Sub-Item 77Q1(g)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is adopted as of this
30th day of March, 2010 by and among (i) Xxx Xxxxxx Retirement Strategy Trust
(the "Target Entity") on behalf of its respective series identified on Exhibit A
hereto (each a "Target Fund"); (ii) Xxx Xxxxxx Asset Management ("VKAM"); (iii)
AIM Growth Series (the "Acquiring Entity"), on behalf of its respective series
identified on Exhibit A hereto (each an "Acquiring Fund"); and (iv) Invesco
Advisers, Inc ("IAI").
WHEREAS, Xxxxxx Xxxxxxx entered into a definitive agreement dated
October 19, 2009 (the "Transaction Agreement") to sell substantially all of its
retail asset management business operating under both the Xxxxxx Xxxxxxx and Xxx
Xxxxxx brands to Invesco, Ltd. ("Invesco") (referred to herein as the
"MS/Invesco Transaction");
WHEREAS, the parties hereto intend for each Acquiring Fund and its
corresponding Target Fund (as set forth in Exhibit A hereto) to enter into a
transaction pursuant to which: (i) the Target Fund will liquidate all, or
substantially all, of its assets in exchange for cash immediately prior to the
Closing (as defined in Section 3.1); (ii) the Acquiring Fund will acquire the
assets and assume the liabilities of the Target Fund in exchange solely for the
corresponding class or classes of shares (as applicable) of the Acquiring Fund
identified on Exhibit A of equal value to the net assets of the Target Fund
being acquired, and (iii) the Target Fund will distribute such shares of the
Acquiring Fund to shareholders of the corresponding class of the Target Fund, in
connection with the liquidation of the Target Fund, all upon the terms and
conditions hereinafter set forth in this Agreement (each such transaction, a
"Reorganization" and collectively, the "Reorganizations")
WHEREAS, each of the Target Entity and the Acquiring Entity is an
open-end, registered investment company of the management type; and
WHEREAS, each Target Fund and its corresponding Acquiring Fund intend
to treat its respective Reorganization as a taxable transaction that does not
qualify as a tax-free reorganization within the meaning of Section 368(a)(1) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. DESCRIPTION OF THE REORGANIZATIONS
1.1. It is the intention of the parties hereto that each Reorganization
described herein shall be conducted separately of the others, and a party that
is not a party to a Reorganization shall incur no obligations, duties or
liabilities with respect to such Reorganization by reason of being a party to
this Agreement. If any one or more Reorganizations should fail to be
consummated, such failure shall not affect the other Reorganizations in any way.
1.2. Provided that all conditions precedent to a Reorganization set forth
herein have been satisfied as of the Closing Date (as defined in Section 3.1),
and based on the representations and warranties each party provides to the
others, the Target Entity and the Acquiring Entity agree to take the
following steps with respect to their Reorganization(s), the parties to which
and classes of shares to be issued in connection with which are set forth in
Exhibit A:
(a) On or before the Closing, the Target Fund shall reduce all, or
substantially all, of its assets to cash denominated in U.S. currency. The
Target Fund shall transfer all of its Assets, as defined and set forth in
Section 1.2(b), to the Acquiring Fund, and the Acquiring Fund in exchange
therefor shall assume the Liabilities, as defined and set forth in Section
1.2(c), and deliver to the Target Fund the number of full and fractional
Acquiring Fund shares determined in the manner set forth in Section 2.
(b) The assets of the Target Fund to be transferred to the Acquiring
Fund shall consist of all assets and property, including, without
limitation, all cash (including that derived from the liquidation of its
assets in exchange for cash pursuant to Section 1.2(a)), securities,
commodities and futures interests, claims (whether absolute or contingent,
known or unknown, accrued or unaccrued and including, without limitation,
any interest in pending or future legal claims in connection with past or
present portfolio holdings, whether in the form of class action claims,
opt-out or other direct litigation claims, or regulator or
government-established investor recovery fund claims, and any and all
resulting recoveries) and dividends or interest receivable that are owned
by the Target Fund and any deferred or prepaid expenses shown as an asset
on the books of the Target Fund on the Closing Date, except for cash, bank
deposits or cash equivalent securities in an amount necessary to pay the
estimated costs of extinguishing any Excluded Liabilities (as defined in
Section 1.2(c)) and cash in an amount necessary to pay any distributions
pursuant to Section 7.1(g) (collectively, "Assets").
(c) The Acquiring Fund shall assume all of the liabilities of the
Target Fund, whether accrued or contingent, known or unknown, existing at
the Closing Date (as defined in Section 2.1(a)), except for the Target
Fund's Excluded Liabilities (as defined below), if any, pursuant to this
Agreement (collectively, with respect to each Target Fund separately,
"Liabilities"). Each Target Fund will use its best efforts to discharge all
known Liabilities prior to or at the Valuation Date to the extent possible
and consistent with its own investment objectives and policies and normal
business operations. If prior to the Closing Date the Acquiring Entity
identifies a liability that the Acquiring Entity and the Target Entity
mutually agree should not be assumed by the Acquiring Fund, such liability
shall be excluded from the definition of Liabilities hereunder and shall be
listed on a Schedule of Excluded Liabilities to be signed by the Acquiring
Entity and the Target Entity at Closing and attached to this Agreement as
Schedule 1.2(c) (the "Excluded Liabilities"). The Assets minus the
Liabilities of a Target Fund shall be referred to herein as the Target
Fund's "Net Assets."
(d) As soon as is reasonably practicable after the Closing, the Target
Fund will distribute to its shareholders of record ("Target Fund
Shareholders") the shares of the Acquiring Fund of the corresponding class
received by the Target Fund pursuant to Section 1.2(a), as set forth in
Exhibit A, on a pro rata basis within that class, and will as promptly as
practicable completely liquidate and dissolve. Such distribution and
liquidation will be accomplished, with respect to each class of the Target
Fund's shares, by the transfer of the Acquiring Fund shares of the
corresponding class then credited to the account of the Target Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Target Fund Shareholders of the class.
The aggregate net asset value of the Acquiring Fund
-2-
shares to be so credited to the corresponding Target Fund Shareholders
shall be equal to the aggregate net asset value of the corresponding Target
Fund's shares owned by the Target Fund Shareholders on the Valuation Date.
The Acquiring Fund shall not issue certificates representing shares in
connection with such exchange.
(e) Ownership of Acquiring Fund shares will be shown on its books, as
such are maintained by the Acquiring Fund's transfer agent.
2. VALUATION
2.1. With respect to each Reorganization:
(a) The value of the Target Fund's Assets shall be the value of such
Assets computed as of immediately after the close of regular trading on the
New York Stock Exchange ("NYSE"), which shall reflect the declaration of
any dividends, on the business day next preceding the Closing Date (the
"Valuation Date"), using the Target Fund's valuation procedures established
by the Target Entity's Board of Trustees, which shall be provided to the
Acquiring Fund prior to the Valuation Date.
