Sub-Item 77Q1(e)
MEMORANDUM OF AGREEMENT
(ADVISORY FEE WAIVERS)
This Memorandum of Agreement is entered into as of the effective date on the
attached Exhibit A and B (each an "Exhibit" or, collectively the "Exhibits"),
between AIM Counselor Series Trust (Invesco Counselor Series Trust), AIM Equity
Funds (Invesco Equity Funds), AIM Funds Group (Invesco Funds Group), AIM Growth
Series (Invesco Growth Series), AIM International Mutual Funds (Invesco
International Mutual Funds), AIM Investment Funds (Invesco Investment Funds),
AIM Investment Securities Funds (Invesco Investment Securities Funds), AIM
Sector Funds (Invesco Sector Funds), AIM Tax-Exempt Funds (Invesco Tax-Exempt
Funds), AIM Treasurer's Series Trust (Invesco Treasurer's Series Trust), AIM
Variable Insurance Funds (Invesco Variable Insurance Funds), Invesco California
Municipal Income Trust, Invesco California Municipal Securities, Invesco
California Quality Municipal Securities, Invesco High Yield Investments Fund,
Inc., Invesco Municipal Income Opportunities Trust, Invesco Municipal Income
Opportunities Trust II, Invesco Municipal Income Opportunities Trust III,
Invesco Municipal Premium Income Trust, Invesco New York Quality Municipal
Securities, Invesco Quality Municipal Income Trust, Invesco Quality Municipal
Investment Trust, Invesco Quality Municipal Securities, Invesco Value Municipal
Bond Trust, Invesco Value Municipal Income Trust, Invesco Value Municipal
Securities, Invesco Value Municipal Trust, and Short-Term Investments Trust
(each a "Trust" or, collectively, the "Trusts"), on behalf of the funds listed
on the Exhibits to this Memorandum of Agreement (the "Funds"), and Invesco
Advisers, Inc. ("Invesco"). Invesco shall and hereby agrees to waive fees of
the Funds, on behalf of their respective classes as applicable, severally and
not jointly, as indicated in the Exhibits.
For and in consideration of the mutual terms and agreements set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Invesco agrees that until at least the expiration date
set forth on Exhibit A (the "Expiration Date") and with respect to those Funds
listed on the Exhibit, Invesco will waive its advisory fees at the rate set
forth on the Exhibit.
For and in consideration of the mutual terms and agreements set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Trusts and Invesco agree as follows:
1. Invesco agrees that until the expiration date, if any, of the commitment
set forth on the attached Exhibit B occurs, as such Exhibit B is amended
from time to time, Invesco will waive advisory fees payable by an
Investing Fund (defined below) in an amount equal to 100% of the net
advisory fee Invesco receives on the Uninvested Cash (defined below)
from the Affiliated Money Market Fund (defined below) in which the
Investing Fund invests (the "Waiver").
i. Invesco's Fund Accounting Group will calculate, and apply, the Waiver
monthly, based upon the average investment of Uninvested Cash made by
the Investing Fund during the previous month in an Affiliated Money
Market Fund.
ii.The Waiver will not apply to those Investing Funds that do not charge
an advisory fee, either due to the terms of their advisory agreement,
or as a result of contractual or voluntary fee waivers.
iii.The Waiver will not apply to cash collateral for securities lending.
For purposes of the paragraph above, the following terms shall have the
following meanings:
(a)"Affiliated Money Market Fund" - any existing or future Trust that
holds itself out as a money market fund and complies with Rule 2a-7
under the Investment Company Act of 1940, as amended;
(b)"Investing Fund" - any Fund investing Cash Balances and/or Cash
Collateral in an Affiliated Money Market Fund; and
(c)"Uninvested Cash" - cash available and uninvested by a Trust that may
result from a variety of sources, including dividends or interest
received on portfolio securities,
unsettled securities transactions, strategic reserves, matured
investments, proceeds from liquidation of investment securities,
dividend payments, or new investor capital.
2. Neither a Trust nor Invesco may remove or amend the Waiver to a Trust's
detriment prior to requesting and receiving the approval of the Board of
Trustee of the applicable Fund's Trust to remove or amend such Waiver.
Invesco will not have any right to reimbursement of any amount so waived.
The Boards of Trustees and Invesco may terminate or modify this Memorandum
of Agreement prior to the Expiration Date only by mutual written consent.
Invesco will not have any right to reimbursement of any amount so waived or
reimbursed.
Subject to the foregoing paragraphs, Invesco agrees to review the
then-current waivers for each class of the Funds listed on the Exhibits on a
date prior to the Expiration Date to determine whether such waivers should be
amended, continued or terminated. The waivers will expire upon the Expiration
Date unless the Trusts and Invesco have agreed to continue them. The Exhibits
will be amended to reflect any such agreement.
It is expressly agreed that the obligations of the Trusts hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trusts personally, but shall only bind the assets
and property of the Funds, as provided in each Trust's Agreement and
Declaration of Trust. The execution and delivery of this Memorandum of
Agreement have been authorized by the Trustees of each Trust, and this
Memorandum of Agreement has been executed and delivered by an authorized
officer of each Trust acting as such; neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the Funds, as
provided in each Trust's Agreement and Declaration of Trust.
IN WITNESS WHEREOF, each of the Trusts, on behalf of itself and its Funds
listed in Exhibit A and B to this Memorandum of Agreement, and Invesco have
entered into this Memorandum of Agreement as of the Effective Date on the
attached Exhibits.
AIM COUNSELOR SERIES TRUST (INVESCO COUNSELOR SERIES TRUST)
AIM EQUITY FUNDS (INVESCO EQUITY FUNDS)
AIM FUNDS GROUP (INVESCO FUNDS GROUP)
AIM GROWTH SERIES (INVESCO GROWTH SERIES)
AIM INTERNATIONAL MUTUAL FUNDS (INVESCO INTERNATIONAL MUTUAL FUNDS)
AIM INVESTMENT FUNDS (INVESCO INVESTMENT FUNDS)
AIM INVESTMENT SECURITIES FUNDS (INVESCO INVESTMENT SECURITIES FUNDS)
AIM SECTOR FUNDS (INVESCO SECTOR FUNDS)
AIM TAX-EXEMPT FUNDS (INVESCO TAX-EXEMPT FUNDS)
AIM TREASURER'S SERIES TRUST (INVESCO TREASURER'S SERIES TRUST)
AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS)
INVESCO CALIFORNIA MUNICIPAL INCOME TRUST
INVESCO CALIFORNIA MUNICIPAL SECURITIES
INVESCO CALIFORNIA QUALITY MUNICIPAL SECURITIES
INVESCO HIGH YIELD INVESTMENTS FUND, INC.
INVESCO MUNICIPAL INCOME OPPORTUNITIES TRUST
INVESCO MUNICIPAL INCOME OPPORTUNITIES TRUST II
INVESCO MUNICIPAL INCOME OPPORTUNITIES TRUST III
INVESCO MUNICIPAL PREMIUM INCOME TRUST
INVESCO NEW YORK QUALITY MUNICIPAL SECURITIES
INVESCO QUALITY MUNICIPAL INCOME TRUST
INVESCO QUALITY MUNICIPAL INVESTMENT TRUST
INVESCO QUALITY MUNICIPAL SECURITIES
INVESCO VALUE MUNICIPAL BOND TRUST
INVESCO VALUE MUNICIPAL INCOME TRUST
INVESCO VALUE MUNICIPAL SECURITIES
INVESCO VALUE MUNICIPAL TRUST
SHORT-TERM INVESTMENTS TRUST
on behalf of the Funds listed in the Exhibit
to this Memorandum of Agreement
By: /s/ Xxxx X. Xxxx
--------------------------
Title: Senior Vice President
INVESCO ADVISERS, INC.
By: /s/ Xxxx X. Xxxx
--------------------------
Title: Senior Vice President
EXHIBIT A TO ADVISORY FEE MOA
-----------------------------
EFFECTIVE EXPIRATION
AIM EQUITY FUNDS (INVESCO EQUITY FUNDS) WAIVER DESCRIPTION DATE DATE
--------------------------------------- ---------------------------------------------------- --------- ----------
Invesco Constellation Fund Invesco will waive advisory fees to the extent
necessary so that advisory fees Invesco receives do
not exceed the annualized rates listed below. 3/27/2006 12/31/2012
0.695% of the first $250M
0.615% of the next $4B
0.595% of the next $750M
0.57% of the next $2.5B
0.545% of the next $2.5B
0.52% of the excess over $10B
AIM TREASURER'S SERIES TRUST (INVESCO EFFECTIVE EXPIRATION
TREASURER'S SERIES TRUST) WAIVER DESCRIPTION DATE DATE
------------------------------------- -------------------------------------------------- --------- ----------
Premier Portfolio Invesco will waive advisory fees in the amount of
0.07% of the Fund's average daily net assets 2/1/2011 12/31/2012
Premier U.S. Government Money Portfolio Invesco will waive advisory fees in the amount of
0.07% of the Fund's average daily net assets 2/1/2011 12/31/2012
EXHIBIT "B"
AIM COUNSELOR SERIES TRUST (INVESCO COUNSELOR SERIES TRUST)
PORTFOLIO EFFECTIVE DATE COMMITTED UNTIL
--------- ------------------ ---------------
Invesco California Tax-Free Income Fund February 12, 2010 June 30, 2013
Invesco Core Plus Bond Fund June 2, 2009 June 30, 2013
Invesco Equally-Weighted S&P 500 Fund February 12, 2010 June 30, 2013
Invesco Floating Rate Fund July 1, 2007 June 30, 2013
Invesco S&P 500 Index Fund February 12, 2010 June 30, 2013
Invesco Global Real Estate Income Fund July 1, 2007 June 30, 0000
Xxxxxxx X.X. Quantitative Core Fund July 1, 2007 June 30, 2013
Invesco Xxx Xxxxxx American Franchise Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Equity and Income Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Growth and Income Fund February 12, 2010 June 30, 0000
Xxxxxxx Xxx Xxxxxx Xxxxxxxxxxxx Tax Free Income Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Small Cap Growth Fund February 12, 2010 June 30, 2013
AIM EQUITY FUNDS (INVESCO EQUITY FUNDS)
PORTFOLIO EFFECTIVE DATE COMMITTED UNTIL
--------- -------------- ---------------
Invesco Charter Fund July 1, 2007 June 30, 2013
Invesco Constellation Fund July 1, 2007 June 30, 2013
Invesco Disciplined Equity Fund July 14, 2009 June 30, 2013
Invesco Diversified Dividend Fund July 1, 2007 June 30, 0000
Xxxxxxx Xxxxxx Fund July 1, 2007 June 30, 2013
AIM FUNDS GROUP (INVESCO FUNDS GROUP)
FUND EFFECTIVE DATE COMMITTED UNTIL
---- -------------- ---------------
Invesco European Small Company Fund July 1, 2007 June 30, 2013
Invesco Global Core Equity Fund July 1, 2007 June 30, 2013
Invesco International Small Company Fund July 1, 2007 June 30, 2013
Invesco Small Cap Equity Fund July 1, 2007 June 30, 2013
AIM GROWTH SERIES (INVESCO GROWTH SERIES)
FUND EFFECTIVE DATE COMMITTED UNTIL
---- ----------------- ---------------
Invesco Convertible Securities Fund February 12, 2010 June 30, 2013
Invesco Global Quantitative Core Fund July 1, 2007 June 30, 2013
Invesco Mid Cap Core Equity Fund July 1, 2007 June 30, 2013
Invesco Small Cap Growth Fund July 1, 2007 June 30, 2013
Invesco Xxx Xxxxxx Leaders Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx U.S. Mortgage Fund February 12, 2010 June 30, 2013
AIM INTERNATIONAL MUTUAL FUNDS (INVESCO INTERNATIONAL MUTUAL FUNDS)
FUND EFFECTIVE DATE COMMITTED UNTIL
---- --------------- ---------------
Invesco Asia Pacific Growth Fund July 1, 2007 June 30, 2013
Invesco European Growth Fund July 1, 2007 June 30, 2013
Invesco Global Growth Fund July 1, 2007 June 30, 2013
Invesco Global Opportunities Fund August 1, 2012 June 30, 2013
Invesco Global Select Companies Fund August 1, 2012 June 30, 2013
Invesco Global Small & Mid Cap Growth Fund July 1, 2007 June 30, 2013
Invesco International Growth Fund July 1, 2007 June 30, 2013
Invesco International Core Equity Fund July 1, 2007 June 30, 2013
AIM INVESTMENT FUNDS (INVESCO INVESTMENT FUNDS)
FUND EFFECTIVE DATE COMMITTED UNTIL
---- ------------------ ---------------
Invesco Balanced-Risk Allocation Fund* May 29, 2009 June 30, 2013
Invesco Balanced-Risk Commodity Strategy Fund** November 29, 2010 June 30, 2013
Invesco China Fund July 1, 2007 June 30, 2013
Invesco Commodities Strategy Fund*** February 12, 2010 June 30, 2013
Invesco Developing Markets Fund July 1, 2007 June 30, 2013
Invesco Emerging Markets Equity Fund May 11, 2011 June 30, 2013
Invesco Emerging Market Local Currency Debt Fund June 14, 2010 June 30, 2013
Invesco Endeavor Fund July 1, 2007 June 30, 2013
Invesco Global Advantage Fund February 12, 2010 June 30, 2013
Invesco Global Health Care Fund July 1, 2007 June 30, 2013
Invesco International Total Return Fund July 1, 2007 June 30, 2013
Invesco Pacific Growth Fund February 12, 2010 June 30, 2013
Invesco Premium Income Fund December 13, 2011 June 30, 2013
Invesco Small Companies Fund July 1, 2007 June 30, 2013
AIM INVESTMENT SECURITIES FUNDS (INVESCO INVESTMENT SECURITIES FUNDS)
FUND EFFECTIVE DATE COMMITTED UNTIL
---- ------------------ ---------------
Invesco Dynamics Fund July 1, 2007 June 30, 2013
Invesco Global Real Estate Fund July 1, 2007 June 30, 2013
Invesco High Yield Fund July 1, 2007 June 30, 2013
Invesco High Yield Securities Fund February 12, 2010 June 30, 2013
Invesco Limited Maturity Treasury Fund July 1, 2007 June 30, 2013
Invesco Money Market Fund July 1, 2007 June 30, 2013
Invesco Municipal Bond Fund July 1, 2007 June 30, 2013
Invesco Real Estate Fund July 1, 2007 June 30, 2013
Invesco Short Term Bond Fund July 1, 2007 June 30, 0000
Xxxxxxx X.X. Government Fund July 1, 2007 June 30, 2013
Invesco Xxx Xxxxxx Corporate Bond Fund February 12, 2010 June 30, 2013
--------
* Advisory fees to be waived by Invesco for Invesco Balanced-Risk Allocation
Fund also include advisory fees that Invesco receives on the Uninvested Cash
from the Affiliated Money Market Fund in which Invesco Cayman Commodity Fund
I, Ltd. invests.
