MERGER AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
THE LATIN AMERICA EQUITY FUND, INC.
AND
THE LATIN AMERICA INVESTMENT FUND, INC.
DATED AS OF JULY 31, 2000
TABLE OF CONTENTS
1. DEFINITIONS 1
2. BASIC TRANSACTION 1
2.1. The Merger 1
2.2. Actions at Closing 1
2.3. Effect of Merger 2
2.4. Name Change 2
3. REPRESENTATIONS AND WARRANTIES OF THE LATIN AMERICA EQUITY
FUND, INC. 2
3.1. Organization 2
3.2. Registrations and Qualifications 2
3.3. Regulatory Consents and Approvals 2
3.4. Noncontravention 3
3.5. Financial Statements 3
3.6. Annual Report 3
3.7. Qualification, Corporate Power, Authorization of Transaction
3
3.8. Legal Compliance 3
3.9. Material Contracts 4
3.10. Undisclosed Liabilities 4
3.11. Tax Filings 4
3.12. Qualification under Subchapter M 4
3.13. Form N-14 and Exemptive Application 4
3.14. Capitalization. 5
3.15. Books and Records 5
4. REPRESENTATIONS AND WARRANTIES OF THE LATIN AMERICA
INVESTMENT FUND, INC. 5
4.1. Organization 5
4.2. Registrations and Qualifications 6
4.3. Regulatory Consents and Approvals 6
4.4. Noncontravention 6
4.5. Financial Statements 6
4.6. Annual Report 7
4.7. Qualification, Corporate Power, Authorization of
Transaction 7
4.8. Legal Compliance 7
4.9. Material Contracts 7
4.10. Undisclosed Liabilities 7
4.11. Tax Filings 7
4.12. Qualification under Subchapter M 8
4.13. Form N-14 and Exemptive Application 8
4.14. Capitalization. 8
4.15. Issuance of Stock. 9
4.16. Books and Records 9
5. CONVERSION TO LATIN AMERICA INVESTMENT FUND, INC.
COMMON STOCK 9
5.1. Conversion. 9
5.2. Computation of Net Asset Value 9
5.3. Issuance of Latin America Investment Fund, Inc. Common
Stock 10
5.4. Surrender of Latin America Equity Fund, Inc. Stock
Certificates 10
6. COVENANTS OF THE PARTIES 10
6.1. Shareholders' Meetings. 10
6.2. Operations in the Normal Course 10
6.3. Articles of Merger 11
6.4. Regulatory Filings. 11
6.5. Preservation of Assets 11
6.6. Tax Matters 11
6.7. Shareholder List 12
6.8. Delisting, Termination of Registration as an Investment
Company 12
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE LATIN AMERICA
INVESTMENT, INC. FUND 12
7.1. Approval of Merger 12
7.2. Certificates and Statements by the Latin America Equity
Fund, Inc. 12
7.3. Absence of Litigation 13
7.4. Legal Opinions. 13
7.5. Auditor's Consent and Certification 15
7.6. Liabilities 15
7.7. Effectiveness of N-14 Registration Statement 15
7.8. Approval of Exemptive Application; Regulatory Filings. 15
7.9. Administrative Rulings, Proceedings 16
7.10. Satisfaction of the Latin America Investment Fund, Inc 16
7.11. Dividends 16
7.12. Custodian's Certificate 16
7.13. Books and Records 16
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE LATIN AMERICA
EQUITY FUND, INC. 16
8.1. Approval of Merger 16
8.2. Certificates and Statements by the Latin America Investment Fund,
Inc. 17
8.3. Absence of Litigation 17
8.4. Legal Opinions. 17
8.5. Auditor's Consent and Certification 19
8.6. Effectiveness of N-14 Registration Statement 20
8.7. Approval of Exemptive Application; Regulatory Filings. 20
8.8. Satisfaction of the Latin America Equity Fund, Inc 20
8.9. Dividends 20
9. PAYMENT OF EXPENSES 21
9.1. Allocation 21
10. COOPERATION FOLLOWING EFFECTIVE DATE 21
11. INDEMNIFICATION 21
11.1. The Latin America Equity Fund, Inc 21
11.2. The Latin America Investment Fund, Inc 21
12. TERMINATION, POSTPONEMENT AND WAIVERS 22
12.1. Termination. 22
12.2. Waiver 22
12.3. Expiration of Representations and Warranties. 22
13. MISCELLANEOUS 23
13.1. Transfer Restriction 23
13.2. Material Provisions 23
13.3. Notices 23
13.4. Amendments 25
13.5. Headings 25
13.6. Counterparts 25
13.7. Enforceability 25
13.8. Successors and Assigns 25
13.9. Governing Law 25
THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is
made as of this 31st day of July, 2000, between The Latin America
Equity Fund, Inc. (the "Target Fund" or the "Latin America Equity
Fund"), a Maryland corporation and a registered investment company
under the Investment Company Act of 1940, as amended (the "1940
Act"), and The Latin America Investment Fund, Inc. (the "Acquiring
Fund" or the "Latin America Investment Fund"), a Maryland corporation
and a registered investment company under the 1940 Act.
This agreement contemplates a tax-free merger transaction which
qualifies for federal income tax purposes as a reorganization within
the meaning of Section 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the Parties hereto agree as follows:
1. DEFINITIONS
Certain capitalized terms used in this Agreement are specifically
defined herein.
2. BASIC TRANSACTION
2.1. The Merger. On and subject to the terms and conditions of this
Agreement, the Target Fund will merge with and into the Acquiring
Fund (the "Merger") at the Effective Date (as defined in Section
2.3 below) in accordance with the Maryland General Corporation Law
("MGCL"). The Latin America Investment Fund shall be the surviving
investment company. The Latin America Equity Fund shall cease to
exist as a separate investment company.
Each share of the Latin America Equity Fund will be converted into
an equivalent dollar amount (to the nearest one ten-thousandth of
one cent) of full shares of Common Stock of the Latin America
Investment Fund, with a par value of $0.001 per share, based on
the net asset value per share of each of the Parties at 4:00 p.m.
Eastern Time on the Business Day prior to the Effective Date (the
"Valuation Time"). No fractional shares of the Latin America
Investment Fund will be issued to Latin America Equity Fund
shareholders. In lieu thereof, the Latin America Investment Fund
will purchase all fractional shares of the Latin America Investment
Fund at the current net asset value of shares of the Latin America
Investment Fund for the account of all holders of fractional
interests, and each such holder will receive such holder's pro rata
share of the proceeds of such purchase. The Effective Date and the
Business Day prior to it must each be a day on which the New York
Stock Exchange (the "NYSE") is open for trading (a "Business Day").
From and after the Effective Date, the Acquiring Company shall
possess all of the properties, assets, rights, privileges, powers
and shall be subject to all of the restrictions, liabilities,
obligations, disabilities and duties of the Latin America Equity
Fund, all as provided under Maryland law.
2.2. Actions at Closing. At the closing of the transactions
contemplated by this Agreement (the "Closing") on the date thereof
(the "Closing Date"), (i) the Latin America Equity Fund will deliver
to the Latin America Investment Fund the various certificates and
documents referred to in Article 7 below, (ii) the Latin America
Investment Fund will deliver to the Latin America Equity Fund the
various certificates and documents referred to in Article 8 below,
and (iii) the Latin America Equity Fund and the Latin America
Investment Fund will file jointly with the State Department of
Assessments and Taxation of Maryland (the "Department") articles
of merger (the "Articles of Merger") and make all other filings
or recordings required by Maryland law in connection with the Merger.