(b) The net asset value per share of each class of the Acquiring Fund
shares issued in connection with the Reorganization shall be the net asset
value per share of each class computed on the Valuation Date, using the
Acquiring Fund's valuation procedures established by the Acquiring Entity's
Board of Trustees.
(c) The number of shares issued of each class of the Acquiring Fund
(including fractional shares, if any, rounded to the nearest thousandth) in
exchange for the Target Fund's Net Assets shall be determined by dividing
the value of the Net Assets of the Target Fund attributable to each class
of Target Fund shares by the net asset value per share of the corresponding
share class of the Acquiring Fund.
(d) All computations of value shall be made by the Target Fund's
designated recordkeeping agent using the valuation procedures described in
this Section 2 and shall be subject to review by the Acquiring Fund's
recordkeeping agent and, if requested by either the Target Entity or the
Acquiring Entity, by the independent registered public accountant of the
requesting party.
3. CLOSING AND CLOSING DATE
3.1. Each Reorganization shall close on June 1, 2010 or such other date as
the parties may agree with respect to any or all Reorganizations (the "Closing
Date"). All acts taking place at the closing of a Reorganization (the "Closing")
shall be deemed to take place simultaneously as of immediately prior to the
opening of regular trading on the NYSE on the Closing Date of that
Reorganization unless otherwise agreed to by the parties (the "Closing Time").
The Closing of each Reorganization shall be held in person, by facsimile, email
or such other communication means as the parties may reasonably agree.
3.2. With respect to each Reorganization:
-3-
(a) The Target Fund's portfolio securities, investments or other
assets that are represented by a certificate or other written instrument
shall be transferred and delivered by the Target Fund as of the Closing
Date to the Acquiring Fund's Custodian for the account of the Acquiring
Fund duly endorsed in proper form for transfer and in such condition as to
constitute good delivery thereof. The Target Fund shall direct the Target
Custodian (the "Target Custodian") to deliver to the Acquiring Fund's
Custodian as of the Closing Date by book entry, in accordance with the
customary practices of Target Custodian and any securities depository (as
defined in Rule 17f-4 under the Investment Company Act of 1940, as amended
(the "1940 Act")), in which the Assets are deposited, the Target Fund's
portfolio securities and instruments so held. The cash to be transferred by
a Target Fund shall be delivered to the Acquiring Fund's Custodian by wire
transfer of federal funds or other appropriate means on the Closing Date.
If the Target Fund is unable to make such delivery on the Closing Date in
the manner contemplated by this Section for the reason that any of such
securities or other investments purchased prior to the Closing Date have
not yet been delivered to the Target Fund or its broker, then the Acquiring
Fund may, in its sole discretion, waive the delivery requirements of this
Section with respect to said undelivered securities or other investments if
the Target Fund has, by or on the Closing Date, delivered to the Acquiring
Fund or its Custodian executed copies of an agreement of assignment and
escrow and due bills executed on behalf of said broker or brokers, together
with such other documents as may be required by the Acquiring Fund or its
Custodian, such as brokers' confirmation slips.
(b) The Target Entity shall direct the Custodian for each Target Fund
(the "Target Custodian") to deliver, at the Closing, a certificate of an
authorized officer stating that the Assets have been delivered in proper
form to the Acquiring Fund no later than the Closing Time on the Closing
Date.
(c) At such time prior to the Closing Date as the parties mutually
agree, the Target Fund shall provide (i) instructions and related
information to the Acquiring Fund or its transfer agent with respect to the
Target Fund Shareholders, including names, addresses, dividend reinvestment
elections and tax withholding status of the Target Fund Shareholders as of
the date agreed upon (such information to be updated as of the Closing
Date, as necessary) and (ii) the information and documentation maintained
by the Target Fund or its agents relating to the identification and
verification of the Target Fund Shareholders under the USA PATRIOT ACT and
other applicable anti-money laundering laws, rules and regulations (the
"AML Documentation") and such other information as the Acquiring Fund may
reasonably request. The Acquiring Fund and its transfer agent shall have no
obligation to inquire as to the validity, propriety or correctness of any
such instruction, information or documentation, but shall, in each case,
assume that such instruction, information or documentation is valid,
proper, correct and complete.
(d) The Target Entity shall direct the transfer agent for a Target
Fund (the "Target Transfer Agent") to deliver to the Acquiring Fund at the
Closing a certificate of an authorized officer stating that its records, as
provided to the Acquiring Entity, contain the names and addresses of the
Target Fund Shareholders and the number of outstanding shares of each class
owned by each such shareholder immediately prior to the Closing. The
Acquiring Fund shall issue and deliver to the Secretary of the Target Fund
a confirmation evidencing the Acquiring Fund shares to be credited on the
Closing Date, or provide other evidence satisfactory to the Target Entity
that such Acquiring Fund shares have been credited to the Target Fund
Shareholders' accounts on the books of the Acquiring Fund. At the Closing,
each party shall deliver to the other such bills of
-4-
sale, checks, assignments, certificates, if any, receipts or other
documents as such other party or its counsel may reasonably request.