** Advisory fees to be waived by Invesco for Invesco Balanced-Risk Commodity
Strategy Fund also include advisory fees that Invesco receives on the
Uninvested Cash from the Affiliated Money Market Fund in which Invesco
Cayman Commodity Fund III, Ltd. invests.
***Advisory fees to be waived by Invesco for Invesco Commodities Strategy Fund
also include advisory fees that Invesco receives on the Uninvested Cash from
the Affiliated Money Market Fund in which Invesco Cayman Commodity Fund II,
Ltd. Invests.
Sub-Item 77Q1(e)
AIM SECTOR FUNDS (INVESCO SECTOR FUNDS)
FUND EFFECTIVE DATE COMMITTED UNTIL
---- ----------------- ---------------
Invesco Energy Fund July 1, 2007 June 30, 2013
Invesco Gold & Precious Metals Fund July 1, 2007 June 30, 2013
Invesco Leisure Fund July 1, 2007 June 30, 2013
Invesco Technology Fund July 1, 2007 June 30, 2013
Invesco Technology Sector Fund February 12, 2010 June 30, 2013
Invesco Utilities Fund July 1, 2007 June 30, 2013
Invesco Value Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx American Value Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Xxxxxxxx Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Mid Cap Growth Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Small Cap Value Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Value Opportunities Fund February 12, 2010 June 30, 2013
AIM TAX-EXEMPT FUNDS (INVESCO TAX-EXEMPT FUNDS)
FUND EFFECTIVE DATE COMMITTED UNTIL
---- ----------------- ---------------
Invesco Tax-Exempt Cash Fund July 1, 2007 June 30, 2013
Invesco Tax-Free Intermediate Fund July 1, 2007 June 30, 2013
Invesco Xxx Xxxxxx High Yield Municipal Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Intermediate Term Municipal
Income Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx Municipal Income Fund February 12, 2010 June 30, 0000
Xxxxxxx Xxx Xxxxxx Xxx Xxxx Tax Free Income Fund February 12, 2010 June 30, 2013
AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS)
FUND EFFECTIVE DATE COMMITTED UNTIL
---- ----------------- ---------------
Invesco V.I. Balanced-Risk Allocation Fund**** December 22, 2010 June 30, 2013
Invesco V.I. Core Equity Fund July 1, 2007 June 30, 2013
Invesco V.I. Diversified Income Fund July 1, 2007 June 30, 2013
Invesco V.I. Diversified Dividend Fund February 12, 2010 June 30, 2013
Invesco V.I. Equally-Weighted S&P 500 Fund February 12, 2010 June 30, 2013
Invesco V.I. Global Core Equity Fund February 12, 2010 June 30, 2013
Invesco V.I. Global Health Care Fund July 1, 2007 June 30, 2013
Invesco V.I. Global Real Estate Fund July 1, 2007 June 30, 2013
Invesco V.I. Government Securities Fund July 1, 2007 June 30, 2013
Invesco V.I. High Yield Fund July 1, 2007 June 30, 2013
Invesco V.I. High Yield Securities Fund February 12, 2010 June 30, 2013
Invesco V.I. International Growth Fund July 1, 2007 June 30, 2013
Invesco V.I. Mid Cap Core Equity Fund July 1, 2007 June 30, 2013
Invesco V.I. Money Market Fund July 1, 2007 June 30, 2013
Invesco V.I. S&P 500 Index Fund February 12, 2010 June 30, 2013
Invesco V.I. Small Cap Equity Fund July 1, 2007 June 30, 2013
Invesco V.I. Technology Fund July 1, 2007 June 30, 2013
Invesco V.I. Utilities Fund July 1, 2007 June 30, 2013
Invesco Xxx Xxxxxx V.I. American FranchiseFund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx V.I. Xxxxxxxx Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx V.I. Equity and Income Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx V.I. Growth and Income Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx V.I. Mid Cap Growth Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx V.I. American Value Fund February 12, 2010 June 30, 2013
Invesco Xxx Xxxxxx V.I. Value Opportunities Fund July 1, 2007 June 30, 2013
--------
**** Advisory fees to be waived by Invesco for Invesco V.I. Balanced-Risk
Allocation Fund also include an amount equal to advisory fees that Invesco
receives from any money market fund or similarly pooled cash equivalent
investment vehicle advised by Invesco and/or Invesco's affiliates in which
Invesco Cayman Commodity Fund IV, Ltd. invests.
SHORT-TERM INVESTMENTS TRUST
FUND EFFECTIVE DATE COMMITTED UNTIL
---- -------------- ---------------
Government TaxAdvantage Portfolio July 1, 2007 June 30, 2013
STIC Prime Portfolio July 1, 2007 June 30, 2013
Treasury Portfolio July 1, 2007 June 30, 2013
CLOSED-END FUNDS
FUND EFFECTIVE DATE COMMITTED UNTIL
---- -------------- ---------------
Invesco California Insured Municipal Income Trust June 1, 2010 June 30, 0000
Xxxxxxx Xxxxxxxxxx Municipal Securities June 1, 2010 June 30, 0000
Xxxxxxx Xxxxxxxxxx Quality Municipal Securities June 1, 2010 June 30, 2013
Invesco High Yield Investments Fund, Inc. June 1, 2010 June 30, 2013
Invesco Municipal Income Opportunities Trust June 1, 2010 June 30, 2013
Invesco Municipal Income Opportunities Trust II June 1, 2010 June 30, 2013
Invesco Municipal Income Opportunities Trust III June 1, 2010 June 30, 2013
Invesco Municipal Premium Income Trust June 1, 2010 June 30, 2013
Invesco New York Quality Municipal Securities June 1, 2010 June 30, 2013
Invesco Quality Municipal Income Trust June 1, 2010 June 30, 2013
Invesco Quality Municipal Investment Trust June 1, 2010 June 30, 2013
Invesco Quality Municipal Securities June 1, 2010 June 30, 2013
Invesco Value Municipal Bond Trust June 1, 2010 June 30, 2013
Invesco Value Municipal Income Trust June 1, 2010 June 30, 2013
Invesco Value Municipal Securities June 1, 2010 June 30, 2013
Invesco Value Municipal Trust June 1, 2010 June 30, 2013
Sub-Item 77Q1(e)
SUB-ADVISORY CONTRACT
This contract is made as of August 27, 2012, by and among Invesco Advisers,
Inc. (the "Adviser") and each of Invesco Asset Management Deutschland GmbH;
Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited;
Invesco Australia Limited; Invesco Hong Kong Limited; Invesco Senior Secured
Management, Inc. and Invesco Canada Ltd., (each a "Sub-Adviser" and,
collectively, the "Sub-Advisers").
WHEREAS:
A) The Adviser has entered into an investment advisory agreement with
Invesco Municipal Income Opportunities Trust a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
B) The Adviser is authorized to delegate certain, any or all of its
rights, duties and obligations under investment advisory agreements to
sub-advisers, including sub-advisers that are affiliated with the Adviser;
C) Each Sub-Adviser represents that it is registered with the
U.S. Securities and Exchange Commission ("SEC") as an investment adviser
under the Investment Advisers Act of 1940 ("Advisers Act"), or will be so
registered prior to providing any services to any of the Funds under this
Contract, and engages in the business of acting as an investment adviser; and
D) The Sub-Advisers and their affiliates have personnel in various
locations throughout the world and have been formed in part for the purpose
of researching and compiling information and recommendations on the
economies of various countries and securities of issuers located in such
countries or on various types of investments and investment techniques, and
providing investment advisory services in connection therewith.
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Adviser hereby appoints each Sub-Adviser as a
sub-adviser of the Trust for the period and on the terms set forth herein.
Each Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. Duties as Sub-Adviser. Subject to paragraph 7 below, the Adviser may,
in its discretion, appoint each Sub-Adviser to perform one or more of the
following services with respect to all or a portion of the investments of
the Trust. The services and the portion of the investments of the Trust to
be advised or managed by each Sub-Adviser shall be as agreed upon from time
to time by the Adviser and the Sub-Advisers. Each Sub-Adviser shall pay the
salaries and fees of all personnel of such Sub-Adviser performing services
for the Trust related to research, statistical and investment activities.
(a) Investment Advice. If and to the extent requested by the Adviser,
each Sub-Adviser shall provide investment advice to the Trust and the
Adviser with respect to all or a portion of the investments of the Trust or
with respect to various investment techniques, and in connection with such
advice shall furnish the Trust and the Adviser
with such factual information, research reports and investment
recommendations as the Adviser may reasonably require.
(b) Order Execution. If and to the extent requested by the Adviser, each
Sub-Adviser shall place orders for the purchase and sale of portfolio
securities or other investments for the Trust. In so doing, each Sub-Adviser
agrees that it shall comply with paragraph 3 below.
