[GREAT HALL LETTERHEAD]
GREAT HALL MINNESOTA INSURED TAX-EXEMPT FUND
60 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402
October 4, 1996
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Great Hall Minnesota Insured Tax-Exempt Fund ("Great Hall Fund"), a series of
Great Hall Investment Funds, Inc. ("Great Hall Investment Funds") to be held on
November 6, 1996 at 8:30 a.m., Central Time, at the offices of Great Hall
Investment Funds, 10th Floor Auditorium, 60 South Sixth Street, Minneapolis,
Minnesota 55402, for the purpose of considering and voting upon a proposed
Agreement and Plan of Reorganization (the "Plan") for Great Hall Fund.
If the Plan is approved by the shareholders of Great Hall Fund, all or
substantially all of the assets and certain stated and identified liabilities of
Great Hall Fund will be exchanged for shares of Voyageur Minnesota Insured Fund
("Voyageur Fund") having an aggregate net asset value equal to the value of
Great Hall Fund's aggregate net assets transferred to Voyageur Fund. In the
reorganization, you will receive Class A shares of Voyageur Fund having a net
asset value equal to the value of your Great Hall Fund shares.
Voyageur Fund is a series of Voyageur Insured Funds, Inc. ("Voyageur
Insured Funds"), an open-end management investment company located in
Minneapolis, Minnesota. Voyageur Fund Managers, Inc. ("VFM") acts as the
investment adviser to Voyageur Fund. As of June30, 1996, VFM served as the
investment adviser to 6 closed-end and 10 open-end funds (comprised of 33
separate investment portfolios), administered numerous private accounts and,
together with its affiliates, managed approximately $11.5 billion in assets,
including more than $1 billion in Minnesota municipal bonds.
The investment objectives of Great Hall Fund and Voyageur Fund are similar
in that both seek to provide shareholders with income that is exempt from
federal income tax and Minnesota personal income tax. Shareholders should
carefully consider, however, both the similarities and the differences
(including the difference that Voyageur Fund may invest to a greater extent than
Great Hall Fund in securities subject to the alternative minimum tax and also
may invest in certain derivative tax-exempt obligations) between the investment
objectives, policies and restrictions of the two Funds. These similarities and
differences, as well as other important information concerning the proposed
combination of the Funds, are described in detail in the Prospectus/Proxy
Statement, which you are encouraged to review carefully.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOUR APPROVAL OF THE PLAN.
The Board has recognized that the strategy of Great Hall Fund's distributor of
promoting predominantly externally managed retail mutual funds (exclusive of
Great Hall money market funds) could in the long term cause Great Hall Fund's
size to decrease and thereby make the objective of providing competitive
investment returns increasingly difficult to achieve. The Board therefore has
determined that a transfer of Great Hall Fund to another investment firm would
be in the Fund's best interests. The Board has further determined that VFM is an
organization with strong professional credentials and with business strategies
that are consistent in all material respects with the Fund's long term best
interests.
Approval of the Plan will require the affirmative vote of the holders of a
majority of the outstanding shares of Great Hall Fund. We urge you to take the
time to consider this important matter and vote now. Whether or not you expect
to attend the meeting, please sign and promptly return the enclosed proxy in the
enclosed postage-prepaid envelope. Your prompt response will insure that your
shares are counted at the meeting.
Sincerely,
J. Scott Spiker
Chief Executive
Officer of Great Hall Investment
Funds, Inc.
GREAT HALL MINNESOTA INSURED TAX-EXEMPT FUND
A SEPARATELY MANAGED SERIES OF
GREAT HALL INVESTMENT FUNDS, INC.
60 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402
_________________________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 6, 1996
_________________________________________
October 4, 1996
To the Shareholders of Great Hall Minnesota Insured Tax-Exempt Fund:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of Great Hall
Minnesota Insured Tax-Exempt Fund ("Great Hall Fund"), a separately managed
series of Great Hall Investment Funds, Inc. ("Great Hall Investment Funds"),
will be held at 8:30 a.m., Central time, on November 6, 1996, at the offices of
Great Hall Investment Funds, 10th Floor Auditorium, 60 South Sixth Street,
Minneapolis, Minnesota 55402. The purpose of the special meeting is as follows:
1. To consider and vote on a proposed Agreement and Plan of
Reorganization (the "Plan") providing for (a) the acquisition of all
or substantially all of the assets and the assumption of certain
stated and identified liabilities of Great Hall Fund by Voyageur
Minnesota Insured Fund ("Voyageur Fund"), a series of Voyageur Insured
Funds, Inc., in exchange for Class A common shares of Voyageur Fund
having an aggregate net asset value equal to the aggregate value of
the assets acquired (less liabilities assumed) of Great Hall Fund and
(b) the liquidation of Great Hall Fund and the pro rata distribution
of Voyageur Fund shares to Great Hall Fund shareholders. Under the
Plan, Great Hall Fund shareholders will receive Class A shares of
Voyageur Fund having a net asset value equal as of the effective time
of the Plan to the net asset value of their Great Hall Fund shares. A
vote in favor of the Plan will be considered a vote in favor of an
amendment to the articles of incorporation of Great Hall Investment
Funds required to effect the reorganization contemplated by the Plan.
2. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Even if Great Hall Fund shareholders vote to approve the Plan, consummation
of the Plan is subject to certain other conditions. See "Information About the
Reorganization--Plan of Reorganization" in the attached Prospectus/Proxy
Statement. GREAT HALL FUND SHAREHOLDERS WILL NOT BEAR COSTS DIRECTLY RELATED TO
THE REORGANIZATION.
THE BOARD OF DIRECTORS OF GREAT HALL INVESTMENT FUNDS UNANIMOUSLY
RECOMMENDS APPROVAL OF THE PLAN.
The close of business on September 20, 1996 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the meeting and any adjournments or postponements thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. IN ORDER TO
AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE RESPECTFULLY ASK FOR
YOUR COOPERATION IN MAILING IN YOUR PROXY PROMPTLY. If you are present at the
meeting, you may then revoke your proxy and vote in person, as explained in the
Prospectus/Proxy Statement in the section entitled "Voting Information."
By Order of the Board of Directors,
Matthew L. Thompson
SECRETARY
PROSPECTUS/PROXY STATEMENT
DATED SEPTEMBER 30, 1996
ACQUISITION OF THE ASSETS OF
GREAT HALL MINNESOTA INSURED TAX-EXEMPT FUND
A SEPARATELY MANAGED SERIES OF
GREAT HALL INVESTMENT FUNDS, INC.
60 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402
BY AND IN EXCHANGE FOR SHARES OF
VOYAGEUR MINNESOTA INSURED FUND
A SEPARATELY MANAGED SERIES OF
VOYAGEUR INSURED FUNDS, INC.
90 SOUTH SEVENTH STREET
SUITE 4400
MINNEAPOLIS, MINNESOTA 55402
(800)-553-2143)
This Prospectus/Proxy Statement is being furnished to the shareholders of
Great Hall Minnesota Insured Tax-Exempt Fund ("Great Hall Fund"), a separately
managed series of Great Hall Investment Funds, Inc. ("Great Hall Investment
Funds"), in connection with a special meeting (the "Meeting") of the
shareholders of Great Hall Fund to be held at the offices of Great Hall
Investment Funds, 60 South Sixth Street, Minneapolis, Minnesota 55402, on
November 6, 1996, for the purposes set forth in the accompanying Notice of
Special Meeting of Shareholders. This Prospectus/Proxy Statement is first being
mailed to shareholders of Great Hall Fund on or about October 4, 1996.
Information concerning the voting rights of each Great Hall Fund shareholder is
set forth under "Voting Information" below. Representatives of Insight
Investment Management ("Insight"), a division of IFG Asset Management Services,
Inc., the investment adviser and manager of Great Hall Fund, or of its
affiliates, may, without cost to Great Hall Fund, solicit proxies for management
of Great Hall Fund by means of mail, telephone, or personal calls. All costs of
the solicitation will be borne by Voyageur Fund Managers, Inc. ("VFM") as
described under "Information About the Reorganization--Plan of Reorganization"
below. In addition, the services of a third-party proxy solicitation firm may be
utilized, with such firm's expenses borne by VFM. Persons holding shares as
nominees will, upon request, be reimbursed for their reasonable expenses
incurred in sending proxy soliciting materials on behalf of the Board of
Directors to their principals.
As set forth in the Notice of Special Meeting of Shareholders, this
Prospectus/Proxy Statement relates to a proposed Agreement and Plan of
Reorganization (the "Plan") providing for (a)the acquisition of all or
substantially all of the assets and the assumption of certain stated and
identified liabilities of Great Hall Fund by Voyageur Minnesota Insured Fund
("Voyageur Fund"), a separately managed series of Voyageur Insured Funds, Inc.
("Voyageur Insured Funds"), in exchange for Class A common shares of Voyageur
Fund having an aggregate net asset value equal to the aggregate value of the
assets acquired (less liabilities assumed) of Great Hall Fund, and (b) the
liquidation of Great Hall Fund and the pro rata distribution of its holdings of
Voyageur Fund shares to Great Hall Fund shareholders. Great Hall Fund and
Voyageur Fund are sometimes referred to herein, individually, as a "Fund," or
together, as the "Funds." A vote in favor of the Plan will be considered a vote
in favor of an amendment to the articles of incorporation of Great Hall
Investment Funds required to effect the reorganization contemplated by the Plan.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the proposed Plan and
Reorganization and about Voyageur Fund and its affiliates that each Great Hall
Fund shareholder should know prior to voting on the proposed Plan and
Reorganization. A Statement of Additional Information dated September 30, 1996
relating to this Prospectus/Proxy Statement has been filed with the Securities
and Exchange Commission and is incorporated by reference into this
Prospectus/Proxy Statement. Copies of the Statement of Additional Information
and of the other documents incorporated by Reference into this Prospectus/Proxy
Statement or into the Statement of Additional Information are available without
charge, as noted under "Incorporation by Reference" below.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
As a result of the transactions contemplated by the Plan (collectively, the
"Reorganization"), each shareholder of Great Hall Fund will receive Voyageur
Fund Class A common shares with an aggregate net asset value equal as of the
effective time of the Plan to the aggregate net asset value of their Great Hall
Fund shares. The Reorganization is being structured as a tax-free reorganization
so that no income, gain or loss will be recognized by Great Hall Fund or its
shareholders as a result thereof (except that Great Hall Fund contemplates that
it will make a distribution immediately prior to the Reorganization of all of
its current year net tax-exempt income, ordinary taxable income and net realized
capital gains, if any, not previously distributed, and any portion of this
distribution which does not constitute an exempt-interest dividend will be
taxable to Great Hall Fund shareholders subject to taxation). The shareholders
of Great Hall Fund are being asked to vote on the proposed Plan and
Reorganization at the Meeting.
In addition to the approval of the Plan and Reorganization by Great Hall
Fund shareholders, the consummation of the Reorganization is subject to certain
other conditions. See "Information About the Reorganization--Plan of
Reorganization."
Voyageur Fund is a series of Voyageur Insured Funds, an open-end management
investment company which offers its shares in multiple series. The investment
objective of Voyageur Fund is to seek as high a level of current income exempt
from federal income tax and from the state of Minnesota personal income tax as
is consistent with preservation of capital. The weighted average maturity of the
investment portfolio of Voyageur Fund may vary from approximately 15 to 25
years. Voyageur Fund may invest without limit in securities which may generate
interest that is an item of tax preference for purposes of federal and the state
of Minnesota alternative minimum tax ("AMT"). The investment objectives,
policies and restrictions of both Funds are described and compared below under
"Information About Great Hall Fund and Voyageur Fund--Comparison of Investment
Objectives, Policies and Restrictions."
INCORPORATION BY REFERENCE
The documents listed in items 1 and 2 below, which have been filed with the
Securities and Exchange Commission (the "Commission"), are incorporated herein
by reference to the extent noted below. A Statement of Additional Information
dated September 30, 1996 relating to this Prospectus/Proxy Statement has been
filed with the Commission and is also incorporated by reference into this
Prospectus/Proxy Statement. A copy of the Statement of Additional Information,
and of each of the documents listed in items 2 through 7 below, is available
upon request and without charge by writing to Voyageur Fund at 90 South Seventh
Street, Suite 4400, Minneapolis, Minnesota 55402, or by calling (800) 553-2143.
The documents listed in items 3 through 7 below are incorporated by reference
into the Statement of Additional Information and such items will be provided
with any copy of the Statement of Additional Information which is requested. Any
documents requested will be sent within one business day of receipt of the
request by first class mail or other means designed to ensure equally prompt
delivery.
1. The Prospectus dated April30, 1996, as supplemented June3, 1996, of
Voyageur Fund is incorporated herein in its entirety by reference, and
a copy thereof accompanies this Prospectus/Proxy Statement.
2. The Prospectus dated December1, 1995, as supplemented August 28, 1996,
of Great Hall Fund is incorporated herein in its entirety by
reference.
3. The Statement of Additional Information of Voyageur Fund dated
April30, 1996, as supplemented June3, 1996, is incorporated by
reference in its entirety in the Statement of Additional Information
relating to this Prospectus/Proxy Statement.
4. The Annual Report of Voyageur Fund for the fiscal year ended December
31, 1995 is incorporated by reference in its entirety in the Statement
of Additional Information relating to this Prospectus/Proxy Statement.
5. The unaudited Semi-Annual Report of Voyageur Fund for the six-month
period ended June 30, 1996 is incorporated by reference in its
entirety in the Statement of Additional Information relating to this
Prospectus/Proxy Statement.
6. The Statement of Additional Information dated December1, 1995 of Great
Hall Fund is incorporated by reference in its entirety in the
Statement of Additional Information relating to this Prospectus/Proxy
Statement.
7. The Annual Report of Great Hall Fund for the fiscal year ended July31,
1996 is incorporated by reference in its entirety in the Statement of
Additional Information relating to this Prospectus/Proxy Statement.
Also accompanying and attached to this Prospectus/Proxy Statement as Appendix A
is a copy of the Plan for the proposed Reorganization.
SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE ADDITIONAL
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS/PROXY STATEMENT AND IN THE
DOCUMENTS INCORPORATED BY REFERENCE HEREIN, AND BY REFERENCE TO THE PLAN, A COPY
OF WHICH IS ATTACHED TO THIS PROSPECTUS/PROXY STATEMENT AS APPENDIX A. GREAT
HALL FUND SHAREHOLDERS SHOULD REVIEW THE ACCOMPANYING DOCUMENTS CAREFULLY IN
CONNECTION WITH THEIR REVIEW OF THIS PROSPECTUS/PROXY STATEMENT. PROPOSED
REORGANIZATION
The Plan provides for (a) the acquisition of all or substantially all of
the assets and the assumption of certain stated and identified liabilities of
Great Hall Fund by Voyageur Fund in exchange for Class A common shares of
Voyageur Fund having an aggregate net asset value equal to the aggregate value
of the assets acquired (less liabilities assumed) of Great Hall Fund and (b) the
liquidation of Great Hall Fund and the pro rata distribution of its holdings of
Voyageur Fund shares to Great Hall Fund shareholders as of the effective time of
the Reorganization (the close of normal trading on the New York Stock Exchange,
currently 4:00 p.m. Eastern Time, on the first day upon which the conditions to
closing shall have been satisfied, or such later date as provided for in the
Plan) (such time and date, the "Effective Time"). As a result of the
Reorganization, each shareholder of Great Hall Fund will receive Voyageur Fund
Class A shares with an aggregate net asset value equal to the aggregate net
asset value of the shareholder's Great Hall Fund shares as of the Effective
Time. GREAT HALL FUND SHAREHOLDERS WILL NOT BEAR COSTS DIRECTLY RELATED TO THE
REORGANIZATION. See "Information About the Reorganization."
