<PAGE> 1
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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
PROFESSIONALLY MANAGED PORTFOLIOS
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
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<PAGE> 2
PRELIMINARY PROXY MATERIALS - FOR SEC USE ONLY
UNITED STATES TRUST COMPANY OF BOSTON
40 COURT STREET
BOSTON, MASSACHUSETTS 02108
May __, 1999
Dear Shareholder:
I am writing to inform you of the upcoming special meeting of the
shareholders of Boston Balanced Fund (the "Fund"). At this meeting you are being
asked to vote on a proposed reorganization of the Fund. The Fund is currently a
series of Professionally Managed Portfolios which is an investment company
organized as a Massachusetts business trust. After the completion of the
proposed reorganization transaction, the Fund would be a series of The Coventry
Group ("Coventry"), another investment company also organized as a Massachusetts
business trust. This transaction is prompted by a proposed change in the
administrator and distributor for the Fund. Our firm, United States Trust
Company of Boston, which serves as investment adviser to the Fund, has selected
BISYS Fund Services, Columbus, Ohio ("BISYS"), to serve as the Fund's new
administrator and distributor. The Fund would become a new series of Coventry
due to the fact BISYS currently is the administrator and distributor for each of
the funds that are currently a part of Coventry.
Like the Trust, Coventry is operated as an "umbrella" fund structure -
i.e., a structure that permits the expenses of a single board of trustees and
certain other costs to be spread over a number of fund groups. Moving the Fund
to Coventry will preserve for it the cost-spreading advantages of an "umbrella"
fund arrangement. The reorganization will not cause any change in the Fund's
investment objectives or policies or in its portfolio management. The Fund will
continue to retain United Stated Trust Company of Boston as its investment
adviser and there will not be any increase in the rates of fees payable by the
Fund for investment advisory or other services. The Board of Trustees
unanimously believes that the proposed reorganization is in the Fund's and your
best interests.
PLEASE TAKE A FEW MINUTES TO REVIEW THIS PROXY STATEMENT AND SIGN AND
RETURN THE PROXY CARD TODAY. Please be sure to sign and return each proxy card
regardless of how many you receive.
<PAGE> 3
The Board of Trustees of the Fund has unanimously approved this proposal
and recommends a vote "FOR" the reorganization. If you have any questions
regarding the issues to be voted on or need assistance in completing your proxy
card, please contact us at (617) 726-7250.
Sincerely,
[Signature block]
-----------------------
Lucia Santini
Senior Vice President
ii
<PAGE> 4
BOSTON BALANCED FUND
A SERIES OF PROFESSIONALLY MANAGED PORTFOLIOS
479 WEST 22ND STREET
NEW YORK, NEW YORK 10011
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MAY __, 1999
---------------------
To the Shareholders of the Boston Balanced Fund:
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of Boston Balanced Fund (the "Fund") will be held at 11:00 a.m.,
Eastern Time, on June 14, 1999, at the offices of BISYS Fund Services ("BISYS"),
3435 Stelzer Road, Columbus, Ohio 43219, for the following purposes:
I. To vote upon the approval of an Agreement and Plan of Reorganization, in
the form set forth in Appendix A to the attached Proxy Statement,
pursuant to which the Fund would be reorganized as a separate series of
The Coventry Group, a Massachusetts business trust, as described in the
attached Proxy Statement.
II. To transact such other business as may come properly before the Meeting
and any adjournment thereof.
Shareholders of record at the close of business on May __, 1999 are
entitled to notice of, and to vote at, the Meeting.
By Order of the Board of Trustees of
Professionally Managed Portfolios
[Signature block]
Robin Berger
Secretary
<PAGE> 5
PLEASE RESPOND --- YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY OR PROXIES IN
THE ENCLOSED ENVELOPE SO THAT YOU WILL BE REPRESENTED AT THE MEETING.
ii
<PAGE> 6
BOSTON BALANCED FUND
A SERIES OF PROFESSIONALLY MANAGED PORTFOLIOS
479 WEST 22ND STREET
NEW YORK, NEW YORK 10011
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies from shareholders of Boston Balanced Fund (the "Fund")
in connection with a Special Meeting of Shareholders to be held at 11:00 a.m.,
Eastern Time, on June 14, 1999 and any adjournment thereof (the "Meeting"), at
the offices of BISYS Fund Services ("BISYS"), 3435 Stelzer Road, Columbus, Ohio
43219. The cost of the solicitation (including printing and mailing this Proxy
Statement, Notice of Meeting and Proxy, as well as any supplementary
solicitation) will be borne by U.S. Trust Company of Boston, the Fund's
investment adviser (the "Adviser"). The Notice of the Meeting, Proxy Statement
and Proxies are being mailed to shareholders on or about May __, 1999.
The presence in person or by proxy of the holders of record of 40% of
the outstanding shares of the Fund entitled to vote shall constitute a quorum at
the Meeting. If, however, such quorum shall not be present or represented at the
Meeting or if fewer votes are present in person or by proxy than the minimum
required to approve any proposal presented at the Meeting, the holders of a
majority of the votes attributable to the shares present in person or by proxy
shall have the power to adjourn the Meeting, from time to time, without notice
other than announcement at the Meeting, until the requisite number of votes
shall be present at the Meeting. The persons named as proxies will vote in favor
of such adjournment those proxies which they are entitled to vote in favor of
the Proposal and will vote against any such adjournment those proxies required
to be voted against such Proposal. At any such adjourned Meeting, if the
relevant quorum is subsequently constituted, any business may be transacted
which might have been transacted at the Meeting as originally called.
The Board of Trustees of the Fund has fixed the close of business on May
__, 1999, as the record date (the "Record Date") for the determination of
shareholders entitled to notice of and to vote at the Meeting and at any
adjournments thereof. The numbers of outstanding shares of the Fund as of the
Record Date, are _____________ shares.
3
<PAGE> 7
VOTING
Approval of the proposed reorganization requires the affirmative vote of
a majority of the Fund's outstanding shares which is defined in the 1940 Act to
mean the vote (i) of 67 percent or more of the voting securities present at the
meeting if the holders of more than 50 percent of the outstanding voting
securities of the Fund are present or represented by proxy, or (ii) of more than
50 percent of the outstanding voting securities of the Fund, whichever is less.