(c) Discretionary Investment Management. If and to the extent requested
by the Adviser, each Sub-Adviser shall, subject to the supervision of the
Trust's Board of Trustees (the "Board") and the Adviser, manage all or a
portion of the investments of the Trust in accordance with the investment
objectives, policies and limitations provided in the Trust's Registration
Statement and such other limitations as the Trust or the Adviser may impose
with respect to the Trust by notice to the applicable Sub-Adviser(s) and
otherwise in accordance with paragraph 5 below. With respect to the portion
of the investments of the Trust under its management, each Sub-Adviser is
authorized to: (i) make investment decisions on behalf of the Trust with
regard to any stock, bond, other security or investment instrument,
including but not limited to foreign currencies, futures, options and other
derivatives, and with regard to borrowing money; (ii) place orders for the
purchase and sale of securities or other investment instruments with such
brokers and dealers as the Sub-Adviser may select; and (iii) upon the
request of the Adviser, provide additional investment management services to
the Trust, including but not limited to managing the Trust's cash and cash
equivalents and lending securities on behalf of the Trust. In selecting
brokers or dealers to execute trades for the Trust, each Sub-Adviser will
comply with its written policies and procedures regarding brokerage and
trading, which policies and procedures shall have been approved by the
Board. All discretionary investment management and any other activities of
each Sub-Adviser shall at all times be subject to the control and direction
of the Adviser and the Board.
3. Broker-Dealer Relationships. Each Sub-Adviser agrees that, in placing
orders with brokers and dealers, it will attempt to obtain the best net
result in terms of price and execution. Consistent with this obligation,
each Sub-Adviser may, in its discretion, purchase and sell portfolio
securities from and to brokers and dealers who sell shares of the Trust or
provide the Trust, the Adviser's other clients, or a Sub-Adviser's other
clients with research, analysis, advice and similar services. Each
Sub-Adviser may pay to brokers and dealers, in return for such research and
analysis, a higher commission or spread than may be charged by other brokers
and dealers, subject to such Sub-Adviser determining in good faith that such
commission or spread is reasonable in terms either of the particular
transaction or of the overall responsibility of the Adviser and such
Sub-Adviser to the Trust and their other clients and that the total
commissions or spreads paid by the Trust will be reasonable in relation to
the benefits to the Trust over the long term. In no instance will portfolio
securities be purchased from or sold to a Sub-Adviser, or any affiliated
person thereof, except in accordance with the applicable securities laws and
the rules and regulations thereunder and any exemptive orders currently in
effect. Whenever a Sub-Adviser simultaneously places orders to purchase or
sell the same security on behalf of the Trust and one or more other accounts
advised by such Sub-Adviser, such orders will be allocated as to price and
amount among all such accounts in a manner believed to be equitable to each
account.
4. Books and Records. Each Sub-Adviser will maintain all required books
and records with respect to the securities transactions of the Trust, and
will furnish the Board and the Adviser with such periodic and special
reports as the Board or the Adviser reasonably may request. Each Sub-Adviser
hereby agrees that all records which it maintains for the
2
Adviser are the property of the Adviser, and agrees to preserve for the
periods prescribed by applicable law any records which it maintains for the
Adviser and which are required to be maintained, and further agrees to
surrender promptly to the Adviser any records which it maintains for the
Adviser upon request by the Adviser.
5. Further Duties.
(a) In all matters relating to the performance of this Contract, each
Sub-Adviser will act in conformity with the Agreement and Declaration of
Trust, By-Laws and Registration Statement of the Trust and with the
instructions and directions of the Adviser and the Board and will comply
with the requirements of the 1940 Act, the rules, regulations, exemptive
orders and no-action positions thereunder, and all other applicable laws and
regulations.
(b) Each Sub-Adviser shall maintain compliance procedures for the Trust
that it and the Adviser reasonably believe are adequate to ensure compliance
with the federal securities laws (as defined in Rule 38a-1 under the 0000
Xxx) and the investment objective(s) and policies as stated in the Trust's
prospectuses and statements of additional information. Each Sub-Adviser at
its expense will provide the Adviser or the Fund's Chief Compliance Officer
with such compliance reports relating to its duties under this Contract as
may be requested from time to time. Notwithstanding the foregoing, each
Sub-Adviser will promptly report to the Adviser any material violations of
the federal securities laws (as defined in Rule 38a-1 under the 0000 Xxx)
that it is or should be aware of or of any material violation of the
Sub-Adviser's compliance policies and procedures that pertain to the Trust.
(c) Each Sub-Adviser at its expense will make available to the Board and
the Adviser at reasonable times its portfolio managers and other appropriate
personnel, either in person or, at the mutual convenience of the Adviser and
the Sub-Adviser, by telephone, in order to review the investment policies,
performance and other investment related information regarding the Trust and
to consult with the Board and the Adviser regarding the Trust's investment
affairs, including economic, statistical and investment matters related to
the Sub-Adviser's duties hereunder, and will provide periodic reports to the
Adviser relating to the investment strategies it employs. Each Sub-Adviser
and its personnel shall also cooperate fully with counsel and auditors for,
and the Chief Compliance Officer of, the Adviser and the Trust.
(d) Each Sub-Adviser will assist in the fair valuation of portfolio
securities held by the Trust. The Sub-Adviser will use its reasonable
efforts to provide, based upon its own expertise, and to arrange with
parties independent of the Sub-Adviser such as broker-dealers for the
provision of, valuation information or prices for securities for which
prices are deemed by the Adviser or the Trust's administrator not to be
readily available in the ordinary course of business from an automated
pricing service. In addition, each Sub-Adviser will assist the Trust and its
agents in determining whether prices obtained for valuation purposes
accurately reflect market price information relating to the assets of the
Trust at such times as the Adviser shall reasonably request, including but
not limited to, the hours after the close of a securities market and prior
to the daily determination of the Trust's net asset value per share.
(e) Each Sub-Adviser represents and warrants that it has adopted a code
of ethics meeting the requirements of Rule 17j-1 under the 1940 Act and the
requirements of Rule 204A-1 under the Advisers Act and has provided the
Adviser and the Board a copy of such code of ethics, together with evidence
of its adoption, and will promptly provide copies of any changes thereto,
together with evidence of their adoption. Upon request of
3
the Adviser, but in any event no less frequently than annually, each
Sub-Adviser will supply the Adviser a written report that (A) describes any
issues arising under the code of ethics or procedures since the
Sub-Adviser's last report, including but not limited to material violations
of the code of ethics or procedures and sanctions imposed in response to the
material violations; and (B) certifies that the procedures contained in the
Sub-Adviser's code of ethics are reasonably designed to prevent "access
persons" from violating the code of ethics.
(f) Upon request of the Adviser, each Sub-Adviser will review draft
reports to shareholders and other documents provided or available to it and
provide comments on a timely basis. In addition, each Sub-Adviser and each
officer and portfolio manager thereof designated by the Adviser will provide
on a timely basis such certifications or sub-certifications as the Adviser
may reasonably request in order to support and facilitate certifications
required to be provided by the Trust's Principal Executive Officer and
Principal Financial Officer and will adopt such disclosure controls and
procedures in support of the disclosure controls and procedures adopted by
the Trust as the Adviser, deems are reasonably necessary.
(g) Unless otherwise directed by the Adviser or the Board, each
Sub-Adviser will vote all proxies received in accordance with the Adviser's
proxy voting policy or, if the Sub-Adviser has a proxy voting policy
approved by the Board, the Sub-Adviser's proxy voting policy. Each
Sub-Adviser shall maintain and shall forward to the Trust or its designated
agent such proxy voting information as is necessary for the Trust to timely
file proxy voting results in accordance with Rule 30b1-4 under the 1940 Act.
(h) Each Sub-Adviser shall provide the Trust's custodian on each business
day with information relating to all transactions concerning the assets of
the Trust and shall provide the Adviser with such information upon request
of the Adviser.
6. Services Not Exclusive. The services furnished by each Sub-Adviser
hereunder are not to be deemed exclusive and such Sub-Adviser shall be free
to furnish similar services to others so long as its services under this
Contract are not impaired thereby. Nothing in this Contract shall limit or
restrict the right of any director, officer or employee of a Sub-Adviser,
who may also be a Trustee, officer or employee of the Trust, to engage in
any other business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a similar
nature or a dissimilar nature.
7. Use of Subsidiaries and Affiliates. Each Sub-Adviser may perform any
or all of the services contemplated hereunder, including but not limited to
providing investment advice to the Trust pursuant to paragraph 2(a) above
and placing orders for the purchase and sale of portfolio securities or
other investments for the Trust pursuant to paragraph 2(b) above, directly
or through such of its subsidiaries or other affiliates, including each of
the other Sub-Advisers, as such Sub-Adviser shall determine; provided,
however, that performance of such services through such subsidiaries or
other affiliates shall have been approved, when required by the 1940 Act, by
(i) a vote of a majority of the independent Trustees who are not parties to
this Contract or "interested persons" (as defined in the 0000 Xxx) of a
party to this Contract, other than as Board members ("Independent
Trustees"), cast in person at a meeting called for the purpose of voting on
such approval, and/or (ii) a vote of a majority of that Trust's outstanding
voting securities.
8. Compensation.
(a) The only fees payable to the Sub-Advisers under this Contract are for
providing discretionary investment management services pursuant to
paragraph 2(c) above. For such services, the Adviser will pay each
Sub-Adviser a fee, computed daily and paid
4
monthly, equal to (i) 40% of the monthly compensation that the Adviser
receives from the Trust pursuant to its advisory agreement with the Trust,
multiplied by (ii) the fraction equal to the net assets of the Trust as to
which the Sub-Adviser shall have provided discretionary investment
management services pursuant to paragraph 2(c) above for that month divided
by the net assets of the Trust for that month. This fee shall be payable on
or before the last business day of the next succeeding calendar month. This
fee shall be reduced to reflect contractual or voluntary fee waivers or
expense limitations by the Adviser, if any, in effect from time to time as
set forth in paragraph 9 below. In no event shall the aggregate monthly fees
paid to the Sub-Advisers under this Contract exceed 40% of the monthly
compensation that the Adviser receives from the Trust pursuant to its
advisory agreement with the Trust, as reduced to reflect contractual or
voluntary fee waivers or expense limitations by the Adviser, if any.
(b) If this Contract becomes effective or terminates before the end of
any month, the fees for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
(c) If a Sub-Adviser provides the services under paragraph 2(c) above to
the Trust for a period that is less than a full month, the fees for such
period shall be prorated according to the proportion which such period bears
to the applicable full month.
9. Fee Waivers and Expense Limitations. If, for any fiscal year of the
Trust, the amount of the advisory fee which such Trust would otherwise be
obligated to pay to the Adviser is reduced because of contractual or
voluntary fee waivers or expense limitations by the Adviser, the fee payable
to each Sub-Adviser pursuant to paragraph 8 above shall be reduced
proportionately; and to the extent that the Adviser reimburses the Trust as
a result of such expense limitations, such Sub-Adviser shall reimburse the
Adviser that proportion of such reimbursement payments which the fee payable
to each Sub-Adviser pursuant to paragraph 8 above bears to the advisory fee
payable to the Adviser pursuant to its advisory agreement with the Trust.
10. Limitation of Liability of Sub-Adviser and Indemnification. No
Sub-Adviser shall be liable for any costs or liabilities arising from any
error of judgment or mistake of law or any loss suffered by the Trust in
connection with the matters to which this Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
part of such Sub-Adviser in the performance by such Sub-Adviser of its
duties or from reckless disregard by such Sub-Adviser of its obligations and
duties under this Contract. Any person, even though also an officer,
partner, employee, or agent of a Sub-Adviser, who may be or become a
Trustee, officer, employee or agent of the Trust, shall be deemed, when
rendering services to the Trust or acting with respect to any business of
the Trust, to be rendering such service to or acting solely for the Trust
and not as an officer, partner, employee, or agent or one under the control
or direction of such Sub-Adviser even though paid by it.
11. Duration and Termination.
(a) This Contract shall become effective with respect to each Sub-Adviser
upon the later of the date hereabove written and the date that such
Sub-Adviser is registered with the SEC as an investment adviser under the
Advisers Act, if a Sub-Adviser is not so registered as of the date hereabove
written; provided, however, that this Contract shall not take effect with
respect to the Trust unless it has first been approved (i) by a vote of a
majority of the Independent Trustees, cast in person at a meeting called for
the
5
purpose of voting on such approval, and (ii) by vote of a majority of the
Trust's outstanding voting securities, when required by the 0000 Xxx.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in force and effect until two years after its effective date
determined in 11(a). Thereafter, if not terminated, this Contract shall
continue automatically for successive periods not to exceed twelve months
each, provided that such continuance is specifically approved at least
annually (i) by a vote of a majority of the Trust's Independent Trustees,
cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Trust.
