EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of August 20, 2002 (the
"Agreement"), between and among The Advisors' Inner Circle Fund ("AIC Trust"), a
Massachusetts business trust, with its principal place of business at 000
Xxxxxxx Xxxxxx, Xxxxxx, XX 00000, with regard to its CRA Realty Shares Portfolio
(the "Acquired Fund") and ING Equity Trust ("ING Equity Trust"), a Massachusetts
business trust, with its principal place of business at 0000 X. Xxxxxxxxxx Xxxxx
Xxxx, Xxxxxxxxxx, XX 00000 with regard to its ING Real Estate Fund (the
"Acquiring Fund").
WHEREAS, AIC Trust was organized on July 18, 1991 under Massachusetts law
as a business trust under an Agreement and Declaration of Trust. AIC Trust is an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). AIC Trust has authorized two classes
of shares of the Acquired Fund: Institutional Class Shares and Class A Shares.
The Acquired Fund is a validly existing series of AIC Trust and has only
Institutional Class Shares issued and outstanding;
WHEREAS, ING Equity Trust was organized on June 12, 1998 under
Massachusetts law as a business trust under a Declaration of Trust. ING Equity
Trust is an open-end management investment company registered under the 1940
Act. ING Equity Trust has authorized capital consisting of an unlimited number
of shares of beneficial interest with $0.01 par value of separate series of ING
Equity Trust. The Acquiring Fund is a duly organized and validly existing series
of ING Equity Trust;
NOW, THEREFORE, in consideration of the mutual promises herein contained
and intending to be legally bound hereby, the parties hereto agree to effect the
transfer of all of the assets of the Acquired Fund solely in exchange for the
assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund
and shares of beneficial interest of Class I Shares of the Acquiring Fund
("Acquiring Fund Shares") followed by the distribution, at the Effective Time
(as defined in Section 12 of this Agreement), of such Acquiring Fund Shares to
the holders of Institutional Class Shares of the Acquired Fund ("Acquired Fund
Shares") on the terms and conditions hereinafter set forth in liquidation of the
Acquired Fund. The parties hereto covenant and agree as follows:
1. PLAN OF REORGANIZATION. At the Effective Time, the Acquired Fund will
assign, deliver and otherwise transfer all of its assets and goods and
marketable title thereto, and assign all of the liabilities as are set forth in
a statement of assets and liabilities, to be prepared as of the Valuation Time
(the "Statement of Assets and Liabilities") to the Acquiring Fund free and clear
of all liens, encumbrances and adverse claims except as provided in this
Agreement, and the Acquiring Fund shall acquire all assets, and shall assume all
liabilities of the Acquired Fund, in exchange for delivery to the Acquired Fund
by the Acquiring Fund of a number of Acquiring Fund Shares (both full and
fractional) equivalent in number and value to the Acquired Fund Shares
outstanding immediately prior to the Effective Time. Shareholders of record of
Institutional Class Shares of the Acquired Fund at the Effective Time will be
credited with full and fractional Class I Shares of the Acquiring Fund. The
assets and liabilities of the Acquired Fund shall be exclusively assigned to and
assumed by the Acquiring Fund. All debts, liabilities, obligations and duties of
the Acquired Fund, to the extent that they exist at or after the Effective Time
shall after the Effective Time attach to the Acquiring Fund and may be enforced
against the Acquiring Fund to the same extent as if the same had been incurred
by the Acquiring Fund. The events outlined in this Section 1 are the
"Reorganization."
2. TRANSFER OF ASSETS.
(a) The assets of the Acquired Fund to be acquired by the Acquiring Fund
and allocated thereto shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable) as set forth in the Statement of Assets and Liabilities, as
well as any claims or rights of action or rights to register shares
under applicable securities laws, any books or records of the Acquired
Fund and other property owned by the Acquired Fund at the Effective
Time.
A-1
(b) The Acquired Fund shall direct First Union National Bank, as custodian
for the Acquired Fund (the "Custodian"), to deliver, at or prior to the
Effective Time, a certificate of an authorized officer stating that:
(i) assets have been delivered in proper form to the Acquiring Fund
within two business days prior to or at the Effective Time, 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 Fund'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 Fund no later than five
business days preceding the Effective Time, and shall be transferred
and delivered by the Acquired Fund prior to or as of the Effective Time
for the account of the Acquiring Fund duly endorsed in proper form for
transfer in such condition as to constitute good delivery thereof. The
Custodian shall deliver prior to or as of the Effective Time by book
entry, in accordance with the customary practices of any securities
depository, as defined in Rule 17f-4 under the 1940 Act, in which the
Acquired Fund's assets are deposited and the Custodian, the Acquired
Fund's assets deposited with such depositories. The cash to be
transferred by the Acquired Fund shall be delivered by wire transfer of
federal funds prior to or as of the Effective Time.
