISG Fund which assert liability on the part of Infinity
or any ISG Fund.
(f) There are no material contracts outstanding to which Infinity, with
respect to the ISG Funds, or any ISG Fund is a party, other than as disclosed in
the ISG Prospectuses and the corresponding Statement of Additional Information
or in the Registration Statement and the Proxy Statement.
(g) Neither Infinity, with respect to the ISG Funds, nor any ISG Fund
has any known liabilities of a material nature, contingent or otherwise, other
than those shown as belonging to it on its statement of assets and liabilities
as of June 30, 1999, and those incurred in the ordinary course of Infinity's
business as an investment company since that date. Prior to the Exchange Date,
Infinity will advise AmSouth of all known material liabilities, contingent or
otherwise, incurred by it, with respect to the ISG Funds, and each ISG Fund
subsequent to June 30, 1999, whether or not incurred in the ordinary course of
business.
(h) As used in this Agreement, the term "Investments" shall mean each
ISG Fund's investments shown on the schedule of its portfolio investments as of
June 30, 1999, referred to in Section 1(c) hereof, as supplemented with such
changes as Infinity or each ISG Fund shall make after June 30, 1999, which
changes shall be disclosed to AmSouth, and changes resulting from stock
dividends, stock split-ups, mergers and similar corporate actions.
(i) Each ISG Fund has filed or will file all federal and state tax
returns which, to the knowledge of Infinity's officers, are required to be filed
by each ISG Fund and has paid or will pay all federal and state taxes shown to
be due on said returns or on any assessments received by each ISG Fund. To the
best of such officers' knowledge, all tax liabilities of each ISG Fund have been
adequately provided for on its books, and no tax deficiency or liability of any
ISG Fund has been asserted, and no question with respect thereto has been
raised, by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid.
(j) As of both the Valuation Time and the Exchange Date and except for
shareholder approval and otherwise as described in Section 1(l), Infinity on
behalf of each ISG Fund will have full right, power and authority to sell,
assign, transfer and deliver the Investments and any other assets and
liabilities of each ISG Fund to be transferred to the corresponding AmSouth Fund
pursuant to this Agreement. At the Exchange Date, subject only to the delivery
of the Investments and any such other assets and liabilities as contemplated by
this
▇-▇
▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ will, on behalf of each AmSouth Fund, acquire the Investments
and any such other assets subject to no encumbrances, liens or security
interests in favor of any third party creditor of Infinity or an ISG Fund and,
except as described in Section 1(k), without any restrictions upon the transfer
thereof.
(k) Except as to Investments otherwise disclosed as unregistered
securities pursuant to Section 1(h) hereof, no registration under the Securities
Act of 1933, as amended (the "1933 Act"), of any of the Investments would be
required if they were, as of the time of such transfer, the subject of a public
distribution by either of Infinity or AmSouth.
(l) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by Infinity on behalf of
the ISG Funds or any ISG Fund of the transactions contemplated by this
Agreement, except such as may be required under the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, state
securities or blue sky laws (which term as used herein shall include the laws of
the District of Columbia and of Puerto Rico) or the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976 (the "H-S-R Act").
(m) The registration statement (the "Registration Statement") filed
with the Securities and Exchange Commission (the "Commission") by AmSouth on
Form N-14 relating to the Shares issuable hereunder, and the proxy statement of
Infinity included therein (the "Proxy Statement"), on the effective date of the
Registration Statement and insofar as they relate to Infinity and the ISG Funds,
(i) will comply in all material respects with the provisions of the 1933 Act,
the 1934 Act and the 1940 Act and the rules and regulations thereunder and (ii)
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements were made,
not misleading; and at the time of the shareholders' meeting referred to in
Section 8(a) below and on the Exchange Date, the prospectus contained in the
Registration Statement of which the Proxy Statement is a part (the
"Prospectus"), as amended or supplemented by any amendments or supplements filed
with the Commission by AmSouth, insofar as it relates to Infinity and the ISG
Funds, will not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not misleading; provided, however, that none of the representations
and warranties in this subsection shall apply to statements in or omissions from
the Registration Statement, the Prospectus or the Proxy Statement, made in
reliance upon or in conformity with information furnished by AmSouth, or any
AmSouth Fund, for use in the Registration Statement, Prospectus, or Proxy
Statement.
(n) All of the issued and outstanding shares of common stock of each
ISG Fund have been offered for sale and sold in conformity with all applicable
federal and state securities laws.
A-6
8
2. REPRESENTATIONS AND WARRANTIES OF AMSOUTH. Each of AmSouth and each
AmSouth Fund jointly and severally represent and warrant to and agree with
Infinity and each ISG Fund that:
(a) AmSouth is a business trust duly established and validly existing
under the laws of The Commonwealth of Massachusetts and has power to carry on
its business as it is now being conducted and to carry out this Agreement.
AmSouth and each AmSouth Fund is not required to qualify as a foreign
association in any jurisdiction. AmSouth and each AmSouth Fund has all necessary
federal, state and local authorizations to own all of its properties and assets
and to carry on its business as now being conducted and to fulfill the terms of
this Agreement, except as set forth in Section 2(i).
