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APPENDIX II
AGREEMENT
and
PLAN OF REORGANIZATION
for
XXXXX BLUE CHIP 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 Blue Chip . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . 6
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 BLUE CHIP . . . . 9
Section 3.1. Incorporation: Qualification and Corporate Authority. . . 9
Section 3.2. Registration and Regulation of Xxxxx Blue Chip. . . . . . 9
Section 3.3. Financial Statements . . . . . . . . . . . . . . . . . . 9
Section 3.4. No Material Adverse Changes; Contingent Liabilities . . . 9
Section 3.5. BBC 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
Section 3.17. Benefit and Employment Obligations. . . . . . . . . . . . 15
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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 . . . . . . . . . . . . . . . . . . . . 15
Section 3.22. Prospectus . . . . . . . . . . . . . . . . . . . . . . . 15
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 . . . . . . . . . . . . 18
Section 4.11. Representations Concerning the Reorganization . . . . . . 19
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 . . . . . . . . . . . . . . . . . . 24
Section 5.7. Consents, Approvals and Filings . . . . . . . . . . . . . 25
Section 5.8. Submission of Agreement to Shareholders . . . . . . . . . 25
Section 5.9. Acquisition Proposals . . . . . . . . . . . . . . . . . . 25
Section 5.10. Fiduciary Duties . . . . . . . . . . . . . . . . . . . . 26
Section 5.11. Section 15(f) of the 1940 Act . . . . . . . . . . . . . . 27
ARTICLE VI
CONDITIONS PRECEDENT TO THE REORGANIZATION . . . . . . . 27
Section 6.1. Conditions Precedent of AIM Equity . . . . . . . . . . . 27
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Section 6.2. Mutual Conditions . . . . . . . . . . . . . . . . . . . . 28
Section 6.3. Conditions Precedent of Xxxxx Blue Chip . . . . . . . . . 31
ARTICLE VII
TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . 32
Section 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.2. Survival After Termination . . . . . . . . . . . . . . . 33
ARTICLE VIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.1. Nonsurvival of Representations and Warranties . . . . . . 33
Section 8.2. Law Governing . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.3. Binding Effect, Persons Benefiting, No Assignment . . . . 33
Section 8.4. Obligation of AIM Equity Portfolio. . . . . . . . . . . . 34
Section 8.5. Amendments. . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.6. Enforcement . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.7. Interpretation . . . . . . . . . . . . . . . . . . . . . 34
Section 8.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.9. Entire Agreement; Schedules . . . . . . . . . . . . . . . 34
Section 8.10. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 35
Schedule 3.12(a) - Contracts
Schedule 6.1(d) - Opinion of Counsel to Xxxxx Blue Chip
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 Blue Chip Fund, Inc., a
Wisconsin corporation ("Xxxxx Blue Chip"), and AIM Equity Funds, Inc., a
Maryland corporation ("AIM Equity"), acting on behalf of AIM Blue Chip Fund
(the "Portfolio").
WITNESSETH
WHEREAS, Xxxxx Blue Chip 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 Blue Chip owns securities in which the
Portfolio is permitted to invest; and
WHEREAS, Xxxxx Blue Chip 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 Blue Chip contained
in this Agreement, AIM Equity and Xxxxx Blue Chip 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 Blue Chip,
or any purchase of all or any significant portion of the assets of Xxxxx Blue
Chip, or any equity interest in Xxxxx Blue Chip.
"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 Blue Chip" means Xxxxx Blue Chip Fund, Inc., a
Wisconsin corporation.
"BBC Financial Statements" shall have the meaning set forth
in Section 3.3 of this Agreement.
"BBC Shareholders" means the holders of record as of the
Closing Date of the issued and outstanding shares of the capital stock of Xxxxx
Blue Chip.
"BBC Shareholders Meeting" means a meeting of the
shareholders of Xxxxx Blue Chip convened in accordance with applicable law and
the articles of
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incorporation of Xxxxx Blue Chip to consider and vote upon the
approval of this Agreement and the transactions contemplated by this Agreement.
"BBC Shares" means the issued and outstanding shares of the
capital stock of Xxxxx Blue Chip.
"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
Blue Chip, or otherwise providing benefits to any current or former employee,
officer or director of Xxxxx Blue Chip.
"Closing" means the transfer of the assets of Xxxxx Blue Chip
against the delivery of Portfolio Shares directly to the shareholders of Xxxxx
Blue Chip 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 Blue Chip 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 Blue Chip by the Portfolio in consideration of the issuance of
Portfolio Shares directly to BBC Shareholders as described in this Agreement.