(e) In the event that on the Valuation Date or the Closing Date (a)
the NYSE or another primary trading market for portfolio securities of the
Target Fund (each, an "Exchange") shall be closed to trading or trading
thereupon shall be restricted, or (b) trading or the reporting of trading
on such Exchange or elsewhere shall be disrupted so that, in the judgment
of the Board of Trustees of the Acquiring Entity or the Target Entity or
the authorized officers of either of such entities, accurate appraisal of
the value of the net assets of the Acquiring Fund or the Target Fund,
respectively, is impracticable, the Closing Date shall be postponed until
the first business day after the day when trading shall have been fully
resumed and reporting shall have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Target Entity, on behalf of itself or, where applicable, a Target
Fund, represents and warrants to the Acquiring Entity and its corresponding
Acquiring Fund as follows:
(a) The Target Fund is duly organized as a series of the Target
Entity, which is a statutory trust duly formed, validly existing, and in
good standing under the laws of the State of Delaware with power under its
Amended and Restated Agreement and Declaration of Trust and by-laws
("Governing Documents"), to own all of its Assets, to carry on its business
as it is now being conducted and to enter into this Agreement and perform
its obligations hereunder;
(b) The Target Entity is a registered investment company classified as
a management company of the open-end type, and its registration with the
U.S. Securities and Exchange Commission (the "Commission") as an investment
company under the 1940 Act, and the registration of the shares of the
Target Fund under the Securities Act of 1933 ("1933 Act"), are in full
force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority, or the Financial Industry Regulatory Authority
("FINRA") is required for the consummation by the Target Fund and the
Target Entity of the transactions contemplated herein, except such as have
been obtained or will be obtained at or prior to the Closing Date under the
1933 Act, the Securities Exchange Act of 1934, as amended ("1934 Act"), the
1940 Act and state securities laws;
(d) The current prospectus and statement of additional information of
the Target Fund and each prospectus and statement of additional information
of the Target Fund used at all times between the commencement of operations
of the Target Fund and the date of this Agreement conforms or conformed at
the time of its use in all material respects to the applicable requirements
of the 1933 Act and the 1940 Act and the rules and regulations of the
Commission thereunder and does not or did not at the time of its use
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not materially misleading;
-5-
(e) The Target Fund is in compliance in all material respects with the
applicable investment policies and restrictions set forth in the Target
Fund's prospectus and statement of additional information and the value of
the net assets of the Target Fund is determined using portfolio valuation
methods that comply in all material respects with the requirements of the
1940 Act and the rules and regulations of the Commission thereunder and the
pricing and valuation policies of the Target Fund and there have been no
material miscalculations of the net asset value of the Target Fund or the
net asset value per share of the Target Fund (or any class thereof) during
the twelve-month period preceding the date hereof which would have a
material adverse effect on such Target Fund or its properties or assets;
(f) Except as otherwise disclosed to and accepted, in writing, by or
on behalf of the Acquiring Fund, the Target Fund will on the Closing Date
have good title to the Assets and full right, power, and authority to sell,
assign, transfer and deliver such Assets free of adverse claims, including
any liens or other encumbrances, and upon delivery and payment for such
Assets, the Acquiring Fund will acquire good title thereto, free of adverse
claims and subject to no restrictions on the full transfer thereof,
including, without limitation, such restrictions as might arise under the
1933 Act;
(g) Except as otherwise disclosed to and accepted, in writing, by or
on behalf of the Acquiring Fund, the Target Fund is not engaged currently,
and the execution, delivery and performance of this Agreement will not
result, in (i) a material violation of the Target Entity's Governing
Documents or of any agreement, indenture, instrument, contract, lease or
other undertaking to which the Target Fund or the Target Entity is a party
or by which it is bound, or (ii) the acceleration of any obligation, or the
imposition of any lien, encumbrance, penalty or additional fee under any
agreement, indenture, instrument, contract, lease, judgment or decree to
which the Target Fund or Target Entity is a party or by which it is bound;
(h) Except as otherwise disclosed to and accepted, in writing, by or
on behalf of the Acquiring Fund, all material contracts or other
commitments of the Target Fund (other than this Agreement and certain
investment contracts, including swap agreements, options, futures and
forward contracts) will terminate with respect to the Target Fund without
liability to the Target Fund or may otherwise be assigned to the Acquiring
Fund without the payment of any fee (penalty or otherwise) or acceleration
of any obligations of the Target Fund on or prior to the Closing Date;
(i) Except as otherwise disclosed to and accepted, in writing, by or
on behalf of the Acquiring Fund, no litigation or administrative proceeding
or investigation of or before any court, tribunal, arbitrator, governmental
body or FINRA is presently pending or, to the Target Fund's knowledge,
threatened against the Target Fund that, if adversely determined, would
materially and adversely affect the Target Fund's financial condition or
the conduct of its business. The Target Fund and the Target Entity, without
any special investigation or inquiry, know of no facts that might form the
basis for the institution of such proceedings and neither the Target Entity
nor the Target Fund is a party to or subject to the provisions of any
order, decree or judgment of any court, governmental body or FINRA that
materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
-6-
(j) The financial statements of the Target Fund for the Target Fund's
most recently completed fiscal year have been audited by the independent
registered public accounting firm identified in the Target Fund's
prospectus or statement of additional information included in the Target
Fund's registration statement on Form N-1A (the "Prospectus" and "Statement
of Additional Information"). Such statements, as well as the unaudited,
semi-annual financial statements for the semi-annual period next succeeding
the Target Fund's most recently completed fiscal year, if any, were
prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") consistently applied, and such statements
(copies of which have been furnished or made available to the Acquiring
Fund) present fairly, in all material respects, the financial condition of
the Target Fund as of such date in accordance with GAAP, and there are no
known contingent liabilities of the Target Fund required to be reflected on
a balance sheet (including the notes thereto) in accordance with GAAP as of
such date not disclosed therein;
(k) Since the last day of the Target Fund's most recently completed
fiscal year, there has not been any material adverse change in the Target
Fund's financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, except as otherwise
disclosed to and accepted by the Acquiring Fund in writing. For the
purposes of this subparagraph, a decline in net asset value due to declines
in market values of securities held by the Target Fund, the redemption of
the Target Fund's shares by shareholders of the Target Fund or the
discharge of the Target Fund's ordinary course liabilities shall not
constitute a material adverse change;
(l) On the Closing Date, all material Returns (as defined below) of
the Target Fund required by law to have been filed by such date (including
any extensions) shall have been filed and are or will be true, correct and
complete in all material respects, and all Taxes (as defined below) shown
as due or claimed to be due by any government entity shall have been paid
or provision has been made for the payment thereof. To the Target Fund's
knowledge, no such Return is currently under audit by any Federal, state,
local or foreign Tax authority; no assessment has been asserted with
respect to such Returns; there are no levies, liens or other encumbrances
on the Target Fund or its assets resulting from the non-payment of any
Taxes; no waivers of the time to assess any such Taxes are outstanding nor
are any written requests for such waivers pending; and adequate provision
has been made in the Target Fund financial statements for all Taxes in
respect of all periods ended on or before the date of such financial
statements. As used in this Agreement, "Tax" or "Taxes" means (i) any tax,
governmental fee or other like assessment or charge of any kind whatsoever
(including, but not limited to, withholding on amounts paid to or by any
person), together with any interest, penalty, addition to tax or additional
amount imposed by any governmental authority (domestic or foreign)
responsible for the imposition of any such tax. "Return" means reports,
returns, information returns, elections, agreements, declarations, or other
documents of any nature or kind (including any attached schedules,
supplements and additional or supporting material) filed or required to be
filed with respect to Taxes, including any claim for refund, amended return
or declaration of estimated Taxes (and including any amendments with
respect thereto);
(m) The Target Fund has elected to be a regulated investment company
under Subchapter M of the Code and is a fund that is treated as a separate
corporation under Section 851(g) of the Code. The Target Fund has qualified
for treatment as a regulated investment company for each
-7-
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. In order to (i)
ensure continued qualification of the Target Fund for treatment as a
"regulated investment company" for tax purposes and (ii) eliminate any tax
liability of the Target Fund arising by reason of undistributed investment
company taxable income or net capital gain, the Target Fund, will declare
on or prior to the Valuation Date to the shareholders of Target Fund a
dividend or dividends that, together with all previous such dividends,