All shares represented by the enclosed form of proxy will be voted in accordance
with the instructions indicated on the proxy if it is completed, dated, signed
and returned in time to be voted at the Meeting and is not subsequently revoked.
If the proxy is returned properly signed and dated, but no instructions are
given, the shares represented will be voted in favor of the applicable Proposal.
Any proxy may be revoked by the timely submission of a properly executed,
subsequently dated proxy; by delivery to the Fund of a timely written
revocation; or otherwise by giving notice of revocation in open meeting prior to
the finalization of the vote on a Proposal. Execution and submission of a proxy
does not affect a shareholder's right to attend the Meeting in person.
In addition to the solicitation of proxies by use of the mail, proxies
may be solicited by officers of the Fund, or by officers and employees of the
Funds' investment adviser and administrator, personally or by telephone or
telegraph, without special compensation.
The most recent annual report of the Fund, including financial
statements, for the year ended June 30, 1998, and the most recent semi-annual
report for the semi-annual period ended December 31, 1998, have been mailed
previously to shareholders. If you have not received these reports or would like
to receive additional copies free of charge, please contact the Fund at the
address set forth on the first page of this proxy statement or by calling (617)
726-7250 and they will be sent within three business days by first class mail.
PROPOSAL I
APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION
Management of the Fund has proposed, and the Trustees have approved, a
restructuring of the Fund. Currently, the Fund is a separate investment series
of Professionally Managed Portfolios (the "Trust"), which is organized as a
Massachusetts business trust. The proposed reorganization would cause the Fund
to become a separate investment series of The Coventry Group ("Coventry"), a
registered investment company that is also organized as a Massachusetts business
trust (the "Reorganization"). Like the Trust, Coventry's affairs are overseen by
a board of trustees. There will be no changes to the Fund's investment
objectives or policies. The Adviser will continue to serve as the Fund's
investment adviser. The Adviser, which is located at 40 Court Street, Boston,
Massachusetts, is a Massachusetts-chartered banking and trust company and is a
wholly-owned subsidiary of UST Corp., a Massachusetts bank holding company.
The Reorganization has been proposed in connection with the pending
change in certain service providers for the Fund. At present, the Fund utilizes
Investment Company Administration
4
<PAGE> 8
Corporation ("ICAC") as its administrator and it utilizes First Fund
Distributors, Inc. ("FFDI") as its distributor. Management of the Fund has
determined to replace ICAC and FFDI with BISYS Fund Services, of Columbus, Ohio.
BISYS currently provides mutual fund administration and distribution services to
over 60 mutual fund complexes encompassing more than 900 individual portfolios
having total assets under management of approximately $200 billion. BISYS is a
wholly-owned subsidiary of BISYS Group, Inc., a publicly traded corporation that
provides technological and administrative services to over 1,000 financial
institutions nationwide including banks, savings institutions and mutual fund
companies.
The Reorganization is designed to preserve for the Fund the advantages
of being part of an "umbrella" fund structure. An umbrella fund is one in which
a single registered investment company, such as the Trust or Coventry, has
series that include various independently managed funds. By organizing these
funds as series of a single umbrella fund, the funds get the benefit of certain
efficiencies and cost savings. Among other things, a single board of trustees
oversees all of the component funds, and costs related to the trustees (their
fees, expenses of trustees' meetings), are spread across all the component
funds.
The Reorganization has received unanimous approval from the Trust's
Board of Trustees. The Reorganization is proposed to be accomplished pursuant to
an Agreement and Plan of Reorganization providing for the transfer of all of the
assets of the Fund to a newly formed series (the "Acquiring Series") of Coventry
in exchange for shares of the Acquiring Series as described below, and for the
assumption by the Acquiring Series of all of the liabilities of the Fund. The
completion of these transactions will result in the complete liquidation of the
Fund. As a result of the Reorganization, shareholders of the Fund would become
shareholders of the Acquiring Series and have the same proportionate interest in
the same portfolio of assets as prior to the Reorganization.
TERMS OF THE PLAN
The Reorganization is subject to a number of conditions, including the
approval of the Fund's shareholders. Accordingly, shareholders are being asked
to vote upon the approval of an Agreement and Plan of Reorganization (the
"Plan") pursuant to which the Reorganization would be consummated. The following
description of the Plan and the features of the proposed reorganization are
qualified in their entirety by reference to the text of the Plan. A copy of the
Plan is set forth as Exhibit A to this Proxy Statement.
The Plan provides, among other things, for the transfer of all of the
assets of the Fund to the Acquiring Series in exchange for (i) the assumption by
the Acquiring Series of all of the identified liabilities of the Fund and (ii)
the issuance to the Fund of shares of beneficial interest (the "Acquiring Series
Shares") in the Acquiring Series, the number of which shall be calculated based
upon the value of the net assets of the Fund then outstanding as of 4:00 p.m.
Eastern Time on the Valuation Time (defined in the Plan to be June 17, 1999, or
such other date as may be agreed upon by the Trust and Coventry). Specifically,
on the Exchange Date (the date following
5
<PAGE> 9
the Valuation Date) the Acquiring Series will deliver to the Fund a number of
full and fractional Acquiring Series Shares having an aggregate net asset value
equal to the value of the assets of the Fund attributable to its shares of
beneficial interest (the "Fund Shares"), transferred to the Fund on the Exchange
Date, less the value of the liabilities of the Fund, assumed by the Acquiring
Series on that date. After receipt of the Acquiring Series Shares, the Fund will
cause the Acquiring Series Shares to be distributed to its shareholders, in
complete liquidation of the Fund. The distribution of Acquiring Series Shares
will be accomplished by the establishment of accounts on the share records of
the Acquiring Series in the names of the Fund shareholders, each account
representing the respective number of full and fractional Acquiring Series
Shares due to such shareholder. Certificates with respect to Acquiring Series
Shares will not be issued.
