Exhibit 4(B)
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 11th day of November, 2004, by and between ING Variable Products Trust,
a Massachusetts business trust (the "Trust") with its principal place of
business at 7337 East Doubletree Ranch Road, Scottsdale, Arizona 85258-2034, on
behalf of the ING VP MidCap Opportunities (the "Acquiring Portfolio"), a
separate series of the Trust, and ING Variable Products Trust, on behalf of the
ING VP Growth Opportunities Portfolio (the "Acquired Portfolio"), another
separate series of the Trust.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a)(1) of the
United States Internal Revenue Code of 1986, as amended (the "Code"). The
reorganization (the "Reorganization") will consist of the transfer of all of the
assets of the Acquired Portfolio to the Acquiring Portfolio in exchange solely
for Class R and Class S voting shares of beneficial interest of the Acquiring
Portfolio (the "Acquiring Portfolio Shares"), the assumption by the Acquiring
Portfolio of all liabilities of the Acquired Portfolio, and the distribution of
the Acquiring Portfolio Shares to the shareholders of the Acquired Portfolio in
complete liquidation of the Acquired Portfolio as provided herein, all upon the
terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Acquired Portfolio and the Acquiring Portfolio are series
of an open-end, registered investment company of the management type, and the
Acquired Portfolio owns securities which generally are assets of the character
in which the Acquiring Portfolio is permitted to invest; and
WHEREAS, the Trustees of the Trust have determined that the exchange of
all of the assets of the Acquired Portfolio for Acquiring Portfolio Shares and
the assumption of all liabilities of the Acquired Portfolio by the Acquiring
Portfolio is in the best interests of the Acquiring Portfolio and its
shareholders and that the interests of the existing shareholders of the
Acquiring Portfolio would not be diluted as a result of this transaction; and
WHEREAS, the Trustees of the Trust have determined that the exchange of
all of the assets of the Acquired Portfolio for Acquiring Portfolio Shares and
the assumption of all liabilities of the Acquired Portfolio by the Acquiring
Portfolio is in the best interests of the Acquired Portfolio and its
shareholders and that the interests of the existing shareholders of the Acquired
Portfolio would not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED PORTFOLIO TO THE ACQUIRING PORTFOLIO
IN EXCHANGE FOR THE ACQUIRING PORTFOLIO SHARES, THE ASSUMPTION OF ALL
ACQUIRED PORTFOLIO LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED
PORTFOLIO
1.1. Subject to the requisite approval of the Acquired Portfolio
shareholders and the other terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired
Portfolio agrees to transfer all of the Acquired Portfolio's assets, as set
forth in paragraph 1.2, to the Acquiring Portfolio, and the Acquiring Portfolio
agrees in exchange therefor: (i) to deliver to the Acquired Portfolio the number
of full and fractional Class R and Class S Acquiring Portfolio Shares determined
by dividing the value of the Acquired Portfolio's net assets with respect to
Class R and Class S, computed in the manner and as of the time and date set
forth in paragraph 2.1, by the net asset value of one Acquiring Portfolio Share
of Class R and Class S, 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 Portfolio as set forth in paragraph 1.3. Such transactions shall take
place at the closing provided for in paragraph 3.1 (the "Closing").
1.2. The assets of the Acquired Portfolio to be acquired by the
Acquiring Portfolio shall consist of all assets and property, including, without
limitation, all cash, securities, commodities and futures interests and
dividends or interests receivable, that are owned by the Acquired Portfolio, and
any deferred or prepaid expenses shown as an asset on the books of the Acquired
Portfolio, on the closing date provided for in paragraph 3.1 (the "Closing
Date") (collectively, "Assets").
1.3. The Acquired Portfolio will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Portfolio
shall also assume all of the liabilities of the Acquired Portfolio, whether
accrued or contingent, known or unknown, existing at the Valuation Date, as
defined in paragraph 2.1 (collectively, "Liabilities"). On or as soon as
practicable prior to the Closing Date, the Acquired Portfolio will declare and
pay to its shareholders of record one or more dividends and/or other
distributions so that it will have distributed substantially all (and in no
event less than 98%) of its investment company taxable income (computed without
regard to any deduction for dividends paid) and realized net capital gain, if
any, for the current taxable year through the Closing Date.
