FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of this
21st day of September, 2006, by and between ING Partners, Inc., a Maryland
corporation with its principal place of business at 0000 Xxxx Xxxxxxxxxx Xxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxx 00000-0000 (the "Company"), on behalf of its series,
ING Xxxxxxxxx Xxxxxx Partners Portfolio (the "Acquiring Portfolio"), and ING
Investors Trust, a Massachusetts business trust with its principal place of
business at 0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000-0000 (the
"Trust"), on behalf of its series, ING Eagle Asset Capital Appreciation
Portfolio (the "Acquired Portfolio").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Acquired Portfolio to the Acquiring Portfolio in exchange solely
for the Service Class ("Class S") voting shares of common stock of the Acquiring
Portfolio (the "Acquiring Portfolio Shares"), the assumption by the Acquiring
Portfolio of the liabilities of the Acquired Portfolio described in paragraph
1.3, and the distribution of the Acquiring Portfolio Shares to the shareholders
of the Acquired Portfolio in complete liquidation of the Acquired Portfolio as
provided herein, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, the Acquired Portfolio and the Acquiring Portfolio are series
of open-end, registered investment companies of the management type, and the
Acquired Portfolio owns securities which generally are assets of the character
in which the Acquiring Portfolio is permitted to invest; and
WHEREAS, the Board of Directors of the Company has determined that the
exchange of all of the assets of the Acquired Portfolio for Acquiring Portfolio
Shares and the assumption of the liabilities of the Acquired Portfolio, as
described in paragraph 1.3 herein, by the Acquiring Portfolio is in the best
interests of the Acquiring Portfolio and its shareholders and that the interests
of the existing shareholders of the Acquiring Portfolio would not be diluted as
a result of this transaction; and
WHEREAS, the Board of Trustees of the Trust has determined that the
exchange of all of the assets of the Acquired Portfolio for Acquiring Portfolio
Shares and the assumption of the liabilities of the Acquired Portfolio by the
Acquiring Portfolio, as described in paragraph 1.3 herein, is in the best
interests of the Acquired Portfolio and its shareholders and that the interests
of the existing shareholders of the Acquired Portfolio would not be diluted as a
result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED PORTFOLIO TO THE ACQUIRING PORTFOLIO IN
EXCHANGE FOR THE ACQUIRING PORTFOLIO SHARES, THE ASSUMPTION OF ALL KNOWN
ACQUIRED PORTFOLIO LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED
PORTFOLIO
1.1. Subject to the requisite approval of the Acquired Portfolio
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired
Portfolio agrees to transfer all of the Acquired Portfolio's assets, as set
forth in paragraph 1.2, to the Acquiring Portfolio, and the Acquiring Portfolio
agrees in exchange therefor: (i) to deliver to the Acquired Portfolio the number
of full and fractional Class S Acquiring Portfolio Shares determined by dividing
the value of the Acquired Portfolio's net assets with respect to each class,
computed in the manner and as of the time and date set forth in paragraph 2.1,
by the net asset value of one Acquiring Portfolio Share of the same class,
computed in the manner and as of the time and date set forth in paragraph 2.2;
(ii) to deliver to the Acquired Portfolio the number of full and fractional
Class S Acquiring Portfolio Shares determined by dividing the value of the
Acquired Portfolio's net assets with respect to Service 2 Class ("Class S2")
shares, computed in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Acquiring Portfolio Share of Class
S, computed in the manner and as of the time and date set forth in paragraph
2.2; and (iii) to assume the liabilities of the Acquired Portfolio, as set forth
in paragraph 1.3. Such transactions shall take place at the closing provided for
in paragraph 3.1 (the "Closing").
1.2. The assets of the Acquired Portfolio to be acquired by the
Acquiring Portfolio shall consist of all assets and property, including, without
limitation, all cash, securities, commodities and futures interests and
dividends or interests receivable that are owned by the Acquired Portfolio and
any deferred or prepaid expenses shown as an asset on the books of the Acquired
Portfolio on the closing date provided for in paragraph 3.1 (the "Closing Date")
(collectively, "Assets").
