Exhibit 4
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this ___ day of __________, 2004, by and between ING Funds Trust, a Delaware
statutory trust with its principal place of business at 0000 Xxxx Xxxxxxxxxx
Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000-0000, on behalf of its series, ING
Intermediate Bond (the "Acquiring Fund"), and ING Series Fund, Inc., a Maryland
corporation (the "Company") with its principal place of business at 0000 Xxxx
Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000-0000, on behalf of its series,
ING Bond Fund (the "Acquired Fund").
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 Fund to the Acquiring Fund in exchange solely for Class
A, Class B, Class C, Class I and Class O voting shares of beneficial interest of
the Acquiring Fund (the "Acquiring Fund Shares"), the assumption by the
Acquiring Fund of the liabilities of the Acquired Fund described in paragraph
1.3, and the distribution of the Acquiring Fund Shares to the shareholders of
the Acquired Fund in complete liquidation of the Acquired Fund as provided
herein, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, the Acquired Fund and the Acquiring Fund are series of
open-end, registered investment companies of the management type and the
Acquired Fund owns securities which generally are assets of the character in
which the Acquiring Fund is permitted to invest;
WHEREAS, the Trustees of ING Funds Trust have determined that the
exchange of all of the assets of the Acquired Fund for Acquiring Fund Shares and
the assumption of the liabilities of the Acquired Fund described in paragraph
1.3 by the Acquiring Fund is in the best interests of the Acquiring Fund and its
shareholders and that the interests of the existing shareholders of the
Acquiring Fund would not be diluted as a result of this transaction; and
WHEREAS, the Directors of the Company have determined that the exchange
of all of the assets of the Acquired Fund for Acquiring Fund Shares and the
assumption of all liabilities of the Acquired Fund by the Acquiring Fund is in
the best interests of the Acquired Fund and its shareholders and that the
interests of the existing shareholders of the Acquired Fund 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 FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR THE ACQUIRING FUND SHARES, THE ASSUMPTION OF ACQUIRED FUND
LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED FUND
1.2. Subject to the requisite approval of the Acquired Fund
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer all of the Acquired Fund's assets, as set forth in paragraph
1.2, to the Acquiring Fund, and the Acquiring Fund agrees in exchange therefore:
(i) to deliver to the Acquired Fund the number of full and fractional Class A,
Class B, Class C, Class I and Class O Acquiring Fund Shares determined by
dividing the value of the Acquired Fund'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 Fund Share of the same class, computed
in the manner and as of the time and date set forth in paragraph 2.2; and (ii)
to assume all liabilities of the Acquired Fund, 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 Fund to be acquired by the
Acquiring Fund 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 Fund and any
deferred or prepaid expenses shown as an asset on the books of the Acquired Fund
on the closing date provided for in paragraph 3.1 (the "Closing Date")
(collectively, "Assets").
1.3. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund shall
assume the liabilities of the Acquired Fund set forth in the Acquired Fund's
statement of assets and liabilities as of the Closing Date delivered by the
Company, on behalf of the Acquired Fund, to the Trust, on behalf of the
Acquiring Fund, pursuant to paragraph 7.2 hereof. On or as soon as practicable
prior to the Closing Date, the Acquired Fund 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 Fund will distribute to the Acquired Fund's
shareholders of record with respect to each class of its shares, determined as
of immediately after the close of business on the Closing Date (the "Acquired
Fund Shareholders"), on a pro rata basis within that class, the Acquiring Fund
Shares of the same class received by the Acquired Fund pursuant to paragraph
1.1, and will completely liquidate. Such distribution and liquidation will be
accomplished, with respect to each class of the Acquired Fund's shares, by the
transfer of the Acquiring Fund Shares then credited to the account of the
Acquired Fund on the books of the Acquiring Fund to open accounts on the share
records of the Acquiring Fund in the names of the Acquired Fund Shareholders.