1.4. Immediately after the transfer of Assets provided for in paragraph
1.1, the Acquired Portfolio will distribute to the Acquired Portfolio's
shareholders of record, determined as of immediately after the close of business
on the Closing Date (the "Acquired Portfolio Shareholders"), on a pro rata
basis, the Acquiring Portfolio Shares of the same class received by the Acquired
Portfolio pursuant to paragraph 1.1, and will completely liquidate. Such
distribution and liquidation will be accomplished, with respect to the Acquired
Portfolio's shares, by the transfer of the Acquiring Portfolio Shares then
credited to the account of the Acquired Portfolio on the books of the Acquiring
Portfolio to open accounts on the share records of the Acquiring Portfolio in
the names of the Acquired Portfolio Shareholders. The aggregate net asset value
of Class R and Class S Acquiring Portfolio Shares to be so credited to Class R
and Class S Acquired Portfolio Shareholders shall be equal to the aggregate net
asset value of the Acquired Portfolio shares of that same class owned by such
shareholders on the Closing Date. All issued and outstanding shares of the
Acquired Portfolio will simultaneously be canceled on the books of the Acquired
Portfolio.
1.5. Ownership of Acquiring Portfolio Shares will be shown on the books
of the Acquiring Portfolio's transfer agent, as defined in paragraph 3.3.
1.6. Any reporting responsibility of the Acquired Portfolio including,
but not limited to, the responsibility for filing of regulatory reports, tax
returns, or other documents with the U.S. Securities and Exchange Commission
(the "Commission"), any state securities commission, and any federal, state or
local tax authorities or any other relevant regulatory authority, is and shall
remain the responsibility of the Acquired Portfolio.
2. VALUATION
2.1. The value of the Assets shall be the value computed as of
immediately after the close of business of the New York Stock Exchange ("NYSE")
and after the declaration of any dividends on the Closing Date (such time and
date being hereinafter called the "Valuation Date"), using the valuation
procedures in the then-current prospectus and statement of additional
information with respect to the Acquiring Portfolio, and valuation procedures
established by the Acquiring Portfolio's Board of Trustees.
2.2. The net asset value of a Class R and Class S Acquiring Portfolio
Share shall be the net asset value per share computed with respect to that class
as of the Valuation Date, using the valuation procedures set forth in the
Acquiring Portfolio's then-current prospectus and statement of additional
information and valuation procedures established by the Acquiring Portfolio's
Board of Trustees.
2.3. The number of the Class R and Class S Acquiring Portfolio Shares
to be issued (including fractional shares, if any) in exchange for the Acquired
Portfolio's Assets shall be determined by dividing the value of the net assets
with respect to the Class S shares of the Acquired Portfolio, determined using
the same valuation procedures referred to in paragraph 2.1, by the net asset
value of an Acquiring Portfolio Share, determined in accordance with paragraph
2.2.
2.4. All computations of value shall be made by the Acquired
Portfolio's designated record keeping agent and shall be subject to review by
the Acquiring Portfolio's record keeping agent and by each Portfolio's
respective independent accountants.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be April [ ], 2004, or such other date as
the parties may agree to in writing. 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 Portfolio or at such
other time and/or place as the parties may agree.
3.2. The Acquired Portfolio shall direct State Street Bank and Trust
Company, as custodian for the Acquired Portfolio (the "Custodian"), to deliver,
at the Closing, a certificate of an authorized officer stating that (i) the
Assets shall have been delivered in proper form to the Acquiring Portfolio
within two business days prior to or on the Closing Date, and (ii) all necessary
taxes in connection with the delivery of the Assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or provision for
payment has been made. The Acquired Portfolio's portfolio securities represented
by a certificate or other written instrument shall be presented by the Acquired
Portfolio Custodian to the custodian for the Acquiring Portfolio for examination
no later than five business days preceding the Closing Date, and shall be
transferred and delivered by the Acquired Portfolio as of the Closing Date for
the account of the Acquiring Portfolio duly endorsed in proper form for transfer
in such condition as to constitute good delivery thereof. The Custodian shall
deliver, as of the Closing Date by Date by book entry, in accordance with the
customary practices of the Custodian and any securities depository (as defined
in Rule 17f-4 under the Investment Company Act of 1940, as amended (the "1940
Act")) in which the Acquired Portfolio's Assets are deposited, the Assets that
are deposited with such depositories. The cash to be transferred by the Acquired
Portfolio shall be delivered by wire transfer of federal funds on the Closing
Date.