(b) AmSouth is registered under the 1940 Act as an open-end management
investment company, and such registration has not been revoked or rescinded and
is in full force and effect. Each AmSouth Fund that has had active operations
prior to the Exchange Date, has elected to qualify and has qualified as a
regulated investment company under Part I of Subchapter M of the Code, as of and
since its first taxable year, and qualifies and intends to continue to qualify
as a regulated investment company for its taxable year ending upon its
liquidation. Each AmSouth Fund that has had actual operations prior to the
Exchange Date has been a regulated investment company under such sections of the
Code at all times since its inception. AmSouth Current Income, AmSouth Treasury
Reserve Money Market, AmSouth Moderate Growth and Income, AmSouth Growth and
Income, AmSouth Growth, AmSouth Aggressive Growth, AmSouth International Equity,
AmSouth Mid Cap, AmSouth Large Cap, AmSouth Capital Growth, AmSouth Tennessee
Tax-Exempt, AmSouth Limited Term Tennessee Tax-Exempt, and AmSouth Limited Term
U.S. Government, which have not had active operations prior to the Exchange
Date, intend to qualify as regulated investment companies under Part I of
Subchapter M of the Code.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of investments (indicating
their market values) for each AmSouth Fund for the year ended JULY 31, 1999,
such statements and schedules having been audited by PricewaterhouseCoopers LLP,
independent accountants to AmSouth, have been furnished to Infinity.
(d) The prospectuses of each AmSouth Fund dated December 1, 1999 and
December 14, 1999, (collectively, the "AmSouth Prospectuses"), and the
Statements of Additional Information for the AmSouth Funds, dated December 1,
1999 and December 14, 1999 and on file with the Securities and Exchange
Commission, which have been previously furnished to Infinity, did not as of
their dates and do not as of the date hereof contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to
A-7
9
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of AmSouth or any AmSouth Fund, overtly threatened
against AmSouth or any AmSouth Fund which assert liability on the part of
AmSouth or any AmSouth Fund.
(f) There are no material contracts outstanding to which AmSouth or any
AmSouth Fund is a party, other than as disclosed in the AmSouth Prospectuses and
the corresponding Statement of Additional Information or in the Registration
Statement.
(g) Neither AmSouth nor any AmSouth Fund has any known liabilities of a
material nature, contingent or otherwise, other than those shown on its
statement of assets and liabilities as of July 31, 1999, referred to above and
those incurred in the ordinary course of the business of AmSouth as an
investment company or any AmSouth Fund since such date. Prior to the Exchange
Date, AmSouth will advise Infinity of all known material liabilities, contingent
or otherwise, incurred by it and each AmSouth Fund subsequent to July 31, 1999,
whether or not incurred in the ordinary course of business.
(h) Each AmSouth Fund has filed or will file all federal and state tax
returns which, to the knowledge of AmSouth's officers, are required to be filed
by each AmSouth Fund and has paid or will pay all federal and state taxes shown
to be due on said returns or on any assessments received by each AmSouth Fund.
To the best of such officers' knowledge, all tax liabilities of each AmSouth
Fund have been adequately provided for on its books, and no tax deficiency or
liability of any AmSouth Fund has been asserted, and no question with respect
thereto has been raised, by the Internal Revenue Service or by any state or
local tax authority for taxes in excess of those already paid.
(i) No consent, approval, authorization or order of any governmental
authority is required for the consummation by AmSouth or any AmSouth Fund of the
transactions contemplated by this Agreement, except such as may be required
under the 1933 Act, the 1934 Act, the 1940 Act, state securities or Blue Sky
laws or the H-S-R Act.
(j) As of both the Valuation Time and the Exchange Date and otherwise
as described in Section 2(i), AmSouth on behalf of each AmSouth Fund will have
full right, power and authority to purchase the Investments and any other assets
and assume the liabilities of each ISG Fund to be transferred to the
corresponding AmSouth Fund pursuant to this Agreement.
(k) The Registration Statement, the Prospectus and the Proxy Statement,
on the effective date of the Registration Statement and insofar as they relate
to AmSouth and the AmSouth Funds: (i) will comply in all material respects with
the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder and (ii) will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
A-8
10
which they were made, not misleading; and at the time of the shareholders'
meeting referred to in Section 8(a) and at the Exchange Date, the Prospectus, as
amended or supplemented by any amendments or supplements filed with the
Commission by AmSouth or any AmSouth Fund, will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that
none of the representations and warranties in this subsection shall apply to
statements in or omissions from the Registration Statement, the Prospectus or
the Proxy Statement made in reliance upon and in conformity with information
furnished by Infinity or any ISG Fund for use in the Registration Statement, the
Prospectus or the Proxy Statement.
(l) Shares to be issued to each ISG Fund have been duly authorized and,
when issued and delivered pursuant to this Agreement and the Prospectus, will be
legally and validly issued and will be fully paid and nonassessable by AmSouth
and no shareholder of AmSouth will have any preemptive right of subscription or
purchase in respect thereof.
(m) The issuance of Shares pursuant to this Agreement will be in
compliance with all applicable federal and state securities laws.