"Required BBC 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 Blue Chip. At the
Effective Time, all of the assets of Xxxxx Blue Chip, 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 BBC
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 Blue Chip 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 Blue Chip 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.
(c) The net value of the assets of Xxxxx Blue Chip
subject to this Agreement shall be computed by AIM Equity and shall be subject
to adjustment by
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the amount, if any, agreed to by Xxxxx Blue Chip and AIM Equity. In
determining the value of the securities transferred by Xxxxx Blue Chip 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 Blue Chip. Securities for which market quotes are not available shall
be valued as mutually agreed by AIM Equity and Xxxxx Blue Chip, 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 Blue Chip, who will apply certain
procedures agreed to by AIM Equity and Xxxxx Blue Chip to test such
computations.
Section 2.3. Excluded Assets. There shall be
deducted from the assets of Xxxxx Blue Chip 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 Blue Chip to be sufficient
to pay all the liabilities of Xxxxx Blue Chip, including, without limitation,
(i) amounts owed or to be owed to any BBC 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
Blue Chip in making and carrying out the transactions contemplated by this
Agreement.
Section 2.4. Valuation Date. The assets of Xxxxx Blue
Chip 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 Blue
Chip will be permanently closed as of the close of business on the Valuation
Date and only requests for the redemption of shares of Xxxxx Blue Chip received
in proper form prior to the close of trading on the NYSE on the Valuation Date
shall be accepted by Xxxxx Blue Chip. Redemption requests thereafter received
by Xxxxx Blue Chip 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 BBC Shareholders under this Agreement.
Section 2.5. Delivery.
(a) Assets held by Xxxxx Blue Chip shall be delivered by
Xxxxx Blue Chip to the Custodian on the Closing Date. No later than three (3)
business days preceding the Closing Date Xxxxx Blue Chip shall instruct its
custodian to make such delivery to the Custodian. Xxxxx Blue Chip shall
further instruct its custodian
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that any trade made by Xxxxx Blue Chip 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 Blue Chip (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 Blue Chip is unable to
make delivery in the manner contemplated by Section 2.5(a) of securities held
by Xxxxx Blue Chip for the reason that any of such securities purchased prior
to the Closing Date have not yet been delivered to Xxxxx Blue Chip, 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 Blue Chip 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 Blue Chip shall pay or make
provisions for all of its debts, liabilities and taxes and distribute all
remaining assets to the BBC Shareholders, and Xxxxx Blue Chip 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 BBC Shareholders, Xxxxx Blue Chip
shall not be obligated to so dissolve and deregister.
Section 2.7. Issuance of AIM Equity Shares. At the Closing
Date, Xxxxx Blue Chip shall instruct AIM Equity that the pro rata interest of
each of BBC Shareholders of record as of the close of business on the Valuation
Date, as certified by Xxxxx Blue Chip's transfer agent, in the Portfolio Shares
be registered on the books of AIM Equity in full and fractional shares in the
name of each BBC Shareholder, and AIM Equity agrees promptly to comply with said
instruction. All issued and outstanding shares of Xxxxx Blue Chip's capital
stock shall thereupon be canceled on the books of Xxxxx Blue Chip. 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 BBC Shareholders and shall forward a
confirmation of such ownership to the BBC
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Shareholders. No redemption or repurchase of such shares credited to
former BBC Shareholders in respect of Xxxxx Blue Chip 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 Blue Chip 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 Blue Chip 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 Blue Chip
shall deliver a list setting forth the securities it then owns together with
the respective Federal income tax bases thereof. Xxxxx Blue Chip 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 Blue Chip 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 Blue Chip and Xxxxx Blue Chip shall use its
reasonable best efforts to discharge all known liabilities, as far as may be
possible, prior to the Closing Date.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF XXXXX BLUE XXXX
Xxxxx Blue Chip represents and warrants to AIM Equity that:
Section 3.1. Incorporation: Qualification and Corporate
Authority. Xxxxx Blue Chip 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 Blue
Chip. Xxxxx Blue Chip is duly registered with the SEC as an investment company
under the Investment Company Act and all BBC 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 Blue Chip to revoke or rescind any such registration or
qualification. Xxxxx Blue Chip 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 Blue Chip 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 Blue Chip 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 Blue Chip and all purchases and redemptions of BBC 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 Blue Chip 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 Blue Chip previously delivered to
AIM Equity (the "BBC Financial Statements") present fairly in all material
respects the financial position of Xxxxx Blue Chip 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
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Blue Chip or the status of Xxxxx Blue Chip 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 Blue Chip or occurring in the ordinary course of
business of Xxxxx Blue Chip. There are no contingent liabilities of Xxxxx Blue
Chip not disclosed in the BBC Financial Statements which are required to be
disclosed in accordance with generally accepted accounting principles.