1.3. The Acquired Portfolio will endeavor to discharge all of its
known liabilities and obligations prior to the Closing Date. The Acquiring
Portfolio shall assume the liabilities of the Acquired Portfolio set forth in
the Acquired Portfolio's Statement of Assets and Liabilities as of the Closing
Date delivered by the Trust, on behalf of the Acquired Portfolio, to the
Company, on behalf of the Acquiring Portfolio, pursuant to paragraph 7.2 hereof.
On or as soon as practicable prior to the Closing Date, the Acquired Portfolio
will declare and pay to its shareholders of record one or more dividends and/or
other distributions so that it will have distributed substantially all (and in
no event less than 98%) of its investment company taxable income (computed
without regard to any deduction for dividends paid) and realized net capital
gain, if any, for the current taxable year through the Closing Date.
1.4. Immediately after the transfer of assets provided for in
paragraph 1.1, the Acquired Portfolio will: (i) distribute to the Acquired
Portfolio's shareholders of record with respect to Class S shares, determined as
of immediately after the close of business on the Closing Date, on a PRO RATA
basis within that class, the Acquiring Portfolio Shares of the same class
received by the Acquired Portfolio pursuant to paragraph 1.1; (ii) distribute to
the Acquired Portfolio's shareholders of record with respect to Class S2 shares,
determined as of immediately after the close of business on the Closing Date, on
a PRO RATA basis within that class, the Acquiring Portfolio Shares of Class S
received by the Acquired Portfolio pursuant to paragraph 1.1; and (iii)
completely liquidate. Such distribution and liquidation will be accomplished,
with respect to each class of the Acquired Portfolio's shares, by the transfer
of the Acquiring Portfolio Shares then credited to the account of the Acquired
Portfolio on the books of the Acquiring Portfolio to open accounts on the share
records of the Acquiring Portfolio in the names of Class S and Class S2 Acquired
Portfolio's shareholders, determined as of immediately after the close of
business on the Closing Date, ("Acquired Portfolio Shareholders"). The aggregate
net asset value of Class S Acquiring Portfolio Shares to be so credited to Class
S Acquired Portfolio Shareholders shall, with respect to each class, be equal to
the aggregate net asset value of the Acquired Portfolio shares of that same
class owned by such shareholders on the Closing Date. The aggregate net asset
value of Class S Acquiring Portfolio Shares to be so credited to Class S2
Acquired Portfolio Shareholders shall be equal to the aggregate net asset value
of the Acquired Portfolio shares of Class S2 owned by such shareholders on the
Closing Date. All issued and outstanding Class S Acquired Portfolio shares will
simultaneously be canceled on the books of the Acquired Portfolio, although
share certificates representing interests in Class S shares of the Acquired
Portfolio will represent a number of the same class of Acquiring Portfolio
Shares after the Closing Date, as determined in accordance with Section 2.3. All
issued and outstanding Class S2 Acquired Portfolio shares will simultaneously be
canceled on the books of the Acquired Portfolio, although share certificates
representing interests in Class S2 shares of the Acquired Portfolio will
represent a number of Class S Acquiring Portfolio shares after the Closing Date,
as determined in accordance with Section 2.3. The Acquiring Portfolio shall not
issue certificates representing the Class S Acquiring Portfolio Shares in
connection with such exchange.
1.5. Ownership of Acquiring Portfolio Shares will be shown on the
books of the Acquiring Portfolio's transfer agent, as defined in paragraph 3.3.
1.6. Any reporting responsibility of the Acquired Portfolio including,
but not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. Securities and Exchange Commission
(the "Commission"), any state securities commission, and any federal, state or
local tax authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Acquired Portfolio.
2. VALUATION
2.1. The value of the Assets shall be the value computed as of
immediately after the close of business of the New York Stock Exchange and after
the declaration of any dividends on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures in the
then-current prospectus and statement of additional information with respect to
the Acquiring Portfolio, and valuation procedures established by the Acquiring
Portfolio's Board of Directors.
2.2. The net asset value of a Class S Acquiring Portfolio Share shall
be the net asset value per share computed with respect to that class as of the
Valuation Date, using the valuation procedures set forth in the Acquiring
Portfolio's then-current prospectus and statement of additional and valuation
procedures established by the Acquiring Portfolio's Board of Directors.