The aggregate net asset value of Class A, Class B, Class C, Class I and Class O
Acquiring Fund Shares to be so credited to Class A, Class B, Class C, Class I
and Class O Acquired Fund Shareholders shall, with respect to each class, be
equal to the aggregate net asset value of the Acquired Fund shares of that same
class owned by such shareholders on the Closing Date. All issued and outstanding
shares of the Acquired Fund will simultaneously be canceled on the books of the
Acquired Fund, although share certificates representing interests in Class A,
Class B, Class C, Class I and Class O shares of the Acquired Fund will represent
a number of the same class of Acquiring Fund Shares after the Closing Date, as
determined in accordance with Section 2.3. The Acquiring Fund shall not issue
certificates representing the Class A, Class B, Class C, Class I and Class O
Acquiring Fund Shares in connection with such exchange.
1.5. Ownership of Acquiring Fund Shares will be shown on the books
of the Acquiring Fund's transfer agent, as defined in paragraph 3.3.
1.6. Any reporting responsibility of the Acquired Fund including,
but not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the 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 Fund.
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 Fund, and valuation procedures established by the Acquiring Fund's
Board of Trustees.
2.2. The net asset value of a Class A, Class B, Class C, Class I
and Class O Acquiring Fund 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 Fund's then-current prospectus and
statement of additional and valuation procedures established by the Acquiring
Fund's Board of Trustees.
2.5. The number of the Class A, Class B, Class C, Class I and Class
O Acquiring Fund Shares to be issued (including fractional shares, if any) in
exchange for the Acquired Fund's assets shall be determined with respect to each
such class by dividing the value of the net assets with respect to the Class A,
Class B, Class C, Class I and Class O shares of the Acquired Fund, 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 Fund Share, determined in accordance
with paragraph 2.2.
2.6. All computations of value shall be made by the Acquired Fund's
designated record keeping agent and shall be subject to review by Acquiring
Fund's record keeping agent and by each Fund's respective independent
accountants.
3. CLOSING AND CLOSING DATE
7.7. The Closing Date shall be August 14, 2004, 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 4:00 p.m., Eastern Time. The Closing
shall be held at the offices of the Acquiring Fund or at such other time and/or
place as the parties may agree.
7.8. The Acquired Fund shall direct The Bank of New York, as
custodian for the Acquired Fund (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 Fund 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 Fund's portfolio securities represented by a certificate or other
written instrument shall be presented for examination by the Acquired Fund
Custodian to the custodian for the Acquiring Fund no later than five business
days preceding the Closing Date, and shall be transferred and delivered by the
Acquired Fund as of the Closing Date 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 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 Fund's Assets are
deposited, the Acquired Fund's portfolio securities and instruments deposited
with such depositories. The cash to be transferred by the Acquired Fund shall be
delivered by wire transfer of federal funds on the Closing Date.
7.9. The Acquired Fund shall direct DST Systems, Inc. (the
"Transfer Agent"), on behalf of the Acquired Fund, to deliver at the Closing 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 Class A, Class B, Class C, Class I and Class O shares
owned by each such shareholder immediately prior to the Closing. The Acquiring
Fund shall issue and deliver a confirmation evidencing the Acquiring Fund Shares
to be credited on the Closing Date to the Secretary of the Acquiring 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. 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.
7.10. 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 Fund or the Acquired Fund 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 Directors of the Acquired Fund or the Board of Trustees of the
Acquiring Fund, accurate appraisal of the value of the net assets of the
Acquiring Fund or the Acquired Fund 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.