Section 3.5. BBC Shares; Liabilities.
(a) The BBC 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 Blue Chip who own five percent (5%) or more of the BBC Shares, and to the
knowledge of Xxxxx Blue Chip's management, the remaining BBC 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 BBC 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 BBC Shares as of the same date. For purposes of this Section 3.5,
BBC Shares exchanged for cash or other property or exchanged for cash in lieu
of fractional shares of the Portfolio will be treated as outstanding BBC Shares
on the date of the Reorganization. Moreover, BBC Shares and Portfolio Shares
held by BBC Shareholders and otherwise sold, redeemed or disposed of prior or
subsequent to the Reorganization will be considered in making this
representation, except for BBC Shares or Portfolio Shares which have been, or
will be, redeemed by Xxxxx Blue Chip 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.
(c) At the time of the Reorganization, Xxxxx Blue Chip
shall not have outstanding any warrants, options, convertible securities or any
other type of right pursuant to which any Person could acquire BBC Shares,
except for the right of investors to acquire BBC 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 Blue Chip 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
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substantially unchanged manner. In anticipation of the Reorganization, Xxxxx
Blue Chip 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 Blue Chip 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 BBC 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 Blue Chip and, assuming this
Agreement has been duly executed and delivered by AIM Equity and approved by
the BBC Shareholders, constitutes the legal, valid and binding obligation of
Xxxxx Blue Chip, enforceable against Xxxxx Blue Chip 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 Blue Chip and performance by Xxxxx Blue
Chip of its obligations hereunder has been duly authorized by all necessary
corporate action on the part of Xxxxx Blue Chip, other than BBC 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 Blue Chip 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 Blue Chip (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
Blue Chip 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
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Xxxxx Blue Chip or any of its properties. Xxxxx Blue Chip 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 Blue Chip in connection with the due execution and delivery
by Xxxxx Blue Chip of this Agreement and the consummation by Xxxxx Blue
Chip of the transactions contemplated hereby.
Section 3.10. Permits. Xxxxx Blue Chip 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 Blue Chip 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 Blue Chip, has any litigation been overtly
threatened in writing or orally, against Xxxxx Blue Chip 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 Blue Chip, threatened in writing or, if probable of assertion, orally
against Xxxxx Blue Chip or affecting any property, asset, interest, or right of
Xxxxx Blue Chip, 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
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were entered by, filed with or issued by Governmental Authority relating to the
conduct of the business of Xxxxx Blue Chip affecting in any significant respect
the conduct of its business. Xxxxx Blue Chip is not, and has not been, to the
knowledge of Xxxxx Blue Chip, 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 Blue Chip 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 Blue Chip 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 Blue Chip, 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 Blue Chip has
good and marketable title to all properties and assets reflected in BBC
Financial Statements as owned by it, free and clear of all Liens except as
described in the BBC Financial Statements.
Section 3.14. Ineligible Persons. Except as previously
disclosed to AIM Equity, neither Xxxxx Blue Chip nor any "Affiliated Person" of
Xxxxx Blue Chip 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
Xxxxx Blue Chip 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 Blue Chip's knowledge, there is no proceeding or
investigation that is reasonably likely to become the basis for any such
disqualification, denial, suspension or revocation.
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Section 3.15. Rule 17e-1. Xxxxx Blue Chip has duly adopted
procedures pursuant to Rule 17e-1 under the Investment Company Act, to the
extent applicable, and Xxxxx Blue Chip 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 Blue Chip has elected to be treated as a
regulated investment company under Subchapter M of the Code. Xxxxx Blue Chip
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 Blue Chip as a "regulated investment company" for tax
purposes and (ii) eliminate any tax liability of Xxxxx Blue Chip arising by
reason of undistributed investment company taxable income or net taxable gain,
Xxxxx Blue Chip will declare to the BBC 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 Blue Chip 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 Blue Chip for all
Taxes in 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 Blue Chip, 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 Blue Chip is currently being or has been audited since
September 30, 1990 with respect to income taxes (and since September 30,
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1992 with respect to all other Taxes) by any Federal, state, local, or foreign
Tax authority.