3.3. The Acquired Portfolio shall direct DST Systems, Inc. (the
"Transfer Agent"), on behalf of the Acquired Portfolio, to deliver at the
Closing a certificate of an authorized officer stating that its records contain
the names and addresses of the Acquired Portfolio Shareholders and the number
and percentage ownership of outstanding Class R and Class S shares owned by each
such shareholder immediately prior to the Closing. The Acquiring Portfolio shall
issue and deliver a confirmation evidencing the Acquiring Portfolio Shares to be
credited on the Closing Date to the Secretary of the Acquiring Portfolio, or
provide evidence satisfactory to the Acquired Portfolio that such Acquiring
Portfolio Shares have been credited to the Acquired Portfolio's account on the
books of the Acquiring Portfolio. At the Closing each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
3.4. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the Acquiring Portfolio or
the Acquired Portfolio shall be closed to trading or trading thereupon shall be
restricted, or (b) trading or the reporting of trading on such Exchange or
elsewhere shall be disrupted so that, in the judgment of the Board of Trustees,
respectively, accurate appraisal of the value of the net assets of the Acquiring
Portfolio or the Acquired Portfolio, respectively, is impracticable, the Closing
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Trust on behalf of the Acquired Portfolio, represents and
warrants as follows:
(a) The Acquired Portfolio is duly organized as a series of the Trust
which is a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts with power under the Trust's
Declaration of Trust ("Declaration of Trust") to own all of its Assets and to
carry on its business as it is now being conducted;
(b) The Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act, and the registration of
shares of the Acquired Portfolio under the Securities Act of 1933, as amended
("1933 Act"), is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired
Portfolio of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act") and the 1940 Act and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional information of
the Acquired Portfolio and each prospectus and statement of additional
information of the Acquired Portfolio used during the three years previous to
the date of this Agreement conforms or conformed at the time of its use in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading;
(e) On the Closing Date, the Trust, on behalf of the Acquired Portfolio
will have good and marketable title to the Assets and full right, power, and
authority to sell, assign, transfer and deliver such Assets hereunder free of
any liens or other encumbrances, and upon delivery and payment for such Assets,
the Trust, on behalf of the Acquiring Portfolio will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof,
including such restrictions as might arise under the 1933 Act, other than as
disclosed to the Acquiring Portfolio;
(f) The Acquired Portfolio is not engaged currently, and the execution,
delivery and performance of this Agreement will not result, in (i) a material
violation of the Trust's Declaration of Trust or By-Laws or of any agreement,
indenture, instrument, contract, lease or other undertaking to which the Trust
on behalf of the Acquired Portfolio, is a party or by which it is bound, or (ii)
the acceleration of any obligation, or the imposition of any penalty, under any
agreement, indenture, instrument, contract, lease, judgment or decree to which
the Trust, on behalf of the Acquired Portfolio is a party or by which it is
bound;
(g) All material contracts or other commitments of the Acquired
Portfolio (other than this Agreement and certain investment contracts, including
options, futures, and forward contracts) will terminate without liability to the
Acquired Portfolio on or prior to the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by the
Trust, on behalf of the Acquiring Portfolio, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Acquired
Portfolio, or any of its properties or assets that, if adversely determined,
would materially and adversely affect the Acquired Portfolio's financial
condition or the conduct of its business. The Trust, on behalf of the Acquired
Portfolio, knows of no facts which might form the basis for the institution of
such proceedings and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which materially and
adversely affects the Acquired Portfolio's business or the Acquired Portfolio's
ability to consummate the transactions herein contemplated;
(i) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets, and Portfolio of Investments of the Acquired
Portfolio as of December 31, 2002 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 Portfolio) present fairly, in all
material respects, the financial condition of the Acquired Portfolio as of such
date in accordance with GAAP, and there are no known contingent liabilities of
the Acquired Portfolio required to be reflected on a balance sheet (including
the notes thereto) in accordance with GAAP as of such date not disclosed
therein;
(j) Since December 31, 2002, there has not been any material adverse
change in the Acquired Portfolio's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Portfolio of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquiring Portfolio. For the purposes of this
subparagraph (j), a decline in net asset value per share of the Acquired
Portfolio due to declines in market values of securities in the Acquired
Portfolio's portfolio, the discharge of Acquired Portfolio liabilities, or the
redemption of Acquired Portfolio Shares by shareholders of the Acquired
Portfolio shall not constitute a material adverse change;
(k) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Acquired Portfolio
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquired Portfolio's knowledge, no
such return is currently under audit and no assessment has been asserted with
respect to such returns;
(l) For each taxable year of its operation (including the taxable year
ending on the Closing Date), the Acquired Portfolio has met (or will meet) the
requirements of Subchapter M of the Code for qualification as a regulated
investment company, has complied (or will comply) with the applicable
diversification requirements imposed by Subchapter L of the Code, has been (or
will be) eligible to and has computed (or will compute) its federal income tax
under Section 852 of the Code, and will have distributed all of its investment
company taxable income and net capital gain (as defined in the Code) that has
accrued through the Closing Date, and before the Closing Date will have declared
dividends sufficient to distribute all of its investment company taxable income
and net capital gain for the period ending on the Closing Date;
(m) All issued and outstanding shares of the Acquired Portfolio are,
and on the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the 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.