The Board of Directors of Great Hall Investment Funds, including all of the
directors who are not "interested persons," as defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), of Great Hall Investment Funds, has
unanimously determined that the Reorganization would be in the best interests of
Great Hall Fund and its shareholders and therefore has approved and submitted
the Plan for approval by Great Hall Fund shareholders. The Board has recognized
that the strategy of Great Hall Fund's distributor of promoting predominantly
externally managed retail mutual funds (exclusive of Great Hall money market
funds) could in the long term cause Great Hall Fund's size to decrease and
thereby make the objective of providing competitive investment returns
increasingly difficult to achieve. The Board therefore has determined that a
transfer of Great Hall Fund to another investment firm would be in the Fund's
best interests. The Board has further determined that VFM is an organization
with strong professional credentials and with business strategies that are
consistent in all materials respects with the Fund's long term best interests.
For a more detailed discussion of the Board's reasons for approving the
Reorganization, see "Information About the Reorganization--Reasons for the
Reorganization."
The Board of Directors of Voyageur Fund has also concluded that the
Reorganization would be in the best interests of Voyageur Fund's existing
shareholders and has therefore approved the Reorganization on behalf of Voyageur
Fund.
Approval of the Plan and Reorganization will require the affirmative vote
of a majority of the outstanding shares of Great Hall Fund.
TAX CONSEQUENCES
Prior to completion of the Reorganization, Great Hall Fund will have
received from Dorsey & Whitney LLP, counsel to Voyageur Fund, an opinion that,
upon the Reorganization, no gain or loss will be recognized by Great Hall Fund
or its shareholders for federal income tax purposes. The holding period and
aggregate tax basis of Voyageur Fund shares that are received by each Great Hall
Fund shareholder will be the same as the holding period and aggregate tax basis
of Great Hall Fund shares previously held by such shareholders. In addition, the
holding period and tax basis of the assets of Great Hall Fund in the hands of
Voyageur Fund as a result of the Reorganization will be the same as in the hands
of Great Hall Fund immediately prior to the Reorganization. See "Information
About the Reorganization--Federal Income Tax Consequences."
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
Great Hall Fund and Voyageur Fund are both open-end investment company
series with investment objectives which are similar.
* Great Hall Fund seeks to provide a high level of current income exempt
from both federal and state of Minnesota income taxes consistent with
prudent investment.
* Voyageur Fund seeks as high a level of current income exempt from
federal income tax and from the personal income tax of the state of
Minnesota as is consistent with preservation of capital.
The investment policies of Great Hall Fund and Voyageur Fund are similar
but not identical.
o Under normal market conditions, Great Hall Fund will invest no more
than 20% of its net assets in obligations the interest from which
gives rise to a preference item for the purpose of the federal
alternative minimum tax. Voyageur Fund may invest without limit in
such obligations. See "Principal Risk Factors--Differences in
Investment Risks--Alternative Minimum Tax."
o Voyageur Fund may write (i.e., sell) covered put and call options,
purchase put and call options on the securities in which it may invest
and on indices of securities in which it may invest and purchase and
sell derivative tax-exempt obligations. Great Hall Fund may not enter
into such transactions. See "Principal Risk Factors--Differences in
Investment Risks--Derivative Tax-Exempt Obligations", and "--Options."
o Great Hall Fund invests exclusively in: (a) obligations that at all
times are fully insured as to the scheduled payment of all
installments of interest and principal; (b) uninsured obligations that
have a Aaa rating by Moody's Investors Service, Inc. ("Moody's") or a
AAA rating by Standard and Poor's Corporation ("S&P"), where the
payment of interest and principal is secured by an escrow account
consisting of obligations of the U.S. Government or its agencies or
instrumentalities; and (c) to a limited extent, certain uninsured
short-term, tax-exempt obligations of issuers with the highest rating
from Moody's or S&P. Except during temporary defensive periods, Great
Hall Fund invests more than 80% of the value of its total assets in
Minnesota municipal obligations.
Voyageur Fund invests in tax-exempt obligations consisting of (a)
obligations that at all times are fully insured as to scheduled
payments of principal and interest ("insured securities") and (b)
"escrow secured" or "defeased" bonds. Voyageur Fund may invest up to
10% of its net assets in securities of tax-exempt money market mutual
funds (which are not insured). Under normal market conditions,
Voyageur Fund invests substantially all of its assets in tax-exempt
obligations the interest on which is exempt from federal income tax
and Minnesota personal income tax.
Pending the investment or reinvestment of its assets in longer-term
municipal obligations, each Fund may invest up to 35% of its net
assets in uninsured short-term tax-exempt instruments provided such
instruments carry an A-1+ or SP-1+ short-term rating or AAA or Aaa
long-term rating by S&P or Moody's.
o Great Hall Fund is a nondiversified fund and Voyageur Fund is a
diversified fund. Generally, a nondiversified fund such as Great Hall
Fund is able to invest, subject to certain federal tax requirements, a
relatively higher percentage of its assets in the securities of a
limited number of issuers which may result in the Fund's securities
being more susceptible to any single economic, political or regulatory
occurrence than the securities of a diversified fund such as Voyageur
Fund.
o Under normal market conditions, it is anticipated that the average
weighted maturity of Great Hall Fund's portfolio will be in the range
of 17 to 22 years and possibly in excess of 22 years. The weighted
average maturity of the investment portfolio of Voyageur Fund is
expected to be approximately 15 to 25 years.
o Both Funds may invest in repurchase agreements, variable and floating
rate securities and state and municipal lease obligations, purchase
securities on a "when-issued" basis and borrow money from banks for
temporary or emergency purposes (in an amount equal to 20% of total
assets for Voyageur Fund and 5% of total assets for Great Hall Fund).
The Funds' investment objectives, policies and restrictions are described
and compared in further detail herein under "Information About Great Hall Fund
and Voyageur Fund--Comparison of Investment Objectives, Policies and
Restrictions." The Annual Reports of Voyageur Fund and Great Hall Fund for the
fiscal years ended December 31, 1995 and July 31, 1996, respectively, referred
to on the cover page hereof under "Incorporation by Reference," and the
unaudited Semi-Annual Report of Voyageur Fund for the six-month period ended
June 30, 1996, provide information concerning the composition of the respective
Funds' assets at the applicable dates.
FEES AND EXPENSES
GREAT HALL FUND EXPENSES. Insight serves as investment adviser of Great
Hall Fund pursuant to an Investment Advisory Agreement. For Insight's services
under such Agreement, Great Hall Fund is obligated to pay Insight a monthly fee
at an annual rate of .50% of the Fund's average daily net assets.
Dain Bosworth Incorporated (the "Distributor") serves as the exclusive
distributor of the shares of Great Hall Fund pursuant to a Co-Distributor
Agreement with Great Hall Investment Funds. Under such Agreement, the
Distributor retains the sales charges, if any, paid by Great Hall Fund
shareholders in connection with their purchases of Fund shares. In addition,
Great Hall Fund has adopted pursuant to Rule 12b-1 under the 1940 Act a
distribution plan pertaining to its shares (the " Distribution Plan"). Great
Hall Fund's Distribution Plan provides that the Distributor is entitled to
receive fees at the annual rate of up to .30% of the average daily net assets
attributable to Great Hall Fund shares. The Distributor and Great Hall Fund have
voluntarily agreed to limit such 12b-1 fees to .20% per year of Great Hall
Fund's average daily net assets and to use such fees only in connection with the
provision of services to existing Fund shareholders.
Rodney Square Management Corporation is the transfer agent for Great Hall
Fund and provides certain shareholder and shareholder-related services.
Insight voluntarily limits total Great Hall Fund expenses to .82% of the
Fund's average daily net assets. This expense limitation may be terminated or
revised at any time.
VOYAGEUR FUND EXPENSES. Voyageur Fund Managers, Inc. ("VFM") has been
retained under an Investment Advisory Agreement to act as Voyageur Fund's
investment adviser. Voyageur Fund pays VFM a monthly investment advisory and
management fee equivalent on an annual basis to .50% of the Fund's average daily
net assets.
VFM also acts as Voyageur Fund's dividend disbursing, transfer,
administrative and accounting services agent pursuant to an Administrative
Services Agreement. Under the Agreement, Voyageur Fund pays VFM a monthly fee
based upon the Fund's average daily net assets and the number of shareholder
accounts then existing. This fee is equal to the sum of (a) $1.33 per
shareholder account per month, (b) $1,000 to $1,500 per month based on the
average daily net assets of the Fund and (c)a percentage of average daily net
assets which ranges from 0.02% to 0.11% based on the average daily net assets of
the Fund. This fee is in addition to investment advisory fees payable under the
Investment Advisory Agreement. See "The Investment Advisor and
Underwriter--Expenses of the Funds" in the statement of additional information
of Voyageur Fund incorporated by reference into the Statement of Additional
Information pertaining to this Prospectus/Proxy Statement.
Voyageur Fund Distributors, Inc. ("VFD"), an affiliate of VFM, acts as the
principal distributor of Voyageur Fund's shares pursuant to a Distribution
Agreement with Voyageur Fund. Under the Distribution Agreement, VFD retains the
sales charges, if any, paid by Voyageur Fund Class A shareholders in connection
with their purchases of Fund shares and is entitled to deduct a contingent
deferred sales charge on the redemption of certain Class A shares initially sold
without a sales charge. In addition, Voyageur Fund has adopted a Plan of
Distribution pursuant to Rule 12b-1 under the 1940 Act. Pursuant to this Plan,
Voyageur Fund pays VFD a Rule 12b-1 fee at an annual rate of .25% of the Fund's
average daily net assets attributable to Class A shares for servicing of
shareholder accounts and distribution related services.
For the fiscal year ending December 31, 1996, VFM has undertaken to limit
total Voyageur Fund expenses, including Rule 12b-1 fees, to 1.00% of average
daily net assets for Class A shares. However, as reflected below under
"Comparison of Fees and Expenses", actual expenses were lower than this level
for the six-month period ended June 30, 1996. This expense limitation may be
terminated or revised at any time after December 31, 1996. In addition, VFM is
contractually obligated to pay the operating expenses of Voyageur Fund
(excluding interest, taxes, brokerage fees and commissions, and Rule 12b-1 fees)
which exceed 1% of the Fund's average daily net assets on an annual basis,
provided that payments made by VFM as a result of such contractual obligation
shall not exceed VFM's investment advisory and management fee.
COMPARISON OF FEES AND EXPENSES
The following tables are intended to assist Great Hall Fund shareholders of
each class in understanding the various costs and expenses (expressed as a
percentage of average net assets) (a) that such shareholders currently bear as
Great Hall Fund shareholders (under the "Great Hall Fund" column); (b) that
shareholders of Voyageur Fund currently bear (under the "Voyageur Fund") column;
and (c) that such shareholders can expect to bear as Voyageur Fund shareholders
after the Reorganization is consummated (under the "Pro Forma" column). THE
EXAMPLES SET FORTH BELOW SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR
FUTURE EXPENSES OR PERFORMANCE, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE SHOWN.
The following tables are based on audited Great Hall Fund expenses for the
fiscal year ended July31, 1996 and unaudited Voyageur Fund expenses for the
six-month period ended June 30, 1996.
<TABLE>
<CAPTION>
GREAT HALL FUND SHARES AND
VOYAGEUR FUND CLASS A SHARES FEES AND EXPENSES
GREAT HALL VOYAGEUR PRO
FUND FUND FORMA (1)
---- ---- ---------
SHAREHOLDER TRANSACTION EXPENSES
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price)................................ 4.50% 3.75% 3.75%
Maximum Deferred Sales Charge (2)................................. 1.00% 1.00% 1.00%
Other Redemption Fees............................................. None None None
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
Management Fees (After Fee Waivers for Great Hall Fund) (3)....... 0.29% 0.50% 0.50%
Rule 12b-1 Fees (After Fee Waivers for Great Hall Fund) (3)....... 0.20% 0.25% 0.25%
Other Expenses ................................................... 0.33% 0.16% 0.16%
----- ----- -----
Total Fund Operating Expenses (After Fee Waivers
for Great Hall Fund)(3)........................................ 0.82% 0.91% 0.91%
TOTAL FUND OPERATING EXPENSES WITHOUT FEE WAIVERS ................ 1.15% 0.91% 0.91%
</TABLE>
EXAMPLE (4)
You would pay the following expenses on a $1,000 investment over various time
periods assuming a 5% annual return and redemption at the end of each time
period:
<TABLE>
<CAPTION>
GREAT HALL VOYAGEUR PRO
FUND FUND FORMA (1)
---- ---- ---------
<S> <C> <C> <C>
1 year............................................................ $53 $46 $46
3 years........................................................... $70 $65 $65
5 years........................................................... $88 $86 $86
10 years.......................................................... $142 $145 $145
</TABLE>
(1) Pro forma numbers are based on Voyageur Fund's unaudited Total Operating
Expenses for Class A shares of 0.91% of average daily net assets for the
six months ending June 30, 1996.
(2) For both Funds, a contingent deferred sales charge may apply to the
redemption of Class A shares that are purchased without an initial sales
charge. See "Purchase, Exchange and Redemption Procedures" below.
(3) Total Fund Operating Expenses for Great Hall Fund reflect expense
limitations discussed herein. The Distributor voluntarily limits 12b-1 fees
for Great Hall Fund shares to 0.20% of the Fund's average daily net assets
attributable to such shares. Without fee waivers, Management Fees, 12b-1
Fees and Total Operating Expenses would have been 0.50%, 0.30% and 1.15%,
respectively, of average daily net assets.
(4) Assumes deduction of the maximum initial sales charge at the time of
purchase (4.50% for Great Hall Fund and 3.75% for Voyageur Fund and on a
pro forma basis) and no deduction of a contingent deferred sales charge at
the time of redemption. The example is based upon Total Fund Operating
Expenses after voluntary fee waivers for Great Hall Fund.
PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES
PURCHASES OF SHARES. Shares of both Great Hall Fund and Voyageur Fund Class
A may be purchased at a public offering price equal to their net asset value per
share plus a sales charge. The maximum sales charge for Great Hall Fund is 4.50%
of the public offering price for investments of less than $100,000. For Voyageur
Fund, the maximum sales charge is 3.75% of the public offering price for
investments of less than $50,000. For each Fund, the sales charge is reduced on
a graduated scale for larger purchases. Purchases of $1,000,000 or more for
Voyageur Fund and Great Hall Fund are not subject to an initial sales charge.
However, shares of either Fund relating to such $1,000,000 purchases redeemed
during the two years after purchase are subject to a 1.00% contingent deferred
sales charge ("CDSC"). The holding period of Great Hall Fund shareholders who
purchased without an initial sales charge because of the $1,000,000 waiver will
count toward determination of applicability of Voyageur Fund's CDSC following
the Reorganization.
For additional information on the purchase of Voyageur Fund and Great Hall
Fund shares, see "How to Purchase Shares," beginning on page 24 of the
accompanying Voyageur Fund prospectus, and "How to Invest," beginning on page 16
of the Great Hall Fund prospectus incorporated herein by reference.
PURCHASES AT REDUCED OR NO SALES CHARGE. For the shares of Great Hall Fund
and Voyageur Fund Class A, various persons, entities and groups may qualify for
reduced sales charges, or for purchases at net asset value without a sales
charge. Following the Reorganization, current Great Hall Fund shareholders (as
holders of Voyageur Fund shares) will be entitled to the Special Purchase Plans
and other purchase privileges as are set forth in the accompanying prospectus of
Voyageur Fund. These purchase plans and privileges differ in certain respects
from those currently offered by Great Hall Fund. See "How to Purchase
Shares--Class A Shares--Front End Sales Charge Alternative" beginning on page 26
of the accompanying Voyageur Fund prospectus and "How to Invest--Reduced Sales
Charges" beginning on page 17 of the Great Hall Fund prospectus incorporated
herein by reference. Additionally, Class A shares of Voyageur Fund will be
offered at net asset value, without the imposition of a sales charge, to
shareholder accounts which were in existence and entitled to purchase shares of
Great Hall Fund without a sales charge as of the Effective Time.
