EX-99.77Q1 OTHR EXHB 10 ex77q1g-a.txt EXHIBIT SUB-ITEM 77Q1(G) APPENDIX I AGREEMENT AND PLAN OF REORGANIZATION FOR ATLANTIC WHITEHALL EQUITY INCOME FUND A SEPARATE PORTFOLIO OF ATLANTIC WHITEHALL FUNDS TRUST JULY 7, 2009 TABLE OF CONTENTS
PAGE ---- ARTICLE 1 DEFINITIONS ................................................... 2 SECTION 1.1. Definitions ............................................ 2 ARTICLE 2 TRANSFER OF ASSETS ............................................ 6 SECTION 2.1. Reorganization of Selling Fund ......................... 6 SECTION 2.2. Computation of Net Asset Value ......................... 6 SECTION 2.3. Valuation Date ......................................... 6 SECTION 2.4. Delivery ............................................... 6 SECTION 2.5. Termination of Series and Redemption of Selling Fund Shares ................................................. 7 SECTION 2.6. Issuance of Shell Fund Shares .......................... 7 SECTION 2.7. Investment Securities .................................. 8 SECTION 2.8. Liabilities ............................................ 8 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER ...................... 8 SECTION 3.1. Organization; Authority ................................ 8 SECTION 3.2. Registration and Regulation of Seller .................. 8 SECTION 3.3. Financial Statements ................................... 9 SECTION 3.4. No Material Adverse Changes; Contingent Liabilities .... 9 SECTION 3.5. Selling Fund Shares; Business Operations ............... 9 SECTION 3.6. Accountants ............................................ 10 SECTION 3.7. Binding Obligation ..................................... 10 SECTION 3.8. No Breaches or Defaults ................................ 10 SECTION 3.9. Authorizations or Consents ............................. 10 SECTION 3.10. Permits ................................................ 11 SECTION 3.11. No Actions, Suits or Proceedings ....................... 11 SECTION 3.12. Contracts .............................................. 11 SECTION 3.13. Properties and Assets .................................. 11 SECTION 3.14. Taxes .................................................. 12 SECTION 3.15. Benefit and Employment Obligations ..................... 12 SECTION 3.16. Brokers ................................................ 12 SECTION 3.17. Voting Requirements .................................... 13 SECTION 3.18. State Takeover Statutes ................................ 13 SECTION 3.19. Books and Records ...................................... 13 SECTION 3.20. Prospectus and Statement of Additional Information ..... 13 SECTION 3.21. No Distribution ........................................ 13 SECTION 3.22. Liabilities of Selling Fund ............................ 13 SECTION 3.23. Shareholder Expenses ................................... 13 SECTION 3.24. Intercompany Indebtedness; Consideration ............... 13 SECTION 3.25. Information Supplied by Seller ......................... 13 SECTION 3.26. Selling Fund Fiscal Year ............................... 13
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PAGE ---- ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER ....................... 14 SECTION 4.1. Organization; Authority ................................ 14 SECTION 4.2. Registration and Regulation of Buyer ................... 14 SECTION 4.3. Financial Statements ................................... 14 SECTION 4.4. Registration of Shell Fund Shares ...................... 14 SECTION 4.5. Accountants ............................................ 15 SECTION 4.6. Binding Obligation ..................................... 15 SECTION 4.7. No Breaches or Defaults ................................ 15 SECTION 4.8. Authorizations or Consents ............................. 16 SECTION 4.9. Permits ................................................ 16 SECTION 4.10. No Actions, Suits or Proceedings ....................... 16 SECTION 4.11. Taxes .................................................. 16 SECTION 4.12. Brokers ................................................ 17 SECTION 4.13. Representations Concerning the Reorganization .......... 17 SECTION 4.14. Prospectus and Statement of Additional Information ..... 17 SECTION 4.15. Intercompany Indebtedness; Consideration ............... 18 ARTICLE 5 COVENANTS ..................................................... 18 SECTION 5.1. Conduct of Business .................................... 18 SECTION 5.2. Expenses ............................................... 18 SECTION 5.3. Further Assurances ..................................... 18 SECTION 5.4. Notice of Events ....................................... 18 SECTION 5.5. Consents, Approvals and Filings ........................ 19 SECTION 5.6. Submission of Agreement to Shareholders ................ 19 SECTION 5.7. Distribution ........................................... 19 ARTICLE 6 CONDITIONS PRECEDENT TO THE REORGANIZATION .................... 19 SECTION 6.1. Conditions Precedent of Buyer .......................... 19 SECTION 6.2. Mutual Conditions ...................................... 21 SECTION 6.3. Conditions Precedent of Seller ......................... 22 ARTICLE 7 TERMINATION OF AGREEMENT ...................................... 23 SECTION 7.1. Termination ............................................ 23 SECTION 7.2. Survival After Termination ............................. 23 ARTICLE 8 MISCELLANEOUS ................................................. 24 SECTION 8.1. Survival of Representations, Warranties and Covenants .. 24 SECTION 8.2. Governing Law .......................................... 24 SECTION 8.3. Binding Effect, Persons Benefiting, No Assignment ...... 24
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PAGE ---- SECTION 8.4. Obligations of Buyer and Seller ........................ 24 SECTION 8.5. Amendments ............................................. 25 SECTION 8.6. Enforcement ............................................ 25 SECTION 8.7. Interpretation ......................................... 25 SECTION 8.8. Counterparts ........................................... 25 SECTION 8.9. Entire Agreement; Exhibits and Schedules ............... 25 SECTION 8.10. Notices ................................................ 25 SECTION 8.11. Representations by Investment Adviser .................. 26 SECTION 8.12. Successors and Assigns; Assignment ..................... 27
EXHIBIT A Excluded Liabilities of Selling Fund SCHEDULE 6.2(f) Tax Opinions iii AGREEMENT AND PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION, dated as of July 7, 2009 (this "Agreement"), by and among Atlantic Whitehall Funds Trust, a Delaware statutory trust ("Seller"), acting on behalf of Atlantic Whitehall Equity Income Fund ("Selling Fund"), a separate series of Seller, AIM Equity Funds, a Delaware statutory trust ("Buyer"), acting on behalf of AIM Disciplined Equity Fund ("Shell Fund"), a newly created series portfolio of Buyer, Invesco Aim Advisors, Inc. ("Invesco Aim"), and Stein Roe Investment Counsel, Inc., a Delaware corporation ("Stein Roe"). WITNESSETH WHEREAS, Seller is a management investment company registered with the SEC (as defined below) under the Investment Company Act (as defined below) that offers separate series of its shares representing interests in its investment portfolios, including Selling Fund, for sale to the public; and WHEREAS, Buyer is a management investment company registered with the SEC under the Investment Company Act that offers separate series of its shares representing interests in investment portfolios, including Shell Fund, for sale to the public; and WHEREAS, Seller desires to provide for the reorganization of Selling Fund through the transfer of all of its Assets (as defined below) to Shell Fund in exchange for the assumption by Shell Fund of the Liabilities (as defined below) of Selling Fund and the issuance by Buyer of shares of Shell Fund in the manner set forth in this Agreement; and WHEREAS, Invesco Aim serves as the investment adviser to Shell Fund and is making certain representations, warranties and agreements set forth in this Agreement; and WHEREAS, Stein Roe serves as the investment adviser to Selling Fund and is making certain representations, warranties and agreements set forth in this Agreement; and WHEREAS, the Board of Directors of Buyer has determined that the exchange of all of the assets of Selling Fund for Shell Fund Shares (as defined below) and the assumption of the liabilities of Selling Fund, as described in Section 2.8 herein, by Shell Fund is in the best interests of Shell Fund and its shareholders and that the interests of the existing shareholders of Shell Fund would not be diluted as a result of this transaction; and WHEREAS, the Board of Trustees of Seller has determined that the exchange of all of the assets of Selling Fund for Shell Fund Shares (as defined below) and the assumption of the liabilities of Selling Fund by Shell Fund, as described in Section 2.8 herein, is in the best interests of Selling Fund and its shareholders and that the interests of the existing shareholders of Selling Fund would not be diluted as a result of this transaction; and 1 WHEREAS, this Agreement is intended to be and is adopted by the parties hereto as a Plan of Reorganization within the meaning of the regulations under Section 368(a) of the Code (as defined below). NOW, THEREFORE, in consideration of the foregoing premises and the agreements and undertakings contained in this Agreement, Seller and Buyer agree as follows: Article 1 DEFINITIONS SECTION 1.1. Definitions. For all purposes in this Agreement, the following terms shall have the respective meanings set forth in this Section 1.1 (such definitions to be equally applicable to both the singular and plural forms of the terms herein defined): "Advisers Act" means the Investment Advisers Act of 1940, as amended, and all rules and regulations of the SEC adopted pursuant thereto. "Agreement" means this Agreement and Plan of Reorganization, together with all exhibits and schedules attached hereto and all amendments hereto and thereof. "Applicable Law" means the applicable laws of the state of Delaware and shall include the Delaware Statutory Trust Act. "AML Documentation" means the information and documentation maintained by Seller or its agents relating to the identification and verification of Selling Fund Shareholders under the USA PATRIOT ACT and other applicable