The consummation of the Reorganization is subject to the conditions set
forth in the Plan. The Plan may be terminated and the Reorganization abandoned
at any time, before or after approval by the Shareholders of the Fund, by mutual
consent of the respective Trustees of the Trust and Coventry. The Plan may also
be amended before or after its approval by shareholders of the Fund, and the
Trust and Coventry may waive any condition to their respective obligations under
the Plan provided that no amendment or waiver of a condition after such approval
may adversely affect the interests of shareholders of the Acquiring Series or
the Fund.
EFFECT OF SHAREHOLDER APPROVAL OF THE REORGANIZATION
The Fund's current Investment Advisory Agreement is, technically, an
agreement between the Trust and the Adviser. Thus, upon the Reorganization, this
agreement will have to be terminated and a new investment advisory agreement
will be entered into between the Adviser and Coventry. An investment company
registered under the 1940 Act is required to obtain shareholder approval with
regard to an investment advisory agreement with the company's investment
adviser. As part of the proposal to reorganize the Fund, approval by the
requisite vote of the Shareholders of the Reorganization will also constitute,
for the purposes of the 1940 Act: approval of the proposed Investment Advisory
Agreement between Coventry on behalf of the Fund and United States Trust Company
of Boston. The terms of this agreement will be substantially the same as the
current agreement with the Trust on behalf of the Fund except for: (1) its date
and term; and (2) the fact that Coventry instead of the Trust will be a party.
Assuming shareholder approval of the Reorganization, the Fund, as the
sole shareholder of the Acquiring Series immediately prior to the completion of
the Reorganization, will effect the required advisory agreement approval by
voting its respective shares in the Acquiring Series in favor of the new
Investment Advisory Agreement on behalf of its shareholders prior to the
Reorganization. Coventry will then consider the requirements of the 1940 Act
referred to above to have been satisfied with respect to this agreement.
DESCRIPTION OF ACQUIRING SERIES SHARES
Shares will be issued to the Fund's shareholders in accordance with the
Plan as discussed above. The shares will be authorized for issuance by the Board
of Trustees of Coventry in
6
<PAGE> 10
accordance with Coventry's Declaration of Trust and Massachusetts business trust
law. The Acquiring Series will have substantially identical purchase, redemption
and exchange procedures as are currently in effect for the Fund, as described in
the Fund's current prospectus and statement of additional information.
INVESTMENT POLICIES AND INVESTMENT RESTRICTIONS
No changes will be made in the Fund's investment objectives, policies or
investment restrictions.
FEE STRUCTURE AND EXPENSES
The Reorganization will not cause any increase in fee rates or any
change in the nature of expenses to which the Fund will be subject subsequent to
the Reorganization.
EXPENSES OF THE REORGANIZATION
U.S. Trust Company of Boston will bear all expenses associated with the
transactions contemplated by the Plan, including expenses associated with the
solicitation of proxies.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to the Fund's obligation to consummate the
Reorganization, the Trust will receive an opinion from Dechert Price & Rhoads,
counsel to Coventry, to the effect that, on the basis of the existing provisions
of the Internal Revenue Code of 1986, as amended, (the "Code"), current
administrative rules and court decisions, the transactions contemplated by the
Plan constitute a tax-free reorganization for federal income tax purposes.
THE COVENTRY GROUP
Coventry was organized as a Massachusetts business trust on January 8,
1992. Coventry consists of several separate series managed by a number of
different investment advisers. Although there may be variations in the service
provider arrangements for different series (or groups of series), BISYS (or its
affiliates) typically provides administration, distribution, transfer agent and
fund accounting services to each of the series. Coventry's affairs are overseen
by a Board of Trustees. The four Trustees are as follows:
Walter B. Grimm - Mr. Grimm serves as Chairman of the Board of Trustees
and President of Coventry. He has been an employee of BISYS Fund Services since
1992. As an employee of Coventry's distributor, Mr. Grimm is currently the only
Trustee of Coventry who is an "interested person," as defined in the 1940 Act.
Maurice G. Stark - Currently retired, Mr. Stark served until the end of
1994 as Vice President-Finance and Treasurer of Battelle Memorial Institute, a
scientific research and development service corporation.
7
<PAGE> 11
Michael M. Van Buskirk - Mr. Van Buskirk has been Executive Vice
President of The Ohio Bankers' Association, a trade association, since 1991.
John H. Ferring IV - Since 1979, President and owner of Plaze,
Incorporated, St. Louis, Missouri.
BASIS FOR THE BOARD'S RECOMMENDATIONS
The Board of Trustees of the Trust, including a majority of those
Trustees who are not "interested persons" of the Trust, as defined in the 1940
Act (the "Independent Trustees"), unanimously approved the Reorganization at a
meeting held on February17, 1999. In approving the Reorganization, the Trustees
of the Trust determined that the proposed Reorganization would be in the best
interests of the Fund, and that the interests of the Fund's shareholders would
not be diluted as a result of effecting the Reorganization. The Board considered
various factors in recommending that shareholders approve the Reorganization.
The Trustees considered that the investment objective, policies and restrictions
of the Fund are identical to those of the Acquiring Series and that, the Fund
would be managed by the same personnel and in accordance with the same
investment strategies and techniques utilized in the management of the Fund
immediately prior to the Reorganization. The Board considered the qualifications
of BISYS to serve as the new administrator and distributor for the Fund and
concluded that BISYS was qualified and capable of providing these services. The
Board also took note of the fact that because Coventry is also organized as a
Massachusetts business trust like the Trust, the rights and interest of
shareholders will remain substantially unchanged and will not be significantly
altered as a result of the Reorganization. For these reasons, the Board
determined to approve the Reorganization and to recommend that shareholders vote
in favor of the transaction.
CONTINUATION OF SHAREHOLDER ACCOUNTS AND PLANS
BISYS, as Coventry's transfer agent, will establish accounts for all
current Fund shareholders containing the appropriate number of Acquiring Series
shares to be received by that shareholder in accordance with the terms and
provisions of the Plan. These accounts will be identical in all material
respects to the accounts currently maintained by the Fund on behalf of its
shareholders.
THE BOARD OF TRUSTEES OF THE TRUST,
INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND APPROVAL
OF PROPOSAL I.
