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APPENDIX II
AGREEMENT
and
PLAN OF REORGANIZATION
for
XXXXX CAPITAL DEVELOPMENT FUND, INC.
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRANSFER OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1. Reorganization of Xxxxx Capital Development . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2. Computation of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.3. Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.4. Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.5. Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.6. Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.7. Issuance of AIM Equity Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.8. Investment Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXX CAPITAL DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.1. Incorporation: Qualification and Corporate Authority . . . . . . . . . . . . . . . . . . . 9
Section 3.2. Registration and Regulation of Xxxxx Capital Development . . . . . . . . . . . . . . . . . 9
Section 3.3. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.4. No Material Adverse Changes; Contingent Liabilities . . . . . . . . . . . . . . . . . . . . 10
Section 3.5. BCD Shares; Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.6. Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.7. Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.8. No Breaches or Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.9. Authorizations or Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.10. Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.11. No Actions, Suits or Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.12. Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.13. Properties and Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.14. Ineligible Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.15. Rule 17e-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.16. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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Section 3.17. Benefit and Employment Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.18. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.19. Voting Requirements; Dissenter's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.20. State Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.21. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.22. Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AIM EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.1. Incorporation: Qualification and Corporate Authority . . . . . . . . . . . . . . . . . . . 16
Section 4.2. Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.3. No Breaches or Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.4. Authorizations or Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.5. Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.6. No Actions, Suits or Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.7. Ineligible Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.8. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.9. Registration and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.10. Registration of Portfolio Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 4.11. Representations Concerning the Reorganization . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.12. Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.1. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.2. Confidentiality and Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.4. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.5. Notice of Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.6. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.7. Consents, Approvals and Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.8. Submission of Agreement to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.9. Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.10. Fiduciary Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.11. Section 15(f) of the 1940 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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ARTICLE VI
CONDITIONS PRECEDENT TO THE REORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.1. Conditions Precedent of AIM Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.2. Mutual Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.3. Conditions Precedent of Xxxxx Capital Development . . . . . . . . . . . . . . . . . . . . . 31
TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.2. Survival After Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.1. Nonsurvival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.2. Law Governing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.3. Binding Effect, Persons Benefiting, No Assignment . . . . . . . . . . . . . . . . . . . . . 34
Section 8.4. Obligation of AIM Equity Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.5. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.6. Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.7. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.9. Entire Agreement; Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.10. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Schedule 3.12(a) - Contracts
Schedule 6.1(d) - Opinion of Counsel to Xxxxx Capital Development
Schedule 6.2(g) - Tax Opinions
Schedule 6.3(d) - Opinion of Counsel to AIM Equity
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AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of December 20,
1995 (this "Agreement"), by and between Xxxxx Capital Development Fund, Inc., a
Wisconsin corporation ("Xxxxx Capital Development"), and AIM Equity Funds,
Inc., a Maryland corporation ("AIM Equity"), acting on behalf of AIM Capital
Development Fund (the "Portfolio").
WITNESSETH
WHEREAS, Xxxxx Capital Development is an investment company
registered with the Securities and Exchange Commission (the "SEC") under the
Investment Company Act (as defined below); and
WHEREAS, AIM Equity is an investment company registered with
the SEC under the Investment Company Act that offers separate classes of its
shares representing interests in several investment portfolios for sale to the
public; and
WHEREAS, Xxxxx Capital Development owns securities in which
the Portfolio is permitted to invest; and
WHEREAS, Xxxxx Capital Development desires to provide for its
reorganization through the transfer of substantially all of its assets to the
Portfolio in exchange for shares of the Portfolio issued in the manner set
forth in this Agreement; and
WHEREAS, this Agreement is intended to be and is adopted as a
Plan of Reorganization and Liquidation within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing premises and
the agreements and undertakings of AIM Equity and Xxxxx Capital Development
contained in this Agreement, AIM Equity and Xxxxx Capital Development agree as
follows:
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions. (a) 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):
"Acquisition Proposal" means, except for the transactions
contemplated hereby, any proposal with respect to a merger, reorganization,
consolidation, share exchange or similar transaction involving Xxxxx Capital
Development, or any purchase of all or any significant portion of the assets of
Xxxxx Capital Development, or any equity interest in Xxxxx Capital Development.
"AEF Registration Statement" means the registration statement
on Form N-1A of AIM Equity, as amended, Registration No. 2-25469/811-1424, that
is applicable to the Portfolio.
"Advisers Act" means the Investment Advisers Act of 1940, as
amended, and all rules and regulations of the SEC adopted pursuant thereto.
"Affiliated Person" means an affiliated person as defined in
Section 2(a)(3) of the Investment Company Act.
"Agreement" means this Agreement and Plan of Reorganization
together with all schedules and exhibits attached hereto and all amendments
hereto and thereof.
"AIM Equity" means AIM Equity Funds, Inc., a Maryland
corporation.
"Xxxxx Capital Development" means Xxxxx Capital Development
Fund, Inc., a Wisconsin corporation.
"BCD Financial Statements" shall have the meaning set forth in
Section 3.3 of this Agreement.
"BCD Shareholders" means the holders of record as of the
Closing Date of the issued and outstanding shares of the capital stock of Xxxxx
Capital Development.
"BCD Shareholders Meeting" means a meeting of the shareholders
of Xxxxx Capital Development convened in accordance with applicable law and the
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articles of incorporation of Xxxxx Capital Development to consider and vote
upon the approval of this Agreement and the transactions contemplated by this
Agreement.
"BCD Shares" means the issued and outstanding shares of the
capital stock of Xxxxx Capital Development.
"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 Xxxxx
Capital Development, or otherwise providing benefits to any current or former
employee, officer or director of Xxxxx Capital Development.
"Closing" means the transfer of the assets of Xxxxx Capital
Development against the delivery of Portfolio Shares directly to the
shareholders of Xxxxx Capital Development as described in Section 2.1 of this
Agreement.
"Closing Date" means March 29, 1996, or such other date as the
parties may mutually determine.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" shall have the meaning set forth in
Section 5.2(a) of this Agreement.
"Custodian" means State Street Bank and Trust Company acting
in its capacity as custodian for the assets of the Portfolio.
"Effective Time" shall mean 2:00 p.m. Central Time on the
Closing Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended, and all rules and regulations adopted by the SEC pursuant thereto.
"Excluded Assets" shall have the meaning set forth in Section
2.3 of this Agreement.
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"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 National Association of
Securities Dealers, Inc., the Commodities and 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 by the SEC pursuant
thereto.
"Lien" means any pledge, lien, security interest, charge,
claim or encumbrance of any kind.
"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.
"Person" means an individual or a corporation, partnership,
joint venture, association, trust, unincorporated organization or other entity.
"Portfolio" means AIM Capital Development Fund, an investment
portfolio of AIM Equity.
"Portfolio Shares" means shares of common stock of AIM Equity,
par value $.001, each representing an interest in the Portfolio.
"Reorganization" means the acquisition of certain of the
assets of Xxxxx Capital Development by the Portfolio in consideration of the
issuance of Portfolio Shares directly to BCD Shareholders as described in this
Agreement.
"Required BCD Shareholder Vote" shall have the meaning set
forth in Section 3.19 of this Agreement.
"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.
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"Securities Act" means the Securities Act of 1933, as amended,
and all rules and regulations adopted by the SEC pursuant thereto.
"Tax" means any tax or similar governmental charge, impost or
levy (including, without limitation, income taxes (including, without
limitation, 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, ad valorem taxes, property taxes,
withholding taxes, payroll taxes, minimum taxes, or windfall profit taxes),
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.
"Valuation Date" shall have the meaning set forth in Section
2.4 of this Agreement.
ARTICLE II
TRANSFER OF ASSETS
Section 2.1. Reorganization of Xxxxx Capital Development.
At the Effective Time, all of the assets of Xxxxx Capital Development, except
the Excluded Assets, shall be delivered to the Custodian for the account of the
Portfolio in exchange for, and against delivery by AIM Equity directly to the
BCD Shareholders at the opening of business on the Closing Date of a number of
Portfolio Shares (including, if applicable, fractional shares rounded to the
nearest thousandth) having an aggregate net asset value equal to the net value
of the assets of Xxxxx Capital Development so transferred, assigned and
delivered, all determined and adjusted as provided in Section 2.2 below. Upon
delivery of such assets, the Portfolio 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 of the Portfolio Shares and the
net value of the assets of Xxxxx Capital Development subject to this Agreement
shall, in each case, be determined as of the close of business on the NYSE on
the Valuation Date.
