SUB-ITEM 77Q1(g)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is adopted as of this
1st day of April, 2011 by and among (i) each of the Invesco open-end registered
investment companies identified as a Target Entity on Exhibit A hereto (each a
"Target Entity") separately, on behalf of its respective series identified on
Exhibit A hereto (each a "Target Fund"); (ii) each of the Invesco open-end
registered investment companies identified as an Acquiring Entity on Exhibit A
hereto (each an "Acquiring Entity"), separately on behalf of its respective
series identified on Exhibit A hereto (each an "Acquiring Fund"); and (iii)
Invesco Advisers, Inc. ("IAI").
WHEREAS, the parties hereto intend for each Acquiring Fund and its
corresponding Target Fund (as set forth in Exhibit A hereto) to enter into a
transaction pursuant to which: (i) the Acquiring Fund will acquire the assets
and assume the liabilities of the Target Fund in exchange for the corresponding
class or classes of shares (as applicable) of the Acquiring Fund identified on
Exhibit A of equal value to the net assets of the Target Fund being acquired,
and (ii) the Target Fund will distribute such shares of the Acquiring Fund to
shareholders of the corresponding class of the Target Fund, in connection with
the liquidation of the Target Fund, all upon the terms and conditions
hereinafter set forth in this Agreement (each such transaction, a
"Reorganization" and collectively, the "Reorganizations");
WHEREAS,each Target Entity and each Acquiring Entity is an open-end,
registered investment company of the management type; and
WHEREAS, this Agreement is intended to be and is adopted as a plan of
reorganization and liquidation with respect to each Reorganization within the
meaning of Section 368(a)(1) of the United States Internal Revenue Code of 1986,
as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, and intending to be legally bound, the
parties hereto covenant and agree as follows:
1. DESCRIPTION OF THE REORGANIZATIONS
1.1. It is the intention of the parties hereto that each Reorganization
described herein shall be conducted separately from the others, and a party that
is not a party to a Reorganization shall incur no obligations, duties or
liabilities with respect to such Reorganization by reason of being a party to
this Agreement. If any one or more Reorganizations should fail to be
consummated, such failure shall not affect the other Reorganizations in any way.
1.2. Provided that all conditions precedent to a Reorganization set forth
herein have been satisfied as of the Closing Date (as defined in Section 3.1),
and based on the representations and warranties each party provides to the
others, each Target Entity and its corresponding Acquiring Entity agree to take
the following steps with respect to their Reorganization(s), the parties to
which and classes of shares to be issued in connection with which are set forth
in Exhibit A:
(a) The Target Fund shall transfer all of its Assets, as defined and
set forth in Section 1.2(b), to the Acquiring Fund, and the Acquiring Fund
in exchange therefor shall assume the Liabilities, as defined and set forth
in Section 1.2(c), and deliver to the Target Fund the number of full and
fractional Acquiring Fund shares determined in the manner set forth in
Section 2.
(b) The assets of the Target Fund to be transferred to the Acquiring
Fund shall consist of all assets and property, including, without
limitation, all cash, securities, commodities and futures interests, claims
(whether absolute or contingent, known or unknown, accrued or unaccrued and
including, without limitation, any interest in pending or future legal
claims in connection with past or present portfolio holdings, whether in
the form of class action claims, opt-out or other direct litigation claims,
or regulator or government-established investor recovery fund claims, and
any and all resulting recoveries) and dividends or interest receivable that
are owned by the Target Fund and any deferred or prepaid expenses shown as
an asset on the books of the Target Fund on the Closing Date, except for
cash, bank deposits or cash equivalent securities in an amount necessary to
pay the estimated costs of extinguishing any Excluded Liabilities (as
defined in Section 1.2(c)) and cash in an amount necessary to pay any
distributions pursuant to Section 7.1(f) (collectively, "Assets").
(c) The Acquiring Fund shall assume all of the liabilities of the
Target Fund, whether accrued or contingent, known or unknown, existing at
the Closing Date, except for the Target Fund's Excluded Liabilities (as
defined below), if any, pursuant to this Agreement (collectively, with
respect to each Target Fund separately, "Liabilities"). If prior to the
Closing Date the Acquiring Entity identifies a liability that the Acquiring
Entity and the Target Entity mutually agree should not be assumed by the
Acquiring Fund, such liability shall be excluded from the definition of
Liabilities hereunder and shall be listed on a Schedule of Excluded
Liabilities to be signed by the Acquiring Entity and the Target Entity at
Closing and attached to this Agreement as Schedule 1.2(c) (the "Excluded
Liabilities"). The Assets minus the Liabilities of a Target Fund shall be
referred to herein as the Target Fund's "Net Assets."
(d) As soon as is reasonably practicable after the Closing, the Target
Fund will distribute to its shareholders of record ("Target Fund
Shareholders") the shares of the Acquiring Fund of the corresponding class
received by the Target Fund pursuant to Section 1.2(a), as set forth in
Exhibit A, on a pro rata basis within that class, and the Target Fund will
as promptly as practicable completely liquidate and dissolve. Such
distribution and liquidation will be accomplished, with respect to each
class of the Target Fund's shares, by the transfer of the Acquiring Fund
shares of the corresponding class then credited to the account of the
Target Fund on the books of the Acquiring Fund to open accounts on the
share records of the Acquiring Fund in the names of the Target Fund
Shareholders of the class. The aggregate net asset value of the Acquiring
Fund shares to be so credited to the corresponding Target Fund Shareholders
shall be equal to the aggregate net asset value of the corresponding Target
Fund's shares owned by the Target Fund Shareholders on the Valuation Date.