anti-money laundering laws, rules and regulations. "Assets" means all assets and property of Selling Fund, including, without limitation, all cash, securities, commodities and futures interests, and dividends or interest or other receivables that are owned by Selling Fund, any deferred or prepaid expenses shown as an asset on the books of Selling Fund at the Closing, and 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. "Benefit Plan" means any material "employee benefit plan" (as defined in Section 3(3) of ERISA) and any material bonus, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, vacation, retirement, profit sharing, welfare plans or other plan, arrangement or understanding maintained or contributed to by Seller on behalf of Selling Fund, or otherwise providing benefits to any current or former employee, officer or director/trustee of Seller. "Buyer" means AIM Equity Funds, a Delaware statutory trust. "Buyer Counsel" means Stradley Ronon Stevens & Young, LLP. 2 "Buyer Custodian" means State Street Bank and Trust Company acting in its capacity as custodian for the assets of Shell Fund. "Buyer Registration Statement" means the registration statement on Form N-1A of Buyer, as amended, 1940 Act Registration No. 811-01424. "Closing" means the transfer of the Assets of Selling Fund to Shell Fund, the assumption of the Liabilities by Shell Fund and the issuance of Shell Fund Shares directly to Selling Fund Shareholders as described in Section 2.1 of this Agreement. "Closing Date" means September 21, 2009, or such other date as the parties may mutually agree upon. "Code" means the Internal Revenue Code of 1986, as amended, and all rules and regulations adopted pursuant thereto. "Effective Time" means immediately before the opening of business of the Shell Fund on the Closing Date, or such other time as the parties may mutually agree. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and all rules or regulations adopted pursuant thereto. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and all rules and regulations adopted pursuant thereto. "Governing Documents" means the organic documents which govern the business and operations of each of Buyer and Seller and shall include, as applicable, Trust Instrument, Amended and Restated Agreement and Declaration of Trust, Amended and Restated Bylaws and Bylaws. "Governmental Authority" means any foreign, United States or state government, government agency, department, board, commission (including the SEC) or instrumentality, and any court, tribunal or arbitrator of competent jurisdiction, and any governmental or non-governmental self-regulatory organization, agency or authority (including the NASD Regulation, Inc., the Commodity Futures Trading Commission, the National Futures Association, the Investment Management Regulatory Organization Limited and the Office of Fair Trading). "Investment Company Act" means the Investment Company Act of 1940, as amended, and all rules and regulations adopted pursuant thereto. "Liabilities" means the liabilities of Selling Fund (i) incurred in the ordinary course of business and included as a liability on the books and records of Selling Fund (and reflected in Selling Fund's net asset value) and set forth in Selling Fund's Statement of Assets and Liabilities as of the Closing Date delivered by the Seller, on behalf of Selling Fund, to Buyer, on behalf of Shell Fund, pursuant to Section 6.1(f) hereof or (ii) as otherwise mutually agreed to in writing by Buyer and Seller and identified on Exhibit A hereof as of the Closing Date. 3 "Lien" means any pledge, lien, security interest, charge, claim or encumbrance of any kind. "majority of the outstanding voting securities" means the affirmative vote of the lesser of: (a) 67% or more of the voting securities of Selling Fund present or represented by proxy at the Shareholders Meeting, if the holders of more than 50% of the outstanding voting securities of Selling Fund are present or represented by proxy; or (b) more than 50% of the outstanding voting securities of Selling Fund. "Material Adverse Effect" means an effect that would cause a change in the condition (financial or otherwise), properties, assets or prospects of an entity having an adverse monetary effect in an amount equal to or greater than $50,000. "NYSE" means the New York Stock Exchange. "Performance Calculation Information" shall have the meaning set forth in Section 3.19 of this Agreement. "Permits" shall have the meaning set forth in Section 3.10 of this Agreement. "Person" means an individual or a corporation, partnership, joint venture, association, trust, unincorporated organization or other entity. "Registration Statement on Form N-14" means the registration statement on Form N-14 pursuant to which the Shell Fund Shares to be issued pursuant to Section 2.6 shall be registered under the Securities Act. "Reorganization" means the acquisition of the Assets of Selling Fund by Shell Fund in consideration of the assumption by Shell Fund of the Liabilities and the issuance by Buyer of Shell Fund Shares directly to Selling Fund Shareholders as described in this Agreement. "Required Shareholder Vote" means, the affirmative vote of a "majority of the outstanding voting securities" of the Selling Fund. "Return" means any return, report or form or any attachment thereto required to be filed with any taxing authority. "SEC" means the United States Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended, and all rules and regulations adopted pursuant thereto. "Seller" means Atlantic Whitehall Funds Trust, a Delaware statutory trust. "Seller Custodian" means State Street Bank and Trust Company acting in its capacity as custodian for the assets of Selling Fund. 4 "Seller Registration Statement" means the registration statement on Form N-1A of Seller, as amended, 1940 Act Registration No. 811-08738. "Selling Fund" means Atlantic Whitehall Equity Income Fund, a separate series of Seller. "Selling Fund Auditors" means Ernst & Young L.L.P. "Selling Fund Financial Statements" means the audited Statement of Assets and Liabilities, Statements of Operations and Changes in Net Assets, and Schedule of Investments of Selling Fund at November 30, 2008. "Selling Fund Shareholders" means the holders of record of the outstanding Institutional Class shares of Selling Fund as of the close of regular trading on the NYSE on the Valuation Date. "Selling Fund Shares" means the issued and outstanding Institutional Class shares of Selling Fund. "Shareholders Meeting" means a meeting of the shareholders of Selling Fund convened in accordance with Applicable Law and the Governing Documents of Seller to consider and vote upon the approval of this Agreement, and any adjournments thereof. "Shell Fund" means AIM Disciplined Equity Fund, a separate series of Buyer. "Shell Fund Auditors" means PricewaterhouseCoopers LLP. "Shell Fund Share" and "Shell Fund Shares" means Class Y shares of Shell Fund issued pursuant to Section 2.6 of this Agreement. "Stein Roe" means Stein Roe Investment Counsel, Inc., a Delaware corporation "Tax" means any tax or similar governmental charge, impost or levy, including income taxes (including alternative minimum tax and estimated tax), franchise taxes, transfer taxes or fees, sales taxes, use taxes, gross receipts taxes, value added taxes, employment taxes, excise taxes, property taxes, withholding taxes, payroll taxes, minimum taxes, or windfall profit taxes) ad valorem or other taxes, stamp taxes, duties, fees, assessment or charges, whether payable directly or by withholding, together with any related penalties, fines, additions to tax or interest, imposed by the United States or any state, county, local or foreign government or subdivision or agency thereof and including any transferee or secondary liability in respect of any tax (whether imposed by law, contractual agreement or otherwise). "Termination Date" means December 31, 2009, or such later date as the parties may mutually agree upon. "Treasury Regulations" means the Federal income tax regulations adopted pursuant to the Code. 5 "USA PATRIOT ACT" means Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, Pub. L. No. 107-56, and rules and regulations adopted pursuant thereto. "Valuation Date" shall have the meaning set forth in Section 2.2 of this Agreement. Article 2 TRANSFER OF ASSETS SECTION 2.1. Reorganization of Selling Fund. At the Effective Time, Seller shall deliver all of the Assets of Selling Fund to Buyer Custodian for the account of Shell Fund in exchange for the assumption by Shell Fund of the Liabilities and delivery by Buyer directly to the holders of record as of the Effective Time of the issued and outstanding Institutional Class shares of Selling Fund of a number of Class Y shares of Shell Fund (including, if applicable, fractional shares rounded to the nearest thousandth), having an aggregate net asset value equal to the value of the net assets of Selling Fund so transferred, assigned and delivered, all determined and adjusted as provided in Section 2.2 below. Upon delivery of such Assets, Shell Fund will receive good and marketable title to such Assets free and clear of all Liens. SECTION 2.2. Computation of Net Asset Value. (a) The net asset value per share of Class Y shares of Shell Fund, and the value of the Assets and the amount of the Liabilities shall, in each case, be determined as of the close of regular trading on the NYSE, and after the declaration of any dividends, on the business day next preceding the Closing Date (the "Valuation Date"). (b) The net asset value of each Shell Fund Share shall be the net asset value per share computed with respect to Class Y as of the Valuation Date, using the evaluation procedures set forth in Shell Fund's then-current prospectus and statement of additional information and valuation procedures established by Shell Fund's Board of Trustees. (c) The value of the Institutional Class shares of Selling Fund and the value of the Assets and the amount of the Liabilities of the Institutional Class shares of Selling Fund to be transferred to the Shell Fund pursuant to this Agreement shall be computed as of the Valuation Date, using the evaluation procedures set forth in Selling Fund's then-current prospectus and statement of additional information and valuation procedures established by Selling Fund's Board of Trustees. (d) Subject to Sections 2.2(b) and (c) above, all computations of value regarding the Assets and Liabilities of Selling Fund and the net asset value per share of Class Y shares of Shell Fund to be issued pursuant to this Agreement shall be made by agreement of Seller and Buyer. The parties agree to use commercially reasonable efforts to resolve any material pricing differences between the prices of portfolio securities determined in accordance with their respective pricing policies and procedures. 