REDEMPTION. Shareholders of each Fund may redeem their shares, in whole or
in part, on any business day. All redemptions are made at the net asset value
next determined after a redemption request has been received in good order. As
discussed above, a contingent deferred shales charge may apply to redemptions of
certain shares of each Fund initially purchased without a sales charge. For
additional information on redemption of shares, see "How to Sell Shares,"
beginning on page 30 of the accompanying Voyageur Fund prospectus, and "How to
Redeem Shares," beginning on page 18 of the Great Hall Fund prospectus
incorporated herein by reference.
EXCHANGE PRIVILEGES. Shares of Voyageur Fund may be exchanged for shares of
the same class of other funds advised by VFM ("Voyageur Complex Funds"). These
exchange privileges are further explained on page 33 of the accompanying
Voyageur Fund prospectus under the heading "Exchange Privilege."
DIVIDENDS AND DISTRIBUTIONS
Each Fund declares dividends from net investment income on each day it is
open for business, and pays such distributions monthly. Net realized long-term
capital gains, if any, are declared and distributed by each Fund annually.
For each Fund, dividends and capital gains distributions are reinvested in
additional shares of the Fund unless a shareholder elects otherwise.
CAPITAL SHARES; SHAREHOLDER VOTING RIGHTS
All Great Hall Fund shares are the same class and freely transferable. Each
share has equal dividend rights and is entitled to one vote at all shareholder
meetings. Voyageur Fund offers Class A, Class B and Class C shares. Each class
of shares of Voyageur Fund represents an interest in the same portfolio of
investments of Voyageur Fund and has identical voting, dividend, liquidation,
and other rights on the same terms and conditions except that expenses related
to the distribution of a class of shares are borne solely by such class and that
each class of the Fund's shares has exclusive voting rights with respect to
provisions of Fund's Rule 12b-1 plan which pertain to that particular class or
when a class vote is required by the 1940 Act.
PRINCIPAL RISK FACTORS
DIFFERENCES IN INVESTMENT RISKS
As discussed below, there are certain differences in the investment risks
associated with investments in Voyageur Fund and Great Hall Fund that should be
considered carefully by Great Hall Fund shareholders.
DIVERSIFICATION. As noted above, Great Hall Fund is a non-diversified fund
and Voyageur Fund is a diversified fund. Investment companies are classified as
either "diversified" or "nondiversified" investment companies. Generally, a
non-diversified fund such as Great Hall Fund will be able to invest, subject to
certain federal tax requirements, a relatively higher percentage of its assets
in the securities of a limited number of issuers which may result in such fund's
securities being more susceptible to a single economic, political or regulatory
occurrence than the securities of a diversified fund, such as Voyageur Fund.
However, Great Hall Fund is still required to meet certain diversification
requirements in order to qualify as a regulated investment company for federal
income tax purposes.
ALTERNATIVE MINIMUM TAX. Voyageur Fund may invest without limit in
securities the interest on which is an item of tax preference for purposes of
calculation of federal or state alternative minimum tax ("AMT"). Great Hall Fund
attempts not to invest in AMT securities and may invest no more than 20% of its
net assets in such securities. See "Distributions to Shareholders and Taxes --
Taxes -- Federal Income Taxation" in the Voyageur Fund Prospectus.
DERIVATIVE TAX-EXEMPT OBLIGATIONS. Voyageur Fund may acquire derivative
tax-exempt obligations, which are custodial receipts or certificates
underwritten by securities dealers or banks that evidence ownership of future
interest payments, principal payments or both on certain tax-exempt obligations.
Certain of these derivative tax-exempt obligations involve special risks. The
principal and interest payments on the custodial receipts underlying derivative
tax-exempt obligations may be allocated in a number of ways. For example,
payments may be allocated such that certain custodial receipts may have variable
or floating interest rates and others may be stripped securities which pay only
the principal or interest due on the underlying tax-exempt obligations. Voyageur
Fund may also invest in custodial receipts which are "inverse floating
obligations" (also sometimes referred to as "residual interest bonds"). These
securities pay interest rates that vary inversely to changes in the interest
rates of specified short-term tax-exempt obligations or an index of short-term
tax-exempt obligations. Thus, as market interest rates increase, the interest
rates on inverse floating obligations decrease. Conversely, as market rates
decline, the interest rates on inverse floating obligations increase. Such
securities have the effect of providing a degree of investment leverage, since
the interest rates on such securities will generally change at a rate which is a
multiple of the change in the interest rates of the specified tax-exempt
obligations or index. As a result, the market values of inverse floating
obligations will generally be more volatile than the market values of other
tax-exempt obligations and investments in these types of obligations will
increase the volatility of the net asset value of shares of Voyageur Fund.
Voyageur Fund's investments in derivative tax-exempt obligations will not exceed
20% of the Fund's total assets. Great Hall Fund may not invest in such
securities.
OPTIONS. Voyageur Fund may write (i.e., sell) covered put and call options
and purchase put and call options on the securities in which it may invest and
on indices of securities in which it may invest. The use of options entails
special risks as set forth in the accompanying Voyageur Fund prospectus under
"Investment Objectives and Policies--Miscellaneous Investment Practices." Great
Hall Fund may not make such investments.
SHARED INVESTMENT RISKS
Because the investment objectives, policies and restrictions of Great Hall
Fund and Voyageur Fund are similar (see "Information About Great Hall Fund and
Voyageur Fund--Comparison of Investment Objectives, Policies and Restrictions"
below), an investment in either Fund involves many of the same risks. Certain of
these risks are discussed below.
DEBT SECURITIES. Investment in debt securities, including municipal
securities, involves both interest rate and credit risk. Generally, the value of
debt instruments rises and falls inversely with interest rates. As interest
rates decline, the value of debt securities generally increases. Conversely,
rising interest rates tend to cause the value of debt securities to decrease.
Bonds with longer maturities generally are more volatile than bonds with shorter
maturities. The market value of debt securities also varies according to the
relative financial condition of the issuer. In general, lower-quality bonds
offer higher yields due to the increased risk that the issuer will be unable to
meet its obligations on interest or principal payments at the time called for by
the debt instrument. Each Fund's investments are also subject to "call" risk.
Certain obligations held by a Fund may permit the issuer at its option to call
or redeem its securities. If an issuer were to redeem securities held by a Fund
during a time of declining interest rates, the Fund might not be able to
reinvest the proceeds in securities providing the same investment return as the
securities redeemed.
STATE CONSIDERATIONS. The value of tax-exempt obligations owned by each
Fund may be adversely affected by local political and economic conditions and
developments within the state of Minnesota. Adverse conditions in an industry
significant to a local economy could have a correspondingly adverse effect on
the financial condition of local issuers. Other factors that could affect
tax-exempt obligations include a change in the local, state or national economy,
demographic factors, ecological or environmental concerns, statutory limitations
on the issuer's ability to increase taxes and other developments generally
affecting the revenues of issuers (for example, legislation or court decisions
reducing state aid to local governments or mandatory additional services).
Financial considerations relating to the risks associated with investing in
Minnesota are described in the accompanying prospectus of Voyageur Fund under
"Risks and Special Investment Considerations--State Considerations," in the
prospectus of Great Hall Fund incorporated herein by reference under "Investment
Objectives and Policies--Minnesota Fund--Minnesota Bonds," and in the statements
of additional information of both Funds, incorporated by reference into the
Statement of Additional Information relating to this Prospectus/Proxy Statement.
OTHER. Both Funds may invest in repurchase agreements, purchase securities
on a "when-issued" basis and borrow money from banks for temporary or emergency
purposes (in an amount equal to 20% of total assets for Voyageur Fund and 10% of
total assets for Great Hall Fund). Each of these transactions involves certain
risks as set forth in the accompanying Voyageur Fund prospectus under
"Investment Objectives and Policies--Miscellaneous Investment Practices" and in
the Great Hall Fund prospectus incorporated herein by reference under
"Investment Objectives and Policies."
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
INVESTMENT OBJECTIVES
Great Hall Fund and Voyageur Fund are both open-end funds with investment
objectives which are similar.
* Great Hall Fund seeks to provide a high level of current income exempt
from both federal and state of Minnesota income taxes consistent with
prudent investment.
* Voyageur Fund's investment objective is to seek as high a level of
current income exempt from federal income tax and from the personal
income tax of the state of Minnesota as is consistent with the
preservation of capital.
INVESTMENT POLICIES
The investment policies and restrictions of Great Hall Fund and Voyageur
Fund are similar but not identical, as discussed in further detail below.
GENERAL. Both Funds invest in municipal obligations rated investment grade
or, if not rated, considered by the respective Fund to have equivalent credit
characteristics.
INSURANCE. As a non-fundamental policy, the municipal obligations in the
investment portfolio of Great Hall Fund will consist of: (a) obligations that
are fully insured as to the scheduled payment of all installments of interest
and principal ("Insured Obligations"), and (b) uninsured obligations that have a
Aaa rating by Moody's or a AAA rating by S&P, where the payment of interest and
principal is secured by an escrow account consisting of obligations of the U.S.
Government or its agencies or instrumentalities. Similarly, Voyageur Fund's
portfolio consists of obligations that at all times are fully insured securities
and escrow secured or defeased bonds. All securities in Voyageur Fund's
portfolio, after application of insurance, will be rated Aaa by Moody's and/or
AAA by S&P at the time of investment. Additionally, pending the investment or
reinvestment of its assets in longer-term municipal obligations, each Fund may
invest up to 35% of its net assets in uninsured short-term tax-exempt municipal
obligations, provided such instruments carry an A-1+ or SP-1+ short-term rating
or AAA long-term rating by S&P, or a P-1 or MIG-1 short-term rating or Aaa
long-term rating by Moody's. In addition, Great Hall Fund's investments in
municipal obligations must be rated (or, if not rated, considered by Insight to
have equivalent credit characteristics) Baa or better, MIG-2 or better or
prime-2 or better by Moody's and BBB or better, SP-2 or better or A-2 or better
by S&P. Municipal obligations rated Baa or BBB have certain speculative
characteristics.
The insured obligations in the portfolios of each Fund are insured as to
the payment of principal and interest either through (a)insurance purchased by
the issuer at the time of original insurance, (b)secondary insurance purchased
by a holder after the initial issuance, or (c)portfolio insurance purchased by
the Fund. The purpose of insurance is to minimize credit risks to the Funds and
their shareholders associated with defaults in municipal obligations owned by
the Fund. There can be no assurance that any insurer will be able to meet its
obligations. Further, such insurance does not insure against market risk and
therefore does not guarantee the market value of the securities in each Fund's
investment portfolio upon which the net asset value of the Fund's shares is
based. Such market value will continue to fluctuate in response to fluctuations
in interest rates or the bond market. Similarly, such insurance does not cover
or guarantee the value of the shares of the Fund. Therefore, the amount received
upon redemption of shares of a Fund may be more or less than the original cost
of such shares less any applicable sales charge paid in connection with the
acquisition of such shares.
The investment policy requiring insurance on investments applies only to
municipal obligations in each Fund's portfolio and will not affect the Fund's
ability to hold its assets in cash or to invest in escrow secured and defeased
bonds or in certain short-term tax-exempt obligations as set forth above, or
affect its ability to invest in uninsured taxable obligations for temporary or
liquidity purposes or on a defensive basis in accordance with the investment
policies and restrictions of the Fund.
DIVERSIFICATION. Great Hall Fund is a nondiversified fund and Voyageur Fund
is a diversified fund. Generally, a nondiversified fund such as Great Hall Fund
is able to invest, subject to certain federal tax requirements, a relatively
higher percentage of its assets in the securities of a limited number of issuers
which may result in the Fund's securities being more susceptible to any single
economic, political or regulatory occurrence than the securities of a
diversified fund such as Voyageur Fund.
MINNESOTA BONDS. Great Hall Fund will attempt to invest 100% (and as a
matter of fundamental policy during normal circumstances will invest at least
80%) of the value of its net assets in securities the interest on which is
exempt from regular federal income tax and the personal income tax of the state
of Minnesota and from federal and Minnesota alternative minimum tax. At least
95% of the exempt interest dividends paid by Great Hall Fund will be derived
from interest income on obligations of the state of Minnesota or its political
or government subdivisions, municipalities, governmental agencies or
instrumentalities. Similarly, in normal market conditions, Voyageur Fund will
invest substantially all of its assets in tax-exempt obligations the interest on
which is exempt from federal income tax and state of Minnesota personal income
tax. Each Fund is therefore susceptible to political, economic or regulatory
factors affecting issuers of, and the market for, Minnesota municipal
obligations.
Further, because of the relatively small number of issuers of Minnesota
municipal obligations, each Fund is more likely to invest a higher percentage of
its assets in the securities of one or a small number of issuers than an
investment company that invests in a broad range of tax-exempt securities. This
lack of diversification involves an increased risk of loss to the Funds. As a
result, the value of each Fund's shares may fluctuate more widely than the value
of shares of a portfolio investing in securities relating to a number of
different states. It should be noted that the creditworthiness of obligations
issued by local Minnesota issuers may be unrelated to the creditworthiness of
obligations issued by the state of Minnesota, and that there is no obligation on
the part of the State to make payment on such local obligations in the event of
default. The ability of state, county or local governments to meet their
obligations will depend primarily on the availability of tax and other revenues
available to governmental issuers and may be affected from time to time by
economic, political and demographic conditions within Minnesota. In addition,
constitutional or statutory restrictions may limit government's power to raise
revenue or increase taxes. The availability of federal, state and local aid to
issuers may also affect their ability to meet their obligations. Additional
information regarding Minnesota is set forth in Voyageur Fund's statement of
additional information incorporated by reference in the Statement of Additional
Information relating to this Prospectus/Proxy Statement.
AVERAGE PORTFOLIO MATURITY. Under normal market conditions, it is
anticipated that the average weighted maturity of Great Hall Fund's portfolio
will be in the range of 17 to 22 years, and possibly in excess of 22 years. The
weighted average maturity of the investment portfolio of Voyageur Fund is
expected to be approximately 15 to 25 years.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in
illiquid securities. The sale of illiquid securities often requires more time
and results in higher brokerage charges or dealer discounts and other selling
expenses than does the sale of securities eligible for trading on national
securities exchanges or in the over-the-counter markets. A Fund may be
restricted in its ability to sell such securities at a time when its investment
adviser deems it advisable to do so. In addition, in order to meet redemption
requests, a Fund may have to sell other assets, rather than such illiquid
securities, at a time which is not advantageous.
REPURCHASE AGREEMENTS AND FORWARD COMMITMENTS. Both Funds may invest in
repurchase agreements and each Fund may purchase securities on a "when issued"
or forward commitment basis, with delivery and payment for the securities
normally taking place 15 to 45 days after the date of the transaction. The
purchase of securities on such a basis involves certain risks. See "Investment
Objectives and Policies --Miscellaneous Investment Practices" in the
accompanying Voyageur Fund prospectus.
TAXABLE INVESTMENTS. Each Fund may invest up to 20% of its net assets in
taxable fixed income obligations under normal market conditions, although Great
Hall Fund will attempt to invest 100% of its net assets in tax-exempt
obligations and Voyageur Fund anticipates that, in normal market conditions, it
will invest substantially all of its assets in tax-exempt obligations. In
addition, each Fund may invest without limit in taxable obligations for
temporary defensive purposes. The taxable obligations in which Voyageur Fund may
invest are described in the accompanying Voyageur Fund prospectus under
"Investment Objectives and Policies--All Funds." To the extent the Funds invest
in taxable investments, the Funds may not at such times be in a position to
achieve the investment objective of current income exempt from regular federal
income tax and Minnesota personal income tax. Great Hall Fund may invest up to
20% of its assets in securities the interest on which is an item of tax
preference for purposes of the federal alternative minimum tax. Voyageur Fund
may invest without limitation in such securities.
BORROWING. As a fundamental policy, Great Hall Fund may borrow from banks
up to a limit of 5% of its total assets, but only for temporary or emergency
non-investment purposes. Voyageur Fund, as a fundamental policy, may borrow
money from banks for temporary or emergency purposes in an amount not exceeding
20% of the value of its total assets.
DERIVATIVE TAX-EXEMPT OBLIGATIONS. Voyageur Fund may acquire derivative
tax-exempt obligations, which are custodial receipts or trust certificates
underwritten by securities dealers or banks that evidence ownership of future
interest payments, principal payments or both on certain tax-exempt obligations.