At the Closing, any outstanding certificates representing shares of a
Target Fund will be cancelled. The Acquiring Fund
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shall not issue certificates representing shares in connection with such
exchange, irrespective of whether Target Fund shareholders hold their
shares in certificated form.
(e) Ownership of Acquiring Fund shares will be shown on its books, as
such are maintained by the Acquiring Fund's transfer agent.
2. VALUATION
2.1. With respect to each Reorganization:
(a) The value of the Target Fund's Assets shall be the value of such
Assets computed as of immediately after the close of regular trading on the
New York Stock Exchange ("NYSE"), which shall reflect the declaration of
any dividends, on the business day next preceding the Closing Date (the
"Valuation Date"), using the Target Fund's valuation procedures established
by the Target Entity's Board of Trustees.
(b) The net asset value per share of each class of the Acquiring Fund
shares issued in connection with the Reorganization shall be the net asset
value per share of the corresponding class of each class computed on the
Valuation Date using the Acquiring Fund's valuation procedures established
by the Acquiring Entity's Board of Trustees, which are the same as the
Target Fund's valuation procedures.
(c) The number of shares issued of each class of the Acquiring Fund
(including fractional shares, if any, rounded to the nearest thousandth) in
exchange for the Target Fund's Net Assets shall be determined by dividing
the value of the Net Assets of the Target Fund attributable to each class
of Target Fund shares by the net asset value per share of the corresponding
share class of the Acquiring Fund.
(d) All computations of value shall be made by the Target Fund's and
the Acquiring Fund's designated recordkeeping agent using the valuation
procedures described in this Section 2.
3. CLOSING AND CLOSING DATE
3.1. Each Reorganization shall close on the date identified on Exhibit A or
such other date as the parties may agree with respect to any or all
Reorganizations (the "Closing Date"). All acts taking place at the closing of a
Reorganization (the "Closing") shall be deemed to take place simultaneously as
of immediately prior to the opening of regular trading on the NYSE on the
Closing Date of that Reorganization unless otherwise agreed to by the parties
(the "Closing Time").
3.2. With respect to each Reorganization:
(a) The Target Fund's portfolio securities, investments or other
assets that are represented by a certificate or other written instrument
shall be transferred and delivered by the Target Fund as of the Closing
Date to the Acquiring Fund's Custodian for the account of the Acquiring
Fund, duly endorsed in proper form for transfer and in such condition as to
constitute good delivery thereof. The Target Fund shall direct the Target
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Fund's custodian (the "Target Custodian") to deliver to the Acquiring
Fund's Custodian as of the Closing Date by book entry, in accordance with
the customary practices of Target 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 Assets are deposited, the Target
Fund's portfolio securities and instruments so held. The cash to be
transferred by a Target Fund shall be delivered to the Acquiring Fund's
Custodian by wire transfer of federal funds or other appropriate means on
the Closing Date.
(b) The Target Entity shall direct the Target Custodian for each
Target Fund to deliver, at the Closing, a certificate of an authorized
officer stating that (i) except as permitted by Section 3.2(a), the Assets
have been delivered in proper form to the Acquiring Fund no later than the
Closing Time on the Closing Date, and (ii) all necessary taxes in
connection with the delivery of the Assets, including all applicable
Federal, state and foreign stock transfer stamps, if any, have been paid or
provision for payment has been made.
(c) At such time prior to the Closing Date as the parties mutually
agree, the Target Fund shall provide (i) instructions and related
information to the Acquiring Fund or its transfer agent with respect to the
Target Fund Shareholders, including names, addresses, dividend reinvestment
elections and tax withholding status of the Target Fund Shareholders as of
the date agreed upon (such information to be updated as of the Closing
Date, as necessary) and (ii) the information and documentation maintained
by the Target Fund or its agents relating to the identification and
verification of the Target Fund Shareholders under the USA PATRIOT ACT and
other applicable anti-money laundering laws, rules and regulations and such
other information as the Acquiring Fund may reasonably request. The
Acquiring Fund and its transfer agent shall have no obligation to inquire
as to the validity, propriety or correctness of any such instruction,
information or documentation, but shall, in each case, assume that such
instruction, information or documentation is valid, proper, correct and
complete.
(d) The Target Entity shall direct each applicable transfer agent for
a Target Fund (the "Target Transfer Agent") to deliver to the Acquiring
Fund at the Closing a certificate of an authorized officer stating that its
records, as provided to the Acquiring Entity, contain the names and
addresses of the Target Fund Shareholders and the number of outstanding
shares of each class owned by each such shareholder immediately prior to
the Closing. The Acquiring Fund shall issue and deliver to the Secretary of
the Target Fund a confirmation evidencing the Acquiring Fund shares to be
credited on the Closing Date, or provide other evidence satisfactory to the
Target Entity that such Acquiring Fund shares have been credited to the
Target Fund Shareholders' accounts on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale,
checks, assignments, certificates, if any, receipts or other documents as
such other party or its counsel may reasonably request.