(c) Xxxxx Blue Chip's fiscal year has not been changed
for tax purposes since September 30, 1990.
Section 3.17. Benefit and Employment Obligations. Xxxxx
Blue Chip 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 Blue Chip 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 Blue Chip 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 BBC Shares
(the "Required BBC Shareholder Vote") are the only votes of the holders of any
class or series of Xxxxx Blue Chip's capital stock necessary to approve this
Agreement and the transactions contemplated by this Agreement. The BBC
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.
Section 3.21. Books and Records. The books and records of
Xxxxx Blue Chip reflecting, among other things, the purchase and sale of BBC
Shares by BBC Shareholders, the number of issued and outstanding shares owned
by each BBC 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 Blue Chip 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
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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 Blue Chip, or any supplement thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AIM EQUITY
AIM Equity represents and warrants to Xxxxx Blue Chip 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 Blue Chip, 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 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;
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(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.
(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.
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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 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.
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(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 Blue Chip and
BBC Shareholders entitled to vote at the BBC 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 Blue Chip 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.
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 Blue Chip 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.
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(c) Following the Reorganization, the Portfolio will
continue the "historic business" of Xxxxx Blue Chip (within the meaning of
Section 1.368-1(d) of the Income Tax Regulations under the Code) or use a
significant portion of Xxxxx Blue Chip'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
of more of the voting securities any issuer.
Section 4.12. Prospectus. The prospectus and statement of
additional information for Xxxxx Blue Chip 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 Blue
Chip 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 Blue Chip 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 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 Blue Chip 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;
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(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 Blue Chip 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
Blue Chip, 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;
(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
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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 Blue Chip or its
representatives relating to Xxxxx Blue Chip, 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 Blue Chip, a possible transaction with Xxxxx Blue Chip 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 Blue Chip,
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.
(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 Blue Chip 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
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with, any representative of Baird Blue Chip 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 Baird
Blue Chip of the existence, terms and circumstances surrounding such a request,
(ii) to consult with Baird Blue Chip 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 Baird Blue Chip 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 Baird Blue Chip thereafter, AIM
Equity shall redeliver to Baird Blue Chip 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 Baird Blue Chip, 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 contained in printed, magnetic or other tangible media, or in
information storage and retrieval systems. At the request of Baird Blue Chip,
compliance with the foregoing shall be certified in writing to Baird Blue Chip
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, Baird
Blue Chip and AIM Equity shall agree upon and release a mutually acceptable
press release and Baird Blue Chip 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 Baird Blue Chip, 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.
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(f) The provisions of this Section 5.2 shall
terminate on the closing of the Reorganization.
Section 5.3. Expenses. Baird Blue Chip 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 Baird Blue Chip, and Baird Blue Chip 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 Baird Blue Chip, 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 Baird Blue Chip, 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
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) Baird Blue Chip 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 Baird Blue Chip; provided,
however, that any such access shall not significantly interfere with the
business or operations of Baird Blue Chip.
(b) Any information made available to or obtained by AIM
Equity or its authorized representatives pursuant to subsection (a) above, or
otherwise in
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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 Baird Blue Chip 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
Baird Blue Chip 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 Baird
Blue Chip 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 Baird Blue Chip and AIM Equity shall use
reasonable efforts to provide such information and communications to
Governmental Authorities as such Governmental Authorities may request.
Section 5.8. Submission of Agreement to Shareholders.
Baird Blue Chip shall take all action necessary in accordance with applicable
law and its articles of incorporation and by-laws to convene the BBC
Shareholders Meeting. Baird Blue Chip shall, through its Board of Directors,
recommend to the BBC Shareholders approval of this Agreement and the other
transactions contemplated by this Agreement, except to the extent provided in
Section 5.10 hereof. Baird Blue Chip shall use its reasonable best efforts to
hold the BBC Shareholders Meeting as soon as practicable after the date hereof.
Section 5.9. Acquisition Proposals. Baird Blue Chip
shall not, nor shall it authorize any officer, director or employee of, or any
investment banker, attorney or other advisor or representative of Baird Blue
Chip 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
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any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Acquisition Proposal, and Baird Blue Chip shall
promptly terminate any such discussions with any Person that has expressed or
expresses an interest in acquiring Baird Blue Chip or negotiations pending at
the date of this Agreement provided, however, Baird Blue Chip or any
officer, director or employee of, or any investment banker, attorney or other
adviser or representative of Baird Blue Chip may, following the receipt of an
Acquisition Proposal that the Board of Directors of Baird Blue Chip 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. Baird Blue
Chip 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 Baird Blue Chip 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 Baird Blue Chip'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 Baird Blue Chip with respect to such information.