shall have the effect of distributing (A) all of Target Fund's investment
company taxable income (determined without regard to any deductions for
dividends paid) for the taxable year ended prior to the Closing Date and
substantially all of such investment company taxable income for the short
taxable year beginning on the first day of its current taxable year and
ending on the Closing Date and (B) all of Target 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 short
taxable year (in each case after reduction for any capital loss carryover);
(n) All issued and outstanding shares of the Target Fund are, and on
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the Target Entity and, in every state where
offered or sold, such offers and sales have been in compliance in all
material respects with applicable registration and/or notice requirements
of the 1933 Act and state and District of Columbia securities laws. All of
the issued and outstanding shares of the Target Fund will, at the time of
Closing, be held by the persons and in the amounts set forth in the records
of the Target Transfer Agent, on behalf of the Target Fund. The Target Fund
does not have and will not have outstanding as of the Closing Date any
options, warrants or other rights to subscribe for or purchase any of the
shares of the Target Fund, nor is there outstanding any security
convertible into any of the Target Fund's shares, except for the automatic
conversion right of holders of Class B shares, as applicable, of the Target
Fund to convert to Class A shares in accordance with the terms set forth in
the Target Fund's Prospectus and Statement of Additional Information and
Governing Documents;
(o) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
action, if any, on the part of the Board of Trustees of the Target Entity,
on behalf of the Target Fund, and subject to the approval of the
shareholders of the Target Fund, and the due authorization, execution and
delivery of this Agreement by the other parties hereto, this Agreement will
constitute a valid and binding obligation of the Target Fund, enforceable
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(p) As of the date of this Agreement or within a certain time
thereafter as mutually agreed by the parties, the Target Fund has provided
the Acquiring Fund with all information relating to the Target Fund
reasonably necessary for the preparation of the N-14 Registration Statement
(as defined in Section 5.1(b) hereof), in compliance with the 1933 Act, the
1934 Act and the 1940 Act in connection with the meeting of shareholders of
the Target Fund to approve this Agreement and the transactions contemplated
hereby. As of the effective date of the N-14 Registration Statement, the
date of the meeting of shareholders of the Target Fund and the Closing
Date, such information provided by any Target Fund will not contain any
untrue
-8-
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading;
provided, however, that the representations and warranties in this
subparagraph shall not apply to statements in or omissions from the N-14
Registration Statement made in reasonable reliance upon and in conformity
with information that was furnished by the Acquiring Fund for use therein;
(q) The books and records of the Target Fund are true and correct in
all material respects and contain no material omissions with respect to
information required to be maintained under laws, rules, and regulations
applicable to the Target Fund;
(r) The Target Entity 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
(s) The Target Fund has no unamortized or unpaid organizational fees
or expenses.
4.2. The Acquiring Entity, on behalf of itself or, where applicable, an
Acquiring Fund, represents and warrants to the Target Entity and its
corresponding Target Fund as follows:
(a) The Acquiring Fund is duly organized as a series of the Acquiring
Entity, which is a statutory trust duly formed, validly existing, and in
good standing under the laws of the State of Delaware, with power under its
Amended and Restated Agreement and Declaration of Trust, as amended (the
"Agreement and Declaration of Trust") and by-laws to own all of its
properties and assets and to carry on its business as it is now being
conducted, and to enter into this Agreement and perform its obligations
hereunder;
(b) The Acquiring Entity is a registered investment company classified
as a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act and the registration
of the shares of the Acquiring Fund under the 1933 Act are in full force
and effect;
(c) No consent, approval, authorization, or order of any court,
governmental authority or FINRA is required for the consummation by the
Acquiring Fund and the Acquiring Entity of the transactions contemplated
herein, except such as have been or will be obtained at or prior to the
Closing Date under the 1933 Act, the 1934 Act, the 1940 Act and state
securities laws;
(d) The current prospectus and statement of additional information of
the Acquiring Fund and each prospectus and statement of additional
information of the Acquiring Fund used at all times between the
commencement of operations of the Acquiring Fund and the date of this
Agreement conforms or conformed at the time of its use in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act
and the rules and regulations of the Commission thereunder and does not or
did not at the time of its use include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not materially misleading;
(e) The Acquiring Fund is in compliance in all material respects with
the applicable investment policies and restrictions set forth in the
Acquiring Fund's prospectus and statement of
-9-
additional information and the value of the net assets of the Acquiring
Fund is determined using portfolio valuation methods that comply in all
material respects with the requirements of the 1940 Act and the rules and
regulations of the Commission thereunder and the pricing and valuation
procedures of the Acquiring Fund and there have been no material
miscalculations of the net asset value of the Acquiring Fund or the net
asset value per share of the Acquiring Fund (or any class thereof) during
the twelve month period preceding the date hereof which would have a
material adverse effect on such Acquiring Fund or its properties or assets;
(f) Except as otherwise disclosed to and accepted, in writing, by or
on behalf of the Target Fund, the Acquiring Fund is not engaged currently,
and the execution, delivery and performance of this Agreement will not
result, in (i) a material violation of the Acquiring Entity's Agreement and
Declaration of Trust or by-laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring Fund or the
Acquiring Entity is a party or by which it is bound, or (ii) the
acceleration of any obligation, or the imposition of any lien, encumbrance,
penalty, or additional fee under any agreement, indenture, instrument,
contract, lease, judgment or decree to which the Acquiring Fund or the
Acquiring Entity is a party or by which it is bound;
(g) Except as otherwise disclosed to and accepted in writing by or on
behalf of the Target Fund, no litigation or administrative proceeding or
investigation of or before any court, tribunal, arbitrator, governmental
body or FINRA is presently pending or, to the Acquiring Fund's knowledge,
threatened against the Acquiring Fund that, if adversely determined, would
materially and adversely affect the Acquiring Fund's financial condition or
the conduct of its business. The Acquiring Fund and the Acquiring Entity,
without any special investigation or inquiry, know of no facts that might
form the basis for the institution of such proceedings and neither the
Acquiring Entity nor the Acquiring Fund is a party to or subject to the
provisions of any order, decree or judgment of any court, governmental body
or FINRA that materially and adversely affects its business or its ability
to consummate the transactions herein contemplated;
(h) The financial statements of the Acquiring Fund for the Acquiring
Fund's most recently completed fiscal year have been audited by the
independent registered public accounting firm identified in the Acquiring
Fund's prospectus or statement of additional information included in the
Acquiring Fund's registration statement on Form N-1A. Such statements, as
well as the unaudited, semi-annual financial statements for the semi-annual
period next succeeding the Acquiring Fund's most recently completed fiscal
year, if any, were prepared in accordance with GAAP consistently applied,
and such statements (copies of which have been furnished or made available
to the Target Fund) present fairly, in all material respects, the financial
condition of the Acquiring Fund as of such date in accordance with GAAP,
and there are no known contingent liabilities of the Acquiring Fund
required to be reflected on a balance sheet (including the notes thereto)
in accordance with GAAP as of such date not disclosed therein;
(i) Since the last day of the Acquiring Fund's most recently completed
fiscal year, there has not been any material adverse change in the
Acquiring Fund's financial condition, assets, liabilities or business,
other than changes occurring in the ordinary course of business, except as
otherwise disclosed to and accepted by the Target Fund in writing. For the
purposes of this subparagraph, a decline in net asset value due to declines
in market values of securities held by the Acquiring Fund, the redemption
of the Acquiring Fund's shares by shareholders of the
-10-
Acquiring Fund or the discharge of the Acquiring Fund's ordinary course
liabilities shall not constitute a material adverse change;
(j) On the Closing Date, all material Returns of the Acquiring Fund
required by law to have been filed by such date (including any extensions)
shall have been filed and are or will be true, correct and complete in all
material respects, and all Taxes shown as due or claimed to be due by any
government entity shall have been paid or provision has been made for the
payment thereof. To the Acquiring Fund's knowledge, no such Return is
currently under audit by any Federal, state, local or foreign Tax
authority; no assessment has been asserted with respect to such Returns;
there are no levies, liens or other encumbrances on the Acquiring Fund or
its assets resulting from the non-payment of any Taxes; no waivers of the
time to assess any such Taxes are outstanding nor are any written requests
for such waivers pending; and adequate provision has been made in the
Acquiring Fund financial statements for all Taxes in respect of all periods
ended on or before the date of such financial statements.