2.3. Effect of Merger. Subject to the requisite approvals of the
shareholders of the Parties, and to the other terms and conditions
described herein, the Merger shall become effective at such time as
the Articles of Merger are accepted for record by the Department or
at such later time as is specified in the Articles of Merger (the
"Effective Date") and the separate corporate existence of the Latin
America Equity Fund shall cease. As promptly as practicable after
the Merger, the Latin America Equity Fund shall delist its shares
from the NYSE and its registration under the 1940 Act shall be
terminated. Any reporting responsibility of the Latin America
Equity Fund is, and shall remain, the responsibility of the Latin
America Equity Fund up to and including the Effective Date.
2.4. Name Change. Upon the Effective Date, the name of the Acquiring
Fund shall be changed to "The Latin America Equity Fund, Inc."
3. REPRESENTATIONS AND WARRANTIES OF THE LATIN AMERICA EQUITY FUND,
INC.
The Latin America Equity Fund represents and warrants to the Latin
America Investment Fund that the statements contained in this Article
3 are correct and complete in all material respects as of the
execution of this Agreement on the date hereof. The Latin America
Equity Fund represents and warrants to, and agrees with, the Latin
America Investment Fund that:
3.1. Organization. The Latin America Equity Fund is a corporation
duly organized, validly existing under the laws of the State of
Maryland and is in good standing with the Department, and has the
power to own all of its assets and to carry on its business as it
is now being conducted and to carry out this Agreement.
3.2. Registrations and Qualifications. The Latin America Equity
Fund is duly registered under the 1940 Act as a closed-end,
non-diversified management investment company (File No. 811-06413),
and such registration has not been revoked or rescinded and is in
full force and effect. The Latin America Equity Fund has elected
and qualified for the special tax treatment afforded regulated
investment companies ("RICs") under Sections 851-855 of the Code
at all times since its inception. The Latin America Equity Fund
is qualified as a foreign corporation in every jurisdiction where
required, except to the extent that failure to so qualify would
not have a material adverse effect on the Latin America Equity Fund.
3.3. Regulatory Consents and Approvals. No consent, approval,
authorization, or order of any court or governmental authority is
required for the consummation by the Latin America Equity Fund of
the transactions contemplated herein, except (i) such as have been
obtained or applied for under the Securities Act of 1933, as amended
(the "1933 Act"), the Securities Exchange Act of 1934 (the "1934
Act"), the 1940 Act and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 0000 (xxx "XXX Xxx") (ii) such as may be required by state
securities laws and (iii) such as may be required under Maryland
law for the acceptance for record of the Articles of Merger by the
Department.
3.4. Noncontravention. The Latin America Equity Fund is not, and
the execution, delivery and performance of this Agreement by the
Latin America Equity Fund will not result, in violation of the laws
of the State of Maryland or of the Articles of Incorporation or the
By-laws of the Latin America Equity Fund, or of any material
agreement, indenture, instrument, contract, lease or other
undertaking to which the Latin America Equity Fund is a party or
by which it is bound, and the execution, delivery and performance
of this Agreement by the Latin America Equity Fund will not result
in the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract,
lease, judgment or decree to which the Latin America Equity Fund
is a party or by which it is bound.
3.5. Financial Statements. The Latin America Investment Fund has
been furnished with a statement of assets, liabilities and capital
and a schedule of investments of the Latin America Equity Fund, each
as of December 31, 1999, said financial statements having been
examined by PricewaterhouseCoopers LLP, independent public
accountants. These financial statements are in accordance with
generally accepted accounting principles applied on a consistent
basis ("GAAP") and present fairly, in all material respects, the
financial position of the Latin America Equity Fund as of such date
in accordance with GAAP, and there are no known contingent
liabilities of the Latin America Equity Fund required to be reflected
on a balance sheet (including the notes thereto) in accordance with
GAAP as of such date not disclosed therein.
3.6. Annual Report. The Latin America Investment Fund has been
furnished with the Latin America Equity Fund's Annual Report to
Shareholders for the year ended December 31, 1999.
3.7. Qualification, Corporate Power, Authorization of Transaction.
The Latin America Equity Fund has full power and authority to enter
into and perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement has been
duly authorized by all necessary action of its Board of Directors,
and, subject to shareholder approval, this Agreement constitutes a
valid and binding contract enforceable in accordance with its terms,
subject to the effects of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto.
3.8. Legal Compliance. No material litigation or administrative
proceeding or investigation of or before any court or governmental
body is presently pending (in which service of process has been
received) or to its knowledge threatened against the Latin America
Equity Fund or any properties or assets held by it. The Latin
America Equity Fund knows of no facts which might form the basis
for the institution of such proceedings which would materially and
adversely affect its business and is not 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 its
business or its ability to consummate the transactions herein
contemplated.
3.9. Material Contracts. There are no material contracts
outstanding to which the Latin America Equity Fund is a party
that have not been disclosed in the N-14 Registration Statement
(as defined in Section 3.13 below) or will not be otherwise
disclosed to the Latin America Investment Fund prior to the
Effective Date.
3.10. Undisclosed Liabilities. Since December 31, 1999, there
has not been any material adverse change in the Latin America
Equity Fund's financial condition, assets, liabilities or business
and the Latin America Equity Fund has no known liabilities of a
material amount, contingent or otherwise, required to be disclosed
in a balance sheet in accordance with GAAP other than those shown
on the Latin America Equity Fund's statements of assets, liabilities
and capital referred to above, those incurred in the ordinary course
of its business as an investment company since January 1, 2000, and
those incurred in connection with the Merger. Prior to the Effective
Date, the Latin America Equity Fund will advise the Latin America
Investment Fund in writing of all known liabilities, contingent
or otherwise, whether or not incurred in the ordinary course of
business, existing or accrued. For purposes of this Section 3.10,
a decline in net asset value per share of the Latin America Equity
Fund due to declines in market values of securities in the Latin
America Equity Fund's portfolio or the discharge of Latin America
Equity Fund liabilities will not constitute a material adverse
change.
3.11. Tax Filings. All federal and other tax returns and information
reports of the Latin America Equity Fund required by law to have been
filed shall have been filed and are or will be correct in all
material respects, and all federal and other taxes shown as due
or required to be shown as due on said returns and reports shall
have been paid or provision shall have been made for the payment
thereof, and, to the best of the Latin America Equity Fund's
knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns.
All tax liabilities of the Latin America Equity Fund have been
adequately provided for on its books, and no tax deficiency or
liability of the Latin America Equity Fund has been asserted and
no question with respect thereto has been raised by the Internal
Revenue Service or by any state or local tax authority for taxes
in excess of those already paid, up to and including the taxable
year in which the Effective Date occurs.
3.12. Qualification under Subchapter M. For each taxable year of
its operation (including the taxable year ending on the Effective
Date), the Latin America Equity Fund has met the requirements of
Subchapter M of the Code for qualification as a RIC and has elected
to be treated as such, has been eligible to and has computed its
federal income tax under Section 852 of the Code, and will have
distributed substantially all of its investment company taxable
income and net realized capital gain (as defined in the Code)
that has accrued through the Effective Date.