8
<PAGE> 12
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information as of May 1999 for
the Fund with respect to each person or group known to the Fund to be the
beneficial owner of more than 5% of the Fund's outstanding voting securities:
<TABLE>
<CAPTION>
AMOUNT AND PERCENT
NAME AND ADDRESS OF NATURE OF OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- -------------- ------------------- -------------------- -------
<S> <C> <C> <C>
Boston Balanced Fund ........
</TABLE>
OTHER MATTERS
The Board does not currently know of any matters to be presented at the
Meeting other than those mentioned in this Proxy Statement. If any other matters
come properly before the Meeting, the shares represented by proxies will be
voted with respect thereto in accordance with the best judgement of the person
or persons voting the proxies.
The Fund does not hold annual or regular meetings of its shareholders.
Proposals of shareholders which are intended to be presented at a future
shareholders' meeting must be received by the Fund by a reasonable time prior to
the Fund's solicitation of proxies relating to such future meeting. Shareholder
proposals must meet certain requirements and there is no guarantee that any
proposal will be presented at a shareholders' meeting.
9
<PAGE> 13
PRELIMINARY PROXY MATERIALS -- FOR SEC USE ONLY
PROXY
BOSTON BALANCED FUND
SPECIAL MEETING OF SHAREHOLDERS
June 14, 1999
The undersigned hereby appoints __________ and __________ and each of
them, his attorneys and proxies with full power of substitution to vote and act
with respect to all shares of Boston Balanced Fund (the "Fund") held by the
undersigned at the Special Meeting of Shareholders of the Fund to be held at
11:00 a.m., Eastern Time, on June 14, 1999, at the offices of BISYS Fund
Services, 3435 Stelzer Road, Columbus, Ohio 43219 and at any adjournment thereof
(the "Meeting"), and instructs them to vote as indicated on the matters referred
to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of an Agreement and Plan of Reorganization for Boston Balanced Fund and
the transactions contemplated thereunder.
[ ]FOR [ ]AGAINST [ ]ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated _____________________, 1999
----------------------------------------------
Name of Shareholder(s) -- Please print or type
----------------------------------------------
Signature(s) of Shareholder(s)
----------------------------------------------
Signature(s) of Shareholder(s)
10
<PAGE> 14
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
11
<PAGE> 15
APPENDIX A
----------
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
Agreement and Plan of Reorganization ("Agreement") dated as of May __,
1999, by and between Professionally Managed Portfolios, a Massachusetts business
trust ("Portfolios"), on behalf of its separate investment series Boston
Balanced Fund ("Acquired Fund"), and The Coventry Group ("Group"), a
Massachusetts business trust, on behalf of its separate investment series Boston
Balanced Fund ("Acquiring Fund").
WHEREAS, Portfolios is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end investment company of the
management type and is authorized to issue its shares of beneficial interest in
separate series, including Acquired Fund, each of which maintains a separate and
distinct portfolio of assets; and
WHEREAS, Group is registered under the 1940 Act as an open-end
investment company of the management type and is authorized to issue its shares
of beneficial interest in separate series, including Acquiring Fund, each of
which maintains a separate and distinct portfolio of assets; and
WHEREAS, Acquired Fund will transfer all of its assets and assign all of
its liabilities to Acquiring Fund, in exchange for voting shares of beneficial
interest of Acquiring Fund ("Acquiring Fund Shares"), followed by the
distribution of the Acquiring Fund Shares by Acquired Fund to the shareholders
of Acquired Fund in exchange for their shares of Acquired Fund and in
liquidation of Acquired Fund, all upon the terms and provisions of this
Agreement (the "Reorganization"); and
WHEREAS, this Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the trustees of Portfolios have determined that the
Reorganization is in the best interests of Acquired Fund and that the interests
of its shareholders will not be diluted as a result thereof, and
WHEREAS, the trustees of Group have determined that the Reorganization
is in the best interests of Acquiring Fund and that the interests of its
shareholders will not be diluted as a result thereof;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto covenant and agree as follows:
A-1
<PAGE> 16
1. Plan of Reorganization and Liquidation.
(a) Sale of Assets, Assumption of Liabilities. Subject to the
prior approval of shareholders of the Acquired Fund and to the other
terms and conditions contained herein, Portfolios, on behalf of Acquired
Fund, agrees to assign, convey, transfer and deliver to Group and
Acquiring Fund, and Group, on behalf of Acquiring Fund, agrees to
acquire from Portfolios and Acquired Fund, all of the Investments (as
defined in Section 1(b)), cash and other assets of Acquired Fund, and
Group, on behalf of Acquiring Fund, agrees in exchange therefor to issue
to Acquired Fund the Acquiring Fund Shares and to assume all liabilities
of the Acquired Fund, whether contingent or otherwise, then existing.
The number of Acquiring Fund Shares to be issued by Group on behalf of
Acquiring Fund will be identical to the number of shares of the Acquired
Fund outstanding on the Valuation Date defined in Section 2. Such
transactions shall take place at the closing provided for in Section 3
(the "Closing").
(b) Assets Acquired. The assets to be acquired by Acquiring Fund
from Acquired Fund shall consist of all of Acquired Fund's property,
including, without limitation, (i) all investments shown on the
unaudited statement of assets and liabilities at December 31, 1998, as
supplemented with such changes as Acquired Fund has made after that date
in the ordinary course of its business, (ii) cash and dividends or
interest receivables which are owned by Acquired Fund, (iii) claims
(whether absolute or contingent, known or unknown, accrued or unaccrued)
and (iv) any deferred or prepaid expenses shown as an asset on the books
of Acquired Fund on the Valuation Date. As used herein, the term
"Investments" shall mean Acquired Fund's investments shown on the
unaudited statement of assets and liabilities at December 31, 1998, as
supplemented with such changes as Acquired Fund has made after December
31, 1998, in the ordinary course of its business.
(c) Liabilities Assumed. Acquiring Fund shall assume all
liabilities, expenses, costs, charges and reserves of Acquired Fund,
contingent or otherwise, reflected in the unaudited statement of assets
and liabilities of Acquired Fund as of the Valuation Date, prepared by
or on behalf of Portfolios in accordance with generally accepted
accounting principles consistently applied, and shall not assume any
other liabilities, whether absolute or contingent, not reflected
therein.