6 SECTION 2.3. Valuation Date. The share transfer books of Selling Fund will be permanently closed as of the close of business on the Valuation Date and only requests for the redemption of shares of Selling Fund received in proper form prior to the close of regular trading on the NYSE on the Valuation Date shall be accepted by Selling Fund. Redemption requests thereafter received by Selling Fund shall be deemed to be redemption requests for the Class Y shares of the Shell Fund Shares (assuming that the transactions contemplated by this Agreement have been consummated), to be distributed to Selling Fund Shareholders under this Agreement. SECTION 2.4. Delivery. (a) No later than three (3) business days preceding the Closing Date, Seller shall instruct Seller Custodian to transfer all Assets held by Selling Fund to the account of Shell Fund maintained at Buyer Custodian. Such Assets shall be delivered by Seller to Buyer Custodian on the Closing Date. The Assets so delivered shall be duly endorsed in proper form for transfer in such condition as to constitute a good delivery thereof, in accordance with the custom of brokers, and shall be accompanied by all necessary state stock transfer stamps, if any, or a check for the appropriate purchase price thereof. Cash held by Selling Fund shall be delivered on the Closing Date and shall be in the form of currency or wire transfer in Federal funds, payable to the order of the account of Shell Fund at Buyer Custodian. (b) If, on the Closing Date, Selling Fund is unable to make delivery in the manner contemplated by Section 2.4(a) of securities held by Selling Fund for the reason that any of such securities purchased prior to the Closing Date have not yet been delivered to Selling Fund or its broker, then Buyer shall waive the delivery requirements of Section 2.4(a) with respect to said undelivered securities if Selling Fund has delivered to Buyer Custodian by or on the Closing Date, and with respect to said undelivered securities, 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 Buyer or Buyer Custodian, including brokers' confirmation slips. SECTION 2.5. Termination of Series and Cancellation of Selling Fund Shares. Following receipt of the Required Shareholder Vote and as soon as reasonably practicable after the Closing, Seller shall cancel the issued and outstanding shares of Selling Fund from Selling Fund Shareholders in accordance with its Governing Documents and all issued and outstanding shares of Selling Fund shall thereupon be canceled on the books of Seller. SECTION 2.6. Issuance of Shell Fund Shares. At the Effective Time, Selling Fund Shareholders of record, determined as of the Effective Time, shall be issued that number of full and fractional Class Y shares of Shell Fund having a net asset value equal to the net asset value of such shares of Selling Fund held by Selling Fund Shareholders on the Valuation Date in accordance with Sections 2.1 and 2.2. Seller shall provide instructions to the transfer agent of Shell Fund with respect to the Shell Fund Shares to be issued to Selling Fund Shareholders, including names, addresses, dividend reinvestment elections and tax withholding status of Selling Fund Shareholders and backup withholding and nonresident alien withholding certifications, notices or records on file with respect to Selling Fund Shareholders. Seller shall also provide to the transfer agent of Shell Fund the AML Documentation and such other information as Buyer may reasonably request. 7 Buyer 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. Buyer shall record on its books the ownership of the Shell Fund Shares by Selling Fund Shareholders and shall forward a confirmation of such ownership to Selling Fund Shareholders. No redemption or repurchase of such shares credited to former Selling Fund Shareholders in respect of Selling Fund Shares represented by unsurrendered share certificates shall be permitted until such certificates have been surrendered to Buyer for cancellation, or if such certificates are lost or misplaced, until lost certificate affidavits have been executed and delivered to Buyer. SECTION 2.7. Investment Securities. On or prior to the Valuation Date, Seller shall deliver a list setting forth the securities and other investments Selling Fund then owned together with the respective Federal income tax bases thereof and holding periods therefor. Seller shall provide to Buyer on or before the Valuation Date detailed tax basis accounting records for each security and other investment to be transferred to it pursuant to this Agreement. Such records shall be prepared in accordance with the requirements for specific identification tax lot accounting and clearly reflect the bases used for determination of gain and loss realized on the sale of any security or other investment transferred to Shell Fund hereunder. Such records shall be made available by Seller prior to the Valuation Date for inspection by the Treasurer of Buyer (or his or her designee) or Shell Fund Auditors upon reasonable request. SECTION 2.8. Liabilities. Selling Fund shall use reasonable best efforts to discharge all of its known liabilities, so far as may be practical, prior to the Closing Date. Shell Fund shall not assume any liabilities of Selling Fund other than the Liabilities, including, without limitation, any liability for recoupment of advisory fees waived or expenses paid pursuant to that certain Expense Limitation Undertaking by and between Seller and Stein Roe. Article 3 REPRESENTATIONS AND WARRANTIES OF SELLER Seller, on behalf of Selling Fund, represents and warrants to Buyer as follows: SECTION 3.1. Organization; Authority. Seller is duly organized, validly existing and in good standing under Applicable Law, with all requisite trust power and authority to enter into this Agreement and perform its obligations hereunder. SECTION 3.2. Registration and Regulation of Seller. Seller is duly registered with the SEC as an investment company under the Investment Company Act and all Selling Fund Shares which have been or are being offered for sale have been duly registered under the Securities Act and have been duly registered, qualified or are exempt from registration or qualification under the securities laws of each state or other jurisdiction in which such shares have been or are being offered for sale, and no action has been taken by Seller to revoke or rescind any such registration or qualification. To the best of its knowledge, Selling Fund is in compliance in all material respects with all applicable laws, rules and regulations, including, without limitation, the Investment Company Act, the Securities Act, the Exchange Act and all applicable state securities laws. Selling Fund is in compliance in all material respects with the investment policies and restrictions 8 applicable to it set forth in the Seller Registration Statement. The value of the net assets of Selling Fund is determined using portfolio valuation methods that comply in all material respects with the requirements of the Investment Company Act and the policies of Selling Fund and all purchases and redemptions of Selling Fund Shares have been effected at the net asset value per share calculated in such manner. SECTION 3.3. Financial Statements. The Selling Fund Financial Statements have been audited by Ernst & Young L.L.P, an independent registered public accounting firm, and are in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") consistently applied, and such statements (copies of which have been furnished to Shell Fund) present fairly, in all material respects, the financial condition of Selling Fund as of such date in accordance with U.S. GAAP, and there are no known contingent liabilities of Selling Fund required to be reflected on a balance sheet (including the notes thereto) in accordance with U.S. GAAP as of such date not disclosed therein. SECTION 3.4. No Material Adverse Changes; Contingent Liabilities. Since the date of the Selling Fund Financial Statements, no material adverse change has occurred in the financial condition, results of operations, business, assets or liabilities of Selling Fund or the status of Selling Fund as a regulated investment company under the Code, other than changes resulting from any change in general conditions in the financial or securities markets or the performance of any investments made by Selling Fund or occurring in the ordinary course of business of Selling Fund or Seller. There are no contingent liabilities of Selling Fund not disclosed in the Selling Fund Financial Statements and no contingent liabilities of Selling Fund have arisen since the date of the most recent financial statements included in the Selling Fund Financial Statements. SECTION 3.5. Selling Fund Shares; Business Operations. (a) Selling Fund Shares have been duly authorized and validly issued and are fully paid and non-assessable. (b) During the five-year period ending on the date of the Reorganization, neither Selling Fund nor any person related to Selling Fund (as defined in Section 1.368-1(e)(3) of the Treasury Regulations without regard to Section 1.368-1(e)(3)(i)(A)) will have directly or through any transaction, agreement, or arrangement with any other person, (i) acquired shares of Selling Fund for consideration other than shares of Selling Fund, except for shares redeemed in the ordinary course of Selling Fund's business as an open-end investment company as required by the Investment Company Act, or (ii) made distributions with respect to Selling Fund's shares, except for (a) distributions necessary to satisfy the requirements of Sections 852 and 4982 of the Code for qualification as a regulated investment company and avoidance of excise tax liability and (b) additional distributions, to the extent such additional distributions do not exceed 50 percent of the value (without giving effect to such distributions) of the proprietary interest in Selling Fund on the Effective Date. (c) At the time of its Reorganization, Selling Fund shall not have outstanding any warrants, options, convertible