(k) The Acquiring Fund has elected to be a regulated investment
company under Subchapter M of the Code and is a fund that is treated as a
separate corporation under Section 851(g) of the Code. The Acquiring Fund
has qualified for treatment as a regulated investment company for each
taxable year since inception that has ended prior to the Closing Date and
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 Acquiring Fund
has no earnings or profits accumulated in any taxable year in which the
provisions of Subchapter M of the Code did not apply to it.
(l) All issued and outstanding Acquiring Fund shares are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Acquiring Entity and, in every state where
offered or sold, such offers and sales have been in compliance in all
material respects with applicable registration and/or notice requirements
of the 1933 Act and state and District of Columbia securities laws. The
Acquiring Fund does not have and will not have outstanding as of the
Closing Date any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund shares (other than rights presented by this
contract), nor is there outstanding any security convertible into any
Acquiring Fund shares;
(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 trustees of the Acquiring Entity, on
behalf of the Acquiring Fund, and subject to the approval of shareholders
of the Target Fund and the due authorization, execution and delivery of
this Agreement by the other parties hereto, this Agreement will constitute
a valid and binding obligation of the Acquiring Fund, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(n) The shares of the Acquiring Fund to be issued and delivered to the
Target Fund, for the account of the Target Fund Shareholders, pursuant to
the terms of this Agreement, will on the Closing Date have been duly
authorized and, when so issued and delivered, will be duly and validly
issued Acquiring Fund shares, and, upon receipt of the Target Fund's Assets
in
-11-
accordance with the terms of this Agreement, will be fully paid and
non-assessable by the Acquiring Entity;
(o) The books and records of the Acquiring Fund are true and correct
in all material respects and contain no material omissions with respect to
information required to be maintained under laws, rules, and regulations
applicable to the Acquiring Fund;
(p) The Acquiring Entity 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 Acquiring Fund has no unamortized or unpaid organizational
fees or expenses for which it does not expect to be reimbursed by Invesco
or its affiliates; and
(r) As of the effective date of the N-14 Registration Statement (as
defined in Section 5.1(b)), the date of the meeting of shareholders of the
Target Fund and the Closing Date, the information provided by any Acquiring
Fund for use in the N-14 Registration Statement will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading;
provided, however, that the representations and warranties in this
subparagraph shall not apply to statements in or omissions from the N-14
Registration Statement made in reasonable reliance upon and in conformity
with information that was furnished by the Target Fund for use therein.
5. COVENANTS OF THE ACQUIRING FUND AND THE TARGET FUND
5.1. With respect to each Reorganization:
(a) The Acquiring Fund and the Target Fund, except with respect to the
transactions contemplated by Section 1.2(a) and any dividends or
distribution that may be advisable as a result of such transactions, each:
(i) will operate its business in the ordinary course and substantially in
accordance with past practices between the date hereof and the Closing Date
for the Reorganization, it being understood that such ordinary course of
business may include the declaration and payment of customary dividends and
distributions, and any other distribution that may be advisable, and (ii)
shall use its reasonable best efforts to preserve intact its business
organization and material assets and maintain the rights, franchises and
business and customer relations necessary to conduct the business
operations of the Acquiring Fund or the Target Fund, as appropriate, in the
ordinary course in all material respects.
(b) The parties hereto shall cooperate in preparing, and the Acquiring
Entity shall file with the Commission, a registration statement on Form
N-14 under the 1933 Act which shall properly register the Acquiring Fund
shares to be issued in connection with the Reorganization and include a
proxy statement with respect to the votes of the shareholders of the Target
Fund to approve the Reorganization (the "N-14 Registration Statement").
(c) The Target Entity will call a meeting of the shareholders of the
Target Fund to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated
herein. The Target Entity shall, through its board of trustees, if
-12-
considered by such trustees to be consistent with their fiduciary
obligations, recommend to the shareholders of the Target Fund approval of
this Agreement.
(d) The Target Fund covenants that the Acquiring Fund shares to be
issued pursuant to this Agreement are not being acquired for the purpose of
making any distribution thereof, other than in accordance with the terms of
this Agreement.
(e) The Target Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the
beneficial ownership of the Target Fund's shares.
(f) The Target Entity will at or prior to the Closing provide the
Acquiring Fund with a copy (which may be in electronic form) of the
shareholder ledger accounts including, without limitation, the name,
address and taxpayer identification number of each shareholder of record,
the number of shares of beneficial interest held by each shareholder, the
dividend reinvestment elections applicable to each shareholder, and the
backup withholding and nonresident alien withholding certifications,
notices or records on file with the Target Fund with respect to each
shareholder, for all of the shareholders of record of the Target Fund as of
the close of business on the Valuation Date, who are to become holders of
the Acquiring Fund as a result of the transfer of Assets (the "Target Fund
Shareholder Documentation"), certified by its transfer agent or its
President or Vice-President to the best of their knowledge and belief. The
information to be provided under this sub-section shall be provided at or
prior to the Closing.
(g) Subject to the provisions of this Agreement, the Acquiring Fund
and the Target Fund will each take, or cause to be taken, all action, and
do or cause to be done all things, reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by
this Agreement.
(h) As soon as is reasonably practicable after the Closing, the Target
Fund will make one or more liquidating distributions to its shareholders
consisting of the applicable class of shares of the Acquiring Fund received
at the Closing, as set forth in Section 1.2(d) hereof.
(i) The Acquiring Fund and the Target Fund shall each use their
reasonable best efforts prior to Closing to fulfill or obtain the
fulfillment of the conditions precedent to effect the transactions
contemplated by this Agreement.
(j) The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and
such of the state blue sky or securities laws as may be necessary in order
to continue its operations after the Closing Date.
(k) It is the intention of the parties to treat each Reorganization as
a taxable transaction that does not qualify as a tax-free reorganization
within the meaning of Section 368(a)(1)(A) of the Code. None of the parties
to this Agreement 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.
(l) Any reporting responsibility of the Target Fund, including, but
not limited to, the responsibility for filing regulatory reports, tax
returns relating to tax periods
-13-
ending on or prior to the Closing Date (whether due before or after the
Closing Date), or other documents with the Commission, any state securities
commission, and any Federal, state or local tax authorities or any other
relevant regulatory authority, is and shall remain the responsibility of
the Target Fund.