(d) Distribution in Liquidation; Dissolution. Upon consummation
of the transactions described in Sections 1(a), 1(b), and 1(c) above,
Acquired Fund shall distribute pro rata in complete liquidation to its
shareholders of record as of the Closing Date the Acquiring Fund Shares
received by it. Such distribution will be accomplished by the transfer
of the Acquiring Fund Shares then credited to the account of Acquired
Fund on the books of Acquiring Fund to open accounts on the share
records of Acquiring Fund in the names of the Acquired Fund shareholders
and representing the respective pro rata number of the Acquiring Fund
Shares due such shareholders. Portfolios, on behalf of Acquired Fund,
shall take such further action as may be required, necessary or
appropriate under Portfolios' Declaration of Trust, Massachusetts law
and the Code to effect the complete liquidation and dissolution of
Acquired Fund as promptly as practicable after the
A-2
<PAGE> 17
Closing Date. Portfolios, on behalf of Acquired Fund, will fulfill all
reporting requirements under the 1940 Act and the Code regarding
Acquired Fund, both before and after the Reorganization.
2. Valuation Date.
(a) The value of Acquired Fund's assets to be acquired by
Acquiring Fund in the Reorganization shall be the value of such assets
computed as of the close of business of the New York Stock Exchange on
June 17, 1999 after the declaration of any dividends on that date (such
time and date being herein referred to as the "Valuation Date"), using
the valuation procedures set forth in the Acquired Fund's prospectus or
statement of additional information.
(b) The number of the Acquiring Fund Shares shall equal the
number of full and fractional Acquiring Fund shares outstanding on the
Valuation Date.
3. Closing Date.
(a) Delivery of the assets of Acquired Fund, assumption of the
liabilities of Acquired Fund, and delivery of the Acquiring Fund Shares
shall be made at the offices of Group, 3435 Stelzer Road, Columbus, Ohio
on June 18, 1999, or such other date, and location agreed to by
Portfolios and Group, (such date of delivery being referred to herein as
the "Closing Date").
(b) The Custodian for Acquiring Fund shall deliver at the
Closing a certificate of an authorized officer stating that: (i)
Acquired Fund's portfolio securities, cash and any other assets have
been delivered in proper form to Acquiring Fund within five business
days prior to or on the Closing Date; and (ii) all necessary taxes,
including all applicable federal and state stock transfer stamps, if
any, have been paid, or provision for payment has been made, in
conjunction with the delivery of portfolio securities. Group, on behalf
of Acquiring Fund, may waive compliance with this Section 3(b) if in its
sole discretion it determines to do so.
4. Expenses of Reorganization. Neither Acquired Fund nor Acquiring Fund
will be responsible for the expenses of the Reorganization (including
proxy solicitation and other costs associated with Acquired Fund's
Special Meeting and professional fees and expenses in connection with
the preparation of this Agreement). The expenses of the Reorganization
shall be assumed and paid by United States Trust Company of Boston, the
adviser of Acquired Fund and Acquiring Fund. Any such expenses so borne
by United States Trust Company of Boston shall be solely and directly
related to the Reorganization within the meaning of Revenue Ruling
73-54, 1973-1 C.B. 187.
5. Representations, Warranties and Agreements of Portfolios. Portfolios
represents and warrants to, and agrees with, Group and Acquiring Fund
that:
(a) Portfolios is a Massachusetts business trust, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and has the power and
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<PAGE> 18
authority to own all of its properties and assets and to carry out its
obligations under this Agreement.
(b) Portfolios is registered with the Securities and Exchange
Commission ("Commission") under the 1940 Act as an open-end investment
company of the management type, and such registration has not been
revoked or rescinded and is in full force and effect.
(c) For each taxable year of its operation, including the
taxable year of the Closing, Acquired Fund has qualified and elected to
be treated as a regulated investment company under Subchapter M of the
Code, and has been eligible to and has computed its federal income tax
under Section 852 of the Code.
(d) The statements of assets and liabilities, including the
schedules of portfolio investments as of June 30, 1998, 1997 and 1996,
and the related statements of operations for the years then ended, have
been audited by Ernst & Young, L.L.P., independent certified public
accountants and have been furnished to Group. Such statements of assets
and liabilities and related statements of operations fairly present the
financial position of Acquired Fund as of such dates and are in
conformity with generally accepted accounting principles consistently
applied, and there are no known material liabilities of Acquired Fund as
of such dates which are not disclosed therein.
(e) The Prospectus of Acquired Fund dated October 31, 1998, as
supplemented to date ("Acquired Fund Prospectus"), and its related
Statement of Additional Information of even date therewith, in the forms
filed under the Securities Act of 1933, as amended ("1933 Act") with the
Commission and previously furnished to Group, did not as of that date
and do not as of the date hereof contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(f) Except as may have been previously disclosed to Acquiring
Fund, there are no material legal, administrative or other proceedings
pending or, to the knowledge of Acquired Fund, threatened against
Portfolios, Acquired Fund or any of its assets. Portfolios knows of no
facts that might form the basis for the institution of such proceedings
and is not a party to or subject to the provisions of any order, decree
or judgment of any court or governmental body that materially and
adversely affects its business or its ability to consummate the
transactions herein contemplated.
(g) There are no material contracts outstanding to which
Portfolios, on behalf of Acquired Fund, is a party, other than as
disclosed in the Acquired Fund Prospectus and the corresponding
Statement of Additional Information, and there are no such contracts or
commitments (other than this Agreement) which will be terminated with
liability to Portfolios on behalf of Acquired Fund on or prior to the
Closing Date.
(h) Acquired Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to Acquired
Fund on its statement of
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<PAGE> 19
assets and liabilities at December 31, 1998, and those incurred in the
ordinary course of Portfolios' business as an investment company since
that date.