(e) In the event that on the Valuation Date or the Closing Date (a)
the NYSE or another primary trading market for portfolio securities of the
Target Fund (each, an "Exchange") 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
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that, in the judgment of the Board of Trustees of the Acquiring Entity or
the Target Entity or the authorized officers of either of such entities,
accurate appraisal of the value of the net assets of the Acquiring Fund or
the Target Fund, 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. Each Target Entity, on behalf of itself or, where applicable, a Target
Fund, represents and warrants to the Acquiring Entity and its corresponding
Acquiring Fund as follows:
(a) The Target Fund is duly organized as a series of the Target
Entity, which is a statutory trust duly formed, validly existing, and in
good standing under the laws of the State of Delaware with power under its
Amended and Restated Agreement and Declaration of Trust and by-laws
("Governing Documents"), to own all of its Assets, to carry on its business
as it is now being conducted and to enter into this Agreement and perform
its obligations hereunder;
(b) The Target Entity is a registered investment company classified as
a management company of the open-end type, and its registration with the
U.S. Securities and Exchange Commission (the "Commission") as an investment
company under the 1940 Act, and the registration of the shares of the
Target Fund under the Securities Act of 1933, as amended ("1933 Act"), are
in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority or the Financial Industry Regulatory Authority
("FINRA") is required for the consummation by the Target Fund and the
Target Entity of the transactions contemplated herein, except such as have
been obtained or will be obtained at or prior to the Closing Date under the
1933 Act, the Securities Exchange Act of 1934, as amended ("1934 Act"), the
1940 Act and state securities laws;
(d) The current prospectus and statement of additional information of
the Target Fund and each prospectus and statement of additional information
of the Target Fund used at all times between the commencement of operations
of the Target Fund and 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) The Target Fund is in compliance in all material respects with the
applicable investment policies and restrictions set forth in the Target
Fund's prospectus and statement of additional information;
(f) Except as otherwise disclosed to and accepted by or on behalf of
the Acquiring Fund, the Target Fund will on the Closing Date have good
title to the Assets
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and full right, power, and authority to sell, assign, transfer and deliver
such Assets free of adverse claims, including any liens or other
encumbrances, and upon delivery and payment for such Assets, the Acquiring
Fund will acquire good title thereto, free of adverse claims and subject to
no restrictions on the full transfer thereof, including, without
limitation, such restrictions as might arise under the 1933 Act, provided
that the Acquiring Fund will acquire Assets that are segregated as
collateral for the Target Fund's derivative positions, including without
limitation, as collateral for swap positions and as margin for futures
positions, subject to such segregation and liens that apply to such Assets;
(g) The financial statements of the Target Fund for the Target Fund's
most recently completed fiscal year have been audited by the independent
registered public accounting firm identified in the Target Fund's
prospectus or statement of additional information included in the Target
Fund's registration statement on Form N-1A (the "Prospectus" and "Statement
of Additional Information"). Such statements, as well as the unaudited,
semi-annual financial statements for the semi-annual period next succeeding
the Target Fund's most recently completed fiscal year, if any, were
prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") consistently applied, and such statements
present fairly, in all material respects, the financial condition of the
Target Fund as of such date in accordance with GAAP, and there are no known
contingent liabilities of the Target Fund required to be reflected on a
balance sheet (including the notes thereto) in accordance with GAAP as of
such date not disclosed therein;
(h) Since the last day of the Target Fund's most recently completed
fiscal year, there has not been any material adverse change in the Target
Fund's financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business;
(i) On the Closing Date, all material Returns (as defined below) of
the Target Fund required by law to have been filed by such date (including
any extensions) shall have been filed and are or will be true, correct and
complete in all material respects, and all Taxes (as defined below) shown
as due or claimed to be due by any government entity shall have been paid
or provision has been made for the payment thereof. To the Target Fund's
knowledge, no such Return is currently under audit by any Federal, state,
local or foreign Tax authority; no assessment has been asserted with
respect to such Returns; there are no levies, liens or other encumbrances
on the Target Fund or its assets resulting from the non-payment of any
Taxes; no waivers of the time to assess any such Taxes are outstanding nor
are any written requests for such waivers pending; and adequate provision
has been made in the Target Fund financial statements for all Taxes in
respect of all periods ended on or before the date of such financial
statements. As used in this Agreement, "Tax" or "Taxes" means (i) any tax,
governmental fee or other like assessment or charge of any kind whatsoever
(including, but not limited to, withholding on amounts paid to or by any
person), together with any interest, penalty, addition to tax or additional
amount imposed by any governmental authority (domestic or foreign)
responsible for the imposition of any such tax. "Return" means reports,
returns, information returns, elections, agreements, declarations, or other
documents of any nature
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or kind (including any attached schedules, supplements and additional or
supporting material) filed or required to be filed with respect to Taxes,
including any claim for refund, amended return or declaration of estimated
Taxes (and including any amendments with respect thereto);
(j) The Target Fund has elected to be a regulated investment company
under Subchapter M of the Code and is a fund that is treated as a separate
corporation under Section 851(g) of the Code. The Target Fund has qualified
for treatment as a regulated investment company for each taxable year since
inception that has ended prior to the Closing Date and will have satisfied
the requirements of Part I of Subchapter M of the Code to maintain such
qualification for the period beginning on the first day of its current
taxable year and ending on the Closing Date. The Target Fund has no
earnings or profits accumulated in any taxable year in which the provisions
of Subchapter M of the Code did not apply to it. If Target Fund serves as a
funding vehicle for variable contracts (life insurance or annuity), Target
Fund, with respect to each of its taxable years that has ended prior to the
Closing Date during which it has served as such a funding vehicle, has
satisfied the diversification requirements of Section 817(h) of the Code
and will continue to satisfy the requirements of Section 817(h) of the Code
for the period beginning on the first day of its current taxable year and
ending on the Closing Date. In order to (i) ensure continued qualification
of the Target Fund for treatment as a "regulated investment company" for
tax purposes and (ii) eliminate any tax liability of the Target Fund
arising by reason of undistributed investment company taxable income or net
capital gain, the Target Fund, before the Closing Date will declare on or
prior to the Valuation Date to the shareholders of Target Fund a dividend
or dividends that, together with all previous such dividends, shall have
the effect of distributing (i) all of its investment company taxable income
(determined without regard to any deductions for dividends paid) and all of
its net capital gains (after reduction for any capital loss carryover), if
any, for the period from the close of its last fiscal year to the Closing
Time on the Closing Date; (ii) any such investment company taxable income
and net capital gains for its taxable year ended prior to the Closing Date
to the extent not otherwise already distributed; and (iii) at least 90
percent of the excess, if any, of the Target Fund's interest income
excludible from gross income under Section 103(a) of the Code over its
deductions disallowed under Sections 265 and 171(a)(2) of the Code for its
taxable year ended prior to the Closing Date and at least 90 percent of
such net tax-exempt income for the period from the close of its last fiscal
year to the Closing Time on the Closing Date.;
(k) All issued and outstanding shares of the Target Fund are, and on
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the Target Entity and, in every state where
offered or sold, such offers and sales have been in compliance in all
material respects with applicable registration and/or notice requirements
of the 1933 Act and state and District of Columbia securities laws;
(l) 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 Board of Trustees of the Target Entity,
on behalf of the Target Fund, and subject to the approval of the
shareholders of the Target Fund and the due authorization, execution and
delivery of this Agreement by the other parties hereto, this Agreement will
constitute
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a valid and binding obligation of the Target Fund, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(m) The books and records of the Target Fund are true and correct in
all material respects and contain no material omissions with respect to
information required to be maintained under the laws, rules and regulations
applicable to the Target Fund;
(n) The Target Fund is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code; and
(o) The Target Fund has no unamortized or unpaid organizational fees
or expenses.