(n) Each of AmSouth Government Income Fund, AmSouth Limited Term Bond
Fund, AmSouth Equity Income Fund, AmSouth Municipal Bond Fund, AmSouth Small Cap
Fund, AmSouth Tax-Exempt Money Market Fund, AmSouth Prime Money Market Fund,
AmSouth Bond Fund, is qualified and will at all times through the Exchange Date
qualify for taxation as a "regulated investment company" under Sections 851 and
852 of the Code. AmSouth Current Income, AmSouth Treasury Reserve Money Market,
AmSouth Moderate Growth and Income, AmSouth Growth and Income, AmSouth Growth,
AmSouth Aggressive Growth, AmSouth International Equity, AmSouth Mid Cap,
AmSouth Large Cap, AmSouth Capital Growth, AmSouth Tennessee Tax-Exempt, AmSouth
Limited Term Tennessee Tax-Exempt, and AmSouth Limited Term U.S. Government,
upon filing of their first income tax returns at the completion of their first
taxable year will elect to be regulated investment companies and until such time
will take all steps necessary to ensure qualification as regulated investment
companies under Sections 851 and 852 of the Code.
(o) AmSouth through its administrator, transfer agent, custodian or
otherwise, will cooperate fully and in a timely manner with Infinity and each
ISG Fund in completing each of the actions required of it and its agents and
necessary for consummation of the transactions described in Sections 3 (a) and
(b) of this Agreement.
3. REORGANIZATION. (a) Subject to the requisite approval of the
shareholders of each ISG Fund and to the other terms and conditions contained
herein (including each ISG Fund's obligation to distribute to its respective
shareholders all of its investment company taxable income and net capital gain
as described in Section 9(k) hereof), Infinity and each ISG Fund agree to sell,
assign, convey, transfer and deliver to the corresponding AmSouth Fund, and each
AmSouth Fund agree to acquire from the corresponding ISG Fund, on the Exchange
A-9
11
Date all of the Investments and all of the cash and other assets of each ISG
Fund in exchange for that number of Shares of the corresponding AmSouth Fund
provided for in Section 4 and the assumption by the corresponding AmSouth Fund
of all of the liabilities of the ISG Fund. Pursuant to this Agreement, such ISG
Fund will, as soon as practicable after the Exchange Date, distribute in
liquidation all of the Shares received by it to its shareholders in exchange for
their shares of common stock of such ISG Fund.
(b) Infinity, on behalf of each ISG Fund, will pay or cause to be paid
to the corresponding AmSouth Fund any interest and cash dividends received by it
on or after the Exchange Date with respect to the Investments transferred to the
AmSouth Funds hereunder. Infinity, on behalf of each ISG Fund, will transfer to
the corresponding AmSouth Fund any rights, stock dividends or other securities
received by Infinity or any ISG Fund after the Exchange Date as stock dividends
or other distributions on or with respect to the Investments transferred, which
rights, stock dividends and other securities shall be deemed included in the
assets transferred to each AmSouth Fund at the Exchange Date and shall not be
separately valued, in which case any such distribution that remains unpaid as of
the Exchange Date shall be included in the determination of the value of the
assets of the ISG Fund acquired by the corresponding AmSouth Fund.
4. EXCHANGE DATE; VALUATION TIME. On the Exchange Date, AmSouth will
deliver to Infinity a number of Shares having an aggregate net asset value equal
to the value of the assets of the corresponding ISG Fund acquired by each
AmSouth Fund, less the value of the liabilities of such ISG Fund assumed,
determined as hereafter provided in this Section 4.
(a) Subject to Section 4(d) hereof, the value of each ISG Fund's net
assets will be computed as of the Valuation Time using the valuation procedures
for the corresponding AmSouth Fund set forth in the AmSouth Prospectus and
Statement of Additional Information. In no event shall the same security held by
both Infinity and AmSouth be valued at different prices.
(b) Subject to Section 4(d) hereof, the net asset value of a share of
each AmSouth Fund will be determined to the nearest full cent as of the
Valuation Time, using the valuation procedures set forth in the AmSouth
Prospectus for the particular AmSouth Fund.
(c) Subject to Section 4(d), the Valuation Time shall be 4:00 p.m.
Eastern Standard time on MARCH 10, 2000 for all of the ISG Funds, or such
earlier or later days as may be mutually agreed upon in writing by the parties
hereto (the "Valuation Time").
(d) No formula will be used to adjust the net asset value of any ISG
Fund or AmSouth Fund to take into account differences in realized and unrealized
gains and losses.
(e) Each AmSouth Fund shall issue its Shares to the corresponding ISG
Fund on one share deposit receipt registered in the name of the corresponding
ISG Fund. Each ISG Fund
A-10
12
shall distribute in liquidation the Shares received by it hereunder pro rata to
its shareholders by redelivering such share deposit receipt to AmSouth's
transfer agent which will as soon as practicable set up open accounts for each
ISG Fund shareholder in accordance with written instructions furnished by
Infinity.
(f) Each AmSouth Fund shall assume all liabilities of the corresponding
ISG Fund, whether accrued or contingent, in connection with the acquisition of
assets and subsequent dissolution of the corresponding ISG Fund or otherwise,
except that recourse for assumed liabilities relating to a particular ISG Fund
will be limited to the corresponding AmSouth Fund.
5. EXPENSES, FEES, ETC. (a) Subject to subsections 5(b) through 5(e),
all fees and expenses, including accounting expenses, portfolio transfer taxes
(if any) or other similar expenses incurred directly in connection with the
consummation by AmSouth and Infinity of the transactions contemplated by this
Agreement will be borne by AMSOUTH BANK, including the costs of proxy materials,
proxy solicitation, and legal expenses; provided, however, that such expenses
will in any event be paid by the party directly incurring such expenses if and
to the extent that the payment by the other party of such expenses would result
in the disqualification of any AmSouth Fund or any ISG Fund, as the case may be,
as a "regulated investment company" within the meaning of Section 851 of the
Code. Fees and expenses not incurred directly in connection with the
consummation of the Transaction will be borne by the party incurring such fees
and expenses.