(c) Notwithstanding the foregoing, with respect to the Trust or any
Sub-Adviser(s), this Contract may be terminated at any time, without the
payment of any penalty, (i) by vote of the Fund's Board or by a vote of a
majority of the outstanding voting securities of the Trust on sixty days'
written notice to such Sub-Adviser(s); or (ii) by the Adviser on sixty days'
written notice to such Sub-Adviser(s); or (iii) by a Sub-Adviser on sixty
days' written notice to the Trust. Should this Contract be terminated with
respect to a Sub-Adviser, the Adviser shall assume the duties and
responsibilities of such Sub-Adviser unless and until the Adviser appoints
another Sub-Adviser to perform such duties and responsibilities. Termination
of this Contract with respect to one or more Sub-Adviser(s) shall not affect
the continued effectiveness of this Contract with respect to any remaining
Sub-Adviser(s). This Contract will automatically terminate in the event of
its assignment.
12. Amendment. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought, and, when required by the 1940 Act, no amendment of
this Contract shall be effective until approved by vote of a majority of the
Trust's outstanding voting securities.
13. Notices. Any notices under this Contract shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other
party entitled to receipt thereof at such address as such party may
designate for the receipt of such notice. Until further notice to the other
party, it is agreed that the address of the Trust and the Adviser shall be
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000. Until further notice to
the other party, it is agreed that the address of each Sub-Adviser shall be
set forth in Exhibit I attached hereto.
14. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Texas and the 1940 Act. To the extent that the
applicable laws of the State of Texas conflict with the applicable
provisions of the 1940 Act, the latter shall control.
15. Multiple Sub-Advisory Agreements. This Contract has been signed by
multiple parties; namely the Adviser, on one hand, and each Sub-Adviser, on
the other. The parties have signed one document for administrative
convenience to avoid a multiplicity of documents. It is understood and
agreed that this document shall constitute a separate sub-advisory agreement
between the Adviser and each Sub-Adviser with respect to the Trust, as if
the Adviser and such Sub-Adviser had executed a separate sub-advisory
agreement naming such Sub-Adviser as a sub-adviser to the Trust. With
respect to any one Sub-Adviser, (i) references in this Contract to "a
Sub-Adviser" or to "each Sub-Adviser" shall be deemed to refer only to such
Sub-Adviser, and (ii) the term "this Contract" shall be construed according
to the foregoing provisions.
6
16. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Contract shall
not be affected thereby. This Contract shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors. Any
question of interpretation of any term or provision of this Contract having
a counterpart in or otherwise derived from a term or provision of the 1940
Act or the Advisers Act shall be resolved by reference to such term or
provision of the 1940 Act or the Advisers Act and to interpretations
thereof, if any, by the United States Courts or in the absence of any
controlling decision of any such court, by rules, regulations or orders of
the SEC issued pursuant to said Acts. In addition, where the effect of a
requirement of the 1940 Act or the Advisers Act reflected in any provision
of the Contract is revised by rule, regulation or order of the SEC, such
provision shall be deemed to incorporate the effect of such rule, regulation
or order.
7
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated as of the day and year first above
written.
INVESCO ADVISERS, INC.
Adviser
BY: /s/ Xxxx X. Xxxx
------------------------------
NAME: Xxxx X. Xxxx
TITLE: Senior Vice President
8
INVESCO ASSET MANAGEMENT DEUTSCHLAND GMBH INVESCO ASSET MANAGEMENT LIMITED
Sub-Adviser Sub-Adviser
By: /s/ Xxxxxxxxx Xxxxxxxxx /s/ Jens Langewand By: /s/ X. X. Xxxxxxxxx
------------------------------------------------ -------------------------------------------------
Name: Xxxxxxxxx Xxxxxxxxx Jens Langewand Name: X. X. Xxxxxxxxx
Title: Managing Director Managing Director Title: Director
INVESCO ASSET MANAGEMENT (JAPAN) LIMITED INVESCO AUSTRALIA LIMITED
Sub-Adviser Sub-Adviser
By: /s/ Xxxxxxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxx /s/ Xxxx X'Xxxxx
------------------------------------------------ -------------------------------------------------
Name: Xxxxxxxx Xxxxxxxx Name: Xxxx Xxxxxxx Xxxx X'Xxxxx
Title: Managing Director Title: Co Secretary Chief Executive Officer
INVESCO HONG KONG LIMITED INVESCO SENIOR SECURED MANAGEMENT, INC.
Sub-Adviser Sub-Adviser
By: /s/ Xxxxx Xxx /s/ Xxxxxx Xxx By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------------ -------------------------------------------------
Name: Xxxxx Xxx Xxxxxx Xxx Name: Xxxxxxx X. Xxxxx
Title: Director Director Title: Secretary & General Counsel
INVESCO CANADA LTD.
Sub-Adviser
By: /s/ Xxxx Xxxxxxx
------------------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President; Head of
Legal-Canada; CCO; and Secretary
9
EXHIBIT I
ADDRESSES OF SUB-ADVISERS
Invesco Asset Management Deutschland GmbH
Xx xxx Xxxxx 0, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Invesco Asset Management Limited
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx Xxxxxxx
XX0X 0XX
ENGLAND
Invesco Asset Management (Japan) Limited
25th Floor, Shiroyama Trust Tower
0-0, Xxxxxxxxx 0-xxxxx, Xxxxxx-Xx
Xxxxx, Xxxxx 105-6025
Invesco Australia Limited
000 Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxx Xxxxxxxx 0000, Xxxxxxxxx
Invesco Hong Kong Limited
32nd Floor
Three Pacific Place
0 Xxxxx'x Xxxx Xxxx
Xxxx Xxxx
Invesco Senior Secured Management, Inc.
1166 Avenue of the Americas, 00xx Xxxxx
Xxx Xxxx, XX 00000
XXX
Xxxxxxx Xxxxxx Ltd.
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX, X0X 0X0
10
Sub-Item 77Q1(g)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is adopted as of this 2nd
day of July, 2012 by and among (i) each of the Invesco closed-end registered
investment companies identified as a Merging Fund on Exhibit A hereto, each a
Delaware statutory trust (each a "Merging Fund"); (ii) each of the Invesco
closed-end registered investment companies identified as a Surviving Fund on
Exhibit A hereto, each a Delaware statutory trust (each a "Surviving Fund");
and (iii) Invesco Advisers, Inc. ("IAI"). The predecessor to each Merging Fund,
each a Massachusetts business trust except the predecessor to the Invesco High
Yield Investment Fund, Inc., which is a Maryland corporation (each a
"Predecessor Merging Fund"), and the predecessor to each Surviving Fund, each a
Massachusetts business trust (each a "Predecessor Surviving Fund"), joins this
agreement solely for the purposes of making the representations in paragraph
4.1 or 4.2, as applicable, and agreeing to be bound by paragraphs 5.1(a),
5.1(b), 5.1(d) and 5.1(i). Each Merging Fund and Surviving Fund are together
referred to herein as the "Funds" and each Predecessor Merging Fund and
Predecessor Surviving Fund are referred to individually as a "Predecessor Fund."
WHEREAS, each Merging Fund and each Surviving Fund is a closed-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 Merger (as defined below) within the
meaning of Section 368(a) of the United States Internal Revenue Code of 1986,
as amended (the "Code"), and Treasury Regulations Sections 1.368-2(g) and
1.368-3(a); and
WHEREAS, each merger will consist of the merger of a Merging Fund into its
corresponding Surviving Fund, as set forth on Exhibit A, pursuant to the
provisions of the Delaware Statutory Trust Act, 12 Del. C. Section 3801, et
seq. (the "DSTA"), and will have the consequences described in Section 1.2
below (each such transaction, a "Merger" and collectively, the "Mergers"); and
WHEREAS, a condition precedent to each Merger is the redomestication of the
Predecessor Merging Fund and the Predecessor Surviving Fund from a
Massachusetts business trust or Maryland corporation, as applicable, to a
Delaware statutory trust, which will include the transfer of all of the
Predecessor Fund's assets and assumption of all of the Predecessor Fund's
liabilities by the applicable Fund in exchange for the issuance by such Fund to
the Predecessor Fund of shares of beneficial interest of the Fund and the
distribution of those shares to the Predecessor Fund's shareholders (each a
"Redomestication");
WHEREAS, the Boards of Trustees of each Surviving Fund and of each Merging
Fund have determined that the Merger is in the best interests of the Surviving
Fund and the Merging Fund, respectively, and the interests of the shareholders
of the Surviving Fund and the Merging Fund will not be diluted as a result of
the Merger;
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 MERGERS
1.1. It is the intention of the parties hereto that each Merger described
herein shall be conducted separately from the others, and a party that is not a
party to a Merger shall incur no obligations, duties or liabilities, nor make
any representations, warranties or covenants, with respect to such Merger by
reason of being a party to this Agreement. If any one or more Mergers should
fail to be consummated, such failure shall not affect the other Mergers in any
way.
1.2. Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, with respect to each
Merging Fund and its corresponding Surviving Fund, at the Closing Time (as
defined below), the Merging Fund shall be merged with and into the Surviving
Fund, the separate existence of the Merging Fund as a Delaware Statutory Trust
and registered investment company shall cease, and the Surviving Fund will be
the surviving entity for all purposes, including accounting purposes and for
purposes of presenting investment performance history.
1.3. Upon the terms and subject to the conditions of this Agreement, on the
Closing Date (as defined below), the applicable parties shall cause the Merger
to be consummated by filing a certificate of merger (a "Certificate of Merger")
with the Secretary of State of the State of Delaware in accordance with
Section 3815 of the DSTA. The Merger shall become effective at 9:15 a.m.
Eastern Time, as shall be specified in a Certificate of Merger duly filed with
the Secretary of the State of Delaware, or at such later date or time as the
parties shall agree and specify in the Certificate of Merger (the "Closing
Time").
1.4. As a result of operation of the applicable provisions of the DSTA, the
following events occur simultaneously at the Closing Time, except as otherwise
provided herein:
(a) all of the assets, property, goodwill, rights, privileges, powers and
franchises of the Merging Fund, 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), dividends or interest receivable, deferred or prepaid
expenses shown as an asset on the books of the Merging Fund on the Closing
Date, goodwill, contractual rights, originals or copies of all books and
records of the Merging Fund and all intangible property that is owned by the
Merging Fund (collectively, the "Merging Fund Assets") shall vest in the
Surviving Fund, and all of the liabilities, debts, obligations, restrictions
and duties of the Merging Fund (whether known or unknown, absolute or
contingent, accrued or unaccrued and including, without limitation, any
liabilities of the Merging Fund to indemnify the trustees or officers of the
Merging Fund or any other persons under the Merging Fund's Declaration of
Trust or otherwise, and including all liabilities, debts, obligations,
restrictions and duties of the Predecessor Fund assumed by the Merging Fund
pursuant to the Redomestication) (collectively, the "Merging Fund
Liabilities") shall become the liabilities, debts, obligations, restrictions
and duties of the Surviving Fund;
-2-
(b) Merging Fund common shares of beneficial interest (the "Merging Fund
Common Shares") shall be converted into Surviving Fund common shares of
beneficial interest (the "Surviving Fund Common Shares") and Merging Fund
preferred shares of beneficial interest, if any (the "Merging Fund Preferred
Shares"), shall be converted into Surviving Fund preferred shares of
beneficial interest (the "Surviving Fund Preferred Shares"). Prior to the
Closing Time or as soon as practicable thereafter, the Surviving Fund will
open shareholder accounts on the share ledger records of the Surviving Fund
in the names of and in the amounts due to the shareholders of the Merging
Fund Common Shares and Merging Fund Preferred Shares (if any) based on their
respective holdings in the Merging Fund as of the close of business on the
Valuation Date, as more fully described in Section 3 below;
(c) At the Closing Time, the agreement and declaration of trust and
bylaws of the Surviving Fund in effect immediately prior to the Closing Time
shall continue to be the agreement and declaration of trust and bylaws of
the Surviving Fund, until and unless thereafter amended in accordance with
their respective terms;
(d) From and after the Closing Time, the trustees and officers of the
Surviving Fund shall continue to be the trustees and officers of the
combined Merging Fund and Surviving Fund, and such trustees and officers
shall serve for such terms as are provided in the agreement and declaration
of trust and the bylaws of the Surviving Fund; and
(e) From and after the Closing Time, the Surviving Fund's investment
objectives, strategies, policies and restrictions shall continue to be the
investment objectives, strategies, policies and restrictions of the combined
Merging Fund and Surviving Fund.