4.2. Each Acquiring Entity, on behalf of the Acquiring Fund, represents and
warrants to the Target Entity and its corresponding Target Fund as follows:
(a) The Acquiring Fund is duly organized as a series of the Acquiring
Entity, which is a statutory trust duly formed, validly existing, and in
good standing under the laws of the State of Delaware, with power under its
Agreement and Declaration of Trust, as amended (the "Agreement and
Declaration of Trust"), to own all of its properties and assets and to
carry on its business as it is now being, and as it is contemplated to be,
conducted, and to enter into this Agreement and perform its obligations
hereunder;
(b) The Acquiring Entity is a registered investment company classified
as a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration
of the shares of the Acquiring Fund under the 1933 Act are in full force
and effect;
(c) No consent, approval, authorization, or order of any court,
governmental authority or FINRA is required for the consummation by the
Acquiring Fund and the Acquiring Entity of the transactions contemplated
herein, except such as have been or will be obtained (at or prior to the
Closing Date) under the 1933 Act, the 1934 Act, the 1940 Act and state
securities laws;
(d) The prospectuses and statements of additional information of the
Acquiring Fund to be used in connection with the Reorganization will
conform at the time of their 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 will not 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) The Acquiring Fund is in compliance in all material respects with
the applicable investment policies and restrictions set forth in the
Acquiring Fund's prospectus and statement of additional information;
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(f) The financial statements of the Acquiring Fund for the Acquiring
Fund's most recently completed fiscal year have been audited by the
independent registered public accounting firm identified in the Acquiring
Fund's prospectus or statement of additional information included in the
Acquiring Fund's registration statement on Form N-1A. Such statements, as
well as the unaudited, semi-annual financial statements for the semi-annual
period next succeeding the Acquiring Fund's most recently completed fiscal
year, if any, were prepared in accordance with accounting principles
generally accepted in the United States of America ("GAAP") consistently
applied, and such statements present fairly, in all material respects, the
financial condition of the Acquiring Fund as of such date in accordance
with GAAP, and there are no known contingent liabilities of the Acquiring
Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(g) Since the last day of the Acquiring Fund's most recently completed
fiscal year, there has not been any material adverse change in the
Acquiring Fund's financial condition, assets, liabilities or business,
other than changes occurring in the ordinary course of business;
(h) On the Closing Date, all material Returns of the Acquiring Fund
required by law to have been filed by such date (including any extensions)
shall have been filed and are or will be true, correct and complete in all
material respects, and all Taxes shown as due or claimed to be due by any
government entity shall have been paid or provision has been made for the
payment thereof. To the Acquiring Fund's knowledge, no such Return is
currently under audit by any Federal, state, local or foreign Tax
authority; no assessment has been asserted with respect to such Returns;
there are no levies, liens or other encumbrances on the Acquiring Fund or
its assets resulting from the non-payment of any Taxes; and no waivers of
the time to assess any such Taxes are outstanding nor are any written
requests for such waivers pending; and adequate provision has been made in
the Acquiring Fund financial statements for all Taxes in respect of all
periods ended on or before the date of such financial statements;
(i) The Acquiring Fund has elected to be a regulated investment
company under Subchapter M of the Code and is a fund that is treated as a
separate corporation under Section 851(g) of the Code. The Acquiring Fund
has qualified for treatment as a regulated investment company for each
taxable year since inception that has ended prior to the Closing Date and
has satisfied the requirements of Part I of Subchapter M of the Code to
maintain such qualification for the period beginning on the first day of
its current taxable year and ending on the Closing Date. The Acquiring Fund
has no earnings or profits accumulated in any taxable year in which the
provisions of Subchapter M of the Code did not apply to it. If the
Acquiring Fund serves as a funding vehicle for variable contracts (life
insurance or annuity), the Acquiring Fund, with respect to each of its
taxable years that has ended prior to the Closing Date during which it has
served as such a funding vehicle, has satisfied the diversification
requirements of Section 817(h) of the Code and will continue to satisfy the
requirements of Section 817(h) of the Code for the period beginning on the
first day of its current taxable year and ending on the Closing Date;
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(j) All issued and outstanding Acquiring Fund shares are, and on the
Closing Date will be, duly authorized and validly issued and outstanding,
fully paid and non-assessable by the Acquiring Entity and, in every state
where offered or sold, such offers and sales have been in compliance in all
material respects with applicable registration and/or notice requirements
of the 1933 Act and state and District of Columbia securities laws;
(k) 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 Acquiring Entity, on
behalf of the Acquiring Fund, and subject to the approval of shareholders
of the Target Fund and the due authorization, execution and delivery of
this Agreement by the other parties hereto, this Agreement will constitute
a valid and binding obligation of the Acquiring Fund, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(l) The shares of the Acquiring Fund to be issued and delivered to the
Target Fund, for the account of the Target Fund Shareholders, pursuant to
the terms of this Agreement, will on the Closing Date have been duly
authorized and, when so issued and delivered, will be duly and validly
issued Acquiring Fund shares, and, upon receipt of the Target Fund's Assets
in accordance with the terms of this Agreement, will be fully paid and
non-assessable by the Acquiring Entity;
(m) The books and records of the Acquiring Fund are true and correct
in all material respects and contain no material omissions with respect to
information required to be maintained under laws, rules, and regulations
applicable to the Acquiring Fund;
(n) The Acquiring Fund is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code;
(o) The Acquiring Fund has no unamortized or unpaid organizational
fees or expenses for which it does not expect to be reimbursed by Invesco
or its affiliates.