(b) In the event the transactions contemplated by this Agreement are
not consummated by reason of Infinity being either unwilling or unable to go
forward (other than by reason of the nonfulfillment or failure of any condition
to Infinity's obligations referred to in Section 8(a) or Section 10), Infinity
shall pay directly all reasonable fees and expenses incurred by AmSouth in
connection with such transactions, including, without limitation, legal,
accounting and filing fees.
(c) In the event the transactions contemplated by this Agreement are
not consummated by reason of AmSouth being either unwilling or unable to go
forward (other than by reason of the nonfulfillment or failure of any condition
to AmSouth's obligations referred to in Section 8(a) or Section 9), AmSouth
shall pay directly all reasonable fees and expenses incurred by Infinity in
connection with such transactions, including without limitation legal,
accounting and filing fees.
(d) In the event the transactions contemplated by this Agreement are
not consummated for any reason other than (i) AmSouth or Infinity being either
unwilling or unable to go forward or (ii) the nonfulfillment or failure of any
condition to Infinity or AmSouth's obligations referred to in Section 8(a),
Section 9 or Section 10 of this Agreement, then each of Infinity and AmSouth
shall bear the expenses it has actually incurred in connection with such
transactions.
A-11
13
(e) Notwithstanding any other provisions of this Agreement, if for any
reason the transactions contemplated by this Agreement are not consummated, no
party shall be liable to the other party for any damages resulting therefrom,
including without limitation consequential damages, except as specifically set
forth above.
6. PERMITTED ASSETS. AmSouth and Infinity agree to review the assets of
the ISG Funds to ensure that at any time prior to the Exchange Date the assets
of any ISG Fund do not include any assets that the corresponding AmSouth Fund is
not permitted, or reasonably believes to be unsuitable for it, to acquire,
including without limitation any security that, prior to its acquisition by any
ISG Fund, is unsuitable for the corresponding AmSouth Fund to acquire.
7. EXCHANGE DATE. Delivery of the assets of the ISG Funds to be
transferred, assumption of the liabilities of the ISG Funds to be assumed, and
the delivery of Shares to be issued shall be made on March 13, 2000 at 10:00
a.m. or at such other times and dates agreed to by Infinity and AmSouth, the
date and time upon which such delivery is to take place being referred to herein
as the "Exchange Date."
8. SPECIAL MEETING OF SHAREHOLDERS; DISSOLUTION. (a) Infinity agrees to
call a special meeting of the shareholders of each ISG Fund as soon as is
practicable after the effective date of the Registration Statement for the
purpose of considering the sale of all of the assets of each ISG Fund to and the
assumption of all of the liabilities of each ISG Fund by the corresponding
AmSouth Fund as herein provided, approving this Agreement, and authorizing the
liquidation and dissolution of each ISG Fund, and, except as set forth in
Section 13, it shall be a condition to the obligations of each of the parties
hereto that the holders of the shares of common stock of each ISG Fund shall
have approved this Agreement and the transactions contemplated herein in the
manner required by law and Infinity's Articles of Incorporation and Bylaws at
such a meeting on or before the Valuation Time.
(b) Infinity and each ISG Fund agree that the liquidation and
dissolution of each ISG Fund will be effected in the manner provided in
Infinity's Articles of Incorporation and Bylaws in accordance with applicable
law, that it will not make any distributions of any Shares to the shareholders
of a ISG Fund without first paying or adequately providing for the payment of
all of such ISG Fund's known debts, obligations and liabilities.
(c) Each of AmSouth and Infinity will cooperate with the other, and
each will furnish to the other the information relating to itself required by
the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations
thereunder to be set forth in the Registration Statement, including the
Prospectus and the Proxy Statement.
9. CONDITIONS TO AMSOUTH'S OBLIGATIONS. The obligations of AmSouth and
each AmSouth Fund hereunder shall be subject to the following conditions:
A-12
14
(a) That this Agreement shall have been approved and the transactions
contemplated hereby, including the liquidation and dissolution of the ISG Funds,
shall have been approved by the shareholders of each ISG Fund in the manner
required by law.
(b) Infinity shall have furnished to AmSouth a statement of each ISG
Fund's assets and liabilities, with values determined as provided in Section 4
of this Agreement, together with a list of Investments with their respective tax
costs, all as of the Valuation Time, certified on Infinity's behalf by its
President (or any Vice President) and Treasurer, and a certificate of both such
officers, dated the Exchange Date, to the effect that as of the Valuation Time
and as of the Exchange Date there has been no material adverse change in the
financial position of any ISG Fund since June 30, 1999, other than changes in
the Investments since that date or changes in the market value of the
Investments, or changes due to net redemptions of shares of the ISG Funds,
dividends paid or losses from operations.
(c) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of Infinity and each ISG Fund made in this
Agreement are true and correct in all material respects as if made at and as of
such dates, Infinity and each ISG Fund has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to each of such dates, and Infinity shall have furnished to AmSouth a
statement, dated the Exchange Date, signed by Infinity's President (or any Vice
President) and Treasurer certifying those facts as of such dates.
