AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made
this 30TH day of JULY, 1996 by and between Franklin New York Tax-Free Income
Fund, Inc. (the "Fund") a New York corporation with its principal place of
business at 000 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxx, XX 00000-0000, and
Franklin New York Tax-Free Income Fund (the "Trust"), a business trust created
under the laws of the State of Delaware with its principal place of business at
000 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxx, XX 00000-0000.
In consideration of the mutual promises contained herein, and intending
to be legally bound, the parties hereto agree as follows:
1. PLAN OF REORGANIZATION.
(a) Upon satisfaction of the conditions precedent described in Section
3 hereof, the Fund will convey, transfer and deliver to the Trust at
the closing provided for in Section 2 (hereinafter referred to as the
"Closing") all of its then-existing assets. In consideration thereof,
the Trust agrees at the Closing (i) to assume and pay, to the extent
that they exist on or after the Effective Date of the Reorganization
(as defined in Section 2 hereof), all of the Fund's obligations and
liabilities, whether absolute, accrued, contingent or otherwise,
including all fees and expenses in connection with the Agreement,
including without limitation costs of legal advice, accounting,
printing, mailing, proxy solicitation and transfer taxes, if any, the
obligations and liabilities allocated to the Fund to become the
obligations and liabilities of the Trust, and (ii) to deliver to the
Fund full and fractional shares of beneficial interest of the Trust,
par value $0.01, equal in number to the number of full and fractional
shares of common stock, with $0.01 par value, of the Fund. The
transactions contemplated hereby are intended to qualify as a
reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
(b) The Trust will effect such delivery by establishing an open account
for each stockholder of the Fund and by crediting to such account, the
exact number of full and fractional shares of the appropriate class of
the Trust such stockholder held in the corresponding class of the Fund
on the Effective Date of the Reorganization. Fractional shares of the
Trust will be carried to the third decimal place. On the Effective Date
of the Reorganization, the net asset value per share of beneficial
interest of each class of the Trust shall be deemed to be the same as
the net asset value per share of each class of the Fund. On such date,
each certificate representing shares of a class of the Fund will
represent the same number of shares of the corresponding class of the
Trust. Each stockholder of the Fund will have the right to exchange his
(her) share certificates for share certificates of the corresponding
class of the Trust. However, a stockholder need not make this exchange
of certificates unless he (she) so desires. Simultaneously with the
crediting of the shares of the Trust to the stockholders of record of
the Fund, the shares of the Fund held by such stockholder shall be
canceled.
(c) As soon as practicable after the Effective Date of the
Reorganization, the Fund shall take all necessary steps under New York
law to effect a complete dissolution of the Fund.
2. CLOSING AND EFFECTIVE DATE OF THE REORGANIZATION. The Closing shall
commence at 3:00 p.m. Pacific time on September 30 1996, or such later date as
the parties may agree, and shall be effective on the business day following the
commencement of the Closing (the "Effective Date"). The Closing will take place
at the principal offices of the Fund and Trust, 000 Xxxxxxxx Xxxxxx Xxxxxxxxx,
Xxx Xxxxx, XX 00000.
3. CONDITIONS PRECEDENT. The obligations of the Fund and the Trust to
effectuate the Reorganization hereunder shall be subject to the satisfaction of
each of the following conditions:
(a) Such authority and orders from the Securities and Exchange
Commission (the "Commission") and state securities commissions as may
be necessary to permit the parties to carry out the transactions
contemplated by this Agreement shall have been received;
(b) One or more post-effective amendments to the Fund's Registration
Statement on Form N-1A under the Securities Act of 1933 and the
Investment Company Act of 1940, as amended (the "1940 Act"), containing
(i) such amendments to such Registration Statement as are determined by
the Directors of the Fund to be necessary and appropriate as a result
of the Agreement, and (ii) the adoption by the Trust as its own of such
Registration Statement, as so amended, shall have been filed with the
Commission, and such post-effective amendment or amendments to the
Fund's Registration Statement shall have become effective, and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued, and no proceeding for that purpose shall have been
initiated or threatened by the Commission (other than any such stop
order, proceeding or threatened proceeding which shall have been
withdrawn or terminated);
(c) Confirmation shall have been received from the Commission or the
Staff thereof that Trust shall, effective upon or before the Closing
Date of the Reorganization, be duly registered as an open-end
management investment company under the Act of 1940, as amended;
(d) Each party shall have received a ruling from the Internal Revenue
Service or an opinion from Messrs. Bleakley Xxxxx & Xxxxxxx, White
Plains, New York, to the effect that the reorganization contemplated by
this Agreement qualifies as a "reorganization" under Section 368(a) of
the Code, and, thus, will not give rise to the recognition of income,
gain or loss for federal or state income tax purposes to the Fund, the
Trust or stockholders of the Fund or the Trust;
(e) The Trust shall have received an opinion from Messrs. Bleakley
Xxxxx & Xxxxxxx, addressed to and in form and substance satisfactory to
it, to the effect that (i) this Agreement and the Reorganization
contemplated thereby, and the execution of this Agreement, has been
duly authorized and approved by the Fund and constitutes a legal, valid
and binding agreement of the fund in accordance with its terms; (ii)
the Fund is duly organized and validly existing under the laws of the
State of New York.
(f) The Fund shall have received an opinion from Messrs. Bleakley,
Xxxxx & Xxxxxxx, White Plains, NY, addressed to and in form and
substance satisfactory to it, to the effect that (i) this Agreement and
the reorganization contemplated thereby and the execution of this
Agreement, has been duly authorized and approved by the Trust and
constitutes a legal, valid and binding agreement of the Trust in
accordance with its terms; (ii) the Trust is duly organized, validly
existing and in good standing under the laws of the State of Delaware;
and (iii) the shares of each class of the Trust to be issued in the
Reorganization pursuant to the terms of this Agreement have been duly
authorized and, when issued and delivered as provided in this
Agreement, will have been validly issued and fully paid and will be
non-assessable by the Trust.
(g) The shares of the Trust shall have been duly qualified for offering
to the public in those states of the United States, and jurisdictions
where they are presently qualified so as to permit the transfers
contemplated by this Agreement to be consummated;
(h) This Agreement and the reorganization contemplated hereby shall
have been adopted and approved by an affirmative vote of at least
two-thirds of all votes entitled to be cast at a meeting of the
stockholders of the Fund including a majority of the shares outstanding
in each class;
(i) The stockholders of the Fund shall have voted to direct the Fund to
vote, and the Fund shall have voted, as sole shareholder of each class
of the Trust, to:
(1) Elect as Trustees of the Trust (the "Trustees") the following
individuals: Messrs. Ashton, Fortunato, Xxxxxxx X. Xxxxxxx, Xxxxxx
X. Xxxxxxx, Xx., and Xxxxxxx;
(2) Select Coopers & Xxxxxxx L.L.P., as the independent auditors for
the Trust for the fiscal year ending May 31, 1997;
(3) Approve a new investment management agreement between the
Trust and Franklin Advisers, Inc., which is substantially
identical to the current investment management agreement between
the Fund and Franklin Advisers, Inc.; and
(4) Approve a distribution plan for each class of the only series of
the Trust, as adopted pursuant to Rule 12b-1 under the 1940 Act
which is substantially identical to the current 12b-1
distribution plan for each class of stock of the Fund.
(j) The Trustees shall have taken the following action at a meeting duly
called for such purposes:
(1) Approval of the Trust's Custodian Agreement;
(2) Selection of Coopers & Xxxxxxx, L.L.P. as the Trust's auditors
for the fiscal year ending May 31, 1997;
(3) Approval of an investment management agreement
between the Trust and Franklin Advisers, Inc., which is
substantially identical to the current investment management
agreement between the Fund and Franklin Advisers, Inc.;
(4) Authorization of the issuance by the Trust, prior
to the Effective Date of the Reorganization, of one share of
each class of the Trust, to the Fund in consideration for the
payment of its then current public offering price for the
purpose of enabling the Fund to vote on matters referred to in
paragraph (i) of this Section 3;
(5) Submission of the matters referred to in paragraph (i) of this
Section 3 to the Fund as sole shareholder of the Trust; and
(6) Authorization of the issuance by the Trust of shares of the
Trust on the Effective Date of the Reorganization in exchange for
the assets of the Fund pursuant to the terms and provisions of
this Agreement.
At any time prior to the Closing, any of the foregoing conditions
may be waived by the Board of Directors of the Fund if, in the
judgment of the Directors, such waiver will not have a material
adverse effect on the benefits intended under this Agreement to
the stockholders of the Fund.
4. TERMINATION. The Board of Directors of the Fund may terminate this Agreement
and abandon the reorganization contemplated hereby, notwithstanding approval
thereof by the stockholders of the Fund, at any time prior to the Effective Date
of the Reorganization if, in the judgment of the Directors, the facts and
circumstances make proceeding with the Agreement inadvisable.
5. ENTIRE AGREEMENT. This Agreement embodies the entire agreement between the
parties and there are no agreements, understandings, restrictions or warranties
among the parties other than those set forth herein or herein provided for.
6. FURTHER ASSURANCES. The Fund and the Trust shall take such further action as
may be necessary or desirable and proper to consummate the transactions
contemplated hereby.
7. COUNTERPARTS. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
8. GOVERNING LAW. This Agreement and the transactions contemplated hereby shall
be governed by and construed and enforced in accordance with the laws of the
State of Delaware.
IN WITNESS WHEREOF, the Trust and the Fund have each caused this
Agreement and Plan of Reorganization to be executed on its behalf by its
President and its seal to be affixed hereto and attested by its Secretary, all
as of the day and year first-above written.
Attest: Franklin New York
Tax-Free Income Fund, Inc.
By: /S/XXXXX X. XXXXXX By: /S/X. X. XXXXXXX
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx
Secretary President
Attest: Franklin New York
Tax-Free Income Fund
By: /S/XXXXX X. XXXXXX By: /S/X. X. XXXXXXX
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx
Secretary President