(i) At the Closing Date, Portfolios, on behalf of Acquired Fund,
shall have filed all federal and other tax returns and reports
(including information returns) required to be filed by Acquired Fund by
such date (including any extensions), which returns and reports will be
correct in all material respects, and shall have paid or provided for
the payment of all federal and other taxes shown to be due on said
returns or reports or on any assessments received by Acquired Fund. All
tax liabilities of Acquired Fund have been adequately provided for on
its books, and no tax deficiency or liability of Acquired Fund has been
asserted, and no question with respect thereto has been raised, by the
Internal Revenue Service or by any state or local tax authority for
taxes in excess of those already paid.
(j) At the Closing Date, except for shareholder approval and
otherwise as described in Section 2(k), Portfolios will have full right,
power and authority to assign, transfer and deliver the Investments and
other Acquired Fund assets and liabilities to be transferred to Group
pursuant to this Agreement; on the Closing Date, subject only to the
delivery of the Investments and any such other assets and liabilities as
contemplated by this Agreement, Group, on behalf of Acquiring Fund, will
acquire the Investments and any such other assets subject to no
encumbrances, liens or security interests in favor of any third party
creditor of Acquired Fund and without any restrictions upon the transfer
thereof.
(k) No consent, approval, authorization or order of any court or
governmental authority is required to be obtained by Portfolios in order
to permit the consummation of the transactions contemplated by this
Agreement, except such as may be required under the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940
Act, regulations under those Acts, or state securities laws, all of
which shall have been received prior to the Closing Date, except for
such consents, approvals, authorizations or orders as may be required
subsequent to the Closing Date.
(l) Portfolios' registration statement on Form N-1A regarding
the Acquired Fund (the "Portfolios Registration Statement") under the
1933 Act and the 1940 Act, as of the date hereof and as of the Closing
Date, (i) complies and will comply in all material respects with the
provisions of the 1933 Act and the Rules and Regulations of the
Commission thereunder (the "1933 Act Regulations") and the 1940 Act and
the Rules and Regulations of the Commission thereunder ("1940 Act
Regulations"), and (ii) does not and will not contain an 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 not
misleading.
(m) Portfolios will call a Special Meeting of Shareholders of
the Acquired Fund ("Special Meeting") to consider and act upon this
Agreement, the Reorganization and related matters. In connection with
such meeting, Portfolios will solicit proxies from the Acquired Fund
shareholders pursuant to proxy solicitation materials complying in all
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<PAGE> 20
material respects with the 1934 Act and the Rules and Regulations of the
Commission thereunder ("1934 Act Regulations") and the 1940 Act and the
1940 Act Regulations.
6. Representations, Warranties and Agreements of Group. Group represents
and warrants to, and agrees with, Portfolios and Acquired Fund that:
(a) Group is a Massachusetts business trust, validly existing
and in good standing under the laws of the Commonwealth of Massachusetts
and has the power and authority to own all of its properties and assets
and to carry out its obligations under this Agreement.
(b) Group is registered with the Commission under the 1940 Act
as an open-end investment company of the management type, and such
registration has not been revoked or rescinded and is in full force and
effect. On or before the Closing Date, Group's Registration Statement
under the 1933 Act on Form N-1A regarding the Acquiring Fund (the "Group
Registration Statement"), shall have been declared effective by the
Commission.
(c) Group expects that Acquiring Fund will qualify and elect to
be treated as a regulated investment company under Subchapter M of the
Code for the taxable year including the Closing and will take all
actions necessary to do so.
(d) Acquiring Fund will have no assets or liabilities as of the
Valuation Date.
(e) Except as Group has previously disclosed to Portfolios,
there are no material legal, administrative or other proceedings pending
or, to the knowledge of Group, threatened against Group or Acquiring
Fund which assert liability on the part of Group or Acquiring Fund.
(f) There are no material contracts outstanding to which Group
is a party, other than this Agreement and material contracts disclosed
in the Group Registration Statement.
(g) No consent, approval, authorization or order of any
governmental authority is required to be obtained by Group in order to
permit the consummation of the transactions contemplated by this
Agreement, except such as may be required under the 1933 Act, 1934 Act,
1940 Act, regulations under those Acts or state securities laws, all of
which shall have been received prior to the Closing Date, except for
such consents, approvals, authorizations or orders as may be required
subsequent to the Closing Date.
(h) On the Closing Date, Group and Acquiring Fund will have full
right, power and authority to acquire the Investments and any other
assets and assume the liabilities of Acquired Fund to be transferred to
Acquiring Fund pursuant to this Agreement.
(i) At the time the Group Registration Statement becomes
effective and as of the Closing Date, the Group Registration Statement
(i) will comply in all material respects with the provisions of the 1933
Act and the 1933 Act Regulations and the 1940 Act and
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<PAGE> 21
the 1940 Act Regulations, and (ii) will not contain an 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 not
misleading.
(j) Group has no plan or intention to issue additional Acquiring
Fund Shares following the Reorganization except for shares issued in the
ordinary course of Group's business as an open-end investment company;
nor does Group have any plan or intention to redeem or otherwise
reacquire any Acquiring Fund Shares issued to Acquired Fund shareholders
pursuant to the Reorganization, other than through redemptions arising
in the ordinary course of that business; Group will continue Acquired
Fund's business in the same manner that Acquired Fund conducted it
immediately before the Reorganization and has no plan or intention to
sell or otherwise dispose of any of the assets to be acquired by
Acquiring Fund in the Reorganization, except for dispositions made in
the ordinary course of business and dispositions necessary to maintain
the status of Acquiring Fund as a regulated investment company under
Subchapter M of the Code.
(k) The Acquiring Fund Shares to be issued by Group have been
duly authorized and, when issued and delivered by Group and Acquiring
Fund to Acquired Fund pursuant to this Agreement, will be legally and
validly issued by Group and will be fully paid and nonassessable, and no
shareholder of Acquiring Fund will have any preemptive right of
subscription or purchase in respect thereof.
(l) The issuance of Acquiring Fund Shares pursuant to this
Agreement will be in compliance with all applicable federal and state
securities laws. Acquiring Fund will use all reasonable efforts to
obtain the approvals and authorizations required by such laws.
