September 29, 2009
AGREEMENT AND PLAN OF REORGANIZATION
In order to consummate the reorganization contemplated
herein (the "Reorganization") and in consideration of the
promises and the covenants and agreements hereinafter set
forth, and intending to be legally bound, ING Clarion Real
Estate Income Fund ("IIA"), a registered closed-end
investment company, File No. 811-21404, ING Clarion Global
Real Estate Income Fund ("IGR"), a registered closed-end
investment company, File No. 811-21465 and IGR Merger
Subsidiary, a Delaware statutory trust and a direct,
wholly-owned subsidiary of IGR ("Merger Subsidiary", and,
together with IGR, the "IGR Parties"; the IGR Parties and
IIA are collectively referred to as the "Funds"), each
hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE IGR PARTIES.
Each of IGR and Merger Subsidiary represents and warrants
to, and agrees with, IIA that:
(a) Each of IGR and Merger Subsidiary is a statutory trust
duly organized, validly existing and in good standing in
conformity with the laws of the State of Delaware, and has
the power to own all of its assets and to carry out this
Agreement. Each of IGR and Merger Subsidiary has all
necessary federal, state and local authorizations to carry
on its business as it is now being conducted and to carry
out this Agreement.
(b) IGR is duly registered under the Investment Company Act
of 1940, as amended (the "1940 Act") as a non-diversified,
closed-end management investment company and such
registration has not been revoked or rescinded and is in
full force and effect.
(c) Each of IGR and Merger Subsidiary has full power and
authority to enter into and perform its obligations under
this Agreement. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary
action of each of IGR's and Merger Subsidiary's Board of
Trustees, and this Agreement constitutes a valid and binding
contract enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and court decisions
with respect thereto.
(d) IIA has been furnished with IGR's Annual Report to
Shareholders for the fiscal year ended December 31, 2008,
and the audited financial statements appearing therein,
having been audited by Ernst & Young LLP, independent
registered public accounting firm, fairly present the
financial position of IGR as of the respective dates
indicated, in conformity with generally accepted accounting
principles used in the United States applied on a consistent basis.
(e) An unaudited statement of assets and liabilities of IGR
and an unaudited schedule of investments of IGR, in each
case with values determined as provided in Section 4 of
this Agreement, each as of the Valuation Time (as defined
in Section 3(i) herein) (together, the "IGR Closing
Financial Statements"), will be furnished to IIA, at or
prior to the Closing Date (as defined in Section 7(a)
herein), for the purpose of determining the number of IGR
Common Shares (as defined in Section 1(m) herein) to be
issued to IIA shareholders pursuant to Section 6 of this
Agreement; the IGR Closing Financial Statements will fairly
present the financial position of IGR as of the Valuation
Time in conformity with generally accepted accounting
principles used in the United States applied on
a consistent basis.
(f) There are no material legal, administrative or other
proceedings pending or, to the knowledge of either of IGR
or Merger Subsidiary, threatened against either IGR or
Merger Subsidiary which assert liability on the part of IGR
or Merger Subsidiary or which materially affect its
financial condition or its ability to consummate the
Reorganization. Neither IGR nor Merger Subsidiary is
charged with or, to the best of its knowledge, threatened
with any violation or investigation of any possible
violation of any provisions of any federal, state or local
law or regulation or administrative ruling relating to any
aspect of its business.
(g) There are no material contracts outstanding to which
IGR or Merger Subsidiary is a party that have not been
disclosed in the N-14 Registration Statement (as defined
in subsection (k) below) or that will not otherwise be
disclosed to IIA prior to the Valuation Time.
(h) Neither IGR nor Merger Subsidiary is obligated under
any provision of its charter or its bylaws, each as amended
to the date hereof, and is not a party to any contract or
other commitment or obligation, and is not subject to any
order or decree, which would be violated by its
execution of or performance under this Agreement, except
insofar as the Funds have mutually agreed to amend such
contract or other commitment or obligation to cure any
potential violation as a condition precedent to
the Reorganization.
(i) IGR has no known liabilities of a material amount,
contingent or otherwise, other than those shown on IGR's
Annual Report for the year ended December 31, 2008, those
incurred since the date thereof in the ordinary course of
its business as an investment company, and those incurred
in connection with the Reorganization. As of the Valuation
Time, IGR will advise IIA in writing of all known
liabilities, contingent or otherwise, whether or not
incurred in the ordinary course of business, existing or
accrued as of such time, except to the extent disclosed in
the IGR Closing Financial Statements.
(j) No consent, approval, authorization or order of any
court or government authority is required for the
consummation by IGR or Merger Subsidiary of the
Reorganization, except such as may be required under the
Securities Act of 1933, as amended (the "1933 Act"), the
Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act or state securities laws (which term as
used herein shall include the laws of the District of
Columbia and Puerto Rico) or the New York Stock
Exchange Rules.
(k) The registration statement filed by IGR on Form N-14,
which includes the proxy statement of IIA with respect to
the transactions contemplated herein
(the "Proxy Statement/Prospectus"), and any supplement or
amendment thereto or to the documents included or
incorporated by reference therein (collectively, as so
amended or supplemented, the "N-14 Registration Statement"),
on its effective date, at the time of the shareholders
meeting called to vote on this Agreement and on the Closing
Date, insofar as it relates to IGR, (i) complied or will
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 and (ii) did not or will not contain
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 misleading;
and the Proxy Statement/Prospectus included therein did not
or will not contain any untrue statement of a material fact
or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however,
that the representations and warranties in this subsection
only shall apply to statements in or omissions from the
N-14 Registration Statement made in reliance upon and in
conformity with information furnished by IGR for use in the
N-14 Registration Statement.