All of the issued and outstanding shares of the Acquired Portfolio will, at the
time of Closing, be held by the persons and in the amounts set forth in the
records of the Transfer Agent, on behalf of the Acquired Portfolio, as provided
in paragraph 3.3. The Acquired Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of the shares of the
Acquired Portfolio, nor is there outstanding any security convertible into any
of the Acquired Portfolio shares;
(n) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Trust on behalf of the Acquired Portfolio,
and, subject to the approval of the shareholders of the Acquired Portfolio, this
Agreement will constitute a valid and binding obligation of the Acquired
Portfolio, enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization, moratorium and other laws relating to
or affecting creditors' rights and to general equity principles;
(o) The information to be furnished by the Acquired Portfolio for use
in registration statements, proxy materials and other documents filed or to be
filed with any federal, state or local regulatory authority (including the
National Association of Securities Dealers, Inc.), which may be necessary in
connection with the transactions contemplated hereby, shall be accurate and
complete in all material respects and shall comply in all material respects with
Federal securities and other laws and regulations thereunder applicable thereto;
and
(p) The proxy statement of the Acquired Portfolio (the "Proxy
Statement") to be included in the Registration Statement, insofar as it relates
to the Acquired Portfolio, will, on the effective date of the Registration
Statement and on the Closing Date (i) not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which such statements were made, not materially misleading provided, however,
that the representations and warranties in this subparagraph (p) shall not apply
to statements in or omissions from the Proxy Statement and the Registration
Statement made in reliance upon and in conformity with information that was
furnished by the Acquiring Portfolio for use therein, and (ii) comply in all
material respects with the provisions of the 1933 Act, the 1934 Act and the 1940
Act and the rules and regulations thereunder.
4.2. The Trust, on behalf of the Acquiring Portfolio, represents and
warrants as follows:
(a) The Acquiring Portfolio is duly organized as a series of the Trust,
which is a business trust duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts with power under the Trust's
Declaration of Trust to own all of its properties and assets and to carry on its
business as it is now being conducted;
(b) The Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration of
shares of the Acquiring Portfolio under the 1933 Act, is in full force and
effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Portfolio of the transactions contemplated herein, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may be
required by state securities laws;
(d) The current prospectus and statement of additional information of
the Acquiring Portfolio and each prospectus and statement of additional
information of the Acquiring Portfolio used during the three years previous to
the date of this Agreement conforms or conformed at the time of its use in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not materially misleading;
(e) On the Closing Date, the Acquiring Portfolio will have good and
marketable title to the Acquiring Portfolio's assets, free of any liens of other
encumbrances, except those liens or encumbrances as to which the Acquired
Portfolio has received notice and necessary documentation at or prior to the
Closing;
(f) The Acquiring Portfolio is not engaged currently, and the
execution, delivery and performance of this Agreement will not result, in (i) a
material violation of the Trust's Declaration of Trust or By-Laws or of any
agreement, indenture, instrument, contract, lease or other undertaking to which
the Trust, on behalf of the Acquiring Portfolio, is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which the Trust on behalf of the Acquiring Portfolio, is a party or
by which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by the
Trust, on behalf of the Acquired Portfolio, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against the Trust, on behalf
of the Acquiring Portfolio, or any of the Acquiring Portfolio's properties or
assets that, if adversely determined, would materially and adversely affect the
Acquiring Portfolio's financial condition or the conduct of its business. The
Trust on behalf of the Acquiring Portfolio knows of no facts which might form
the basis for the institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the Acquiring
Portfolio's business or the Acquiring Portfolio's ability to consummate the
transactions herein contemplated;
(h) The Statement of Assets and Liabilities, Statements of Operations
and Changes in Net Assets and Portfolio of Investments of the Acquiring