5. COVENANTS OF THE ACQUIRING FUND AND THE TARGET FUND
5.1. With respect to each Reorganization:
(a) The Acquiring Fund and the Target Fund each: (i) will operate its
business in the ordinary course and substantially in accordance with past
practices between the date hereof and the Closing Date for the
Reorganization, it being understood that such ordinary course of business
may include the declaration and payment of customary dividends and
distributions, and any other distribution that may be advisable, and (ii)
shall use its reasonable best efforts to preserve intact its business
organization and material assets and maintain the rights, franchises and
business and customer relations necessary to conduct the business
operations of the Acquiring Fund or the Target Fund, as appropriate, in the
ordinary course in all material respects.
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(b) The Target Entity will call a meeting of the shareholders of the
Target Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated
herein.
(c) The Target Fund covenants that the Acquiring Fund shares to be
issued pursuant to this Agreement are not being acquired for the purpose of
making any distribution thereof, other than in accordance with the terms of
this Agreement.
(d) The Target Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Target Fund's shares.
(e) If reasonably requested by the Acquiring Fund in writing, the
Target Entity will provide the Acquiring Fund with (1) a statement of the
respective tax basis and holding period of all investments to be
transferred by a Target Fund to the Acquiring Fund, (2) a copy (which may
be in electronic form) of the shareholder ledger accounts including,
without limitation, the name, address and taxpayer identification number of
each shareholder of record, the number of shares of beneficial interest
held by each shareholder, the dividend reinvestment elections applicable to
each shareholder, and the backup withholding and nonresident alien
withholding certifications, notices or records on file with the Target Fund
with respect to each shareholder, for all of the shareholders of record of
the Target Fund as of the close of business on the Valuation Date, who are
to become holders of the Acquiring Fund as a result of the transfer of
Assets (the "Target Fund Shareholder Documentation"), certified by its
transfer agent or its President or Vice-President to the best of their
knowledge and belief, (3) all FIN 48 work papers and supporting statements
pertaining to a Target Fund (the "FIN 48 Workpapers"), and (4) the tax
books and records of a Target Fund for purposes of preparing any returns
required by law to be filed for tax periods ending after the Closing Date.
(f) Subject to the provisions of this Agreement, the Acquiring Fund
and the Target Fund will each take, or cause to be taken, all action, and
do or cause to be done all things, reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement.
(g) As soon as is reasonably practicable after the Closing, the Target
Fund will make one or more liquidating distributions to its shareholders
consisting of the applicable class of shares of the Acquiring Fund received
at the Closing, as set forth in Section 1.2(d) hereof.
(h) If reasonably requested in writing by Acquiring Fund, a statement
of the earnings and profits (accumulated and current) of the Target Fund
for federal income tax purposes that will be carried over to the Acquiring
Fund as a result of Section 381 of the Code.
(i) It is the intention of the parties that each Reorganization will
qualify as a reorganization with the meaning of Section 368(a)(1) of the
Code. None of the parties to a Reorganization shall take any action or
cause any action to be taken (including, without
-11-
limitation the filing of any tax return) that is inconsistent with such
treatment or results in the failure of such Reorganization to qualify as a
reorganization within the meaning of Section 368(a)(1) of the Code.
(j) Any reporting responsibility of the Target Fund, including, but
not limited to, the responsibility for filing regulatory reports, tax
returns relating to tax periods ending on or prior to the Closing Date
(whether due before or after the Closing Date), or other documents with 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 Target Fund, except as otherwise is
mutually agreed by the parties.