(l) IGR has filed, or intends to file, or has obtained
extensions to file, all federal, state and local tax returns
which are required to be filed by it, and has paid or has
obtained extensions to pay, all federal, state and local
taxes shown on said returns to be due and owing and all
assessments received by it, up to and including the taxable
year in which the Closing Date occurs. All tax liabilities
of IGR have been adequately provided for on its books, and
no tax deficiency or liability of IGR has been asserted and
no question with respect thereto has been raised by the
Internal Revenue Service or by any state or local tax
authority for taxes in excess of those already paid, up to
and including the taxable year in which the Closing Date occurs.
(m) IGR is authorized to issue an unlimited number of common
shares of beneficial interest, par value $0.001 per share
(the "IGR Common Shares") and an unlimited number of
preferred shares of beneficial interest 104,148,144.02
shares of which are outstanding on the date hereof, and an
unlimited number of proffered shares of beneficial interest,
none of which are outstanding on the date hereof. Each
outstanding IGR Common Share is fully paid and nonassessable
and has full voting rights.
(n) The books and records of IGR made available to the IIA
and/or its counsel are substantially true and correct and
contain no material misstatements or omissions with respect
to the operations of IGR.
(o) The IGR Common Shares to be issued to IIA pursuant to
this Agreement will have been duly authorized and, when
issued and delivered pursuant to this Agreement, will be
legally and validly issued and will be fully paid and
nonassessable and will have full voting rights, and no
shareholder of IGR will have any preemptive right of
subscription or purchase in respect thereof.
(p) At or prior to the Closing Date, the IGR Common Shares
to be transferred to IIA for distribution to the shareholders
of IIA on the Closing Date will be duly qualified for
offering to the public in all states of the United States
in which the sale of shares of the Funds presently are
qualified, and there will be a sufficient number of such
shares registered under the 1933 Act and, as may be
necessary, with each pertinent state securities commission
to permit the transfers contemplated by this Agreement to
be consummated.
(q) At or prior to the Closing Date, IGR will have obtained
any and all regulatory, Trustee and shareholder approvals
necessary to issue the IGR Common Shares to IIA.
(r) IGR has elected to qualify and has qualified as a
regulated investment company ("RIC") within the meaning of
Section 851 of the Internal Revenue Code of 1986, as
amended (the "Code") for each of its taxable years since
its inception; and IGR has satisfied the distribution
requirements to maintain RIC status for each of its
taxable years.
(s) Merger Subsidiary has not elected, and will not elect,
to be treated as a corporation for U.S. federal income tax
purposes. Merger Subsidiary is a wholly owned subsidiary
of IGR. Merger Subsidiary is a disregarded entity for U.S.
federal income tax purposes.
2. REPRESENTATIONS AND WARRANTIES OF IIA.
IIA represents and warrants to, and agrees with,
the IGR Parties that:
(a) IIA is a statutory trust duly organized, validly
existing and in good standing in conformity with the laws
of the State of Delaware, and has the power to own all of
its assets and to carry out this Agreement. IIA has all
necessary federal, state and local authorizations to carry
on its business as it is now being conducted and
to carry out this Agreement.
(b) IIA is duly registered under the 1940 Act as a
non-diversified, closed-end management investment company,
and such registration has not been revoked or rescinded
and is in full force and effect.
(c) IIA has full power and authority to enter into and
perform its obligations under this Agreement subject, in
the case of consummation of the Reorganization to the
approval and adoption of this Agreement and the
Reorganization by the shareholders of IIA as described in
Section 8(a) hereof. The execution, delivery and
performance of this Agreement have been duly authorized by
all necessary action of its Board of Trustees and this
Agreement constitutes a valid and binding contract
enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with
respect thereto.
(d) The IGR Parties have been furnished with IIA's Annual
Report to Shareholders for the fiscal year ended
December 31, 2008, and the audited financial statements
appearing therein, having been audited by Ernst & Young LLP,
independent registered public accounting firm, fairly
present the financial position of IIA as of the respective
dates indicated, in conformity with generally accepted
accounting principles used in the United States applied
on a consistent basis.
(e) An unaudited statement of assets and liabilities of IIA
and an unaudited schedule of investments of IIA in each
case with values determined as provided in Section 4 of
this Agreement, each as of the Valuation Time (together,
the "IIA Closing Financial Statements"), will be furnished
to the IGR Parties at or prior to the Closing Date for the
purpose of determining the number of IGR Common Shares to
be issued to IIA pursuant to Section 3 of this Agreement;
the IIA Closing Financial Statements will fairly present
the financial position of IIA as of the Valuation Time in
conformity with generally accepted accounting principles
used in the United States applied on a consistent basis.
(f) There are no material legal, administrative or other
proceedings pending or, to the knowledge of IIA, threatened
against it which assert liability on the part of IIA or
which materially affect its financial condition or its
ability to consummate the Reorganization. IIA is not
charged with or, to the best of its knowledge, threatened
with any violation or investigation of any possible
violation of any provisions of any federal, state or local
law or regulation or administrative ruling relating to any
aspect of its business.
(g) There are no material contracts outstanding to which
IIA is a party that have not been disclosed in the N-14
Registration Statement or will not otherwise be disclosed
to the IGR Parties prior to the Valuation Time.
(h) IIA is not obligated under any provision of its charter
or its bylaws, each as amended to the date hereof, or a
party to any contract or other commitment or obligation,
and is not subject to any order or decree, which would be
violated by its execution of or performance under this
Agreement, except insofar as the Funds have mutually agreed
to amend such contract or other commitment or obligation
to cure any potential violation as a condition precedent to
the Reorganization.