2. VALUATION
2.1. Computations of value in connection with the Closing (as defined below)
of each Merger shall be 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 immediately preceding the Closing Date (the
"Valuation Date").
2.2. All computations of value of the Merging Fund, the Merging Fund Common
Shares, the Merging Fund Preferred Shares (if any), the Merging Fund Assets and
the Merging Fund Liabilities shall be made using the Merging Fund's valuation
procedures established by the Merging Fund's Board of Trustees. All
computations of value of the Surviving Fund, the Surviving Fund Common Shares,
the Surviving Fund Preferred Shares (if any) and the Surviving Fund's assets
and liabilities shall be made using the Surviving Fund's valuation procedures
established by the Surviving Fund's Board of Trustees.
3. CLOSING AND CLOSING DATE
3.1. Each Merger shall close on August 27, 2012 or such other date as the
parties may agree with respect to any or all Mergers (the "Closing Date"). All
acts taking place at the closing of a Merger (the "Closing") shall be deemed to
take place simultaneously as of the Closing Time unless otherwise agreed to by
the parties. In the event that on the Valuation Date or the Closing
-3-
Date (a) the NYSE or another primary trading market for portfolio securities of
the Merging 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 Merging Fund or the corresponding Surviving Fund or
the authorized officers of either of such entities, accurate appraisal of the
value of the net assets of the Surviving Fund or the Merging 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.
3.2. With respect to each Merger:
(a) The Merging 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 Merging Fund as of the Closing Date, or as
soon as reasonably practicable thereafter, to the Surviving Fund's custodian
for the account of the Surviving Fund, duly endorsed in proper form for
transfer and in such condition as to constitute good delivery thereof.
(b) No later than the Closing, the Merging Fund shall provide the
Surviving Fund or its transfer agent with the names, addresses, dividend
reinvestment elections and tax withholding status of the Merging Fund
shareholders as of the Valuation Date and the information and documentation
maintained by the Merging Fund or its agents relating to the identification
and verification of the Merging Fund shareholders under the USA PATRIOT Act
and other applicable anti-money laundering laws, rules and regulations and
such other information as the Surviving Fund may reasonably request. The
Surviving 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.
(c) The Surviving Fund shall issue and deliver to the Merging Fund a
confirmation evidencing the Surviving Fund Common Shares and Surviving Fund
Preferred Shares, if any, to be credited on the Closing Date, or provide
other evidence satisfactory to the Merging Fund that such shares have been
credited to the Merging Fund shareholders' accounts on the books of the
Surviving Fund.
(d) Surviving Fund Common Shares of an aggregate net asset value equal to
the aggregate net asset value of the Merging Fund Common Shares shall be
issued by the Surviving Fund to the holders of the Merging Fund Common
Shares in exchange for all of the Merging Fund Common Shares. The aggregate
net asset value of such shares shall be determined as set forth in Section 2
above.
(e) Surviving Fund Preferred Shares of an aggregate liquidation
preference equal to the aggregate liquidation preference of the Merging Fund
Preferred Shares shall be issued by the Surviving Fund to the holders of the
Merging Fund Preferred Shares, if any, in exchange for all of the Merging
Fund Preferred Shares. The terms of the
-4-
Surviving Fund Preferred Shares shall be substantially the same as the terms
of the Merging Fund Preferred Shares.
(f) The Surviving Fund shall not issue certificates representing
Surviving Fund Common Shares in connection with the Merger. Any certificates
representing ownership of Merging Fund Common Shares that remain outstanding
at the Closing Time shall be deemed to be cancelled by operation of law and
shall no longer evidence ownership of the Merging Fund or its shares.
4. REPRESENTATIONS AND WARRANTIES
4.1. Each Merging Fund and Predecessor Merging Fund represents and warrants
to the corresponding Surviving Fund as follows:
(a) The Merging Fund is duly formed as a statutory trust, validly
existing, and in good standing under the laws of the State of Delaware with
power under its agreement and declaration of trust and bylaws ("Governing
Documents"), to own all of its Merging Fund 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 Merging Fund is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as a closed-end management investment
company, and such registration has not been revoked or rescinded and is in
full force and effect;
(c) No consent, approval, authorization, or order of any court,
governmental authority, the Financial Industry Regulatory Authority
("FINRA") or any stock exchange on which shares of the Merging Fund are
listed is required for the consummation by the Merging Fund of the
transactions contemplated herein, except such as have been or will be
obtained (at or prior to the Closing Time);
(d) The Merging Fund is not obligated under any provision of its
Governing Documents and is not a party to any contract or other commitment
or obligation, and is not subject to any order or decree, which would be
violated by its execution or performance under this Agreement, except
insofar as the Funds have mutually agreed to amend such contract or other
commitment or obligation to cure any potential violation as a condition
precedent to the Merger;
(e) The Merging Fund is authorized to issue an unlimited number of Common
Shares and an unlimited number of Preferred Shares and all of the issued and
outstanding shares of beneficial interest of the Merging Fund are, and on
the Closing Date will be, duly authorized and validly issued and
outstanding, fully paid and non-assessable by the Merging Fund and no
shareholder of the Merging Fund will have any preemptive right of
subscription or purchase in respect thereof and, in every state where
offered or sold, such offers and sales by the Merging Fund have been in
compliance in all material respects with applicable registration and/or
notice requirements of the Securities Act of 1933, as amended (the "1933
Act") and state and District of Columbia securities laws;
-5-
(f) Except as otherwise disclosed to and accepted by or on behalf of the
Surviving Fund, the Merging Fund will on the Closing Date have good title to
the Merging Fund Assets and have full right, power and authority to sell,
assign, transfer and deliver such Merging Fund Assets free of adverse
claims, including any liens or other encumbrances, and upon delivery and
payment for such Merging Fund Assets, the Surviving 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 Surviving Fund will
acquire Merging Fund Assets that are segregated as collateral for the
Merging 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 Merging Fund Assets;
(g) The financial statements of the Merging Fund for the Merging Fund's
most recently completed fiscal year have been audited by the independent
registered public accounting firm appointed by the Merging Fund's Board of
Trustees. Such statements, as well as the unaudited, semi-annual financial
statements for the semi-annual period next succeeding the Merging 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 Merging Fund as of
such date in accordance with GAAP;
(h) The Merging Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on its
statement of assets and liabilities as of the Merging Fund's most recently
completed fiscal year or half-year and those incurred in the ordinary course
of the Merging Fund's business as an investment company since such date;
(i) There are no material legal, administrative or other proceedings
pending or, to the knowledge of the Merging Fund, threatened against the
Merging Fund which assert liability or which may, if successfully prosecuted
to their conclusion, result in liability on the part of the Merging Fund,
other than as have been disclosed to the Surviving Fund;
(j) The registration statement filed by the Surviving Fund on Form N-14,
which includes, among other things, a proxy statement of the Merging Fund
and a prospectus of the Surviving Fund with respect to the transactions
contemplated herein (including the statement of additional information
incorporated by reference therein, the "Joint Proxy Statement/Prospectus"),
and any supplement or amendment thereto or to the documents included or
incorporated by reference therein (collectively, as so amended or
supplemented, the "N-14 Registration Statement"), on its effective date, at
the time of the shareholders meeting called to vote on the proposals set
forth in the Joint Proxy Statement/Prospectus and on the Closing Date,
insofar as it relates to the Merging Fund, (i) complied or will comply in
all material respects with the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), and the 1940 Act and the rules and
regulations thereunder (ii) did not or will not contain any untrue statement
of a material fact or omit any material fact required to be stated therein
or necessary to make the
-6-
statements therein not misleading; and the Joint Proxy Statement/Prospectus,
as of its date, at the time of the shareholders meeting called to vote on
the proposals set forth therein and on the Closing Date, insofar as it
relates to the Merging Fund, (i) complied or will comply in all material
respects with the 1933 Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder and (ii) did not or will not contain any untrue
statement of a material fact or omit any material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall apply only
to statements in or omissions from the N-14 Registration Statement or the
Joint Proxy Statement/Prospectus made in reliance upon and in conformity
with information furnished by the Merging Fund for use in the N-14
Registration Statement or the Joint Proxy Statement/Prospectus.
(k) On the Closing Date, all material Returns (as defined below) of the
Merging 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 Merging 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
Merging 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 Merging 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 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);
(l) The Merging 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 Merging 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 Merging 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. In order to (A) ensure
continued qualification of the Merging Fund for treatment as a regulated
investment company for tax purposes and (B) eliminate any tax liability of
the Merging Fund arising by reason of undistributed investment
-7-
company taxable income or net capital gain, the Merging Fund, before the
Closing Date, will declare on or prior to the Valuation Date to the
shareholders of the Merging Fund a dividend or dividends that, together with
all previous such dividends, shall have the effect of distributing (i) all
of Merging Fund's investment company taxable income for the taxable year
ended prior to the Closing Date and substantially all of such investment
company taxable income for the final taxable year ending on the Closing Date
(in each case determined without regard to any deductions for dividends
paid); (ii) all of Merging Fund's net capital gain recognized in its taxable
year ended prior to the Closing Date and substantially all of any such net
capital gain recognized in such final taxable year (in each case after
reduction for any capital loss carryover); and (iii) at least 90 percent of
the excess, if any, of the Merging 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 the taxable year prior to
the Closing Date and at least 90 percent of such net tax-exempt income for
such final taxable year;
(m) 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 Merging Fund and, subject
to the approval of the shareholders of the Funds and the due authorization,
execution and delivery of this Agreement by IAI, this Agreement will
constitute a valid and binding obligation of the Merging Fund enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(n) All of the issued and outstanding Merging Fund Common Shares were
offered for sale and sold in conformity with all applicable federal and
state securities laws.
(o) The books and records of the Merging 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 Merging Fund;
(p) The Merging 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;
(q) The Merging Fund has no unamortized or unpaid organizational fees or
expenses; and
(r) There are no material contracts outstanding to which the Merging Fund
is a party that have not been disclosed in the N-14 Registration Statement
or that will not otherwise be disclosed to the Surviving Fund prior to the
Closing Time.