(m) On or prior to the signing of this Agreement or within twenty (20)
business days thereafter, the Target Fund shall have delivered to the
Acquiring Fund copies of: (1) the federal, state and local income tax
returns filed by or on behalf of the Target Fund for the prior three (3)
taxable years; (2) any of the following that have been issued to or for the
benefit of or that otherwise affect the Target Fund and which have
continuing relevance: (a) rulings, determinations, holdings or opinions
issued by any federal, state, local or foreign tax authority and (b) legal
opinions; and (3) any organizational documents, including without
limitation, the declarations of trust and by-laws, together with the board
meeting minutes and consent of trustees and shareholders with respect to
any wholly-owned subsidiaries of the Target Fund.
(n) The contingent deferred sales charge ("CDSC") applicable to Class
B5 and Class C5 shares of the Acquiring Fund issued in connection with the
Reorganization will be calculated based on the CDSC schedule of Class B and
Class C shares, respectively, of the Target Fund and, for purposes of
calculating the CDSC, recipients of such Class B5 and Class C5 shares of
the Acquiring Fund shall be deemed to have acquired such shares on the
date(s) that the corresponding shares of the Target Fund were acquired by
the shareholder.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TARGET FUND
6.1. With respect to each Reorganization, the obligations of the Target
Entity, on behalf of the Target Fund, to consummate the transactions provided
for herein shall be subject, at the Target Fund's election, to the performance
by the Acquiring Fund of all of the obligations to be performed by it hereunder
on or before the Closing Date and, in addition thereto, the following
conditions:
(a) All representations and warranties of the Acquiring Fund and the
Acquiring Entity contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be
affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the
Closing Date;
(b) The Acquiring Entity shall have delivered to the Target Entity on
the Closing Date a certificate executed in its name by its President or
Vice President and Treasurer, in form and substance reasonably satisfactory
to the Target Entity and dated as of the Closing Date, to the effect that
the representations and warranties of or with respect to the Acquiring Fund
made in this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement;
(c) The Acquiring Entity and the Acquiring Fund shall have performed
all of the covenants and complied with all of the provisions required by
this Agreement to be performed or complied with by the Acquiring Entity and
the Acquiring Fund, on or before the Closing Date;
-14-
(d) The Target Fund and the Acquiring Fund shall have agreed on the
number of full and fractional shares of each class of the Acquiring Fund
set forth on Exhibit A hereto to be issued in connection with the
Reorganization after such number has been calculated in accordance with
Section 1.2 hereto;
(e) The Target Entity shall have received on the Closing Date the
opinion of Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP ("Xxxxxxxx Ronon"), counsel
to the Acquiring Entity (which may rely on certificates of officers or
trustees of the Acquiring Entity), dated as of the Closing Date, covering
the following points:
(i) The Acquiring Entity is a statutory trust duly formed,
validly existing and in good standing under the laws of the State of
Delaware and has the trust power to own all of the Acquiring Fund's
properties and assets and to conduct its business, including that of the
Acquiring Fund, as a registered investment company as described in its
organizational documents or in the most recently filed registration
statement of the Acquiring Fund;
(ii) The Acquiring Entity is a registered investment company
classified as a management company of the open-end type with respect to
each series of shares it offers, including the Acquiring Fund, under the
1940 Act, and its registration with the Commission as an investment company
under the 1940 Act is in full force and effect;
(iii) The Agreement has been duly authorized by the Acquiring
Entity on behalf of the Acquiring Fund and, assuming due authorization,
execution and delivery of the Agreement by the Target Entity, the Target
Fund and VKAM is a valid and binding obligation of the Acquiring Entity, on
behalf of the Acquiring Fund, enforceable against the Acquiring Entity in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent conveyance, reorganization, receivership, moratorium
and other similar laws relating to or affecting creditors' rights
generally, general equity principles (whether considered in a proceeding in
equity or at law) and to an implied covenant of good faith and fair
dealing;
(iv) The Acquiring Fund shares to be issued to the Target Fund
Shareholders as provided by this Agreement are duly authorized, upon such
delivery will be validly issued and upon receipt of the Target Fund's
Assets will be fully paid and non-assessable by the Acquiring Entity and no
shareholder of an Acquiring Fund has any preemptive rights to subscription
or purchase in respect thereof; and
(v) The execution and delivery of the Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
violation of the Acquiring Entity's Agreement and Declaration of Trust or
By-laws or a breach or default under any agreement pertaining to the
Acquiring Fund identified as an exhibit in Part C of the registration
statement on Form N-1A last filed by Acquiring Entity or, to the knowledge
of such counsel, result in the acceleration of any obligation or the
imposition of any penalty under any such agreement.
-15-
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
7.1. With respect to each Reorganization, the obligations of the Acquiring
Entity, on behalf of the Acquiring Fund, to consummate the transactions provided
for herein shall be subject, at the Acquiring Fund's election, to the
performance by the Target Fund of all of the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
(a) All representations and warranties of the Target Entity and the
Target Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date,
with the same force and effect as if made on and as of the Closing Date;
(b) The Target Entity, on behalf of the Target Fund, shall have
delivered to the Acquiring Entity on the Closing Date (i) a statement of
the Target Fund's Assets, together with a list of portfolio securities of
the Target Fund, as of the Closing Date, certified by the Treasurer of the
Target Entity, (ii) the Target Fund Shareholder Documentation, (iii) the
AML Documentation, and (iv) to the extent permitted by applicable law, all
information pertaining to, or necessary or useful in the calculation or
demonstration of, the investment performance of the Target Fund;
(c) The Target Entity shall have delivered to the Acquiring Entity on
the Closing Date a certificate executed in its name by its President or
Vice President and Treasurer, in form and substance reasonably satisfactory
to the Acquiring Entity and dated as of the Closing Date, to the effect
that the representations and warranties of or with respect to the Target
Fund made in this Agreement are true and correct at and as of the Closing
Date, except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as the Acquiring Entity shall
reasonably request;
(d) The Target Custodian and the Target Transfer Agent shall have
delivered the certificates contemplated by Sections 3.2(b) and 3.2(d) of
this Agreement, respectively, and the Target Transfer Agent or the Target
Fund's President or Vice President shall have delivered the certificate
contemplated by Section 5.1(f) of this Agreement, duly executed by an
authorized officer of the Target Custodian, the Target Transfer Agent, the
Target Fund's President or the Target Fund's Vice President, as applicable.