2.3. The number of the Class S Acquiring Portfolio Shares to be issued
(including fractional shares, if any) in exchange for the Acquired Portfolio's
Class S assets shall be determined with respect to each such class by dividing
the value of the net assets with respect to the Class S shares of the Acquired
Portfolio, as the case may be, determined using the same valuation procedures
referred to in paragraph 2.1, by the net asset value of an Acquiring Portfolio
Share of the same Class, determined in accordance with paragraph 2.2. The number
of Class S Acquiring Portfolio Shares to be issued (including fractional shares,
if any) in exchange for the Acquired Portfolio's Class S2 assets shall be
determined with respect to Class S2 by dividing the value of the net assets with
respect to the Class S2 shares of the Acquired Portfolio determined using the
same valuation procedures referred to in paragraph 2.1, by the net asset value
of a Class S Acquiring Portfolio Share, determined in accordance with paragraph
2.2.
2.4. All computations of value shall be made by the Acquired
Portfolio's designated record keeping agent and shall be subject to review by
Acquiring Portfolio's record keeping agent and by each Fund's respective
independent accountants.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be December 16, 2006 or such other date as
the parties may agree. All acts taking place at the Closing shall be deemed to
take place simultaneously as of immediately after the close of business on the
Closing Date unless otherwise agreed to by the parties. The close of business on
the Closing Date shall be as of 4:00p.m., Eastern Time. The Closing shall be
held at the offices of the Acquiring Portfolio or at such other time and/or
place as the parties may agree.
3.2. The Acquired Portfolio shall direct The Bank of New York as
custodian for the Acquired Portfolio (the "Custodian"), to deliver, at the
Closing, a certificate of an authorized officer stating that (i) the Assets
shall have been delivered in proper form to the Acquiring Portfolio within two
business days prior to or on the Closing Date; and (ii) all necessary taxes in
connection with the delivery of the Assets, including all applicable federal and
state stock transfer stamps, if any, have been paid or provision for payment has
been made. The Acquired Portfolio's portfolio securities represented by a
certificate or other written instrument shall be presented for examination by
the Custodian to the custodian for the Acquiring Portfolio no later than five
business days preceding the Closing Date, and shall be transferred and delivered
by the Acquired Portfolio as of the Closing Date for the account of the
Acquiring Portfolio duly endorsed in proper form for transfer in such condition
as to constitute good delivery thereof. The Custodian shall deliver as of the
Closing Date by book entry, in accordance with the customary practices of the
Custodian and any securities depository (as defined in Rule 17f-4 under the
Investment Company Act of 1940, as amended (the "1940 Act")) in which the
Acquired Portfolio's Assets are deposited, the Acquired Portfolio's portfolio
securities and instruments deposited with such depositories. The cash to be
transferred by the Acquired Portfolio shall be delivered by wire transfer of
federal funds on the Closing Date.
3.3. The Acquired Portfolio shall direct DST Systems, Inc. (the
"Transfer Agent"), on behalf of the Acquired Portfolio, to deliver at the
Closing a certificate of an authorized officer stating that its records contain
the names and addresses of the Acquired Portfolio Shareholders and the number
and percentage ownership of outstanding Class S and Class S2 shares owned by
each such shareholder immediately prior to the Closing. The Acquiring Portfolio
shall issue and deliver a confirmation evidencing the Acquiring Portfolio Shares
to be credited on the Closing Date to the Secretary of the Acquiring Portfolio,
or provide evidence satisfactory to the Acquired Portfolio that such Acquiring
Portfolio Shares have been credited to the Acquired Portfolio's account on the
books of the Acquiring Portfolio. At the Closing, each party shall deliver to
the other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
3.4. In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Portfolio or the Acquired Portfolio shall be closed to trading or
trading thereupon shall be restricted; or (b) trading or the reporting of
trading on such Exchange or elsewhere shall be disrupted so that, in the
judgment of the Board of Trustees of the Acquired Portfolio or the Board of
Directors of the Acquiring Portfolio, accurate appraisal of the value of the net
assets of the Acquiring Portfolio or the Acquired Portfolio is impracticable,
the Closing Date shall be postponed until the first business day after the day
when trading shall have been fully resumed and reporting shall have been
restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. Except as has been disclosed to the Acquiring Portfolio in a
written instrument executed by an officer of the Trust, the Trust, on behalf of
the Acquired Portfolio, represents and warrants to the Company as follows:
(a) The Acquired Portfolio is duly organized as a series of the
Trust, which is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, with power under
the Trust's Declaration of Trust to own all of its properties and assets and to