3.13. Form N-14 and Exemptive Application. The exemptive application
to be filed with the Securities and Exchange Commission (the "SEC")
by the Parties regarding the Merger (the "Exemptive Application")
and the registration statement to be filed by the Latin America
Investment Fund on Form N-14 relating to the Latin America
Investment Fund Common Stock to be issued pursuant to this
Agreement, and any supplement or amendment thereto or to the
documents therein (as amended, the "N-14 Registration Statement"),
on the effective date of the N-14 Registration Statement, at the
time of the shareholders' meetings referred to in Article 6 of
this Agreement and at the Effective Date, insofar as it relates to
the Latin America Equity Fund (i) shall have complied or will comply
in all material respects with the provisions of the 1933 Act, the
1934 Act and the 1940 Act and the rules and regulations thereunder
and (ii) did not or will 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 not
misleading; and the prospectus included therein did not or will
not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading; provided, however, that the representations and
warranties in this Section 3.13 shall only apply to statements
in, or omissions from, the N-14 Registration Statement made in
reliance upon and in conformity with information furnished by
the Latin America Investment Fund for use in the N-14 Registration
Statement.
3.14. Capitalization.
(a) All issued and outstanding shares of the Latin America Equity
Fund (i) have been offered and sold in compliance in all material
respects with applicable registration requirements of the 1933 Act
and state securities laws, (ii) are, and on the Effective Date will
be, duly and validly issued and outstanding, fully paid and
non-assessable, and (iii) will be held at the time of the Closing
by the persons and in the amounts set forth in the records of the
transfer agent as provided in Section 6.7. The Latin America Equity
Fund does not have outstanding any options, warrants or other rights
to subscribe for or purchase any of the Latin America Equity Fund
shares, nor is there outstanding any security convertible into,
or exchangeable for, any of the Latin America Equity Fund shares.
(b) The Latin America Equity Fund is authorized to issue 100,000,000
shares of stock, par value $0.001 per share, all of which shares are
classified as Common Stock and each outstanding share of which is
fully paid, non-assessable and has full voting rights.
3.15. Books and Records. The books and records of the Latin America
Equity Fund made available to the Latin America Investment Fund are
substantially true and correct and contain no material misstatements
or omissions with respect to the operations of the Latin America
Equity Fund.
4. REPRESENTATIONS AND WARRANTIES OF THE LATIN AMERICA INVESTMENT
FUND, INC.
The Latin America Investment Fund represents and warrants to the
Latin America Equity Fund that the statements contained in this
Article 4 are correct and complete in all material respects as of
the execution of this Agreement on the date hereof. The Latin
America Investment Fund represents and warrants to, and agrees
with, the Latin America Equity Fund that:
4.1. Organization. The Latin America Investment Fund is a
corporation duly organized, validly existing under the laws of
the State of Maryland and is in good standing with the Department,
and has the power to own all of its assets and to carry on its
business as it is now being conducted and to carry out this
Agreement.
4.2. Registrations and Qualifications. The Latin America Investment
Fund is duly registered under the 1940 Act as a closed-end,
non-diversified management investment company (File No. 811-06094)
and such registration has not been revoked or rescinded and is in
full force and effect. The Latin America Investment Fund has
elected and qualified for the special tax treatment afforded RICs
under Sections 851-855 of the Code at all times since its inception.
The Latin America Investment Fund is qualified as a foreign
corporation in every jurisdiction where required, except to the
extent that failure to so qualify would not have a material
adverse effect on the Latin America Investment Fund.
4.3. Regulatory Consents and Approvals. No consent, approval,
authorization, or order of any court or governmental authority is
required for the consummation by the Latin America Investment Fund
of the transactions contemplated herein, except (i) such as have
been obtained or applied for under the 1933 Act, the 1934 Act, the
1940 Act and the HSR Act, (ii) such as may be required by state
securities laws and (iii) such as may be required under Maryland
law for the acceptance for record of the Articles of Merger by the
Department.
4.4. Noncontravention. The Latin America Investment Fund is not,
and the execution, delivery and performance of this Agreement by
the Latin America Investment Fund will not result, in violation of
the laws of the State of Maryland or of the Articles of Incorporation
or the By-laws of the Latin America Investment Fund, or of any
material agreement, indenture, instrument, contract, lease or other
undertaking to which the Latin America Investment Fund is a party
or by which it is bound, and the execution, delivery and performance
of this Agreement by the Latin America Investment Fund will not
result in the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract,
lease, judgment or decree to which the Latin America Investment
Fund is a party or by which it is bound.
4.5. Financial Statements. The Latin America Equity Fund has been
furnished with a statement of assets, liabilities and capital and a
schedule of investments of the Latin America Investment Fund, each
as of December 31, 1999, said financial statements having been
examined by PricewaterhouseCoopers LLP, independent public
accountants. These financial statements are in accordance with
GAAP and present fairly, in all material respects, the financial
position of the Latin America Investment Fund as of such date in
accordance with GAAP, and there are no known contingent liabilities
of the Latin America Investment Fund required to be reflected on a
balance sheet (including the notes thereto) in accordance with GAAP
as of such date not disclosed therein.
The Latin America Equity Fund has been furnished with an unaudited
statement of assets, liabilities and capital and a schedule of
investments of the Latin America Investment Fund, each as of
June 30, 2000. This financial statement and schedule of investments
are in accordance with GAAP and present fairly, in all material
respects the financial position of the Latin America Investment
Fund as of such date in accordance with GAAP, and there are no known
contingent liabilities of the Latin America Investment Fund required
to be reflected on a balance sheet (including the notes thereto) in
accordance with GAAP as of such date not disclosed therein.
4.6. Annual Report. The Latin America Equity Fund has been furnished
with the Latin America Investment Fund's Annual Report to
Shareholders for the fiscal year ended December 31, 1999.
4.7. Qualification, Corporate Power, Authorization of Transaction.
The Latin America Investment Fund has full power and authority to
enter into and perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement has been
duly authorized by all necessary action of its Board of Directors,
and, subject to shareholder approval, this Agreement constitutes a
valid and binding contract enforceable in accordance with its
terms, subject to the effects of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect
thereto.
4.8. Legal Compliance. No material litigation or administrative
proceeding or investigation of or before any court or governmental
body is presently pending or to its knowledge threatened against the
Latin America Investment Fund or any properties or assets held by
it. The Latin America Investment Fund knows of no facts which might
form the basis for the institution of such proceedings which would
materially and adversely affect its business and is not 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 its business or its ability to consummate the transactions
herein contemplated.
4.9. Material Contracts. There are no material contracts outstanding
to which the Latin America Investment Fund is a party that have not
been disclosed in the N-14 Registration Statement or will not be
otherwise disclosed to the Latin America Equity Fund prior to the
Effective Date.
4.10. Undisclosed Liabilities. Since December 31, 1999, there has
not been any material adverse change in the Latin America
Investment Fund's financial condition, assets, liabilities, or
business and the Latin America Investment Fund has no known
liabilities of a material amount, contingent or otherwise, required
to be disclosed in a balance sheet with GAAP other than those shown
on the Latin America Investment Fund's statements of assets,
liabilities and capital referred to above, those incurred in the
ordinary course of its business as an investment company since
January 1, 2000, and those incurred in connection with the
Merger. Prior to the Effective Date, the Latin America
Investment Fund will advise the Latin America Equity Fund in
writing of all known liabilities, contingent or otherwise, whether
or not incurred in the ordinary course of business, existing or
accrued. For purposes of this Section 4.10, a decline in net asset
value per share of the Latin America Investment Fund due to declines
in market values of securities in the Latin America Investment
Fund's portfolio or the discharge of the Latin America Investment
Fund liabilities will not constitute a material adverse change.