Portfolio as of December 31, 2002 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 Portfolio)
present fairly, in all material respects, the financial condition of the
Acquiring Portfolio as of such date in accordance with GAAP, and there are no
known contingent liabilities of the Acquiring Portfolio required to be reflected
on a balance sheet (including the notes thereto) in accordance with GAAP as of
such date not disclosed therein;
(i) Since December 31, 2002, there has not been any material adverse
change in the Acquiring Portfolio's financial condition, assets, liabilities or
business, other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Portfolio of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquired Portfolio. For purposes of this subparagraph
(i), a decline in net asset value per share of the Acquiring Portfolio due to
declines in market values of securities in the Acquiring Portfolio's portfolio,
the discharge of Acquiring Portfolio liabilities, or the redemption of Acquiring
Portfolio Shares by shareholders of the Acquiring Portfolio, shall not
constitute a material adverse change;
(j) On the Closing Date, all Federal and other tax returns, dividend
reporting forms, and other tax-related reports of the Acquiring Portfolio
required by law to have been filed by such date (including any extensions) shall
have been filed and are or will be correct in all material respects, and all
Federal and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof, and to the best of the Acquiring Portfolio's knowledge no
such return is currently under audit and no assessment has been asserted with
respect to such returns;
(k) For each taxable year of its operation (including the taxable year
that includes the Closing Date), the Acquiring Portfolio has met (or will meet)
the requirements of Subchapter M of the Code for qualification as a regulated
investment company, has complied (or will comply) with the applicable
diversification requirements imposed by Subchapter L of the Code, 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 Portfolio Shares are, and on
the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable (recognizing that, under Massachusetts law, it is
theoretically possible that shareholders of the Acquiring Portfolio could, under
certain circumstances, be held personally liable for obligations of the
Acquiring Portfolio) and have been offered and sold in every state and the
District of Columbia in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities laws. The
Acquiring Portfolio does not have outstanding any options, warrants or other
rights to subscribe for or purchase any Acquiring Portfolio Shares, nor is there
outstanding any security convertible into any Acquiring Portfolio Shares;
(m) The execution, delivery and performance of this Agreement will have
been fully authorized prior to the Closing Date by all necessary action, if any,
on the part of the Trustees of the Trust on behalf of the Acquiring Portfolio
and this Agreement will constitute a valid and binding obligation of the Trust,
on behalf of the Acquiring Portfolio, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general equity principles;
(n) Acquiring Portfolio Shares to be issued and delivered to the
Acquired Portfolio, for the account of the Acquired Portfolio Shareholders,
pursuant to the terms of this Agreement, will on the Closing Date have been duly
authorized and, when so issued and delivered, will be duly and validly issued
Acquiring Portfolio Shares, and will be fully paid and non-assessable
(recognizing that, under Massachusetts law, it is theoretically possible that
shareholders of the Acquiring Portfolio could, under certain circumstances, be
held personally liable for obligations of the Acquiring Portfolio);
(o) The information to be furnished by the 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 Portfolio, the
Registration Statement relating to the Acquiring Portfolio Shares issuable
hereunder, and the proxy materials of the Acquired Portfolio to be included in
the Registration Statement, and any amendment or supplement to the foregoing,
will, from the effective date of the Registration Statement through the date of
the meeting of shareholders of the Acquired Portfolio contemplated therein (i)
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
misleading provided, however, that the representations and warranties in this
subparagraph (p) shall not apply to statements in or omissions from the
Registration Statement made in reliance upon and in conformity with information
that was furnished by the Acquired Portfolio for use therein, and (ii) comply in
all material respects with the provisions of the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder.
5. COVENANTS OF THE ACQUIRING PORTFOLIO AND THE ACQUIRED PORTFOLIO
5.1. The Acquiring Portfolio and the Acquired Portfolio each will
operate its business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions,
and any other distribution that may be advisable.