(e) The Target Entity and the Target Fund shall have performed all of
the covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by the Target Entity and the
Target Fund, on or before the Closing Date;
(f) The Target Fund and the Acquiring Fund shall have agreed on the
number of full and fractional shares of each class of the Acquiring Fund
set forth on Exhibit A hereto to be issued in connection with the
Reorganization after such number has been calculated in accordance with
Section 1.2 hereto;
(g) The Target Fund shall have declared and paid a distribution or
distributions prior to the Closing that, together with all previous
distributions, shall have the effect of distributing to its shareholders
(i) all of its investment company taxable income (determined without regard
to any deductions for dividends paid) and all of its net realized capital
gains, if any, for the period from the close of its last fiscal year to the
Closing Time on the Closing Date; and (ii) any undistributed
-16-
investment company taxable income and net realized capital gains from any
period to the extent not otherwise already distributed;
(h) The Acquiring Entity shall have received on the Closing Date the
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to the Target
Entity (which may rely on certificates of officers or trustees of the
Target Entity), dated as of the Closing Date, covering the following
points:
(i) The Target Entity is a statutory trust duly formed, validly
existing and in good standing under the laws of the State of Delaware and
has the trust power to own all of Target Fund's properties and assets, and
to conduct its business, including that of the Target Fund, as a registered
investment company as described in its organizational documents or in the
most recently filed registration statement of the Target Fund;
(ii) The Target Entity is a registered investment company
classified as a management company of the open-end type with respect to
itself and, if applicable, each series of shares it offers, including the
Target Fund, under the 1940 Act, and its registration with the Commission
as an investment company under the 1940 Act is in full force and effect;
(iii) The Agreement has been duly authorized by the Target Entity
on behalf of the Target Fund and, assuming due authorization, execution and
delivery of the Agreement by the Acquiring Entity and the Acquiring Fund,
is a valid and binding obligation of the Target Entity, on behalf of the
Target Fund, enforceable against the Target Entity in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
conveyance, reorganization, receivership, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equity
principles (whether considered in a proceeding in equity or at law) and to
an implied covenant of good faith and fair dealing; and
(iv) The execution and delivery of the Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
violation of, the Target Entity's Governing Documents or a breach or
default under any agreement pertaining to the Target Fund identified as an
exhibit in Part C of the registration statement on Form N-1A last filed by
Target Entity or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty under any
such agreement.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
TARGET FUND
With respect to each Reorganization, if any of the conditions set forth
below have not been satisfied on or before the Closing Date with respect to the
Target Fund or the Acquiring Fund, the Acquiring Entity or Target Entity,
respectively, shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
-17-
8.1. The Agreement shall have been approved by the requisite vote of the
holders of the outstanding shares of the Target Fund in accordance with the
provisions of the Target Entity's Governing Documents, Delaware law, and the
1940 Act, and certified copies of the voting record from the proxy solicitor
evidencing such approval shall have been delivered to the Acquiring Fund.
Notwithstanding anything herein to the contrary, neither the Target Fund nor the
Acquiring Fund may waive the conditions set forth in this Section 8.1;
8.2. The Agreement and transactions contemplated herein shall have been
approved by the Board of Trustees of the Target Entity and the Board of Trustees
of the Acquiring Entity and each party shall have delivered to the other party a
copy of the resolutions approving this Agreement and the transactions
contemplated in connection herewith adopted by such party's Board of Trustees,
certified by the secretary or equivalent officer. Notwithstanding anything
herein to the contrary, neither the Target Fund nor the Acquiring Fund may waive
the conditions set forth in this Section 8.2;
8.3. On the Closing Date, no action, suit or other proceeding shall be
pending or, to the Target Entity's or the Acquiring Entity's knowledge,
threatened before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement, the transactions contemplated herein or the MS/Invesco Transaction;
8.4. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Acquiring Fund or Target Fund to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Target Fund, provided that either party hereto may for
itself waive any of such conditions;
8.5. 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 contemplated under the 1933 Act;
8.6. The Target Entity and the Acquiring Entity shall have received on or
before the Closing Date an opinion of Xxxxxxxx Ronon in form and substance
reasonably acceptable to the Target Entity and the Acquiring Entity, as to the
matters set forth on Schedule 8.6. In rendering such opinion, Xxxxxxxx Ronon may
request and rely upon representations contained in certificates of officers of
the Target Entity, the Acquiring Entity and others, and the officers of the
Target Entity and the Acquiring Entity shall use their best efforts to make
available such truthful certificates; and
8.7. The MS/Invesco Transaction contemplated by the Transaction Agreement
shall have been consummated.
9. BROKERAGE FEES AND EXPENSES
9.1. The parties hereto represent and warrant to each other that there are
no brokers or finders entitled to receive any payments in connection with the
transactions provided for herein.
-18-
9.2. Xxxxxx Xxxxxxx and Invesco will bear or arrange for an entity under
common ownership of Xxxxxx Xxxxxxx or Invesco to bear the expenses relating to
the Reorganizations, allocated among Xxxxxx Xxxxxxx and Invesco as set forth in
the Transaction Agreement. The costs of the Reorganizations shall include, but
not be limited to, costs associated with obtaining any necessary order of
exemption from the 1940 Act, if any, organizing each Acquiring Fund,
preparation, printing and distribution of the N-14 Registration Statement for
each Reorganization (including the prospectus/proxy statement contained
therein), legal fees, accounting fees, and expenses of holding shareholders'
meetings.
10. COOPERATION AND EXCHANGE OF INFORMATION
10.1. With respect to each Reorganization, prior to the Closing and for a
reasonable time thereafter, the Target Entity and the corresponding Acquiring
Entity will provide each other and their respective representatives with such
cooperation, assistance and information as is reasonably necessary (i) for the
filing of any Tax Return, for the preparation for any audit, and for the
prosecution or defense of any claim, suit or proceeding relating to any proposed
adjustment, or (ii) for any financial accounting purpose. Each such party or
their respective agents will retain until the applicable period for assessment
under applicable law (giving effect to any and all extensions or waivers) has
expired all returns, schedules and work papers and all material records or other
documents relating to Tax matters and financial reporting of tax positions of
the Target Fund and the Acquiring Fund for its taxable period first ending after
the Closing of the applicable Reorganization and for all prior taxable periods
for which the statute of limitation had not run at the time of the Closing,
provided that a Target Entity shall not be required to maintain any such
documents that it has delivered to the Acquiring Fund.
11. INDEMNIFICATION
11.1. With respect to a Reorganization, the Acquiring Entity, out of the
assets of the Acquiring Fund, and IAI agree to indemnify and hold harmless the
Target Entity and each of the Target Entity's officers and trustees from and
against any and all losses, claims, damages, liabilities or expenses (including,
without limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which, jointly and severally, the Target Entity or any of its
trustees or officers may become subject, insofar as such loss, claim, damage,
liability or expense (or actions with respect thereto) arises out of or is based
on any breach by the Acquiring Entity, on behalf of the Acquiring Fund, of any
of its representations, warranties, covenants or agreements set forth in this
Agreement. This indemnification obligation shall survive the termination of this
Agreement and the closing of the Reorganization.