(k) If reasonably requested in writing by Acquiring Fund, the Target
Fund shall deliver to the Acquiring Fund copies of: (1) the federal, state
and local income tax returns filed by or on behalf of the Target Fund for
the prior three (3) taxable years; and (2) any of the following that have
been issued to or for the benefit of or that otherwise affect the Target
Fund and which have continuing relevance: (a) rulings, determinations,
holdings or opinions issued by any federal, state, local or foreign tax
authority and (b) legal opinions.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TARGET FUND
6.1. With respect to each Reorganization, the obligations of the Target
Entity, on behalf of the Target Fund, to consummate the transactions provided
for herein shall be subject, at the Target Fund's election, to the performance
by the Acquiring Fund of all of the obligations to be performed by it hereunder
on or before the Closing Date, and, in addition thereto, the following
conditions:
(a) All representations and warranties of the Acquiring Fund and the
Acquiring Entity 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;
(b) The Acquiring Entity shall have delivered to the Target Entity on
the Closing Date a certificate executed in its name by its President or
Vice President and Treasurer, in form and substance reasonably satisfactory
to the Target Entity and dated as of the Closing Date, to the effect that
the representations and warranties of or with respect to the Acquiring Fund
made in this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement;
(c) The Acquiring Entity and the Acquiring Fund shall have performed
all of the covenants and complied with all of the provisions required by
this Agreement to be performed or complied with by the Acquiring Entity and
the Acquiring Fund,on or before the Closing Date; and
-12-
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
7.1. With respect to each Reorganization, the obligations of the Acquiring
Entity, on behalf of the Acquiring Fund, to consummate the transactions provided
for herein shall be subject, at the Acquiring Fund's election, to the
performance by the Target Fund of all of the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
(a) All representations and warranties of the Target Entity and the
Target Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date,
with the same force and effect as if made on and as of the Closing Date;
(b) If requested by Acquiring Fund, the Target Entity, on behalf of
the Target Fund, shall have delivered to the Acquiring Entity (i) a
statement of the Target Fund's Assets, together with a list of portfolio
securities of the Target Fund showing the adjusted tax basis of such
securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer of the Target Entity, (ii) the
Target Fund Shareholder Documentation, (iii) if applicable, the FIN 48
Workpapers, (iv) to the extent permitted by applicable law, all information
pertaining to, or necessary or useful in the calculation or demonstration
of, the investment performance of the Target Fund, and (v) a statement of
earnings and profits as provided in Section 5.1(h);
(c) The Target Entity shall have delivered to the Acquiring Entity on
the Closing Date a certificate executed in its name by its President or
Vice President and Treasurer, in form and substance reasonably satisfactory
to the Acquiring Entity and dated as of the Closing Date, to the effect
that the representations and warranties of or with respect to the Target
Fund made in this Agreement are true and correct at and as of the Closing
Date, except as they may be affected by the transactions contemplated by
this Agreement;
(d) The Target Custodian shall have delivered the certificate
contemplated by Sections 3.2(b) of this Agreement, duly executed by an
authorized officer of the Target Custodian;
(e) The Target Entity and the Target Fund shall have performed all of
the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by the Target Entity and the
Target Fund, on or before the Closing Date; and
(f) The Target Fund shall have declared and paid or cause to be 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 (determined
without regard to any deductions for dividends paid) and all of its net
capital gains (after reduction for any capital loss carryover), if any, for
the period from the close of its last fiscal year to the Closing Time
-13-
on the Closing Date; (ii) any such investment company taxable income and
net capital gains for its taxable year ended prior to the Closing Date to
the extent not otherwise already distributed; and (iii) at least 90 percent
of the excess, if any, of the Target Fund's interest income excludible from
gross income under Section 103(a) of the Code over its deductions
disallowed under Sections 265 and 171(a)(2) of the Code for its taxable
year ended prior to the Closing Date and at least 90 percent of such net
tax-exempt income for the period from the close of its last fiscal year to
the Closing Time on the Closing Date.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
TARGET FUND
With respect to each Reorganization, if any of the conditions set forth
below have not been satisfied on or before the Closing Date with respect to the
Target Fund or the Acquiring Fund, the Acquiring Entity or Target Entity,
respectively, shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1. The Agreement shall have been approved by the requisite vote of the
holders of the outstanding shares of the Target Fund in accordance with the
provisions of the Target Entity's Governing Documents, Delaware law, and the
1940 Act. Notwithstanding anything herein to the contrary, neither the Target
Fund nor the Acquiring Fund may waive the conditions set forth in this Section
8.1;
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending or, to the Target Entity's or the Acquiring Entity'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, 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 Acquiring Fund or the Target Fund to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Target Fund, provided that either party hereto may for
itself waive any of such conditions;
8.4. A registration statement on Form N-14 under the 1933 Act properly
registering the Acquiring Fund shares to be issued in connection with the
Reorganization 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 known to be contemplated
under the 1933 Act; and
8.5. The Target Entity and the Acquiring Entity shall have received on or
before the Closing Date an opinion of Xxxxxxxx Ronon in form and substance
reasonably acceptable to the Target Entity and the Acquiring Entity, as to the
matters set forth on Schedule 8.6. In rendering such opinion, Xxxxxxxx Ronon may
request and rely upon representations contained in certificates of officers of
the Target Entity, the Acquiring Entity and others, and the officers of the
Target
-14-
Entity and the Acquiring Entity shall use their best efforts to make available
such truthful certificates.
9. FEES AND EXPENSES
9.1. Each Acquiring Fund will bear its expenses relating to the
Reorganizations, which IAI has estimated to be $30,000 per Reorganization. A
Target Fund will bear its costs associated with the Reorganization to the extent
that the Target Fund is expected to recoup those costs within 24 months
following the Reorganization as a result of reduced total annual fund operating
expenses based on estimates prepared by the Adviser and discussed with the
Board. IAI has agreed to bear the Reorganization costs of any Target Fund that
does not meet the foregoing threshold.
10. FINAL TAX RETURNS AND FORMS 1099 OF TARGET FUND
10.1. After the Closing Date, except as otherwise agreed to by the parties,
Target Entity shall or shall cause its agents to prepare any federal, state or
local tax returns, including any Forms 1099, required to be filed by Target
Entity with respect to each Target Fund's final taxable year ending with its
complete liquidation and for any prior periods or taxable years and shall
further cause such tax returns and Forms 1099 to be duly filed with the
appropriate taxing authorities.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES AND COVENANTS
11.1. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall not survive the consummation of the transactions contemplated hereunder.