carry on its business as it is now being conducted;
(b) The Trust 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 the registration of
shares of the Acquired Portfolio under the Securities Act of 1933, as amended
("1933 Act"), is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired
Portfolio of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act") and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional
information of the Acquired Portfolio and each prospectus and statement of
additional information of the Acquired Portfolio used during the three years
previous to the date of this Agreement conforms or conformed at the time of its
use 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 does
not, or did not at the time of its use, 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) On the Closing Date, the Acquired Portfolio will have good
and marketable title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such Assets, the Acquiring
Portfolio 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 Portfolio;
(f) The Acquired Portfolio is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Trust's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Trust, on behalf of the Acquired Portfolio, is a party or by which it is
bound; or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which the Trust, on behalf of the Acquired Portfolio, is a party or
by which it is bound;
(g) All material contracts or other commitments of the Acquired
Portfolio (other than this Agreement and certain investment contracts including
options, futures and forward contracts) will terminate without liability to the
Acquired Portfolio prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by
the Company, on behalf of the Acquiring Portfolio, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
the Acquired Portfolio or any of its properties or assets that, if adversely
determined, would materially and adversely affect its financial condition or the
conduct of its business. The Trust, on behalf of the Acquired Portfolio, knows
of no facts which 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 which materially and adversely
affects its business or its ability to consummate the transactions herein
contemplated;
(i) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets, and Schedule of Investments of the
Acquired Portfolio at December 31, 2005 have been audited by KPMG LLP,
independent registered public accountants, and are in accordance with U.S.
generally accepted accounting principles ("U.S. GAAP") consistently applied, and
such statements (copies of which have been furnished to the Acquiring Portfolio)
present fairly, in all material respects, the financial condition of the
Acquired Portfolio as of such date in accordance with U.S. GAAP, and
there are no known contingent liabilities of the Acquired Portfolio required to
be reflected on a balance sheet (including the notes thereto) in accordance with
U.S. GAAP as of such date not disclosed therein;
(j) Since December 31, 2005, there has not been any material
adverse change in the Acquired Portfolio's financial condition, assets,
liabilities or business, other than changes occurring in the ordinary course of
business, or any incurrence by the Acquired Portfolio of indebtedness maturing
more than one year from the date such indebtedness was incurred, except as
otherwise disclosed to and accepted by the Acquiring Portfolio (For the purposes
of this subparagraph (j), a decline in net asset value per share of the Acquired
Portfolio due to declines in market values of securities in the Acquired
Portfolio's portfolio, the discharge of Acquired Portfolio liabilities, or the
redemption of Acquired Portfolio Shares by shareholders of the Acquired
Portfolio shall not constitute a material adverse change);
(k) On the Closing Date, all federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Acquired
Portfolio required by law to have been filed by such date (including any
extensions) shall have been filed and are or will be correct in all material
respects, 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 Portfolio's
knowledge, no such return is currently under audit and no assessment has been
asserted with respect to such returns;
(l) For each taxable year of its operation (including the taxable
year ending on the Closing Date), the Acquired Portfolio has met (or will meet)
the requirements of Sub-chapter M of the Code for qualification as a regulated
investment company, has been (or will be) eligible to and has computed (or will
compute) its federal income tax under Section 852 of the Code, and will have
distributed all of its investment company taxable income and net capital gain
(as defined in the Code) that has accrued through the Closing Date, and before
the Closing Date will have declared dividends sufficient to distribute all of
its investment company taxable income and net capital gain for the period ending
on the Closing Date;
(m) All issued and outstanding shares of the Acquired Portfolio
are, and on the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable, and have been offered and sold in every state and
the District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws. All of the
issued and outstanding shares of the Acquired Portfolio will, at the time of
Closing, be held by the persons and in the amounts set forth in the records of
the Transfer Agent, on behalf of the Acquired Portfolio, as provided in