(d) Infinity shall have delivered to AmSouth a letter from KPMG LLP
dated the Exchange Date stating that such firm reviewed the federal and state
income tax returns of each ISG Fund for the year ended December 31, 1999 and
that, in the course of such review, nothing came to their attention which caused
them to believe that such returns did not properly reflect, in all material
respects, the federal and state income taxes of each ISG Fund for the periods
covered thereby, or that each ISG Fund would not qualify as a regulated
investment company for federal income tax purposes.
(e) There shall not be any material litigation pending with respect to
the matters contemplated by this Agreement.
(f) AmSouth shall have received an opinion of Stroock & Stroock & ▇▇▇▇▇
LLP, in form reasonably satisfactory to AmSouth and dated the Exchange Date, to
the effect that (i) Infinity is a corporation duly established and validly
existing under the laws of the State of Maryland, (ii) this Agreement has been
duly authorized, executed, and delivered by Infinity on behalf of the ISG Funds
and, assuming that the Registration Statement, the Prospectus and the Proxy
Statement comply with the 1933 Act, the 1934 Act and the 1940 Act and assuming
due authorization, execution and delivery of this Agreement by AmSouth, is a
valid and binding obligation of Infinity with respect to the ISG Funds, subject
to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and
similar laws relating to or affecting creditors' rights generally and court
decisions with respect thereto,
A-13
15
and such counsel shall not be required to express an opinion with respect to the
application of equitable principles in any proceeding, whether at law or in
equity, or with respect to the provisions of this Agreement intended to limit
liability for particular matters to an ISG Fund and its assets, (iii) Infinity
and each ISG Fund has power to sell, assign, convey, transfer and deliver the
Investments and other assets contemplated hereby and, upon consummation of the
transactions contemplated hereby in accordance with the terms of this Agreement,
Infinity and each ISG Fund will have duly sold, assigned, conveyed, transferred
and delivered such Investments and other assets to AmSouth, (iv) the execution
and delivery of this Agreement did not, and the consummation of the transactions
contemplated hereby will not, violate Infinity's Articles of Incorporation and
Bylaws or any provision of an agreement known to such counsel to which Infinity,
with respect to the ISG Funds, or any ISG Fund is a party or by which it is
bound, it being understood that with respect to investment restrictions as
contained in Infinity's Articles of Incorporation and Bylaws, such counsel may
rely upon a certificate of an officer of Infinity whose responsibility it is to
advise Infinity with respect to such matters, and (v) no consent, approval,
authorization or order of any court or governmental authority is required for
the consummation by Infinity or any ISG Fund of the transactions contemplated
hereby, except such as have been obtained under the 1933 Act, the 1934 Act and
the 1940 Act and such as may be required under state securities or blue sky laws
and the H-S-R Act, and it being understood that such opinion shall not be deemed
to apply to AmSouth's compliance obligations under the 1933 Act, 1934 Act, 1940
Act, state securities or blue sky laws and H-S-R Act.
(g) AmSouth shall have received an opinion of Ropes & ▇▇▇▇, counsel to
AmSouth addressed to AmSouth and each AmSouth Fund, and to Infinity and ISG
Funds in form reasonably satisfactory to AmSouth and dated the Exchange Date
(which opinion would be based upon certain factual representations and subject
to certain qualifications), to the effect that, on the basis of the existing
provisions of the Code, current administrative rules and court decisions, for
Federal income tax purposes: (i) no gain or loss will be recognized by any ISG
Fund or its Shareholders upon the transfer of the assets to the corresponding
AmSouth Fund in exchange for Shares and the assumption by such AmSouth Fund of
the liabilities of the ISG Fund or upon the distribution of Shares by the ISG
Fund to its shareholders in liquidation pursuant to this Agreement; (ii) the
basis of the Shares an Infinity Shareholder receives in connection with the
transaction will be the same as the basis of his or her ISG Fund shares
exchanged therefor; (iii) an Infinity shareholder's holding period with respect
to his or her Shares will be determined by including the period for which he or
she held the ISG Fund shares exchanged therefor, provided that he or she held
such ISG Fund shares as capital assets; (iv) no gain or loss will be recognized
by any AmSouth Fund upon the receipt of the assets of the corresponding ISG Fund
in exchange for Shares and the assumption by the AmSouth Fund of the liabilities
of the corresponding ISG Fund; (v) the basis in the hands of the AmSouth Fund of
the assets of the corresponding ISG Fund transferred to the AmSouth Fund will be
the same as the basis of the assets in the hands of the corresponding ISG Fund
immediately prior to the transfer; and (vi) each AmSouth Fund's holding periods
with respect to the assets of the corresponding ISG Fund will include the
periods for which such assets were held by the
A-14
16
corresponding ISG Fund.
(h) Subject to the parties' compliance with Section 6 hereof, the
assets of each ISG Fund to be acquired by the corresponding AmSouth Fund will
include no assets which the corresponding AmSouth Fund, by reason of limitations
contained in its Declaration of Trust or of investment restrictions disclosed in
the AmSouth Prospectuses in effect on the Exchange Date, may not properly
acquire. AmSouth shall not change the AmSouth Declaration of Trust and the
AmSouth Prospectuses so as to restrict permitted investments for each AmSouth
Fund except as required by the Commission or any state regulatory authority.
(i) The Registration Statement shall have become effective under the
1933 Act and applicable Blue Sky provisions, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of AmSouth,
contemplated by the Commission and or any state regulatory authority.