securities or any other type of right pursuant to which any Person may acquire Selling Fund Shares, except for the right of investors to acquire Selling Fund 9 Shares at the public offering price in the normal course of its business as a series of an open-end management investment company operating under the Investment Company Act. (d) Seller does not have, and has not had during the six (6) months prior to the date of this Agreement, any employees, and shall not hire any employees from and after the date of this Agreement through the Closing Date. SECTION 3.6. Accountants. Selling Fund Auditors, which have reported upon the Selling Fund Financial Statements for the fiscal year or period, as applicable, ended on the date of the most recent financial statements included in the Selling Fund Financial Statements are independent public accountants as required by the Securities Act and the Exchange Act. SECTION 3.7. Binding Obligation. This Agreement has been duly authorized, executed and delivered by Seller on behalf of Selling Fund and, assuming this Agreement has been duly executed and delivered by Buyer and approved by the shareholders of Selling Fund, constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms from and with respect to the revenues and assets of Selling Fund, except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors rights generally, or by general equity principles (whether applied in a court of law or a court of equity and including limitations on the availability of specific performance or other equitable remedies). SECTION 3.8. No Breaches or Defaults. The execution and delivery of this Agreement by Seller on behalf of Selling Fund and performance by Seller of its obligations hereunder have been duly authorized by all necessary trust action on the part of Seller, other than approval by the shareholders of Selling Fund, and (i) do not, and on the Closing Date will not, result in any violation of the Governing Documents of Seller and (ii) do not, and on the Closing Date will not, result in a breach of any of the terms or provisions of, or constitute (with or without the giving of notice or the lapse of time or both) a default under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation or imposition of any Lien upon any Assets or penalty or additional fee of Selling Fund (except for such breaches or defaults or Liens that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect) under (A) any indenture, mortgage or loan agreement or any other material agreement or instrument to which Seller is a party or by which it may be bound and which relates to the Assets or business of Selling Fund or to which any property of Selling Fund may be subject; (B) any Permit (as defined below); or (C) any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Authority having jurisdiction over Seller or any property of Selling Fund. Seller is not under the jurisdiction of a court in a proceeding under Title 11 of the United States Code or similar case within the meaning of Section 368(a)(3)(A) of the Code. SECTION 3.9. Authorizations or Consents. Other than those which shall have been obtained or made on or prior to the Closing Date and those that must be made after the Closing Date to comply with Section 2.5 of this Agreement, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority will be required to be obtained or made 10 by Seller in connection with the execution and delivery by Seller of this Agreement and the consummation by Seller of the transactions contemplated hereby. SECTION 3.10. Permits. Seller has in full force and effect all approvals, consents, authorizations, registrations, certificates, filings, franchises, licenses, notices, permits and rights of Governmental Authorities (collectively, "Permits") necessary for it to conduct its business as presently conducted as it relates to Selling Fund, and there has occurred no default under any Permit, except for the absence of Permits and for defaults under Permits the absence or default of which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. To the knowledge of Seller there are no proceedings relating to the suspension, revocation or modification of any Permit, except for such that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. SECTION 3.11. No Actions, Suits or Proceedings. (a) To the knowledge of Seller, there is no pending action, suit or proceeding, nor has any litigation been overtly threatened in writing or, if probable of assertion, threatened orally against Seller before any Governmental Authority which questions the validity or legality of this Agreement or of the actions contemplated hereby or which seeks to prevent the consummation of the transactions contemplated hereby, including the Reorganization. (b) To the knowledge of Seller, there are no judicial, administrative or arbitration actions, suits, or proceedings instituted or pending or threatened in writing or, if probable of assertion, threatened orally against Seller affecting any property, asset, interest or right of Selling Fund, that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to Selling Fund. To the knowledge of Seller, there are not in existence on the date hereof any plea agreements, judgments, injunctions, consents, decrees, exceptions or orders that were entered by, filed with or issued by any Governmental Authority relating to Seller's conduct of the business of Selling Fund affecting in any significant respect the conduct of such business. Seller is not, and has not been, to the knowledge of Seller, the target of any material investigation by the SEC or any state securities administrator with respect to its conduct of the business of Selling Fund, other than as has been disclosed in the Seller Registration Statement. SECTION 3.12. Contracts. Seller is not in default under any contract, agreement, commitment, arrangement, lease, insurance policy or other instrument to which it is a party and which involves or affects the Assets of Selling Fund, by which the Assets, business, or operations of Selling Fund may be bound or affected, or under which it or the Assets, business or operations of Selling Fund receives benefits, which default could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and, to the knowledge of Seller there has not occurred any event (including the Reorganization) that, with the lapse of time or the giving of notice or both, would constitute such a default. SECTION 3.13. Properties and Assets. Selling Fund has good and marketable title to all Assets, including properties and assets reflected in the Selling Fund Financial Statements as owned by it, free and clear of all Liens, except as described in the Selling Fund Financial Statements. 11 SECTION 3.14. Taxes. (a) Selling 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. Selling 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. Selling Fund has no earnings and profits accumulated in any taxable year in which the provisions of Subchapter M of the Code did not apply to it. In order to (i) ensure continued qualification of Selling Fund for treatment as a "regulated investment company" for tax purposes and (ii) eliminate any tax liability of Selling Fund arising by reason of undistributed investment company taxable income or net capital gain, Seller will declare on or prior to the Valuation Date to the shareholders of Selling Fund a dividend or dividends that, together with all previous such dividends, shall have the effect of distributing (A) all of Selling Fund's investment company taxable income (determined without regard to any deductions for dividends paid) for the taxable year ended November 30, 2008 and (B) all of Selling Fund's net capital gain recognized in its taxable year ended November 30, 2008 (after reduction for any capital loss carryover). (b) Selling Fund has timely filed all Returns required to be filed by it and all Taxes with respect thereto have been paid, except where the failure so to file or so to pay, would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Adequate provision has been made in the Selling Fund Financial Statements for all Taxes in respect of all periods ended on or before the date of such financial statements, except where the failure to make such provisions would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No deficiencies for any Taxes have been proposed, assessed or asserted in writing by any taxing authority against Selling Fund, and no deficiency has been proposed, assessed or asserted, in writing, where such deficiency would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No waivers of the time to assess any such Taxes are outstanding nor are any written requests for such waivers pending and no Return of Selling Fund is currently being or has been audited with respect to income taxes or other Taxes by any Federal, state, local or foreign Tax authority. SECTION 3.15. Benefit and Employment Obligations. Selling Fund has no obligation to provide any post-retirement or post-employment benefit to any Person. Immediately after the Closing Date and as a result of the Closing, Selling Fund will have no obligation to provide any post-retirement or post-employment benefit to any Person, including but not limited to under any Benefit Plan, and will have no obligation to provide unfunded deferred compensation or other unfunded or self-funded benefits to any Person. SECTION 3.16. Brokers. No broker, finder or similar intermediary has acted for or on behalf of Seller in connection with this Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled to any broker's, finder's or similar fee or other commission in connection therewith based on any agreement, arrangement or understanding with Seller or any action taken by it. 12 SECTION 3.17. Voting Requirements. The Required Shareholder Vote is the only vote of the holders of any class of shares of Selling Fund necessary to approve this Agreement. SECTION 3.18. State Takeover Statutes. No state takeover statute or similar statute or regulation applies or purports to apply to this Agreement or any of the transactions contemplated by this Agreement. SECTION 3.19. Books and Records. The books and records of Seller relating to Selling Fund, reflecting, among other things, the performance returns of Selling Fund that are or have been included in Selling Fund's prospectuses, advertisements and sales literature and the information used to calculate such performance returns ("Performance