Great Hall Fund may not purchase such obligations. Certain of these derivative
tax-exempt obligations involve special risks. See "Principal Risk
Factors--Derivative Tax-Exempt Obligations."
OPTIONS. Voyageur Fund may write (i.e., sell) covered put and call options
and purchase put and call options on the securities in which it may invest and
on indices of securities in which it may invest. Great Hall Fund may not engage
in options transactions. Participation in the options market involves investment
risks and transaction costs to which Voyageur Fund would not be subject absent
the use of this strategy. See "Investment Objectives and Policies--Miscellaneous
Investment Practices--Options on Securities" in the accompanying Voyageur Fund
prospectus.
The foregoing comparison does not purport to be a complete summary of the
investment policies, restrictions and risk factors of Great Hall Fund or
Voyageur Fund. For complete discussions of the investment policies, restrictions
and risk factors of the respective Funds, see Voyageur Fund's prospectus
accompanying this Prospectus/Proxy Statement; Great Hall Fund's prospectus
referred to under "Incorporation by Reference;" and the statements of additional
information of Great Hall Fund and Voyageur Fund, also referred to under such
caption. The Annual Reports of Voyageur Fund and Great Hall Fund for the fiscal
years ended December31, 1995 and July 31, 1996, respectively, and the unaudited
Semi-Annual Report of Voyageur Fund for the six-month period ended June 30,
1996, referred to on the cover page hereof under "Incorporation by Reference,"
provide information concerning the composition of the respective Funds'
portfolios at the applicable dates.
CAPITALIZATION
The following table shows the capitalization of Great Hall Fund and of
Voyageur Fund as of June 30, 1996 and on a pro forma basis as of that date,
giving effect to the proposed Reorganization:
(In thousands, except per share values)
<TABLE>
<CAPTION>
GREAT HALL VOYAGEUR
FUND FUND PRO FORMA
---- ---- ---------
CLASS A SHARES*
<S> <C> <C> <C>
Net assets........................................... $25,375 $287,567 $312,942
Net asset value per share............................ $9.96 $10.36 $10.32
Shares outstanding................................... 2,549 27,769 30,318
CLASS B SHARES*
Net assets........................................... -- $5,887 $5,887
Net asset value per share............................ -- $10.35 $10.35
Shares outstanding................................... -- 569 569
CLASS C SHARES*
Net assets........................................... -- $3,250 $3,250
Net asset value per share............................ -- $10.36 $10.36
Shares outstanding................................... -- 314 314
</TABLE>
_________________
* Great Hall Fund offers only one class of shares without designation.
INFORMATION ABOUT THE REORGANIZATION
REASONS FOR THE REORGANIZATION
Great Hall Fund was organized and commenced operations in June 1992 by
acquiring all of the assets and liabilities of Carnegie Tax-Exempt Fund
("Carnegie Fund"), a mutual fund managed by Carnegie Capital Management
Corporation ("Carnegie"). Prior to such acquisition, 48% of Carnegie's stock was
owned by Insight's affiliates, Dain Bosworth Incorporated ("Dain") and Rauscher
Pierce Refsnes, Inc., and Insight served as the sub-adviser and portfolio
manager of Carnegie Fund. Since the acquisition, Insight has served as Great
Hall Fund's sole investment adviser, and Dain has served as the Fund's
distributor. Each of Insight and Dain is a wholly owned subsidiary of
Inter-Regional Financial Group, Inc. ("IFG").
Since the Carnegie acquisition, IFG's strategy concerning retail mutual
funds (like that of many similar financial services firms) has evolved in the
direction of promoting predominantly retail funds that are managed by firms not
affiliated with IFG (exclusive of Great Hall money market funds). IFG and the
Board of Directors of Great Hall Investment Funds have recognized that IFG's
strategy could in the long term result in a decreasing asset base for the Great
Hall Funds and a corresponding difficulty in controlling fund expenses and in
providing competitive returns. For this reason, IFG and Great Hall Investment
Funds have explored and evaluated the relative merits of various options,
including the possible transfer of Great Hall Fund to a firm with a strategy
more congruent with the Fund's long-term best interests -- a firm that could,
among other factors, more actively promote and market the Fund. It was
ultimately decided by IFG and Great Hall Investment Funds' Board of Directors
that such a transfer would indeed be in the best interests of Great Hall Fund
and its shareholders.
IFG thereupon engaged an investment banker to assist in identifying and
screening potential acquiring firms. The banker identified a number of
potentially suitable candidates, and through the process of preliminary
negotiations and due diligence, the Voyageur organization emerged as the
apparent most suitable candidate.
The Board of Directors of Great Hall Investment Funds appointed a committee
of independent directors (the "Committee") to review and evaluate IFG's
recommendation of the proposed Voyageur transaction. Based on its review of the
Voyageur organization and the proposed transactions, the Committee recommended
and the Board of Directors of Great Hall Investment Funds agreed, that the
Reorganization would be in the best interest of Great Hall Fund and its
shareholders. In evaluating the Voyageur organization, the Committee or Insight
(among other matters): interviewed principal Voyageur executive, investment,
marketing, legal, compliance, administrative and accounting personnel and the
Voyageur Fund's independent auditors; reviewed, inspected and analyzed
applicable legal documents, compliance, accounting and administrative procedures
and systems, financial information and other relevant documents and files;
analyzed comparative fund performance and expenses; and conducted various
on-site visits and inspections. Based thereon, the Committee recommended that
the Board of Directors of Great Hall Investment Funds approve the Reorganization
and recommend the Reorganization for shareholder approval.
The Board of Directors believes that the Reorganization will be in the best
interests of Great Hall Fund and its shareholders for the following reasons (in
addition to the aforementioned reasons):
EXPERIENCE OF THE VOYAGEUR ORGANIZATION. VFM currently serves as the
investment adviser of 6 closed-end investment companies, 10 open-end investment
companies (consisting of 33 separate portfolios ) and, together with its
affiliates, numerous privately-managed accounts with combined assets as of July
31, 1996 of approximately $11.5 billion (which includes over $1 billion of
Minnesota municipal bonds). Of the investment companies managed by VFM, 28 are
single-state municipal bond funds (including 7 funds investing predominantly in
Minnesota municipal securities). Therefore, the Reorganization appears
consistent with VFM's current areas of expertise as well as its business plans
and strategies. Additionally, VFM's portfolio managers appear to be
well-experienced and to have commendable track records managing portfolios
similar to Great Hall Fund.
EXPENSES IN CONNECTION WITH THE REORGANIZATION. NO EXPENSES DIRECTLY
INCURRED IN CONNECTION WITH THE REORGANIZATION WILL BE BORNE BY GREAT HALL FUND,
VOYAGEUR FUND OR THEIR RESPECTIVE SHAREHOLDERS. The Class A Voyageur Fund shares
to be received by Great Hall Fund shareholders will not be subject to any
front-end sales charges. In addition, the Reorganization will be tax-free to
each Fund and its shareholders and will not result in any economic dilution to
either Fund or its shareholders.
ASSET LEVELS; MARKETING ABILITIES OF VOYAGEUR ORGANIZATION. Great Hall Fund
has a relatively small asset base, which in the long term could limit the Fund's
ability to control costs and to generate competitive returns (in the absence of
voluntary fee and expense waivers and reimbursements). Voyageur Fund has an
asset base of over ten times the asset base of Great Hall Fund, and the
Reorganization will therefore result in Great Hall Fund becoming a part of a
much larger fund, which may provide the investment adviser with greater
flexibility in managing the Fund's assets as well as a greater ability to
realize economies of scale and otherwise to control Fund fee and expense levels.
In addition, the Voyageur organization has a much more extensive and developed
network of independent brokers and dealers through whom the Voyageur Fund is
distributed (with currently over 600 authorized dealers of Voyageur Fund
shares). The greater marketing abilities and coverage of the Voyageur
organization may optimize the opportunities for growth and the attendant
opportunities for increased portfolio management flexibility and investment
returns and for control over Fund expense levels.
FEE AND EXPENSE LEVELS. Great Hall Fund and Voyageur Fund have similar fee
and expense levels (taking into consideration historical expense waivers).
EXCHANGE PRIVILEGES; SHAREHOLDER SERVICES. The Voyageur organization offers
a comprehensive and competitive range of services to Fund shareholders,
including among others the ability to exchange Voyageur Fund shares for shares
of most other mutual funds for which VFM serves as investment adviser at net
asset value without the payment of a sales charge. In addition, most mutual
funds managed by VFM offer additional purchase options to prospective
shareholders through the availability of multiple classes of shares.
FOR THE FOREGOING REASONS, THE BOARD OF DIRECTORS OF GREAT HALL INVESTMENT
FUNDS BELIEVES THAT THE REORGANIZATION WILL BE IN THE BEST INTERESTS OF THE
GREAT HALL FUND AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THE APPROVAL OF
THE REORGANIZATION BY SUCH SHAREHOLDERS.
PLAN OF REORGANIZATION
The following summary of the proposed Plan and the Reorganization is
qualified in its entirety by reference to the Plan attached to this
Prospectus/Proxy Statement as Appendix A. The Plan provides that, as of the
Effective Time, Voyageur Fund will acquire all or substantially all of the
assets and assume all identified and stated liabilities of Great Hall Fund in
exchange for Voyageur Fund Class A common shares having an aggregate net asset
value equal to the aggregate value of the assets acquired (less liabilities
assumed) from Great Hall Fund. The value of Great Hall Fund assets and
liabilities to be acquired by Voyageur Fund, and the value of Voyageur Fund
shares to be received in exchange therefor, will be computed as of the Effective
Time. Voyageur Fund will not assume any liabilities or obligations of Great Hall
Fund, whether absolute or contingent, other than those identified and stated in
an unaudited statement of assets and liabilities of Great Hall Fund as of the
Effective Time. Because Great Hall Fund is a separate series of Great Hall
Investment Funds, for corporate law purposes the transaction is structured as a
sale of the assets and assumption of the liabilities allocated to Great Hall
Fund in exchange for the issuance of Voyageur Fund shares to Great Hall Fund,
followed immediately by the distribution of such Voyageur Fund shares to Great
Hall Fund shareholders and the cancellation and retirement of outstanding Great
Hall Fund shares.
Pursuant to the Plan, each holder of Great Hall Fund will receive, at the
Effective Time, Class A shares of Voyageur Fund with an aggregate net asset
value equal to the aggregate net asset value of Great Hall Fund shares owned by
such shareholder immediately prior to the Effective Time. Under the Plan, the
net asset value per share of Great Hall Fund's shares and Voyageur Fund's Class
A shares will be computed as of the Effective Time using the valuation
procedures set forth in the respective Funds' articles of incorporation and
bylaws and then-current prospectuses and statements of additional information
and as may be required by the 1940 Act. At the Effective Time, Voyageur Fund
will issue to Great Hall Fund, and Great Hall Fund will distribute to Great Hall
Fund's shareholders of record, determined as of the Effective Time, Voyageur
Fund shares issued in exchange for Great Hall Fund assets as described above.
All outstanding shares of Great Hall Fund thereupon will be canceled and retired
and no additional shares representing interests in Great Hall Fund will be
issued thereafter, and Great Hall Fund will be deemed to be liquidated. The
distribution of Voyageur Fund shares to former Great Hall Fund shareholders will
be accomplished by the establishment of accounts on the share records of
Voyageur Fund in the names of Great Hall Fund shareholders, each representing
the numbers of full and fractional Voyageur Fund Class A shares due such
shareholders.
The Plan provides that no sales charges will be incurred by Great Hall Fund
shareholders in connection with the acquisition by them of Voyageur Fund shares
pursuant thereto. However, if Great Hall Fund shares were initially acquired
without a front-end sales charge in connection with a purchase of $1,000,000 or
more, Voyageur Fund Class A shares acquired in the Reorganization may continue
to be subject to a contingent deferred sales charge. The Plan provides that in
determining whether to apply the one-year 1.0% contingent deferred sales charge
to Voyageur Fund Class A shares acquired in the Reorganization, credit will be
given for the period a former Great Hall Fund shareholder who is subject to such
a contingent deferred sales charge held his or her shares.
Great Hall Fund contemplates that it will make a distribution immediately
prior to the Effective Time of all of its current year net tax-exempt income,
ordinary taxable income and net realized capital gains, if any, not previously
distributed. Any portion of this distribution which does not constitute an
exempt-interest dividend will be taxable to Great Hall Fund shareholders subject
to taxation.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan, including, among others: (a)approval of the Plan by the
shareholders of Great Hall Fund; (b)the delivery of the opinion of counsel
described below under "-- Federal Income Tax Consequences;" (c) the accuracy as
of the Effective Time of the representations and warranties made by Great Hall
Fund and Voyageur Fund in the Plan; and (d) the delivery of customary closing
certificates. See the Plan attached hereto as Appendix A for a complete listing
of the conditions to the consummation of the Reorganization. The Plan may be
terminated and the Reorganization abandoned at any time prior to the Effective
Time, before or after approval by shareholders of Great Hall Fund, by resolution
of the Board of Directors of either Great Hall Investment Funds or Voyageur
Insured Funds, if circumstances should develop that, in the opinion of such
Board, make proceeding with the consummation of the Plan and Reorganization not
in the best interests of the respective Fund's shareholders.
The Plan provides that VFM will pay the costs incurred by the Acquiring
Fund and the Acquired Fund in connection with the Reorganization, including the
fees and expenses associated with the preparation and filing of a registration
statement for purposes of registering the Voyageur Fund shares to be issued in
the Reorganization, and the expenses of printing and mailing this
Prospectus/Proxy Statement and holding the Great Hall Fund shareholder meeting
required to approve the Reorganization. The Plan also provides that at or prior
to the Effective Time, expenses incurred by Great Hall Fund shall have been
maintained by Insight or otherwise so as not to exceed any applicable
state-imposed expense limitations. In addition, the Plan provides that at or
prior to the Effective Time, appropriate action shall have been taken by Insight
or otherwise such that there are no unamortized organizational expenses on the
books of Great Hall Fund.
Under the Plan, Great Hall Fund has agreed not to acquire any securities
which are not permissible investments for Voyageur Fund prior to the Effective
Time, and it is a condition to closing that Great Hall Fund not hold any such
securities immediately prior to the Effective Time. See "Summary--Investment
Objectives, Policies and Restrictions" and "Information about Great Hall Fund
and Voyageur Fund--Comparison of Investment Objectives, Policies and
Restrictions." Great Hall Fund does not hold any such securities at the date of
this Prospectus/Proxy Statement.
Approval of the Plan will require the affirmative vote of a majority of the
outstanding shares of Great Hall Fund. If the Plan is not approved, the Board of
Directors of the Great Hall Fund will consider other possible courses of action.
DESCRIPTION OF VOYAGEUR FUND SHARES
For information concerning the shares of Voyageur Fund, including voting
rights, see "Summary--Capital Shares; Shareholder Voting Rights" above. All
Voyageur Fund shares issued in the Reorganization will be fully paid and
non-assessable and will not be entitled to preemptive or cumulative voting
rights.
FEDERAL INCOME TAX CONSEQUENCES
It is intended that the exchange of Voyageur Fund shares for Great Hall
Fund's net assets and the distribution of such shares to Great Hall Fund's
shareholders upon liquidation of Great Hall Fund will be treated as a tax-free
reorganization under the Internal Revenue Code of 1986, as amended (the "Code"),
and that, for federal income tax purposes, no income, gain or loss will be
recognized by Great Hall Fund's shareholders (except that Great Hall Fund
contemplates that it will make a distribution, immediately prior to the
Reorganization, of all of its current year net tax-exempt income, ordinary
taxable income and net realized capital gains, if any, not previously
distributed, and any portion of this distribution which does not represent
tax-exempt income or otherwise qualify as an exempt-interest dividend will be
taxable to Great Hall Fund shareholders subject to taxation). Great Hall Fund
has not asked, nor does it plan to ask, the Internal Revenue Service to rule on
the tax consequences of the Reorganization.