paragraph 3.3. The Acquired Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquired Portfolio, nor is there outstanding any security convertible into any
of the Acquired Portfolio shares;
(n) The execution, delivery and performance of this Agreement
will have been duly authorized prior to the Closing Date by all necessary
action, if any, on the part of the Trustees of the Trust, on behalf of the
Acquired Portfolio, and, subject to the approval of the shareholders of the
Acquired Portfolio, this Agreement will constitute a valid and binding
obligation of the Acquired Portfolio, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general equity principles;
(o) The information to be furnished by the Acquired Portfolio for
use in registration statements, proxy materials and other documents filed or to
be filed with any federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.), which may be necessary in
connection with the transactions contemplated hereby, shall be accurate and
complete in all material respects and shall comply in all material respects with
federal securities and other laws and regulations thereunder applicable thereto;
and
(p) The proxy statement of the Acquired Portfolio (the "Proxy
Statement") to be included in the Registration Statement referred to in
paragraph 5.6, insofar as it relates to the Acquired Portfolio, will, on the
effective date of the Registration Statement and on the Closing Date (i) 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 provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the Proxy
Statement and the Registration Statement made in reliance upon and in conformity
with information that was furnished by the Acquiring Portfolio for use therein;
and (ii) comply in all material respects with the provisions of the 1933 Act,
the 1934 Act and the 1940 Act and the rules and regulations thereunder.
4.2. Except as has been disclosed to the Acquired Portfolio in a
written instrument executed by an officer of the Company, the Company, on behalf
of the Acquiring Portfolio, represents and warrants to the Trust as follows:
(a) The Acquiring Portfolio is duly organized as a series of the
Company, which is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, with power under the Company's
Articles of Incorporation to own all of its properties and assets and to carry
on its business as it is now being conducted;
(b) The Company 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 the registration of
the shares of the Acquiring Portfolio under the 1933 Act, is in full force and
effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Portfolio of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be
required by state securities laws;
(d) The current prospectus and statement of additional
information of the Acquiring Portfolio and each prospectus and statement of
additional information of the Acquiring Portfolio used during the three years
previous to the date of this Agreement conforms or conformed at the time of its
use 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 does
not or did not at the time of its use 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) On the Closing Date, the Acquiring Portfolio will have good
and marketable title to the Acquiring Portfolio's assets, free of any liens of
other encumbrances, except those liens or encumbrances as to which the Acquired
Portfolio has received notice and necessary documentation at or prior to the
Closing;
(f) The Acquiring Portfolio is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Company's Articles of Incorporation or By-Laws or of
any agreement, indenture, instrument, contract, lease or other undertaking to
which the Company, on behalf of the Acquiring Portfolio, is a party or by which
it is bound; or (ii) the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Company, on behalf of the Acquiring Portfolio,
is a party or by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by
the Trust, on behalf of the Acquired Portfolio, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Company, on
behalf of the Acquiring Portfolio, or any of the Acquiring Portfolio's
properties or assets that, if adversely determined, would materially and
adversely affect the Acquiring Portfolio's financial condition or the conduct of
the Acquiring Portfolio's business. The Company, on behalf of the Acquiring
Portfolio, knows of no facts which 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 which materially and
adversely affects its business or its ability to consummate the transactions
herein contemplated;
(h) The Statement of Assets and Liabilities, Statements of
Operations and Changes in Net Assets and Schedule of Investments of the
Acquiring Portfolio at December 31, 2005 have been audited by KPMG LLP,
independent registered public accountants, and are in accordance with U.S. GAAP
consistently applied, and such statements (copies of which have been furnished
to the Acquired Portfolio) present fairly, in all material respects, the
financial condition of the Acquiring Portfolio as of such date in accordance
with U.S. GAAP, and there are no known contingent liabilities of the Acquiring
Portfolio required to be reflected on a balance sheet (including the notes
thereto) in accordance with U.S. GAAP as of such date not disclosed therein;
(i) Since December 31, 2005, there has not been any material
