Sub-Item 77Q1(g)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is adopted as of this
25th day of March, 2013 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 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, property, and goodwill 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, with respect to each Target Fund
separately, "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
shall not issue certificates representing shares in connection with such
exchange, irrespective of whether Target Fund shareholders hold their Target
Fund 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 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 or promptly thereafter, a certificate of an
authorized officer stating that 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. The Acquiring Entity shall be
responsible for paying all necessary taxes in connection with the delivery
of the Assets, including all applicable Federal, state and foreign stock
transfer stamps, if any, and shall deliver, at the Closing or promptly
thereafter, a certificate of an authorized officer or the Acquiring Entity
stating that all such taxes 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 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 corresponding 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
Agreement and Declaration of Trust, as amended, 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 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 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) substantially all of its investment company
taxable income (determined without regard to any deductions for dividends
paid) and substantially 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) all of its
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 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
Governing Documents, 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;
(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 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;
(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; and
(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.
(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, the Target Entity, on
behalf of the Target Fund, will provide the Acquiring Fund with (1) a
statement of the respective tax basis and holding period of all investments
to be transferred by the 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) the tax books and records of the Target Fund for
purposes of preparing any returns required by law to be filed for tax
periods ending after the Closing Date, and (4) all FASB ASC 000-00-00
(formerly FIN 48) workpapers and supporting statements pertaining to the
Target Fund (the "FIN 48 Workpapers"). The foregoing information to be
provided within such timeframes as is mutually agreed by the parties.
(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 by the Acquiring Fund, the Target Entity, on
behalf of the Target Fund, shall deliver to the 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. The information to be provided under this subsection shall be
provided within such timeframes as is mutually agreed by the parties.
(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 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 by the Acquiring Fund, the Target Entity, on
behalf of 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; and
(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.
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) 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;
(c) 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) 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/or (v) a statement of earnings and profits as provided in
Section 5.1(h);
(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) substantially all of its investment company taxable income
(determined without regard to any deductions for dividends paid) and
substantially 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) all of its 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 condition 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 Entity and the Acquiring Entity shall use their best efforts to make
available such truthful certificates.
9. FEES AND EXPENSES
9.1. Each Target Fund and Acquiring Fund will bear its costs associated with