(i) IIA has no known liabilities of a material amount,
contingent or otherwise, other than those shown in its
Annual Report for the year ended December 31, 2008,
those incurred since the date thereof in the ordinary
course of its business as an investment company and those
incurred in connection with the Reorganization. As of the
Valuation Time, IIA will advise the IGR Parties in writing
of all known liabilities, contingent or otherwise, whether
or not incurred in the ordinary course of business,
existing or accrued as of such time, except to the extent
disclosed in the IIA Closing Financial Statements.
(j) No consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by IIA of the Reorganization, except such as
may be required under the 1933 Act, the 1934 Act and the
1940 Act or state securities laws (which term as used
herein shall include the laws of the District of Columbia and Puerto
Rico).
(k) The N-14 Registration Statement, on its effective date,
at the time of the shareholders meeting called to vote on
this Agreement and on the Closing Date, insofar as it
relates to IIA (i) complied or will 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
and (ii) did not or will not contain 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 misleading; and the Proxy
Statement/Prospectus included therein did not or will not
contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the
representations and warranties in this subsection shall
apply only to statements in or omissions from the N-14
Registration Statement made in reliance upon and in
conformity with information furnished by IIA for use in
the N-14 Registration Statement.
(l) IIA has filed, or intends to file, or has obtained
extensions to file, all federal, state and local tax
returns which are required to be filed by it, and has paid
or has obtained extensions to pay, all federal, state and
local taxes shown on said returns to be due and owing and
all assessments received by it, up to and including the
taxable year in which the Closing Date occurs. All tax
liabilities of IIA have been adequately provided for on its
books, and no tax deficiency or liability of IIA has been
asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state
or local tax authority for taxes in excess of those already
paid, up to and including the taxable year in which
the Closing Date occurs. IIA is authorized to issue an
unlimited number of common shares of beneficial interest,
par value $0.001 per share (the "IIA Common Shares"),
15,019,376.82 shares of which are outstanding on the date
hereof, and an unlimited number of preferred shares of
beneficial interest, none of which are outstanding on the
date hereof. Each outstanding IIA Common Share is fully
paid and nonassessable and has full voting rights.
(m) The books and records of IIA made available to the IGR
Parties and/or its counsel are substantially true and
correct and contain no material misstatements or omissions
with respect to the operations of IIA.
(n) IIA has elected to qualify and has qualified as a RIC
within the meaning of Section 851 of the Code for each
of its taxable years since its inception; and IIA has
satisfied the distribution requirements to maintain RIC
status for each of its taxable years.
3. THE REORGANIZATION.
(a) Subject to receiving the requisite approvals of the
shareholders of IIA, and to the other terms and conditions
contained herein, and in accordance with the Delaware
Statutory Trust Act (the "DSTA"), at the Effective Time
(as defined in Section 3(b)) IIA shall be merged with and
into Merger Subsidiary, the separate existence of IIA as
a Delaware statutory trust and registered investment
company shall cease and Merger Subsidiary shall continue
as the surviving entity following the Reorganization
(sometimes referred to herein as the "Surviving Fund") and
as a subsidiary of IGR. The existence of Merger Subsidiary
shall continue unaffected and unimpaired by the
Reorganization and, as the Surviving Fund,
it shall be governed by the DSTA.
(b) Upon the terms and subject to the conditions of this
Agreement, on the Closing Date, the parties shall cause the
Reorganization to be consummated by filing a certificate
of merger (the "Certificate of Merger") with the Secretary
of State of the State of Delaware in accordance with the
DSTA. The Reorganization shall become effective at such
time as the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware, or at such
subsequent date or time as Parent and IIA shall agree and
specify in the Certificate of Merger (the "Effective Time").
(c) At the Effective Time, the effect of the Reorganization
shall be as provided in the applicable provisions of the
DSTA. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, except as
otherwise provided herein, all the property, rights,
privileges, powers and franchises of IIA and the Merger
Subsidiary shall vest in the Surviving Fund, and all debts,
liabilities, obligations, restrictions, disabilities and
duties of IIA and the Merger Subsidiary shall become the
debts, liabilities, obligations, restrictions, disabilities
and duties of the Surviving Fund.
(d) At the Effective Time, the Agreement and Declaration
of Trust and the Bylaws of the Merger Subsidiary in effect
immediately prior to the Effective Time shall continue to
be the Agreement and Declaration of Trust and the Bylaws
of the Surviving Fund, until thereafter amended in
accordance with their respective terms and applicable law.
(e) From and after the Effective Time, the directors and
officers of Merger Subsidiary shall be the directors and
officer of the Surviving Fund, and such directors and
officers shall serve until their successors have been duly
elected or appointed and qualified or unit their death,
resignation or removal in accordance with the Agreement and
Declaration of Trust and the Bylaws of the Surviving Fund.
(f) Pursuant to this Agreement, as soon as practicable, and
in no event more than 48 hours, exclusive of Sundays and
holidays, after the Effective Time, IGR will distribute
IGR Common Shares to IIA shareholders in exchange for their
IIA Common Shares. Such distributions shall be
accomplished by the opening of shareholder accounts on the
share ledger records of IGR in the names of and in the
amounts due to the shareholders of IIA based on their
respective holdings in IIA as of the Valuation Time.