Subject to the foregoing, Baird Blue Chip 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
Baird Blue Chip shall not (i) withdraw or modify, or propose to withdraw or
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 Baird Blue
Chip to enter into any agreement with respect to any Acquisition Proposal,
unless Baird Blue Chip receives an Acquisition Proposal and the Board of
Directors of Baird Blue Chip determines in good faith, after consultation with
outside counsel, that in order to comply with its fiduciary duties to the
shareholders of Baird Blue Chip under applicable law, the Board of Directors of
Baird Blue Chip 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 Baird Blue Chip
to enter into an agreement with respect to such Acquisition Proposal or
terminate this Agreement. Nothing contained in this Section 5.10 shall
prohibit Baird Blue Chip from making any disclosure to the BBC Shareholders
which, in the good faith and reasonable judgment of the Board of Directors of
Baird Blue Chip 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 Baird Blue Chip permitted by
this Section 5.10 shall not constitute a breach of this Agreement by Baird Blue
Chip.
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Section 5.11. Section 15(f) of the 1940 Act.
(a) Each of AIM Equity and Baird Blue Chip 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.
(a) 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 Baird Blue Chip or any entity that served as investment
advisor to Baird Blue Chip 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."
(b) 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 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. Baird Blue Chip 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 Baird Blue
Chip shareholders, collected by Baird Blue Chip or paid by Baird Blue Chip 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.
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(a) The representations and warranties of Baird Blue Chip
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) Baird Blue Chip 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 Baird Blue
Chip on behalf of Baird Blue Chip, in such individual's capacity as an officer
of Baird Blue Chip 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
Baird Blue Chip 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) AIM Equity shall have received the signed opinion of
Xxxxxxx & Xxxxx, counsel to Baird Blue Chip, 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 Baird
Blue Chip 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 Baird Blue Chip 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.
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(b) This Agreement, the Reorganization and related
corporate matters shall have been approved and adopted at the BBC Shareholders
Meeting by the shareholders of Baird Blue Chip on the record date by the
Required BBC Shareholder Vote.
(c) The assets of Baird Blue Chip 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 Baird
Blue Chip immediately prior to the Reorganization. For these purposes, assets
used by Baird Blue Chip 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 Baird
Blue Chip's business as an open-end diversified management investment company)
after the date of this Agreement shall be included as assets of Baird Blue Chip
immediately prior to the Reorganization.
(d) No temporary restraining order, preliminary or
permanent injunction or other order issued by any Governmental Authority
preventing the consummation of the Reorganization on the Closing Date shall be
in effect; provided, however, that the party or parties invoking this condition
shall use reasonable efforts to have any such order or injunction vacated.
(e) The Registration Statement on Form N-14 filed by AIM
Equity with respect to the Portfolio Shares to be issued to BBC 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) Baird Blue Chip and AIM Equity shall have received on
or before the Closing Date an opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll in
form, scope
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and substance satisfactory to Baird Blue Chip 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
Capital Development Fund, Inc. and AIM Equity acting on behalf of AIM Capital
Development Fund, and that certain Agreement and Plan of Reorganization dated
December 20, 1995 between The Baird Funds, Inc., acting on behalf of Baird
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 Baird Blue Chip 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
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 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
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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 Baird Blue Chip. The
obligation of Baird Blue Chip 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 Baird Blue
Chip.
(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) Baird Blue Chip 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) Baird Blue Chip shall have received the signed
opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, counsel to AIM Equity, or other
counsel reasonably
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acceptable to Baird Blue Chip, in form and substance reasonably
acceptable to special counsel for Baird Blue Chip, 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 Baird Blue Chip
and AIM Equity; and
(ii) at the election of Baird Blue Chip 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 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 BBC Shareholders Meeting
or any adjournment thereof, the Required BBC
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 Baird Blue Chip in the event Baird Blue Chip
receives an Acquisition Proposal and the Board of Directors of Baird Blue Chip
determines in good faith, after consultation with outside counsel, that, in
order to comply with its fiduciary duties to the stockholders of Baird Blue
Chip under applicable law, the Board of Directors of Baird Blue Chip should
authorize Baird Blue Chip to terminate this Agreement; or
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(iv) by AIM Equity 45 days following the date on which Baird
Blue Chip 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 Baird Blue Chip 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.