As a condition to the closing of the Reorganization, the two Funds will
receive an opinion from Dorsey & Whitney LLP, counsel to Voyageur Fund, based in
part on certain representations to be furnished by each Fund and by VFM,
substantially to the effect that the federal income tax consequences of the
Reorganization will be as follows:
(a) the Reorganization will constitute a reorganization within the meaning
of Section 368(a)(1)(C) of the Code, and Voyageur Fund and Great Hall
Fund each will qualify as a party to the Reorganization under Section
368(b) of the Code;
(b) Great Hall Fund shareholders will recognize no income, gain or loss
upon receipt, pursuant to the Reorganization, of Voyageur Fund shares.
Great Hall Fund shareholders subject to taxation will recognize income
upon receipt of any ordinary taxable income or net capital gains of
Great Hall Fund which are distributed by Great Hall Fund prior to the
Effective Time;
(c) the tax basis of Voyageur Fund shares received by each Great Hall Fund
shareholder pursuant to the Reorganization will be equal to the tax
basis of Great Hall Fund shares exchanged therefor;
(d) the holding period of Voyageur Fund shares received by each Great Hall
Fund shareholder pursuant to the Reorganization will include the
period during which the Great Hall Fund shareholder held Great Hall
Fund shares exchanged therefor, provided that the Great Hall Fund
shares were held as a capital asset at the Effective Time;
(e) Great Hall Fund will recognize no income, gain or loss by reason of
the Reorganization;
(f) Voyageur Fund will recognize no income, gain or loss by reason of the
Reorganization;
(g) the tax basis of the assets received by Voyageur Fund pursuant to the
Reorganization will be the same as the basis of those assets in the
hands of Great Hall Fund as of the Effective Time;
(h) the holding period of the assets received by Voyageur Fund pursuant to
the Reorganization will include the period during which such assets
were held by Great Hall Fund; and
(i) Voyageur Fund will succeed to and take into account the earnings and
profits, or deficit in earnings and profits, of Great Hall Fund as of
the Effective Time.
The foregoing opinion will be based upon certain representations furnished
by Voyageur Insured Funds, Great Hall Investment Funds and VFM, of which two
principal ones are (a) that Voyageur Fund will acquire assets representing at
least 90% of the fair market value of Great Hall Fund's net assets and at least
70% of the fair market value of Great Hall Fund's gross assets immediately prior
to the Effective Time, and (b) that there are no shareholders owning 5% or more
of the outstanding shares of Great Hall Fund and, to the best knowledge of
management of Great Hall Fund, there is no plan or intention on the part of the
Great Hall Fund shareholders to sell, exchange or otherwise dispose of a number
of Voyageur Fund shares to be received pursuant to the Reorganization that would
reduce such shareholders' interest to a number of Voyageur Fund shares having,
in the aggregate, a value as of the Effective Time of less than 50% of the total
value of Great Hall Fund shares outstanding immediately prior to the
consummation of the Reorganization.
Shareholders of Great Hall Fund should consult their tax advisors regarding
the effect, if any, of the proposed Reorganization in light of their individual
circumstances. Since the foregoing discussion only relates to the federal income
tax consequences of the Reorganization, shareholders of Great Hall Fund should
consult their tax advisors as to state and local tax consequences, if any, of
the Reorganization.
INTERESTS OF INSIGHT, VFM AND AFFILIATES IN REORGANIZATION
In a similar transaction to the Reorganization, Voyageur National High
Yield Municipal Bond Fund ("Voyageur National Fund"), a newly organized series
of Voyageur Mutual Funds, Inc., also has agreed to purchase all or substantially
all of the assets and to assume certain stated and identified liabilities of
Great Hall National Tax-Exempt Fund, a series of Great Hall Investment Funds, by
and in exchange for Class A common shares of equal value of Voyageur National
Fund in a tax-free reorganization. In connection with and following the
Reorganization and this additional reorganization (together, the
"Reorganizations"), Insight and the Distributor have agreed to provide various
consulting and shareholder services and have agreed for a period of three years
following the closing of the Reorganizations not to sponsor or acquire a mutual
fund that is similar to either of the Great Hall funds being acquired in the
Reorganizations. In return, VFM has agreed to pay Insight and the Distributor
$1,100,000 at the closing of the transactions plus an amount at the first
anniversary of the closing equal to approximately 2% of the value of the
shareholder accounts being transferred to the acquiring Voyageur funds (less the
$1,100,000 paid at closing), adjusted generally for fluctuations in market
prices between the closing and the first anniversary. In reviewing the
aforementioned payments, the Board of Directors of Great Hall Investment Funds
was aware that Insight and its affiliates incurred costs in organizing and
maintaining the Funds (including costs associated with acquiring the assets of
the Great Hall Fund from the Carnegie organization), as well as the nature of
the other services and consideration to be performed by Insight and the
Distributor.
Each acquiring Voyageur Fund and VFM have agreed to comply in all material
respects with all applicable provisions of Section 15(f) of the 1940 Act
following the Reorganizations. Section 15(f) requires that (a) for a period of
three years following the closing date, at least 75% of each acquiring Voyageur
fund's Board of Directors be comprised of persons who are not "interested
persons" (as defined in the 1940 Act) of either VFM or Insight, and (b) no
"unfair burden" be imposed on the Great Hall funds being acquired or on the
acquiring Voyageur funds as a result of the transaction.
RECOMMENDATION AND VOTE REQUIRED
The Board of Directors of Great Hall Investment Funds, including the
directors who are not "interested persons" of Great Hall Investment Funds,
unanimously recommends that shareholders of Great Hall Fund approve the Plan.
Approval of the Plan will require the affirmative vote of a majority of the
outstanding shares of Great Hall Fund.
VOTING INFORMATION
GENERAL
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Directors of Great Hall Investment Funds
to be used at the Special Meeting of Great Hall Fund shareholders to be held at
8:30 a.m., Central time, on November 6, 1996, at the offices of Great Hall
Investment Funds and at any adjournments thereof. This Prospectus/Proxy
Statement, along with a Notice of Special Meeting and a proxy card, is first
being mailed to shareholders of Great Hall Fund on or about October 4, 1996.
Only shareholders of record as of the close of business on September 20, 1996
(the "Record Date") will be entitled to notice of, and to vote at, the Meeting
or any adjournment thereof. If the enclosed form of proxy is properly executed
and returned on time to be voted at the Meeting, the proxies named therein will
vote the shares represented by the proxy in accordance with the instructions
marked thereon. Unmarked proxies will be voted "for" the proposed Plan and
Reorganization. A proxy may be revoked by giving written notice, in person or by
mail, of revocation before the Meeting to Great Hall Fund at its principal
executive offices, 60 South Sixth Street, Minneapolis, Minnesota 55402, or by
properly executing and submitting a later-dated proxy, or by voting in person at
the Meeting.
If a shareholder executes and returns a proxy but abstains from voting, the
shares held by such shareholder will be deemed present at the Meeting for
purposes of determining a quorum and will be included in determining the total
number of votes cast. If a proxy is received from a broker or nominee indicating
that such person has not received instructions from the beneficial owner or
other person entitled to vote Great Hall Fund shares (i.e., a broker
"non-vote"), the shares represented by such proxy will not be considered present
at the Meeting for purposes of determining a quorum and will not be included in
determining the number of votes cast. Brokers and nominees will not have
discretionary authority to vote shares for which instructions are not received
from the beneficial owner.
Approval of the Plan and Reorganization will require the affirmative vote
described above under "Information About the Reorganization--Recommendation and
Vote Required."
As of September 20, 1996 (a) Great Hall Fund had 2,365,972 shares
outstanding and entitled to vote at the Meeting; (b) Voyageur Fund had
27,320,979 Class A shares, 599,418 Class B shares and 316,404 Class C shares
outstanding; and (c) the directors and officers of the respective Funds as a
group owned less than one percent of the outstanding shares of each Fund or any
class thereof. The following paragraph sets forth information concerning those
persons known by the respective Funds to own of record or beneficially more than
5% of the outstanding shares of either Fund, or more than 5% of the outstanding
shares of any class of Voyageur Fund, as indicated, as of such date, including
persons and entities who beneficially own more than 25% of either Fund or any
class of Voyageur Fund. Unless otherwise indicated, the persons named below have
both record and beneficial ownership:
Great Hall Fund: No shareholders owning 5% or greater shares. Voyageur
Fund: Class A - National Financial Services Corp.*, 200 Liberty Street 4th Fl.,
New York, NY 10281 - 8.9%. * Record ownership only.
Proxies are solicited by mail. Additional solicitations may be made by
telephone or personal contact by officers or employees of Insight and its
affiliates without cost to Great Hall Fund. In addition, the services of a
third-party proxy solicitation firm may be utilized, with such firm's fees and
expenses borne by VFM as described under "Information About the
Reorganization--Plan of Reorganization" above.
In the event that sufficient votes to approve the Plan and Reorganization
are not received by the date set for the Meeting, the persons named as proxies
may propose one or more adjournments of the Meeting for up to 120 days to permit
further solicitation of proxies. In determining whether to adjourn the Meeting,
the following factors may be considered: the percentage of votes actually cast,
the percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any such adjournment will require the
affirmative vote of a majority of the shares present in person or by proxy and
entitled to vote at the Meeting. The persons named as proxies will vote upon
such adjournment after consideration of the best interests of all shareholders.
INTERESTS OF CERTAIN PERSONS
The following persons affiliated with Voyageur Fund receive payments from
the Fund for services rendered pursuant to contractual arrangements with the
Fund: VFM receives payments from Voyageur Fund for investment advisory services
it renders pursuant to an Investment Advisory Agreement, and for dividend
disbursing, transfer agency, administrative and accounting services it renders
pursuant to an Administrative Services Agreement. VFD receives payments from
Voyageur Fund for servicing of shareholder accounts and distribution-related
services pursuant to a Distribution Agreement and the Fund's Plan of
Distribution. See "Summary--Fees and Expenses--Voyageur Fund Expenses" above.
FINANCIAL STATEMENTS AND EXPERTS
The audited statements of assets and liabilities, including the schedules
of investments in securities, of Great Hall Fund as of July31, 1996, and of
Voyageur Fund as of December31, 1995, and the related statements of operations
for the years then ended, the statements of changes in net assets for each of
the periods indicated therein, and the financial highlights for the periods
indicated therein, as included in the Annual Reports of Great Hall Fund for the
fiscal year ended July31, 1996 and Voyageur Fund for the fiscal year ended
December31, 1995, respectively, have been incorporated by reference into this
Prospectus/Proxy Statement in reliance on the reports of KPMG Peat Marwick LLP,
independent auditors for each of Voyageur Fund and Great Hall Fund, given on the
authority of such firms as experts in accounting and auditing. The unaudited
Semi-Annual Report of Voyageur Fund for the six-month period ending June 30,
1996 has been incorporated by reference into the Statement of Additional
Information relating to this Prospectus/Proxy Statement
LEGAL MATTERS
Certain legal matters concerning the issuance of the shares of Voyageur
Fund to be issued in the Reorganization will be passed on by Dorsey & Whitney
LLP.
OTHER INFORMATION ABOUT GREAT HALL FUND AND VOYAGEUR FUND
Information concerning Voyageur Fund and Great Hall Fund is incorporated
herein by reference from Voyageur Fund's current Prospectus dated April30, 1996,
as supplemented June3, 1996, and Great Hall Fund's current Prospectus dated
December1, 1995. The Prospectus of Voyageur Fund accompanies this
Prospectus/Proxy Statement and forms part of the Registration Statement of
Voyageur Fund on Form N-1A which has been filed with the Commission. The
Prospectus of Great Hall Fund may be obtained in the manner described under
"Incorporation by Reference" and forms part of the Registration Statement of
Great Hall Fund on Form N-1A which has been filed with the Commission.
Voyageur Fund and Great Hall Fund are subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and in
accordance therewith file reports and other information including proxy
materials, reports and charter documents with the Commission. These proxy
materials, reports and other information filed by Voyageur Fund and Great Hall
Fund can be inspected and copies obtained at the Public Reference Facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the New York Regional Office of the Commission at Seven World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can also
be obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C. 20549
at prescribed rates.
PROSPECTUS /PROXY STATEMENT
SEPTEMBER 30, 1996
PROPOSED ACQUISITION OF ASSETS OF
GREAT HALL MINNESOTA INSURED
TAX-EXEMPT FUND
A SEPARATELY MANAGED SERIES OF
GREAT HALL INVESTMENT FUNDS, INC.
BY AND IN EXCHANGE FOR SHARES OF
VOYAGEUR MINNESOTA INSURED FUND
A SEPARATELY MANAGED SERIES OF
VOYAGEUR INSURED FUNDS, INC.
=================
TABLE OF CONTENTS
=================
PAGE
INCORPORATION BY REFERENCE............................................. 2
SUMMARY................................................................ 4
PRINCIPAL RISK FACTORS................................................. 9
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS......... 11
CAPITALIZATION......................................................... 13
INFORMATION ABOUT THE REORGANIZATION................................... 17
VOTING INFORMATION..................................................... 19
FINANCIAL STATEMENTS AND EXPERTS....................................... 20
LEGAL MATTERS.......................................................... 20
OTHER INFORMATION ABOUT GREAT HALL FUND AND VOYAGEUR FUND.............. 20
APPENDIX A-- AGREEMENT AND PLAN OF REORGANIZATION...................... A-1
=============================================================================
THE FOLLOWING DOCUMENTS ACCOMPANY THIS PROSPECTUS/PROXY STATEMENT:
PROSPECTUS DATED APRIL30, 1996, AS SUPPLEMENTED JUNE3, 1996, OF VOYAGEUR
MINNESOTA INSURED FUND
ANNUAL REPORT OF VOYAGEUR MINNESOTA INSURED FUND FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1995
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is made as of
this day of ________ , 1996, by and between Voyageur Insured Funds, Inc.
("VOYAGEUR), a Minnesota corporation, on behalf of its Minnesota Insured Fund
(the "ACQUIRING FUND"), a series of Voyageur, and Great Hall Investment Funds,
Inc. ("GREAT HALL"), a Minnesota corporation, on behalf of its Minnesota Insured
Tax-Exempt Fund (the "ACQUIRED FUND"), a series of Great Hall.
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation pursuant to Sections 368(a)(1)(C) and 368(a)(2)(G) of the United
States Internal Revenue Code of 1986, as amended (the "CODE"). The
reorganization (the "REORGANIZATION") will consist of the transfer of all or
substantially all of the assets of the Acquired Fund to the Acquiring Fund and
the assumption by the Acquiring Fund of certain stated and identified
liabilities of the Acquired Fund in exchange solely for full and fractional
Class A common shares, par value $.01 per share, of the Acquiring Fund (the
"ACQUIRING FUND SHARES"), having an aggregate net asset value equal to the
aggregate value of the assets acquired (less liabilities assumed) of the
Acquired Fund, and the distribution of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in liquidation of the Acquired Fund as
provided herein, all upon the terms and conditions hereinafter set forth. The
distribution of Acquiring Fund shares to Acquired Fund shareholders and the
redemption, retirement and cancellation of the Acquired Fund's shares will be
effected pursuant to an amendment to the articles of incorporation of Great Hall
in the form attached hereto as Exhibit 1 (the "AMENDMENT") to be adopted by
Great Hall in accordance with the Minnesota Business Corporation Act.