(g) IIA and IGR covenant and agree to dispose of certain
assets prior to the Closing Date, but only if and to the
extent necessary, so that at Closing, when IIA's assets
are added to IGR's portfolio, the resulting portfolio
will meet IGR's investment objective, policies and
restrictions, as set forth in IGR's Prospectus, a copy of
which has been delivered to IIA. Notwithstanding the
foregoing, nothing herein will require IIA to dispose of
any portion of its assets if, in the reasonable judgment
of IIA's trustees or investment adviser, such disposition
would create more than an insignificant risk that the
Reorganization would not be treated as a "reorganization"
described in Section 368(a) of the Code.
(h) Prior to the Closing Date, IIA shall declare a dividend
or dividends which, together with all such previous
dividends, shall have the effect of distributing to its
shareholders all of its net investment company taxable
income to and including the Closing Date, if any (computed
without regard to any deduction for dividends paid), and
all of its net capital gain, if any, realized to and
including the Closing Date.
(i) The Valuation Time shall be at the close of business of
the New York Stock Exchange on the business day
immediately preceding the Closing Date, or such earlier or
later day and time as may be mutually agreed upon in
writing (the "Valuation Time").
(j) Recourse for liabilities assumed from IIA by the
Surviving Fund in the Reorganization will be limited to
the net assets acquired by the Surviving Fund. The known
liabilities of IIA, as of the Valuation Time, shall be
confirmed to the Surviving Fund pursuant to Section 2(i)
of this Agreement.
(k) For U.S. federal income tax purposes, this Agreement
will constitute a plan of reorganization within the meaning
of U.S. Treasury Regulations Section 1.368-2(g).
4. ISSUANCE AND VALUATION OF IGR COMMON SHARES IN THE REORGANIZATION.
IGR Common Shares of an aggregate net asset value equal to
the aggregate net asset value of IIA Common Shares shall be
issued by IGR to shareholders of IIA in exchange for all
of the IIA Common Shares. The aggregate net asset value of
such shares shall be determined as set forth below.
The net asset value of IIA and IGR shall be determined as
of the Valuation Time in accordance with the regular
procedures of the investment adviser, and no formula will
be used to adjust the net asset value so determined of any
Fund to take into account differences in realized and
unrealized gains and losses. Values in all cases shall be
determined as of the Valuation Time. The value of IIA's
portfolio securities shall be determined pursuant to the
regular procedures of the investment advisor.
Such valuation and determination shall be made by the IGR
Parties in cooperation with IIA and shall be confirmed in
writing by the IGR Parties to IIA. The net asset value
per share of the IGR Common Shares shall be determined in
accordance with such procedures and IGR shall certify the
computations involved. For purposes of determining the net
asset value per share of the IIA Common Shares and the IGR
Common Shares, the value of the securities held by the
applicable Fund plus any cash or other assets (including
interest accrued but not yet received) minus all
liabilities (including accrued expenses) shall be divided
by the total number of IIA Common Shares or IGR Common
Shares, as the case may be, outstanding at such time.
IGR shall issue to shareholders of IIA book entry interests
for the IGR Common Shares registered in the name of such
shareholders on the basis of each holder's proportionate
interest in the aggregate net asset value of the IIA
Common Shares. With respect to any IIA shareholder
holding certificates evidencing ownership of IIA Common
Shares as of the Closing Date, and subject to IGR being
informed thereof in writing by IIA, IGR will not permit
such shareholder to receive new certificates evidencing
ownership of the IGR Common Shares until notified
by IIA or its agent that such shareholder has surrendered
his or her outstanding certificates evidencing ownership of
IIA Common Shares or, in the event of lost certificates,
posted adequate bond. IIA, at its own expense, will
request its shareholders to surrender their outstanding
certificates evidencing ownership of IIA Common Shares
or post adequate bond therefor.
No fractional shares of IGR Common Shares will be issued
to holders of IIA Common Shares unless such shares are held
in a Dividend Reinvestment Plan account. In lieu thereof,
the IGR's transfer agent will aggregate all fractional IGR
Common Shares to be issued in connection with the
Reorganization (other than those issued to a Dividend
Reinvestment Plan account) and sell the resulting full
shares on the New York Stock Exchange at the current
market price for IGR Common Shares for the account of
all holders of such fractional interests, and each such
holder will receive such holder's pro rata share of the
proceeds of such sale upon surrender of such holder's
certificates representing IGR Common Shares.
5. PAYMENT OF EXPENSES.
(a) IIA and the IGR Parties will bear expenses incurred
in connection with the Reorganization, including but not
limited to, costs related to the preparation and
distribution of materials distributed to each Fund's
Board of Trustees, expenses incurred in connection with the
preparation of the Agreement and Plan of Reorganization,
Certificate of Merger and a registration statement on Form
N-14, the printing and distribution of the Proxy
Statement/Prospectus and Annual Reports, SEC and
state securities commission filing fees and legal and
audit fees in connection with the Reorganization, legal
fees incurred preparing each Fund's board materials,
attending each Fund's board meetings and preparing the
minutes, auditing fees associated with each Fund's
financial statements, stock exchange fees, transfer agency
fees, rating agency fees, portfolio transfer taxes (if any)
and any similar expenses incurred in connection with the
Reorganization, which will be borne directly by the
respective Fund incurring the expense or allocated among
the Funds based upon any reasonable methodology approved
by the Trustees of the Funds. Neither the Funds nor the
investment adviser will pay any expenses of shareholders
arising out of or in connection with the Reorganization.
(b) If for any reason the Reorganization is not
consummated, no party shall be liable to any other party
for any damages resulting therefrom, including,
without limitation, consequential damages, and each
Fund shall be responsible, on a proportionate total assets
basis, for all expenses incurred in connection
with the Reorganization.