11.2. With respect to a Reorganization, VKAM agrees to indemnify and hold
harmless the Acquiring Entity and its officers and trustees to the extent that a
Target Fund being merged into such Acquiring Entity is currently advised by VKAM
from and against any and all losses, claims, damages, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which, jointly and severally, the
Acquiring Entity or any of its trustees or officers may become subject, insofar
as such loss, claim, damage, liability or expense (or actions with respect
thereto) arises out of or is based on any breach by the Target Entity, on behalf
of the Target Fund, of any of its representations, warranties, covenants or
-19-
agreements set forth in this Agreement. This indemnification obligation shall
survive the termination of this Agreement and the closing of the Reorganization.
12. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES AND COVENANTS
12.1. Except as described in Section 9.2, each party agrees that no party
has made any representation, warranty or covenant not set forth herein and that
this Agreement constitutes the entire agreement between the parties.
12.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing shall survive the Closing.
13. TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned with respect to one or more (or all) Reorganizations by (i)
mutual agreement of the parties; or (ii) by either the Acquiring Entity or the
Target Entity if the Closing shall not have occurred on or before September 30,
2010, unless such date is extended by mutual agreement of the Acquiring Entity
and the Target Entity; or (iii) by any party if one or more other parties shall
have materially breached its obligations under this Agreement or made a material
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective trustees or officers,
except for (i) any such material breach or intentional misrepresentation or (ii)
the parties' respective obligations under Section 11, as to each of which all
remedies at law or in equity of the party adversely affected shall survive.
14. AMENDMENTS
This Agreement may be amended, modified or supplemented in a writing signed
by the parties hereto to be bound by such Amendment.
15. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by
facsimile, personal service or prepaid or certified mail addressed to:
For the Target Entity:
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxx
Fax: 000-000-0000
With a copy to:
-00-
Xxxxxx Xxxxxxx Investment Management
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx Yu
Fax: 000 000-0000
For Xxx Xxxxxx Asset Management:
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxx
Fax: 000-000-0000
With a copy to:
Xxxxxx Xxxxxxx Investment Management
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxx Yu
Fax: 000 000-0000
For the Acquiring Entity
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: 000-000-0000
Attn: General Counsel
with a copy to:
X. Xxxxxxx Xxxxxxx
Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
For Invesco Advisers, Inc.:
Two Peachtree Pointe
0000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Fax: 000-000-0000
Attn: General Counsel
-21-
16. HEADINGS; GOVERNING LAW; COUNTERPARTS; ASSIGNMENT; LIMITATION OF LIABILITY
16.1. The Article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16.2. 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.
16.3. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other parties. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
16.4. This agreement may be executed in any number of counterparts, each of
which shall be considered an original.
16.5. It is expressly agreed that the obligations of the parties hereunder
shall not be binding upon any of their respective trustees, shareholders,
nominees, officers, agents, or employees personally, but, except as provided in
Sections 9.2, 11.1 and 11.2 hereof, shall bind only the property of the
applicable Target Fund or the applicable Acquiring Fund as provided in the
Governing Documents of the Target Entity or the Agreement and Declaration of
Trust of the Acquiring Entity, respectively. The execution and delivery by such
officers shall not be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the property
of such party.
-22-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be approved on behalf of the Acquiring Fund and Target Fund.
AIM GROWTH SERIES, ON BEHALF OF ITS XXX XXXXXX RETIREMENT STRATEGY TRUST, ON
SERIES IDENTIFIED ON EXHIBIT A HERETO BEHALF OF ITS SERIES IDENTIFIED ON
EXHIBIT A HERETO
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxx III
--------------------------------- ------------------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxxx X. Xxxx III
Title: President Title: President and Principal Executive
Officer
INVESCO ADVISERS, INC. XXX XXXXXX ASSET MANAGEMENT
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxx III
--------------------------------- ------------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx III
Title: Co-President Title: Administrative Officer
-23-
EXHIBIT A
CHART OF REORGANIZATIONS
ACQUIRING FUND (AND SHARE CORRESPONDING TARGET FUND (AND
CLASSES) AND ACQUIRING ENTITY SHARE CLASSES) AND TARGET ENTITY
----------------------------- --------------------------------
AIM BALANCED RISK RETIREMENT XXX XXXXXX IN RETIREMENT
NOW FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2010
2010 FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2015
2010 FUND A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2020
2020 FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2025
2020 FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
-24-
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2030
2030 FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2035
2030 FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2040
2040 FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2045
2040 FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
AIM BALANCED RISK RETIREMENT XXX XXXXXX RETIREMENT 2050
2050 FUND, A SERIES OF AIM STRATEGY FUND, A SERIES OF VAN
GROWTH SERIES KAMPEN RETIREMENT STRATEGY TRUST
Class A5 Class A
Class C5 Class C
Class R5 Class R
Class Y Class I
-25-
SCHEDULE 1.2(C)
Excluded Liabilities
None
-26-
SCHEDULE 8.6
Tax Opinions
With respect to each Reorganization of a Target Fund of the Xxx Xxxxxx
Retirement Strategy Trust:
(i) The Target Fund will recognize gain or loss on the sale immediately
before Closing of all, or substantially all, of the Target Fund's assets for
cash (denominated in U.S. currency) pursuant to Section 1001(a) of the Code;
(ii) The Target Fund more likely than not will recognize gain or loss on
the transfer of any assets (other than cash denominated in U.S. currency) to,
and the assumption of its liabilities by, the Acquiring Fund in exchange solely
for Acquiring Fund shares pursuant to Section 1001(a) of the Code; Target Fund
more likely than not will have an adjusted tax basis in the Acquiring Fund
Shares purchased equal to their cost pursuant to Section 1012(a) of the Code;
(iii) Target Fund more likely than not will recognize gain or loss for U.S.
federal income tax purposes upon the distribution of the Acquiring Fund shares
received by the Target Fund to the Target Fund shareholders in complete
liquidation of the Target Fund in connection with the Reorganization in an
amount equal to the difference, if any, between the fair market value of the
Acquiring Fund Shares distributed and the Target Fund's tax basis in such shares
pursuant to Section 336(a) of the Code;
(iv) Target Fund shareholders more likely than not will recognize gain or
loss for U.S. federal income tax purposes on the exchange of their Target Fund
shares solely for Acquiring Fund shares in connection with the Reorganization in
an amount equal to the difference between the fair market value of the Acquiring
Fund shares received by a Target Fund shareholder and the Target Fund
shareholder's tax basis in his or her Target Fund shares pursuant to Section
331(a) of the Code;
(v) The aggregate tax basis of the Acquiring Fund shares received by the
Target Fund shareholders more likely than not will be equal to the fair market
value of such Acquiring Fund shares on the date of distribution pursuant to
Section 334(a) of the Code;
(vi) The holding period of the Acquiring Fund shares received by the Target
Fund shareholders more likely than not will begin on the day following the date
of receipt of the Acquiring Fund shares (cf., Rev. Rul. 54-607, 1954-2 C.B.
177); and
(vii) The Acquiring Fund will recognize no gain or loss upon its receipt of
the assets of the Target Fund in exchange solely for the assumption of
liabilities of the target Fund and issuance of the Acquiring Fund shares
pursuant to Section 1032(a) of the Code.
-27-