7. Special Meeting of Shareholders; Dissolution.
(a) Portfolios agrees to call the Special Meeting as soon as is
practicable for the purpose of authorizing and approving this Agreement
(including the liquidation and dissolution of Acquired Fund), and it
shall be a condition to the obligations of each of the parties hereto
that the holders of shares of beneficial interest of Acquired Fund shall
have approved this Agreement, and the transactions contemplated herein,
including the liquidation and dissolution of Acquired Fund, in the
manner required by law and by Portfolios' Declaration of Trust at such a
meeting.
(b) Portfolios agrees that the liquidation and dissolution of
Acquired Fund will be effected in the manner provided in Portfolios'
Declaration of Trust and in accordance with applicable law.
(c) Portfolios and Group will cooperate with the other, and each
will furnish to the other the information required by the 1934 Act and
1940 Act and the 1934 Act Regulations and 1940 Act Regulations to be set
forth in the proxy solicitation materials to be prepared by Portfolios
and utilized in connection with the Special Meeting.
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<PAGE> 22
8. Conditions of Acquired Fund's Obligations. The obligations of Portfolios
and Acquired Fund hereunder shall be subject to the following
conditions:
(a) This Agreement shall have been authorized and the
transactions contemplated hereby, including the liquidation and
dissolution of Acquired Fund, shall have been approved by the trustees
and shareholders of Acquired Fund, and by the trustees of Group, in the
manner required by law.
(b) As of the Closing Date, all representations and warranties
of Group and Acquiring Fund made in this Agreement shall be true and
correct in all material respects as if made at and as of such date,
Group and Acquiring Fund shall have complied with all of the agreements
and satisfied all of the conditions on their part to be performed or
satisfied at or prior to the Closing Date, and Group shall have
furnished to Portfolios a statement, dated the Closing Date, signed by
Group's President (or any Vice President) and Treasurer (or other
financial officer) certifying those facts as of the Closing Date.
(c) There shall not be any material litigation pending or
overtly threatened with respect to the matters contemplated by this
Agreement.
(d) Portfolios, on behalf of Acquired Fund, shall have received
an opinion of Dechert Price & Rhoads, in form reasonably satisfactory to
Portfolios and dated the Closing Date, to the effect that (i) Group is a
business trust validly existing under the laws of the Commonwealth of
Massachusetts, (ii) all of the Acquiring Fund Shares to be delivered to
Portfolios, on behalf of Acquired Fund, as provided for by this
Agreement are duly authorized and upon such delivery will be validly
issued and will be fully paid and nonassessable by Group and no
shareholder of Group has any preemptive right to subscription or
purchase in respect thereof, (iii) this Agreement has been duly
authorized, executed and delivered by Group on behalf of Acquiring Fund
and assuming due authorization, execution and delivery of this Agreement
by Acquired Fund, is a valid and binding obligation of Group and
Acquiring Fund enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally
and other equitable principles, (iv) the execution and delivery of this
Agreement did not, and the consummation of the transactions contemplated
hereby will not, violate Group's Declaration of Trust or its By-Laws or
any provision of any agreement known to such counsel to which Group or
Acquiring Fund is a party or by which it is bound, (v) to the knowledge
of such counsel no consent, approval, authorization or order of any
court or governmental authority is required to be obtained by Group in
order to permit the consummation by Group or Acquiring Fund of the
transactions contemplated herein, except such as have been obtained
under the 1933 Act, 1934 Act and 1940 Act and such as may be required
under state securities laws or as may be required under state business
trust laws. In rendering such opinion Dechert Price & Rhoads may rely on
certain reasonable assumptions and certifications of fact received from
Portfolios and Group.
(e) Portfolios shall have received an opinion of Dechert Price &
Rhoads, addressed to Portfolios on behalf of Acquired
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<PAGE> 23
Fund and Group on behalf of Acquiring Fund, and in a form reasonably
satisfactory to Portfolios and dated the Closing Date, with respect to
the matters specified in Section 9(e) of this Agreement. In rendering
such opinion Dechert Price & Rhoads may rely on certain reasonable
assumptions and certifications of fact received from Portfolios on
behalf of Acquired Fund, Group on behalf of Acquiring Fund and certain
Acquired Fund shareholders.
(f) All necessary proceedings taken by Group in connection with
the transactions contemplated by this Agreement and all documents
incidental thereto reasonably shall be satisfactory in form and
substance to Portfolios and Paul, Hastings, Janofsky & Walker LLP.
(g) The Group Registration Statement shall have become effective
under the 1933 Act, Group shall be eligible to sell its securities under
applicable state securities law provisions, and no stop order suspending
such effectiveness or right to sell shall have been instituted or, to
the knowledge of Group, contemplated by the Commission or any state
regulatory authority.
9. Conditions of Acquiring Fund's Obligations. The obligations of Group and
Acquiring Fund hereunder shall be subject to the following conditions:
(a) This Agreement shall have been authorized and the
transactions contemplated hereby, including the liquidation and
dissolution of Acquired Fund, shall have been approved by the trustees
of Portfolios and the shareholders of Acquired Fund, and the trustees of
Acquiring Fund, in the manner required by law.
(b) As of the Closing Date, all representations and warranties
of Acquired Fund made in this Agreement shall be true and correct in all
material respects as if made at and as of the Closing Date; Portfolios
shall have complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied at or prior to the
Closing Date, and Portfolios shall have furnished to Group a statement,
dated the Closing Date, signed by Portfolios' President (or any Vice
President) and Treasurer (or other financial officer) certifying those
facts as of the Closing Date.
(c) There shall not be any material litigation pending or
overtly threatened with respect to the matters contemplated by this
Agreement.