4.2. Each Surviving Fund and Predecessor Surviving Fund represents and
warrants to the corresponding Merging Fund as follows:
(a) The Surviving Fund is duly formed as a statutory trust, 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
-8-
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 Surviving Fund is registered under the 1940 Act as a closed-end
management investment company, and such registration has not been revoked or
rescinded and is in full force and effect;
(c) No consent, approval, authorization, or order of any court,
governmental authority, FINRA or any stock exchange on which shares of the
Surviving Fund are listed is required for the consummation by the Surviving
Fund of the transactions contemplated herein, except such as have been or
will be obtained (at or prior to the Closing Time);
(d) The financial statements of the Surviving Fund for the Surviving
Fund's most recently completed fiscal year have been audited by the
independent registered public accounting firm appointed by the Surviving
Fund's Board of Trustees. Such statements, as well as the unaudited,
semi-annual financial statements for the semi-annual period next succeeding
the Surviving 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
Surviving Fund as of such date in accordance with GAAP;
(e) The Surviving Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on its
statement of assets and liabilities as of the Surviving Fund's most recently
completed fiscal year or half-year and those incurred in the ordinary course
of the Surviving Fund's business as an investment company since such date;
(f) There are no material legal, administrative or other proceedings
pending or, to the knowledge of Surviving Fund, threatened against Surviving
Fund which assert liability or which may, if successfully prosecuted to
their conclusion, result in liability on the part of Surviving Fund, other
than as have been disclosed to the Merging Fund;
(g) The N-14 Registration Statement, on its effective date, at the time
of the shareholders meeting called to vote on the proposals set forth in the
Joint Proxy Statement/Prospectus and on the Closing Date, (i) complied or
will comply in all material respects with the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder and (ii) did not or will
not contain any untrue statement of a material fact or omit any material
fact required to be stated therein or necessary to make the statements
therein not misleading; and the Joint Proxy Statement/Prospectus, as of its
date, at the time of the shareholders meeting called to vote on the
proposals set forth therein and on the Closing Date (i) complied or will
comply in all material respects with the 1933 Act, the 1934 Act and the 1940
Act and regulations thereunder and (ii) did not or will not contain any
untrue statement of a material fact or omit any material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall not apply
to statements in or omissions from the
-9-
N-14 Registration Statement or the Joint Proxy Statement/Prospectus made in
reliance upon and in conformity with information furnished by the Merging
Fund for use in the N-14 Registration Statement or the Joint Proxy
Statement/Prospectus;
(h) On the Closing Date, all material Returns of the Surviving 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 Surviving 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 Surviving 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 Surviving Fund
financial statements for all Taxes in respect of all periods ended on or
before the date of such financial statements;
(i) The Surviving 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 Surviving 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 Surviving 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;
(j) All issued and outstanding Surviving Fund shares are, and on the
Closing Date will be, duly authorized and validly issued and outstanding,
fully paid and non-assessable by the Surviving Fund and, in every state
where offered or sold, such offers and sales by the Surviving Fund 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 or exemptions therefrom, and there will be a sufficient
number of such shares registered under the 1933 Act or exempt from such
registration and, as may be necessary, with applicable state securities
commissions, to permit the issuances contemplated by this Agreement to be
consummated;
(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 Board of Trustees of the Surviving Fund and subject
to the approval of the shareholders of the Funds and the due authorization,
execution and delivery of this Agreement by IAI, this Agreement will
constitute a valid and binding obligation of the Surviving 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;
-10-
(l) The Surviving Fund Common Shares and Surviving Fund Preferred Shares
(if any) to be issued and delivered to the Merging Fund, for the account of
the Merging 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 shares of the Surviving Fund, and
will be fully paid and non-assessable by the Surviving Fund and no
shareholder of the Surviving Fund will have any preemptive right of
subscription or purchase in respect thereof;
(m) The books and records of the Surviving 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 Surviving Fund;
(n) The Surviving 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 Surviving 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 SURVIVING FUND AND THE MERGING FUND
5.1. With respect to each Merger:
(a) The Surviving Fund, the Merging Fund and the corresponding
Predecessor Funds 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 Merger, 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 Surviving Fund, the Merging Fund or the
corresponding Predecessor Fund, as appropriate, in the ordinary course in
all material respects.
(b) Each Fund and Predecessor Fund agrees to mail to its shareholders of
record entitled to vote at the meeting of shareholders at which action is to
be considered regarding this Agreement, in sufficient time to comply with
requirements as to notice thereof, the Joint Proxy Statement/Prospectus
applicable to such Fund, to call a meeting of such shareholders and to take
all other action necessary to obtain approval of the transactions
contemplated herein.
(c) The Merging Fund will provide the Surviving Fund with (1) a statement
of the respective tax basis and holding period of all investments to be
transferred by the Merging Fund to the Surviving 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 Merging Fund with
respect to each shareholder, for all
-11-
of the shareholders of record of the Merging Fund as of the close of
business on the Valuation Date, who are to become holders of the Surviving
Fund as a result of the transfer of Merging Fund Assets, 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 Merging Fund for
purposes of preparing any Returns required by law to be filed for tax
periods ending after the Closing Date, and (4) if reasonably requested by
the Surviving Fund in writing, all FASB ASC 000-00-00 (formerly FIN 48) work
papers and supporting statements pertaining to the Merging Fund. The
foregoing information to be provided within such timeframes as is mutually
agreed by the parties. The Merging Fund agrees to cooperate with the
Surviving Fund in filing any Return, amended return or claim for refund,
determining a liability for taxes or a right to a refund of taxes or
participating in or conducting any audit or other proceeding in respect of
taxes. The Merging Fund agrees to retain for a period of seven (7) years
following the Closing Date all Returns and work papers and all material
records or other documents relating to tax matters for taxable periods
ending on or before the Closing Date.
(d) Subject to the provisions of this Agreement, the Surviving Fund, the
Merging Fund and the corresponding Predecessor Funds 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.
(e) It is the intention of the parties that each Merger will qualify as a
reorganization with the meaning of Section 368(a)(1)(A) of the Code. None of
the parties to a Merger 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 Merger to
qualify as a reorganization within the meaning of Section 368(a)(1)(A) of
the Code.
(f) Any reporting responsibility of the Merging 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 SEC, 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 Merging Fund, except as otherwise is mutually agreed
by the parties.
(g) The Merging Fund undertakes that if the Merger is consummated, it
will file an application pursuant to Section 8(f) of the 1940 Act for an
order declaring that the Merging Fund has ceased to be a registered
investment company.
(h) The Surviving Fund and Predecessor Surviving Fund shall use their
reasonable best efforts to cause the Surviving Fund Common Shares to be
issued in the Merger to be approved for listing on each of the stock
exchanges on which the corresponding Merging Fund Common Shares are listed.
-12-
(i) If the Merging Fund has outstanding Merging Fund Preferred Shares,
the Surviving Fund shall use its reasonable best efforts to obtain a rating
on the Surviving Fund Preferred Shares from at least one nationally
recognized statistical rating organization ("NRSRO") and include in its
governing documents terms relating to the Surviving Fund Preferred Shares
that are either substantially the same as such terms included in the
Governing Documents of the Merging Fund in respect of the Merging Fund
Preferred Shares or substantially the same as such terms included in the
Merging Fund Governing Documents except for such changes as required by any
NRSRO rating the Surviving Fund Preferred Shares, prior to the Closing.
(j) If the Merging Fund has outstanding Merging Fund Preferred Shares or
the Surviving Fund has outstanding Surviving Fund Preferred Shares, the
combined Merging Fund and Surviving Fund will satisfy all of its obligations
set forth in the Surviving Fund's declaration of trust, statement of
preferences of the Surviving Fund Preferred Shares, registration rights
agreement relating to the Surviving Fund Preferred Shares and the Surviving
Fund Preferred Shares certificate (including, without limitation,
satisfaction of the effective leverage ratio and minimum asset coverage
covenants set forth in its statement of preferences) immediately after
Closing.
(k) If the Merging Fund has outstanding Merging Fund Preferred Shares or
the Surviving Fund has outstanding Surviving Fund Preferred Shares,
immediately after closing the Surviving Fund Preferred Shares shall be rated
at least AA-/Aa3 by each rating agency rating, at the request of the
Surviving Fund, the Surviving Fund Preferred Shares.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE MERGING FUND
6.1. With respect to each Merger, the obligations of the Merging Fund to
consummate the transactions provided for herein shall be subject, at the
Merging Fund's election, to the performance by the Surviving Fund of all of the
obligations to be performed by it hereunder on or before the Closing Time, and,
in addition thereto, the following conditions:
(a) All representations and warranties of the Surviving Fund and the
Predecessor Surviving 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 Surviving Fund shall have delivered to the Merging Fund 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 Merging Fund and dated as of the Closing Date, to the effect that the
representations and warranties of or with respect to the Surviving Fund and
the Predecessor Surviving 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 Surviving Fund and the Predecessor Surviving Fund shall have
-13-
performed all of the covenants and complied with all of the provisions
required by this Agreement to be performed or complied with by the Surviving
Fund and the Predecessor Surviving Fund, on or before the Closing Date;
(d) If the Merging Fund has outstanding Merging Fund Preferred Shares,
the Surviving Fund shall have amended its governing documents to include
terms relating to the Surviving Fund Preferred Shares that are either
substantially identical to such terms included in the Governing Documents of
the Merging Fund in respect of the Merging Fund Preferred Shares or
substantially identical to such terms included in the Merging Fund Governing
Documents except for such changes as required by any NRSRO rating the
Surviving Fund Preferred Shares, and shall have obtained a rating on the
Surviving Fund Preferred Shares from at least one NRSRO;
(e) If the Surviving Fund has outstanding Surviving Fund Preferred
Shares, immediately prior to Closing, the Surviving Fund Preferred Shares
shall be rated at least AA-/Aa3 by each rating agency rating, at the request
of the Surviving Fund; the Surviving Fund Preferred Shares; and
(f) If the Surviving Fund has outstanding Surviving Fund Preferred
Shares, the Surviving Fund shall have satisfied all of its obligations set
forth in its declaration of trust, statement of preferences of the Surviving
Fund Preferred Shares, registration rights agreement relating to the
Surviving Fund Preferred Shares and the Surviving Fund Preferred Shares
certificate (including, without limitation, satisfaction of the effective
leverage ratio and minimum asset coverage covenants set forth in its
statement of preferences) immediately prior to Closing.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING FUND
7.1. With respect to each Merger, the obligations of the Surviving Fund to
consummate the transactions provided for herein shall be subject, at the
Surviving Fund's election, to the performance by the Merging 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 Merging Fund and the
Predecessor Merging 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 Merging Fund shall have delivered an unaudited statement of
assets and liabilities and an unaudited schedule of investments as of the
Valuation Date (together the "Closing Financial Statements") for the purpose
of determining the number of Surviving Fund Common Shares and the number of
Surviving Fund Preferred Shares, if any, to be issued to the Merging Fund's
common shareholders and preferred shareholders, if any, and the Closing
Financial Statements will fairly present the financial position of the
Merging Fund as of the Valuation Date in conformity with GAAP applied on a
consistent basis;
-14-
(c) The Merging Fund shall have delivered to the Surviving Fund 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 Surviving Fund and dated as of the Closing Date, to the effect that the
representations and warranties of or with respect to the Merging Fund and
the Predecessor Merging 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 Merging Fund and the Predecessor Merging 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 Merging
Fund and the Predecessor Merging Fund, on or before the Closing Date;
(e) The Merging 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 Merging Fund's investment company taxable income for
the taxable year ended prior to the Closing Date and substantially all of
such investment company taxable income for the final taxable year ending on
the Closing Date (in each case determined without regard to any deductions
for dividends paid); (ii) all of Merging Fund's net capital gain recognized
in its taxable year ended prior to the Closing Date and substantially all of
any such net capital gain recognized in such final taxable year (in each
case after reduction for any capital loss carryover); and (iii) at least 90
percent of the excess, if any, of the Merging 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 the
taxable year prior to the Closing Date and at least 90 percent of such net
tax-exempt income for such final taxable year; and
(f) If the Merging Fund has outstanding Merging Fund Preferred Shares,
the Merging Fund shall have satisfied all of its obligations set forth in
its declaration of trust, statement of preferences of the Merging Fund
Preferred Shares, registration rights agreement relating to the Merging Fund
Preferred Shares and the Merging Fund Preferred Shares certificate
(including, without limitation, satisfaction of the effective leverage ratio
and minimum asset coverage covenants set forth in its statement of
preferences) immediately prior to Closing.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SURVIVING FUND AND THE
MERGING FUND
With respect to each Merger, if any of the conditions set forth below have
not been satisfied on or before the Closing Date with respect to the Merging
Fund or the Surviving Fund, the Merging Fund or the Surviving Fund,
respectively, shall, at its option, not be required to consummate the
transactions contemplated for such Merger by this Agreement:
8.1. The Agreement shall have been approved by the requisite vote of the
holders of the outstanding Common Shares and Preferred Shares of each Fund, as
set forth in the N-14 Registration Statement. Notwithstanding anything herein
to the contrary, neither the Merging
-15-
Fund nor the Surviving 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 Merging Fund's or the Surviving Fund'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 and national
securities exchanges for purposes of listing shares of the Funds, deemed
necessary by the Surviving Fund or the Merging 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 Surviving Fund or the Merging Fund, provided that either
party hereto may for itself waive any of such conditions;
8.4. The N-14 Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have
been issued and, to the best knowledge of the parties hereto, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or known to be contemplated under the 1933 Act; and
8.5. The Merging Fund and the Surviving Fund shall have received on or
before the Closing Date an opinion of Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP
("Xxxxxxxx Ronon") in form and substance reasonably acceptable to the Merging
Fund and the Surviving Fund, as to the matters set forth on Schedule 8.5. In
rendering such opinion, Xxxxxxxx Ronon may request and rely upon
representations contained in certificates of officers of the Merging Fund, the
Surviving Fund, IAI and others, and the officers of the Merging Fund, the
Surviving Fund and IAI shall use their best efforts to make available such
truthful certificates.