WITNESSETH:
WHEREAS, each of Voyageur and Great Hall is a registered, open-end
management investment company, with each of Voyageur and Great Hall offering its
shares in multiple series (each of which series represents a separate and
distinct portfolio of assets and liabilities);
WHEREAS, Great Hall offers shares of the Acquired Fund in a single class
and Voyageur offers shares of the Acquiring Fund in multiple classes which, at
the time the transactions contemplated hereby are consummated, will be Class A,
Class B and Class C shares;
WHEREAS, the Acquired Fund owns securities which generally are assets of
the character in which the Acquiring Fund is permitted to invest; and
WHEREAS, the Board of Directors of each of Great Hall on behalf of the
Acquired Fund and Voyageur on behalf of the Acquiring Fund has determined that
the exchange of all or substantially all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of certain stated and identified
liabilities of the Acquired Fund by the Acquiring Fund is in the best interests
of the shareholders of the Acquired Fund and the Acquiring Fund, respectively.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto covenant and agree as follows:
1. TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE ACQUIRED
FUND TO THE ACQUIRING FUND SOLELY IN EXCHANGE FOR ACQUIRING FUND
SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES AND THE
LIQUIDATION OF THE ACQUIRED FUND
1.1 Subject to the requisite approval by Acquired Fund shareholders and to
the other terms and conditions set forth herein and on the basis of the
representations and warranties contained herein, the Acquired Fund agrees to
transfer all or substantially all of the Acquired Fund's assets as set forth in
Section 1.2 to the Acquiring Fund, and the Acquiring Fund agrees in exchange
therefor (a) to deliver to the Acquired Fund that number of full and fractional
Acquiring Fund Shares determined in accordance with Article 2, and (b) to assume
all of the identified and stated liabilities of the Acquired Fund, as set forth
in Section 1.3. Such transactions shall take place as of the effective time
provided for in Section 3.1 (the "EFFECTIVE TIME").
1.2(a) The assets of the Acquired Fund to be acquired by the Acquiring Fund
shall consist of all or substantially all of the Acquired Fund's property,
including, but not limited to, all cash, securities, commodities, futures, and
interest and dividends receivable which are owned by the Acquired Fund as of the
Effective Time. All of said assets shall be set forth in detail in an unaudited
statement of assets and liabilities of the Acquired Fund as of the Effective
Time (the "EFFECTIVE TIME STATEMENT"). The Effective Time Statement shall, with
respect to the listing of the Acquired Fund's portfolio securities, detail the
adjusted tax basis of such securities by lot, the respective holding periods of
such securities and the current and accumulated earnings and profits of the
Acquired Fund. The Effective Time Statement shall be prepared in accordance with
generally accepted accounting principles (except for footnotes) consistently
applied from the prior audited period and shall be certified by the Acquired
Fund's treasurer.
(b) The Acquired Fund has provided the Acquiring Fund with a list of all of
the Acquired Fund's assets as of the date of execution of this Agreement. The
Acquired Fund reserves the right to sell any of these securities in the ordinary
course of its business and, subject to Section 5.1, to acquire additional
securities in the ordinary course of its business.
1.3 The Acquiring Fund shall assume all of the identified and stated
liabilities, expenses, costs, charges and reserves (including, but not limited
to, expenses incurred in the ordinary course of the Acquired Fund's operations,
such as accounts payable relating to custodian fees, investment management and
administrative fees, legal and audit fees, and expenses of state securities
registration of the Acquired Fund's shares) reflected in the Effective Time
Statement. The Acquiring Fund shall assume only those liabilities of the
Acquired Fund in the amounts reflected on the Effective Time Statement and shall
not assume any other liabilities, whether absolute or contingent, known or
unknown, accrued or unaccrued.
1.4 Immediately after the transfer of assets provided for in Section 1.1
and the assumption of liabilities provided for in Section 1.3, and pursuant to
the plan of reorganization adopted herein, the Acquired Fund will distribute pro
rata (as provided in Article 2) to the Acquired Fund's shareholders of record,
determined as of the Effective Time (the "ACQUIRED FUND SHAREHOLDERS"), the
Acquiring Fund Shares received by the Acquired Fund pursuant to Section 1.1, and
all other assets of the Acquired Fund, if any. Thereafter, no additional shares
representing interests in the Acquired Fund shall be issued. Such distribution
will be accomplished by the transfer of the Acquiring Fund Shares then credited
to the account of the Acquired Fund on the books of the Acquiring Fund to open
accounts on the share records of the Acquiring Fund in the names of the Acquired
Fund shareholders representing the numbers of Acquiring Fund Shares due each
such shareholder. All issued and outstanding shares of the Acquired Fund will
simultaneously be canceled on the books of the Acquired Fund, although share
certificates representing interests in the Acquired Fund will represent those
numbers of Acquiring Fund Shares after the Effective Time as determined in
accordance with Article 2. Unless requested by Acquired Fund shareholders, the
Acquiring Fund will not issue certificates representing the Acquiring Fund
Shares issued in connection with such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund. Acquiring Fund Shares will be issued in the manner described in
the Acquiring Fund's Prospectus and Statement of Additional Information as in
effect as of the Effective Time, except that no front-end sales charges will be
incurred by Acquired Fund Shareholders in connection with their acquisition of
Acquiring Fund Shares pursuant to this Agreement.
1.6 In the event Class A Acquiring Fund shares are distributed by the
Acquiring Fund in the Reorganization to former holders of shares of the Acquired
Fund with respect to which the front-end sales charge was waived due to a
purchase of $1 million or more, the Acquiring Fund agrees that in determining
whether a deferred sales charge is payable upon the sale of such Class A shares
of the Acquiring Fund it shall give credit for the period during which the
holder thereof held such Acquired Fund shares.
1.7 Any reporting responsibility of the Acquired Fund, including, but not
limited to, the responsibility for filing of regulatory reports, tax returns, or
other documents with the Securities and Exchange Commission (the "COMMISSION"),
any state securities commissions, and any federal, state or local tax
authorities or any other relevant regulatory authority, is and shall remain the
responsibility of the Acquired Fund.
2. VALUATION; ISSUANCE OF ACQUIRING FUND SHARES
2.1 The net asset value per share of the Acquired Fund's shares and the
Acquiring Fund's Class A shares shall be computed as of the Effective Time and
after the declaration of any dividends or distributions on that date using the
valuation procedures set forth in their respective articles of incorporation and
bylaws, their then-current Prospectuses and Statements of Additional
Information, and as may be required by the Investment Company Act of 1940, as
amended (the "1940 ACT").
2.2 The total number of Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the assets and liabilities of the
Acquired Fund which are allocable to the Acquired Fund's shares shall have an
aggregate net asset value equal to the aggregate net asset value of the Acquired
Fund's shares immediately prior to the Effective Time, each as determined
pursuant to Section 2.1.
2.3 Immediately after the Effective Time, the Acquired Fund shall
distribute to the Acquired Fund Shareholders in liquidation of the Acquired Fund
pro rata (based upon the ratio that the number of Acquired Fund shares owned by
each Acquired Fund Shareholder immediately prior to the Effective Time bears to
the total number of issued and outstanding Acquired Fund shares immediately
prior to the Effective Time) the full and fractional Acquiring Fund Shares
received by the Acquired Fund pursuant to Section 2.2. Accordingly, each
Acquired Fund Shareholder shall receive, immediately after the Effective Time,
Acquiring Fund Shares with an aggregate net asset value equal to the aggregate
net asset value of the Acquired Fund shares owned by such Acquired Fund
Shareholder immediately prior to the Effective Time.
3. EFFECTIVE TIME; CLOSING
3.1 The closing of the transactions contemplated by this Agreement (the
"CLOSING") shall occur as of the close of normal trading on the New York Stock
Exchange (the "EXCHANGE") (currently, 4:00 p.m. Eastern time), and after the
declaration of any dividends or distributions on such date, on the first day
upon which the conditions to closing shall have been satisfied, or at such time
on such later date as provided herein or as the parties otherwise may agree in
writing (such time and date being referred to herein as the "EFFECTIVE TIME").
All acts taking place at the Closing shall be deemed to take place
simultaneously as of the Effective Time unless otherwise agreed to by the
parties. The Closing shall be held at the offices of Dorsey & Whitney LLP, 220
South Sixth Street, Minneapolis, Minnesota 55402, or at such other place as the
parties may agree.
3.2 The Acquired Fund shall deliver at the Closing its written instructions
to the custodian for the Acquired Fund, acknowledged and agreed to in writing by
such custodian, irrevocably instructing such custodian to transfer to the
Acquiring Fund all of the Acquired Fund's portfolio securities, cash, and any
other assets to be acquired by the Acquiring Fund pursuant to this Agreement.
3.3 In the event that the Effective Time occurs on a day on which (a)the
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund shall be closed to trading or trading
thereon shall be restricted, or (b)trading or the reporting of trading on the
Exchange 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 Effective Time shall be postponed until the close of normal trading on the
Exchange on the first business day when trading shall have been fully resumed
and reporting shall have been restored.
3.4 The Acquired Fund shall deliver at the Closing a certificate of its
transfer agent stating that the records maintained by the transfer agent (which
shall be made available to the Acquiring Fund) contain the names and addresses
of the Acquired Fund shareholders and the number of outstanding Acquired Fund
shares owned by each such shareholder as of the Effective Time. The Acquiring
Fund shall certify at the Closing that the Acquiring Fund Shares required to be
issued by it pursuant to this Agreement have been issued and delivered as
required herein.
3.5 At the Closing, each party to this Agreement shall deliver to the other
such bills of sale, liability assumption agreements, checks, assignments, share
certificates, if any, receipts or other similar documents as such other party or
its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Acquired Fund represents and warrants to the Acquiring Fund as
follows:
(a) Great Hall is a corporation duly organized, validly existing and in
good standing under the laws of the state of Minnesota with power under its
articles of incorporation to own all of its properties and assets and to
carry on its business as it is now conducted;
(b) Great Hall is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act, and of each series
of shares offered by Great Hall (including the Acquired Fund shares) under
the Securities Act of 1933, as amended (the "1933 ACT"), is in full force
and effect;
(c) Shares of the Acquired Fund are registered in all jurisdictions in
which they are required to be registered under state securities laws and
any other applicable laws; said registrations, including any periodic
reports or supplemental filings, are complete and current in all material
respects; all fees required to be paid in connection with such
registrations have been paid; and the Acquired Fund is not subject to any
stop orders, and is fully qualified to sell its shares in any state in
which its shares have been registered;
(d) The Prospectus and Statement of Additional Information of the Acquired
Fund, as of the date hereof and up to and including the Effective Time,
conform and will conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
of the Commission thereunder and do not and will not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not materially misleading;
(e) The Acquired Fund is not, and the execution, delivery and performance
of this Agreement will not result, in a violation of Great Hall's articles
of incorporation or bylaws 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;
(f) No material litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to the
best of the Acquired Fund's knowledge, threatened against the Acquired Fund
or any of its properties or assets. The Acquired Fund is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business or
its ability to consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities of the Acquired Fund as of July
31, 1996, have been audited by KPMG Peat Marwick LLP, independent
accountants, and are in accordance with generally accepted accounting
principles consistently applied, and such statement (a copy of which has
been furnished to the Acquiring Fund) presents fairly, in all material
respects, the financial position of the Acquired Fund as of such date, and
there are no known material contingent liabilities of the Acquired Fund as
of such date not disclosed therein;
(h) Since the end of the Acquired Fund's most recently concluded fiscal
year, there has not been any material adverse change in the Acquired Fund's
financial condition, assets, liabilities or business other than changes
occurring in the ordinary course of business, except as otherwise disclosed
to the Acquiring Fund. For the purposes of this paragraph (h), a decline in
net asset value per share of the Acquired Fund, the discharge or incurrence
of Acquired Fund liabilities in the ordinary course of business, or the
redemption of Acquired Fund shares by Acquired Fund shareholders, shall not
constitute such a material adverse change;
(i) All material federal and other tax returns and reports of the Acquired
Fund required by law to have been filed prior to the Effective Time shall
have been filed and shall be correct, and all federal and other taxes shown
as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof,
and, to the best of the Acquired Fund's knowledge, no such return is
currently under audit and no assessment shall have been asserted with
respect to such returns;
(j) For each taxable year of its operation, the Acquired Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company, and the Acquired Fund intends to meet the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company for its final, partial taxable year;
(k) All issued and outstanding shares of the Acquired Fund are, and at the
Effective Time will be, duly and validly issued and outstanding, fully paid
and non-assessable. All of the issued and outstanding shares of the
Acquired Fund will, at the Effective Time, be held by the persons and in
the amounts set forth in the records of the Acquired Fund, as provided in
Section 3.4. The Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Acquired Fund
shares, and there is not outstanding any security convertible into any
Acquired Fund shares;
(l) At the Effective Time, the Acquired Fund will have good and marketable
title to the Acquired Fund's assets to be transferred to the Acquiring Fund
pursuant to Section 1.2 and full right, power, and authority to sell,
assign, transfer and deliver such assets hereunder, and upon delivery of
and payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act
other than as disclosed to the Acquiring Fund in the Effective Time
Statement;
(m) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Effective Time by all necessary action on
the part of the Acquired Fund's Board of Directors, and, subject to the
approval of the Acquired Fund shareholders, this Agreement will constitute
a valid and binding obligation of the Acquired Fund, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other
laws relating to or affecting creditors' rights and to the application of
equitable principles in any proceeding, whether at law or in equity;
(n) The information to be furnished by and on behalf of the Acquired Fund
for use in registration statements, proxy materials and other documents
which may be necessary in connection with the transactions contemplated
hereby shall be accurate and complete in all material respects;
(o) All information pertaining to the Acquired Fund, Great Hall, and their
agents and affiliates and included in the Registration Statement referred
to in Section 5.5 (or supplied by the Acquired Fund, Great Hall or their
agents or affiliates for inclusion in said Registration Statement), on the
effective date of said Registration Statement and up to and including the
Effective Time, 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 are made, not materially misleading (other than as may timely be
remedied by further appropriate disclosure);
(p) Since the end of the Acquired Fund's most recently concluded fiscal
year, there have been no material changes by the Acquired Fund in
accounting methods, principles or practices, including those required by
generally accepted accounting principles, except as disclosed in writing to
the Acquiring Fund; and
(q) The Effective Time Statement will be prepared in accordance with
generally accepted accounting principles (except for the omission of any
footnotes that would be required thereby) consistently applied and will
present accurately in all material respects the assets and liabilities of
the Acquired Fund as of the Effective Time, and the values of the Acquired
Fund's assets and liabilities to be set forth in the Effective Time
Statement will be computed as of the Effective Time using the valuation
procedures set forth in the Acquired Fund's articles of incorporation and
bylaws, its then-current Prospectus and Statement of Additional
Information, and as may be required by the 1940 Act. At the Effective Time,
the Acquired Fund will have no liabilities, whether absolute or contingent,
accrued or unaccrued, which are not reflected in the Effective Time
Statement.