Calculation Information"), the purchase and sale of Selling Fund Shares, the identity and tax status of Selling Fund Shareholders, the AML Documentation, the number of issued and outstanding shares owned by each Selling Fund Shareholder and the state or other jurisdiction in which such shares were offered and sold, are complete and accurate in all material respects. SECTION 3.20. Prospectus and Statement of Additional Information. The current prospectus and statement of additional information for Selling Fund as of the date on which they were issued did not contain, and as supplemented by any supplement thereto dated prior to or on the Closing Date do 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 not misleading. SECTION 3.21. No Distribution. Shell Fund Shares are not being acquired for the purpose of any distribution thereof, other than in accordance with the terms of this Agreement. SECTION 3.22. Liabilities of Selling Fund. The Liabilities that are to be assumed by Shell Fund in connection with the Reorganization, or to which the assets of Selling Fund to be transferred in the Reorganization are subject, were incurred by Selling Fund in the ordinary course of its business. The fair market value of the assets of Selling Fund to be transferred to Shell Fund in the Reorganization will equal or exceed the sum of the Liabilities to be assumed by Shell Fund. SECTION 3.23. Shareholder Expenses. Selling Fund Shareholders will pay their own expenses, if any, incurred in connection with the Reorganization. SECTION 3.24. Intercompany Indebtedness; Consideration. There is no intercompany indebtedness between Seller and Buyer that was issued or acquired, or will be settled, at a discount. No consideration other than Shell Fund Shares (and Shell Fund's assumption of the Liabilities) will be given in exchange for the Assets of Selling Fund acquired by Shell Fund in connection with the Reorganization. SECTION 3.25. Information Supplied by Seller. The information supplied by Seller regarding Seller or Selling Fund that is included or referenced in the Registration Statement on Form N-14 of Buyer contemplated by section 4.4(b) of this Agreement shall be true, accurate and complete in all respects. SECTION 3.26. Selling Fund Fiscal Year. The Selling Fund has not changed its annual accounting period (fiscal year) within the past five years. 13 Article 4 REPRESENTATIONS AND WARRANTIES OF BUYER Buyer, on behalf of Shell Fund, represents and warrants to Seller as follows: SECTION 4.1. Organization; Authority. Buyer is duly organized, validly existing and in good standing under Applicable Law, with all requisite trust power, and authority to enter into this Agreement and perform its obligations hereunder. SECTION 4.2. Registration and Regulation of Buyer. Buyer is duly registered with the SEC as an investment company under the Investment Company Act. Shell Fund is in compliance in all material respects with all applicable laws, rules and regulations, including, without limitation, the Investment Company Act, the Securities Act, the Exchange Act and all applicable state securities laws. Shell Fund is in compliance in all material respects with the applicable investment policies and restrictions set forth in the Buyer Registration Statement. The value of the net assets of Shell Fund is determined using portfolio valuation methods that comply in all material respects with the requirements of the Investment Company Act and the policies of Shell Fund and all purchases and redemptions of Shell Fund Shares have been effected at the net asset value per share calculated in such manner. SECTION 4.3. Financial Statements. Shell Fund is a newly created series portfolio of Seller formed for the purpose of receiving the Assets of the Selling Fund in connection with the Reorganization. Accordingly, Shell Fund has not prepared books of account and related records or financial statements. SECTION 4.4. Registration of Shell Fund Shares. (a) Shell Fund currently has Class Y shares. Under its Governing Documents, Buyer is authorized to issue an unlimited number of shares of such class. (b) Shell Fund Shares to be issued pursuant to Section 2.6 shall on the Closing Date be duly registered under the Securities Act by a Registration Statement on Form N-14 of Buyer then in effect. (c) On the Closing Date, Shell Fund will have good and marketable title to Shell Fund's Assets, free of any liens or other encumbrances, except those liens or encumbrances incurred in the ordinary course of Shell Fund's business or as to which Selling Fund has received notice and necessary documentation at or prior to the Closing; (d) Shell Fund Shares to be issued pursuant to Section 2.6 are duly authorized and on the Closing Date, assuming the consummation of the Reorganization in accordance with this Agreement, will be validly issued and fully paid and non-assessable and will conform to the description thereof contained in the Registration Statement on Form N-14 then in effect. At the time of its Reorganization, Shell Fund shall not have outstanding any warrants, options, convertible securities or any other type of right pursuant to which any Person could acquire shares of Shell Fund, except for the right of investors to acquire shares of Shell Fund at the 14 public offering price in the normal course of its business as a series of an open-end management investment company operating under the Investment Company Act. (e) The combined proxy statement/prospectus (the "Combined Proxy Statement/Prospectus"), which forms a part of Buyer's Registration Statement on Form N-14, shall be furnished to the shareholders of Selling Fund entitled to vote at the Shareholders Meeting in accordance with normal market practice for such transactions. The Combined Proxy Statement/Prospectus and related Statement of Additional Information of Shell Fund, when they become effective, shall conform in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and shall not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, provided that, with respect to information in the Combined Proxy Statement/Prospectus derived from information supplied by Seller or its agents, Buyer is relying on the accuracy of Seller's representation in Section 3.25 in making this representation. (f) The shares of Shell Fund which have been or are being offered for sale (other than the Shell Fund Shares to be issued in connection with the Reorganization) have been duly registered under the Securities Act by the Buyer Registration Statement and have been duly registered, qualified or are exempt from registration or qualification under the securities laws of each state or other jurisdiction in which such shares have been or are being offered for sale, and no action has been taken by Buyer to revoke or rescind any such registration or qualification. SECTION 4.5. Accountants. Shell Fund Auditors are independent public accountants as required by the Securities Act and the Exchange Act. SECTION 4.6. Binding Obligation. This Agreement has been duly authorized, executed and delivered by Buyer on behalf of Shell Fund and, assuming this Agreement has been duly executed and delivered by Seller, constitutes the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms from and with respect to the revenues and assets of Shell Fund, except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization or similar laws relating to or affecting creditors' rights generally, or by general equity principles (whether applied in a court of law or a court of equity and including limitations on the availability of specific performance or other equitable remedies). SECTION 4.7. No Breaches or Defaults. The execution and delivery of this Agreement by Buyer on behalf of Shell Fund and performance by Buyer of its obligations hereunder have been duly authorized by all necessary trust action on the part of Buyer and (i) do not, and on the Closing Date will not, result in any violation of the Governing Documents of Buyer and (ii) do not, and on the Closing Date will not, result in a breach of any of the terms or provisions of, or constitute (with or without the giving of notice or the lapse of time or both) a default under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a material benefit under, or result in the creation or imposition of any Lien upon any property or assets of Shell Fund (except for such breaches or defaults or Liens that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect) under (A) any indenture, mortgage or loan agreement or any other material agreement or instrument to which Buyer is a party or by which it may be 15 bound and which relates to the assets of Shell Fund or to which any properties of Shell Fund may be subject; (B) any Permit; or (C) any existing applicable law, rule, regulation, judgment, order or decree of any Governmental Authority having jurisdiction over Buyer or any property of Shell Fund. Buyer is not under the jurisdiction of a court in a proceeding under Title 11 of the United States Code or similar case within the meaning of Section 368(a)(3)(A) of the Code. SECTION 4.8. Authorizations or Consents. Other than those which shall have been obtained or made on or prior to the Closing Date, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority will be required to be obtained or made by Buyer in connection with the due execution and delivery by Buyer of this Agreement and the consummation by Buyer of the transactions contemplated hereby. SECTION 4.9. Permits. Buyer has in full force and effect all Permits necessary for it to conduct its business as presently conducted as it relates to Shell Fund, and there has occurred no default under any Permit, except for the absence of Permits and for defaults under Permits the absence or default of which would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. To the knowledge of Buyer there are no proceedings relating to the suspension, revocation or modification of any Permit, except for such that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. SECTION 4.10. No Actions, Suits or Proceedings. (a) There is no pending action, suit or proceeding, nor, to the knowledge of Buyer, has any litigation been overtly threatened in writing or, if probable of assertion, orally, against Buyer before any Governmental Authority which questions the validity or legality of this Agreement or of the transactions contemplated hereby, or which seeks to prevent the consummation of the transactions