6. COVENANTS OF THE FUNDS.
(a) Each Fund covenants to operate its business as
presently conducted between the date hereof and
the Closing Date.
(b) IIA undertakes that if the Reorganization is
consummated, it will file an application pursuant to
Section 8(f) of the 1940 Act for an order declaring that
IIA has ceased to be a registered investment company.
(c) IGR will file the N-14 Registration Statement with
the Securities and Exchange Commission (the "SEC") and
will use its best efforts to provide that the N-14
Registration Statement becomes effective as promptly
as practicable. Each Fund agrees to cooperate fully with
the other, and each will furnish to the other the
information relating to itself to be set forth in the
N-14 Registration Statement as required by the 1933 Act,
the 1934 Act and the 1940 Act, and the rules and
regulations thereunder and the state securities laws.
(d) Each of the Funds agrees that by the Closing Date
all of its U.S. federal and other tax returns and reports
required to be filed on or before such date shall have
been filed and all taxes shown as due on said returns either
have been paid or adequate liability reserves have been
provided for the payment of such taxes.
The intention of the parties is that the transaction
contemplated by this Agreement will qualify as a
"reorganization" within the meaning of Section 368(a)
of the Code. Neither IGR nor Merger Subsidiary nor IIA
shall take any action or cause any action to be taken
(including, without limitation, the filing of any tax
return) that is inconsistent with such treatment or results
in the failure of the transaction to qualify as a
reorganization within the meaning of Section 368(a) of
the Code. At or prior to the Closing Date, the IGR Parties
and IIA will take such action, or cause such action to be
taken, as is reasonably necessary to enable Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP ("Skadden"), special counsel
to the Funds, to render the tax opinion required herein
(including, without limitation, each party's execution
of representations reasonably requested by and
addressed to Skadden).
In connection with this covenant, the Funds agree to
cooperate with each other in filing any tax return,
amended return or claim for refund, determining a
liability for taxes or a right to a refund of taxes or
participating in or conducting any audit or other
proceeding in respect of taxes. The IGR Parties agree to
retain for a period of ten (10) years following the Closing
Date all returns, schedules and work papers and all
material records or other documents relating to tax matters
of IIA for each of such Fund's taxable period first ending
after the Closing Date and for all prior taxable periods.
After the Closing Date, IIA shall prepare, or cause
its agents to prepare, any U.S. federal, state or local
tax returns required to be filed by such Fund with respect
to its final taxable year ending with its complete
liquidation and dissolution and for any prior periods
or taxable years and further shall cause such tax
returns to be duly filed with the appropriate
taxing authorities. Notwithstanding the aforementioned
provisions of this subsection, any expenses incurred by IIA
(other than for payment of taxes) in connection with the
preparation and filing of said tax returns after the
Closing Date shall be borne by IIA to the extent such
expenses have been accrued by IIA in the ordinary
course without regard to the Reorganization; any excess
expenses shall be paid from a liability reserve established
to provide for the payment of such expenses.
(e) IIA agrees to mail to its shareholders of record
entitled to vote at the special meeting of shareholders
at which action is to be considered regarding this
Agreement, in sufficient time to comply with requirements
as to notice thereof, a combined proxy statement and
prospectus which complies in all material respects with
the applicable provisions of Section 14(a) of the 1934
Act and Section 20(a) of the 1940 Act, and the rules
and regulations, respectively, thereunder.
(f) Following the consummation of the Reorganization,
IGR will continue its business as a non-diversified,
closed-end management investment company registered
under the 1940 Act.
(g) IGR shall use its reasonable best efforts to cause
the IGR Common Shares to be issued in the Reorganization
to be approved for listing on the New York Stock Exchange
prior to the Closing Date.
7. CLOSING DATE.
(a) The closing of the Reorganization (the "Closing") shall
occur at 10:00 a.m. at the offices of Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or at such other location as may be
mutually agreed by the Funds, on the next full business day
following the Valuation Time to occur after the
satisfaction or waiver of all of the conditions set forth
in Section 8 of this Agreement (other than the conditions
that relate to actions to be taken, or documents to be
delivered at the Closing, it being understood that the
occurrence of the Closing shall remain subject to the
satisfaction or waiver of such conditions at Closing),
or at such other time and date as may be mutually agreed
to by the Funds (such date, the "Closing Date").
(b) As soon as practicable after the close of business
on the Closing Date, IIA shall deliver to IGR a list of
the names and addresses of all of the shareholders of
record of IIA on the Closing Date and the number of IIA
Common Shares owned by each such shareholder, certified
to the best of its knowledge and belief by the transfer
agent for IIA or by its President.
8. CONDITIONS OF IIA.
The obligations of IIA hereunder shall be subject
to the following conditions:
(a) That this Agreement shall have been adopted,
and the Reorganization shall have been approved, by the
affirmative vote of a majority of the members of the Board
of Trustees of IIA and by the affirmative vote of the
holders of a majority of the outstanding IIA Common Shares;
and that each of the IGR Parties shall have delivered to
IIA a copy of the resolutions approving this Agreement
adopted by its Board of Trustees, each certified by its Secretary.
(b) That IIA shall have received from IGR the IGR Closing
Financial Statements, together with a schedule of IGR's
investments, all as of the Valuation Time, certified on
IGR's behalf by its President (or any Vice President) or
its Treasurer, and a certificate signed by IGR's President
(or any Vice President) and its Treasurer, dated as of
the Closing Date, certifying that as of the Valuation Time
and as of the Closing Date there has been no material
adverse change in the financial position of the IGR since
the date of IGR's most recent Annual or Semi-Annual
Report, as applicable, other than changes in its portfolio
securities since that date or changes in the market
value of its portfolio securities.