(c) The Acquired Fund shall direct Forum Financial Systems, Inc. (the
"Transfer Agent"), on behalf of the Acquired Fund, to deliver prior to
or as of the Effective Time a certificate of an authorized officer
stating that its records contain the names and addresses of the
Acquired Fund Shareholders and the number and percentage ownership of
outstanding Institutional Class shares owned by each shareholder
immediately prior to the Effective Time. The Acquiring Fund shall issue
and deliver a confirmation evidencing the Acquiring Fund Shares to be
credited at the Effective Time to the Secretary of the Acquired Fund,
or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's account
on the books of the Acquiring Fund. No later than the Effective Time
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. CALCULATIONS.
(a) The number of Acquiring Fund Shares issued to the Acquired Fund
pursuant to Section 1 hereof will be the number of issued and
outstanding Acquired Fund Shares at the Valuation Time.
(b) The net asset value of the Acquiring Fund Shares shall be the net asset
value of the Acquired Fund's shares at the Valuation Time. The net
asset value of Acquired Fund Shares shall be computed at the Valuation
Time in the manner set forth in the Acquired Fund's then current
prospectus under the Securities Act of 1933 (the "1933 Act").
4. VALUATION OF ASSETS. The value of the assets of the Acquired Fund shall
be the value of such assets computed as of the time at which the Acquired Fund's
net asset value is calculated at the Valuation Time (as hereinafter defined).
The net asset value of the assets of the Acquired Fund to be transferred to the
Acquiring Fund shall be computed by AIC Trust (and shall be subject to
adjustment by the amount, if any, agreed to by AIC Trust and the Acquired Fund
and ING Equity Trust and the Acquiring Fund). In determining the value of the
securities transferred by the Acquired Fund to the Acquiring Fund, each security
shall be priced in accordance with the pricing policies and procedures of the
Acquired Fund as described in its then current prospectus and statement of
additional information. For such purposes, price quotations and the security
characteristics relating to establishing such quotations shall be determined by
AIC Trust, provided that such determination shall be subject to the approval of
ING Equity Trust. AIC Trust and ING Equity Trust agree to use all commercially
reasonable efforts to resolve, prior to the Valuation Time, any material pricing
differences between the prices of portfolio securities determined in accordance
with the pricing policies and procedures of the Acquiring Fund and those
determined in accordance with the pricing policies and procedures of the
Acquired Fund.
5. VALUATION TIME. The valuation time shall be 4:00 p.m., Eastern Time, on
November 1, 2002, or such earlier or later date and time as may be mutually
agreed in writing by an authorized officer of each of the parties (the
"Valuation Time"). Notwithstanding anything herein to the contrary, in the event
that at the Valuation Time, (a) the New York Stock Exchange shall be closed to
trading or trading thereon 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 ING Equity Trust or AIC Trust, accurate appraisal of the value of
the net assets of the Acquiring Fund or the Acquired Fund is
A-2
impracticable, the Valuation Time shall be postponed until the first
business day after the day when trading shall have been fully resumed without
restriction or disruption, reporting shall have been restored and accurate
appraisal of the value of the net assets of the Acquiring Fund is practicable.
6. LIQUIDATION OF THE ACQUIRED FUND AND CANCELLATION OF SHARES. At the
Effective Time, the Acquired Fund will liquidate and the Acquiring Fund Shares
(both full and fractional) received by the Acquired Fund will be distributed to
the shareholders of record of the Acquired Fund as of the Effective Time in
exchange for the Acquired Fund Shares and in complete liquidation of the
Acquired Fund. Each shareholder of the Acquired Fund will receive a number of
Acquiring Fund Shares equal in number and value to the Acquired Fund Shares held
by that shareholder, and each Acquiring Fund Share and each Acquired Fund Share
will be of equivalent net asset value per share. Such liquidation and
distribution will be accompanied by the establishment of an open account on the
share records of the Acquiring Fund in the name of each shareholder of the
Acquired Fund that represents the respective number of Acquiring Fund Shares due
such shareholder. All of the issued and outstanding shares of the Acquired Fund
shall be cancelled on the books of AIC Trust at the Effective Time and shall
thereafter represent only the right to receive Acquiring Fund Shares. The
Acquired Fund's transfer books shall be closed permanently. AIC Trust also shall
take any and all other steps as shall be necessary and proper to effect a
complete termination of the Acquired Fund.
7. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND. The Acquiring Fund
represents and warrants to the Acquired Fund as follows:
(a) ORGANIZATION, EXISTENCE, ETC. ING Equity Trust is a business trust duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts and has the power to carry on its business as it is now
being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. ING Equity Trust is registered under
the 1940 Act as an open-end management investment company; such
registration has not been revoked or rescinded and is in full force and
effect.
(c) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Fund Shares to be
issued by the Acquiring Fund in connection with the Reorganization have
been duly authorized and upon consummation of the Reorganization will be
validly issued, fully paid and non-assessable by the Trust. Prior to the
Effective Time, there shall be no issued and outstanding Acquiring Fund
Shares or any other securities issued by the Acquiring Fund.
(d) AUTHORITY RELATIVE TO THIS AGREEMENT. ING Equity Trust, on behalf of the
Acquiring Fund, has the power to enter into this Agreement and to carry
out its obligations hereunder. The execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized by ING Equity Trust's Board of
Trustees, and no other proceedings by the Acquiring Fund are necessary
to authorize ING Equity Trust's officers to effectuate this Agreement
and the transactions contemplated hereby. The Acquiring Fund is not a
party to or obligated under any charter, by-law, indenture or contract
provision or any other commitment or obligation, or subject to any order
or decree, which would be violated by its executing and carrying out
this Agreement.
(e) LIABILITIES. There are no liabilities of the Acquiring Fund, whether or
not determined or determinable, other than liabilities incurred in the
ordinary course of business subsequent to the Effective Time or
otherwise disclosed to the Acquired Fund, none of which has been
materially adverse to the business, assets or results of operations of
the Acquiring Fund. ING Equity Trust's Registration Statement, which is
on file with the Securities and Exchange Commission (the "SEC"), does
not contain an untrue statement of material fact or omit a material fact
that is required to be stated therein or that is necessary to make the
statements therein not misleading.
(f) LITIGATION. Except as disclosed to the Acquired Fund, there are no
claims, actions, suits or proceedings pending or, to the actual
knowledge of the Acquiring Fund, threatened which would materially
adversely affect the Acquiring Fund or its assets or business or which
would prevent or hinder in any material respect consummation of the
transactions contemplated hereby.
A-3
(g) CONTRACTS. Except for contracts and agreements disclosed to the Acquired
Fund, under which no default exists, the Acquiring Fund is not a party
to or subject to any material contract, debt instrument, plan, lease,
franchise, license or permit of any kind or nature whatsoever with
respect to the Acquiring Fund.
(h) TAXES. As of the Effective Time, all Federal and other tax returns,
information returns, and other tax-related reports of the Acquiring Fund
required by law to have been filed by such date (including extensions)
shall have been filed, and all other taxes shall have been paid so far
as due, or provision shall have been made for the payment thereof, and
to the best of the Acquiring Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect
to any of such returns.
(i) SUBCHAPTER M. For each taxable year of its operation (including the
taxable year that includes the Effective Date), the Acquiring Fund has
met (or will meet) the requirements of Subchapter 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 Effective Date.
8. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED FUND. The Acquired Fund
represents and warrants to the Acquiring Fund as follows:
(a) ORGANIZATION, EXISTENCE, ETC. AIC Trust is a business trust duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts and has the power to carry on its business as it is now
being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. AIC Trust is registered under the
1940 Act as an open-end management investment company; such registration
has not been revoked or rescinded and is in full force and effect.
(c) FINANCIAL STATEMENTS. The audited financial statements of AIC Trust
relating to the Acquired Fund for the fiscal year ended October 31, 2001
and unaudited financial statements of AIC Trust relating to the Acquired
Fund for the semi-annual period ended April 30, 2001 (the "Acquired
Fund's Financial Statements"), as delivered to the Acquiring Fund,
fairly present the financial position of the Acquired Fund as of the
dates thereof, and the results of its operations and changes in its net
assets for the periods indicated. There are no known contingent
liabilities of the Acquired Fund required to be reflected on a balance
sheet (including notes thereto) in accordance with generally accepted
accounting principles as of such date not disclosed therein.
(d) MARKETABLE TITLE TO ASSETS. The Acquired Fund will have, at the
Effective Time, good and marketable title to, and full right, power and
authority to sell, assign, transfer and deliver, the assets to be
transferred to the Acquiring Fund. Upon delivery and payment for such
assets, the Acquiring Fund will have good and marketable title to such
assets without restriction on the transfer thereof free and clear of all
liens, encumbrances and adverse claims.