(j) All proceedings taken by Infinity in connection with the
transactions contemplated by this Agreement and all documents incidental thereto
reasonably shall be satisfactory in form and substance to AmSouth.
(k) Prior to the Exchange Date, each ISG Fund (other than an ISG Fund
that will combine with a AmSouth Fund in a manner qualifying for treatment under
Section 368(a)(1)(F) of the Code) shall have declared a dividend or dividends
which, together with all previous such dividends, shall have the effect of
distributing to its shareholders all of its investment company taxable income
for its taxable year ended December 31, 1999 and the short taxable year
beginning January 1, 2000 and ending on the Exchange Date (computed without
regard to any deduction for dividends paid), and all of the ISG Fund's net
capital gain realized in its taxable year ended December 31, 1999 and the short
taxable year beginning on January 1, 2000 and ending on the Exchange Date (after
reduction for any capital loss carryover).
(l) Infinity shall have furnished to AmSouth a certificate, signed by
the President (or any Vice President) and the Treasurer of Infinity, as to the
tax cost to Infinity of the securities delivered to AmSouth pursuant to this
Agreement, together with any such other evidence as to such tax cost as AmSouth
may reasonably request.
(m) ISG Funds' custodian shall have delivered to AmSouth a certificate
identifying all of the assets of each ISG Fund held by such custodian as of the
Valuation Time.
(n) ISG Funds' transfer agent shall have provided to AmSouth's transfer
agent (i) the originals or true copies of all of the records of each ISG Fund in
the possession of such ISG transfer agent as of the Exchange Date, (ii) a record
specifying the number of shares of each ISG Fund outstanding as of the Valuation
Time and (iii) a record specifying the name and address of each holder of record
of any such shares of each ISG Fund and the number of shares
A-15
17
held of record by each such shareholder as of the Valuation Time. ISG's transfer
agent shall also have provided AmSouth with a certificate confirming that the
acts specified in the preceding sentence have been taken and that the
information so supplied is complete and accurate to the best knowledge of the
transfer agent.
(o) All of the issued and outstanding shares of common stock of each
ISG Fund shall have been offered for sale and sold in conformity with all
applicable federal or state securities or blue sky laws and, to the extent that
any audit of the records of Infinity or any ISG Fund or its transfer agent by
AmSouth or its agents shall have revealed otherwise, either (i) Infinity and
each ISG Fund shall have taken all actions that in the reasonable opinion of
AmSouth are necessary to remedy any prior failure on the part of Infinity to
have offered for sale and sold such shares in conformity with such laws or (ii)
Infinity shall have furnished (or caused to be furnished) surety, or deposited
(or caused to be deposited) assets in escrow, for the benefit of AmSouth in
amounts sufficient and upon terms satisfactory, in the opinion of AmSouth or its
counsel, to indemnify AmSouth against any expense, loss, claim, damage or
liability whatsoever that may be asserted or threatened by reason of such
failure on the part of Infinity to have offered and sold such shares in
conformity with such laws.
(p) AmSouth shall have received from Ernst & Young LLP a letter
addressed to AmSouth dated as of the Exchange Date reasonably satisfactory in
form and substance to AmSouth and Infinity to the effect that, on the basis of
limited procedures agreed upon by AmSouth and Infinity and described in such
letter (but not an examination in accordance with generally accepted auditing
standards), as of the Valuation Time the value of the assets of each ISG Fund to
be exchanged for the Shares have been determined in accordance with the
valuation procedures for the corresponding AmSouth Fund as set forth in the
AmSouth Prospectus and Statement of Additional Information.
(q) Infinity shall have duly executed and delivered to AmSouth bills of
sale, assignments, certificates and other instruments of transfer ("Transfer
Documents") as AmSouth may deem necessary or desirable to transfer all of
Infinity's and each ISG Fund's entire right, title and interest in and to the
Investments and all other assets of each ISG Fund.
10. CONDITIONS TO INFINITY'S OBLIGATIONS. The obligations of Infinity
and each ISG Fund hereunder shall be subject to the following conditions:
(a) This Agreement shall have been adopted and the transactions
contemplated hereby, including the liquidation and dissolution of the ISG Funds,
shall have been approved by the shareholders of each ISG Fund in the manner
required by law.
(b) AmSouth shall have furnished to Infinity a statement of each
AmSouth Fund's net assets, together with a list of portfolio holdings with
values determined as provided in Section 4, all as of the Valuation Time,
certified on AmSouth's behalf by its President (or any Vice President) and
Treasurer (or any Assistant Treasurer), and a certificate of both such officers,
A-16
18
dated the Exchange Date, to the effect that as of the Valuation Time and as of
the Exchange Date there has been no material adverse change in the financial
position of any AmSouth Fund since July 31, 1999, other than changes in its
portfolio securities since that date, changes in the market value of its
portfolio securities, changes due to net redemptions, dividends paid or losses
from operations.
(c) AmSouth shall have executed and delivered to Infinity an Assumption
of Liabilities dated as of the Exchange Date pursuant to which each AmSouth Fund
will assume all of the liabilities of the corresponding ISG Fund existing at the
Valuation Time in connection with the transactions contemplated by this
Agreement.
(d) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of AmSouth and each AmSouth Fund made in this
Agreement are true and correct in all material respects as if made at and as of
such dates, AmSouth and each AmSouth Fund has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied at or prior to each of such dates, and AmSouth shall have furnished to
Infinity a statement, dated the Exchange Date, signed by AmSouth's President (or
any Vice President) and Treasurer certifying those facts as of such dates.