4.2 The Acquiring Fund represents and warrants to the Acquired Fund as
follows:
(a) Voyageur is a corporation duly organized, validly existing and in good
standing under the laws of the state of Minnesota with power under its
articles of incorporation to own all of its properties and assets and to
carry on its business as it is now conducted;
(b) Voyageur is a registered investment company classified as a management
company of the open-end type, and its registration with the Commission as
an investment company under the 1940 Act, and of each series of shares
offered by Voyageur (including the Acquiring Fund Shares) under the 1933
Act, is in full force and effect;
(c) Shares of the Acquiring Fund are registered in all jurisdictions in
which they are required to be registered under state securities laws and
any other applicable laws; said registrations, including any periodic
reports or supplemental filings, are complete and current; all fees
required to be paid in connection with such registrations have been paid;
and the Acquiring Fund is in good standing, is not subject to any stop
orders, and is fully qualified to sell its shares in any state in which its
shares have been registered;
(d) The Prospectus and Statement of Additional Information of the Acquiring
Fund, as of the date hereof and up to and including the Effective Time,
conform and will conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
of the Commission thereunder and do not and will not include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not materially misleading;
(e) Voyageur is not, and the execution, delivery and performance of this
Agreement will not result, in a violation of its articles of incorporation
or bylaws or of any material agreement, indenture, instrument, contract,
lease or other undertaking to which Voyageur is a party or by which it is
bound;
(f) No material litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to the
best of Voyageur's knowledge, threatened against Voyageur or the Acquiring
Fund or any of its properties or assets. Neither Voyageur nor the Acquiring
Fund is a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially and adversely
affects its business or its ability to consummate the transactions herein
contemplated;
(g) The Statement of Assets and Liabilities of the Acquiring Fund as of
December 31, 1995, audited by KPMG Peat Marwick LLP, independent
accountants, and the unaudited Statement of Assets and Liabilities of the
Acquiring Fund as of June 30, 1996, are each in accordance with generally
accepted accounting principles consistently applied, and such statements
(copies of which have been furnished to the Acquired Fund) present fairly,
in all material respects, the financial position of the Acquiring Fund as
of such dates, and there are no known material contingent liabilities of
the Acquiring Fund as of such dates not disclosed therein;
(h) Since June 30, 1996, there has not been any material adverse change in
the Acquiring Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, except as
otherwise disclosed to the Acquired Fund. For the purposes of this
paragraph (h), a decline in net asset value per share of the Acquiring
Fund, the discharge or incurrence of Acquiring Fund liabilities in the
ordinary course of business, or the redemption of Acquiring Fund shares by
Acquiring Fund shareholders, shall not constitute such a material adverse
change;
(i) All material federal and other tax returns and reports of the Acquiring
Fund required by law to have been filed prior to the Effective Time shall
have been filed and shall be correct, and all federal and other taxes shown
as due or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment thereof,
and, to the best of Voyageur's knowledge, no such return is currently under
audit and no assessment shall have been asserted with respect to such
returns;
(j) For each taxable year of its operation, the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company, and the Acquiring Fund intends to meet the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company in the current and future years;
(k) All issued and outstanding shares of the Acquiring Fund are, and at the
Effective Time will be, duly and validly issued and outstanding, fully paid
and non-assessable. The Acquiring Fund Shares to be issued and delivered to
the Acquired Fund for the account of the Acquired Fund Shareholders,
pursuant to the terms of this Agreement, at the Effective Time will have
been duly authorized and, when so issued and delivered, will be duly and
validly issued and outstanding, fully paid and non-assessable. The
Acquiring Fund does not have outstanding any options, warrants or other
rights to subscribe for or purchase any Acquiring Fund shares, and there is
not outstanding any security convertible into any Acquiring Fund shares
(other than Class B shares which automatically convert to Class A shares
after a specified period);
(l) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Effective Time by all necessary action on
the part of Voyageur's Board of Directors, and at the Effective Time this
Agreement will constitute a valid and binding obligation of Voyageur and
the Acquiring Fund, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other laws relating to or affecting creditors'
rights and to the application of equitable principles in any proceeding,
whether at law or in equity. Consummation of the transactions contemplated
by this Agreement does not require the approval of the Acquiring Fund's
shareholders;
(m) The information to be furnished by and on behalf of the Acquiring Fund
for use in registration statements, proxy materials and other documents
which may be necessary in connection with the transactions contemplated
hereby shall be accurate and complete in all material respects;
(n) Since the end of the Acquiring Fund's most recently concluded fiscal
year, there have been no material changes by the Acquiring Fund in
accounting methods, principles or practices, including those required by
generally accepted accounting principles, except as disclosed in writing to
the Acquired Fund; and
(o) The Registration Statement referred to in Section 5.5, on its effective
date and up to and including the Effective Time, will (i) conform in all
material respects to the applicable requirements of the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 ACT"), and the 1940
Act and the rules and regulations of the Commission thereunder, and (ii)
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such
statements were made, not materially misleading (other than as may timely
be remedied by further appropriate disclosure); provided, however, that the
representations and warranties in clause (ii) of this paragraph shall not
apply to statements in (or omissions from) the Registration Statement
concerning the Acquired Fund, Great Hall, their agents and affiliates, and
Insight (or supplied by the Acquired Fund, Great Hall, or their agents or
affiliates for inclusion in said Registration Statement).
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 Each of the Acquired Fund and the Acquiring Fund will operate its
business in the ordinary course between the date hereof and the Effective Time,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions, and any other
distributions that may be advisable (which may include distributions prior to
the Effective Time of net income and/or net realized capital gains not
previously distributed). Between the date hereof and the Effective Time, the
Acquired Fund will not acquire any securities which are not permissible
investments for the Acquiring Fund.
5.2 Great Hall will call a meeting of the Acquired Fund's shareholders to
consider and act upon this Agreement and to take all other action reasonably
necessary to obtain approval of the transactions contemplated herein.
5.3 Great Hall will assist Voyageur in obtaining such information as the
Acquiring Fund reasonably requests concerning the beneficial ownership of the
Acquired Fund shares.
5.4 Subject to the provisions of this Agreement, Voyageur and Great Hall
will each take, or cause to be taken, all actions, and do or cause to be done,
all things reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement.
5.5 Great Hall will provide Voyageur with information reasonably necessary
with respect to Great Hall and the Acquired Fund and its agents and affiliates
in connection with Voyageur's preparation of the Registration Statement on Form
N-14 of Voyageur (the "REGISTRATION STATEMENT"), in compliance with the 1933
Act, the 1934 Act and the 1940 Act.
5.6 Following the Reorganization, Voyageur shall comply in all material
respects with all applicable provision of Section 15(f) of the 1940 Act.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of Great Hall to consummate the transactions provided for
herein shall be subject, at its election, to the performance by Voyageur of all
the obligations to be performed by it hereunder at or before the Effective Time,
and, in addition thereto, the following further conditions (any of which may be
waived by Great Hall, in its sole and absolute discretion):
6.1 All representations and warranties of Voyageur and the Acquiring Fund
contained in this Agreement shall be true and correct as of the date hereof and,
except as they may be affected by the transactions contemplated by this
Agreement, as of the Effective Time with the same force and effect as if made at
such time;
6.2 Voyageur and the Acquiring Fund shall have delivered to the Acquired
Fund a certificate executed in its name by its President or a Vice President, in
a form reasonably satisfactory to Great Hall and dated as of the date of the
Closing, to the effect that the representations and warranties of Voyageur and
the Acquiring Fund made in this Agreement are true and correct at the Effective
Time, except as they may be affected by the transactions contemplated by this
Agreement and as to such other matters as Great Hall shall reasonably request;
6.3 The Acquiring Fund shall have delivered to the Acquired Fund the
certificate as to the issuance of Acquiring Fund shares contemplated by the
second sentence of Section 3.4;
6.4 The Acquiring Fund's investment adviser shall have paid or agreed to
pay the costs incurred by Voyageur and Great Hall in connection with the
Reorganization, including the fees and expenses associated with the preparation
and filing of the Registration Statement referred to in Section 5.5 above, and
the expenses of printing and mailing the prospectus/proxy statement, soliciting
proxies and holding the Acquired Fund shareholder meeting required to approve
the transactions contemplated by this Agreement; and
6.5 The Acquired Fund shall have received an opinion from Dorsey & Whitney
LLP, counsel to the Acquiring Fund, dated as of the Closing Date, to the effect
that:
(a) Voyageur is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Minnesota, with the corporate
power to own all properties and assets to be acquired pursuant to this
Agreement and to conduct its business as described in the Registration
Statement following the Effective Time;
(b) the Agreement has been duly authorized by all requisite corporate
action, executed and delivered by Voyageur on behalf of the Acquiring Fund
and, assuming due authorization, execution and delivery of the Agreement by
the Acquired Fund, constitutes the valid and binding obligation of the
Acquiring Fund enforceable against the Acquiring Fund in accordance with
its terms, subject as to enforcement, to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' rights, including (without
limitation) applicable fraudulent transfer laws and court decisions
relating thereto and subject to the effect of general principles of equity,
including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforcement of agreements generally (regardless of whether considered in a
proceeding in equity or at law);
(c) the Acquiring Fund Shares to be issued to the Acquired Fund
Shareholders as provided by this Agreement have been duly authorized and
reserved for issuance and upon issuance, delivery and payment therefor as
described in the Agreement will be validly issued, fully paid and
nonassessable, and no shareholder of the Acquiring Fund will have any
preemptive rights to subscription or purchase in respect thereof;
(d) the execution and delivery of the Agreement and the Reorganization will
not violate or conflict with Voyageur's Articles of Incorporation or Bylaws
or any material agreement (known to such counsel) to which Voyageur on
behalf of the Acquiring Fund or the Acquiring Fund is a party or by which
Voyageur on behalf of the Acquiring Fund or the Acquiring Fund is bound;
(e) no consent, approval, authorization or order of and no notice to or
filing with, any court or governmental agency or body of the United States
is required to be obtained for the Reorganization, except such as have been
obtained or made under the 1933 Act, the 1934 Act and the 1940 Act, and
such as may be required under state securities laws;
(f) such counsel does not know of any pending or overtly threatened
lawsuits or claims against Voyageur or the Acquiring Fund with respect to
the Reorganization or which is required to be described in the Registration
Statement or the Prospectus/Proxy Statement that is not described as
required;
(g) to such counsel's knowledge, the Acquiring Fund is registered as an
investment company under the 1940 Act and such registration is in full
force and effect; and
(h) the Registration Statement conforms in all material respects to the
applicable requirements of the 1933 Act, the 1934 Act and the 1940 Act and
the rules and regulations of the Commission thereunder. Such counsel also
shall state that they have reviewed with certain officers of Voyageur and
representatives of Voyageur and the Acquiring Fund the contents of the
Registration Statement and related matters, and, although they are not
verifying and are not passing upon and do not assume any responsibility for
the accuracy and completeness of the statements contained in the
Prospectus/Proxy Statement or the Registration Statement, on the basis of
the foregoing (relying substantially as to materiality upon the opinions of
officers of Voyageur and representatives of Voyageur and the Acquiring
Fund), no facts have come to their attention that lead them to believe that
the Registration Statement as of its effective date, as of the date of the
Acquired Fund Shareholders' meeting and as of the Effective Time, contained
an untrue statement of a material fact or omitted 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,
except that such statement shall not apply to statements contained in, or
omissions from, the Prospectus/Proxy Statement and the Registration
Statement concerning the Acquired Fund, Great Hall, their agents and
affiliates, and Insight (or supplied by the Acquired Fund, Great Hall, or
their agents or affiliates for inclusion in said Prospectus/Proxy Statement
or Registration Statement). Such counsel may state that such counsel
expresses no view with respect to the financial statements, the notes
thereto and the related schedules and other financial or statistical data
included in the Registration Statement or the Prospectus/Proxy Statement.
Such opinion may state that such opinion is solely for the benefit of Great
Hall on behalf of the Acquired Fund, the Acquired Fund, and Great Hall's
directors and officers on behalf of the Acquired Fund. Such opinion may (i)
rely upon the opinion of other counsel, provided such counsel is reasonably
acceptable to the Acquired Fund, to the extent set forth in the opinion,
(ii) provide that references to the knowledge or best of knowledge of such
counsel shall mean the information the attorneys who have represented
Voyageur and the Acquiring Fund in connection with the Reorganization and
all attorneys currently employed by counsel to Voyageur who have worked on
matters for Voyageur within the past 12 months actually receive from
officers of Voyageur or authorized representatives of Voyageur or the
Acquiring Fund, without independent inquiry by counsel, and (iii)include
other customary qualifications and exceptions reasonably acceptable to the
Acquired Fund.
7. 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 of the obligations to be performed by it hereunder at or
before the Effective Time and, in addition thereto, the following conditions
(any of which may be waived by the Acquiring Fund, in its sole and absolute
discretion):
7.1 All representations and warranties of Great Hall and the Acquired Fund
contained in this Agreement shall be true and correct as of the date hereof and,
except as they may be affected by the transactions contemplated by this
Agreement, as of the Effective Time with the same force and effect as if made at
such time.
7.2 The Acquired Fund shall have delivered to the Acquiring Fund the
Effective Time Statement.
7.3 Great Hall and the Acquired Fund shall have delivered to the Acquiring
Fund a certificate executed in its name by its President or a Vice President, in
a form reasonably satisfactory to the Acquiring Fund and dated as of the date of
the Closing, to the effect that the representations and warranties of Great Hall
and the Acquired Fund made in this Agreement are true and correct at the
Effective Time, except as they may be affected by the transactions contemplated
by this Agreement.
7.4 The Acquired Fund shall have delivered to the Acquiring Fund the
written instructions to the custodian for the Acquired Fund contemplated by
Section 3.2.
7.5 The Acquired Fund shall have delivered to the Acquiring Fund the
certificate as to its shareholder records contemplated by the first sentence of
Section 3.4.
7.6 At or prior to the Effective Time, the expenses incurred by the
Acquired Fund (or accrued up to the Effective Time) shall have been maintained
by the Acquired Fund's investment adviser or otherwise so as not to exceed any
applicable contractual or state-imposed expense limitations.
7.7 At or prior to the Effective Time, appropriate action shall have been
taken by the Acquired Fund's investment adviser or otherwise such that no
unamortized organizational expenses shall be reflected in the Effective Time
Statement.
7.8 Immediately prior to the Effective Time, the Acquired Fund shall not
hold any securities which are not permissible investments for the Acquiring
Fund.
7.9 On or prior to the Closing Date, the Acquired Fund shall have made a
distribution to its shareholders of its net tax-exempt income, ordinary taxable
income and net realized capital gains, if any, for its taxable year ending on
the Closing Date, to the extent necessary to avoid federal income and excise
taxes on its income and gains and to maintain its status as a regulated
investment company under the Code.
7.10 The Acquiring Fund shall have received an opinion from Faegre & Benson
LLP, counsel to the Acquired Fund, dated as of the Closing Date, to the effect
that:
(a) Great Hall is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Minnesota, with the corporate
power to own all properties and assets to be acquired pursuant to this
Agreement and to conduct its business as described in the Registration
Statement;
(b) the Agreement has been duly authorized by all requisite corporate
action, executed and delivered by Great Hall on behalf of the Acquired Fund
and, assuming due authorization, execution and delivery of the Agreement by
the Acquiring Fund, constitutes the valid and binding obligation of the
Acquired Fund enforceable against the Acquired Fund in accordance with its
terms, subject as to enforcement, to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' rights, including (without
limitation) applicable fraudulent transfer laws and court decisions
relating thereto and subject to the effect of general principles of equity,
including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, and other similar doctrines affecting the
enforcement of agreements generally (regardless of whether considered in a
proceeding in equity or at law);
(c) the execution and delivery of the Agreement and the Reorganization will
not violate or conflict with the Articles of Incorporation or Bylaws of
Great Hall or any material agreement (known to such counsel) to which Great
Hall on behalf of the Acquired Fund or the Acquired Fund is a party or by
which Great Hall on behalf of the Acquired Fund or the Acquired Fund is
bound;
(d) no consent, approval, authorization or order of and no notice to or
filing with, any court or governmental agency or body of the United States
is required to be obtained or made by the Acquired Fund for the
Reorganization pursuant to the Agreement, except such as have been obtained
or made under the 1933 Act, the 1934 Act and the 1940 Act, and such as may
be required under state securities laws;
(e) such counsel does not know of any pending or overtly threatened
lawsuits or claims against Great Hall or the Acquired Fund with respect to
the Reorganization or which is required to be described in the Registration
Statement or the Prospectus/Proxy Statement that is not described as
required; and
(f) to such counsel's knowledge, Great Hall is registered as an investment
company under the 1940 Act and such registration is in full force and
effect. Such counsel also shall state that they have reviewed with certain
officers of Great Hall and representatives of Great Hall and the Acquired
Fund the contents of the Registration Statement and related matters, and,
although they are not verifying and are not passing upon and do not assume
any responsibility for the accuracy and completeness of the statements
contained in the Prospectus/Proxy Statement or the Registration Statement,
on the basis of the foregoing (relying substantially as to materiality upon
the opinions of officers of Great Hall and representatives of Great Hall
and the Acquired Fund), no facts have come to their attention that lead
them to believe that the Registration Statement as of its effective date,
as of the date of the Acquired Fund Shareholders' meeting and as of the
Effective Time, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein concerning the
Acquired Fund, Great Hall, their agents and affiliates (or supplied by any
such person for inclusion to the Prospectus/Proxy Statement and the
Registration Statement) or necessary to make the statements therein
concerning or supplied by any such persons, in light of the circumstances
under which they were made, not misleading. Such counsel may state that
such counsel expresses no view with respect to the financial statements,
the notes thereto and the related schedules and other financial or
statistical data included in the Registration Statement or the
Prospectus/Proxy Statement. Such opinion may state that such opinion is
solely for the benefit of Voyageur on behalf of the Acquiring Fund, the
Acquiring Fund, and Voyageur's directors and officers on behalf of the
Acquiring Fund. Such opinion may (i) rely upon the opinion of other
counsel, provided such counsel is reasonably acceptable to the Acquiring
Fund, to the extent set forth in the opinion, (ii) provide that references
to the knowledge or best of knowledge of such counsel shall mean the
information the attorneys who have represented Great Hall and the Acquired
Fund in connection with the Reorganization and all attorneys currently
employed by counsel to Great Hall who have worked on matters for Great Hall
within the past 12 months actually receive from officers of Great Hall or
authorized representatives of Great Hall or the Acquired Fund, without
independent inquiry by counsel, and (iii)include other customary
qualifications and exceptions reasonably acceptable to the Acquiring Fund.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
The following shall constitute further conditions precedent to the
consummation of the Reorganization:
8.1 This Agreement, the Amendment and the transactions contemplated herein
and therein shall have been approved by the requisite votes of (a) the Board of
Directors of each of Voyageur and Great Hall, and (b) the holders of the
outstanding shares of the Acquired Fund in accordance with the provisions of
their respective articles of incorporation and bylaws and applicable law, and
each of Voyageur and Great Hall shall have delivered certified copies of the
resolutions evidencing such approvals to the other party. Notwithstanding
anything herein to the contrary, neither Voyageur on behalf of the Acquiring
Fund nor Great Hall on behalf of the Acquired Fund may waive the conditions set
forth in this Section 8.1.