contemplated hereby, including the Reorganization. (b) There are no judicial, administrative or arbitration actions, suits, or proceedings instituted or pending or, to the knowledge of Buyer, threatened in writing or, if probable of assertion, orally, against Buyer, affecting any property, asset, interest or right of Shell Fund, that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect with respect to Shell Fund. There are not in existence on the date hereof any plea agreements, judgments, injunctions, consents, decrees, exceptions or orders that were entered by, filed with or issued by any Governmental Authority relating to Buyer's conduct of the business of Shell Fund affecting in any significant respect the conduct of such business. Buyer is not, and has not been, to the knowledge of Buyer, the target of any material investigation by the SEC or any state securities administrator with respect to its conduct of the business of Shell Fund, other than as has been disclosed in the Shell Fund Registration Statement. SECTION 4.11. Taxes. (a) Shell Fund intends to elect 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. Shell Fund will satisfy the requirements of Part I of Subchapter M of the Code to maintain qualification as a regulated investment company for its current taxable year. 16 Shell 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. (b) Shell Fund has timely filed all Returns required to be filed by it and all Taxes with respect thereto have been paid, except where the failure so to file or so to pay, would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. SECTION 4.12. Brokers. No broker, finder or similar intermediary has acted for or on behalf of Buyer in connection with this Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled to any broker's, finder's or similar fee or other commission in connection therewith based on any agreement, arrangement or understanding with Buyer or any action taken by it. SECTION 4.13. Representations Concerning the Reorganization. (a) There is no plan or intention by Buyer or any person related to Buyer to acquire or redeem any Shell Fund Shares issued in the Reorganization, except to the extent that Shell Fund is required by the Investment Company Act to redeem any of its shares presented for redemption at net asset value in the ordinary course of its business as an open-end, management investment company. (b) Shell Fund has no plan or intention to sell or otherwise dispose of any of the Assets of Selling Fund acquired in the Reorganization, other than in the ordinary course of its business and to the extent necessary to maintain its status as a "regulated investment company" under the Code. (c) Following the Reorganization, Shell Fund will continue an "historic business" of Selling Fund or use a significant portion of Selling Fund's "historic business assets" in a business. For purposes of this representation, the terms "historic business" and "historic business assets" shall have the meanings ascribed to them in Section 1.368-1(d) of the Treasury Regulations. (d) Prior to or in the Reorganization, neither Shell Fund nor any person related to Shell Fund (for purposes of this paragraph as defined in Section 1.368-1(e)(3) of the Treasury Regulations) will have acquired directly or through any transaction, agreement or arrangement with any other person, shares of Selling Fund with consideration other than shares of Shell Fund. There is no plan or intention by Shell Fund to redeem, or by any person related to Shell Fund to acquire, any of the Shell Fund Shares issued in the Reorganization either directly or through any transaction, agreement or arrangement with any other person, other than redemptions in the ordinary course of Shell Fund's business as an open-end investment company as required by the Investment Company Act. SECTION 4.14. Prospectus and Statement of Additional Information. The current prospectus and statement of additional information for Shell Fund as of the date on which it was issued does not contain, and as supplemented by any supplement thereto dated prior to or on the Closing Date does 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 not misleading. 17 SECTION 4.15. Intercompany Indebtedness; Consideration. There is no intercompany indebtedness between Seller and Buyer that was issued or acquired, or will be settled, at a discount. No consideration other than Shell Fund Shares (and Shell Fund's assumption of the Liabilities) will be given in exchange for the Assets of Selling Fund acquired by Shell Fund in connection with the Reorganization. The fair market value of the Assets of Selling Fund transferred to Shell Fund in the Reorganization will equal or exceed the sum of the Liabilities assumed by Shell Fund. Article 5 COVENANTS SECTION 5.1. Conduct of Business. (a) From the date of this Agreement up to and including the Closing Date (or, if earlier, the date upon which this Agreement is terminated pursuant to Article 7), Seller shall conduct the business of Selling Fund only in the ordinary course and substantially in accordance with past practices, and 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 Selling Fund in the ordinary course in all material respects. (b) From the date of this Agreement up to and including the Closing Date (or, if earlier, the date upon which this Agreement is terminated pursuant to Article 7), Buyer shall conduct the business of Shell Fund only in the ordinary course and substantially in accordance with past practices, and 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 Shell Fund in the ordinary course in all material respects. SECTION 5.2. Expenses. Invesco Aim shall bear the costs and expenses of Buyer and Shell Fund incurred in connection with the transactions contemplated by this Agreement and no costs or expenses of Seller or Selling Fund incurred in connection with the transactions contemplated by this Agreement shall be charged to or borne by Seller, Selling Fund, Buyer or Shell Fund. SECTION 5.3. Further Assurances. Each of the parties hereto shall execute such documents and other papers and perform such further acts as may be reasonably required to carry out the provisions hereof and the transactions contemplated hereby. Each such party shall, on or prior to the Closing Date, use its reasonable best efforts to fulfill or obtain the fulfillment of the conditions precedent to the consummation of the Reorganization, including the execution and delivery of any documents, certificates, instruments or other papers that are reasonably required for the consummation of the Reorganization. SECTION 5.4. Notice of Events. Buyer shall give prompt notice to Seller, and Seller shall give prompt notice to Buyer, of (a) the occurrence or non-occurrence of any event which to 18 the knowledge of Buyer or to the knowledge of Seller would be likely to result in any of the conditions specified in (i) in the case of Seller, Sections 6.1 and 6.2 or (ii) in the case of Buyer, Sections 6.2 and 6.3, not being satisfied so as to permit the consummation of the Reorganization and (b) any material failure on its part, or on the part of the other party hereto of which it has knowledge, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 5.4 shall not limit or otherwise affect the remedies available hereunder to any party. SECTION 5.5. Consents, Approvals and Filings. Each of Seller and Buyer shall make all necessary filings, as soon as reasonably practicable, including, without limitation, those required under the Securities Act, the Exchange Act, the Investment Company Act and the Advisers Act, in order to facilitate prompt consummation of the Reorganization and the other transactions contemplated by this Agreement. In addition, each of Seller and Buyer shall use its reasonable best efforts, and shall cooperate fully with each other (i) to comply as promptly as reasonably practicable with all requirements of Governmental Authorities applicable to the Reorganization and the other transactions contemplated herein and (ii) to obtain as promptly as reasonably practicable all necessary permits, orders or other consents of Governmental Authorities and consents of all third parties necessary for the consummation of the Reorganization and the other transactions contemplated herein, provided that nothing in this Section shall require Buyer to request a ruling from the Internal Revenue Service as to the federal tax consequences of the Reorganization. Each of Seller and Buyer shall use reasonable efforts to provide such information and communications to Governmental Authorities as such Governmental Authorities may request. SECTION 5.6. Submission of Agreement to Shareholders. Subject to the Registration Statement on Form N-14 becoming declared effective by the SEC, Seller shall take all action necessary in accordance with applicable law and its Governing Documents to convene the Shareholders Meeting. Seller shall recommend to the shareholders of Selling Fund approval of this Agreement. Seller shall use its reasonable best efforts to hold a Shareholders Meeting as soon as practicable and advisable after the date hereof. SECTION 5.7. Statement of Earnings and Profits. As promptly as practicable, but in any case within sixty days after the Closing Date, the Seller shall furnish the Buyer, in such form as is reasonably satisfactory to the Buyer, a statement of the earnings and profits and of any capital loss carryovers and other items of the Selling Fund for federal income tax purposes that will be carried over by the Shell Fund as a result of Sections 381 through 384 of the Code. Such statement will be reviewed by Selling Fund Auditors and certified by the Seller's Treasurer. Article 6 CONDITIONS PRECEDENT TO THE REORGANIZATION SECTION 6.1. Conditions Precedent of Buyer. The obligation of Buyer to consummate the Reorganization is subject to the satisfaction, at or prior to the Closing Date, of all of the following conditions, any one or more of which may be waived in writing by Buyer. 