8. REPRESENTATIONS AND WARRANTIES
8.1. Except as has been disclosed to the Acquiring Fund in a
written instrument executed by an officer of the Company, the Company, on behalf
of the Acquired Fund, represents and warrants to ING Funds Trust as follows:
(a) The Acquired Fund 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 shares of the Acquired Fund 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
Fund 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 Fund and each prospectus and statement of additional
information of the Acquired Fund 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 Fund 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 Fund
will acquire good and marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as might arise under the
1933 Act, other than as disclosed to the Acquiring Fund;
(f) The Acquired Fund 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 Acquired Fund, 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 Acquired Fund, is a party or by
which it is bound;
(g) All material contracts or other commitments of the
Acquired Fund (other than this Agreement and certain investment contracts
including options, futures, and forward contracts) will terminate without
liability to the Acquired Fund prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and
accepted by ING Funds Trust, on behalf of the Acquiring Fund, 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 Fund 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 Company, on behalf of the Acquired Fund, 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 Fund dated March 31, 2004 have been audited by KPMG LLP, independent
auditors, and are in accordance with generally accepted accounting principles in
the United States ("GAAP") consistently applied, and such statements (copies of
which have been furnished to the Acquiring Fund) present fairly, in all material
respects, the financial condition of the Acquired Fund as of such date in
accordance with GAAP, and there are no known contingent liabilities of the
Acquired Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(j) Since March 31, 2004, there has not been any material
adverse change in the Acquired Fund's financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquiring Fund. For the purposes of this subparagraph (j), a
decline in net asset value per share of the Acquired Fund due to declines in
market values of securities in the Acquired Fund's portfolio, the discharge of
Acquired Fund liabilities, or the redemption of Acquired Fund Shares by
shareholders of the Acquired Fund 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
Fund 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 Fund'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 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 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
Fund 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 Fund 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 Fund, as provided in
paragraph 3.3. The Acquired Fund does not have outstanding any options, warrants
or other rights to subscribe for or purchase any of the shares of the Acquired
Fund, nor is there outstanding any security convertible into any of the Acquired
Fund 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 Directors of the Company, on behalf
of the Acquired Fund, and, subject to the approval of the shareholders of the
Acquired Fund, this Agreement will constitute a valid and binding obligation of
the Acquired Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(o) The information to be furnished by the Acquired Fund
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 Fund (the "Proxy
Statement") to be included in the Registration Statement referred to in
paragraph 5.6, insofar as it relates to the Acquired Fund, 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 Fund 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.
8.2. Except as has been disclosed to the Acquired Fund in a written
instrument executed by an officer of ING Funds Trust, ING Funds Trust, on behalf
of the Acquiring Fund, represents and warrants to the Company as follows:
(a) The Acquiring Fund is duly organized as a series of
ING Funds Trust, which is a statutory trust duly organized, validly existing and
in good standing under the laws of the State of Delaware, with power under ING
Funds Trust to own all of its properties and assets and to carry on its business
as it is now being conducted;
(b) ING Funds 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 the shares of the Acquired Fund 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 Fund of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be
required by state securities laws;
(d) The current prospectus and statement of additional
information of the Acquiring Fund and each prospectus and statement of
additional information of the Acquiring Fund 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 Fund will have
good and marketable title to the Acquiring Fund's assets, free of any liens of
other encumbrances, except those liens or encumbrances as to which the Acquired
Fund has received notice and necessary documentation at or prior to the Closing;
(f) The Acquiring Fund is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of ING Funds Trust's Trust Instrument or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
ING Funds Trust, on behalf of the Acquiring Fund, 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 ING Funds Trust, on behalf of the Acquiring Fund, is a party
or by which it is bound;
(g) Except as otherwise disclosed in writing to and
accepted by the Company, on behalf of the Acquired Fund, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or, to its knowledge, threatened against
ING Funds Trust, on behalf of the Acquiring Fund, or any of the Acquiring Fund's
properties or assets that, if adversely determined, would materially and
adversely affect the Acquiring Fund's financial condition or the conduct of the
Acquiring Fund's business. ING Funds Trust, on behalf of the Acquiring Fund,
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 Fund at March 31, 2004 have been audited by KPMG LLP, independent