8.2 As of the Effective Time, no action, suit or other proceeding shall be,
to the knowledge of either party to this Agreement, 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 consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities deemed necessary by
the Acquiring Fund or the Acquired Fund to permit consummation, in all material
respects, of the transactions contemplated hereby 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 for
itself waive any of such conditions.
8.4 The Registration Statement shall have become effective under the 1933
Act, and no stop order suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act.
8.5 The parties shall have received the opinion of Dorsey & Whitney LLP
addressed to Great Hall and Voyageur, dated as of the date of the Closing, and
based in part on certain representations to be furnished by Great Hall on behalf
of the Acquired Fund, Voyageur on behalf of the Acquiring Fund, and their
respective investment advisers, substantially to the effect that:
(a) the Reorganization will constitute a reorganization within the meaning
of Section 368(a)(1)(C) of the Code, and the Acquiring Fund and the
Acquired Fund each will qualify as a party to the Reorganization under
Section 368(b) of the Code;
(b) the Acquired Fund shareholders will recognize no income, gain or loss
upon receipt, pursuant to the Reorganization, of the Acquiring Fund Shares.
Acquired Fund shareholders subject to taxation will recognize income upon
receipt of any net investment income or net capital gains of the Acquired
Fund which are distributed by the Acquired Fund prior to the Effective
Time;
(c) the tax basis of the Acquiring Fund Shares received by each Acquired
Fund shareholder pursuant to the Reorganization will be equal to the tax
basis of the Acquired Fund shares exchanged therefor;
(d) the holding period of the Acquiring Fund Shares received by each
Acquired Fund shareholder pursuant to the Reorganization will include the
period during which the Acquired Fund shareholder held the Acquired Fund
shares exchanged therefor, provided that the Acquired Fund shares were held
as a capital asset at the Effective Time;
(e) the Acquired Fund will recognize no income, gain or loss by reason of
the Reorganization;
(f) the Acquiring Fund will recognize no income, gain or loss by reason of
the Reorganization;
(g) the tax basis of the assets received by the Acquiring Fund pursuant to
the Reorganization will be the same as the basis of those assets in the
hands of the Acquired Fund as of the Effective Time;
(h) the holding period of the assets received by the Acquiring Fund
pursuant to the Reorganization will include the period during which such
assets were held by the Acquired Fund; and
(i) the Acquiring Fund will succeed to and take into account the earnings
and profits, or deficit in earnings and profits, of the Acquired Fund as of
the Effective Time.
8.6 The Amendment shall have been filed in accordance with the applicable
provisions of Minnesota law.
9. INDEMNIFICATION
9.1 Voyageur on behalf of the Acquiring Fund agrees to indemnify and hold
harmless Great Hall and the Acquired Fund and each of Great Hall's directors and
officers from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which, jointly or severally, Great
Hall and the Acquired Fund or any of Great Hall's directors or officers may
become subject, insofar as any such loss, claim, damage, liability or expense
(or actions with respect thereto) arises out of or is based on any breach by
Voyageur or the Acquiring Fund of any of their representations, warranties,
covenants or agreements set forth in this Agreement.
9.2 Great Hall on behalf of the Acquired Fund agrees to indemnify and hold
harmless Voyageur and the Acquiring Fund and each of Voyageur's directors and
officers from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which, jointly or severally, Voyageur
and the Acquiring Fund or any of Voyageur's directors or officers may become
subject, insofar as any such loss, claim, damage, liability or expense (or
actions with respect thereto) arises out of or is based on any breach by Great
Hall or the Acquired Fund of any of their representations, warranties, covenants
or agreements set forth in this Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF REPRESENTATIONS AND WARRANTIES
10.1 Voyageur on behalf of the Acquiring Fund and Great Hall on behalf of
the Acquired Fund agree that neither party has made any representation,
warranty, covenant or agreement not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
10.2 The representations and warranties contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith shall survive
the consummation of the transactions contemplated hereby.
11. TERMINATION
This Agreement and the transactions contemplated hereby may be terminated
and abandoned by either party by resolution of the party's Board of Directors at
any time prior to the Effective Time, if circumstances should develop that, in
the good faith opinion of such board, make proceeding with this Agreement and
such transactions not in the best interest of the applicable party's
shareholders.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of Great Hall
and Voyageur; provided, however, that following the meeting of the Acquired Fund
shareholders called by Great Hall pursuant to Section 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 Acquired Fund shareholders
under this Agreement to the detriment of such shareholders without their further
approval.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be deemed duly given
if delivered or mailed by registered mail, postage prepaid, addressed to
Voyageur at 90 South Seventh Street, Suite 4400, Minneapolis, Minnesota 55402,
Attention: President (with a copy to Dorsey & Whitney LLP, 220 South Sixth
Street, Minneapolis, Minnesota55402, Attention: Kathleen L. Prudhomme) or Great
Hall, 60 South Sixth Street, Minneapolis, MN 55402, Attention: President (with a
copy to Faegre & Benson LLP, 2200 Norwest Center, 90 South Seventh Street,
Minneapolis, Minnesota 55402, Attention: Matthew L. Thompson).
14. HEADINGS; COUNTERPARTS; ASSIGNMENT; MISCELLANEOUS
14.1 The Article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same agreement.
14.3 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the prior written consent of the other party. 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.
14 .4 The validity, interpretation and effect of this Agreement shall be
governed exclusively by the laws of the State of Minnesota, without giving
effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its President or Vice President.
VOYAGEUR INSURED FUNDS, INC.
on behalf of
VOYAGEUR MINNESOTA INSURED FUND
By_______________________________
Name_____________________________
Title____________________________
GREAT HALL INVESTMENT FUNDS, INC.
on behalf of
GREAT HALL MINNESOTA INSURED
TAX-EXEMPT FUND
By_______________________________
Name_____________________________
Title____________________________
EXHIBIT 1 TO AGREEMENT AND PLAN OF REORGANIZATION
ARTICLES OF AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
OF
GREAT HALL INVESTMENT FUNDS, INC.
The undersigned officer of Great Hall Investment Funds, Inc. (the
"Corporation"), a corporation subject to the provisions of Chapter 302A of the
Minnesota Statutes, hereby certifies that the Corporation's Board of Directors
and shareholders, at meetings held August 21, 1996, and November __, 1996,
respectively, adopted the resolutions hereinafter set forth; and such officer
further certifies that the amendments to the Corporation's Restated Articles of
Incorporation set forth in such resolutions were adopted pursuant to said
Chapter 302A.
WHEREAS, the Corporation is registered as an open end management investment
company (i.e., a mutual fund) under the Investment Company Act of 1940 and
offers its shares to the public in several series, each of which represents
a separate and distinct portfolio of assets; and
WHEREAS, it is desirable and in the best interests of the holders of the
Series D Common shares of the Corporation that the assets belonging to such
series be sold to Voyageur Insured Funds, Inc. ("Voyageur"), a Minnesota
corporation and an open end management investment company registered under
the Investment Company Act of 1940, in exchange for the Series A Class A
shares of Voyageur (also known as the "Voyageur Minnesota Insured Fund");
and
WHEREAS, the Corporation wishes to provide for the pro rata distribution of
such shares of Voyageur received by it to holders of the Corporation's
Series D shares and the simultaneous cancellation, redemption and
retirement of the outstanding Series D shares of the Corporation; and
WHEREAS, the Corporation and Voyageur have entered into an Agreement and
Plan of Reorganization providing for the foregoing transactions; and
WHEREAS, the Agreement and Plan of Reorganization requires that, in order
to bind all holders of the Corporation's Series D shares to the foregoing
transactions, and in particular to bind such holders to the cancellation,
redemption and retirement of the outstanding Series D shares of the
Corporation, it is necessary to adopt an amendment to the Corporation's
Restated Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's Restated Articles of
Incorporation be, and the same hereby are, amended to add the following
Article 5A immediately following Article 5 thereof:
5A. (a) For purposes of this Article 5A, the following terms shall
have the following meanings:
"CORPORATION" means this corporation.
"VOYAGEUR" means Voyageur Insured Funds, Inc., a Minnesota
corporation.
"ACQUIRED FUND" means the portfolio of asses and liabilities
represented by the Corporation's Series D shares.
"ACQUIRED FUND SHARES" means the Corporation's Series D shares.
"ACQUIRING FUND" means Voyageur's Minnesota Insured Fund, which is
represented by Voyageur's Series A shares.
"ACQUIRING FUND SHARES" means Voyageur's Series A shares.
"CLASS A ACQUIRING FUND SHARES" means the Acquiring Fund's Class A
shares.
"EFFECTIVE TIME" means 4:00 p.m. Eastern time on the date upon which
these Articles of Amendment are filed with the Minnesota Secretary of
State.
(b) At the Effective Time, the assets belonging to the Acquired Fund,
the Special Liabilities associated with such assets, and the General Assets
and General Liabilities allocated to the Acquired Fund, shall be sold to
and assumed by the Acquiring Fund in return for Class A Acquiring Fund
Shares, all pursuant to the Agreement and Plan of Reorganization between
the Corporation and Voyageur relating thereto. For purposes of the
foregoing, the terms "assets belonging to," "Special Liabilities," "General
Assets" and "General Liabilities" have the meanings assigned to them in
Article 7 of the Corporation's Restated Articles of Incorporation.
(c) The number of Class A Acquiring Fund Shares to be received by the
Acquired Fund and distributed by it to the respective Acquired Fund
shareholders shall be determined as follows:
(i) The net asset value per share of the Acquired Fund Shares
shall be computed as of the Effective Time using the valuation
procedures set forth in the Acquired Fund's Restated Articles of
Incorporation, its bylaws, its then-current Prospectus and Statement
of Additional Information, and as may be required by the Investment
Company Act of 1940, as amended.
(ii) The total number of Class A Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for the
assets and liabilities of the Acquired Fund shall have an aggregate
net asset value equal to the aggregate net asset value of all of the
Acquired Fund Shares immediately prior to the Effective Time, as
determined pursuant to (i) above.
(iii) Immediately after the Effective Time, the Acquired Fund
shall distribute to the Acquired Fund shareholders in liquidation of
the Acquired Fund pro rata (based upon the ratio that the number of
Acquired Fund Shares owned by each Acquired Fund shareholder
immediately prior to the Effective Time bears to the total number of
issued and outstanding Acquired Fund Shares of such class immediately
prior to the Effective Time) the full and fractional Class A Acquiring
Fund Shares received by the Acquired Fund pursuant to (i) and (ii)
above. Accordingly, each holder of Acquired Fund Shares shall receive,
immediately after the Effective Time, Class A Acquiring Fund Shares
with an aggregate net asset value equal to the aggregate net asset
value of the Acquired Fund Shares owned by such Acquired Fund
shareholder immediately prior to the Effective Time.
(d) The distribution of Class A Acquiring Fund Shares to Acquired Fund
shareholders provided for in paragraph (c) above shall be accomplished by
the issuance of such Class A Acquiring Fund Shares to open accounts on the
share records of the Acquiring Fund in the names of the Acquired Fund
shareholders representing the numbers of Class A Acquiring Fund Shares due
each such shareholder pursuant to the foregoing provisions. All issued and
outstanding Acquired Fund Shares shall simultaneously be canceled on the
books of the Acquired Fund, redeemed and retired. From and after the
Effective Time, share certificates formerly representing Acquired Fund
Shares shall represent the numbers of Class A Acquiring Fund Shares
determined in accordance with the foregoing provisions.
(e) From and after the Effective Time, the Acquired Fund Shares
canceled and retired pursuant to paragraph (d) above shall have the status
of authorized and unissued common shares of the Corporation, without
designation as to series.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed
these Articles of Amendment on behalf of the Corporation on November __, 1996.
GREAT HALL INVESTMENT FUNDS, INC.
By_______________________________
Name_____________________________
Title____________________________
PART B
STATEMENT OF ADDITIONAL INFORMATION
DATED SEPTEMBER 30, 1996
ACQUISITION OF THE ASSETS OF
GREAT HALL MINNESOTA INSURED TAX-EXEMPT FUND
A SEPARATELY MANAGED SERIES OF
GREAT HALL INVESTMENT FUNDS, INC.
60 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402-4422
(800-934-6674)
BY AND IN EXCHANGE FOR SHARES OF
VOYAGEUR MINNESOTA INSURED FUND
A SEPARATELY MANAGED SERIES OF
VOYAGEUR INSURED FUNDS, INC.
90 SOUTH SEVENTH STREET, SUITE 4400
MINNEAPOLIS, MINNESOTA 55402
(800-553-2143)
This Statement of Additional Information relates to the proposed Agreement
and Plan of Reorganization providing for (a) the acquisition of substantially
all of the assets and the assumption of all stated and identified liabilities of
Great Hall Minnesota Insured Tax-Exempt Fund (the "Great Hall Fund"), a
separately managed series of Great Hall Investment Funds, Inc., by Voyageur
Minnesota Insured Fund (the "Voyageur Fund"), in exchange for shares of Voyageur
Fund having an aggregate net asset value equal to the aggregate value of the
assets acquired (less the liabilities assumed) of the Great Hall Fund and (b)
the liquidation of the Great Hall Fund and the pro rata distribution of Voyageur
Fund shares to Great Hall Fund shareholders.
This Statement of Additional Information consists of this cover page and
the following documents which are incorporated by reference herein:
1. The Statement of Additional Information dated April30, 1996, as
supplemented June3, 1996, of Voyageur Fund.
2. The Annual Report of Voyageur Fund for the fiscal year ended
December31, 1995.
3. The unaudited Semi-Annual Report of Voyageur Fund for the six months
ended June30, 1996.
4. The Statement of Additional Information dated December1, 1995 of Great
Hall Fund.
5. The Annual Report of Great Hall Fund for the fiscal year ended July31,
1996.
Financial statements required pursuant to Form N-14 are included in the
above documents which have been incorporated by reference herein. Pro forma
financial statements are not required because the net asset value of Great Hall
Fund does not exceed ten percent of the net asset value of Voyageur Fund,
measured as of September 30, 1996.
This Statement of Additional Information is not a prospectus. A
Prospectus/Proxy Statement dated September 30, 1996 relating to the
above-referenced transaction may be obtained without charge by writing or
calling Voyageur Fund at the address or telephone number noted above. This
Statement of Additional Information relates to, and should be read in
conjunction with, such Prospectus/Proxy Statement.