4.11. Tax Filings. All federal and other tax returns and
information reports of the Latin America Investment Fund required
by law to have been filed shall have been filed and are or will be
correct in all material respects, and all federal and other taxes
shown as due or required to be shown as due on said returns and
reports shall have been paid or provision shall have been made
for the payment thereof, and, to the best of the Latin America
Investment Fund's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to such
returns. All tax liabilities of the Latin America Investment
Fund have been adequately provided for on its books, and no tax
deficiency or liability of the Latin America Investment Fund
has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local
tax authority for taxes in excess of those already paid, up to
and including the taxable year in which the Effective Date occurs.
4.12. Qualification under Subchapter M. For each taxable year
of its operation, the Latin America Investment Fund has met the
requirements of Subchapter M of the Code for qualification as a
RIC and has elected to be treated as such, has been eligible to
and has computed its federal income tax under Section 852 of the
Code, and will have distributed substantially all of its investment
company taxable income and net realized capital gain (as defined in
the Code) that has accrued through the Effective Date.
4.13. Form N-14 and Exemptive Application. The Exemptive
Application, and the N-14 Registration Statement, on the effective
date of the N-14 Registration Statement, at the time of the
shareholders' meetings referred to in Section 6 of this Agreement
and at the Effective Date, insofar as it relates to the Latin
America Investment Fund (i) shall have complied or will comply
in all material respects with the provisions of the 1933 Act,
the 1934 Act and the 1940 Act and the rules and regulations
thereunder and (ii) did not or will 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 not misleading; and the prospectus included
therein did not or will not contain any untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this Section 4.13 shall not apply
to statements in, or omissions from, the N-14 Registration Statement
made in reliance upon and in conformity with information furnished
by the Latin America Equity Fund for use in the N-14 Registration
Statement.
4.14. Capitalization.
(a) All issued and outstanding shares of the Latin America
Investment Fund (i) have been offered and sold in compliance in all
material respects with applicable registration requirements of the
1933 Act and state securities laws, (ii) are, and on the Effective
Date will be, duly and validly issued and outstanding, fully paid
and non-assessable, and (iii) will be held at the time of the
Closing by the persons and in the amounts set forth in the records
of the transfer agent. The Latin America Investment Fund does not
have outstanding any options, warrants or other rights to subscribe
for or purchase any of the Latin America Investment Fund shares, nor
is there outstanding any security convertible into, or exchangeable
for, any of the Latin America Investment Fund shares.
(b) The Latin America Investment Fund is authorized to issue
100,000,000 shares of stock, par value $0.001 per share, all
of which shares are classified as Common Stock and each
outstanding share of which is fully paid, non-assessable and has
full voting rights.
4.15. Issuance of Stock.
(a) The offer and sale of the shares to be issued pursuant to this
Agreement will be in compliance with all applicable federal and
state securities laws.
(b) At or prior to the Effective Date, the Latin America Investment
Fund will have obtained any and all regulatory, director and
shareholder approvals necessary to issue the Latin America
Investment Fund Common Stock.
4.16. Books and Records. The books and records of the Latin America
Investment Fund made available to the Latin America Equity Fund are
substantially true and correct and contain no material misstatements
or omissions with respect to the operations of the Latin America
Investment Fund.
5. CONVERSION TO LATIN AMERICA INVESTMENT FUND, INC. COMMON STOCK
5.1. Conversion.
(a) Subject to the requisite approval of the shareholders of the
Parties, and the other terms and conditions contained herein, at
the Effective Date, each share of Common Stock of the Latin America
Equity Fund will be converted into an equivalent dollar amount (to
the nearest one ten-thousandth of one cent) of full shares of
Latin America Investment Fund Common Stock, computed based on
the net asset value per share of each of the Parties at the
Valuation Time.
(b) No fractional shares of the Latin America Investment Fund will
be issued to Latin America Equity Fund shareholders. In lieu
thereof, the Latin America Investment Fund will purchase all
fractional shares of the Latin America Investment Fund at the
current net asset value of shares of the Latin America Investment
Fund for the account of all holders of fractional interests, and
each such holder will receive such holder's pro rata share of
the proceeds of such purchase.
5.2. Computation of Net Asset Value. The net asset value per
share of the Parties shall be determined as of the Valuation
Time, and no formula will be used to adjust the net asset value
so determined of either of the Parties to take into account
differences in realized and unrealized gains and losses. The
value of the assets of the Latin America Equity Fund to be
transferred to the Latin America Investment Fund shall be
determined by the Latin America Investment Fund pursuant to
the principles and procedures consistently utilized by the
Latin America Investment Fund in valuing its own assets and
determining its own liabilities for purposes of the Merger,
which principles and procedures are substantially similar to
those employed by the Latin America Equity Fund when valuing
its own assets and determining its own liabilities. Such valuation
and determination shall be made by the Latin America Investment
Fund in cooperation with the Latin America Equity Fund and shall
be confirmed in writing by the Latin America Investment Fund to
the Latin America Equity Fund. The net asset value per share of
Latin America Investment Fund Common Stock shall be determined in
accordance with such procedures, and the Latin America Investment
Fund shall certify the computations involved.
5.3. Issuance of Latin America Investment Fund, Inc. Common Stock.
The Latin America Investment Fund shall issue to the shareholders of
the Latin America Equity Fund separate certificates or share deposit
receipts for the Latin America Investment Fund Common Stock by
delivering the certificates or share deposit receipts evidencing
ownership of the Latin America Investment Fund Common Stock to
Fleet National Bank c/o EquiServe, L.P., as the transfer agent
and registrar for the Latin America Investment Fund Common Stock.
5.4. Surrender of Latin America Equity Fund, Inc. Stock Certificates.
With respect to any Latin America Equity Fund shareholder holding
certificates representing shares of the Common Stock of the Latin
America Equity Fund as of the Effective Date, and subject to the
Latin America Investment Fund being informed thereof in writing
by the Latin America Equity Fund, the Latin America Investment
Fund will not permit such shareholder to receive new certificates
evidencing ownership of the Latin America Investment Fund Common
Stock until such shareholder has surrendered his or her
outstanding certificates evidencing ownership of the Common
Stock of the Latin America Equity Fund or, in the event of
lost certificates, posted adequate bond. The Latin America
Equity Fund will request its shareholders to surrender their
outstanding certificates representing certificates of the
Common Stock of the Latin America Equity Fund or post adequate
bond therefor. Dividends payable to holders of record of shares
of the Latin America Equity Fund as of any date after the Effective
Date and prior to the exchange of certificates by any shareholder of
the Latin America Equity Fund shall be paid to such shareholder,
without interest; however, such dividends shall not be paid unless
and until such shareholder surrenders his or her stock certificates
of the Latin America Equity Fund for exchange.
6. COVENANTS OF THE PARTIES
6.1. Shareholders' Meetings.
(a) Each of the Parties shall hold a meeting of its respective
shareholders for the purpose of considering the Merger as described
herein, which meeting has been called by each Party for
October 10, 2000, and any adjournments thereof.
(b) Each of the Parties agrees to mail to each of its respective
shareholders of record entitled to vote at the meeting of
shareholders at which action is to be considered regarding the
Merger, in sufficient time to comply with requirements as to
notice thereof, a combined Proxy Statement and Prospectus which
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.
6.2. Operations in the Normal Course. Each Party covenants to
operate its business in the ordinary course between the date
hereof and the Effective Date, it being understood that such
ordinary course of business will include (i) the declaration
and payment of customary dividends and other distributions and
(ii) in the case of the Latin America Equity Fund, preparing for
its deregistration, except that the distribution of dividends pursuant
to Sections 7.11 and 8.9 of this Agreement shall not be deemed to
constitute a breach of the provisions of this Section 6.2.