8.6. If the Merging Fund has outstanding Merging Fund Preferred Shares, the
Merging Fund and the Surviving Fund shall have received on or before the
Closing Date an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP ("Skadden")
in form and substance reasonably acceptable to the Merging Fund and the
Surviving Fund, as to the matters set forth on Schedule 8.6. In rendering such
opinion, Skadden may request and rely upon representations contained in
certificates of officers of the Merging Fund, the Surviving Fund, IAI and
others, and the officers of the Merging Fund, the Surviving Fund and IAI shall
use their best efforts to make available such truthful certificates.
8.7. The shareholders of each of the Merging Fund and the Surviving Fund
shall have approved the Redomestication of such fund to a Delaware statutory
trust, as described in the proxy materials related to such Redomestication
(including the N-14 Registration Statement), and each such Redomestication
shall have been consummated.
9. FEES AND EXPENSES
9.1. Each Fund will bear its expenses relating to its Merger provided that
1) the Fund is expected to recoup those costs within 24 months following the
Merger as a result of reduced total annual fund operating expenses based on
estimates prepared by the Adviser and discussed with the Board and 2) the
Fund's total annual fund operating expenses did not exceed the
-16-
expense limit under the expense limitation arrangement in place with IAI at the
time such expenses were discussed with the Board. The Fund will bear these
expenses regardless of whether its Merger is consummated, subject to any
expense limitation arrangement in place with IAI. IAI will bear the Merger
costs of any Fund that does not meet the foregoing threshold.
10. FINALTAX RETURNS AND FORMS 1099 OF MERGING FUND
10.1. After the Closing Date, except as otherwise agreed to by the parties,
the Merging Fund shall or shall cause its agents to prepare any federal, state
or local tax Returns, including any Forms 1099, required to be filed by the
Merging Fund with respect to its final taxable year ending on the Closing Date
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. ENTIREAGREEMENT; SURVIVAL OF WARRANTIES AND COVENANTS
11.1. The representations, warranties and covenants of the Funds and IAI
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; provided that the covenants to be performed after the
Closing shall survive the Closing. The representations, warranties and
covenants of each Predecessor Fund contained in this Agreement or in any
document delivered pursuant hereto or in connection herewith shall not survive
the consummation of the Redomestication of such Predecessor Fund.
12. TERMINATION
With respect to each Merger, this Agreement may be terminated and the
transactions contemplated hereby may be abandoned (i) by mutual agreement of
the Merging Fund and the corresponding Surviving Fund, (ii) by the Merging Fund
if any condition of the Surviving Fund's obligations set forth in this
Agreement has not been fulfilled or waived by the Merging Fund, or (iii) by the
Surviving Fund if any condition of the Merging Fund's obligations set forth in
this Agreement has not been fulfilled or waived by the Surviving Fund,
notwithstanding approval thereof by such Funds' shareholders, if circumstances
should develop that, in such parties judgment, make proceeding with this
Agreement inadvisable.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the parties; provided, however, that
following the approval of this Agreement by shareholders of a Merging Fund
and/or its corresponding Surviving Fund, no such amendment may have the effect
of changing the provisions for determining the number of Surviving Fund shares
to be paid to that Merging Fund's shareholders under this Agreement to the
detriment of such Merging Fund shareholders or shall otherwise materially amend
the terms of this agreement without their further approval.
14. HEADINGS;GOVERNING LAW; COUNTERPARTS; ASSIGNMENT; LIMITATION OF LIABILITY
14.1. The Article and Section headings contained in this Agreement are for
reference
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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 with respect to each Merger to the
benefit of the parties to the Merger and their respective successors and
assigns, but no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any such party without the written consent of the
other parties to such Merger. 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 with respect to such Merger 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 Merging Fund or the applicable
Surviving Fund as provided in the Governing Documents of the Merging Fund or
the Agreement and Declaration of Trust of the Surviving Fund, 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.
14.6. Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by fax or
certified mail addressed to the Merging Fund and the Surviving Fund, each at
0000 Xxxxxxxxx Xxxxxx, X.X. Xxxxxxx, XX 00000, Attention: Secretary, fax number
000-000-0000.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
approved on behalf of the Surviving Fund and Merging Fund.
INVESCO ADVISERS, INC. INVESCO VALUE MUNICIPAL INCOME TRUST,
INVESCO VALUE MUNICIPAL BOND TRUST, INVESCO
By: /s/ Xxxx X. Xxxx VALUE MUNICIPAL SECURITIES, INVESCO VALUE
-------------------------------
Name: Xxxx X. Xxxx MUNICIPAL TRUST, INVESCO MUNICIPAL INCOME
Title: Senior Vice President OPPORTUNITIES TRUST, INVESCO MUNICIPAL
INCOME OPPORTUNITIES TRUST II, INVESCO
MUNICIPAL INCOME OPPORTUNITIES TRUST III,
INVESCO QUALITY MUNICIPAL INCOME TRUST,
INVESCO QUALITY MUNICIPAL INVESTMENT TRUST,
INVESCO QUALITY MUNICIPAL SECURITIES, INVESCO
XXX XXXXXX CALIFORNIA VALUE MUNICIPAL
INCOME TRUST, INVESCO CALIFORNIA MUNICIPAL
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INCOME TRUST, INVESCO CALIFORNIA
QUALITY MUNICIPAL SECURITIES,
INVESCO CALIFORNIA MUNICIPAL
SECURITIES, INVESCO XXX XXXXXX
HIGH INCOME TRUST II, INVESCO HIGH
YIELD INVESTMENTS FUND, INC.,
INVESCO XXX XXXXXX MUNICIPAL
OPPORTUNITY TRUST, INVESCO
MUNICIPAL PREMIUM INCOME TRUST,
INVESCO XXX XXXXXX SELECT SECTOR
MUNICIPAL TRUST, INVESCO XXX
XXXXXX TRUST FOR VALUE MUNICIPALS,
INVESCO XXX XXXXXX TRUST FOR
INVESTMENT GRADE NEW YORK
MUNICIPALS, INVESCO NEW YORK
QUALITY MUNICIPAL SECURITIES,
INVESCO XXX XXXXXX MUNICIPAL
TRUST, INVESCO XXX XXXXXX
MASSACHUSETTS VALUE MUNICIPAL
INCOME TRUST, INVESCO XXX XXXXXX
OHIO QUALITY MUNICIPAL TRUST, AND
INVESCO XXX XXXXXX TRUST FOR
INVESTMENT GRADE NEW JERSEY
MUNICIPALS
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
-19-
Sub-Item 77Q1(g)
EXHIBIT A
CHART OF MERGERS
CORRESPONDING MERGING FUND (AND SHARE
SURVIVING FUND (AND SHARE CLASSES) CLASSES)
---------------------------------- -------------------------------------
INVESCO VALUE MUNICIPAL INCOME TRUST INVESCO VALUE MUNICIPAL BOND TRUST
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO VALUE MUNICIPAL INCOME TRUST INVESCO VALUE MUNICIPAL SECURITIES
Common Shares Common Shares
INVESCO VALUE MUNICIPAL INCOME TRUST INVESCO VALUE MUNICIPAL TRUST
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO MUNICIPAL INCOME INVESCO MUNICIPAL INCOME
OPPORTUNITIES TRUST OPPORTUNITIES TRUST II
Common Shares Common Shares
INVESCO MUNICIPAL INCOME INVESCO MUNICIPAL INCOME
OPPORTUNITIES TRUST OPPORTUNITIES TRUST III
Common Shares Common Shares
INVESCO QUALITY MUNICIPAL INCOME INVESCO QUALITY MUNICIPAL INVESTMENT
TRUST TRUST
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO QUALITY MUNICIPAL INCOME
TRUST INVESCO QUALITY MUNICIPAL SECURITIES
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO XXX XXXXXX CALIFORNIA VALUE INVESCO CALIFORNIA MUNICIPAL INCOME
MUNICIPAL INCOME TRUST TRUST
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO XXX XXXXXX CALIFORNIA VALUE INVESCO CALIFORNIA QUALITY MUNICIPAL
MUNICIPAL INCOME TRUST SECURITIES
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO XXX XXXXXX CALIFORNIA VALUE INVESCO CALIFORNIA MUNICIPAL
MUNICIPAL INCOME TRUST SECURITIES
Common Shares Common Shares
INVESCO XXX XXXXXX HIGH INCOME INVESCO HIGH YIELD INVESTMENTS FUND,
TRUST II INC.
Common Shares Common Shares
INVESCO XXX XXXXXX MUNICIPAL
OPPORTUNITY TRUST INVESCO MUNICIPAL PREMIUM INCOME TRUST
Common Shares Common Shares
Preferred Shares Preferred Shares
CORRESPONDING MERGING FUND (AND SHARE
SURVIVING FUND (AND SHARE CLASSES) CLASSES)
---------------------------------- -------------------------------------
INVESCO XXX XXXXXX MUNICIPAL INVESCO XXX XXXXXX SELECT SECTOR
OPPORTUNITY TRUST MUNICIPAL TRUST
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO XXX XXXXXX MUNICIPAL INVESCO XXX XXXXXX TRUST FOR VALUE
OPPORTUNITY TRUST MUNICIPALS
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO XXX XXXXXX TRUST FOR INVESCO NEW YORK QUALITY MUNICIPAL
INVESTMENT GRADE NEW YORK MUNICIPALS SECURITIES
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO XXX XXXXXX MUNICIPAL TRUST INVESCO XXX XXXXXX MASSACHUSETTS
VALUE MUNICIPAL INCOME TRUST
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO XXX XXXXXX MUNICIPAL TRUST INVESCO XXX XXXXXX OHIO QUALITY
MUNICIPAL TRUST
Common Shares Common Shares
Preferred Shares Preferred Shares
INVESCO XXX XXXXXX MUNICIPAL TRUST INVESCO XXX XXXXXX TRUST FOR
INVESTMENT GRADE NEW JERSEY MUNICIPALS
Common Shares Common Shares
Preferred Shares Preferred Shares
-21-
SCHEDULE 8.5
TAX OPINION
(i) The acquisition by Surviving Fund of all of the assets of Merging Fund
in exchange for Surviving Fund shares and the assumption of the liabilities of
Merging Fund through a statutory merger will qualify as a reorganization within
the meaning of Section 368(a)(1)(A) of the Code and the Surviving Fund and
Merging Fund will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code.
(ii) No gain or loss will be recognized by Merging Fund on the transfer of
its assets to, and the assumption of Merging Fund liabilities by, Surviving
Fund in exchange for Surviving Fund shares pursuant to Sections 361(a) and
357(a) of the Code.
(iii) No gain or loss will be recognized by Surviving Fund on the receipt of
the Merging Fund assets in exchange for Surviving Fund shares and the
assumption by Surviving Fund of any liabilities of Merging Fund pursuant to
Section 1032(a) of the Code.
(iv) No gain or loss will be recognized by Merging Fund upon the
distribution of Surviving Fund shares to the shareholders of Merging Fund
pursuant to Section 361(c) of the Code.
(v) The tax basis of the Merging Fund assets received by the Surviving Fund
will be the same as the tax basis of such assets in the hands of the Merging
Fund immediately prior to the transfer pursuant to Section 362(b) of the Code.
(vi) The holding periods of the Merging Fund assets in the hands of the
Surviving Fund will include the periods during which such assets were held by
the Merging Fund pursuant to Section 1223(2) of the Code.