The covenants to be performed after the Closing shall survive the Closing.
12. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned with respect to one or more (or all) Reorganizations by mutual
agreement of the parties.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in a writing signed
by the parties hereto to be bound by such Amendment.
14. HEADINGS; GOVERNING LAW; COUNTERPARTS; ASSIGNMENT; LIMITATION OF LIABILITY
14.1. The Article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
-15-
14.2. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware and applicable Federal law, without regard to
its principles of conflicts of laws.
14.3. 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 parties. 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.
14.4. This agreement may be executed in any number of counterparts, each of
which shall be considered an original.
14.5. It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of their respective directors or trustees,
shareholders, nominees, officers, agents, or employees personally, but shall
bind only the property of the applicable Target Fund or the applicable Acquiring
Fund as provided in the Governing Documents of the Target Entity or the
Agreement and Declaration of Trust of the Acquiring Entity, respectively. 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 property of such party.
-16-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be approved on behalf of the Acquiring Fund and Target Fund.
AIM VARIABLE INSURANCE FUNDS
(INVESCO VARIABLE INSURANCE FUNDS),
ON BEHALF OF ITS RESPECTIVE SERIES
INVESCO ADVISERS, INC. IDENTIFIED ON EXHIBIT A HERETO
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxx
----------------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx X. Xxxx
Title: Co-President and Co-Chief Title: Senior Vice President
Executive Officer
EXHIBIT A
CHART OF REORGANIZATIONS*
* The Closing Date of each Reorganization will be May 2, 2011, or such
other date as the parties may agree.
ACQUIRING FUND (AND SHARE CLASSES) AND
ACQUIRING ENTITY CORRESPONDING TARGET FUND (AND SHARE CLASSES) AND TARGET ENTITY
------------------------------------------- ---------------------------------------------------------------
INVESCO XXX XXXXXX V.I. EQUITY AND INVESCO V.I. SELECT DIMENSIONS BALANCED
INCOME FUND, A SERIES OF AIM VARIABLE FUND, A SERIES OF AIM VARIABLE
INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS (INVESCO VARIABLE
INSURANCE FUNDS) INSURANCE FUNDS)
Series I Series I
Series II Series II
INVESCO XXX XXXXXX V.I. EQUITY AND INVESCO V.I. BASIC BALANCED FUND, A SERIES
INCOME FUND, A SERIES OF AIM VARIABLE OF AIM VARIABLE INSURANCE FUNDS
INSURANCE FUNDS (INVESCO VARIABLE (INVESCO VARIABLE INSURANCE FUNDS)
INSURANCE FUNDS)
Series I Series I
Series II Series II
INVESCO XXX XXXXXX V.I. EQUITY AND INVESCO V.I. INCOME BUILDER FUND, A
INCOME FUND, A SERIES OF AIM VARIABLE SERIES OF AIM VARIABLE INSURANCE FUNDS
INSURANCE FUNDS (INVESCO VARIABLE (INVESCO VARIABLE INSURANCE FUNDS)
INSURANCE FUNDS)
Series I Series I
Series II Series II
INVESCO V.I. GOVERNMENT SECURITIES INVESCO XXX XXXXXX V.I. GOVERNMENT
FUND, A SERIES OF AIM VARIABLE FUND, A SERIES OF AIM VARIABLE INSURANCE
INSURANCE FUNDS (INVESCO VARIABLE FUNDS (INVESCO VARIABLE INSURANCE
INSURANCE FUNDS) FUNDS)
Series I Series I
Series II Series II
INVESCO V.I. HIGH YIELD FUND, A SERIES OF INVESCO XXX XXXXXX V.I. HIGH YIELD
AIM VARIABLE INSURANCE FUNDS (INVESCO FUND, A SERIES OF AIM VARIABLE INSURANCE
VARIABLE INSURANCE FUNDS) FUNDS (INVESCO VARIABLE INSURANCE
FUNDS)
Series I Series I
Series II Series II
ACQUIRING FUND (AND SHARE CLASSES) AND CORRESPONDING TARGET FUND
ACQUIRING ENTITY (AND SHARE CLASSES) AND TARGET ENTITY
------------------------------------------- -------------------------------------------------
INVESCO XXX XXXXXX V.I. XXXXXXXX INVESCO XXX XXXXXX V.I. VALUE FUND, A
FUND, A SERIES OF AIM VARIABLE SERIES OF AIM VARIABLE INSURANCE FUNDS
INSURANCE FUNDS (INVESCO VARIABLE (INVESCO VARIABLE INSURANCE FUNDS)
INSURANCE FUNDS)
Series I Series I
Series II Series II
INVESCO V.I. INTERNATIONAL GROWTH FUND, INVESCO XXX XXXXXX V.I. INTERNATIONAL
A SERIES OF AIM VARIABLE INSURANCE GROWTH EQUITY FUND, A SERIES OF AIM
FUNDS (INVESCO VARIABLE INSURANCE VARIABLE INSURANCE FUNDS (INVESCO
FUNDS) VARIABLE INSURANCE FUNDS)
Series I Series I
Series II Series II
INVESCO V.I. CAPITAL DEVELOPMENT FUND, INVESCO V.I. DYNAMICS FUND, A SERIES OF
A SERIES OF AIM VARIABLE INSURANCE AIM VARIABLE INSURANCE FUNDS (INVESCO
FUNDS (INVESCO VARIABLE INSURANCE VARIABLE INSURANCE FUNDS)
FUNDS)
Series I Series I
Series II Series II
INVESCO XXX XXXXXX V.I. CAPITAL INVESCO V.I. LARGE CAP GROWTH FUND, A
GROWTH FUND, A SERIES OF AIM VARIABLE SERIES OF AIM VARIABLE INSURANCE FUNDS
INSURANCE FUNDS (INVESCO VARIABLE (INVESCO VARIABLE INSURANCE FUNDS)
INSURANCE FUNDS)
Series I Series I