6.3. Articles of Merger. The Parties agree that, as soon as
practicable after satisfaction of all conditions to the Merger,
they will jointly file executed Articles of Merger with the
Department and make all other filings or recordings required
by Maryland law in connection with the Merger.
6.4. Regulatory Filings.
(a) The Latin America Equity Fund undertakes that, if the Merger
is consummated, it will file, or cause its agents to file, an
application pursuant to Section 8(f) of the 1940 Act for an order
declaring that the Latin America Equity Fund has ceased to a
registered investment company.
(b) The Latin America Investment Fund will file the N-14
Registration Statement with the SEC and will use its best efforts
to ensure that the N-14 Registration Statement becomes effective
as promptly as practicable. The Latin America Equity Fund agrees
to cooperate fully with the Latin America Investment Fund, and will
furnish to the Latin America Investment Fund the information
relating to itself to be set forth in the N-14 Registration Statement
as required by the 1933 Act, the 1934 Act, the 1940 Act, and the
rules and regulations thereunder and the state securities or blue
sky laws.
(c) The Parties each agree to proceed as promptly as possible to
cause to be made the necessary filings under the HSR Act (the
"HSR Filing") if applicable, with respect to the transactions
contemplated by this Agreement and to ensure that the related
waiting period expires or is otherwise terminated at the earliest
possible time.
6.5. Preservation of Assets. The Latin America Investment Fund
agrees that it has no plan or intention to sell or otherwise dispose
of the assets of the Latin America Equity Fund to be acquired in the
Merger, except for dispositions made in the ordinary course of
business.
6.6. Tax Matters. Each of the Parties agrees that by the Effective
Date all of its federal and other tax returns and reports required
to be filed on or before such date shall have been filed and all
taxes shown as due on said returns either have been paid or adequate
liability reserves have been provided for the payment of such taxes.
In connection with this covenant, the Parties agree to cooperate
with each other in filing any tax return, amended return or claim
for refund, determining a liability for taxes or a right to a
refund of taxes or participating in or conducting any audit or
other proceeding in respect of taxes. The Latin America Investment
Fund agrees to retain for a period of ten (10) years following the
Effective Date all returns, schedules and work papers and all
material records or other documents relating to tax matters of the
Latin America Equity Fund for its final taxable year and for all
prior taxable periods. Any information obtained under this Section
6.6 shall be kept confidential except as otherwise may be necessary
in connection with the filing of returns or claims for refund or in
conducting an audit or other proceeding. After the Effective Date,
the Latin America Investment Fund shall prepare, or cause its agents
to prepare, any federal, state or local tax returns, including any
Forms 1099, required to be filed and provided to required persons
by the Latin America Equity Fund with respect to its final taxable
years ending with the Effective Date and for any prior periods or
taxable years for which the due date for such return has not passed
as of the Effective Date and further shall cause such tax returns
and Forms 1099 to be duly filed with the appropriate taxing
authorities and provided to required persons. Notwithstanding
the aforementioned provisions of this Section 6.6, any expenses
incurred by the Latin America Investment Fund (other than for
payment of taxes) in excess of any accrual for such expenses by
the Latin America Equity Fund in connection with the preparation
and filing of said tax returns and Forms 1099 after the Effective
Date shall be borne by the Latin America Investment Fund.
6.7. Shareholder List. Prior to the Effective Date, the Latin
America Equity Fund shall have made arrangements with its transfer
agent to deliver to the Latin America Investment Fund, a list of
the names and addresses of all of the shareholders of record of
the Latin America Equity Fund on the Effective Date and the number
of shares of Common Stock of the Latin America Equity Fund owned
by each such shareholder, certified by the Latin America Equity
Fund's transfer agent or President to the best of their knowledge
and belief.
6.8. Delisting, Termination of Registration as an Investment
Company. The Latin America Equity Fund agrees that the (i)
delisting of the shares of the Latin America Equity Fund with
the NYSE and (ii) termination of its registration as a RIC will
be effected in accordance with applicable law as soon as practicable
following the Effective Date.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE LATIN AMERICA
INVESTMENT, INC. FUND
The obligations of the Latin America Investment Fund hereunder
shall be subject to the following conditions:
7.1. Approval of Merger. This Agreement shall have been approved
by the affirmative vote of the holders of a majority of the shares
of Common Stock of the Latin America Investment Fund issued and
outstanding and entitled to vote thereon and the affirmative vote
of the holders of a majority of the shares of Common Stock of the
Latin America Equity Fund issued and outstanding and entitled to
vote thereon; and the Latin America Equity Fund shall have delivered
to the Latin America Investment Fund a copy of the resolutions
approving this Agreement adopted by its Board of Directors and
shareholders, certified by its secretary.
7.2. Certificates and Statements by the Latin America Equity Fund,
Inc.
(a) The Latin America Equity Fund shall have furnished a statement
of assets, liabilities and capital, together with a schedule of
investments with their respective dates of acquisition and tax
costs, certified on its behalf by its President (or any Vice
President) and its Treasurer, and a certificate executed by both
such officers, dated the Effective Date, certifying that there has
been no material adverse change in its financial position since
July 31, 2000, other than changes in its portfolio securities
since that date or changes in the market value of its portfolio
securities.
(b) The Latin America Equity Fund shall have furnished to the Latin
America Investment Fund a certificate signed by its President
(or any Vice President), dated the Effective Date, certifying that
as of the Effective Dates, all representations and warranties made
in this Agreement are true and correct in all material respects as
if made at and as of such date and each has complied with all of
the agreements and satisfied all of the conditions on its part to
be performed or satisfied at or prior to such dates.
(c) The Latin America Equity Fund shall have delivered to the Latin
America Investment Fund a letter from PricewaterhouseCoopers LLP,
dated the Effective Date, stating that such firm has performed a
limited review of the federal, state and local income tax returns
for the period ended December 31, 1999, and that based on such
limited review, nothing came to their attention which caused them
to believe that such returns did not properly reflect, in all
material respects, the federal, state and local income taxes of
the Latin America Equity Fund for the period covered thereby;
and that for the period from December 31, 1999 to and including
the Effective Date and for any taxable year ending upon the
Effective Date, such firm has performed a limited review to
ascertain the amount of such applicable federal, state and local
taxes, and has determined that either such amount has been paid or
reserves have been established for payment of such taxes, this
review to be based on unaudited financial data; and that based on
such limited review, nothing has come to their attention which
caused them to believe that the taxes paid or reserves set aside
for payment of such taxes were not adequate in all material respects
for the satisfaction of federal, state and local taxes for the
period from December 31, 1999, to and including the Effective Date
and for any taxable year ending upon the Effective Date or that
the Latin America Equity Fund would not continue to qualify as
a RIC for federal income tax purposes.
7.3. Absence of Litigation. There shall be no material litigation
pending with respect to the matters contemplated by this Agreement.