(vii) No gain or loss will be recognized by the shareholders of Merging Fund
on the receipt of Surviving Fund shares solely in exchange for Surviving Fund
shares pursuant to Section 354(a)(1) of the Code.
(viii) The aggregate tax basis in Surviving Fund shares received by a
shareholder of the Merging Fund will be the same as the aggregate tax basis of
Merging Fund shares surrendered in exchange therefor pursuant to
Section 358(a)(1) of the Code.
(ix) The holding period of Surviving Fund shares received by a shareholder
of the Merging Fund will include the holding period of the Merging Fund shares
surrendered in exchange therefor, provided that the shareholder held Merging
Fund shares as a capital asset on the Closing Date pursuant to Section 1223(1)
of the Code.
(x) For purposes of Section 381 of the Code, the Surviving 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
Merging Fund described in Section 381(c) of the Code, subject to
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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 Merger on a Merging Fund, Surviving Fund or any Merging 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.
-23-
SCHEDULE 8.6
PREFERRED SHARE OPINION
The VMTP Shares issued by the Surviving Fund in the Merger in exchange for
Merging Fund VMTP Shares will be treated as equity of the Surviving Fund for
U.S. federal income tax purposes.
-24-
Sub-Item 77Q1(e)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 27th day of August, 2012, by and between Invesco
Municipal Income Opportunities Trust, a Delaware statutory trust (the "Trust"),
and Invesco Advisers, Inc., a Delaware corporation (the "Adviser").
RECITALS
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a closed-end management investment company;
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Trust and the Adviser desire to enter into an agreement to
provide for investment advisory services to the Trust upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Advisory Services. The Adviser shall act as investment adviser for the
Trust and shall, in such capacity, supervise all aspects of the Trust's
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Trust's assets, subject at all times to the
policies and control of the Board of Trustees. The Adviser shall give the
Trust the benefit of its best judgment, efforts and facilities in rendering
its services as investment adviser.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Adviser shall:
(a) supervise all aspects of the operations of the Trust;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
Trust, and whether concerning the individual issuers whose securities
are included in the assets of the Trust or the activities in which such
issuers engage, or with respect to securities which the Adviser
considers desirable for inclusion in the Trust's assets;
(c) determine which issuers and securities shall be represented in
the Trust's investment portfolios and regularly report thereon to the
Board of Trustees;
(d) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to
the Board of Trustees; and
(e) take, on behalf of the Trust, all actions which appear to the
Trust necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including but not limited to the
placing of orders for the purchase and sale of securities for the Trust.
3. Securities Lending Duties and Fees. The Adviser agrees to provide the
following services in connection with the securities lending activities of
the Trust: (a) oversee participation in the securities lending program to
ensure compliance with all applicable regulatory and investment guidelines;
(b) assist the securities lending agent or principal (the "Agent") in
determining which specific securities are available for loan; (c) monitor
the Agent to ensure that securities loans are effected in accordance with
the Adviser's instructions and with procedures adopted by the Board of
Trustees; (d) prepare appropriate periodic reports for, and seek appropriate
approvals from, the Board of Trustees with respect to securities lending
activities; (e) respond to Agent inquiries; and (f) perform such other
duties as necessary.
As compensation for such services provided by the Adviser in connection
with securities lending activities, the Trust shall pay the Adviser a fee
equal to 25% of the net monthly interest or fee income retained or paid to
the Trust from such activities.
4. Delegation of Responsibilities. The Adviser is authorized to delegate
any or all of its rights, duties and obligations under this Agreement to one
or more sub-advisors, and may enter into agreements with sub-advisers, and
may replace any such sub-advisors from time to time in its discretion, in
accordance with the 1940 Act, the Advisers Act, and rules and regulations
thereunder, as such statutes, rules and regulations are amended from time to
time or are interpreted from time to time by the staff of the Securities and
Exchange Commission ("SEC"), and if applicable, exemptive orders or similar
relief granted by the SEC and upon receipt of approval of such sub-advisors
by the Board of Trustees and by shareholders (unless any such approval is
not required by such statutes, rules, regulations, interpretations, orders
or similar relief).
5. Independent Contractors. The Adviser and any sub-advisors shall for
all purposes herein be deemed to be independent contractors and shall,
unless otherwise expressly provided or authorized, have no authority to act
for or represent the Trust in any way or otherwise be deemed to be an agent
of the Trust.
6. Control by Board of Trustees. Any investment program undertaken by the
Adviser pursuant to this Agreement, as well as any other activities
undertaken by the Adviser on behalf of the Trust, shall at all times be
subject to any directives of the Board of Trustees.
7. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act
and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Trust, as the
same may be amended from time to time under the Securities Act of 1933
and the 1940 Act;
(c) the provisions of the Trust's Declaration of Trust, as the same
may be amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same may be
amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
2
8. Broker-Dealer Relationships. The Adviser is responsible for decisions
to buy and sell securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates.
(a) The Adviser's primary consideration in effecting a security
transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Adviser will take the following into consideration: the
best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Trust on a continuing
basis. Accordingly, the price to the Trust in any transaction may be
less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the fund
execution services offered.
(c) Subject to such policies as the Board of Trustees may from time
to time determine, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Trust to pay a
broker or dealer that provides brokerage and research services to the
Adviser an amount of commission for effecting a fund investment
transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Adviser
determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided
by such broker or dealer, viewed in terms of either that particular
transaction or the Adviser's overall responsibilities with respect to
the Trust and to other clients of the Adviser as to which the Adviser
exercises investment discretion. The Adviser is further authorized to
allocate the orders placed by it on behalf of the Trust to such brokers
and dealers who also provide research or statistical material, or other
services to the Trust, to the Adviser, or to any sub-advisor. Such
allocation shall be in such amounts and proportions as the Adviser shall
determine and the Adviser will report on said allocations regularly to
the Board of Trustees indicating the brokers to whom such allocations
have been made and the basis therefor.
(d) With respect to the Trust, to the extent the Adviser does not
delegate trading responsibility to one or more sub-advisors, in making
decisions regarding broker-dealer relationships, the Adviser may take
into consideration the recommendations of any sub-advisor appointed to
provide investment research or advisory services in connection with the
Trust, and may take into consideration any research services provided to
such sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940 Act,
the Securities Exchange Act of 1934, and rules and regulations
thereunder, as such statutes, rules and regulations are amended from
time to time or are interpreted from time to time by the staff of the
SEC, any exemptive orders issued by the SEC, and any other applicable
provisions of law, the Adviser may select brokers or dealers with which
it or the Trust are affiliated.
9. Compensation. The compensation that the Trust shall pay the Adviser is
set forth in Appendix I attached hereto.
10. Expenses of the Trust. All of the ordinary business expenses incurred
in the operations of the Trust and the offering of their shares shall be
borne by the Trust unless specifically provided otherwise in this Agreement.
These expenses borne by
3
the Trust include but are not limited to brokerage commissions, taxes,
legal, accounting, auditing, or governmental fees, the cost of preparing
share certificates, custodian, transfer and shareholder service agent costs,
expenses of issue, sale, redemption and repurchase of shares, expenses of
registering and qualifying shares for sale, expenses relating to trustees
and shareholder meetings, the cost of preparing and distributing reports and
notices to shareholders, the fees and other expenses incurred by the Funds
in connection with membership in investment company organizations and the
cost of printing copies of prospectuses and statements of additional
information distributed to the Trust's shareholders.
11. Services to Other Companies or Accounts. The Trust understands that
the Adviser now acts, will continue to act and may act in the future as
investment manager or adviser to fiduciary and other managed accounts, and
as investment manager or adviser to other investment companies, including
any offshore entities, or accounts, and the Trust has no objection to the
Adviser so acting, provided that whenever the Trust and one or more other
investment companies or accounts managed or advised by the Adviser have
available funds for investment, investments suitable and appropriate for
each will be allocated in accordance with a formula believed to be equitable
to each company and account. The Trust recognizes that in some cases this
procedure may adversely affect the size of the positions obtainable and the
prices realized for the Funds.
12. Non-Exclusivity. The Trust understands that the persons employed by
the Adviser to assist in the performance of the Adviser's duties under this
Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict the right
of the Adviser or any affiliate of the Adviser to engage in and devote time
and attention to other businesses or to render services of whatever kind or
nature. The Trust further understands and agrees that officers or directors
of the Adviser may serve as officers or trustees of the Trust, and that
officers or trustees of the Trust may serve as officers or directors of the
Adviser to the extent permitted by law; and that the officers and directors
of the Adviser are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors or trustees of any other firm or trust,
including other investment advisory companies.
13. Effective Date, Term and Approval. This Agreement shall become
effective with respect to the Trust, if approved by the shareholders of the
Trust, on the date indicated above. If so approved, this Agreement shall
thereafter continue in force and effect until two years after the date
indicated above, and may be continued from year to year thereafter, provided
that the continuation of the Agreement is specifically approved at least
annually:
(a) (i) by the Board of Trustees or (ii) by the vote of "a majority
of the outstanding voting securities" of the Trust (as defined in
Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the trustees who are not
parties to this Agreement or "interested persons" (as defined in the
0000 Xxx) of a party to this Agreement (other than as trustees of the
Trust), by votes cast in person at a meeting specifically called for
such purpose.
14. Termination. This Agreement may be terminated as to the Trust at any
time, without the payment of any penalty, by vote of the Board of Trustees
or by vote of a majority of the outstanding voting securities of the Trust,
or by the Adviser, on sixty (60) days' written notice to the other party.
The notice provided for herein may be
4
waived by the party entitled to receipt thereof. This Agreement shall
automatically terminate in the event of its assignment, the term
"assignment" for purposes of this paragraph having the meaning defined in
Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective unless
it is in writing and signed by the party against which enforcement of the
amendment is sought.
16. Liability of Adviser and Trust. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser or any of its
officers, directors or employees, the Adviser shall not be subject to
liability to the Trust or to any shareholder of the Trust for any act or
omission in the course of, or connected with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of
any security.
17. Liability of Shareholders. Notice is hereby given that, as provided
by applicable law, the obligations of or arising out of this Agreement are
not binding upon any of the shareholders of the Trust individually but are
binding only upon the assets and property of the Trust and that the
shareholders shall be entitled, to the fullest extent permitted by
applicable law, to the same limitation on personal liability as shareholders
of private corporations for profit.
18. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other
party entitled to receipt thereof at such address as such party may
designate for the receipt of such notice. Until further notice to the other
party, it is agreed that the address of the Trust and that of the Adviser
shall be 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000.
19. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act or the Advisers Act shall
be resolved by reference to such term or provision of the 1940 Act or the
Advisers Act and to interpretations thereof, if any, by the United States
Courts or in the absence of any controlling decision of any such court, by
rules, regulations or orders of the SEC issued pursuant to said Acts. In
addition, where the effect of a requirement of the 1940 Act or the Advisers
Act reflected in any provision of the Agreement is revised by rule,
regulation or order of the SEC, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. Subject to the
foregoing, this Agreement shall be governed by and construed in accordance
with the laws (without reference to conflicts of law provisions) of the
State of Texas.
20. License Agreement. The Trust shall have the non-exclusive right to
use the name "Invesco" to designate any current or future series of shares
only so long as Invesco Advisers, Inc. serves as investment manager or
adviser to the Trust with respect to such series of shares.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
INVESCO MUNICIPAL INCOME
OPPORTUNITIES TRUST
Attest:
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxx
----------------------- --------------------------------------
Assistant Secretary Name: Xxxx X. Xxxx
(SEAL) Title: Senior Vice President
Attest: INVESCO ADVISERS, INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxx
----------------------- --------------------------------------
Assistant Secretary Name: Xxxx X. Xxxx
(SEAL) Title: Senior Vice President
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APPENDIX I
COMPENSATION TO THE ADVISER
The Trust shall pay the Adviser, out of its assets, as full compensation for
all services rendered, an advisory fee for the Trust set forth below.
TRUST ANNUAL RATE
----- -----------
Invesco Municipal Income 0.50% as a percentage of average
Opportunities Trust weekly net assets
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