adverse change in the Acquiring Portfolio's financial condition, assets,
liabilities or business, other than changes occurring in the ordinary course of
business, or any incurrence by the Acquiring Portfolio of indebtedness maturing
more than one year from the date such indebtedness was incurred, except as
otherwise disclosed to and accepted by the Acquired Portfolio (For purposes of
this subparagraph (i), a decline in net asset value per share of the Acquiring
Portfolio due to declines in market values of securities in the Acquiring
Portfolio's portfolio, the discharge of Acquiring Portfolio liabilities, or the
redemption of Acquiring Portfolio Shares by shareholders of the Acquiring
Portfolio, shall not constitute a material adverse change);
(j) On the Closing Date, all federal and other tax returns,
dividend reporting forms, and other tax-related reports of the Acquiring
Portfolio required by law to have been filed by such date (including any
extensions) shall have been filed and are or will be correct in all material
respects, 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 Acquiring Portfolio's
knowledge no such return is currently under audit and no assessment has been
asserted with respect to such returns;
(k) For each taxable year of its operation (including the taxable
year that includes the Closing Date), the Acquiring Portfolio has met (or will
meet) the requirements of Sub-chapter M of the Code for qualification as a
regulated investment company, has been eligible to (or will be eligible to) and
has computed (or will compute) its federal income tax under Section 852 of the
Code, and has distributed all of its investment company taxable income and net
capital gain (as defined in the Code) for periods ending prior to the Closing
Date;
(l) All issued and outstanding shares of the Acquiring Portfolio
are, and on the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable by the Company and have been offered and sold in
every state and the District of Columbia in compliance in all material respects
with applicable registration requirements of the 1933 Act and state securities
laws. The Acquiring Portfolio does not have outstanding any options, warrants or
other rights to subscribe for or purchase any Acquiring Portfolio Shares, nor is
there outstanding any security convertible into any Acquiring Portfolio Shares;
(m) The execution, delivery and performance of this Agreement
will have been fully authorized prior to the Closing Date by all necessary
action, if any, on the part of the Directors of the Company, on behalf of the
Acquiring Portfolio, and this Agreement will constitute a valid and binding
obligation of the Acquiring Portfolio, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general equity principles;
(n) Class S Acquiring Portfolio Shares to be issued and delivered
to the Acquired Portfolio, for the account of the Acquired Portfolio
Shareholders, pursuant to the terms of this Agreement, will on the Closing Date
have been duly authorized and, when so issued and delivered, will be duly and
validly issued Acquiring Portfolio Shares, and will be fully paid and
non-assessable;
(o) The information to be furnished by the Company for use in the
registration statements, proxy materials and other documents that may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all material
respects with federal securities and other laws and regulations applicable
thereto; and
(p) That insofar as it relates to the Acquiring Portfolio, the
Registration Statement relating to the Acquiring Portfolio Shares issuable
hereunder, and the proxy materials of the Acquired Portfolio to be included in
the Registration Statement, and any amendment or supplement to the foregoing,
will, from the effective date of the Registration Statement through the date of
the meeting of shareholders of the Acquired Portfolio contemplated therein (i)
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
misleading, provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the
Registration Statement made in reliance upon and in conformity with information
that was furnished by the Acquired Portfolio for use therein; and (ii) comply in
all material respects with the provisions of the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder.
5. COVENANTS OF THE ACQUIRING PORTFOLIO AND THE ACQUIRED PORTFOLIO
5.1. The Acquiring Portfolio and the Acquired Portfolio each will
operate its business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions,
and any other distribution that may be advisable.
5.2. The Acquired Portfolio will call a meeting of the shareholders of
the Acquired Portfolio to consider and act upon this Agreement and to take all
other action necessary to obtain approval of the transactions contemplated
herein.
5.3. The Acquired Portfolio covenants that the Class S Acquiring
Portfolio Shares to be issued hereunder are not being acquired for the purpose
of making any distribution thereof, other than in accordance with the terms of
this Agreement.
5.4. The Acquired Portfolio will assist the Acquiring Portfolio in
obtaining such information as the Acquiring Portfolio reasonably requests
concerning the beneficial ownership of the Acquired Portfolio shares.
5.5. Subject to the provisions of this Agreement, the Acquiring
Portfolio and the Acquired Portfolio will each take, or cause to be taken, all
action, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement.