7.4. Legal Opinions.
(a) The Latin America Investment Fund shall have received an
opinion of Xxxxxxx Xxxx & Xxxxxxxxx, as counsel to the Latin
America Equity Fund, in form and substance reasonably satisfactory
to the Latin America Investment Fund and dated the Effective Date,
to the effect that (i) the Latin America Equity Fund is a corporation
duly organized, validly existing under the laws of the State of
Maryland and in good standing with the Department; (ii) the Agreement
has been duly authorized, executed and delivered by the Latin America
Equity Fund, and, assuming that the N-14 Registration Statement
complies with the 1933 Act, 1934 Act and the 1940 Act, constitutes
a valid and legally binding obligation of the Latin America Equity
Fund, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws pertaining to the enforcement
of creditors' rights generally and by equitable principles; (iii)
to the best of such counsel's knowledge, no consent, approval,
authorization or order of any United States federal or Maryland
state court or governmental authority is required for the
consummation by the Latin America Equity Fund of the Merger,
except such as may be required under the 1933 Act, the 1934 Act,
the 1940 Act, the HSR Act, the published rules and regulations of
the SEC thereunder and under Maryland law and such as may be
required by state securities or blue sky laws; (iv) such counsel does
not know of any contracts or other documents with respect to the
Latin America Equity Fund related to the Merger of a character
required to be described in the N-14 Registration Statement which
are not described therein or, if required to be filed, filed as
required; (v) the execution and delivery of this Agreement does
not, and the consummation of the Merger will not, violate any
material provision of the Articles of Incorporation, as amended,
the by-laws, as amended, or any agreement (known to such counsel)
to which the Latin America Equity Fund is a party or by which the
Latin America Equity Fund is bound, except insofar as the parties
have agreed to amend such provision as a condition precedent to
the Merger; (vi) to the best of such counsel's knowledge, no material
suit, action or legal or administrative proceeding is pending or
threatened against the Latin America Equity Fund; and (vii) all
corporate actions required to be taken by the Latin America Equity
Fund to authorize this Agreement and to effect the Merger have
been duly authorized by all necessary corporate actions on behalf
of the Latin America Equity Fund. Such opinion shall also state
that (A) while such counsel cannot make any representation as to
the accuracy or completeness of statements of fact in the N-14
Registration Statement or any amendment or supplement thereto
with respect to the Latin America Equity Fund, nothing has come
to their attention that would lead them to believe that, on the
respective effective dates of the N-14 Registration Statement and
any amendment or supplement thereto with respect to the Latin
America Equity Fund, (1) the N-14 Registration Statement or any
amendment or supplement thereto contained any untrue statement
of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein
not misleading with respect to the Latin America Equity Fund, and
(2) the prospectus included in the N-14 Registration Statement
contained any untrue statement of a material fact or omitted to
state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading with respect to the Latin America Equity Fund; provided
that such counsel need not express any opinion or belief as to the
financial statements, other financial data, statistical data or
information relating to the Latin America Equity Fund contained
or incorporated by reference in the N-14 Registration Statement.
In giving the opinion set forth above, Xxxxxxx Xxxx & Xxxxxxxxx
may state that it is relying on certificates of officers of the
Latin America Equity Fund with regard to matters of fact and
certain certificates and written statements of governmental
officials with respect to the good standing of the Latin America
Equity Fund and on the opinion of Xxxxxxx, Baetjer and Xxxxxx,
LLP, as to matters of Maryland law.
(b) The Latin America Investment Fund shall have received an opinion
from Xxxxxxx Xxxx & Xxxxxxxxx, as counsel to the Latin America Equity
Fund, dated the Effective Date, to the effect that for federal income
tax purposes (i) the Merger as provided in this Agreement will
constitute a reorganization within the meaning of Section
368(a)(1)(A) of the Code and that the Latin America Equity Fund
and the Latin America Investment Fund will each be a "party to
a reorganization" within the meaning of Section 368(b) of the Code;
(ii) no gain or loss will be recognized by the Latin America Equity
Fund as a result of the Merger or upon the conversion of Latin
America Equity Fund shares to Latin America Investment Fund Common;
(iii) no gain or loss will be recognized by the Latin America
Investment Fund as a result of the Merger; (iv) no gain or loss
will be recognized by the shareholders of the Latin America Equity
Fund upon the conversion of their shares into Latin America
Investment Fund Common Stock except to the extent such shareholders
are paid cash in lieu of fractional shares of Latin America
Investment Fund in the Merger; (v) the tax basis of the Latin
America Equity Fund assets in the hands of the Latin America
Investment Fund will be the same as the tax basis of such assets in
the hands of the Latin America Equity Fund immediately prior to the
consummation of the Merger; (vi) immediately after the Merger, the
tax basis of the Latin America Investment Fund Common Stock received
by the shareholders of the Latin America Equity Fund in the Merger
(including that of fractional share interests purchased by the
Surviving Fund) will be equal, in the aggregate, to the tax basis
of the shares of the Latin America Equity Fund converted pursuant
to the Merger; (vii) a shareholder's holding period for the Latin
America Investment Fund Common Stock (including that of fractional
share interests purchased by the Surviving Fund) will be determined
by including the period for which he or she held the Common Stock of
the Latin America Equity Fund converted pursuant to the Merger,
provided that such Latin America Equity Fund shares were held as
a capital asset; (viii) the Latin America Investment Fund's holding
period with respect to the Latin America Equity Fund assets
transferred will include the period for which such assets were
held by the Latin America Equity Fund; and (ix) the payment of
cash to a Latin America Equity Fund shareholder in lieu of fractional
shares of the Latin America Investment Fund will be treated as
though the fractional shares were distributed as part of the Merger
and then redeemed by the Latin America Investment Fund with the
result that the Latin America Equity Fund shareholder will have a
capital gain or loss to the extent the cash distribution differs
from such shareholder's basis allocable to the fractional shares,
provided that the converted Latin America Equity Fund shares were
held as capital assets immediately prior to the conversion and that
the shareholder's proportionate interest in the Latin America
Investment Fund will be reduced as a result of such cash distribution.
7.5. Auditor's Consent and Certification. The Latin America
Investment Fund shall have received from PricewaterhouseCoopers
LLP a letter dated as of the effective date of the N-14 Registration
Statement and a similar letter dated within five days prior to the
Effective Date, in form and substance satisfactory to the Latin
America Investment Fund, to the effect that (i) they are independent
public auditors with respect to the Latin America Investment Fund
within the meaning of the 1933 Act and the applicable published rules
and regulations thereunder; and (ii) in their opinion, the financial
statements and supplementary information of the Latin America
Investment Fund included or incorporated by reference in the N-14
Registration Statement and reported on by them comply as to form
in all material respects with the applicable accounting requirements
of the 1933 Act and the published rules and regulations thereunder.
7.6. Liabilities. The assets or liabilities of the Latin America
Equity Fund to be transferred to the Latin America Investment Fund
shall not include any assets or liabilities which the Latin America
Investment Fund, by reason of limitations in its investment objectives
and policies as in effect upon consummation of theMerger or Articles
of Incorporation, may not properly acquire or assume. The Latin
America Investment Fund does not anticipate that there will be any
such assets or liabilities but the Latin America Investment Fund
will notify the Latin America Equity Fund if any do exist and will
reimburse the Latin America Equity Fund for any reasonable transaction
costs incurred by the Latin America Equity Fund for the liquidation
of such assets and liabilities.
7.7. Effectiveness of N-14 Registration Statement. The N-14
Registration Statement shall have become effective under the
1933 Act and no stop order suspending such effectiveness shall
have been instituted or, to the knowledge of the Latin America
Investment Fund, contemplated by the SEC.
7.8. Approval of Exemptive Application; Regulatory Filings.
(a) The Exemptive Application shall have been approved and the
Latin America Investment Fund shall have received from the SEC
such orders or interpretations as Xxxxxxx Xxxx & Xxxxxxxxx, as
counsel to the Latin America Investment Fund, deems reasonably
necessary or desirable under the 1933 Act and the 1940 Act in
connection with the Merger, provided, that such counsel shall have
requested such orders as promptly as practicable, and all such
orders shall be in full force and effect.
(b) Any applicable waiting period under the HSR Act relating to the
transactions contemplated hereby shall have expired or been
terminated.