(c) That IGR shall have furnished to IIA a certificate
signed by IGR's President (or any Vice President) or its
Treasurer, dated as of the Closing Date, certifying that,
as of the Valuation Time and as of the Closing Date,
all representations and warranties of IGR made in this
Agreement are true and correct in all material respects
with the same effect as if made at and as of such dates,
and that IGR has complied with all of the agreements and
satisfied all of the conditions on its part to be performed
or satisfied at or prior to each of such dates.
(d) That there shall not be any material litigation pending
with respect to the matters contemplated by this Agreement.
(e) That IIA shall have received the opinion of Skadden,
acting as special counsel for each of the IGR Parties,
dated as of the Closing Date, addressed to IIA,
substantially in the form and to the effect that:
(i) each IGR Party is validly existing and in good standing
under the laws of the State of Delaware;
(ii) IGR is registered as a closed-end management
investment company under the 1940 Act;
(iii) each IGR Party has the power and authority to
execute, deliver and perform all of its obligations
under this Agreement under the laws of the State of
Delaware, the execution and delivery and the consummation
by each IGR Party of the transactions contemplated
hereby have been duly authorized by all requisite action
of each IGR Party under the laws of the State of Delaware,
and this Agreement has been duly executed and delivered
by each IGR Party under the laws of the State of Delaware;
(iv) this Agreement constitutes a valid and binding
obligation of each IGR Party (assuming this Agreement
is a valid and binding obligation of the other party hereto);
(v) the execution and delivery by each IGR Party of this
Agreement and the performance by each IGR Party of its
obligations under this Agreement do not conflict with the
charter or the bylaws of either IGR Party;
(vi) neither the execution, delivery or performance by each
IGR Party of this Agreement nor the compliance by
each IGR Party with the terms and provisions hereof
contravene any provision of the laws of the State of
Delaware or the federal laws of the United States;
(vii) no governmental approval, which has not been obtained
or taken and is not in full force and effect, is required
to authorize, or is required in connection with, the
execution or delivery of this Agreement by each IGR Party
or the enforceability of this Agreement against each
IGR Party; and
(viii) the IGR Common Shares to be issued pursuant to the
Reorganization have each been duly authorized and,
upon issuance thereof in accordance with this Agreement,
each will be validly issued, fully paid and nonassessable.
(f) That IIA shall have obtained an opinion from Skadden,
special counsel for IGR, dated as of the Closing Date,
addressed to IIA, that the consummation of the transactions
set forth in this Agreement complies with the
requirements of a reorganization as described
in Section 368(a) of the Code.
(g) That all proceedings taken by each IGR Party and its
counsel in connection with the Reorganization and
all documents incidental thereto shall be satisfactory
in form and substance to IIA.
(h) That the N-14 Registration Statement shall have
become effective under the 1933 Act, and no stop order
suspending such effectiveness shall have been instituted
or, to the knowledge of each IGR Party, be contemplated
by the SEC.
9. CONDITIONS OF THE IGR PARTIES.
The obligations of the IGR Parties hereunder shall be
subject to the following conditions:
(a) That this Agreement shall have been adopted, and
the Reorganization shall have been approved, by the Board
of Trustees of each IGR Party; and IIA shall have delivered
to each IGR Party a copy of the resolution approving this
Agreement adopted by each IGR Party's Board of Trustees,
and a certificate setting forth the vote of the holders of
IIA Common Shares obtained, each certified by its Secretary.
(b) That IIA shall have furnished to the IGR Parties the
IIA Closing Financial Statements, together with a schedule
of investments with their respective dates of acquisition
and tax costs, all as of the Valuation Time, certified on
IIA's behalf by its President (or any Vice President) or
its Treasurer, and a certificate signed by IIA's President
(or any Vice President) or its Treasurer, dated as of the
Closing Date, certifying that as of the Valuation Time
and as of the Closing Date there has been no material
adverse change in the financial position of IIA since the
date of IIA's most recent Annual Report or Semi-Annual
Report, as applicable, other than changes in its portfolio
securities since that date or changes in the market value
of the its portfolio securities.
(c) That IIA shall have furnished to the IGR Parties a
certificate signed by IIA's President
(or any Vice President) or its Treasurer, dated as of
the Closing Date, certifying that as of the Valuation
Time and as of the Closing Date all representations and
warranties of IIA made in this Agreement are true and
correct in all material respects with the same effect as
if made at and as of such dates and IIA has complied
with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied at
or prior to such dates.
(d) That there shall not be any material litigation
pending with respect to the matters contemplated
by this Agreement.
(e) That the IGR Parties shall have received the opinion
of Skadden, acting as special counsel for IIA, dated as
of the Closing Date, addressed to the IGR Parties,
substantially in the form and to the effect that:
(i) IIA is validly existing and in good standing under
the laws of the State of Delaware;
(ii) IIA is registered as a closed-end management
investment company under the 1940 Act;
(iii) IIA has the power and authority to execute,
deliver and perform all of its obligations under this
Agreement under the laws of the State of Delaware,
the execution and delivery and the consummation by
IIA of the transactions contemplated hereby have been
duly authorized by all requisite action of IIA under
the laws of the State of Delaware, and this Agreement
has been duly executed and delivered by IIA under the
laws of the State of Delaware;
(iv) this Agreement constitutes a valid and binding
obligation of IIA (assuming this Agreement is a valid
and binding obligation of the other party hereto);
(v) the execution and delivery by IIA of this Agreement
and the performance by IIA of its obligations under this
Agreement do not conflict with the charter or
the bylaws of IIA;
(vi) neither the execution, delivery or performance by IIA
of this Agreement nor the compliance by IIA with the terms
and provisions hereof contravene any provision of the
laws of the State of Delaware or the federal laws of the
United States; and
(vii) no governmental approval, which has not been obtained
or taken and is not in full force and effect, is required
to authorize, or is required in connection with,
the execution or delivery of this Agreement by IIA
or the enforceability of this Agreement against IIA.
