AGREEMENT
and
PLAN OF REORGANIZATION
for
XXXXX BLUE CHIP FUND, INC.
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............. 8
Section 3.1. Incorporation: Qualification and
Corporate Authority....................... 8
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................ 11
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................................ 13
Section 3.16. Taxes..................................... 14
Section 3.17. Benefit and Employment Obligations........ 15
Section 3.18. Brokers................................... 15
Section 3.19. Voting Requirements; Dissenter's Rights... 15
Section 3.20. State Takeover Statutes................... 15
Section 3.21. Books and Records......................... 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................ 16
Section 4.5. Permits................................... 17
Section 4.6. No Actions, Suits or Proceedings.......... 17
Section 4.7. Ineligible Persons........................ 17
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.................................. 23
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............. 26
ARTICLE VI
CONDITIONS PRECEDENT TO THE REORGANIZATION.................... 27
Section 6.1. Conditions Precedent of AIM Equity........ 27
Section 6.2. Mutual Conditions......................... 28
Section 6.3. Conditions Precedent of Xxxxx Blue Chip... 30
ARTICLE VII
TERMINATION OF AGREEMENT...................................... 31
Section 7.1. Termination............................... 31
Section 7.2. Survival After Termination................ 32
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........ 33
Section 8.5. Amendments................................ 33
Section 8.6. Enforcement............................... 33
Section 8.7. Interpretation............................ 34
Section 8.8. Counterparts.............................. 34
Section 8.9. Entire Agreement; Schedules............... 34
Section 8.10. Notices................................... 34
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
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:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. (a) For all purposes in this Agreement,
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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
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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
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3.3 of this Agreement.
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"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
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.
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"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
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5.2(a) of this Agreement.
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"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
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this Agreement.
"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.
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"Return" means any return, report or form or any attachment thereto
required to be filed with any taxing authority.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations adopted 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
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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
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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.
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(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
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
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assets of Xxxxx Blue Chip described in Section 2.1 all organizational expenses,
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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
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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.
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(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 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
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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
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2.5(a) with respect to said undelivered securities, if Xxxxx Blue Chip has
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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
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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 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.
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(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
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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.
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
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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
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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.
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Since September 30, 1995, no material adverse change has occurred in the
financial condition, results of operations, business, assets or liabilities of
Xxxxx 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. BCD Shares; Liabilities.
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(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
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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
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
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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
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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 Shareholder, 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
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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
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
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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
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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
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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.
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(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
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.
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, 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 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; (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.
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.
(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.
(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;
(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 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 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.
(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
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 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.
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.
(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.
(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 and Ingersoll in form,
scope 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 a 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 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
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
(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.
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
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 he 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
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
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.
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.
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.
(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.
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.