5.6. The Acquired Portfolio will provide the Acquiring Portfolio with
information reasonably necessary for the preparation of a prospectus (the
"Prospectus"), which will include the Proxy Statement referred to in paragraph
4.1(p), all to be included in a Registration Statement on Form N-14 of the
Acquiring Portfolio (the "Registration Statement"), in compliance with the 1933
Act, the 1934 Act and the 1940 Act, in connection with the meeting of the
shareholders of the Acquired Portfolio to consider approval of this Agreement
and the transactions contemplated herein.
5.7. As soon as is reasonably practicable after the Closing, the
Acquired Portfolio will make a liquidating distribution to its shareholders
consisting of the Class S Acquiring Portfolio Shares received at the Closing.
5.8. The Acquiring Portfolio and the Acquired Portfolio shall each use
its reasonable best efforts to fulfill or obtain the fulfillment of the
conditions precedent to effect the transactions contemplated by this Agreement
as promptly as practicable.
5.9. The Trust, on behalf of the Acquired Portfolio, covenants that
the Trust will, from time to time, as and when reasonably requested by the
Acquiring Portfolio, execute and deliver or cause to be executed and delivered
all such assignments and other instruments, and will take or cause to be taken
such further action as the Company, on behalf of the Acquiring Portfolio, may
reasonably deem necessary or desirable in order to vest in and confirm (a) the
Trust's, on behalf of the Acquired Portfolio's, title to and possession of the
Acquiring Portfolio's Shares to be delivered hereunder; and (b) the Company's,
on behalf of the Acquiring Portfolio's, title to and possession of all the
assets and otherwise to carry out the intent and purpose of this Agreement.
5.10. The Acquiring Portfolio will use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state blue sky or securities laws as may be necessary in order
to continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED PORTFOLIO
The obligations of the Trust, on behalf of the Acquired Portfolio, to
consummate the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Company, on behalf of the Acquiring
Portfolio, of all the obligations to be performed by it hereunder on or before
the Closing Date, and, in addition thereto, the following further conditions:
6.1. All representations and warranties of the Company, on behalf of
the Acquiring Portfolio, contained in this Agreement shall be true and correct
in all material respects as of the date hereof and, except as they may be
affected by the transactions contemplated by this Agreement, as of the Closing
Date, with the same force and effect as if made on and as of the Closing Date;
6.2. The Company shall have delivered to the Trust a certificate
executed in its name by its President or Vice President and its Treasurer or
Assistant Treasurer, in a form reasonably satisfactory to the Trust and dated as
of the Closing Date, to the effect that the representations and warranties of
the Company, on behalf of the Acquiring Portfolio, made in this Agreement are
true and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement and as to such other matters
as the Trust shall reasonably request;
6.3. The Company, on behalf of the Acquiring Portfolio, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by the Company, on behalf of
the Acquiring Portfolio, on or before the Closing Date; and
6.4. The Acquired Portfolio and the Acquiring Portfolio shall have
agreed on the number of full and fractional Acquiring Portfolio Shares of each
Class to be issued in connection with the Reorganization after such number has
been calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO
The obligations of the Company, on behalf of the Acquiring Portfolio,
to complete the transactions provided for herein shall be subject, at the
Company's election, to the performance by the Trust, on behalf of the Acquired
Portfolio, of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:
7.1. All representations and warranties of the Trust, on behalf of the
Acquired Portfolio, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
7.2. The Trust shall have delivered to the Acquiring Portfolio a
statement of the Acquired Portfolio's assets and liabilities, as of the Closing
Date, certified by the Treasurer of the Trust;
7.3. The Trust shall have delivered to the Acquiring Portfolio on the
Closing Date a certificate executed in its name by its President or Vice
President and its Treasurer or Assistant Treasurer, in form and substance
satisfactory to the Company and dated as of the Closing Date, to the effect that
the representations and warranties of the Trust, on behalf of the Acquired
Portfolio, made in this Agreement are true and correct at and as of the Closing
Date, except as they may be affected by the transactions contemplated by this
Agreement, and as to such other matters as the Company shall reasonably request;
7.4. The Trust, on behalf of the Acquired Portfolio, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by the Trust, on behalf of
the Acquired Portfolio, on or before the Closing Date;
7.5. The Acquired Portfolio and the Acquiring Portfolio shall have
agreed on the number of full and fractional Acquiring Portfolio Shares of each
class to be issued in connection with the Reorganization after such number has
been calculated in accordance with paragraph 1.1; and
7.6. The Acquired Portfolio shall have declared and paid a
distribution or distributions prior to the Closing that, together with all