the Reorganization to the extent that the 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 IAI and
discussed with the Board. IAI has agreed to bear the Reorganization costs of
any 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.
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 their respective Governing Documents. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
approved on behalf of the Acquiring Fund and Target Fund.
INVESCO ADVISERS, INC. AIM INVESTMENT SECURITIES FUNDS
(INVESCO INVESTMENT SECURITIES FUNDS),
By: /s/ Xxxx X. Xxxx AIM SECTOR FUNDS (INVESCO SECTOR FUNDS),
---------------------------- AIM EQUITY FUNDS (INVESCO EQUITY FUNDS),
Name: Xxxx X. Xxxx AIM TAX-EXEMPT FUNDS
Title: Senior Vice President (INVESCO TAX-EXEMPT FUNDS),
AIM COUNSELOR SERIES TRUST
(INVESCO COUNSELOR SERIES TRUST),
AIM GROWTH SERIES (INVESCO GROWTH SERIES),
AIM VARIABLE INSURANCE FUNDS
(INVESCO VARIABLE INSURANCE FUNDS),
EACH ON BEHALF OF ITS RESPECTIVE SERIES
IDENTIFIED ON EXHIBIT A HERETO
By: /s/ Xxxx X. Xxxx
------------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
EXHIBIT A
CHART OF REORGANIZATIONS
CORRESPONDING TARGET FUND (AND ACQUIRING FUND (AND SHARE CLASSES)
SHARE CLASSES) AND TARGET ENTITY AND ACQUIRING ENTITY CLOSING DATE
------------------------------------- ---------------------------------- --------------
INVESCO MUNICIPAL BOND FUND, A SERIES INVESCO MUNICIPAL INCOME FUND, A
OF AIM INVESTMENT SECURITIES FUNDS SERIES OF AIM TAX-EXEMPT FUNDS
(INVESCO INVESTMENT SECURITIES FUNDS) (INVESCO TAX-EXEMPT FUNDS)
Class A Class A July 15, 2013
Class B Class B July 15, 2013
Class C Class C July 15, 2013
Class Y Class Y July 15, 2013
Investor Class Investor Class July 15, 2013
INVESCO LEADERS FUND, A SERIES OF AIM INVESCO GROWTH ALLOCATION FUND, A
GROWTH SERIES (INVESCO GROWTH SERIES) SERIES OF AIM GROWTH SERIES (INVESCO
GROWTH SERIES)
Class A Class A July 15, 2013
Class B Class B July 15, 2013
Class C Class C July 15, 2013
Class Y Class Y July 15, 2013
INVESCO LEISURE FUND, A SERIES OF AIM INVESCO AMERICAN FRANCHISE FUND, A
SECTOR FUNDS (INVESCO SECTOR FUNDS) SERIES OF AIM COUNSELOR SERIES TRUST
(INVESCO COUNSELOR SERIES TRUST)
Class A Class A July 15, 2013
Class B Class B July 15, 2013
Class C Class C July 15, 2013
Class R Class R July 15, 2013
Class Y Class Y July 15, 2013
Investor Class Class A July 15, 2013
INVESCO CONSTELLATION FUND, A SERIES INVESCO AMERICAN FRANCHISE FUND, A
OF AIM EQUITY FUNDS (INVESCO EQUITY SERIES OF AIM COUNSELOR SERIES TRUST
FUNDS) (INVESCO COUNSELOR SERIES TRUST)
Class A Class A
Class B Class B
Class C Class C
Class R Class R
Class R5 Class R5
Class Y Class Y
INVESCO HIGH YIELD SECURITIES FUND, A INVESCO HIGH YIELD FUND, A SERIES OF
SERIES OF AIM INVESTMENT SECURITIES AIM INVESTMENT SECURITIES FUNDS
FUNDS (INVESCO INVESTMENT SECURITIES (INVESCO INVESTMENT SECURITIES FUNDS)
FUNDS)
Class A Class A July 15, 2013
Class B Class A July 15, 2013
Class C Class C July 15, 2013
Class Y Class Y July 15, 2013
INVESCO DYNAMICS FUND, A SERIES OF INVESCO MID CAP GROWTH FUND, A SERIES
AIM INVESTMENT SECURITIES FUNDS OF AIM SECTOR FUNDS (INVESCO SECTOR
(INVESCO INVESTMENT SECURITIES FUNDS) FUNDS)
Class A Class A July 15, 2013
Class B Class B July 15, 2013
Class C Class C July 15, 2013
Class R Class R July 15, 2013
Class R5 Class R5 July 15, 2013
Class R6 Class R6 July 15, 2013
Class Y Class Y July 15, 2013
Investor Class Class A July 15, 2013
INVESCO V.I. HIGH YIELD SECURITIES INVESCO V.I. HIGH YIELD FUND, A
FUND, A SERIES OF AIM VARIABLE SERIES OF AIM VARIABLE INSURANCE
INSURANCE FUNDS (INVESCO VARIABLE FUNDS (INVESCO VARIABLE INSURANCE
INSURANCE FUNDS) FUNDS)
Series I Series I April 29, 2013
Series II Series II April 29, 2013
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.
(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, 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.
The foregoing opinion may state that no opinion is expressed as to the
effect of the Reorganization on a Target Fund, Acquiring Fund or any Target
Fund Shareholder with respect to any asset as to which unrealized gain or loss
is required to be recognized for federal income tax purposes at the end of a
taxable year (or on the termination or transfer thereof) under a xxxx-to-market
system of accounting.