(e) There shall not be any material litigation pending with respect to
the matters contemplated by this Agreement.
(f) Infinity shall have received an opinion of Ropes & ▇▇▇▇, in form
reasonably satisfactory to Infinity and dated the Exchange Date, to the effect
that (i) AmSouth is a business trust and validly existing in conformity with the
laws of The Commonwealth of Massachusetts, and, to the knowledge of such
counsel, neither AmSouth nor any AmSouth Fund is required to qualify to do
business as a foreign association in any jurisdiction, (ii) the Shares to be
delivered to Infinity as provided for by this Agreement are duly authorized and
upon such delivery will be validly issued and will be fully paid and
nonassessable by AmSouth and no shareholder of AmSouth has any preemptive right
to subscription or purchase in respect thereof, (iii) this Agreement has been
duly authorized, executed and delivered by AmSouth and, assuming that the
Prospectus, the Registration Statement and the Proxy Statement comply with the
1933 Act, the 1934 Act and the 1940 Act and assuming due authorization,
execution and delivery of this Agreement by Infinity, is a valid and binding
obligation of AmSouth, (iv) the execution and delivery of this Agreement did
not, and the consummation of the transactions contemplated hereby will not,
violate AmSouth's Declaration of Trust, as amended, or Code of Regulations, or
any provision of any agreement known to such counsel to which AmSouth or any
AmSouth Fund is a party or by which it is bound, it being understood that with
respect to investment restrictions as contained in AmSouth's Declaration of
Trust, as amended, Code of Regulations or then-current prospectus or statement
of additional information of each AmSouth Fund, such counsel may rely upon a
certificate of an officer of AmSouth whose responsibility it is to advise
AmSouth with respect to such matters, (v) no consent, approval, authorization or
order of any court or governmental authority is required for the consummation by
AmSouth or
A-17
19
any AmSouth Fund of the transactions contemplated herein, except such as have
been obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may
be required under state securities or blue sky laws and the H-S-R Act and it
being understood that such opinion shall not be deemed to apply to Infinity's
compliance obligations under the 1933 Act, 1934 Act, 1940 Act, state securities
or blue sky laws and the H-S-R Act; and (vi) the Registration Statement has
become effective under the 1933 Act, and to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act.
(g) Infinity shall have received an opinion of Ropes & ▇▇▇▇ addressed
to Infinity and each ISG Fund in a form reasonably satisfactory to Infinity and
dated the Exchange Date (which opinion would be based upon certain factual
representations and subject to certain qualifications), with respect to the
matters specified in Section 9(g) of this Agreement.
(h) All proceedings taken by AmSouth in connection with the
transactions contemplated by this Agreement and all documents incidental thereto
reasonably shall be satisfactory in form and substance to Infinity.
(i) The Registration Statement shall have become effective under the
1933 Act and applicable Blue Sky provisions, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of AmSouth,
contemplated by the Commission or any state regulatory authority.
(j) At the Exchange Date, each of the ISG Funds will have sold such of
its assets, if any, if informed by AmSouth in writing that such sale is
necessary to assure that, after giving effect to the acquisition of the assets
pursuant to this Agreement, each of the AmSouth Funds designated as a
"diversified company" will remain a "diversified company" within the meaning of
Section 5(b)(1) of the 1940 Act and in compliance with such other mandatory
investment restrictions as are set forth in the AmSouth Prospectuses previously
furnished to Infinity.
(k) Infinity and ISG Funds receive an order from the Securities and
Exchange Commission exempting from the reorganization from the provisions of
Section 17(a) of the 1940 Act.
11. INDEMNIFICATION. (a) Infinity will indemnify and hold harmless
AmSouth, its trustees and its officers (for purposes of this subsection, the
"Indemnified Parties") against any and all expenses, losses, claims, damages and
liabilities at any time imposed upon or reasonably incurred by any one or more
of the Indemnified Parties in connection with, arising out of, or resulting from
any claim, action, suit or proceeding in which any one or more of the
Indemnified Parties may be involved or with which any one or more of the
Indemnified Parties may be threatened by reason of any untrue statement or
alleged untrue statement of a material fact relating to Infinity or any ISG Fund
contained in the Registration Statement, the Prospectus or the Proxy Statement
or any amendment or supplement to any of the foregoing, or arising out of or
based upon the omission or alleged omission to state in any of the foregoing a
material fact relating to Infinity or any ISG Fund required to be stated therein
or necessary to make the statements relating to Infinity or any ISG Fund therein
not misleading, including, without limitation, any amounts paid by any one or
more of the Indemnified Parties in a reasonable compromise or settlement of any
such claim, action, suit or proceeding, or threatened claim, action, suit or
proceeding made with the prior consent of Infinity. The Indemnified Parties will
notify Infinity in writing within ten days after the receipt by any one or more
of the Indemnified Parties of any notice of legal process or any suit brought
against or claim made against such Indemnified Party as to any matters covered
by this Section 11(a).