7.9. Administrative Rulings, Proceedings. The SEC shall not have
issued an unfavorable advisory report under Section 25(b) of the
1940 Act, nor instituted or threatened to institute any proceeding
seeking to enjoin consummation of the Merger under Section 25(c) of
the 1940 Act; no other legal, administrative or other proceeding
shall be instituted or threatened which would materially affect the
financial condition of the Latin America Equity Fund or would
prohibit the Merger.
7.10. Satisfaction of the Latin America Investment Fund, Inc. All
proceedings taken by the Latin America Equity Fund and its counsel
in connection with the Merger and all documents incidental thereto
shall be satisfactory in form and substance to the Latin America
Investment Fund.
7.11. Dividends. Prior to the Effective Date, the Latin America
Equity Fund shall have declared and paid a dividend or dividends
which, together with all such previous dividends, shall have the
effect of distributing to its shareholders substantially all of its
net investment company taxable income that has accrued through the
Effective Date, if any (computed without regard to any deduction of
dividends paid) (unless such amounts are immaterial), and
substantially all of its net capital gain, if any, realized
through the Effective Date.
7.12. Custodian's Certificate. The Latin America Equity Fund's
custodian shall have delivered to the Latin America Investment Fund
a certificate identifying all of the assets of the Latin America
Equity Fund held or maintained by such custodian as of the Valuation
Time.
7.13. Books and Records. The Latin America Equity Fund's transfer
agent shall have provided to the Latin America Investment Fund (i)
the originals or true copies of all of the records of the Latin
America Equity Fund in the possession of such transfer agent as
of the Exchange Date, (ii) a certificate setting forth the number
of shares of the Latin America Equity Fund outstanding as of the
Valuation Time, and (iii) the name and address of each holder of
record of any shares and the number of shares held of record by
each such shareholder.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE LATIN AMERICA
EQUITY FUND, INC.
The obligations of the Latin America Equity Fund hereunder shall
be subject to the following conditions:
8.1. Approval of Merger. This Agreement shall have been approved
by the affirmative vote of the holders of a majority of the shares
of Common Stock of the Latin America Equity Fund issued and
outstanding and entitled to vote thereon and the affirmative vote
of the holders of a majority of the shares of Common Stock of the
Latin America Investment Fund issued and outstanding and entitled
to vote thereon; and that the Latin America Investment Fund shall
have delivered to the Latin America Equity Fund a copy of the
resolutions approving this Agreement adopted by its Board of
Directors and shareholders, certified by its secretary.
8.2. Certificates and Statements by the Latin America Investment Fund,
Inc.
(a) The Latin America Investment Fund shall have furnished a statement
of assets, liabilities and capital, together with a schedule of
investments with their respective dates of acquisition and tax
costs, certified on its behalf by its President (or any Vice
President) and its Treasurer, and a certificate executed by both
such officers, dated the Effective Date, certifying that there has
been no material adverse change in its financial position since July
31, 2000, other than changes in its portfolio securities since that
date or changes in the market value of its portfolio securities.
(b) The Latin America Investment Fund shall have furnished to the
Latin America Equity Fund a certificate signed by its President
(or any Vice President), dated the Effective Date, certifying that
as of the Effective Date, all representations and warranties made in
this Agreement are true and correct in all material respects as if
made at and as of such date and each has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied at or prior to such dates.
(c) The Latin America Investment Fund shall have delivered to the
Latin America Equity Fund a letter from PricewaterhouseCoopers LLP,
dated the Effective Date, stating that such firm has performed a
limited review of the federal, state and local income tax returns
for the period ended December 31, 1999, and that based on such
limited review, nothing came to their attention which caused them
to believe that such returns did not properly reflect, in all
material respects, the federal, state and local income taxes of
the Latin America Investment Fund for the period covered thereby;
and that for the period from December 31, 1999 to and including the
Effective Date, such firm has performed a limited review to ascertain
the amount of such applicable federal, state and local taxes, and
has determined that either such amount has been paid or reserves
established for payment of such taxes, this review to be based on
unaudited financial data; and that based on such limited review,
nothing has come to their attention which caused them to believe
that the taxes paid or reserves set aside for payment of such taxes
were not adequate in all material respects for the satisfaction of
federal, state and local taxes for the period from December 31, 1999,
to and including the Effective Date or that the Latin America
Investment Fund would not continue to qualify as a RIC for federal
income tax purposes.
8.3. Absence of Litigation. There shall be no material litigation
pending with respect to the matters contemplated by this Agreement.
8.4. Legal Opinions.
(a) The Latin America Equity Fund shall have received an opinion of
Xxxxxxx Xxxx & Xxxxxxxxx, as counsel to the Latin America Investment
Fund, in form and substance reasonably satisfactory to the Latin
America Equity Fund and dated the Effective Date, to the effect
that (i) the Latin America Investment Fund is a corporation duly
organized, validly existing under the laws of the State of Maryland
and in good standing with the Department; (ii) the Agreement has
been duly authorized, executed and delivered by the Latin America
Investment Fund, and, assuming that the N-14 Registration Statement
complies with the 1933 Act, 1934 Act and the 1940 Act, constitutes
a valid and legally binding obligation of the Latin America Investment
Fund, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws pertaining to the enforcement
of creditors' rights generally and by equitable principles; (iii)
to the best of such counsel's knowledge, no consent, approval,
authorization or order of any United States federal or Maryland state
court or governmental authority is required for the consummation by
the Latin America Investment Fund of the Merger, except such as may
be required under the 1933 Act, the 1934 Act, the 1940 Act, the HSR
Act and the published rules and regulations of the SEC thereunder
and under Maryland law and such as may be required under state
securities or blue sky laws; (iv) the N-14 Registration Statement
has become effective under the 1933 Act, no stop order suspending
the effectiveness of the N-14 Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending
or contemplated under the 1933 Act, and, with respect to the Latin
America Investment Fund, the N-14 Registration Statement, and each
amendment or supplement thereto, as of their respective effective
dates, appear on their face to be appropriately responsive in all
material respects to the requirements of the 1933 Act, the 1934 Act
and the 1940 Act and the published rules and regulations of the SEC
thereunder; (v) such counsel does not know of any statutes, legal
or governmental proceedings or contracts with respect to the Latin
America Investment Fund or other documents related to the Merger of
a character required to be described in the N-14 Registration Statement
which are not described therein or, if required to be filed, filed
as required; (vi) the execution and delivery of this Agreement does
not, and the consummation of the Merger will not, violate any
material provision of the Articles of Incorporation, as amended,
the by-laws, as amended, or any agreement (known to such counsel)
to which the Latin America Investment Fund is a party or by which
the Latin America Investment Fund is bound, except insofar as the
parties have agreed to amend such provision as a condition precedent
to the Merger; (vii) to the best of such counsel's knowledge, no
material suit, action or legal or administrative proceeding is
pending or threatened against the Latin America Investment Fund;
and (viii) all corporate actions required to be taken by the Latin
America Investment Fund to authorize this Agreement and to effect
the Merger have been duly authorized by all necessary corporate
actions on behalf of the Latin America Investment Fund. Such
opinion shall also state that (A) while such counsel cannot make
any representation as to the accuracy or completeness of statements
of fact in the N-14 Registration Statement or any amendment or
supplement thereto with respect to the Latin America Investment
Fund, nothing has come to their attention that would lead them to
believe that, on the respective effective dates of the N-14
Registration Statement and any amendment or supplement thereto,
(1) the N-14 Registration Statement or any amendment or supplement
thereto contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading with respect to the
Latin America Investment Fund; and (2) the prospectus included in
the N-14 Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading with respect to the
Latin America Investment Fund; provided that such counsel need not
express any opinion or belief as to the financial statements, other
financial data, statistical data or information relating to the
Latin America Investment Fund contained or incorporated by reference
in the N-14 Registration Statement. In giving the opinion set forth
above, Xxxxxxx Xxxx & Xxxxxxxxx may state that it is relying on
certificates of officers of the Latin America Investment Fund with
regard to matters of fact and certain certificates and written
statements of governmental officials with respect to the good
standing of the Latin America Investment Fund and on the opinion
of Xxxxxxx, Baetjer and Xxxxxx, LLP as to matters of Maryland law.