19 (a) The representations and warranties of Seller on behalf of Selling Fund set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date with the same effect as though all such representations and warranties had been made as of the Closing Date. (b) Seller shall have complied with and satisfied in all material respects all agreements and conditions relating to Selling Fund set forth herein on its part to be performed or satisfied at or prior to the Closing Date. (c) Buyer shall have received at the Closing Date (i) a certificate, dated as of the Closing Date, from an officer of Seller, in such individual's capacity as an officer of Seller and not as an individual, to the effect that the conditions specified in Sections 6.1(a) and (b) have been satisfied and (ii) a certificate, dated as of the Closing Date, from the Secretary or Assistant Secretary (in such capacity) of Seller certifying as to the accuracy and completeness of the attached Governing Documents of Seller, and resolutions, consents and authorizations of or regarding Seller and Selling Fund with respect to the execution and delivery of this Agreement and the transactions contemplated hereby. (d) Unless the Shell Fund provides an opinion of counsel that the Reorganization qualifies as a "reorganization" under Section 368(a)(1)(F) of the Code, the Selling Fund shall have declared and paid a dividend or dividends which, together with all previous such dividends, shall have the effect of distributing to its shareholders all of the Selling Fund's investment company taxable income (computed without regard to any deduction for dividends paid), if any, plus the excess, if any, of its 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, in each case for all taxable periods or years ending on or before the Closing Date, and all of its net capital gains realized (after reduction for any capital loss carry forward), if any, in all taxable periods or years ending on or before the Closing Date. (e) Buyer shall have received from Seller (1) the instructions, information and documentation described in Section 2.6 of this Agreement, (2) the Performance Calculation Information described in Section 3.19 of this Agreement, (3) confirmations or other adequate evidence as to the tax basis and holding periods of the Assets of Selling Fund transferred to Shell Fund in accordance with the terms of this Agreement, (4) all FIN 48 work papers and supporting statements pertaining to the Selling Fund and (5) the tax books and records of the Selling Fund for purposes of preparing any tax returns required by law to be filed after the Closing Date. (f) Seller shall have delivered to Buyer, on behalf of Shell Fund, Selling Fund's Statement of Assets and Liabilities, as of the Closing Date, certified by the Treasurer of Seller. (g) Stein Roe shall have terminated or waived, in either case in writing, any rights to reimbursement from Selling Fund to which it is entitled for fees and expenses absorbed by Stein Roe pursuant to voluntary and contractual fee waiver or expense limitation commitments between Stein Roe and Selling Fund. 20 (h) Buyer shall have received on the Closing Date an opinion of Dechert LLP, counsel to Seller and Selling Fund, dated as of the Closing Date, covering the following points: (i) The Agreement has been duly authorized by Seller, on behalf of the Selling Fund and, assuming due authorization, execution and delivery of the Agreement by Buyer, Shell Fund, Invesco Aim and Stein Roe, is a valid and binding obligation of Seller, on behalf of the Selling Fund enforceable against it in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and to general equity principles. SECTION 6.2. Mutual Conditions. The obligations of Seller and Buyer to consummate the Reorganization are subject to the satisfaction, at or prior to the Closing Date, of all of the following further conditions, any one or more of which may be waived in writing by Seller and Buyer, but only if and to the extent that such waiver is mutual. (a) All filings required to be made prior to the Closing Date with, and all consents, approvals, permits and authorizations required to be obtained on or prior to the Closing Date from, Governmental Authorities in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated herein by Seller and Buyer shall have been made or obtained, as the case may be; provided, however, that such consents, approvals, permits and authorizations may be subject to conditions that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. (b) This Agreement, the Reorganization of Selling Fund and related matters shall have been approved and adopted at the Shareholders Meeting by the shareholders of Selling Fund on the record date by the Required Shareholder Vote. (c) The Assets of Selling Fund to be acquired by Shell Fund shall constitute at least 90% of the fair market value of the net assets and at least 70% of the fair market value of the gross assets held by Selling Fund immediately prior to the Reorganization. For purposes of this Section 6.2(c), assets used by Selling Fund to pay the expenses it incurs in connection with this Agreement and the Reorganization and to effect all shareholder redemptions and distributions (other than regular, normal dividends and regular, normal redemptions pursuant to the Investment Company Act, and not in excess of the requirements of Section 852 of the Code, occurring in the ordinary course of Selling Fund's business as a series of an open-end management investment company) after the date of this Agreement shall be included as Assets of Selling Fund held immediately prior to the Reorganization. (d) No temporary restraining order, preliminary or permanent injunction or other order issued by any Governmental Authority preventing the consummation of the Reorganization on the Closing Date shall be in effect; provided, however, that the party or parties invoking this condition shall use reasonable efforts to have any such order or injunction vacated. (e) The Registration Statement on Form N-14 filed by Buyer with respect to Shell Fund Shares to be issued to Selling Fund Shareholders in connection with the 21 Reorganization shall have become effective under the Securities Act and shall include an undertaking therein to file the opinion referenced in Section 6.2(f) as a post-effective amendment to such Registration Statement after the Closing Date, and no stop order 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 Securities Act. (f) Seller and Buyer shall have received on or before the Closing Date an opinion of Buyer Counsel in form and substance reasonably acceptable to Seller and Buyer, as to the matters set forth on Schedule 6.2(f). In rendering such opinion, Buyer Counsel may request and rely upon representations contained in certificates of officers of Seller, Buyer and others, and the officers of Seller and Buyer shall use their best efforts to make available such truthful certificates. (g) Selling Fund and Shell Fund shall have agreed on the number of full and fractional Shell Fund Shares to be issued in connection with the Reorganization after such number has been calculated in accordance with Sections 2.1 and 2.2. SECTION 6.3. Conditions Precedent of Seller. The obligation of Seller to consummate the Reorganization is subject to the satisfaction, at or prior to the Closing Date, of all of the following conditions, any one or more of which may be waived in writing by Seller. (a) The representations and warranties of Buyer on behalf of Shell Fund set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date with the same effect as though all such representations and warranties had been made as of the Closing Date. (b) Buyer shall have complied with and satisfied in all material respects all agreements and conditions relating to Shell Fund set forth herein on its part to be performed or satisfied at or prior to the Closing Date. (c) Seller shall have received on the Closing Date (i) a certificate, dated as of the Closing Date, from an officer of Buyer, in such individual's capacity as an officer of Buyer and not as an individual, to the effect that the conditions specified in Sections 6.3(a) and (b) have been satisfied and (ii) a certificate, dated as of the Closing Date, from the Secretary or Assistant Secretary of Buyer (in such capacity) certifying as to the accuracy and completeness of the attached Governing Documents of Buyer and resolutions, consents and authorizations of or regarding Buyer with respect to the execution and delivery of this Agreement and the transactions contemplated hereby. (d) Seller shall have received on the Closing Date an opinion of Stradley Ronon Stevens & Young, LLP, counsel to Buyer and the Shell Fund, dated as of the Closing Date, covering the following points: (i) The Shell Fund shares to be issued to the Selling Fund Shareholders as provided by this Agreement are duly authorized, upon such delivery will 22 be validly issued and outstanding, and will be fully paid and non-assessable by the Buyer; and (ii) The Agreement has been duly authorized by Buyer, on behalf of the Shell Fund and, assuming due authorization, execution and delivery of the Agreement by Seller, Selling Fund, Invesco Aim and Stein Roe, is a valid and binding obligation of Buyer, on behalf of the Shell Fund enforceable against it in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and to general equity principles. Article 7 TERMINATION OF AGREEMENT SECTION 7.1. Termination. This Agreement may be terminated on or prior to the Closing Date as follows: (a) by mutual written consent of Seller and Buyer; or (b) at the election of Seller or Buyer, to be effectuated by the delivery by the terminating party to the other party of a written notice of such termination: (i) if the Closing Date shall not be on or before the Termination Date, unless the failure to consummate the Reorganization is the result of a willful and material breach of this Agreement by the party seeking to terminate this Agreement; (ii) if, upon a vote at the Shareholders Meeting or any final adjournment thereof, the Required Shareholder Vote shall not have been obtained as contemplated by Section 6.2(b); or (iii) if any Governmental Authority shall have issued an order, decree or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the Reorganization and such order, decree, ruling or other action shall have become final and nonappealable. SECTION 7.2. Survival After Termination. If this Agreement is terminated in accordance with Section 7.1 hereof and the Reorganization of Selling Fund is not consummated, this Agreement shall become void and of no further force and effect with respect to the Reorganization and Selling Fund, except for the provisions of Section 5.3. 