(b) The net asset value of the Portfolio Shares shall be
computed in the manner set forth in accordance with the policies and procedures
of the Portfolio as described in the AEF Registration Statement.
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(c) The net value of the assets of Xxxxx Capital
Development subject to this Agreement shall be computed by AIM Equity and shall
be subject to adjustment by the amount, if any, agreed to by Xxxxx Capital
Development and AIM Equity. In determining the value of the securities
transferred by Xxxxx Capital Development to the Portfolio, each security shall
be priced in accordance with the policies and procedures of the Portfolio as
described in the AEF Registration Statement. For such purposes, market quotes
and the security characteristics relating to establishing such quotes shall be
determined by AIM Equity, with the approval of Xxxxx Capital Development.
Securities for which market quotes are not available shall be valued as
mutually agreed by AIM Equity and Xxxxx Capital Development, provided that such
value is consistent with the pricing procedures adopted by AIM Equity. All
computations shall be made by AIM Equity in cooperation with the auditors of
AIM Equity and the auditors of Xxxxx Capital Development, who will apply
certain procedures agreed to by AIM Equity and Xxxxx Capital Development to
test such computations.
Section 2.3. Excluded Assets. There shall be deducted
from the assets of Xxxxx Capital Development described in Section 2.1 all
organizational expenses, any prepaid expenses that would not have value to the
Portfolio and cash in an amount estimated by Xxxxx Capital Development to be
sufficient to pay all the liabilities of Xxxxx Capital Development, including,
without limitation, (i) amounts owed or to be owed to any BCD Shareholder,
including declared but unpaid dividends, (ii) accounts payable, taxes and other
accrued and unpaid expenses, if any, incurred in the normal operation of its
business up to and including the Closing Date and (iii) the costs and expenses
incurred by Xxxxx Capital Development in making and carrying out the
transactions contemplated by this Agreement.
Section 2.4. Valuation Date. The assets of Xxxxx Capital
Development and the net asset value per share of the Portfolio Shares shall be
valued as of the close of business on the NYSE on the business day next
preceding the Closing Date (the "Valuation Date"). The stock transfer books of
Xxxxx Capital Development will be permanently closed as of the close of
business on the Valuation Date and only requests for the redemption of shares
of Xxxxx Capital Development received in proper form prior to the close of
trading on the NYSE on the Valuation Date shall be accepted by Xxxxx Capital
Development. Redemption requests thereafter received by Xxxxx Capital
Development shall be deemed to be redemption requests for Portfolio Shares
(assuming that the transactions contemplated by this Agreement have been
consummated) to be distributed to BCD Shareholders under this Agreement.
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Section 2.5. Delivery.
(a) Assets held by Xxxxx Capital Development shall be
delivered by Xxxxx Capital Development to the Custodian on the Closing Date.
No later than three (3) business days preceding the Closing Date Xxxxx Capital
Development shall instruct its custodian to make such delivery to the
Custodian. Xxxxx Capital Development shall further instruct its custodian that
any trade made by Xxxxx Capital Development during the three day period before
the Closing Date shall settle at the Custodian. 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 Xxxxx Capital
Development (other than cash held as part of the Excluded Assets) shall be
delivered at the Effective Time and shall be in the form of currency or wire
transfer in Federal funds, payable to the order of the account of the Portfolio
at the Custodian.
(b) If, on the Closing Date, Xxxxx Capital Development is
unable to make delivery in the manner contemplated by Section 2.5(a) of
securities held by Xxxxx Capital Development for the reason that any of such
securities purchased prior to the Closing Date have not yet been delivered to
Xxxxx Capital Development, its broker or brokers, then, AIM Equity shall waive
the delivery requirements of Section 2.5(a) with respect to said undelivered
securities, if Xxxxx Capital Development has delivered to the Custodian by or
on the Closing Date and with respect to said undelivered securities, executed
copies of an agreement of assignment and escrow agreement and due bills
executed on behalf of said broker or brokers, together with such other
documents as may be required by AIM Equity or the Custodian, including brokers'
confirmation slips.
Section 2.6. Dissolution. As soon as reasonably
practicable after the Closing Date, Xxxxx Capital Development shall pay or make
provisions for all of its debts, liabilities and taxes and distribute all
remaining assets to the BCD Shareholders, and Xxxxx Capital Development shall
be dissolved and deregistered under the Investment Company Act and under
applicable state laws, provided that, in the event that the transactions
contemplated herein are not approved by the BCD Shareholders, Xxxxx Capital
Development shall not be obligated to so dissolve and deregister.
Section 2.7. Issuance of AIM Equity Shares. At the
Closing Date, Xxxxx Capital Development shall instruct AIM Equity that the pro
rata interest of each of BCD Shareholders of record as of the close of business
on the Valuation Date, as certified by Xxxxx Capital Development's transfer
agent, in the Portfolio
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Shares be registered on the books of AIM Equity in full and fractional shares
in the name of each BCD Shareholder, and AIM Equity agrees promptly to comply
with said instruction. All issued and outstanding shares of Xxxxx Capital
Development's capital stock shall thereupon be canceled on the books of Xxxxx
Capital Development. AIM Equity shall have no obligation to inquire as to the
validity, propriety or correctness of any such instruction, but shall, in each
case, assume that such instruction is valid, proper and correct. AIM Equity
shall record on its books the ownership of the Portfolio Shares by BCD
Shareholders and shall forward a confirmation of such ownership to the BCD
Shareholders. No redemption or repurchase of such shares credited to former
BCD Shareholders in respect of Xxxxx Capital Development shares represented by
unsurrendered stock certificates shall be permitted until such certificates
have been surrendered to AIM Equity for cancellation, or if such certificates
are lost or misplaced, until lost certificate affidavits have been executed and
delivered to AIM Equity.
Section 2.8. Investment Securities.
(a) It is expressly understood that Xxxxx Capital
Development may hereafter sell any securities owned by it in the ordinary
course of its business as a diversified, open-end, management investment
company. Upon written request by AIM Equity, Xxxxx Capital Development shall
(i) prior to the Closing Date, dispose of equity securities held by it to
assure that AIM Equity does not own ten percent (10%) or more of the
outstanding voting securities of any issuer as a result of the Reorganization,
or (ii) cooperate with and assist AIM Equity in preparing and filing on the
Closing Date the notification and report form required by the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act, in which case the Closing shall be delayed until
the end of the waiting period prescribed by such act.
(b) On or prior to the Valuation Date, Xxxxx Capital
Development shall deliver a list setting forth the securities it then owns
together with the respective Federal income tax bases thereof. Xxxxx Capital
Development shall provide to AIM Equity on or before the Valuation Date,
detailed tax basis accounting records for each security 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
partial sale of any security transferred to the Portfolio hereunder. Such
records shall be made available by Xxxxx Capital Development prior to the
Valuation Date for inspection by the Treasurer (or his designee) or the
auditors of AIM Equity upon reasonable request.
2.9. Liabilities and Expenses. The Portfolio shall not
assume any liabilities of Xxxxx Capital Development and Xxxxx Capital
Development shall use its
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reasonable best efforts to discharge all known liabilities, as far as may be
possible, prior to the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXX CAPITAL DEVELOPMENT
Xxxxx Capital Development represents and warrants to AIM
Equity that:
Section 3.1. Incorporation: Qualification and Corporate
Authority. Xxxxx Capital Development has been duly incorporated and is validly
existing and in active status under the laws of the State of Wisconsin with all
requisite corporate power and authority to conduct its business as presently
conducted.
Section 3.2. Registration and Regulation of Xxxxx Capital
Development. Xxxxx Capital Development is duly registered with the SEC as an
investment company under the Investment Company Act and all BCD 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 Xxxxx Capital Development to revoke or rescind any
such registration or qualification. Xxxxx Capital Development 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. Xxxxx Capital
Development is in compliance in all material respects with the applicable
investment policies and restrictions set forth in its registration statement
currently in effect. The value of the net assets of Xxxxx Capital Development
is determined using portfolio valuation methods that comply in all material
respects with the requirements of the Investment Company Act and the policies
of Xxxxx Capital Development and all purchases and redemptions of BCD Shares
have been effected at the net asset value per share calculated in such manner.
Section 3.3. Financial Statements. The books of account
and related records of Xxxxx Capital Development fairly reflect in reasonable
detail its assets, liabilities and transactions in accordance with generally
accepted accounting principles applied on a consistent basis. The audited
financial statements dated September 30, 1995 of Xxxxx Capital Development
previously delivered to AIM Equity (the "BCD Financial Statements") present
fairly in all
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material respects the financial position of Xxxxx Capital Development as at the
dates indicated and the results of operations and cash flows for the periods
then ended in accordance with generally accepted accounting principles applied
on a consistent basis for the periods then ended.
Section 3.4. No Material Adverse Changes; Contingent
Liabilities. Since September 30, 1995, no material adverse change has occurred
in the financial condition, results of operations, business, assets or
liabilities of Xxxxx Capital Development or the status of Xxxxx Capital
Development 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 Xxxxx Capital
Development or occurring in the ordinary course of business of Xxxxx Capital
Development. There are no contingent liabilities of Xxxxx Capital Development
not disclosed in the BCD Financial Statements which are required to be
disclosed in accordance with generally accepted accounting principles.
Section 3.5. BCD Shares; Liabilities.
(a) The BCD Shares have been duly authorized and validly
issued and are fully paid and non-assessable (except as provided in Wisconsin
Business Corporation Law Section 180.0622(2)(b)).
(b) There is no plan or intention by the shareholders of
Xxxxx Capital Development who own five percent (5%) or more of the BCD Shares,
and to the knowledge of Xxxxx Capital Development's management, the remaining
BCD Shareholders have no present plan or intention of selling, exchanging,
redeeming or otherwise disposing of a number of the Portfolio Shares received
by them in connection with the Reorganization that would reduce the BCD
Shareholders' ownership of Portfolio Shares to a number of shares having a
value, as of the Closing Date, of less than fifty percent (50%) of the value of
all of the formerly outstanding BCD Shares as of the same date. For purposes
of this Section 3.5, BCD Shares exchanged for cash or other property or
exchanged for cash in lieu of fractional shares of the Portfolio will be
treated as outstanding BCD Shares on the date of the Reorganization. Moreover,
BCD Shares and Portfolio Shares held by BCD Shareholders and otherwise sold,
redeemed or disposed of prior or subsequent to the Reorganization will be
considered in making this representation, except for BCD Shares or Portfolio
Shares which have been, or will be, redeemed by Xxxxx Capital Development or
the Portfolio in the ordinary course of its business as an open-end,
diversified management investment company (or a series thereof) under the
Investment Company Act.
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(c) At the time of the Reorganization, Xxxxx Capital
Development shall not have outstanding any warrants, options, convertible
securities or any other type of right pursuant to which any Person could
acquire BCD Shares, except for the right of investors to acquire BCD Shares at
net asset value in the normal course of its business as an open-end diversified
management investment company operating under the Investment Company Act.
(d) Throughout the five-year period ending on the Closing
Date, Xxxxx Capital Development will have conducted its historic business
within the meaning of Section 1.368-1(d) of the Income Tax Regulations under
the Code in a substantially unchanged manner. In anticipation of the
Reorganization, Xxxxx Capital Development will not dispose of assets that, in
the aggregate, will result in less than fifty percent (50%) of its historic
business assets being transferred to the Portfolio.
(e) Xxxxx Capital Development 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. Price Waterhouse, LLP, which
has reported upon BCD Financial Statements for the period ended September 30,
1995, 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 Xxxxx Capital Development and,
assuming this Agreement has been duly executed and delivered by AIM Equity and
approved by the BCD Shareholder, constitutes the legal, valid and binding
obligation of Xxxxx Capital Development, enforceable against Xxxxx Capital
Development in accordance with its terms, 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 Xxxxx Capital Development and performance by
Xxxxx Capital Development of its obligations hereunder has been duly authorized
by all necessary corporate action on the part of Xxxxx Capital Development,
other than BCD Shareholder approval, and (i) does not and, on the Closing Date,
will not result in any violation of the articles of incorporation or by-laws of
Xxxxx Capital
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Development and (ii) does not and, will not on the Closing Date, 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 Xxxxx Capital Development (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 Xxxxx Capital Development is a party or by which it may be
bound or to which any of its properties 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 Xxxxx Capital Development or
any of its properties. Xxxxx Capital Development 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.
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 2.6 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 by Xxxxx Capital Development in connection with the due execution and
delivery by Xxxxx Capital Development of this Agreement and the consummation by
Xxxxx Capital Development of the transactions contemplated hereby.
Section 3.10. Permits. Xxxxx Capital Development has in
full force and effect all Federal, state, local and foreign governmental
approvals, consents, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights (collectively, "Permits") necessary for
it to conduct its business as presently conducted, 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 Xxxxx Capital Development 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) There is no pending action, litigation or proceeding,
nor, to the knowledge of Xxxxx Capital Development, has any litigation been
overtly threatened
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in writing or orally, against Xxxxx Capital Development 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) There are no legal, administrative or arbitration
actions, suits, or proceedings instituted or pending or, to the knowledge of
Xxxxx Capital Development, threatened in writing or, if probable of assertion,
orally against Xxxxx Capital Development or affecting any property, asset,
interest, or right of Xxxxx Capital Development, that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
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 Governmental Authority relating to the conduct of the
business of Xxxxx Capital Development affecting in any significant respect the
conduct of its business. Xxxxx Capital Development is not, and has not been,
to the knowledge of Xxxxx Capital Development, the target of any investigation
by the SEC or any state securities administrator.
Section 3.12. Contracts.
(a) Except for the contracts and agreements listed on Schedule
3.12(a), Xxxxx Capital Development is not a party to any material contract,
debt arrangement, futures contract, plan, lease, franchise or permit of any
kind or nature whatsoever.
(b) Xxxxx Capital Development is not in default under any
contract, agreement, commitment, arrangement, lease, insurance policy or other
instrument to which it is a party, by which its assets, business, or operations
may be bound or affected, or under which it or its assets, business or
operations receives benefits, and which default could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, and, to
the knowledge of Xxxxx Capital Development, there has not occurred any event
that, with the lapse of time or the giving of notice or both, would constitute
such a default.
Section 3.13. Properties and Assets. Xxxxx Capital
Development has good and marketable title to all properties and assets
reflected in BCD Financial Statements as owned by it, free and clear of all
Liens except as described in the BCD Financial Statements.
Section 3.14. Ineligible Persons. Except as previously
disclosed to AIM Equity, neither Xxxxx Capital Development nor any "Affiliated
Person" of Xxxxx Capital Development has been convicted of any felony or
misdemeanor,
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described in Section 9(a)(1) of the Investment Company Act, nor
has any Affiliated Person of Xxxxx Capital Development been subject, or
presently is subject, to any disqualification that would be a basis for denial,
suspension or revocation of registration of an investment adviser under Section
203(e) of the Advisers Act or Rule 206(4)-4(b) thereunder or of a broker-dealer
under Section 15 of the Exchange Act, or for disqualification as an investment
adviser, employee, officer or director of an investment company under Section 9
of the Investment Company Act, and, to Xxxxx Capital Development's knowledge,
there is no proceeding or investigation that is reasonably likely to become the
basis for any such disqualification, denial, suspension or revocation.
Section 3.15. Rule 17e-1. Xxxxx Capital Development has
duly adopted procedures pursuant to Rule 17e-1 under the Investment Company
Act, to the extent applicable, and Xxxxx Capital Development currently
complies and will comply with the requirements of Section 17(e) of the
Investment Company Act and Rule 17e-1 thereunder, to the extent applicable.
Section 3.16. Taxes.
(a) Xxxxx Capital Development has elected to be treated
as a regulated investment company under Subchapter M of the Code. Xxxxx
Capital Development has qualified as such for each taxable year since inception
and that has ended prior to the Closing Date and will have satisfied the
requirements of Section 851(b) of the Code for the period beginning on the
first day of its current taxable year and ending on the Closing Date. In order
to (i) insure continued qualification of Xxxxx Capital Development as a
"regulated investment company" for tax purposes and (ii) eliminate any tax
liability of Xxxxx Capital Development arising by reason of undistributed
investment company taxable income or net taxable gain, Xxxxx Capital
Development will declare to the BCD Shareholders of record on or prior to the
Valuation Date a dividend or dividends that, together with all such previous
dividends shall have the effect of distributing (A) all of its investment
company taxable income (determined without regard to any deductions for
dividends paid) for the taxable year ended September 30, 1995 and for the short
taxable year beginning on October 1, 1995 and ending on the Closing Date and
(B) all of its net capital gains realized in its taxable year ended September
30, 1995 and in such short taxable year (after reduction for any capital loss
carryover).
(b) Xxxxx Capital Development 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 financial statements of Xxxxx Capital
Development for all Taxes in
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respect of all periods ending 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 Xxxxx Capital Development,
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 Xxxxx Capital Development is currently being or has been audited
since September 30, 1990 with respect to income taxes (and since September 30,
1992 with respect to all other Taxes) by any Federal, state, local, or foreign
Tax authority.
(c) Xxxxx Capital Development's fiscal year has not been
changed for tax purposes since September 30, 1990.
Section 3.17. Benefit and Employment Obligations. Xxxxx
Capital Development has no obligation to provide any post-retirement or
post-employment benefit to any Person, including but not limited to under any
Benefit Plan, and has no obligation to provide unfunded deferred compensation
or other unfunded or self-funded benefits to any Person.
Section 3.18. Brokers. No broker, finder or similar
intermediary has acted for or on behalf of Xxxxx Capital Development 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 Xxxxx Capital Development or
any action taken by it.
Section 3.19. Voting Requirements; Dissenter's Rights. The
affirmative votes of a majority of the holders of the outstanding BCD Shares
(the "Required BCD Shareholder Vote") are the only votes of the holders of any
class or series of Xxxxx Capital Development's capital stock necessary to
approve this Agreement and the transactions contemplated by this Agreement.
The BCD Shareholders may not exercise dissenter's rights granted under the
Wisconsin Business Corporation Law with respect to the Reorganization.
Section 3.20. State Takeover Statutes. No state takeover
statute or similar statute or regulation applies or purports to apply to the
Reorganization, this Agreement or any of the transactions contemplated by this
Agreement.
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Section 3.21. Books and Records. The books and records of
Xxxxx Capital Development reflecting, among other things, the purchase and sale
of BCD Shares by BCD Shareholders, the number of issued and outstanding shares
owned by each BCD Shareholder and the state or other jurisdiction in which such
shares were offered and sold, are complete and accurate in all material
respects.
Section 3.22. Prospectus. The current prospectus and
statement of additional information for Xxxxx Capital Development 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, provided, however, that no representation or warranty is made with
respect to written information provided by AIM Equity for inclusion in the
prospectus or statement of additional information of Xxxxx Capital Development,
or any supplement thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AIM EQUITY
AIM Equity represents and warrants to Xxxxx Capital
Development as follows:
Section 4.1. Incorporation: Qualification and Corporate
Authority. AIM Equity has been duly incorporated and is validly existing and
in good standing under the laws of Maryland, with all requisite corporate power
and authority to enter into this Agreement and perform its obligations
hereunder.
Section 4.2. Binding Obligation. This Agreement has been
duly authorized, executed and delivered by AIM Equity and, assuming this
Agreement has been duly executed and delivered by Xxxxx Capital Development,
constitutes the legal, valid and binding obligation of AIM Equity, enforceable
against AIM Equity in accordance with its terms, 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 4.3. No Breaches or Defaults. The execution and
delivery of this Agreement by AIM Equity and performance by AIM Equity of its
obligations hereunder have been duly authorized by all necessary corporate
action on the part of AIM Equity and (i) do not, and on the Closing Date will
not, result in
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any violation of the charter or by-laws of AIM Equity and (ii) does 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
the Portfolio (except for such breaches or defaults or Liens that would not
reasonably be expected, individually or in the aggregate, to adversely affect
the consummation of the Reorganization) under (A) any indenture, mortgage or
loan or any other material agreement or instrument to which AIM Equity is a
party or by which it may be bound which relates to the Portfolio or to which
any properties of the Portfolio 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 AIM Equity or any of the
Portfolio's properties.
Section 4.4. 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 AIM
Equity in connection with the due execution and delivery by AIM Equity of this
Agreement and the consummation by AIM Equity of the transactions contemplated
hereby.
Section 4.5. Permits. AIM Equity has in full force and
effect all Permits necessary for it to conduct its business as presently
conducted as it relates to the Portfolio, 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 AIM Equity 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 4.6. No Actions, Suits or Proceedings.
(a) There is no pending action, suit or proceeding, nor,
to the knowledge of AIM Equity, has any litigation been overtly threatened in
writing or, if probable of assertion, orally, against AIM Equity 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.
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(b) There are no legal, administrative or arbitration
actions, suits, or proceedings instituted or pending or, to the knowledge of
AIM Equity, threatened in writing or, if probable of assertion, orally against
AIM Equity or affecting any property, asset, interest, or right of the
Portfolio, that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. 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 Governmental
Authority relating to AIM Equity's conduct of the business of the Portfolio
affecting in any significant respect the conduct of such business. AIM Equity
is not, and has not been, to the knowledge of AIM Equity, the target of any
investigation by the SEC or any state securities administrator.
Section 4.7. Ineligible Persons. Neither AIM Equity nor
any "Affiliated Person" of AIM Equity has been convicted of any felony or
misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor
has any affiliated person of AIM Equity been subject, or presently is subject,
to any disqualification that would be a basis for denial, suspension or
revocation of registration of an investment adviser under Section 203(e) of the
Advisers Act or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section
15 of the Exchange Act, or for disqualification as an investment adviser,
employee, officer or director of an investment company under Section 9 of the
Investment Company Act, and, to AIM Equity's knowledge, there is no proceeding
or investigation that is reasonably likely to become the basis for any such
disqualification, denial, suspension or revocation.
Section 4.8. Brokers. No broker, finder or similar
intermediary has acted for or on behalf of AIM Equity 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 AIM Equity or any action taken by AIM Equity.
Section 4.9. Registration and Regulation. AIM Equity is
registered with the SEC under the Investment Company Act as an open-end,
management, series, investment company and the Portfolio has elected to qualify
as a regulated investment company under Section 851 of the Code. On the
Closing Date the Portfolio will be 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. On the Closing Date the Portfolio will be in compliance
in all material respects with the applicable investment policies and
restrictions set forth
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in its registration statement currently in effect. After the Closing Date the
value of the net assets of the Portfolio will be determined using portfolio
valuation methods that comply in all material respects with the requirements of
the Investment Company Act.
Section 4.10. Registration of Portfolio Shares.
(a) The authorized capital stock of AIM Equity consists
of 7,000,000,000 shares with a par value of $0.001 each.
(b) The Portfolio Shares of AIM Equity to be issued
pursuant to Section 2.7 shall on the Closing Date be duly registered under the
Securities Act by a Registration Statement on Form N-14 of AIM Equity then in
effect.
(c) The Portfolio Shares to be issued pursuant to Section
2.7 are duly authorized and on the Closing Date will be validly issued and
fully paid and non-assessable and will conform in all substantial respects to
the description thereof contained in the Registration Statement on Form N-14
then in effect. At the time of the Reorganization, the Portfolio shall not
have outstanding any warrants, options, convertible securities or any other
type of right pursuant to which any Person could acquire Portfolio Shares,
except for the right of investors to acquire Portfolio Shares at the public
offering price in the normal course of its business as an open-end diversified
management investment company operating under the Investment Company Act.
(d) The combined proxy statement/prospectus (the
"Combined Proxy Statement/Prospectus") which forms a part of AIM Equity's
Registration Statement on Form N-14 shall be furnished to Xxxxx Capital
Development and BCD Shareholders entitled to vote at the BCD Shareholders
Meeting. The Combined Proxy Statement/Prospectus and related Statement of
Additional Information of the Portfolio, 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 materially misleading, provided,
however, that no representation or warranty is made with respect to written
information provided by Xxxxx Capital Development for inclusion in the Combined
Prospectus/Proxy Statement.
(e) The Portfolio Shares which AIM Equity intends to
offer for sale to the public after the Closing Date shall be duly registered
under the Securities Act by the AEF Registration Statement then in effect.
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Section 4.11. Representations Concerning the
Reorganization.
(a) AIM Equity has no plan or intention to reacquire any
of the Portfolio Shares issued in the Reorganization, except to the extent that
the Portfolio is required by the Investment Company Act to redeem any of its
shares presented for redemption.
(b) The Portfolio has no plan or intention to sell or
otherwise dispose of any of the assets of Xxxxx Capital Development 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, the Portfolio will
continue the "historic business" of Xxxxx Capital Development (within the
meaning of Section 1.368-1(d) of the Income Tax Regulations under the Code) or
use a significant portion of Xxxxx Capital Development's historic assets in a
business.
(d) Upon consummation of the Reorganization, the
investment portfolios of AIM Equity, in the aggregate, will not own ten percent
or more of the voting securities any issuer.
Section 4.12. Prospectus. The prospectus and statement of
additional information for Xxxxx Capital Development that will become effective
on the Closing Date 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 not misleading, provided, however, that no
representation or warranty is made with respect to written information provided
by Xxxxx Capital Development for inclusion in such prospectus or statement of
additional information, or any supplement thereto.
ARTICLE V
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 VII), Xxxxx Capital Development shall conduct
its businesses 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
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material assets and maintain the rights, franchises and business and customer
relations necessary to conduct its businesses in the ordinary course in all
material respects. Without limiting the generality of the foregoing, Xxxxx
Capital Development shall not do any of the following without the prior written
consent of AIM Equity, which consent shall not be unreasonably withheld:
(i) split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock;
(ii) amend its articles of incorporation or by-laws;
(iii) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership, joint
venture, association or other business organization or division
thereof or any assets that are material, individually or in the
aggregate, to Xxxxx Capital Development taken as a whole, except
purchases of assets in the ordinary course of business consistent with
past practice, and except as permitted under Sections 5.9 and 5.10;
(iv) sell, lease or otherwise dispose of any of its material
properties or assets, or mortgage or otherwise encumber or subject to
any Lien any of its material properties or assets, other than in the
ordinary course of business;
(v) incur any indebtedness for borrowed money or guarantee
any indebtedness of another Person, issue or sell any debt securities
or warrants or other rights to acquire any debt securities of Xxxxx
Capital Development, guarantee any debt securities of another Person,
enter into any "keep well" or other agreement to maintain any
financial statement condition of another Person, or enter into any
arrangement having the economic effect of any of the foregoing;
(vi) settle or compromise any income tax liability or make
any material tax election;
(vii) pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than in the ordinary course of
business;
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(viii) change its methods of accounting, except as required by
changes in generally accepted accounting principles as concurred in by
its independent auditors, or change its fiscal year;
(ix) make or agree to make any material severance,
termination, indemnification or similar payments except pursuant to
existing agreements; or
(x) adopt any Benefit Plan.
(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 VII), AIM Equity shall conduct the business of
the Portfolio 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 the Portfolio in the ordinary course in all material
respects.
Section 5.2. Confidentiality and Announcements.
(a) As used herein, "Confidential Information" means all
information, whether oral, written or otherwise (including any information
furnished prior to the execution of this Agreement), furnished to AIM Equity,
or its directors, officers, partners, affiliates, employees, agents, advisors
or representatives (collectively "representatives") by Xxxxx Capital
Development or its representatives relating to Xxxxx Capital Development, and
all reports, analyses, compilations, studies and other materials prepared by
AIM Equity or its representatives (in whatever form maintained, whether
documentary, computer storage or otherwise) containing, reflecting or based
upon, in whole or in part, any such information or reflecting its review or
view of, or interest in, Xxxxx Capital Development, a possible transaction with
Xxxxx Capital Development or the Confidential Information. The term
"Confidential Information" does not include information which (i) is or becomes
generally available to the public other than as a result of disclosure by AIM
Equity, its representatives or anyone to whom AIM Equity or its representatives
transmits any Confidential Information, in breach of this Agreement or (ii) is
or becomes known or available to AIM Equity on a non-confidential basis from a
source (other than Xxxxx Capital Development, or its representatives) who,
insofar as is known to AIM Equity after due inquiry, is not prohibited from
transmitting the information to AIM Equity or its representatives by a
contractual, legal, fiduciary or other obligation.
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(b) Subject to Section 5.2(c) below, AIM Equity
and its representatives shall keep the Confidential Information confidential
and shall not, without prior written consent of Xxxxx Capital Development
disclose, in whole or in part, and will not use, Confidential Information,
directly or indirectly, for any purpose other than in connection with
evaluating the transaction contemplated by this Agreement. Moreover, AIM
Equity shall transmit Confidential Information to its representatives only if
and to the extent that such representatives need to know the Confidential
Information for the purpose of evaluating such transaction and, prior to being
furnished any Confidential Information, are informed by AIM Equity of the
confidential nature of the Confidential Information, are provided with a copy
of the provisions of this Section 5.2 and agree to be bound hereby. In any
event, AIM Equity shall be responsible for any actions by its representatives
which are not in accordance with the provisions hereof. AIM Equity agrees that
neither AIM Equity nor its representatives will make inquires of, or conduct
any discussions with, any representative of Xxxxx Capital Development or
regarding the Confidential Information other than with the permission of Xxxxxx
X. Low, Jr., Xxxxxx X. Xxxxxxxxxx or Xxxx X. Xxxxxxxx.
(c) In the event that AIM Equity, its
representatives or anyone to whom AIM Equity or its representatives supply the
Confidential Information are requested or required to disclose any Confidential
Information, AIM Equity agrees (i) to immediately notify Xxxxx Capital
Development of the existence, terms and circumstances surrounding such a
request, (ii) to consult with Xxxxx Capital Development on the advisability of
taking legally available steps to resist or narrow the Confidential Information
which, in the opinion of its counsel, AIM Equity is legally compelled to
disclose and (iii) to cooperate with any action by Xxxxx Capital Development or
to obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the Confidential Information; provided,
however, that this Section 5.2(c) shall not prohibit AIM Equity or its
representatives from disclosing Confidential Information that consists of its
or their own work product to persons that have a need to know such information
in the ordinary course of business.
(d) Upon termination of this Agreement pursuant
to Article VII, and promptly upon request from Xxxxx Capital Development
thereafter, AIM Equity shall redeliver to Xxxxx Capital Development or destroy
all tangible Confidential Information and any other tangible material
containing, prepared on the basis of, or reflecting any information in the
Confidential Information (whether prepared by Xxxxx Capital Development, its
advisors or otherwise), and neither AIM Equity nor its representatives will
retain any copies, extracts or other reproductions in whole or in part of such
tangible material. For purposes of this Agreement, "tangible" Confidential
Information shall include, without limitation, information
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contained in printed, magnetic or other tangible media, or in information
storage and retrieval systems. At the request of Xxxxx Capital Development,
compliance with the foregoing shall be certified in writing to Xxxxx Capital
Development by an authorized officer supervising the same.
(e) Notwithstanding the other provisions of this
Section 5.2, promptly following execution and delivery of this Agreement, Xxxxx
Capital Development and AIM Equity shall agree upon and release a mutually
acceptable press release and Xxxxx Capital Development shall give any and all
notices required to be given by law. Except as described in the preceding
sentence and as required by law, prior to the Closing Date, none of Xxxxx
Capital Development, AIM Equity or the parent or any affiliate of either will
issue any press release or make any other public statement with respect to this
Agreement, without the prior written consent of the other parties, which
consent shall not be unreasonably withheld.
(f) The provisions of this Section 5.2 shall
terminate on the closing of the Reorganization.
Section 5.3. Expenses. Xxxxx Capital Development and AIM
Equity shall each bear their respective direct and indirect expenses incurred
in connection with this Agreement, the Reorganization and the other
transactions contemplated hereby.
Section 5.4. 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 5.5. Notice of Events. AIM Equity shall give
prompt notice to Xxxxx Capital Development, and Xxxxx Capital Development shall
give prompt notice to AIM Equity, of (i) the occurrence or nonoccurrence of any
event of which to the knowledge of AIM Equity or to the knowledge of Xxxxx
Capital Development, the occurrence or non-occurrence of which would be likely
to result in any of the conditions specified in (x) in the case of AIM Equity,
Sections 6.1 and 6.2 or (y) in the case of Xxxxx Capital Development, Sections
6.2 and 6.3, not being satisfied so as to permit the consummation of the
Reorganization and (ii) 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
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complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 5.5 shall not limit or
otherwise affect the remedies available hereunder to any party.
Section 5.6. Access to Information.
(a) Xxxxx Capital Development will, during regular business
hours and on reasonable prior notice, allow AIM Equity and its authorized
representatives reasonable access to employees, books and records of Xxxxx
Capital Development; provided, however, that any such access shall not
significantly interfere with the business or operations of Xxxxx Capital
Development.
(b) Any information made available to or obtained by AIM
Equity or its authorized representatives pursuant to subsection (a) above, or
otherwise in connection with this Agreement, shall be subject to the
confidentiality provisions described in Section 5.2 above.
(c) AIM Equity will, during regular business hours and on
reasonable prior notice, allow Xxxxx Capital Development and its authorized
representatives reasonable access to the books and records of AIM Equity
pertaining to the assets of the Portfolio and to employees of AIM Equity with
knowledge thereof, provided, however, that any such access shall not
significantly interfere with the business or operations of AIM Equity.
Section 5.7. Consents, Approvals and Filings. Each of
Xxxxx Capital Development and AIM Equity 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 Xxxxx Capital Development and AIM Equity 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. Each of Xxxxx Capital Development and AIM
Equity shall use reasonable efforts to provide such information and
communications to Governmental Authorities as such Governmental Authorities may
request.
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Section 5.8. Submission of Agreement to Shareholders.
Xxxxx Capital Development shall take all action necessary in accordance with
applicable law and its articles of incorporation and by-laws to convene the BCD
Shareholders Meeting. Xxxxx Capital Development shall, through its Board of
Directors, recommend to the BCD Shareholders approval of this Agreement and the
other transactions contemplated by this Agreement, except to the extent
provided in Section 5.10 hereof. Xxxxx Capital Development shall use its
reasonable best efforts to hold the BCD Shareholders Meeting as soon as
practicable after the date hereof.
Section 5.9. Acquisition Proposals. Xxxxx Capital
Development shall not, nor shall it authorize any officer, director or employee
of, or any investment banker, attorney or other advisor or representative of
Xxxxx Capital Development to, directly or indirectly (i) solicit, initiate or
encourage the submission of any Acquisition Proposal or (ii) participate in any
discussions or negotiations regarding, or furnish to any Person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal, and Xxxxx Capital Development shall promptly
terminate any such discussions with any Person that has expressed or expresses
an interest in acquiring Xxxxx Capital Development or negotiations pending at
the date of this Agreement provided, however, Xxxxx Capital Development or any
officer, director or employee of, or any investment banker, attorney or other
adviser or representative of Xxxxx Capital Development may, following the
receipt of an Acquisition Proposal that the Board of Directors of Xxxxx Capital
Development determines in good faith, after consultation with outside counsel,
would permit the Board of Directors to take any of the actions referred to in
Section 5.10, participate in negotiations regarding such Acquisition Proposal.
Xxxxx Capital Development shall promptly notify AIM Equity, orally and in
writing, of the receipt by it after the date hereof of any Acquisition Proposal
or any inquiry from a potential acquiror of Xxxxx Capital Development which
could reasonably be expected to lead to any Acquisition Proposal, the material
terms and conditions of such Acquisition Proposal or inquiry and the identity
of the Person making any such Acquisition Proposal or inquiry, except to the
extent Xxxxx Capital Development's Board of Directors concludes, after
consultation with outside counsel, that the disclosure of any such information
would be a breach of a duty of confidentiality imposed on Xxxxx Capital
Development with respect to such information. Subject to the foregoing, Xxxxx
Capital Development shall keep AIM Equity informed of the status and details of
any such Acquisition Proposal or inquiry.
Section 5.10. Fiduciary Duties. The Board of Directors of
Xxxxx Capital Development shall not (i) withdraw or modify, or propose to
withdraw or
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modify, in a manner adverse to AIM Equity, its approval or recommendation of
this Agreement or the Reorganization, (ii) approve or recommend, or propose to
approve or recommend, any Acquisition Proposal or (iii) authorize Xxxxx Capital
Development to enter into any agreement with respect to any Acquisition
Proposal, unless Xxxxx Capital Development receives an Acquisition Proposal and
the Board of Directors of Xxxxx Capital Development determines in good faith,
after consultation with outside counsel, that in order to comply with its
fiduciary duties to the shareholders of Xxxxx Capital Development under
applicable law, the Board of Directors of Xxxxx Capital Development should
withdraw or modify its approval or recommendation of this Agreement or the
Reorganization, approve, recommend or enter into negotiations concerning such
Acquisition Proposal, or authorize Xxxxx Capital Development to enter into an
agreement with respect to such Acquisition Proposal or terminate this
Agreement. Nothing contained in this Section 5.10 shall prohibit Xxxxx Capital
Development from making any disclosure to the BCD Shareholders which, in the
good faith and reasonable judgment of the Board of Directors of Xxxxx Capital
Development based on the advice of outside counsel, is required under
applicable law. Notwithstanding any provision of this Agreement to the
contrary, any action by the Board of Directors of Xxxxx Capital Development
permitted by this Section 5.10 shall not constitute a breach of this Agreement
by Xxxxx Capital Development.
Section 5.11. Section 15(f) of the 1940 Act.
(a) Each of AIM Equity and Xxxxx Capital Development
shall use its reasonable best efforts to assure compliance with the conditions
of Section 15(f) of the Investment Company Act as it applies to the
transactions contemplated by this Agreement.
(b) AIM Equity shall for a period of not less than three
years after the Closing Date, use its reasonable best efforts to assure that no
more than 25% of the members of the board of directors AIM Equity shall be
"interested persons" (as defined in the Investment Company Act) of the
investment adviser of Xxxxx Capital Development or any entity that served as
investment advisor to Xxxxx Capital Development or any Person that before or
after the Closing Date was or is an Affiliated Person of any of the foregoing.
Without limiting the generality of the foregoing, AIM Equity will not take,
recommend or endorse any action that would cause more than 25% of the number of
members of its board of directors to be such "interested persons."
(c) AIM Equity represents and warrants that there is no
express or implied understanding, arrangement or intention on its part to
impose an "unfair burden" within the meaning of Section 15(f) of the Investment
Company Act on
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the Portfolio as a result of the transactions contemplated hereby, and that for
a period of not less than two years after the Closing Date, it shall not take
or recommend any act that would constitute an "unfair burden" on the
Portfolio.
Section 5.12. Sales Charges. Xxxxx Capital Development
shall deliver to AIM Equity on the Closing Date a certificate showing (a) the
Remaining Amount and Balance for Interest relating to Asset Based Sales
Charges, as such terms are used in NASD Notice to Members 93-12 at page 56, and
(b) the total sales charges, and the components thereof, paid by Xxxxx Capital
Development shareholders, collected by Xxxxx Capital Development or paid by
Xxxxx Capital Development in connection with sales of its shares since July 1,
1993.
ARTICLE VI
CONDITIONS PRECEDENT TO THE REORGANIZATION
Section 6.1. Conditions Precedent of AIM Equity. The
obligation of AIM Equity 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 AIM Equity.
(a) The representations and warranties of Xxxxx Capital
Development 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) Xxxxx Capital Development shall have complied with
and satisfied in all material respects all agreements and all conditions set
forth herein on its part to be performed or satisfied at or prior to the
Closing Date.
(c) AIM Equity shall have received at the Closing Date
(i) a certificate, dated as of the Closing Date, from an officer of Xxxxx
Capital Development on behalf of Xxxxx Capital Development, in such
individual's capacity as an officer of Xxxxx Capital Development and not as an
individual, to the effect that the conditions specified in Section 6.1(a) and
(b) have been satisfied and (ii) a certificate, dated as of the Closing Date,
from the Secretary or Assistant Secretary of Xxxxx Capital Development
certifying as to the accuracy and completeness of the attached articles of
incorporation and by-laws, and resolutions, consents and authorizations with
respect to the execution and delivery of this Agreement and the transactions
contemplated hereby.
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(d) AIM Equity shall have received the signed opinion of
Xxxxxxx & Xxxxx, counsel to Xxxxx Capital Development, or other counsel
reasonably acceptable to AIM Equity, in form and substance reasonably
acceptable to counsel for AIM Equity, as to the matters set forth in Schedule
6.1(d).
Section 6.2. Mutual Conditions. The obligation of Xxxxx
Capital Development and AIM Equity to consummate the Reorganization is subject
to the satisfaction, at or prior to the Closing Date, of all of the following
further conditions, any one or more may be waived in writing by Fund and AIM
Equity, 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 Xxxxx Capital
Development and AIM Equity 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 and related
corporate matters shall have been approved and adopted at the BCD Shareholders
Meeting by the shareholders of Xxxxx Capital Development on the record date by
the Required BCD Shareholder Vote.
(c) The assets of Xxxxx Capital Development to be
acquired by the Portfolio 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 of Xxxxx Capital Development immediately prior to the Reorganization.
For these purposes, assets used by Xxxxx Capital Development 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 Xxxxx Capital Development's business as an
open-end diversified management investment company) after the date of this
Agreement shall be included as assets of Xxxxx Capital Development 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;
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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 AIM
Equity with respect to the Portfolio Shares to be issued to BCD Shareholders in
connection with the Reorganization shall have become effective under the
Securities 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 Securities Act.
(f) A post-effective amendment to the AEF Registration
Statement filed by AIM Equity to register Portfolio Shares to be offered to the
public shall have become effective under the Securities 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 Securities Act.
(g) Xxxxx Capital Development and AIM Equity shall have
received on or before the Closing Date an opinion of Xxxxxxx Xxxxx Xxxxxxx and
Ingersoll in form, scope and substance satisfactory to Xxxxx Capital
Development and AIM Equity, set forth on Schedule 6.2(g).
(h) The transactions contemplated by that certain
Agreement and Plan of Reorganization dated December 20, 1995, between Xxxxx
Blue Chip Fund, Inc. and AIM Equity acting on behalf of AIM Blue Chip Fund, and
that certain Agreement and Plan of Reorganization dated December 20, 1995
between The Xxxxx Funds, Inc., acting on behalf of Xxxxx Quality Bond Fund, and
AIM Funds Group, acting on behalf of AIM Income Fund, shall be consummated on
the Closing Date.
(i) The dividend or dividends described in the last
sentence of Section 3.16(b) shall have been declared.
(j) A I M Advisors, Inc. ("AIM") shall have executed and
delivered to Xxxxx Capital Development a certificate to the effect that:
(i) its balance sheet as of December 31, 1994 has been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis and fairly reflects the financial
condition of AIM as of the date indicated; since December 31, 1994
there has not been any change in AIM's financial condition, assets,
liabilities or business that would have a
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material adverse effect upon its ability to provide investment
advisory services to the Portfolio and the other funds advised by AIM
(the "AIM Funds").
(ii) AIM is, and on the Closing Date shall be, registered
as an investment adviser under the Investment Advisers Act and,
registered as an investment adviser in all states where it is
required to be so registered.
(iii) AIM is in compliance in all material respects with
all laws, rules and regulations applicable to its business of
providing investment advisory services to the Portfolio and the
AIM Funds, including, without limitation, federal and state
securities laws.
(iv) Neither AIM nor any affiliated person of AIM is
ineligible to serve as an employee, officer, director, member of an
advisory board, investment adviser, depositor or principal
underwriter of any investment company registered under the Investment
Company Act by reason of any conviction of a felony or misdemeanor,
described in Section 9(a)(1) of the Investment Company Act, and is
not subject to any order issued by the SEC under Section 9(b) of the
Investment Company Act. To the best of AIM's knowledge, no facts
exist with respect to AIM, or any Affiliated Person of AIM, which
would form a basis for any such conviction or the issuance of any
such order, judgment or decree.
(v) No litigation, proceeding or governmental
investigation or inquiry is pending or, to the best of AIM's
knowledge, threatened, against AIM that, if determined against AIM
would be reasonably likely to have a material adverse effect on the
Portfolio or a material adverse effect on AIM's ability to provide
investment advisory services to the Portfolio or any of the AIM
Funds.
(k) The transactions contemplated by that certain
Acquisition Agreement dated December 20, 1995 between Xxxxxx X. Xxxxx & Co.
Incorporated and A I M Advisors, Inc. shall be consummated on the Closing Date.
Section 6.3. Conditions Precedent of Xxxxx Capital
Development. The obligation of Xxxxx Capital Development 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 Xxxxx Capital Development.
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(a) The representations and warranties of AIM Equity on
behalf of the Portfolio 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) AIM Equity shall have complied with and satisfied in
all material respects all agreements and all conditions set forth herein on its
part to be performed or satisfied at or prior to the Closing Date.
(c) Xxxxx Capital Development shall have received on the
Closing Date (i) a certificate, dated as of the Closing Date, from an officer
of AIM Equity, in such individual's capacity as an officer of AIM Equity and
not as an individual, to the effect that the conditions specified in Section
6.3(a) and (b) have been satisfied and (ii) a certificate, dated as of the
Closing Date, of AIM Equity, certifying as to the accuracy and completeness of
the attached articles of incorporation and by-laws, and resolutions, consents
and authorizations with respect to the execution and delivery of this Agreement
and the transactions contemplated hereby.
(d) Xxxxx Capital Development shall have received the
signed opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, counsel to AIM Equity, or
other counsel reasonably acceptable to Xxxxx Capital Development, in form and
substance reasonably acceptable to special counsel for Xxxxx Capital
Development, as to the matters set forth on Schedule 6.3(d).
ARTICLE VII
TERMINATION OF AGREEMENT
Section 7.1. Termination.
(a) This Agreement may be terminated on or prior to the
Closing Date as follows:
(i) by mutual written consent of Xxxxx Capital
Development and AIM Equity; and
(ii) at the election of Xxxxx Capital Development or AIM
Equity:
(A) if the Closing Date shall not be on or before
June 30, 1996, or such later date as the
parties hereto may agree
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upon, 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;
(B) if, upon a vote at BCD Shareholders Meeting
or any adjournment thereof, the Required BCD
Shareholder Vote shall not have been obtained
as contemplated by Section 5.8; or
(C) 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; or
(iii) by Xxxxx Capital Development in the event Xxxxx Capital
Development receives an Acquisition Proposal and the Board of Directors of
Xxxxx Capital Development determines in good faith, after consultation with
outside counsel, that, in order to comply with its fiduciary duties to the
stockholders of Xxxxx Capital Development under applicable law, the Board of
Directors of Xxxxx Capital Development should authorize Xxxxx Capital
Development to terminate this Agreement; or
(iv) by AIM Equity 45 days following the date on which Xxxxx
Capital Development first actively participates in any discussions on
negotiations regarding, or furnishes to any Person any confidential information
with respect to, any Acquisition Proposal, unless prior to the expiration of
such 45 day period Xxxxx Capital Development notifies AIM Equity that such
Acquisition Proposal has been rejected and any such negotiations have been
terminated.
(b) The termination of this Agreement shall be effectuated by
the delivery by the terminating party to the other party of a written notice of
such termination. If this Agreement so terminates, it shall become null and
void and have no further force or effect, except as provided in Section 7.2.
Section 7.2. Survival After Termination. If this
Agreement is terminated in accordance with Section 7.1 hereof and the
transactions contemplated hereby are not consummated, this Agreement shall
become void and of no further force and effect, except for the provisions of
Section 5.2 and Section 5.3.
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ARTICLE VIII
MISCELLANEOUS
Section 8.1. Nonsurvival of Representations and
Warranties. Except as set forth below, none of the representations, warranties
or covenants in this Agreement or in any certificate or instrument delivered
pursuant to this Agreement shall survive the Closing Date and no party shall,
therefore, have any recourse therefor against any other party in connection
therewith. This Section 8.1 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Closing Date.
Section 8.2. Law Governing. This Agreement shall be
construed and interpreted according to the laws of the State of Maryland
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. Obligation of AIM Equity Portfolio. Xxxxx
Capital Development and AIM Equity hereby acknowledge and agree that the
Portfolio is a separate investment portfolio of AIM Equity, that AIM Equity is
executing this Agreement on behalf of the Portfolio, and that any amounts
payable by AIM Equity under or in connection with this Agreement shall be
payable solely from the revenues and assets of the Portfolio.
Section 8.5. Amendments. This Agreement may not be
amended, altered or modified except by a written instrument executed by Xxxxx
Capital Development and AIM Equity.
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
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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 or Schedule, such reference shall be to a Section
of, 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 III or IV
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; Schedules. This Agreement,
including the 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 AIM Equity:
AIM Equity Funds, Inc.
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
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with a copy to:
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
(b) If to Xxxxx Capital Development:
Baird Capital Development Fund, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
XXXXX CAPITAL DEVELOPMENT FUND, INC.
By: /s/ M. C. LOW, JR.
__________________________________
AIM EQUITY FUNDS, INC., acting
on behalf of AIM Capital Development Fund
By: /s/ XXXXXX X. XXXXXX
__________________________________
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Schedule 3.12(a)
LIST OF CONTRACTS AND AGREEMENTS
1. Investment Advisory Agreement dated June 25, 1984
between Baird Growth Settlement Fund, Inc. (now
named Xxxxx Capital Development Fund, Inc.) ("BCD
Fund") and Fiduciary Management, Inc. ("FMI").
2. Amendment to Investment Advisory Agreement Dated June
21, 1986 between BCD Fund and FMI.
3. Sub-Advisory Agreement dated December 12, 1986
between BCD Fund and Xxxxxx X. Xxxxx & Co.
Incorporated ("Baird").
4. Administration Agreement dated December 19, 1988
between BCD Fund and Baird.
5. Amended and Restated Distribution Plan of BCD Fund.
6. Distribution Agreement dated June 21, 1986 between
BCD Fund and Baird.
7. Distribution Assistance Agreement dated June 21, 1986
between BCD Fund and Baird.
8. Custodian Agreement dated June 25, 1984 between BCD
Fund and First Wisconsin Trust Company (now named
Firstar Trust Company) ("Firstar").
9. Amendment to Custodian Agreement dated June 21, 1986
between BCD Fund and Firstar.
10. Transfer Agent Agreement dated July 20, 1990 between
BCD Fund and Firstar.
11. License Agreement dated March 31, 1987 between BCD
Fund and Baird.
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12. Agreement dated September 14, 1994, as amended, among
the BCD Fund, The Baird Funds, Inc. and Baird Blue
Chip Fund, Inc. regarding allocation of fidelity bond
coverage, pursuant to Rule 17g-1(f) under the
Investment Company Act of 1940.
13. $1,600,000 Fidelity Bond issued by Reliance Insurance
Company.
14. Articles of Incorporation of BCD Fund.
15. Bylaws of BCD Fund.
16. Order under Section 6(c) of the Investment Company
Act of 1940, dated February 27, 1991, granting an
exemption from Sections 2(a)(32), 2(a)(35), 22(c) and
22(d) of the Act and Rule 22c-1 thereunder.
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Schedule 6.1(d)
OPINION OF COUNSEL TO XXXXX CAPITAL DEVELOPMENT
1. Xxxxx Capital Development is a corporation duly
incorporated and validly existing under the laws of
the State of Wisconsin.
2. Xxxxx Capital Development is an open-end management
investment company registered under the Investment
Company Act of 1940.
3. The execution, delivery and performance of the
Agreement by Xxxxx Capital Development have been duly
authorized and approved by all requisite corporate
action on the part of Xxxxx Capital Development. The
Agreement has been duly executed and delivered by
Xxxxx Capital Development and constitutes the valid
and binding obligation of Xxxxx Capital Development.
4. The BCD Shares outstanding on the date hereof have
been duly authorized and validly issued, are fully
paid and are non-assessable (subject to Wisconsin
Business Corporation Law Section 180.0622(2)(b)).
5. Xxxxx Capital Development is not required to submit
any notice, report or other filing with or obtain any
authorization consent or approval from any
governmental authority or self regulatory
organization prior to the consummation of the
transactions contemplated by the Agreement.
We confirm to you that to our knowledge after inquiry of each
lawyer who is the current primary contact for Xxxxx Capital Development or who
has devoted substantive attention on behalf of Xxxxx Capital Development during
the preceding twelve months and who is still currently employed by or is
currently a member of this firm, no litigation or governmental proceeding is
pending or threatened in writing against Xxxxx Capital Development (i) with
respect to the Agreement or (ii) which involves in excess of $500,000 in
damages.
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Schedule 6.2(g)
Tax Opinions.
(i) The transfer of the assets of Xxxxx Capital
Development to the Portfolio in exchange for the Portfolio Shares
distributed directly to the BCD Shareholders, as provided in the
Agreement, will constitute a "reorganization" within the meaning of
Section 368(a) of the Code and that Xxxxx Capital Development and AIM
Equity will each be a "party to a reorganization" within the meaning
of 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 Xxxxx
Capital Development as a result of such transaction.
(iii) In accordance with Section 1032 of the Code,
no gain or loss will be recognized by the Portfolio upon the receipt
of assets of Xxxxx Capital Development in exchange for Portfolio
Shares issued directly to the BCD Shareholders
(iv) In accordance with Section 354(a)(1) of the
Code, no gain or loss will be recognized by BCD Shareholders on
issuance by AIM Equity of Portfolio Shares in exchange for their BCD
Shares.
(v) In accordance with Section 362(b) of the
Code, the basis to the Portfolio of the assets of Xxxxx Capital
Development transferred to it will be the same as the basis of such
assets in the hands of Xxxxx Capital Development immediately prior to
the exchange.
(vi) In accordance with Section 358(a) of the
Code, a BCD Shareholder's basis for Portfolio Shares issued to such
BCD Shareholder pursuant to Section 2.7 of the Agreement ("Issued
Shares") will be the same as his basis for BCD Shares.
(vii) In accordance with Section 1223(1) of the
Code, a BCD Shareholder's holding period for Portfolio Shares will be
determined by including said BCD Shareholder's holding period for BCD
Shares exchanged therefor, provided that BCD Shareholder held such BCD
Shares as a capital asset.
(viii) In accordance with Section 1223(2) of the
Code, the holding period with respect to the assets of Xxxxx Capital
Development
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transferred to the Portfolio will include the holding
period for such assets in the hands of Xxxxx Capital Development.
(ix) In accordance with Section 381(a)(2) of the
Code, the Portfolio will succeed to and take into account the items of
Xxxxx Capital Development described in Section 381(c) of the Code,
subject to the conditions and limitations specified in Sections 381
through 384 of the Code and the Internal Revenue Service regulations
thereunder.
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Schedule 6.3(d)
OPINION OF COUNSEL TO AIM EQUITY
1. AIM Equity is a corporation duly incorporated and
validly existing under the laws of the State of
Maryland.
2. AIM Equity is an open-end, management investment
company registered under the Investment Company Act
of 1940.
3. The execution, delivery and performance of the
Agreement by AIM Equity have been duly authorized
and approved by all requisite corporate action on
the part of AIM Equity. The Agreement has been duly
executed and delivered by AIM Equity and constitutes
the valid and binding obligation of the Portfolio.
4. The Portfolio Shares outstanding on the date hereof
have been duly authorized and validly issued, are
fully paid and are non-assessable.
5. AIM Equity is not required to submit any notice,
report or other filing with or obtain any
authorization consent or approval from any
governmental authority or self regulatory
organization prior to the consummation of the
transactions contemplated by the Agreement.
We confirm to you that to our knowledge after inquiry of each
lawyer who is the current primary contact for AIM Equity or who has devoted
substantive attention on behalf of AIM Equity during the preceding twelve
months and who is still currently employed by or is currently a member of this
firm, no litigation or governmental proceeding is pending or threatened in
writing against the Portfolio (i) with respect to the Agreement or (ii) which
involves in excess of $500,000 in damages.
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