auditors, and are in accordance with GAAP consistently applied, and such
statements (copies of which have been furnished to the Acquired Fund) present
fairly, in all material respects, the financial condition of the Acquiring Fund
as of such date in accordance with GAAP, and there are no known contingent
liabilities of the Acquiring Fund required to be reflected on a balance sheet
(including the notes thereto) in accordance with GAAP as of such date not
disclosed therein;
(i) Since March 31, 2004 there has not been any material
adverse change in the Acquiring Fund's financial condition, assets, liabilities
or business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed to
and accepted by the Acquired Fund. For purposes of this subparagraph (i), a
decline in net asset value per share of the Acquiring Fund due to declines in
market values of securities in the Acquiring Fund's portfolio, the discharge of
Acquiring Fund liabilities, or the redemption of Acquiring Fund Shares by
shareholders of the Acquiring Fund, 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 Fund 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 Fund'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 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 Closing
Date;
(l) All issued and outstanding Acquiring Fund Shares are,
and on the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by ING Funds Trust 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 Fund does not have outstanding any options, warrants or
other rights to subscribe for or purchase any Acquiring Fund Shares, nor is
there outstanding any security convertible into any Acquiring Fund 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 Trustees of ING Funds Trust, on
behalf of the Acquiring Fund, and this Agreement will constitute a valid and
binding obligation of the Acquiring Fund, 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) The Class A, Class B, Class C, Class I and Class O
Acquiring Fund Shares to be issued and delivered to the Acquired Fund, for the
account of the Acquired Fund Shareholders, pursuant to the terms of this
Agreement, will on the Closing Date have been duly authorized and, when so
issued and delivered, will be duly and validly issued Acquiring Fund Shares, and
will be fully paid and non-assessable;
(o) The information to be furnished by ING Funds Trust
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 Fund, the
Registration Statement relating to the Acquiring Fund Shares issuable hereunder,
and the proxy materials of the Acquired Fund 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 Fund 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 Fund 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.
9. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
9.1. The Acquiring Fund and the Acquired Fund 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.
9.2. The Acquired Fund will call a meeting of the shareholders of
the Acquired Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated herein.
9.3. The Acquired Fund covenants that the Class A, Class B, Class
C, Class I and Class O Acquiring Fund 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.
9.4. The Acquired Fund will assist the Acquiring Fund in obtaining
such information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Acquired Fund shares.
9.5. Subject to the provisions of this Agreement, the Acquiring
Fund and the Acquired Fund 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.
9.6. The Acquired Fund will provide the Acquiring Fund 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 Fund (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 Fund to consider approval of this Agreement and the
transactions contemplated herein.
9.7. As soon as is reasonably practicable after the Closing, the
Acquired Fund will make a liquidating distribution to its shareholders
consisting of the Class A, Class B, Class C, Class I and Class O Acquiring Fund
Shares received at the Closing.
9.8. The Acquiring Fund and the Acquired Fund 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.
9.9. The Company, on behalf of the Acquired Fund, covenants that
the Company will, from time to time, as and when reasonably requested by the
Acquiring Fund, 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 ING Funds Trust, on behalf of the Acquiring Fund, may
reasonably deem necessary or desirable in order to vest in and confirm (a) the
Company's, on behalf of the Acquired Fund's, title to and possession of the
Acquiring Fund's Shares to be delivered hereunder, and (b) the Company's, on
behalf of the Acquiring Fund's, title to and possession of all the assets and
otherwise to carry out the intent and purpose of this Agreement.
9.10. The Acquiring Fund 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.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Company, on behalf of the Acquired Fund, to
consummate the transactions provided for herein shall be subject, at the
Company's election, to the performance by ING Funds Trust, on behalf of the
Acquiring Fund, of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions:
10.1. All representations and warranties of ING Funds Trust, on
behalf 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
Closing Date, with the same force and effect as if made on and as of the Closing
Date;
10.2. ING Funds Trust shall have delivered to the Company 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
Company and dated as of the Closing Date, to the effect that the representations
and warranties of ING Funds Trust, on behalf of the Acquiring Fund, 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;
10.3. ING Funds Trust, on behalf of the Acquiring Fund, 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 ING Funds Trust, on behalf
of the Acquiring Fund, on or before the Closing Date; and
10.4. The Acquired Fund and the Acquiring Fund shall have agreed on
the number of full and fractional Acquiring Fund Shares of each Class to be
issued in connection with the Reorganization after such number has been
calculated in accordance with paragraph 1.1.