(e) AUTHORITY RELATIVE TO THIS AGREEMENT. AIC Trust, on behalf of the
Acquired Fund, has the power to enter into this Agreement and to carry
out its obligations hereunder. The execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated
hereby, have been duly authorized by AIC Trust's Board of Trustees, and,
except for approval by the shareholders of the Acquired Fund, no other
proceedings by that Acquired Fund are necessary to authorize AIC Trust's
officers to effectuate this Agreement and the transactions contemplated
hereby. The Acquired Fund is not a party to or obligated under any
charter, by-law, indenture or contract provision or any other commitment
or obligation, or subject to any order or decree, which would be
violated by its executing and carrying out this Agreement.
(f) LIABILITIES. There are no liabilities of the Acquired Fund, whether or
not determined or determinable, other than liabilities disclosed or
provided for in the Acquired Fund's Financial Statements and liabilities
incurred in the ordinary course of business prior to the Effective Time,
or otherwise disclosed to the Acquiring Fund, none of which has been
materially adverse to the business, assets or results of operations of
the Acquired Fund. AIC Trust's Registration Statement, which is on file
with the SEC, does not contain an untrue statement of a material fact or
omit a material fact that is required to be stated therein or that is
necessary to make the statements therein not misleading.
A-4
(g) LITIGATION. Except as disclosed to the Acquiring Fund, there are no
claims, actions, suits or proceedings pending or, to the knowledge of
the Acquired Fund, threatened which would materially adversely affect
the Acquired Fund or its assets or business or which would prevent or
hinder in any material respect consummation of the transactions
contemplated hereby.
(h) CONTRACTS. Except for contracts and agreements disclosed to the
Acquiring Fund, under which no default exists, the Acquired Fund, at the
Effective Time, is not a party to or subject to any material contract,
debt instrument, plan, lease, franchise, license or permit of any kind
or nature whatsoever.
(i) TAXES. As of the Effective Time, all Federal and other tax returns,
information returns, and other tax-related reports of the Acquired Fund
required by law to have been filed shall have been filed by such date
(including extensions), and all other taxes shall have been paid so far
as due, or provision shall have been made for the payment thereof, and
to the best of the Acquired Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect
to any of such returns.
(j) SUBCHAPTER M. For each taxable year of its operation (including the
taxable year ending on the Effective Date), the Acquired Fund has met
(or will meet) the requirements of Subchapter 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 Effective Date, and before the
Effective 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 Effective Date.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
(a) All representations and warranties of the Acquired Fund 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 Effective Time, with the same
force and effect as if made on and as of the Effective Time. At the
Effective Time, ING Equity Trust shall have received a certificate from
the President or Vice President of AIC Trust, dated as of such date,
certifying on behalf of AIC Trust that as of such date that the
conditions set forth in this clause (a) have been met.
(b) The Acquiring Fund shall have received an opinion of counsel on behalf
of the Acquired Fund, dated as of the Effective Time, addressed and in
form and substance satisfactory to counsel for the Acquiring Fund, to
the effect that: (i) AIC Trust is duly organized under the laws of the
Commonwealth of Massachusetts and the Acquired Fund is a validly
existing series of AIC Trust; (ii) AIC Trust is an open-end management
investment company registered under the 1940 Act; (iii) this Agreement
and the Reorganization provided for herein and the execution of this
Agreement have been duly authorized and approved by all requisite
corporate action on behalf of AIC Trust and this Agreement has been duly
executed and delivered by AIC Trust on behalf of the Acquired Fund and
is a valid and binding obligation of AIC Trust on behalf of the Acquired
Fund, subject to applicable bankruptcy, insolvency, fraudulent
conveyance and similar laws or court decisions regarding enforcement of
creditors' rights generally and such counsel shall express no opinion
with respect to the application of equitable principles on any
proceeding, whether at law or in equity, as to the enforceability of any
provision of this Agreement relating to remedies after default, as to
availability of any specific or equitable relief of any kind, with
respect to the provisions of this Agreement intended to limit liability
for a particular matter to a particular Acquired Fund and its assets,
including but not limited to Section 21 of this Agreement or with
respect to the provisions of this Agreement relating to indemnification;
and (iv) to the best of counsel's knowledge, no consent, approval, order
or other authorization of any Federal or state court or administrative
or regulatory agency is required for AIC Trust to enter into this
Agreement on behalf of the Acquired Fund or carry out its terms that has
not been obtained other than where the failure to obtain any such
consent, approval, order or authorization would not have a material
adverse effect on the operations of the Acquired Fund.
(c) The Acquired Fund shall have delivered to the Acquiring Fund at the
Effective Time the Acquired Fund's Statement of Assets and Liabilities,
prepared in accordance with generally accepted accounting principles
consistently applied, together with a certificate of the Treasurer or
Assistant Treasurer of AIC Trust as to the aggregate asset value of the
Acquired Fund's portfolio securities.
A-5
(d) At the Effective Time, AIC Trust shall have performed and complied in
all material respects with each of its agreements and covenants required
by this Agreement to be performed or complied with by AIC Trust prior to
or at the Effective Time and ING Equity Trust shall have received a
certificate from the President or Vice President of AIC Trust, dated as
of such date, certifying on behalf of AIC Trust that the conditions set
forth in this clause (d) have been, continue to be, satisfied.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
(a) All representations and warranties of the Acquiring Fund 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 Effective Time, with the same
force and effect as if made on and as of the Effective Time. At the
Effective Time, AIC Trust shall have received a certificate from the
President or Vice President of ING Equity Trust, dated as of such date,
certifying on behalf of ING Equity Trust that as of such date that the
conditions set forth in this clause (a) have been met.
(b) The Acquired Fund shall have received an opinion of counsel on behalf of
the Acquiring Fund, dated as of the Effective Time, addressed and in
form and substance satisfactory to counsel for the Acquired Fund, to the
effect that: (i) ING Equity Trust is duly organized under the laws of
the Commonwealth of Massachusetts and the Acquiring Fund is a validly
existing series of the ING Equity Trust; (ii) ING Equity Trust is an
open-end management investment company registered under the 1940 Act;
(iii) this Agreement and the Reorganization provided for herein and the
execution of this Agreement have been duly authorized and approved by
all requisite corporate action of ING Equity Trust on behalf of the
Acquiring Fund and this Agreement has been duly executed and delivered
by ING Equity Trust on behalf of the Acquiring Fund and is a valid and
binding obligation of ING Equity Trust, on behalf of the Acquiring Fund,
subject to applicable bankruptcy, insolvency, fraudulent conveyance and
similar laws or court decisions regarding enforcement of creditors'
rights generally and such counsel shall express no opinion with respect
to the application of equitable principles on any proceeding, whether at
law or in equity, as to the enforceability of any provision of this
Agreement relating to remedies after default, as to availability of any
specific or equitable relief of any kind, with respect to the provisions
of this Agreement intended to limit liability for a particular matter to
a particular Acquiring Fund and its assets, including but not limited to
Section 21 of this Agreement or with respect to the provisions of this
Agreement relating to indemnification; (iv) to the best of counsel's
knowledge, no consent, approval, order or other authorization of any
Federal or state court or administrative or regulatory agency is
required for ING Equity Trust to enter into this Agreement on behalf of
the Acquiring Fund or carry out its terms that has not already been
obtained, other than where the failure to obtain any such consent,
approval, order or authorization would not have a material adverse
effect on the operations of the Acquiring Fund; and (v) the Acquiring
Fund Shares to be issued in the Reorganization have been duly authorized
and upon issuance thereof in accordance with this Agreement will be
validly issued, fully paid and non-assessable by the Trust.
(c) At the Effective Time, ING Equity Trust shall have performed and
complied in all material respects with each of its agreements and
covenants required by this Agreement to be performed or complied with by
ING Equity Trust prior to or at the Effective Time and AIC Trust shall
have received a certificate from the President or Vice President of ING
Equity Trust, dated as of such date, certifying on behalf of ING Equity
Trust that the conditions set forth in this clause (c) have been, and
continue to be, satisfied.
(d) The Acquired Fund 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 4:00 p.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.
11. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND AND
THE ACQUIRING FUND. The obligations of the Acquired Fund and the Acquiring Fund
to effectuate this Agreement shall be subject to the satisfaction of each of the
following conditions:
A-6
(a) With respect to the Acquired Fund, AIC Trust will call a meeting of
shareholders to consider and act upon this Agreement and to take all
other actions reasonably necessary to obtain the approval by
shareholders of the Acquired Fund of this Agreement and the
transactions contemplated herein, including the Reorganization and the
termination of the Acquired Fund if the Reorganization is consummated.
AIC Trust has prepared or will prepare a notice of meeting, form of
proxy, and proxy statement (collectively, the "Proxy Materials") to be
used in connection with such meeting; provided that the Acquiring Fund
has furnished or will furnish information relating to it as is
reasonably necessary for the preparation of the Proxy Materials.