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.
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Section 8.4. Obligation of AIM Equity Portfolio. Baird
Blue Chip 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 Baird
Blue Chip 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 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
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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
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 Baird Blue Chip:
Xxxxx Blue Chip 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.
BAIRD BLUE CHIP FUND, INC.
By: /s/ M. C. LOW, JR.
-----------------------------
AIM EQUITY FUNDS, INC., acting
on behalf of AIM Blue Chip Fund
By: /s/ XXXXXX X. XXXXXX
-----------------------------
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Schedule 3.12(a)
LIST OF CONTRACTS AND AGREEMENTS
1. Investment Advisory Agreement dated December 31, 1986 between Baird
Blue Chip Fund, Inc. ("BBC Fund") and Xxxxxx X. Xxxxx & Co.
Incorporated ("Baird").
2. Administration Agreement dated December 19, 1988 between BBC Fund and
Fiduciary Management, Inc., together with a supplemental letter dated
December 19, 1988.
3. Distribution Plan of BBC Fund.
4. Distribution Agreement dated December 31, 1986 between BBC Fund and
Baird.
5. Distribution Assistance Agreement dated December 31, 1986 between BBC
Fund and Baird.
6. Custodian Agreement dated December 31, 1986 between BBC Fund and First
Wisconsin Trust Company (now known as Firstar Trust Company)
("Firstar").
7. Transfer Agent Agreement dated July 20, 1990 between BBC Fund and
Firstar.
8. License Agreement dated March 31, 1987 between BBC Fund and Baird.
9. Agreement dated September 14, 1994, as amended, among BBC Fund, The
Baird Funds, Inc. and Xxxxx Capital Development Fund, Inc. regarding
allocation of fidelity bond coverage, pursuant to Rule 17g-1(f) under
the Investment Company Act of 1940.
10. $1,600,000 Fidelity Bond issued by Reliance Insurance Company.
11. Articles of Incorporation of BBC Fund.
12. Bylaws of BBC Fund.
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Schedule 6.1(d)
OPINION OF COUNSEL TO BAIRD BLUE CHIP
1. Baird Blue Chip is a corporation duly incorporated
and validly existing under the laws of the State of
Wisconsin.
2. Baird Blue Chip 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 Baird Blue Chip have been duly
authorized and approved by all requisite corporate
action on the part of Baird Blue Chip. The Agreement
has been duly executed and delivered by Baird Blue
Chip and constitutes the valid and binding obligation
of Baird Blue Chip.
4. The BBC 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. Baird Blue Chip 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 Baird Blue Chip or who has
devoted substantive attention on behalf of Baird Blue Chip 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 Baird Blue Chip (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 Baird Blue Chip
to the Portfolio in exchange for the Portfolio Shares distributed
directly to the BBC Shareholders, as provided in the Agreement, will
constitute a "reorganization" within the meaning of Section 368(a) of
the Code and that Baird Blue Chip 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 Baird
Blue Chip 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 Baird Blue Chip in exchange for Portfolio Shares issued
directly to the BBC Shareholders.
(iv) In accordance with Section 354(a)(1) of the
Code, no gain or loss will be recognized by BBC Shareholders on
issuance by AIM Equity of Portfolio Shares in exchange for their BBC
Shares.
(v) In accordance with Section 362(b) of the
Code, the basis to the Portfolio of the assets of Baird Blue Chip
transferred to it will be the same as the basis of such assets in the
hands of Baird Blue Chip immediately prior to the exchange.
(vi) In accordance with Section 358(a) of the
Code, a BBC Shareholder's basis for Portfolio Shares issued to such
BBC Shareholder pursuant to Section 2.7 of the Agreement ("Issued
Shares") will be the same as his basis for BBC Shares.
(vii) In accordance with Section 1223(1) of the
Code, a BBC Shareholder's holding period for Portfolio Shares will be
determined by including said BBC Shareholder's holding period for BBC
Shares exchanged therefor, provided that BBC Shareholder held such BBC
Shares as a capital asset.
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(viii) In accordance with Section 1223(2) of the
Code, the holding period with respect to the assets of Baird Blue
Chip transferred to the Portfolio will include the holding period
for such assets in the hands of Baird Blue Chip.
(ix) In accordance with Section 381(a)(2) of the
Code, the Portfolio will succeed to and take into account the items of
Baird Blue Chip 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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