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of ING Funds Trust, on behalf of the Acquiring Fund, to
complete the transactions provided for herein shall be subject, at ING Funds
Trust's election, to the performance by the Company, on behalf of the Acquired
Fund, of all of the obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, the following conditions:
11.1. All representations and warranties of the Company, on behalf
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 Closing Date, with
the same force and effect as if made on and as of the Closing Date;
11.2. The Company shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, as of the Closing Date,
certified by the Treasurer of the Company;
11.3. The Company shall have delivered to the Acquiring Fund 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 ING Funds Trust and dated as of the Closing Date, to the effect
that the representations and warranties of the Company, on behalf of the
Acquired Fund, 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 ING Funds Trust shall reasonably
request;
11.4. The Company, on behalf of the Acquired Fund, 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 Acquired Fund, on or before the Closing Date;
11.5. The Acquired Fund and the Acquiring Fund shall have agreed on
the number of full and fractional Acquiring Fund 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
11.6. 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.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE ACQUIRED FUND
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Company, on behalf of the Acquired
Fund, or ING Funds Trust, on behalf of the Acquiring Fund, the other party to
this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
14.6. 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 Fund in accordance with the provisions of the Company's
Articles of Incorporation, By-Laws, applicable Maryland law and the 1940 Act,
and certified copies of the resolutions evidencing such approval shall have been
delivered to the Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the ING Funds Trust nor the Company may waive the conditions
set forth in this paragraph 8.1;
14.7. 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;
14.8. All consents of other parties and all other consents, orders
and permits of Federal, state and local regulatory authorities deemed necessary
by ING Funds Trust or the Company to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
the Acquiring Fund or the Acquired Fund, provided that either party hereto may
for itself waive any of such conditions;
14.9. 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
14.10. The parties shall have received the opinion of Dechert LLP
addressed to the Company and ING Funds Trust 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 ING Funds Trust
and the Company. Notwithstanding anything herein to the contrary, neither ING
Funds Trust nor the Company may waive the condition set forth in this paragraph
8.5.
15. BROKERAGE FEES AND EXPENSES
15.1. The Company, on behalf of the Acquired Fund, and ING Funds
Trust, on behalf of the Acquiring Fund, 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.
15.2. The expenses relating to the proposed Reorganization will be
borne by the investment adviser to the Acquiring Fund. 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 Fund's
prospectus and the Acquired Fund'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.
16. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
16.1. ING Funds Trust and the Company 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.
16.2. 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.
17. 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
November 30, 2004, 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.
18. 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
Company and ING Funds Trust; provided, however, that following the meeting of
the shareholders of the Acquired Fund called by the Company 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 A, Class B, and Class C, Class I and Class O
Acquiring Fund Shares to be issued to the Acquired Fund Shareholders under this
Agreement to the detriment of such shareholders without their further approval.
19. 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 ING Funds
Trust or the Series Fund, Inc., 0000 Xxxx Xxxxxxxxxx Xxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxx 00000-0000, attn: Xxxx Xxxxxxx, in each case with a copy to Dechert LLP,
0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, attn: Xxxxxxx X. Xxxxxx.
20. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
20.1. 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.
20.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
20.3. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its
principles of conflicts of laws.
20.4. 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.
20.5. 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 Company personally, but shall bind only
the trust property of the Acquired Fund, as provided in the Articles of
Incorporation of the Company. 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 and its seal to be affixed thereto
and attested by its Secretary or Assistant Secretary.
ING FUNDS TRUST on behalf of its
ING INTERMEDIATE BOND FUND series
Attest:
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SECRETARY By:
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Title:
THE SERIES FUND, INC. on behalf of its
ING BOND FUND series
Attest:
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SECRETARY By:
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Title:
