AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan"), is made as of this
5th day of March, 2003, by and between Templeton Global Investment Trust (the
"Trust"), a statutory trust created under the laws of the State of Delaware in
1993, with its principal place of business at 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx
0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000, on behalf of its series, Xxxxxxxxx
Latin America Fund ("Latin America Fund"), and Xxxxxxxxx Funds, Inc. (the
"Company"), a corporation organized under the laws of the State of Maryland in
1977 with its principal place of business at 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx
0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000-0000, on behalf of its series, Xxxxxxxxx
Foreign Fund ("Foreign Fund").
PLAN OF REORGANIZATION
The reorganization (hereinafter referred to as the "Plan of
Reorganization") will consist of (i) the acquisition by the Company on behalf of
Foreign Fund, of substantially all of the property, assets and goodwill of Latin
America Fund in exchange solely for full and fractional Class A, Class C and
Advisor Class shares of common stock, par value $1.00 per share, of Foreign Fund
("Foreign Fund Shares"); (ii) the distribution Foreign Fund Shares to the
shareholders of Class A, Class C and Advisor Class share of Latin America Fund
(the "Latin America Fund Shares"), according to their respective interests in
Latin America Fund in complete liquidation of Latin America Fund; and (iii) the
dissolution of Latin America Fund as soon as is practicable after the closing
(as defined in Section 3, hereinafter called the "Closing"), all upon and
subject to the terms and conditions of this Plan hereinafter set forth.
AGREEMENT
In order to consummate the Plan and in consideration of the premises and of
the covenants and agreements hereinafter set forth, and intending to be legally
bound, the parties hereto covenant and agree as follows:
1. Sale and Transfer of Assets, Liquidation and Dissolution of Latin America
Fund.
(a) Subject to the terms and conditions of this Plan, and in reliance on
the representations and warranties of the Company, on behalf of Foreign Fund,
herein contained, and in consideration of the delivery by the Company of the
number of Foreign Fund Shares hereinafter provided, the Trust on behalf of Latin
America Fund agrees that it will convey, transfer and deliver to the Company,
for the benefit of Foreign Fund, at the Closing all of Latin America Fund's then
existing assets, free and clear of all liens, encumbrances, and claims
whatsoever (other than shareholders' rights of redemption), except for cash,
bank deposits, or cash equivalent securities in an estimated amount necessary
to: (i) pay Latin America Fund's share of the costs and expenses of carrying out
this Plan (including, but not limited to, fees of counsel and accountants, and
expenses of its liquidation and dissolution contemplated hereunder), which costs
and expenses shall be established on Latin America Fund's books as liability
reserves; (ii) discharge its unpaid liabilities on its books at the closing date
(as defined in Section 3, hereinafter called the "Closing Date"), including, but
not limited to, its income dividends and capital gains distributions, if any,
payable for the period prior to, and through, the Closing Date and excluding
those liabilities that would otherwise be discharged at a later date in the
ordinary course of business; and (iii) pay such contingent liabilities as the
Board of Trustees of the Trust shall reasonably deem to exist against Latin
America Fund, if any, at the Closing Date, for which contingent and other
appropriate liability reserves shall be established on Latin America Fund's
books (hereinafter "Net Assets"). The Company shall not assume any liability of
Latin America Fund and Latin America Fund shall use its reasonable best efforts
to discharge all of its known liabilities, so far as may be possible, from the
cash, bank deposits and cash equivalent securities described above. Latin
America Fund shall also retain any and all rights that it may have over and
against any person that may have accrued up to and including the close of
business on the Closing Date.
(b) Subject to the terms and conditions of this Plan, and in reliance on
the representations and warranties of the Trust, on behalf of Latin America
Fund, herein contained, and in consideration of such sale, conveyance, transfer,
and delivery, the Company agrees at the Closing to deliver to the Trust the
number of Foreign Fund Shares, determined by dividing the net asset value per
share of each of Class A, Class C and Advisor Class shares of Latin America Fund
by the net asset value per share of each of Class A, Class C and Advisor Class
shares of Foreign Fund, respectively, and separately multiplying the result
thereof by the number of outstanding Class A, Class C and Advisor Class shares,
respectively, of Latin America Fund, as of 4:00 p.m. Eastern time on the Closing
Date. The number of Foreign Fund Shares delivered to the Trust shall have an
aggregate net asset value equal to the value of the Latin America Fund's Net
Assets, all determined as provided in Section 2 of this Plan and as of the date
and time specified therein.
(c) Immediately following the Closing, the Trust shall dissolve Latin
America Fund and distribute pro rata to Latin America Fund's shareholders of
record as of the close of business on the Closing Date, Foreign Fund Shares
received by Latin America Fund pursuant to this Section 1. Such dissolution and
distribution shall be accomplished by the establishment of accounts on the share
records of Latin America Fund of the type and in the amounts due such
shareholders based on their respective holdings as of the close of business on
the Closing Date. Fractional Foreign Fund Shares shall be carried to the third
decimal place. As promptly as practicable after the Closing, each holder of any
outstanding certificate or certificates representing shares of beneficial
interest of Latin America Fund shall be entitled to surrender the same to the
transfer agent for Foreign Fund in exchange for the number of Foreign Fund
Shares of the same class into which the Latin America Fund Shares theretofore
represented by the certificate or certificates so surrendered shall have been
converted. Certificates for Foreign Fund Shares shall not be issued, unless
specifically requested by the shareholders. Until so surrendered, each
outstanding certificate which, prior to the Closing, represented shares of
beneficial interest of Latin America Fund shall be deemed for all Foreign Fund's
purposes to evidence ownership of the number of Foreign Fund Shares into which
the Latin America Fund Shares (which prior to the Closing were represented
thereby) have been converted.
(d) At the Closing, each shareholder of record of Latin America Fund as of
the record date (the "Distribution Record Date") with respect to any unpaid
dividends and other distributions that were prepared prior to the Closing,
including any dividend or distribution declared pursuant to Section 8(e) hereof,
shall have the right to receive such unpaid dividends and distributions with
respect to the shares of Latin America Fund that such person had on such
Distribution Record Date.
(e) All books and records relating to Latin America Fund, including all
books and records required to be maintained under the Investment Company Act of
1940, as amended (the "1940 Act") and the rules and regulations thereunder,
shall be available to the Company from and after the date of this Agreement, and
shall be turned over to the Company on or prior to the Closing.
2. Valuation.
(a) The net asset value of Foreign Fund Shares and Latin America Fund
Shares and the value of Latin America Fund's Net Assets to be acquired by
Foreign Fund hereunder shall in each case be computed as of 4:00 p.m. Eastern
time on the Closing Date unless on such date (a) the New York Stock Exchange
("NYSE") is not open for unrestricted trading or (b) the reporting of trading on
the NYSE or elsewhere is disrupted or (c) any other extraordinary financial
event or market condition occurs (all such events described in (a), (b) or (c)
are each referred to as a "Market Disruption"). The net asset value per share of
the Foreign Fund Shares and Latin America Fund Shares and the value of the Latin
America Fund's Net Assets shall be computed in accordance with the valuation
procedures set forth in the respective prospectuses of Foreign Fund and Latin
America Fund.
(b) In the event of a Market Disruption on the proposed Closing Date so
that an accurate appraisal of the net asset value of Foreign Fund Shares or
Latin America Fund Shares or the value of the Latin America Fund's Net Assets is
impracticable, the Closing Date shall be postponed until the first business day
when regular trading on the NYSE shall have been fully resumed and reporting
shall have been restored and other trading markets are otherwise stabilized.
(c) All computations of value regarding the net asset value of the Foreign
Fund Shares and Latin America Fund Shares and the value of Latin America Fund's
Net Assets shall be made by the investment advisor to Foreign Fund; provided,
however, that all computations of value shall be subject to review by Latin
America Fund.
3. Closing and Closing Date.
The Closing Date shall be May 9, 2003, or such later date as the parties
may mutually agree. The Closing shall take place at the principal office of the
Trust at 5:00 p.m., Eastern time, on the Closing Date. The Trust on behalf of
Latin America Fund shall have provided for delivery as of the Closing of those
Net Assets of Latin America Fund to be transferred to the account of Foreign
Fund's Custodian, JPMorgan Chase Bank, Network Management, 0 Xxxxx XxxxxXxxx
Xxxxxx - 00/xx/ Xxxxx, Xxxxxxxx, XX 00000. Also, the Trust, on behalf of Latin
America Fund, shall deliver at the Closing a list of names and addresses of the
shareholders of record of each class of Latin America Fund Shares and the number
of full and fractional shares of beneficial interest owned by each such
shareholder, indicating thereon which such shares are represented by outstanding
certificates and which by book-entry accounts, all as of 4:00 p.m. Eastern time
on the Closing Date, certified by its transfer agent or by its President to the
best of its or his knowledge and belief. The Company on behalf of Foreign Fund
shall issue and deliver a certificate or certificates evidencing the Foreign
Fund Shares to be delivered to the account of Latin America Fund at said
transfer agent registered in such manner as the officers of the Trust on behalf
of Latin America Fund may request, or provide evidence satisfactory to the Trust
that such Foreign Fund Shares have been registered in an account on the books of
Foreign Fund in such manner as the officers of the Trust on behalf of Latin
America Fund may request.
4. Representations and Warranties by the Company on behalf of Foreign Fund.
The Company, on behalf of Foreign Fund, represents and warrants to the
Trust that:
(a) Foreign Fund is a series of the Company, a corporation organized under
the laws of the State of Maryland on August 15, 1977, and is validly existing
under the laws of that State. The Company is duly registered under the 1940 Act,
as an open-end, management investment company and all of the Foreign Fund Shares
sold were sold pursuant to an effective registration statement filed under the
Securities Act of 1933, as amended (the "1933 Act"), except for those shares
sold pursuant to the private offering exemption for the purpose of raising
initial capital as required by the 1940 Act.
(b) The Company is authorized to issue two billion six hundred million
shares of common stock of Foreign Fund, par value $1.00 per share, each
outstanding share of which is fully paid, non-assessable, freely transferable
and has full voting rights, and currently issues shares of two (2) series,
including Foreign Fund. Foreign Fund is further divided into five classes of
shares of which Foreign Fund Shares represent three classes: Class A, Class C
and Advisor Class shares of beneficial interest. No shareholder of the Company
shall have any option, warrant or preemptive right of subscription or purchase
with respect to Foreign Fund Shares.
(c) The financial statements appearing in the Foreign Fund's Annual Report
to Shareholders for the fiscal year ended August 31, 2002, audited by
PricewaterhouseCoopers LLP, copies of which have been delivered to the Trust,
and any interim unaudited financial statements, copies of which may be furnished
to the Trust, fairly present the financial position of Foreign Fund as of such
date and the results of its operations for the period indicated in conformity
with generally accepted accounting principles applied on a consistent basis.
(d) The books and records of Foreign Fund accurately summarize the
accounting data represented and contain no material omissions with respect to
the business and operations of Foreign Fund.
(e) The Company has the power to own all of its properties and assets, to
perform its obligations under this Plan and to consummate the transactions
contemplated herein. The Company is not required to qualify to do business in
any jurisdiction in which it is not so qualified or where failure to qualify
would subject it to any material liability or disability. The Company has all
necessary federal, state and local authorizations, consents and approvals
required to own all of its properties and assets and to conduct Foreign Fund's
business as such business is now being conducted and to consummate the
transactions contemplated herein.
(f) The Company, on behalf of Foreign Fund, is not a party to or obligated
under any provision of its Articles of Incorporation, as amended ("Articles of
Incorporation") or Amended and Restated By-laws ("By-laws"), or any contract or
any other commitment or obligation and is not subject to any order or decree
that would be violated by its execution of or performance under this Plan, and
no consent, approval, authorization or order of any court or governmental
authority is required for the consummation by the Company of the transactions
contemplated by the Plan, except for the registration of the Foreign Fund Shares
under the 1933 Act, the 1940 Act, or as may otherwise be required under the
federal and state securities laws or the rules and regulations thereunder.
(g) The Company has elected to treat Foreign Fund as a regulated investment
company ("RIC") for federal income tax purposes under Part I of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), Foreign Fund is a
"fund" as defined in Section 851(g)(2) of the Code, has qualified as a RIC for
each taxable year since its inception and will qualify as a RIC as of the
Closing Date, and consummation of the transactions contemplated by the Plan will
not cause it to fail to be qualified as a RIC as of the Closing Date.
(h) Foreign Fund is not under jurisdiction of a Court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
(i) Foreign Fund does not have any unamortized or unpaid organizational
fees or expenses.
(j) All information to be furnished by the Company to the Trust for use in
preparing any prospectus, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto.
(k) Foreign Fund does not have any known liabilities, costs or expenses of
a material amount, contingent or otherwise, other than those incurred in the
ordinary course of business as an investment company.
(l) There is no intercorporate indebtedness existing between Latin America
Fund and Foreign Fund that was issued, acquired or will be settled at a
discount.