(f) That the IGR Parties shall have obtained an opinion
from Skadden, special counsel for IIA, dated as of the
Closing Date, addressed to the IGR Parties, that the
consummation of the transactions set forth in this Agreement
complies with the requirements of a reorganization as
described in Section 368(a) of the Code.
(g) That all proceedings taken by IIA and its counsel in
connection with the Reorganization and all documents
incidental thereto shall be satisfactory in form and
substance to the IGR Parties.
(h) That the N-14 Registration Statement shall have
become effective under the 1933 Act and no stop order
suspending such effectiveness shall have been instituted
or, to the knowledge of IIA, be contemplated by the SEC.
(i) That prior to the Closing Date IIA shall have declared
a dividend or dividends which, together with all such
previous dividends, shall have the effect of distributing
to its shareholders all of its net investment company
taxable income for the period to and including the Closing
Date, if any (computed without regard to any deduction
for dividends paid), and all of its net capital gain,
if any, realized to and including the Closing Date.
10. TERMINATION, POSTPONEMENT AND WAIVERS.
(a) Notwithstanding anything contained in this Agreement
to the contrary, this Agreement may be terminated and the
Reorganization abandoned at any time (whether before or
after adoption thereof by the shareholders of IIA) prior
to the Closing Date, or the Closing Date may be postponed,
(i) by mutual consent of the Boards of Trustees of the
Funds, (ii) by the Board of Trustees of IIA if any
condition of IIA's obligations set forth in Section 8 of
this Agreement has not been fulfilled or waived by such
Board; (iii) by the Board of Trustees of IGR if any
condition of IGR's obligations set forth in Section 9 of
this Agreement has not been fulfilled or waived by such
Board; or (iv) by the Board of Trustees of Merger
Subsidiary if any condition of Merger Subsidiary's
obligations set forth in Section 9 of this Agreement has
not been fulfilled or waived by such Board.
(b) If the transactions contemplated by this Agreement
have not been consummated by December 31, 2009,
this Agreement automatically shall terminate on that date,
unless a later date is mutually agreed to by the Boards
of Trustees of the Funds.
(c) In the event of termination of this Agreement pursuant
to the provisions hereof, the same shall become void and
have no further effect, and there shall not be any
liability on the part of any Fund or its respective
trustees, directors, officers, agents or shareholders
in respect of this Agreement.
(d) At any time prior to the Closing Date, any of the
terms or conditions of this Agreement may be waived by
the Board of Trustees of any Fund (whichever is entitled
to the benefit thereof), if, in the judgment of such Board
after consultation with its counsel, such action or waiver
will not have a material adverse effect on the benefits
intended under this Agreement to the shareholders of their
respective Fund, on behalf of which such action is taken.
(e) The respective representations and warranties
contained in Sections 1 and 2 of this Agreement shall
expire with, and be terminated by, the consummation
of the Reorganization, and neither Fund nor any of its
respective officers, trustees, agents or shareholders
shall have any liability with respect to such
representations or warranties after the Closing Date.
This provision shall not protect any officer, trustee,
agent or shareholder of either Fund against any liability
to the entity for which that officer, trustee, agent or
shareholder so acts or to its shareholders, to which that
officer, trustee, agent or shareholder otherwise would be
subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of his or her
duties in the conduct of such office.
(f) If any order or orders of the SEC with respect to
this Agreement shall be issued prior to the Closing Date
and shall impose any terms or conditions which are
determined by action of the Boards of Trustees of the
Funds to be acceptable, such terms and conditions shall
be binding as if a part of this Agreement without further
vote or approval of the shareholders of IIA unless
such terms and conditions shall result in a change in
the method of computing the number of IGR Common Shares
to be issued to shareholders of IIA, in which event,
unless such terms and conditions shall have been
included in the proxy solicitation materials furnished
to the shareholders of IIA prior to the meeting at which
the Reorganization shall have been approved, this Agreement
shall not be consummated and shall terminate unless IIA
promptly shall call a special meeting of shareholders
at which such conditions so imposed shall
be submitted for approval.
11. INDEMNIFICATION.
(a) Each party (an "Indemnitor") shall indemnify and hold
the other and its officers, trustees, agents and persons
controlled by or controlling any of them
(each an "Indemnified Party") harmless from and against
any and all losses, damages, liabilities, claims, demands,
judgments, settlements, deficiencies, taxes, assessments,
charges, costs and expenses of any nature whatsoever
(including reasonable attorneys' fees) including amounts
paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees reasonably incurred
by such Indemnified Party in connection with the defense
or disposition of any claim, action, suit or other
proceeding, whether civil or criminal, before any court
or administrative or investigative body in which such
Indemnified Party may be or may have been involved
as a party or otherwise or with which such Indemnified
Party may be or may have been threatened
(collectively, the "Losses") arising out of or related to
any claim of a breach of any representation, warranty or
covenant made herein by the Indemnitor; provided,
however, that no Indemnified Party shall be indemnified
hereunder against any Losses arising directly from
such Indemnified Party's (i) willful misfeasance,
(ii) bad faith, (iii) gross negligence or (iv) reckless
disregard of the duties involved in the conduct of
such Indemnified Party's position.