5.2. The Trust will call a meeting of the shareholders of the Acquired
Portfolio to consider and act upon this Agreement and to take all other action
necessary to obtain approval of the transactions contemplated herein.
5.3. The Acquired Portfolio covenants that the Class R and Class S
Acquiring Portfolio Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof, other than in accordance with the
terms of this Agreement.
5.4. Subject to the provisions of this Agreement, the Acquiring
Portfolio and the Acquired Portfolio will each take, or cause to be taken, all
action, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement.
5.5. As soon as is reasonably practicable after the Closing, the
Acquired Portfolio will make a liquidating distribution to its shareholders
consisting of the Class R and Class S Acquiring Portfolio Shares received at the
Closing.
5.6. The Acquiring Portfolio and the Acquired Portfolio shall each use
its reasonable best efforts to fulfill or obtain the fulfillment of the
conditions precedent to effect the transactions contemplated by this Agreement
as promptly as practicable.
5.7. The Trust, on behalf of the Acquired Portfolio, covenants that the
Trust will, from time to time, as and when reasonably requested by the Acquiring
Portfolio, execute and deliver or cause to be executed and delivered all such
assignments and other instruments, and will take or cause to be taken such
further action as the
Trust, on behalf of the Acquiring Portfolio, may reasonably deem necessary or
desirable in order to vest in and confirm (a) the Trust's, on behalf of the
Acquired Portfolio's, title to and possession of the Acquiring Portfolio Shares
to be delivered hereunder, and (b) Trust's, on behalf of the Acquiring
Portfolio's, title to and possession of all the assets, and to carry out the
intent and purpose of this Agreement.
5.8. The Acquiring Portfolio will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and such
of the state blue sky or securities laws as may be necessary in order to
continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED PORTFOLIO
The obligations of the Trust, on behalf of the Acquired Portfolio, to
consummate the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Trust, on behalf of the Acquiring Portfolio,
of all the obligations to be performed by it hereunder on or before the Closing
Date, and, in addition thereto, the following further conditions:
6.1. All representations and warranties of the Trust, on behalf of the
Acquiring Portfolio, contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
6.2. The Acquiring Portfolio shall have delivered to the Acquired
Portfolio 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 Acquired Portfolio and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Portfolio made in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement and as to such other
matters as the Acquired Portfolio shall reasonably request;
6.3. The Trust, on behalf of the Acquiring Portfolio, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by the Trust, on behalf of
the Acquiring Portfolio, on or before the Closing Date; and
6.4. The Acquired Portfolio and the Acquiring Portfolio shall have
agreed on the number of full and fractional Acquiring Portfolio Shares of Class
R and Class S to be issued in connection with the Reorganization after such
number has been calculated in accordance with paragraph 1.1.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO
The obligations of the Trust, on behalf of the Acquiring Portfolio, to
complete the transactions provided for herein shall be subject, at the Trust's
election, to the performance by the Trust on behalf of the Acquired Portfolio of
all of the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following conditions:
7.1. All representations and warranties of the Trust, on behalf of the
Acquired Portfolio, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date;
7.2. The Trust shall have delivered to the Acquiring Portfolio a
statement of the Acquired Portfolio's assets and liabilities, as of the Closing
Date, certified by the Treasurer of the Trust;
7.3 The Acquired Portfolio shall have delivered to the Acquiring
Portfolio 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 Acquiring Portfolio and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquired Portfolio made in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement and as to such other
matters as the Acquiring Portfolio shall reasonably request;
7.4. The Trust, on behalf of the Acquired Portfolio, shall have
performed all of the covenants and complied with all of the provisions required
by this Agreement to be performed or complied with by the Trust, on behalf of
the Acquired Portfolio, on or before the Closing Date;
7.5. The Acquired Portfolio and the Acquiring Portfolio shall have
agreed on the number of full and fractional Acquiring Portfolio Shares of Class
R and Class S to be issued in connection with the Reorganization after such
number has been calculated in accordance with paragraph 1.1; and
7.6. The Acquired Portfolio shall have declared and paid a distribution
or distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its investment company taxable income and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to 4:00
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 PORTFOLIO
AND THE ACQUIRED PORTFOLIO
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to the Trust, on behalf of the Acquired
Portfolio, or the Trust, on behalf of the Acquiring Portfolio, the other party
to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1. The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Portfolio in accordance with the provisions of the Trust's
Declaration of Trust, By-Laws, applicable Massachusetts law and the 1940 Act,
and certified copies of the resolutions evidencing such approval shall have been
delivered to the Acquiring Portfolio. Notwithstanding anything herein to the
contrary, the Trust may not waive the conditions set forth in this paragraph 8.1
on behalf of the Acquired Portfolio or the Acquiring Portfolio;
8.2. On the Closing Date no action, suit or other proceeding shall be
pending or, to the Trust's knowledge, threatened before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with, this Agreement or the transactions
contemplated herein;
8.3. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Trust to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to obtain any
such consent, order or permit would not involve a risk of a material adverse
effect on the assets or properties of the Acquiring Portfolio or the Acquired
Portfolio, provided that either party hereto may for itself waive any of such
conditions;
8.4. The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act; and
8.5. The parties shall have received the opinion of Dechert addressed
to the 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 of
representations it shall request of the Trust. Notwithstanding anything herein
to the contrary, the Trust may not waive the condition set forth in this
paragraph 8.5.