(m) Foreign Fund does not own, directly or indirectly, nor has it owned
during the past five (5) years, directly or indirectly, any shares of Latin
America Fund.
(n) The Company has no plan or intention to issue additional shares of
Foreign Fund following the reorganization except for shares issued in the
ordinary course of its business as a series of an open-end investment company;
nor does the Company have any plan or intention to redeem or otherwise reacquire
any shares of Foreign Fund issued pursuant to the Plan of Reorganization, other
than in the ordinary course of its business or to the extent necessary to comply
with its legal obligation under Section 22(e) of the 0000 Xxx.
(o) Foreign Fund will actively continue Latin America Fund's business in
substantially the same manner that Latin America Fund conducted that business
immediately before the Plan of Reorganization. Foreign Fund has no plan or
intention to sell or otherwise dispose of any of the former assets of Latin
America Fund, except for dispositions made in the ordinary course of its
business or dispositions necessary to maintain its qualification as a RIC,
although in the ordinary course of its business, Foreign Fund will continuously
review its investment portfolio (as Latin America Fund did before the Plan of
Reorganization) to determine whether to retain or dispose of particular stocks
or securities, including those included among the former assets of Latin America
Fund.
(p) The Form N-14 Registration Statement referred to in Section 7(g) hereof
(other than the portions of such documents based on information furnished by or
on behalf of the Trust for inclusion or incorporation by reference therein), and
any Prospectus or Statement of Additional Information of Foreign Fund contained
or incorporated therein by reference, and any supplement or amendment to the
Form N-14 Registration Statement or any such Prospectus or Statement of
Additional Information, on the effective and clearance dates of the Form N-14
Registration Statement, on the date of the Special Meeting of Latin America Fund
shareholders, and on the Closing Date: (a) shall comply in all material respects
with the provisions of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), the 1940 Act, the rules and regulations thereunder, and all
applicable state securities laws and the rules and regulations thereunder; and
(b) shall not contain 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 the statements
were made, not misleading.
5. Representations and Warranties by the Trust on behalf of Latin America Fund.
The Trust, on behalf of Latin America Fund, represents and warrants to the
Company that:
(a) Latin America Fund is a series of the Trust, a statutory trust created
under the laws of the State of Delaware on December 21, 1993, and is validly
existing under the laws of that State. The Trust is duly registered under the
1940 Act as an open-end, management investment company and all of the Trust's
Latin America Fund Shares sold were sold pursuant to an effective registration
statement filed under the 1933 Act, except for those shares sold pursuant to the
private offering exemption for the purpose of raising the required initial
capital, as required by the 1940 Act.
(b) The Trust is authorized to issue an unlimited number of shares of
beneficial interest of Latin America Fund, par value $0.01 per share, each
outstanding share of which is fully paid, non-assessable, freely transferable
and has full voting rights, and currently issues shares of two (2) series,
including Latin America Fund. Latin America Fund has three classes of shares:
Class A, Class C and Advisor Class, and an unlimited number of shares of
beneficial interest of the Trust have been allocated and designated to each
class of Latin America Fund. No shareholder of the Trust has or will have any
option, warrant or preemptive rights of subscription or purchase with respect to
Latin America Fund Shares.
(c) The financial statements appearing in Latin America Fund's Annual
Report to Shareholders for the fiscal year ended March 31, 2002, audited by
PricewaterhouseCoopers LLP, copies of which have been delivered, or will be
delivered, to the Company, and any interim financial statements for the Trust
which may be furnished to the Company, fairly present the financial position of
Latin America Fund as of such date and the results of its operations for the
period indicated in conformity with generally accepted accounting principles
applied on a consistent basis.
(d) The books and records of Latin America Fund accurately summarize the
accounting data represented and contain no material omissions with respect to
the business and operations of Latin America Fund.
(e) The Trust has the power to own all of its properties and assets, to
perform its obligations under this Plan and to consummate the transactions
contemplated herein. The Trust is not required to qualify to do business in any
jurisdiction in which it is not so qualified or where failure to qualify would
subject it to any material liability or disability. The Trust has all necessary
federal, state and local authorizations, consents and approvals required to own
all of its properties and assets and to conduct Latin America Fund's business as
such business is now being conducted and to consummate the transactions
contemplated herein.
(f) The Trust, on behalf of Latin America Fund, is not a party to or
obligated under any provision of its Trust Instrument or Bylaws, or any contract
or any other commitment or obligation, and is not subject to any order or
decree, that would be violated by its execution of or performance under this
Plan. The Trust has furnished the Company with copies or descriptions of all
material agreements or other arrangements to which Latin America Fund is a
party. Latin America Fund has no material contracts or other commitments (other
than this Plan or agreements for the purchase of securities entered into in the
ordinary course of business and consistent with its obligations under this Plan)
which will not be terminated by Latin America Fund in accordance with their
terms at or prior to the Closing Date.
(g) The Trust has elected to treat Latin America Fund as a RIC for federal
income tax purposes under Part I of Subchapter M of the Code. Latin America Fund
is a "fund" as defined in section 851(g)(2) of the Code, has qualified as a RIC
for each taxable year since its inception, and will qualify as a RIC as of the
Closing Date, and consummation of the transactions contemplated by the Plan will
not cause it to fail to be qualified as a RIC as of the Closing Date.
(h) Latin America Fund is not under jurisdiction of a Court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
(i) Latin America Fund does not have any unamortized or unpaid organization
fees or expenses.
(j) The Prospectuses for Class A, Class C and Advisor Class shares of Latin
America Fund, dated August 1, 2002, and the corresponding Statements of
Additional Information, dated August 1, 2002, 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, in light of the
circumstances under which they were made, not misleading, and any amended,
revised, or new prospectus or statement of additional information of Latin
America Fund or any supplement thereto, that is hereafter filed with the SEC
(copies of which documents shall be provided to the Company promptly after such
filing), shall not contain any untrue statement of a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(k) Latin America Fund does not have any known liabilities, costs or
expenses of a material amount, contingent or otherwise, other than those
reflected in the financial statements referred to in Section 5(c) hereof and
those incurred in the ordinary course of business as an investment company since
the dates of those financial statements. On the Closing Date, the Trust shall
advise the Company in writing of all Latin America Fund's known liabilities,
contingent or otherwise, whether or not incurred in the ordinary course of
business, existing or accrued at such time.
(l) Since March 31, 2002, there has not been any material adverse change in
Latin America Fund's financial condition, assets, liabilities, or business other
than changes occurring in the ordinary course of its business.
(m) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Latin America Fund or
the Trust of the transactions contemplated by the Plan, except as may be
required under the federal or state securities laws or the rules and regulations
thereunder.
(n) The information to be furnished by the Trust or Latin America Fund for
use in preparing the Form N-14 Registration Statement referred to in Section
7(g) hereof, and the Proxy Statement/Prospectus to be included in the Form N-14
Registration Statement, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby, shall be
accurate and complete and shall comply in all material respects with federal
securities and other laws and regulations thereunder applicable thereto.
(o) There is no intercorporate indebtedness existing between Latin America
Fund and Foreign Fund that was issued, acquired or will be settled at a
discount.
(p) There is no plan or intention of Latin America Fund shareholders who
individually own 5% or more of shares of Latin America Fund and, to the best of
the Trust's knowledge, there is no plan or intention of the remaining Latin
America Fund shareholders to redeem or otherwise to dispose of any shares of
Foreign Fund to be received by them in the Plan of Reorganization (but
redemptions and dispositions of shares of Foreign Fund may occur in the future
as a consequence of investment decisions unrelated to the Plan of
Reorganization). The Trust does not anticipate dispositions of shares of Latin
America Fund at the time or soon after the reorganization to exceed the usual
rate and frequency of redemptions of shares of Latin America Fund as a series of
an open-end investment company. Consequently, the Trust is not aware of any plan
that would cause the percentage of shareholder interests, if any, that will be
disposed of as a result of or at the time of the Plan of Reorganization to be 1%
or more of the shares of Latin America Fund outstanding as of the Closing Date.
(q) As of the Closing Date, Latin America Fund will not have outstanding
any warrants, options, convertible securities, or any other type of rights
pursuant to which any person could acquire shares of Latin America Fund, except
for the right of investors to acquire its shares at the applicable stated
offering price in the normal course of its business as an open-end diversified
management investment company operating under the 1940 Act.
(r) Throughout the five year period ending on the Closing Date, Latin
America Fund will have conducted its historic business within the meaning of
Section 1.368-1(d) of the Income Tax Regulations under the Code.
6. Representations and Warranties by the Trust and the Company.
The Trust, on behalf of Latin America Fund, and the Company, on behalf of
Foreign Fund, each represents and warrants to the other that:
(a) The statement of assets and liabilities to be furnished by it as of
4:00 p.m. Eastern time on the Closing Date for the purpose of determining the
number of Foreign Fund Shares to be issued pursuant to Section 1 of this Plan,
will accurately reflect each Fund's Net Assets and outstanding shares of
beneficial interest, as of such date, in conformity with generally accepted
accounting principles applied on a consistent basis.
(b) At the Closing, it will have good and marketable title to all of the
securities and other assets shown on the statement of assets and liabilities
referred to in (a) above, free and clear of all liens or encumbrances of any
nature whatsoever, except such imperfections of title or encumbrances as do not
materially detract from the value or use of the assets subject thereto, or
materially affect title thereto.
(c) Except as disclosed in its currently effective prospectus relating to
Latin America Fund, in the case of the Trust, and Foreign Fund, in the case of
the Company, there is no material suit, judicial action, or legal or
administrative proceeding pending or threatened against it. Neither the Company
nor the Trust are a party to or subject to the provisions of any order, decree
or judgment of any court or governmental body which materially and adversely
affects Foreign Fund's or Latin America Fund's business or their ability to
consummate the transactions herein contemplated.
(d) There are no known actual or proposed deficiency assessments with
respect to any taxes payable by it.
(e) The execution, delivery, and performance of this Plan have been duly
authorized by all necessary action of its Board of Trustees/Directors, as the
case may be, and this Plan, subject to the approval of Latin America Fund's
shareholders in the case of the Trust, constitutes a valid and binding
obligation enforceable in accordance with its terms, subject as to enforcement
to bankruptcy, insolvency, reorganization arrangement, moratorium, and other
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(f) It anticipates that consummation of this Plan will not cause Latin
America Fund, in the case of the Trust, and Foreign Fund, in the case of the
Company, to fail to conform to the requirements of Subchapter M of the Code for
federal income taxation qualification as a RIC at the end of its fiscal year.
7. Covenants of the Trust and the Company.
(a) The Trust, on behalf of Latin America Fund, and the Company, on behalf
of Foreign Fund, each covenant to operate their respective businesses as
presently conducted between the date hereof and the Closing, it being understood
that such ordinary course of business will include customary dividends and
distributions and any other distribution necessary or desirable to minimize
federal income or excise taxes.
(b) The Trust, on behalf of Latin America Fund, undertakes that it will not
acquire Foreign Fund Shares for the purpose of making distributions thereof to
anyone other than Latin America Fund's shareholders.
(c) The Trust, on behalf of Latin America Fund, undertakes that, if this
Plan is consummated, it will liquidate and dissolve Latin America Fund.
(d) The Trust, on behalf of Latin America Fund, and the Company, on behalf
of Foreign Fund, each agree that, by the Closing, all of their Federal and other
tax returns and reports required by law to be filed on or before such date shall
have been filed, and all Federal and other taxes shown as due on said returns
shall have either been paid or adequate liability reserves shall have been
provided for the payment of such taxes, and to the best of their knowledge no
such tax return is currently under audit and no tax deficiency or liability has
been asserted with respect to such tax returns or reports by the Internal
Revenue Service or any state or local tax authority.
(e) At the Closing, the Trust, on behalf of Latin America Fund, will
provide Foreign Fund a copy of the shareholder ledger accounts, certified by
Latin America Fund's transfer agent or its President to the best of its or his
knowledge and belief, for all the shareholders of record of Latin America Fund
Shares as of 4:00 p.m. Eastern time on the Closing Date who are to become
shareholders of Foreign Fund as a result of the transfer of assets that is the
subject of this Plan.
(f) The Board of Trustees of the Trust shall call and the Trust shall hold,
a Special Meeting of Latin America Fund's shareholders to consider and vote upon
this Plan (the "Special Meeting") and the Trust shall take all other actions
reasonably necessary to obtain approval of the transactions contemplated herein.
The Trust agrees to mail to each shareholder of record of Latin America Fund
entitled to vote at the Special Meeting at which action on this Plan is to be
considered, in sufficient time to comply with requirements as to notice thereof,
a combined Prospectus/Proxy Statement that complies in all material respects
with the applicable provisions of Section 14(a) of the 1934 Act and Section
20(a) of the 1940 Act, and the rules and regulations, respectively, thereunder.
(g) The Company will file with the U.S. Securities and Exchange Commission
a registration statement on Form N-14 under the 1933 Act relating to Foreign
Fund Shares issuable hereunder ("Registration Statement"), and will use its best
efforts to provide that the Registration Statement becomes effective as promptly
as is practicable. At the time it becomes effective, the Registration Statement
will (i) comply in all material respects with the applicable provisions of the
1933 Act, and the rules and regulations promulgated thereunder; and (ii) not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. At the time the Registration Statement becomes effective, at the
time of the Special Meeting, and at the Closing Date, the prospectus and
statement of additional information included in the Registration Statement will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(h) Subject to the provisions of this Plan, the Company and the Trust each
shall take, or cause to be taken, all action, and do or cause to be done, all
things reasonably necessary, proper or advisable to consummate the transactions
contemplated by this Plan.
(i) The Trust shall furnish to the Company on the Closing Date a Statement
of Assets and Liabilities of Latin America Fund as of the Closing Date, which
statement shall be prepared in accordance with GAAP consistently applied and
shall be certified by Latin America Fund's Treasurer or Assistant Treasurer. As
promptly as practicable, but in any case, within forty-five (45) days after the
Closing Date, the Trust shall furnish to the Company, in such form as is
reasonably satisfactory to the Company, a statement of the earnings and profits
of Latin America Fund for federal income tax purposes, and of any capital loss
carryovers and other items that will be carried over to Foreign Fund as a result
of Section 381 of the Code, which statement shall be certified by Latin America
Fund's Treasurer or Assistant Treasurer. The Trust covenants that Latin America
Fund has no earnings and profits that were accumulated by it or any acquired
entity during a taxable year when it or such entity did not qualify as a RIC
under the Code, or, if it has such earnings and profits, it shall distribute
them to its shareholders prior to the Closing Date.
(j) The Trust shall deliver to the Company at the Closing Date confirmation
or other adequate evidence as to the tax costs and holding periods of the assets
and property of Latin America Fund transferred to the Company in accordance with
the terms of this Plan.
8. Conditions Precedent to be Fulfilled by the Trust and the Company.
The consummation of this Plan hereunder shall be subject to the following
respective conditions:
(a) That: (i) all the representations and warranties of the other party
contained herein shall be true and correct as of the Closing with the same
effect as though made as of and at such date; (ii) the other party shall have
performed all obligations required by this Plan to be performed by it prior to
the Closing; and (iii) the other party shall have delivered to such party a
certificate signed by the President and by the Secretary or equivalent officer
to the foregoing effect.
(b) That each party shall have delivered to the other party a copy of the
resolutions approving the Plan adopted and approved by the appropriate action of
the Board of Directors/Trustees certified by its Secretary or equivalent officer
of each of the Funds.
(c) That the U.S. Securities and Exchange Commission shall not have issued
an unfavorable management report under Section 25(b) of the 1940 Act or
instituted or threatened to institute any proceeding seeking to enjoin
consummation of the Plan under Section 25(c) of the 1940 Act. And, further, no
other legal, administrative or other proceeding shall have been instituted or
threatened that would materially affect the financial condition of either party
or would prohibit the transactions contemplated hereby.
(d) That this Plan and the Plan of Reorganization contemplated hereby shall
have been adopted and approved by the appropriate action of the shareholders of
Latin America Fund at an annual or special meeting or any adjournment thereof.
(e) That a distribution or distributions shall have been declared for Latin
America Fund prior to the Closing Date that, together with all previous
distributions, shall have the effect of distributing to its shareholders (i) all
of its ordinary income and all of its capital gain net income, if any, for the
period from the close of its last fiscal year to 4:00 p.m. Eastern time on the
Closing Date; and (ii) any undistributed ordinary income and capital gain net
income from any period to the extent not otherwise declared for distribution.
Capital gain net income has the meaning given such term by Section 1222(g) of
the Code.
(f) That all required consents of other parties and all other consents,
orders, and permits of federal, state and local authorities (including those of
the U.S. Securities and Exchange Commission (the "SEC") and of state Blue Sky
securities authorities, including any necessary "no-action" positions or
exemptive orders from such federal and state authorities) to permit consummation
of the transaction contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order, or permit would not involve a risk of
material adverse effect on the assets and properties of Latin America Fund or
Foreign Fund.
(g) That there shall be delivered to the Trust, on behalf of Latin America
Fund, and the Company, on behalf of Foreign Fund, an opinion, from Messrs.
Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP, counsel to the Company, to the effect that,
provided the transaction contemplated hereby is carried out in accordance with
this Plan and based upon certificates of the officers of the Trust and the
Company with regard to matters of fact:
(1) The acquisition by Foreign Fund of substantially all the assets of
Latin America Fund as provided for herein in exchange for Foreign Fund
Shares followed by the distribution by Latin America Fund to its
shareholders of Foreign Fund Shares in complete liquidation of Latin
America Fund will qualify as a reorganization within the meaning of Section
368(a)(1) of the Code, and Latin America Fund and Foreign Fund will each be
a "party to the reorganization" within the meaning of Section 368(b) of the
Code;
(2) No gain or loss will be recognized by Latin America Fund upon the
transfer of substantially all of its assets to Foreign Fund in exchange
solely for voting shares of Foreign Fund (Sections 361(a) and 357(a) of the
Code). No opinion, however, will be expressed as to whether any accrued
market discount will be required to be recognized as ordinary income
pursuant to Section 1276 of the Code;
(3) Foreign Fund will recognize no gain or loss upon the receipt of
substantially all of the assets of Latin America Fund in exchange solely
for voting shares of Foreign Fund (Section 1032(a) of the Code);
(4) No gain or loss will be recognized by Latin America Fund upon the
distribution of Foreign Fund Shares to its shareholders in liquidation of
Latin America Fund (in pursuance of the Plan) (Section 361(c)(1) of the
Code);
(5) The basis of the assets of Latin America Fund received by Foreign Fund
will be the same as the basis of such assets to Latin America Fund
immediately prior to the Plan of Reorganization (Section 362(b) of the
Code);
(6) The holding period of the assets of Latin America Fund received by
Foreign Fund will include the period during which such assets were held by
Latin America Fund (Section 1223(2) of the Code);
(7) No gain or loss will be recognized by the shareholders of Latin America
Fund upon the exchange of their shares in Latin America Fund for voting
shares of Foreign Fund including fractional shares to which they may be
entitled (Section 354(a) of the Code);
(8) The basis of Foreign Fund Shares received by the shareholders of Latin
America Fund shall be the same as the basis of the Latin America Fund
Shares exchanged therefor (Section 358(a)(1) of the Code);
(9) The holding period of Foreign Fund Shares received by shareholders of
Latin America Fund (including fractional shares to which they may be
entitled) will include the holding period of the Latin America Fund Shares
surrendered in exchange therefor, provided that the Latin America Fund
Shares were held as a capital asset on the effective date of the exchange
(Section 1223(1) of the Code); and
(10) Foreign Fund will succeed to and take into account as of the date of
the transfer (as defined in Section 1.381(b)-1(b) of the regulations issued
by the United States Treasury ("Treasury Regulations")) the items of Latin
America Fund described in Section 381(c) of the Code, subject to the
conditions and limitations specified in Sections 381, 382, 383 and 384 of
the Code and the Treasury Regulations.
(h) That there shall be delivered to the Company, on behalf of Foreign
Fund, an opinion in form and substance satisfactory to it from Messrs. Xxxxxxxx
Ronon Xxxxxxx & Xxxxx, LLP, counsel to the Trust, on behalf of Latin America
Fund, to the effect that, subject in all respects to the effects of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws
now or hereafter affecting generally the enforcement of creditors' rights:
(1) Latin America Fund is a series of the Trust and that the Trust is a
validly existing statutory trust in good standing under the laws of the
State of Delaware;
(2) The Trust is authorized to issue an unlimited number of shares of
beneficial interest, par value $0.01 per share, of Latin America Fund.
Three classes of shares of Latin America Fund (Class A, Class C, and
Advisor Class) have been designated as Latin America Fund Shares, and an
unlimited number of shares of beneficial interest of the Trust have been
allocated to Latin America Fund Shares. Assuming that the initial shares of
beneficial interest of Latin America Fund were issued in accordance with
the 1940 Act and the Trust Instrument and Bylaws of the Trust, and that all
other outstanding shares of Latin America Fund were sold, issued and paid
for in accordance with the terms of Latin America Fund's prospectus in
effect at the time of such sales, each such outstanding share is fully
paid, non-assessable, freely transferable and has full voting rights;
(3) The Trust is an open-end investment company of the management type
registered as such under the 1940 Act;
(4) Except as disclosed in Latin America Fund's currently effective
prospectus, such counsel does not know of any material suit, action, or
legal or administrative proceeding pending or threatened against Latin
America Fund, the unfavorable outcome of which would materially and
adversely affect the Trust or Latin America Fund;
(5) The execution and delivery of this Plan and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
trust action on the part of the Trust on behalf of Latin America Fund; and
(6) To the knowledge of such counsel, neither the execution, delivery, nor
performance of this Plan by the Trust, on behalf of Latin America Fund,
violates any provision of its Trust Instrument or Bylaws, or the provisions
of any agreement or other instrument filed by the Trust as an exhibit to
its Registration Statement on Form N-1A; this Plan is the legal, valid and
binding obligation of the Trust, on behalf of Latin America Fund, and is
enforceable against the Trust, on behalf of Latin America Fund, in
accordance with its terms.
In giving the opinions set forth above, this counsel may state that it is
relying on certificates of the officers of the Trust with regard to matters of
fact, and certain certifications and written statements of governmental
officials with respect to the good standing of the Trust.
(i) That there shall be delivered to the Trust, on behalf of Latin America
Fund, an opinion in form and substance satisfactory to it from Messrs. Xxxxxxxx
Ronon Xxxxxxx & Xxxxx, LLP, counsel to the Company, on behalf of Foreign Fund,
to the effect that, subject in all respects to the effects of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other laws now
or hereafter affecting generally the enforcement of creditors' rights:
(1) Foreign Fund is a series of the Company and the Company is a validly
existing corporation in good standing under the laws of the State of
Maryland;
(2) The Company is authorized to issue two billion six hundred million
shares of common stock, par value $1.00 per share of Foreign Fund. Foreign
Fund is further divided into five (5) classes of shares of which Foreign
Fund Shares constitute Class A, Class C and Advisor Class shares, par value
$1.00 per share. Assuming that the initial shares of common stock of
Foreign Fund were issued in accordance with the 1940 Act, and the Articles
of Incorporation and the By-laws of the Company, and that all other
outstanding shares of Foreign Fund were sold, issued and paid for in
accordance with the terms of Foreign Fund's prospectus in effect at the
time of such sales, each such outstanding share of Foreign Fund is fully
paid, non-assessable, freely transferable and has full voting rights;
(3) Foreign Fund is an open-end investment company of the management type
registered as such under the 1940 Act;
(4) Except as disclosed in Foreign Fund's currently effective prospectus,
such counsel does not know of any material suit, action, or legal or
administrative proceeding pending or threatened against Foreign Fund, the
unfavorable outcome of which would materially and adversely affect the
Company or Foreign Fund;
(5) Foreign Fund Shares to be issued pursuant to the terms of this Plan
have been duly authorized and, when issued and delivered as provided in
this Plan, will have been validly issued and fully paid and will be
non-assessable by the Company, on behalf of Foreign Fund;
(6) The execution and delivery of this Plan and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, on behalf of Foreign Fund;
(7) To the knowledge of such counsel, neither the execution, delivery, nor
performance of this Plan by the Company, on behalf of Foreign Fund,
violates any provision of its Articles of Incorporation or By-laws, or the
provisions of any agreement or other instrument filed by the Company as an
exhibit to its Registration Statement on Form N-1A; this Plan is the legal,
valid and binding obligation of the Company, on behalf of Foreign Fund, and
is enforceable against the Company, on behalf of Foreign Fund, in
accordance with its terms; and
(8) The registration statement of the Company, of which the prospectus
dated January 1, 2003 of Foreign Fund is a part (the "Prospectus") is, at
the time of the signing of this Plan, effective under the 1933 Act, and, to
the best knowledge of such counsel, no stop order suspending the
effectiveness of such registration statement has been issued, and no
proceedings for such purpose have been instituted or are pending before or
threatened by the U.S. Securities and Exchange Commission under the 1933
Act, and nothing has come to counsel's attention that causes it to believe
that, at the time the Prospectus became effective or at the time of the
signing of this Plan, such Prospectus (except for the financial statements
and other financial and statistical data included therein, as to which
counsel need not express an opinion), contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
such counsel knows of no legal or government proceedings required to be
described in the Prospectus, or of any contract or document of a character
required to be described in the Prospectus that is not described as
required.
In giving the opinions set forth above, this counsel may state that it is
relying on certificates of the officers of the Company with regard to matters
of fact, and certain certifications and written statements of governmental
officials with respect to the good standing of the Company.
(j) That Latin America Fund shall have received a certificate from the
President or any Vice President and the Secretary or any Assistant Secretary of
the Company, on behalf of Foreign Fund, to the effect that the statements
contained in the Prospectus, at the time the Prospectus became effective and at
the date of the signing of this Plan, did 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.
(k) That the Company's Registration Statement with respect to Foreign Fund
Shares to be delivered to Latin America Fund's shareholders in accordance with
this Plan shall have become effective, and no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto, shall have been issued prior to the Closing Date or shall be in effect
at Closing, and no proceedings for the issuance of such an order shall be
pending or threatened on that date.
(l) That Foreign Fund Shares to be delivered hereunder shall be eligible
for sale with each state commission or agency with which such eligibility is
required in order to permit Foreign Fund Shares lawfully to be delivered to each
holder of Latin America Fund Shares.
(m) That, at the Closing, there shall be transferred to the Company, on
behalf of Foreign Fund, aggregate Net Assets of Latin America Fund comprising at
least 90% in fair market value of the total net assets and 70% of the fair
market value of the total gross assets recorded on the books of Latin America
Fund on the Closing Date.
(n) That there be delivered to the Company, on behalf of Foreign Fund,
information concerning the tax basis of Latin America Fund in all securities
transferred to Foreign Fund, together with shareholder information including the
names, addresses, and taxpayer identification numbers of the shareholders of
Latin America Fund as of the Closing Date, the number of shares held by each
shareholder, the dividend reinvestment elections applicable to each shareholder,
and the backup withholding and nonresident alien withholding certifications,
notices or records on file with Latin America Fund respect to each shareholder.
9. Brokerage Fees and Expenses.
(a) The Trust, on behalf of Latin America Fund, and the Company, on behalf
of Foreign Fund, each represents and warrants to the other that there are no
broker or finders' fees payable by it in connection with the transactions
provided for herein.
(b) The expenses of entering into and carrying out the provisions of this
Plan shall be borne one-quarter by Foreign Fund, one-quarter by Latin America
Fund, and one-quarter by Xxxxxxxxx Investment Counsel, LLC and one-quarter by
Xxxxxxxxx Global Advisors Limited.
10. Termination; Postponement; Waiver; Order.
(a) Anything contained in the Plan to the contrary notwithstanding, the
Plan may be terminated and the Plan of Reorganization abandoned at any time
(whether before or after approval thereof by the shareholders of Latin America
Fund) prior to the Closing, or the Closing may be postponed as follows:
(1) by mutual consent of the Trust, on behalf of Latin America Fund, and
the Company, on behalf of Foreign Fund;
(2) by the Company, on behalf of Foreign Fund, if any condition of its
obligations set forth in Section 8 has not been fulfilled or waived and it
reasonably appears that such condition or obligation will not or cannot be
met; or
(3) by the Trust, on behalf of Latin America Fund, if any conditions of its
obligations set forth in Section 8 has not been fulfilled or waived and it
reasonably appears that such condition or obligation will not or cannot be
met.
An election by the Company or the Trust to terminate the Plan and to
abandon the Plan of Reorganization shall be exercised respectively, by the Board
of Directors or Trustees of either the Company or the Trust.
(b) If the transactions contemplated by this Plan have not been consummated
by December 31, 2003, the Plan shall automatically terminate on that date,
unless a later date is agreed to by both the Company and the Trust.
(c) In the event of termination of the Plan pursuant to the provisions
hereof, the same shall become void and have no further effect, and neither the
Trust, the Company, Latin America Fund nor Foreign Fund, nor their directors,
trustees, officers, or agents or the shareholders of Latin America Fund or
Foreign Fund shall have any liability in respect of this Plan, but all expenses
incidental to the preparation and carrying out of this Plan shall be paid as
provided in Section 9(b) hereof.
(d) At any time prior to the Closing, any of the terms or conditions of
this Plan may be waived by the party who is entitled to the benefit thereof by
action taken by that party's Board of Directors or Trustees if, in the judgment
of such Board of Directors or Trustees, such action or waiver will not have a
material adverse effect on the benefits intended under this Plan to its
shareholders, on behalf of whom such action is taken.
(e) The respective representations and warranties contained in Sections 4
to 6 hereof shall expire with and be terminated by the Plan on the Closing Date,
and neither the Trust nor the Company, nor any of their officers, directors,
trustees, agents or shareholders shall have any liability with respect to such
representations or warranties after the Closing Date. This provision shall not
protect any officer, director, trustee, agent or shareholder of the Trust or the
Company against any liability to the entity for which that officer, trustee,
agent or shareholder so acts or to its shareholders to which that officer,
trustee, agent or shareholder would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties in
the conduct of such office.
(f) If any order or orders of the U.S. Securities and Exchange Commission
with respect to this Plan shall be issued prior to the Closing and shall impose
any terms or conditions that are determined by action of the Board of Trustees
of the Trust, on behalf of Latin America Fund, or the Board of Directors of the
Company, on behalf of Foreign Fund, to be acceptable, such terms and conditions
shall be binding as if a part of this Plan without further vote or approval of
the shareholders of Latin America Fund, unless such terms and conditions shall
result in a change in the method of computing the number of Foreign Fund Shares
to be issued to Latin America Fund in which event, unless such terms and
conditions shall have been included in the proxy solicitation material furnished
to the shareholders of Latin America Fund prior to the meeting at which the
transactions contemplated by this Plan shall have been approved, this Plan shall
not be consummated and shall terminate unless the Trust shall promptly call a
special meeting of the shareholders of Latin America Fund at which such
conditions so imposed shall be submitted for approval.
11. Indemnification.
(a) The Company, on behalf of Foreign Fund, shall indemnify, defend and
hold harmless Latin America Fund, the Trust, its Board of Trustees, officers,
employees and agents (collectively "Acquired Fund Indemnified Parties") against
all losses, claims, demands, liabilities and expenses, including reasonable
legal and other expenses incurred in defending third party claims, actions,
suits or proceedings, whether or not resulting in any liability to such Acquired
Fund Indemnified Parties, including amounts paid by any one or more of the
Acquired Fund Indemnified Parties in a compromise or settlement of any such
claim, action, suit or proceeding, or threatened third party claim, suit, action
or proceeding made with the consent of the Company and Foreign Fund, arising
from any untrue statement or alleged untrue statement of a material fact
contained in the Form N-14 Registration Statement, as filed and in effect with
the SEC or any application prepared by the Company and Foreign Fund with any
state regulatory agency in connection with the transactions contemplated by this
Plan under the securities laws thereof ("Application"); or which arises out of
or is based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Company and Foreign Fund shall only
be liable in such case to the extent that any such loss, claim, demand,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission about the Company
and/or Foreign Fund or the transactions contemplated by this Plan made in the
Form N-14 Registration Statement or any Application.
(b) The Trust, on behalf of Latin America Fund, until the time of Latin
America Fund's liquidation, shall indemnify, defend, and hold harmless Foreign
Fund, the Company, its Board of Directors, officers, employees and agents
("Acquiring Fund Indemnified Parties") against all losses, claims, demands,
liabilities, and expenses, including reasonable legal and other expenses
incurred in defending third party claims, actions, suits or proceedings, whether
or not resulting in any liability to such Acquiring Fund Indemnified Parties,
including amounts paid by any one or more of the Acquiring Fund Indemnified
Parties in a compromise or settlement of any such claim, suit, action, or
proceeding, made with the consent of the Trust, arising from any untrue
statement or alleged untrue statement of a material fact contained in the Form
N-14 Registration Statement, as filed and in effect with the SEC or any
Application; or which arises out of or is based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Trust and Latin America Fund shall only be liable in such case to the extent
that any such loss, claim, demand, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission about the Trust and/or Latin America Fund or the transactions
contemplated by this Plan made in the Form N-14 Registration Statement or any
Application.
(c) A party seeking indemnification hereunder is hereinafter called the
"Indemnified Party" and the party from whom the indemnified party is seeking
indemnification hereunder is hereinafter called the "Indemnifying Party." Each
Indemnified Party shall notify the Indemnifying Party in writing within ten (10)
days of the receipt by one or more of the Indemnified Parties of any notice of
legal process of any suit brought against or claim made against such Indemnified
Party as to any matters covered by this Section 11, but the failure to notify
the Indemnifying Party shall not relieve the Indemnifying Party from any
liability which it may have to any Indemnified Party otherwise than under this
Section 11. The Indemnifying Party shall be entitled to participate at its own
expense in the defense of any claim, action, suit, or proceeding covered by this
Section 11, or, if it so elects, to assume at its own expense, the defense
thereof with counsel satisfactory to the Indemnified Parties; provided, however,
if the defendants in any such action include both the Indemnifying Party and any
Indemnified Party and the Indemnified Party shall have reasonably concluded that
there may be legal defenses available to it which are different from or
additional to those available to the Indemnifying Party, the Indemnified Party
shall have the right to select separate counsel to assume such legal defense and
to otherwise participate in the defense of such action on behalf of such
Indemnified Party.
Upon receipt of notice from the Indemnifying Party to the Indemnified
Parties of the election by the Indemnifying Party to assume the defense of such
action, the Indemnifying Party shall not be liable to such Indemnified Parties
under this Section 11 for any legal or other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof unless (i) the
Indemnified Parties shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the provision of the immediately
preceding sentence (it being understood, however, that the Indemnifying Parties
shall not be liable for the expenses of more than one separate counsel); (ii)
the Indemnifying Parties do not employ counsel reasonably satisfactory to the
Indemnified Parties to represent the Indemnified Parties within a reasonable
amount of time after notice of commencement of the action; or (iii) the
Indemnifying Parties have authorized the employment of counsel for the
Indemnified Parties at its expense.
(d) This Section 11 shall survive the termination of this Plan and for a
period of three (3) years following the Closing Date.
12. Liability of the Company and the Trust.
(a) Each party acknowledges and agrees that all obligations of the Company
under this Plan are binding only with respect to Foreign Fund; that any
liability of the Company under this Plan with respect to the Company, or in
connection with the transactions contemplated herein with respect to Foreign
Fund, shall be discharged only out of the assets of Foreign Fund; that no other
series of the Company shall be liable with respect to this Plan or in connection
with the transactions contemplated herein; and that neither the Trust nor Latin
America Fund shall seek satisfaction of any such obligation or liability from
the shareholders of the Company, the directors, officers, employees or agents of
the Company, or any of them.
(b) Each party acknowledges and agrees that all obligations of the Trust
under this Plan are binding only with respect to Latin America Fund; that any
liability of the Trust under this Plan with respect to Latin America Fund, or in
connection with the transactions contemplated herein with respect to Latin
America Fund, shall be discharged only out of the assets of Latin America Fund;
that no other series of the Trust shall be liable with respect to this Plan or
in connection with the transactions contemplated herein; and that neither the
Company nor Foreign Fund shall seek satisfaction of any such obligation or
liability from the shareholders of the Trust, the trustees, officers, employees
or agents of the Trust, or any of them.
13. Entire Agreement and Amendments.
The Plan embodies the entire agreement between the parties and there are no
agreements, understandings, restrictions, or warranties relating to the
transactions contemplated by the Plan other than those set forth herein or
herein provided for. The Plan may be amended only by mutual consent of the
parties in writing. Neither the Plan nor any interest herein may be assigned
without the prior written consent of the other party.
14. Counterparts.
The Plan may be executed in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts together shall constitute
but one instrument.
15. Notices.
Any notice, report, or demand required or permitted by any provision of
this Plan shall be in writing and shall be deemed to have been given if
delivered or mailed, first class postage prepaid, addressed to Foreign Fund, at
Xxxxxxxxx Funds, Inc., 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000, Attention: Secretary, or Latin America Fund, at Xxxxxxxxx Global
Investment Trust, 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000, Attention: Secretary, as the case may be.
16. Governing Law.
This Plan shall be governed by and carried out in accordance with the laws
of the State of Delaware.
IN WITNESS WHEREOF, the Trust, on behalf of Latin America Fund, and the
Company, on behalf of Foreign Fund, have each caused this Plan to be executed on
its behalf by its duly authorized officers, all as of the date and year
first-above written.
XXXXXXXXX FUNDS, INC., on behalf of
Attest: XXXXXXXXX FOREIGN FUND
By: /s/XXXXXX X. XXXXXXXX By: /s/XXXXXXX X. XXXXX
---------------------------------- ----------------------------------
Xxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxx
Assistant Secretary Vice President
TEMPLETON GLOBAL INVESTMENT TRUST, on
Attest: behalf of XXXXXXXXX LATIN AMERICA FUND
By: /s/XXXXXX X. XXXXXXX By: /s/XXXXX X. XXXX
---------------------------------- ----------------------------------
Xxxxxx X. Xxxxxxx Xxxxx X. Xxxx
Assistant Secretary Vice President