(b) The Indemnified Party shall use its best efforts
to minimize any liabilities, damages, deficiencies, claims,
judgments, assessments, costs and expenses in respect of
which indemnity may be sought hereunder.
The Indemnified Party shall give written notice to
Indemnitor within the earlier of ten (10) days of receipt
of written notice to the Indemnified Party or thirty (30)
days from discovery by the Indemnified Party of any
matters which may give rise to a claim for indemnification
or reimbursement under this Agreement. The failure to
give such notice shall not affect the right of the
Indemnified Party to indemnity hereunder unless such
failure has materially and adversely affected the rights
of the Indemnitor; provided that in any event such notice
shall have been given prior to the expiration of the
Survival Period. At any time after ten (10) days from
the giving of such notice, the Indemnified Party may,
at its option, resist, settle or otherwise compromise,
or pay such claim unless it shall have received notice
from the Indemnitor that the Indemnitor intends,
at the Indemnitor's sole cost and expense, to assume
the defense of any such matter, in which case the
Indemnified Party shall have the right, at no cost or
expense to the Indemnitor, to participate in such defense.
If the Indemnitor does not assume the defense of such
matter, and in any event until the Indemnitor states in
writing that it will assume the defense, the Indemnitor
shall pay all costs of the Indemnified Party arising out
of the defense until the defense is assumed; provided,
however, that the Indemnified Party shall consult with
the Indemnitor and obtain indemnitor's prior written
consent to any payment or settlement of any such claim.
The Indemnitor shall keep the Indemnified Party fully
apprised at all times as to the status of the defense.
If the Indemnitor does not assume the defense,
the Indemnified Party shall keep the Indemnitor apprised
at all times as to the status of the defense.
Following indemnification as provided for hereunder,
the Indemnitor shall be subrogated to all rights of
the Indemnified Party with respect to all third parties,
firms or corporations relating to the matter for
which indemnification has been made.
12. OTHER MATTERS.
(a) All covenants, agreements, representations and
warranties made under this Agreement and any
certificates delivered pursuant to this Agreement shall be
deemed to have been material and relied upon by each
of the parties, notwithstanding any investigation made
by them or on their behalf.
(b) All notices hereunder shall be sufficiently given
for all purposes hereunder if in writing and delivered
personally or sent by registered mail or certified mail,
postage prepaid. Notice to IIA shall be addressed to
IIA c/o ING Clarion Real Estate Securities, L.P.,
000 Xxxx xx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, XX 00000,
Attention: Xxxxx Xxxxxxxx, or at such other address as IIA
may designate by written notice to the IGR Parties.
Notice to the IGR Parties shall be addressed to the
IGR Parties c/o ING Clarion Real Estate Securities, L.P.,
000 Xxxx xx Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, XX 00000,
Attention: Xxxxx Xxxxxxxx, or at such other address and
to the attention of such other person as the IGR Parties
may designate by written notice to IIA.
Any notice shall be deemed to have been served or given
as of the date such notice is delivered personally or mailed.
(c) This Agreement supersedes all previous correspondence
and oral communications between the Funds regarding the
Reorganization, constitutes the only understanding with
respect to the Reorganization, may not be changed except
by a letter of agreement signed by each Fund and
shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements
made and to be performed in said state.
(d) This Agreement may be amended or modified by
the parties hereto prior to the Closing Date, by action
taken or authorized by their respective Boards of Trustees,
at any time before or after adoption of this Agreement and
approval of the Reorganization by IIA's shareholders,
but, after any such adoption and approval, no amendment
or modification shall be made which by law requires
further approval by such shareholders without such
further approval. This Agreement may not be amended
or modified except by an instrument in writing signed on
behalf of each of the Funds.
(e) This Agreement is not intended to confer upon any
person other than the parties hereto (or their respective
successors and assigns) any rights, remedies, obligations
or liabilities hereunder. If any provision of this
Agreement shall be held or made invalid by statute rule,
regulation, decision of a tribunal or otherwise, the
remainder of this Agreement shall not be affected thereby
and, to such extent, the provisions of this Agreement
shall be deemed severable provided that this Agreement
shall be deemed modified to give effect to the fullest
extent permitted under applicable law to the intentions
of the party as reflected by this Agreement prior to the
invalidity of such provision.
(f) It is expressly agreed that the obligations of the
Funds hereunder shall not be binding upon any of their
respective Trustees, shareholders, nominees, officers,
agents, or employees personally, but shall bind only
the property of the respective Fund. The execution and
delivery of this Agreement has been authorized by the
Board of Trustees of each Fund and signed by authorized
officers of each Fund, acting as such, and neither such
authorization by such Trustees, nor such execution and
delivery by such officers shall 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 each Fund.
(g) This Agreement may be executed in any number
of counterparts, each of which, when executed and
delivered, shall be deemed to be an original but all such
counterparts together shall constitute but one instrument.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have hereunto
caused this Agreement to be executed and delivered
by their duly authorized officers as of the day and
year first written above.
ING CLARION REAL ESTATE INCOME FUND
By: /s/ X. Xxxxxx Xxxxxxxx
Name: X. Xxxxxx Xxxxxxxx
Title: President
ING CLARION GLOBAL REAL ESTATE INCOME FUND
By: /s/ X. Xxxxxx Xxxxxxxx
Name: X. Xxxxxx Xxxxxxxx
Title: President
IGR MERGER SUBSIDIARY
By: /s/ X. Xxxxxx Xxxxxxxx
Name: X. Xxxxxx Xxxxxxxx
Title: President
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