(b) The Registration Statement on Form N-14 of the Acquiring Fund shall be
effective under the 1933 Act and, to the best knowledge of the
Acquiring Fund, no investigation or proceeding for that purpose shall
have been instituted or be pending, threatened or contemplated under
the 1933 Act.
(c) The shares of the Acquiring Fund shall have been duly qualified for
offering to the public in all states of the United States, the
Commonwealth of Puerto Rico and the District of Columbia (except where
such qualifications are not required) so as to permit the transfer
contemplated by this Agreement to be consummated.
(d) The Acquired Fund and the Acquiring Fund shall have received on or
before the Effective Time an opinion of counsel satisfactory to the
Acquired Fund and the Acquiring Fund, based on customary officers'
certificates provided by each, substantially to the effect that for
Federal income tax purposes:
(1) No gain or loss will be recognized by the Acquired Fund upon the
transfer of its assets in exchange solely for Acquiring Fund Shares
(except to the extent that such assets consist of contracts
described in section 1256 of the Code) and the assumption by the
Acquiring Fund of the Acquired Fund's stated liabilities;
(2) No gain or loss will be recognized by the Acquiring Fund on its
receipt of Acquired Fund assets in exchange for Acquiring Fund
Shares and the assumption by the Acquiring Fund of the Acquired
Fund's liabilities;
(3) The basis of the Acquired Fund's assets in the Acquiring Fund's
hands will be the same as the basis of those assets in the Acquired
Fund's hands immediately before the Effective Time;
(4) The Acquiring Fund's holding period for the assets received by the
Acquired Fund will include the holding period of those assets in
the Acquired Fund's hands immediately before the Effective Time;
(5) No gain or loss will be recognized by the Acquired Fund on the
distribution of Acquiring Fund Shares to the Acquired Fund's
shareholders in exchange for their Acquired Fund Shares;
(6) No gain or loss will be recognized by any Acquired Fund shareholder
as a result of the Acquired Fund's distribution of Acquiring Fund
Shares to such shareholder in exchange for such shareholder's
Acquired Fund Shares;
(7) The basis of the Acquiring Fund Shares received by each Acquired
Fund shareholder will be the same as the adjusted basis of that
Acquired Fund shareholder's Acquired Fund Shares surrendered in
exchange therefor; and
(8) The holding period of the Acquiring Fund Shares received by each
Acquired Fund shareholder will include such shareholder's holding
period for the Acquired Fund Shares surrendered in exchange
therefor, provided that said Acquired Fund Shares were held as
capital assets as of the Effective Time.
(e) This Agreement and the Reorganization contemplated hereby shall have
been approved by at least a majority of the outstanding shares of the
Acquired Fund entitled to vote on the matter.
(f) The Board of Trustees of ING Equity Trust shall have approved this
Agreement and authorized the issuance by the Acquiring Fund of
Acquiring Fund Shares at the Effective Time in exchange for the assets
of the Acquired Fund pursuant to the terms and provisions of this
Agreement.
A-7
12. EFFECTIVE TIME OF THE REORGANIZATION. The exchange of the Acquired
Fund's assets for the Acquiring Fund Shares shall be effective as of opening of
business on November 4, 2002, or at such other time and date as fixed by the
mutual consent of the parties (the "Effective Time").
13. TERMINATION. This Agreement and the transactions contemplated hereby
may be terminated and abandoned without penalty by resolution of the Board of
Trustees of AIC Trust and/or by resolution of the Board of Trustees of ING
Equity Trust, at any time prior to the Effective Time, if circumstances should
develop that, in the opinion of both or either Board, make proceeding with the
Agreement inadvisable.
14. AMENDMENT. This Agreement may be amended, modified or supplemented in
such manner as may be mutually agreed upon in writing by the parties; provided,
however, no such amendment may have the effect of changing the provisions for
determining the number or value of Acquiring Fund Shares to be paid to the
Acquired Fund's shareholders under this Agreement to the detriment of such
Acquired Fund's shareholders.
15. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
16. NOTICES. Any notice, report, statement or demand required or permitted
by any provision of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy, certified mail or overnight express courier
addressed as follows:
if to the Acquiring Fund: if to the Acquired Fund:
Xxxxxxxx Xxxxxxxx Xxxxxxx X. Xxxxxxx, Esq.
ING Equity Trust SEI Investments Company
0000 X. Xxxxxxxxxx Xxxxx Xxxx Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000 Xxxx, XX 00000
with a copy to: with a copy to:
Xxxxxxx X. Xxxxxx, Esq. Xxxx X. Xxxx, Esq.
Dechert Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxx Xxxxxx, XX 0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
17. FEES AND EXPENSES.
(a) Each of the Acquiring Fund and the Acquired Fund represents and
warrants to the other that there are no brokers or finders entitled to
receive any payments in connection with the transactions provided for
herein.
(b) Except as otherwise provided for herein, all expenses of the
reorganization contemplated by this Agreement will be borne by ING
Investments, LLC or its affiliates, on behalf of the Acquired Fund.
Such expenses include, without limitation: (i) expenses incurred in
connection with the entering into and the carrying out of the
provisions of this Agreement; (ii) expenses associated with the
preparation and filing of the Proxy Materials under the 1934 Act; (iii)
registration or qualification fees and expenses of preparing and filing
such forms as are necessary under applicable state securities laws to
qualify the Acquiring Fund Shares to be issued in connection herewith
in each state in which the Acquired Fund's shareholders are resident as
of the date of the mailing of the Proxy Materials to such shareholders;
(iv) postage; (v) printing; (iv) accounting fees; (vii) legal fees; and
(viii) solicitation costs related to obtaining shareholder approval of
the transactions contemplated by this Agreement. Notwithstanding the
foregoing, the Acquiring Fund shall pay its own Federal and state
registration fees.
18. INDEMNIFICATION.
(a) ING Equity Trust, out of the assets of the Acquiring Fund, shall
indemnify, defend and hold harmless the Acquired Fund, AIC Trust, its
Board of Trustees, officers, employees and agents (collectively
"Acquired Fund Indemnified Parties") against all losses, claims,
demands, liabilities and expenses, including reasonable legal and other
expenses incurred in defending third-party claims, actions, suits or
proceedings, whether or not resulting in any liability to such Acquired
Fund Indemnified Parties, including amounts paid by any one or more of
the Acquired Fund Indemnified Parties in a compromise or settlement of
any
A-8
such claim, action, suit or proceeding, or threatened third party
claim, suit, action or proceeding made with the consent of ING Equity
Trust, on behalf of the Acquiring Fund, arising from any untrue
statement or alleged untrue statement of a material fact contained in
the Proxy Materials, as filed and in effect with the SEC, or any
application prepared by ING Equity Trust, on behalf of the Acquiring
Fund with any state regulatory agency in connection with the
transactions contemplated by this Agreement under the securities laws
thereof ("Application"); or which arises out of or is based upon any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that ING Equity Trust and the Acquiring
Fund shall only be liable in such case to the extent that any such
loss, claim, demand, liability or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission by ING Equity Trust and/or the Acquiring Fund about
ING Equity Trust and/or the Acquiring Fund or the transactions
contemplated by this Agreement made in the Proxy Materials or any
Application.
(b) AIC Trust, on behalf of the Acquired Fund, shall indemnify, defend, and
hold harmless the Acquiring Fund, ING Equity Trust, its Board of
Trustees, officers, employees and agents ("Acquiring Fund Indemnified
Parties") against all losses, claims, demands, liabilities, and
expenses, including reasonable legal and other expenses incurred in
defending third-party claims, actions, suits or proceedings, whether or
not resulting in any liability to such Acquiring Fund Indemnified
Parties, including amounts paid by any one or more of the Acquiring
Fund Indemnified Parties in a compromise or settlement of any such
claim, suit, action or proceeding, or threatened third-party claim,
suit, action or proceeding made with the consent of AIC Trust, on
behalf of the Acquired Fund (if the Acquired Fund still exists),
arising from any untrue statement or alleged untrue statement of a
material fact contained in the Proxy Materials, as filed and in effect
with the SEC or any Application; or which arises out of or is based
upon any omission or alleged omission to state therein a material fact
required to be stated therein and necessary to make the statements
therein not misleading; provided, however, that AIC Trust and the
Acquired Fund shall only be liable in such case to the extent that any
such loss, claim, demand, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission by AICTrust and/or the Acquired Fund about AIC
Trust and/or the Acquired Fund or about the transactions contemplated
by this Agreement made in the Proxy Materials or any Application.
(c) ING Equity Trust, out of the Acquiring Fund's assets, shall indemnify,
defend, and hold harmless each of the Acquiring Fund's Indemnified
Parties from and against any and all losses, claims, damage,
liabilities, or expenses including, without limitation, the payment of
reasonable legal fees and other expenses incurred in defending
third-party claims, actions, suits or proceedings, whether or not
resulting in any liability to such Acquiring Fund Indemnified Parties,
including amounts paid by any one or more of the Acquiring Fund
Indemnified Parties in a compromise or settlement of any such claim,
action, suit or proceeding, or threatened third party claim, suit,
action or proceeding, insofar as any such loss, claim, damage,
liability, or expense (or actions with respect thereto) arises out of
any act, conduct or omission relating to the Acquired Fund prior to the
Effective Time.
(d) ING Equity Trust, out of the Acquiring Fund's assets, shall indemnify,
defend, and hold harmless each of the Acquired Fund's Indemnified
Parties from and against any and all losses, claims, damage,
liabilities, or expenses including without limitation, the payment of
reasonable legal fees and other expenses incurred in defending
third-party claims, actions, suits or proceedings, whether or not
resulting in any liability to such Acquired Fund Indemnified Parties,
including amounts paid by any one or more of the Acquired Fund
Indemnified Parties in a compromise or settlement of any such claim,
action, suit or proceeding, or threatened third party claim, suit,
action or proceeding, insofar as any such loss, claim, damage,
liability, or expense (or actions with respect thereto) arises out of
any act, conduct or omission relating to the Acquiring Fund subsequent
to the Effective Time.
(e) A party seeking indemnification hereunder is hereinafter called the
"indemnified party" and the party from whom the indemnified party is
seeking indemnification hereunder is hereinafter called the
"indemnifying party." Each indemnified party shall notify the
indemnifying party in writing within ten (10) days of the receipt by
one or more of the indemnified parties of any notice of legal process
of any suit brought against or claim made against such indemnified
party as to any matters covered by this Section 18, but the failure to
notify the indemnifying party shall not relieve the indemnifying party
from any liability
A-9
which it may have to any indemnified party otherwise than under this
Section 18. The indemnifying party shall be entitled to participate at
its own expense in the defense of any claim, action, suit, or
proceeding covered by this Section 18, or, if it so elects, to assume
at its own expense the defense thereof with counsel satisfactory to the
indemnified parties; provided, however, if the defendants in any such
action include both the indemnifying party and any indemnified party
and the indemnified party shall have reasonably concluded that there
may be legal defenses available to it which are different from or
additional to those available to the indemnifying party, the
indemnified party shall have the right to select separate counsel to
assume such legal defense and to otherwise participate in the defense
of such action on behalf of such indemnified party.
(f) Upon receipt of notice from the indemnifying party to the indemnified
parties of the election by the indemnifying party to assume the defense
of such action, the indemnifying party shall not be liable to such
indemnified parties under this Section 18 for any legal or other
expenses subsequently incurred by such indemnified parties in
connection with the defense thereof unless (i) the indemnified parties
shall have employed such counsel in connection with the assumption of
legal defenses in accordance with the provision of the immediately
preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel); (ii) the indemnifying party does not employ counsel
reasonably satisfactory to the indemnified parties to represent the
indemnified parties within a reasonable time after notice of
commencement of the action; or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified parties at its
expense.
(g) This Section 18 shall survive the termination of this Agreement and for
a period of five years following the Effective Date.
19. HEADINGS, COUNTERPARTS, ASSIGNMENT.
(a) The article and section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
(c) This Agreement shall be binding upon 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.
20. ENTIRE AGREEMENT. Each of the Acquiring Fund and the Acquired Fund
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. The representations, warranties and covenants contained
herein or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
21. FURTHER ASSURANCES. Each of the Acquiring Fund and the Acquired Fund
shall take such further action as may be necessary or desirable and proper to
consummate the transactions contemplated hereby.
22. BINDING NATURE OF AGREEMENT. As provided in AIC Trust's Declaration of
Trust on file with the Secretary of the Commonwealth of Massachusetts, this
Agreement was executed by the undersigned officers and trustees of AIC Trust, on
behalf of the Acquired Fund, as officers and trustees and not individually, and
the obligations of this Agreement are not binding upon the undersigned officers
and trustees individually, but are binding only upon the assets and property of
AIC Trust. Moreover, no series of AIC Trust shall be liable for the obligations
of any other series of AIC Trust. This Agreement was executed by the undersigned
officers and trustees of ING Equity Trust, on behalf of the Acquiring Fund, as
officers and trustees and not individually, and the obligations of this
Agreement are not binding upon the undersigned officers and trustees
individually, but are binding only upon the assets and property of ING Equity
Trust.
A-10
Moreover, no series of ING Equity Trust shall be liable for the obligations
of any other series of ING Equity Trust.
ING EQUITY TRUST,
on behalf of its series,
the ING Real Estate Fund
By:_____________________
Title:____________________
THE ADVISORS' INNER CIRCLE FUND,
on behalf of its series,
the CRA Realty Shares Portfolio
By:_____________________
Title:____________________
A-11