A-18
20
Infinity shall be entitled to participate at its own expense in the defense of
any claim, action, suit or proceeding covered by this Section 11(a), or, if it
so elects, to assume at its expense by counsel satisfactory to the Indemnified
Parties the defense of any such claim, action, suit or proceeding, and if
Infinity elects to assume such defense, the Indemnified Parties shall be
entitled to participate in the defense of any such claim, action, suit or
proceeding at their expense. Infinity's and the ISG Funds' obligation under this
Section 11(a) to indemnify and hold harmless the Indemnified Parties shall
constitute a guarantee of payment so that the ISG Funds will pay in the first
instance any expenses, losses, claims, damages and liabilities required to be
paid by them under this Section 11(a) without the necessity of the Indemnified
Parties' first paying the same.
(b) AmSouth will indemnify and hold harmless Infinity, its directors
and its officers (for purposes of this subparagraph, the "Indemnified Parties")
against any and all expenses, losses, claims, damages and liabilities at any
time imposed upon or reasonably incurred by any one or more of the Indemnified
Parties in connection with, arising out of, or resulting from any claim, action,
suit or proceeding in which any one or more of the Indemnified Parties may be
involved or with which any one or more of the Indemnified Parties may be
threatened by reason of any untrue statement or alleged untrue statement of a
material fact relating to AmSouth or any AmSouth Fund contained in the
Registration Statement, the Prospectus or the Proxy Statement, or any amendment
or supplement to any of the foregoing, or arising out of or based upon the
omission or alleged omission to state in any of the foregoing a material fact
relating to AmSouth or any AmSouth Fund required to be stated therein or
necessary to make the statements relating to AmSouth or any AmSouth Fund therein
not misleading, including, without limitation, any amounts paid by any one or
more of the Indemnified Parties in a reasonable compromise or settlement of any
such claim, action, suit or proceeding, or threatened claim, action, suit or
proceeding made with the prior consent of AmSouth. The Indemnified Parties will
notify AmSouth in writing within ten days after the receipt by any one or more
of the Indemnified Parties of any notice of legal process or any suit brought
against or claim made against such Indemnified Party as to any matters covered
by this Section 11(b). AmSouth shall be entitled to participate at its own
expense in the defense of any claim, action, suit or proceeding covered by this
Section 11(b), or, if it so elects, to assume at its expense by counsel
satisfactory to the Indemnified Parties the defense of any such claim, action,
suit or proceeding, and, if AmSouth elects to assume such defense, the
Indemnified Parties shall be entitled to participate in the defense of any such
claim, action, suit or proceeding at their own expense. The AmSouth Funds'
obligation under this Section 11(b) to indemnify and hold harmless the
Indemnified Parties shall constitute a guarantee of payment so that the AmSouth
Funds will pay in the first instance any expenses, losses, claims, damages and
liabilities required to be paid by them under this Section 11(b) without the
necessity of the Indemnified Parties' first paying the same.
▇-▇▇
▇▇
▇▇. NO BROKER, ETC. Each of AmSouth and Infinity represents that there
is no person who has dealt with it who by reason of such dealings is entitled to
any broker's or finder's or other similar fee or commission arising out of the
transactions contemplated by this Agreement.
13. TERMINATION. AmSouth and Infinity may, by mutual consent of their
respective trustees, terminate this Agreement, and AmSouth or Infinity, after
consultation with counsel and by consent of their respective trustees or an
officer authorized by such trustees, may waive any condition to their respective
obligations hereunder. If the transactions contemplated by this Agreement have
not been substantially completed by June 30, 2000, this Agreement shall
automatically terminate on that date unless a later date is agreed to by AmSouth
and Infinity.
Notwithstanding any other provision in this Agreement, in the event
shareholder approval of this Agreement and the transactions contemplated by this
Agreement is obtained with respect to only one or more ISG Funds but not all of
the ISG Funds, AmSouth and Infinity agree to consummate those transactions with
respect to those ISG Funds that have approved this Agreement and those
transactions.
14. COVENANTS, ETC. DEEMED MATERIAL. All covenants, agreements,
representations and warranties made under this Agreement and any certificates
delivered pursuant to this Agreement shall be deemed to have been material and
relied upon by each of the parties, notwithstanding any investigation made by
them or on their behalf.
15. SOLE AGREEMENT; AMENDMENTS. This Agreement supersedes all previous
correspondence and oral communications between the parties regarding the subject
matter hereof, constitutes the only understanding with respect to such subject
matter, may not be changed except by a letter of agreement signed by each party
hereto, and shall be construed in accordance with and governed by the laws of
The Commonwealth of Massachusetts.
16. AGREEMENT AND DECLARATION OF TRUST AmSouth Funds is a business
trust organized under Massachusetts law and under a Declaration of Trust, to
which reference is hereby made and a copy of which is on file at the office of
the Secretary of The Commonwealth of Massachusetts and elsewhere as required by
law, and to any and all amendments thereto so filed or hereafter filed. The
obligations of "AmSouth Funds" entered into in the name or on behalf thereof by
any of the Trustees, officers, employees or agents are made not individually,
but in such capacities, and are not binding upon any of the Trustees, officers,
employees, agents or shareholders of AmSouth personally, but bind only the
assets of AmSouth and all persons dealing with any series or funds of AmSouth,
such as the AmSouth Funds, must look solely to the assets of AmSouth belonging
to such series or funds for the enforcement of any claims against AmSouth.
A-20
22
This Agreement may be executed in any number of counter-parts, each of
which, when executed and delivered, shall be deemed to be an original.
THE INFINITY MUTUAL FUNDS, INC.
On Behalf of its ISG Funds
By:___________________________
AMSOUTH FUNDS
By:____________________________
A-21