9. BROKERAGE FEES AND EXPENSES
9.1. The Trust, on behalf of the Acquiring Portfolio and the Acquired
Portfolio, represents and warrants that there are no brokers or finders entitled
to receive any payments in connection with the transactions provided for herein.
9.2. The expenses relating to the proposed Reorganization will be
shared so that (1) half of such costs are borne by the investment adviser to the
Acquired and Acquiring Portfolios, and (2) half are borne by the Acquired and
Acquiring Portfolios and will be paid by the Acquired Portfolio and Acquiring
Portfolio pro rata based upon the relative net assets of the Acquired Portfolio
and Acquiring Portfolio as of the close of business on the record date for
determining the shareholders of the Acquired Portfolio entitled to vote on the
Reorganization. The costs of the Reorganization shall include, but not be
limited to, costs associated with obtaining any necessary order of exemption
from the 1940 Act, preparation of the Registration Statement, printing and
distributing the Acquiring Portfolio's prospectus and the Acquired Portfolio's
proxy materials, legal fees, accounting fees, securities registration fees, and
expenses of holding shareholders' meetings. Notwithstanding any of the
foregoing, expenses will in any event be paid by the party directly incurring
such expenses if and to the extent that the payment by another person of such
expenses would result in the disqualification of such party as a "regulated
investment company" within the meaning of Section 851 of the Code.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The Trust agrees that it has not made any representation,
warranty or covenant not set forth herein and that this Agreement constitutes
the entire agreement between the parties.
10.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing shall survive the Closing.
11. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party by (i) mutual agreement of the parties,
or (ii) by either party if the Closing shall not have occurred on or before July
31, 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 of the parties including the Trust or its Trustees
or officers, except for any such material breach or intentional
misrepresentation, as to each of which all remedies at law or in equity of the
party adversely affected shall survive.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be deemed necessary or advisable by the authorized officers of the Trust;
provided, however, that following the meeting of the shareholders of the
Acquired Portfolio called by the Trust pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of the Class R and Class S Acquiring Portfolio Shares to
be issued to the Acquired Portfolio Shareholders under this Agreement to the
detriment of such shareholders without their further approval.
13. NOTICES
Any notice, report, statement or demand required or permitted
by any provisions of this Agreement shall be in writing and shall be
given by facsimile, personal service or prepaid or certified mail
addressed to the Trust, 7337 East Doubletree Ranch Road, Scottsdale,
Arizona 85258-2034, attn: Huey P. Falgout, Jr., with a copy to Dechert
LLP, 1775 I Street, N.W., Washington, D.C. 20006, attn: Jeffrey S.
Puretz.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1. The Article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to its principles of
conflicts of laws.
14.4. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5. It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of such party, as provided in the Declaration of Trust of the
Trust. The execution and delivery by such officers shall not be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of such party as provided in
the Declaration of Trust.
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 VARIABLE PRODUCTS TRUST on behalf
of its ING VP GROWTH OPPORTUNITIES
VALUE PORTFOLIO
Attest:
_________________________________ By:_____________________________________
Secretary
Title:__________________________________
ING VARIABLE PRODUCTS TRUST
on behalf of its ING VP MIDCAP
OPPORTUNITIES
Attest:
_________________________________ By:_____________________________________
Secretary
Title:__________________________________