23 Article 8 MISCELLANEOUS SECTION 8.1. Survival of Representations, Warranties and Covenants. The representations and warranties in this Agreement, and the covenants in this Agreement that are required to be performed at or prior to the Closing Date, shall terminate two (2) years following the Closing Date. The covenants in this Agreement that are required to be performed in whole or in part subsequent to the Closing Date shall survive the consummation of the transactions contemplated hereunder for a period of two (2) years following the Closing Date. SECTION 8.2. Governing Law. This Agreement shall be construed and interpreted according to the laws of the State of Delaware applicable to contracts made and to be performed wholly within such state. SECTION 8.3. Binding Effect, Persons Benefiting, No Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties and such Persons. Nothing in this Agreement is intended or shall be construed to confer upon any entity or Person other than the parties hereto and their respective successors and permitted assigns any right, remedy or claim under or by reason of this Agreement or any part hereof. Without the prior written consent of the parties hereto, this Agreement may not be assigned by any of the parties hereto. SECTION 8.4. Obligations of Buyer and Seller. (a) Seller and Buyer hereby acknowledge and agree that Shell Fund is a separate investment portfolio of Buyer, that Buyer is executing this Agreement on behalf of Shell Fund, and that any amounts payable by Buyer under or in connection with this Agreement shall be payable solely from the revenues and assets of Shell Fund. Seller further acknowledges and agrees that this Agreement has been executed by a duly authorized officer of Buyer in his or her capacity as an officer of Buyer intending to bind Buyer as provided herein, and that no officer, trustee or shareholder of Buyer shall be personally liable for the liabilities or obligations of Buyer incurred hereunder. Finally, Seller acknowledges and agrees that the liabilities and obligations of Shell Fund pursuant to this Agreement shall be enforceable against the assets of Shell Fund only and not against the assets of Buyer generally or assets belonging to any other series of Buyer. (b) Seller and Buyer hereby acknowledge and agree that Selling Fund is a separate investment portfolio of Seller, that Seller is executing this Agreement on behalf of Selling Fund and that any amounts payable by Seller under or in connection with this Agreement shall be payable solely from the revenues and assets of Selling Fund. Buyer further acknowledges and agrees that this Agreement has been executed by a duly authorized officer of Seller in his or her capacity as an officer of Seller intending to bind Seller as provided herein, and that no officer, trustee or shareholder of Seller shall be personally liable for the liabilities or obligations of Seller incurred hereunder. Finally, Buyer acknowledges and agrees that the liabilities and obligations of Selling Fund pursuant to this Agreement shall be enforceable 24 against the assets of Selling Fund only and not against the assets of Seller generally or assets belonging to any other series of Seller. SECTION 8.5. Amendments. This Agreement may not be amended, altered or modified except by a written instrument executed by Seller and Buyer, provided that, Invesco Aim and/or Stein Roe must also execute such written instrument with respect to any amendment, alteration or modification that affects the representations or obligations of Invesco Aim and/or Stein Roe under this Agreement. SECTION 8.6. Enforcement. The parties agree irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States or any state having jurisdiction, in addition to any other remedy to which they are entitled at law or in equity. SECTION 8.7. Interpretation. When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section of, or an Exhibit or a Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." Each representation and warranty contained in Article 3 or 4 that relates to a general category of a subject matter shall be deemed superseded by a specific representation and warranty relating to a subcategory thereof to the extent of such specific representation or warranty. SECTION 8.8. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and each of which shall constitute one and the same instrument. SECTION 8.9. Entire Agreement; Exhibits and Schedules. This Agreement, including the Exhibits, Schedules, certificates and lists referred to herein, and any documents executed by the parties simultaneously herewith or pursuant thereto, constitute the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, written or oral, between the parties with respect to such subject matter. SECTION 8.10. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand or by overnight courier, two days after being sent by registered mail, return receipt requested, or when sent by telecopier (with receipt confirmed), provided, in the case of a telecopied notice, a copy is also sent by registered mail, return receipt requested, or by courier, addressed as follows (or to such other address as a party may designate by notice to the other): (a) If to Seller: 25 Atlantic Whitehall Funds Trust 50 Rockefeller Plaza, 15th Floor New York, NY 10020 Attn: Gabrielle D. Bailey, Secretary with a copy to: Atlantic Trust Private Wealth Management Two Peachtree Pointe, Suite 1100 Atlanta, GA 30309 Attn: Wayne DeWitt, General Counsel and to: Dechert LLP 200 Clarendon Street, 27th Floor Boston, MA 02116-5201 Attn: John V. O'Hanlon (b) If to Buyer: AIM Equity Funds 11 Greenway Plaza, Suite 100 Houston, TX 77046-1173 Attn: John M. Zerr with a copy to: Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 Attn: E. Carolan Berkley SECTION 8.11. Representations by Investment Adviser. (a) In its capacity as investment adviser to Seller, Stein Roe represents to Buyer that to the best of its knowledge the representations and warranties of Seller and Selling Fund contained in this Agreement are true and correct as of the date of this Agreement. For purposes of this Section 8.11(a), the best knowledge standard shall be deemed to mean that the officers of Stein Roe who have substantive responsibility for the provision of investment advisory services to Seller do not have actual knowledge to the contrary after due inquiry. (b) In its capacity as investment adviser to Buyer, Invesco Aim represents to Seller that to the best of its knowledge the representations and warranties of Buyer and Shell Fund contained in this Agreement are true and correct as of the date of this Agreement. For purposes of this Section 8.11(b), the best knowledge standard shall be deemed to mean that the 26 officers of Invesco Aim who have substantive responsibility for the provision of investment advisory services to Buyer do not have actual knowledge to the contrary after due inquiry. SECTION 8.12. Successors and Assigns; Assignment. This Agreement shall be binding upon and inure to the benefit of Seller, on behalf of Selling Fund, and Buyer, on behalf of Shell Fund, Invesco Aim and Stein Roe, and their respective successors and permitted assigns. The parties hereto expressly acknowledge and agree that this Agreement shall be binding upon and inure to the benefit of Buyer, Seller, Invesco Aim and Stein Roe. 27 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. ATLANTIC WHITEHALL FUNDS TRUST, acting on behalf of ATLANTIC WHITEHALL EQUITY INCOME FUND By: /s/ Kenneth J .Kozanda ------------------------------------ Name: Kenneth J. Kozanda Title: Treasurer AIM EQUITY FUNDS, acting on behalf of AIM DISCIPLINED EQUITY FUND By: /s/ Philip A. Taylor ------------------------------------ Name: Philip A. Taylor Title: President INVESCO AIM ADVISORS, INC. By: /s/ Philip A. Taylor ------------------------------------ Name: Philip A. Taylor Title: President STEIN ROE INVESTMENT COUNSEL, INC. By: /s/ Kenneth J. Kozanda ------------------------------------ Name: Kenneth J. Kozanda Title: Chief Administrative Officer 28 EXHIBIT A LIABILITIES OF SELLING FUND [To be completed, if applicable] SCHEDULE 6.2(F) TAX OPINIONS (i) The transfer of the assets of Selling Fund to Shell Fund in exchange solely for Shell Fund Shares distributed directly to Selling Fund Shareholders and Shell Fund's assumption of the Liabilities, as provided in the Agreement, will constitute a "reorganization" within the meaning of Section 368(a) of the Code and Selling Fund and Shell Fund will be "a party to a reorganization" within the meaning of Section 368(b) of the Code. (ii) In accordance with Section 361(a) and Section 361(c)(1) of the Code, no gain or loss will be recognized by Selling Fund on the transfer of its assets to Shell Fund solely in exchange for Shell Fund Shares and Shell Fund's assumption of the Liabilities or on the distribution of Shell Fund Shares to Selling Fund Shareholders. (iii) In accordance with Section 1032 of the Code, no gain or loss will be recognized by Shell Fund upon the receipt of assets of Selling Fund in exchange for Shell Fund Shares issued directly to Selling Fund Shareholders. (iv) In accordance with Section 354(a)(1) of the Code, no gain or loss will be recognized by Selling Fund Shareholders on the receipt of Shell Fund Shares in exchange for Selling Fund Shares. (v) In accordance with Section 362(b) of the Code, the basis to Shell Fund of the assets of Selling Fund will be the same as the basis of such assets in the hands of Selling Fund immediately prior to the Reorganization. (vi) In accordance with Section 358(a) of the Code, a Selling Fund Shareholder's basis for Shell Fund Shares received by the Selling Fund Shareholder will be the same as his or her basis for Selling Fund Shares exchanged therefor. (vii) In accordance with Section 1223(1) of the Code, a Selling Fund Shareholder's holding period for Shell Fund Shares will be determined by including such Selling Fund Shareholder's holding period for Selling Fund Shares exchanged therefor, provided that such Selling Fund Shareholder held such Selling Fund Shares as a capital asset. 1 (viii) In accordance with Section 1223(2) of the Code, the holding period with respect to the assets of Selling Fund transferred to Shell Fund in the Reorganization will include the holding period for such assets in the hands of Selling Fund. (ix) In accordance with Section 381(a) of the Code, Shell 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 Treasury Regulations), the items of Selling Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381(b) and (c) of the Code and the Treasury Regulations thereunder. 2