previous distributions, shall have the effect of distributing to its
shareholders (i) all of its investment company taxable income and all of its net
realized capital gains, if any, for the period from the close of its last fiscal
year to 4:00p.m. Eastern time on the Closing; and (ii) any undistributed
investment company taxable income and net realized capital gains from any period
to the extent not otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO AND
THE ACQUIRED PORTFOLIO
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Trust, on behalf of the Acquired
Portfolio, or the Company, on behalf of the Acquiring Portfolio, the other party
to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1. The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Portfolio in accordance with the provisions of the Trust's
Declaration of Trust, By-Laws, applicable Massachusetts law and the 1940 Act,
and certified copies of the resolutions evidencing such approval shall have been
delivered to the Acquiring Portfolio. Notwithstanding anything herein to the
contrary, neither the Company nor the Trust may waive the conditions set forth
in this paragraph 8.1;
8.2. On the Closing Date no action, suit or other proceeding shall be
pending or, to its knowledge, threatened 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 Company or the Trust 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 Portfolio
or the Acquired Portfolio, 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 orders 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; and
8.5. The parties shall have received the opinion of Dechert LLP
addressed to the Trust and the Company substantially to the effect that, based
upon certain facts, assumptions, and representations, the transaction
contemplated by this Agreement shall constitute a tax-free reorganization for
federal income tax purposes. The delivery of such opinion is conditioned upon
receipt by Dechert LLP of representations it shall request of the Company and
the Trust. Notwithstanding anything herein to the contrary, neither the Company
nor the Trust may waive the condition set forth in this paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1. The Trust, on behalf of the Acquired Portfolio, and the Company,
on behalf of the Acquiring Portfolio, represent and warrant to each other that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
9.2 The expenses relating to the proposed Reorganization will be borne
by the investment adviser to the Acquiring Portfolio (or an affiliate of the
investment adviser). The costs of the Reorganization shall include, but not be
limited to, costs associated with obtaining any necessary order of exemption
from the 1940 Act, preparation of the Registration Statement, printing and
distributing the Acquiring Portfolio's prospectus and the Acquired Portfolio's
proxy materials, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The Company and the Trust agree that neither party has made any
representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
10.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party by (i) mutual agreement of the parties;
or (ii) by either party if the Closing shall not have occurred on or before June
30, 2007, unless such date is extended by mutual agreement of the parties; or
(iii) by either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Trustees or Directors or
officers, except for any such material breach or intentional misrepresentation,
as to each of which all remedies at law or in equity of the party adversely
affected shall survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of the Trust
and the Company; provided, however, that following the meeting of the
shareholders of the Acquired Portfolio called by the Trust pursuant to paragraph
5.2 of this Agreement, no such amendment may have the effect of changing the
provisions for determining the number of the Class S Acquiring Portfolio Shares
to be issued to the Class S and Class S2 Acquired Portfolio 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 given by
facsimile, personal service or prepaid or certified mail addressed to the
Company or the Trust, 0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx
00000-0000, attn: Xxxx X. Xxxxxxx Xx., in each case with a copy to Dechert LLP,
0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, attn: Xxxxxxx X. Xxxxxx.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1. The Article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in accordance
with the laws of the State of Maryland without regard to its principles of
conflicts of laws.
14.4. 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 any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5. It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of the Acquired Portfolio, as provided in the Declaration of
Trust of the Trust. The execution and delivery by such officers shall not be
deemed to have been made by any of them individually or to impose any liability
on any of them personally, but shall bind only the trust property of such party.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President.
ING PARTNERS, INC. on behalf of its
ING XXXXXXXXX XXXXXX PARTNERS PORTFOLIO
series
By:
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Title:
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ING INVESTORS TRUST on behalf of its
ING EAGLE ASSET CAPITAL APPRECIATION
PORTFOLIO series
By:
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Title:
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