(d) Group shall have received an opinion of Paul, Hastings,
Janofsky & Walker LLP, in form reasonably satisfactory to Group and
dated the Closing Date, to the effect that (i) Portfolios is a business
trust validly existing under the laws of the Commonwealth of
Massachusetts, (ii) this Agreement has been duly authorized, executed
and delivered by Portfolios and, assuming due authorization, execution
and delivery of this Agreement by Group, is a valid and binding
obligation of Portfolios and Acquired Fund, enforceable in accordance
with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and other equitable
principles, (iii) Portfolios, on behalf of Acquired Fund, has power to
assign, convey, transfer and deliver the Investments and other assets
contemplated hereby
A-9
<PAGE> 24
and, upon consummation of the transactions contemplated hereby in
accordance with the terms of this Agreement, Portfolios, on behalf of
Acquired Fund, will have duly assigned, conveyed, transferred and
delivered such Investments and other assets to Group and Acquiring Fund
(iv) the execution and delivery of this Agreement did not and the
consummation of the transactions contemplated hereby will not, violate
Group's Declaration of Trust or its By-Laws, as amended, or any
provision of any agreement known to such counsel to which Portfolios is
a party or by which it is bound, and (v) to the knowledge of such
counsel no consent, approval, authorization or order of any court or
governmental authority is required to be obtained by Portfolios in order
to permit the consummation by Portfolios or Acquired Fund of the
transactions contemplated herein, except such as have been obtained
under the 1934 Act and 1940 Act and such as may be required under state
securities laws or state business trust laws. In rendering such opinion,
Paul, Hastings, Janofsky & Walker LLP may rely upon certain reasonable
and customary assumptions and certifications of fact received from
Portfolios and Group.
(e) Group, on behalf of Acquiring Fund, shall have received an
opinion of Dechert Price & Rhoads, addressed to Group on behalf of
Acquiring Fund and Portfolios on behalf of Acquired Fund, and in a form
reasonably satisfactory to Group and dated the Closing Date, to the
effect that for federal income tax purposes (i) the transfer of all of
Acquired Fund's assets in exchange for the Acquiring Fund Shares and the
assumption by Acquiring Fund of liabilities of Acquired Fund will
constitute a "reorganization" within the meaning of Section 368(a) of
the Code, and each of Acquiring Fund and Acquired Fund is a "party to a
reorganization" within the meaning of Section 368(b) of the Code; (ii)
no gain or loss will be recognized by Acquired Fund upon the transfer of
the assets of Acquired Fund in exchange for the Acquiring Fund Shares
and the assumption by Acquiring Fund of the liabilities of Acquired Fund
or upon the constructive distribution of Acquiring Fund Shares by
Acquired Fund to its shareholders in liquidation; (iii) no gain or loss
will be recognized by the shareholders of Acquired Fund upon the
exchange of their shares for Acquiring Fund Shares, (iv) the basis of
the Acquiring Fund Shares an Acquired Fund shareholder receives in
connection with the Reorganization will be the same as the basis of his
or her shares exchanged therefor; (v) an Acquired Fund shareholder's
holding period for his or her Acquiring Fund Shares will be determined
by including the period for which he or she held Acquired Fund shares
exchanged therefor, provided that he or she held such shares as capital
assets; (vi) no gain or loss will be recognized by the Acquiring Fund
upon the receipt of the assets of Acquired Fund in exchange for
Acquiring Fund Shares and the assumption by Acquiring Fund of the
liabilities of Acquired Fund; (vii) the basis in the hands of Acquiring
Fund of the assets of Acquired Fund transferred to Acquiring Fund will
be the same as the basis of the assets in the hands of Acquired Fund
immediately prior to the transfer; and (viii) Acquiring Fund's holding
periods of the assets of Acquired Fund will include the period for which
such assets of Acquired Fund were held by Acquired Fund. The delivery of
such opinion is conditioned upon receipt by Dechert Price & Rhoads of
representations it shall request from Portfolios on behalf of Acquired
Fund and from Group on behalf of Acquiring Fund.
(f) All necessary proceedings taken by Portfolios in connection
with the transactions contemplated by this Agreement and all documents
incidental thereto
A-10
<PAGE> 25
reasonably shall be satisfactory in form and substance to Group and
Dechert Price & Rhoads.
10. Termination. Portfolios and Group may, by mutual consent of their
respective trustees, terminate this Agreement, and Portfolios or Group,
after consultation with counsel and by consent of their respective
trustees or an officer authorized by such trustees, may, subject to
Section 12 of this Agreement, waive any condition to their respective
obligations hereunder.
11. Sole Agreement; Governing Law; Amendments. This Agreement supersedes all
previous correspondence and oral communications between the parties
regarding the subject matter hereof, constitutes the only understanding
with respect to such subject matter and shall be construed in accordance
with and governed by the laws of the Commonwealth of Massachusetts.
This Agreement may be amended at any time by action of the trustees of
Portfolios and Group, notwithstanding approval thereof by the
shareholders of Acquired Fund, or a duly authorized officer thereof,
provided that no amendment shall have a material adverse effect on the
interests of the shareholders of Acquired Fund or of the shareholders of
Acquiring Fund.
12. Agreement and Declaration of Trust. Portfolios is a business trust
organized under Massachusetts law, and under a Declaration of Trust, to
which reference is hereby made and a copy of which is on file at the
office of the Secretary of State of the Commonwealth of Massachusetts as
required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of Portfolios entered into in the name
or on behalf thereof by any of the trustees, officers, employees or
agents are made not individually, but in such capacities, and are not
binding upon any of the trustees, officers, employees, agents or
shareholders of Portfolios personally, but bind only the assets of
Acquired Fund, in accordance with Massachusetts law, and all persons
dealing with any of the series or funds of Portfolios, such as the
Acquired Fund must look solely to the assets of Portfolios belonging to
such series or funds for the enforcement of any claims against
Portfolios.
The names "The Coventry Group" and "Trustees of The Coventry Group"
refer respectively to the Trust created and the Trustees, as trustees
but not individually or personally, acting from time to time under an
Agreement and Declaration of Trust dated as of January 8, 1992, to which
reference is made and a copy of which is on file at the office of the
Secretary of State of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of "The Coventry Group" entered into in
the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not
binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the assets of the Trust and all persons
dealing with any fund of shares of the Trust, such as Acquiring Fund,
must look solely to the assets of the Trust belonging to such fund for
the enforcement of any claims against the Trust.
A-11
<PAGE> 26
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
Professionally Managed Portfolios The Coventry Group
on behalf of its series on behalf of its series
Boston Balanced Fund Boston Balanced Fund
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------ ------------------------------
A-12