Series II Series II
INVESCO V.I. DIVIDEND GROWTH FUND, A INVESCO V.I. FINANCIAL SERVICES FUND, A
SERIES OF AIM VARIABLE INSURANCE FUNDS SERIES OF AIM VARIABLE INSURANCE FUNDS
(INVESCO VARIABLE INSURANCE FUNDS) (INVESCO VARIABLE INSURANCE FUNDS)
Series I Series I
Series II Series II
INVESCO V.I. DIVIDEND GROWTH FUND, A INVESCO V.I. SELECT DIMENSIONS DIVIDEND
SERIES OF AIM VARIABLE INSURANCE FUNDS GROWTH FUND, A SERIES OF AIM VARIABLE
(INVESCO VARIABLE INSURANCE FUNDS) INSURANCE FUNDS (INVESCO VARIABLE
INSURANCE FUNDS)
Series I Series I
Series II Series II
INVESCO XXX XXXXXX V.I. GLOBAL VALUE INVESCO V.I. GLOBAL DIVIDEND GROWTH
EQUITY FUND, A SERIES OF AIM VARIABLE FUND, A SERIES OF AIM VARIABLE INSURANCE
INSURANCE FUNDS (INVESCO VARIABLE FUNDS (INVESCO VARIABLE INSURANCE
ACQUIRING FUND (AND SHARE CLASSES) AND CORRESPONDING TARGET FUND (AND
ACQUIRING ENTITY SHARE CLASSES) AND TARGET ENTITY
------------------------------------------- -----------------------------------
INSURANCE FUNDS) FUNDS)
Series I Series I
Series II Series II
SCHEDULE 1.2(c)
EXCLUDED LIABILITIES
None
SCHEDULE 8.6
TAX OPINIONS
(i) The acquisition by the Acquiring Fund of substantially all of the
assets of the Target Fund, as provided for in the Agreement, in exchange for
Acquiring Fund shares and the assumption by the Acquiring Fund of all of the
liabilities of the Target Fund, followed by the distribution by the Target Fund
to its shareholders of the Acquiring Fund shares in complete liquidation of the
Target Fund, will qualify as a reorganization within the meaning of Section 368
(a)(1) of the Code, and the Target Fund and the Acquiring Fund each will be a
"party to the reorganization" within the meaning of Section 368(b) of the Code.
(ii) No gain or loss will be recognized by the Target Fund upon the
transfer of substantially all of its assets to, and assumption of its
liabilities by, the Acquiring Fund in exchange solely for Acquiring Fund shares
pursuant to Section 361(a) and Section 357(a) of the Code, except that Target
Fund may be required to recognize gain or loss with respect to contracts
described in Section 1256(b) of the Code or stock in a passive foreign
investment company, as defined in Section 1297(a) of the Code.
(iii) No gain or loss will be recognized by the Acquiring Fund upon the
receipt by it of substantially all of the assets of the Target Fund in exchange
solely for the assumption of the liabilities of the Target Fund and issuance of
the Acquiring Fund shares pursuant to Section 1032(a) of the Code.
(iv) No gain or loss will be recognized by the Target Fund upon the
distribution of the Acquiring Fund shares by the Target Fund to its shareholders
in complete liquidation (in pursuance of the Agreement) pursuant to Section
361(c)(1) of the Code.
(v) The tax basis of the assets of the Target Fund received by the
Acquiring Fund will be the same as the tax basis of such assets in the hands of
the Target Fund immediately prior to the transfer pursuant to Section 362(b) of
the Code.
(vi) The holding periods of the assets of the Target Fund in the hands of
the Acquiring Fund will include the periods during which such assets were held
by the Target Fund pursuant to Section 1223(2) of the Code.
(vii) No gain or loss will be recognized by the shareholders of the Target
Fund upon the exchange of all of their Target Fund shares for the Acquiring Fund
shares pursuant to Section 354(a) of the Code.
(viii) The aggregate tax basis of the Acquiring Fund shares to be received
by each shareholder of the Target Fund will be the same as the aggregate tax
basis of Target Fund shares exchanged therefor pursuant to Section 358(a)(1) of
the Code.
(ix) The holding period of Acquiring Fund shares received by a shareholder
of the Target Fund will include the holding period of the Target Fund shares
exchanged therefor,
provided that the shareholder held Target Fund shares as a capital asset on the
date of the exchange pursuant to Section 1223(1) of the Code.
(x) For purposes of Section 381 of the Code, either: (i) The Acquiring Fund
will succeed to and take into account, as of the date of the transfer as defined
in Section 1.381(b)-1(b) of the income tax regulations issued by the United
States Department of the Treasury (the "Income Tax Regulations"), the items of
the Target Fund described in Section 381(c) of the Code, subject to the
conditions and limitations specified in Sections 381, 382, 383 and 384 of the
Code and the Income Tax Regulations thereunder; or (ii) The Acquiring Fund will
succeed to and take into account, as of the date of the transfer as defined in
Section 1.381(b)-1(b) of the income tax regulations issued by the United States
Department of the Treasury (the "Income Tax Regulations"), the items of the
Target Fund described in Section 381(c) of the Code as if there had been no
Reorganization.