(b) The Latin America Equity Fund shall have received an opinion
from Xxxxxxx Xxxx & Xxxxxxxxx and dated the Effective Date, to the
effect that for federal income tax purposes (i) the Merger as
provided in this Agreement will constitute a reorganization within
the meaning of Section 368(a)(1)(A) of the Code and that the Latin
America Investment Fund and the Latin America Equity Fund will each
be a "party to a reorganization" within the meaning of Section
368(b) of the Code; (ii) no gain or loss will be recognized by
the Latin America Equity Fund as a result of the Merger or upon
the conversion of Latin America Equity shares to Latin America
Investment Fund Common Stock; (iii) no gain or loss will be
recognized by the Latin America Equity Fund as a result of the
Merger; (iv) no gain or loss will be recognized by the shareholders
of the Latin America Equity Fund upon the conversion of their shares
into Latin America Investment Fund Common Stock except to the extent
such shareholders are paid cash in lieu of fractional shares of
Latin America Investment Fund in the Merger; (v) the tax basis of
the Latin America Equity Fund assets in the hands of the Latin
America Investment Fund will be the same as the tax basis of such
assets in the hands of the Latin America Equity Fund immediately
prior to the consummation of the Merger; (vi) immediately after the
Merger, the tax basis of the Latin America Investment Fund Common
Stock received by the shareholders of the Latin America Equity Fund
in the Merger (including that of fractional share interests purchased
by the Surviving Fund) will be equal, in the aggregate, to the tax
basis of the shares of the Latin America Equity Fund converted
pursuant to the Merger; (vii) a shareholder's holding period for
the Latin America Investment Fund Common Stock (including that of
fractional share interests purchased by the Surviving Fund) will
be determined by including the period for which he or she held the
Common Stock of the Latin America Equity Fund converted pursuant
to the Merger, provided, that such Latin America Equity Fund shares
were held as a capital asset; (viii) the Latin America Investment
Fund's holding period with respect to the Latin America Equity Fund
assets transferred will include the period for which such assets
were held by the Latin America Equity Fund; and (ix) the payment
of cash to a Latin America Equity Fund shareholder in lieu of
fractional shares of the Latin America Investment Fund will be
treated as though the fractional shares were distributed as part
of the Merger and then redeemed by the Latin America Investment
Fund with the result that the Latin America Equity Fund shareholder
will have a capital gain or loss to the extent the cash distribution
differs from such shareholder's basis allocable to the fractional
shares, provided that the converted Latin America Equity Fund
shares were held as capital assets immediately prior to the
conversion and that the shareholder's proportionate interest in
the Latin America Investment Fund will be reduced as a result of
such cash distribution.
8.5. Auditor's Consent and Certification. The Latin America Equity
Fund shall have received from PricewaterhouseCoopers LLP a letter
dated as of the effective date of the N-14 Registration Statement
and a similar letter dated within five days prior to the Effective
Date, in form and substance satisfactory to the Latin America Equity
Fund, to the effect that (i) they are independent public auditors
with respect to the Latin America Investment Fund within the meaning
of the 1933 Act and the applicable published rules and regulations
thereunder; and (ii) in their opinion, the financial statements
and supplementary information of the Latin America Investment Fund
incorporated by reference in the N-14 Registration Statement and
reported on by them comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the
published rules and regulations thereunder.
8.6. Effectiveness of N-14 Registration Statement. The N-14
Registration Statement shall have become effective under the 1933
Act and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the Latin America Equity Fund,
contemplated by the SEC.
8.7. Approval of Exemptive Application; Regulatory Filings.
(a) The Exemptive Application shall have been approved and the
Latin America Equity Fund shall have received from the SEC such
orders or interpretations as Xxxxxxx Xxxx & Xxxxxxxxx, as counsel
to the Latin America Equity Fund, deems reasonably necessary or
desirable under the 1933 Act and the 1940 Act in connection with
the Merger, provided, that such counsel or counsel to the Latin
America Investment Fund shall have requested such orders as promptly
as practicable, and all such orders shall be in full force and
effect. Any applicable waiting period under the HSR Act relating
to the transactions contemplated hereby shall have expired or been
terminated.
(b) The SEC shall not have issued an unfavorable advisory report
under Section 25(b) of the 1940 Act, nor instituted or threatened
to institute any proceeding seeking to enjoin consummation of the
Merger under Section 25(c) of the 1940 Act; no other legal,
administrative or other proceeding shall be instituted or threatened
which would materially affect the financial condition of the Latin
America Equity Fund or would prohibit the Merger.
(c) The Latin America Investment Fund shall have received from any
relevant state securities administrator such order or orders as
are reasonably necessary or desirable under the 1933 Act, the 1934
Act, the 1940 Act, and any applicable state securities or blue sky
laws in connection with the transactions contemplated hereby, and
that all such orders shall be in full force and effect.
8.8. Satisfaction of the Latin America Equity Fund, Inc. All
proceedings taken by the Latin America Investment Fund and its
counsel in connection with the Merger and all documents incidental
thereto shall be satisfactory in form and substance to the Latin
America Equity Fund.
8.9. Dividends. Prior to the Effective Date, the Latin America
Investment Fund shall have declared and paid a dividend or dividends
which, together with all such previous dividends, shall have the
effect of distributing to its shareholders substantially all of
its net investment company taxable income that has accrued through
the Effective Date, if any (computed without regard to any deduction
of dividends paid) (unless such amounts are immaterial) and
substantially all of its net capital gain, if any, realized through
the Effective Date.
9. PAYMENT OF EXPENSES
9.1. Allocation. All expenses incurred in connection with the Merger
shall be allocated equally between the Latin America Investment Fund
and the Latin America Equity Fund in the event the Merger is
consummated. Such expenses shall include, but not be limited to,
all costs related to the preparation and distribution of the N-14
Registration Statement, the Exemptive Application, the HSR Filing
for the Parties, proxy solicitation expenses, legal and accounting
fees, SEC registration fees, and NYSE listing fees. Neither of the
Parties owes any broker's or finder's fees in connection with the
transactions provided for herein.
10. COOPERATION FOLLOWING EFFECTIVE DATE
In case at any time after the Effective Date any further action
is necessary to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution
and delivery of such further instruments and documents) as any other
Party may reasonably request, all at the sole cost and expense of
the requesting Party (unless the requesting Party is entitled to
indemnification as described below). The Latin America Equity Fund
acknowledges and agrees that from and after the Effective Date, the
Latin America Investment Fund shall be entitled to possession of all
documents, books, records, agreements and financial data of any sort
pertaining to the Latin America Equity Fund.
11. INDEMNIFICATION
11.1. The Latin America Equity Fund, Inc. The Latin America
Investment Fund agrees to indemnify and hold harmless the Latin
America Equity Fund and each of the Latin America Equity Fund's
directors and officers from and against any and all losses, claims,
damages, liabilities or expenses (including, without limitation, the
payment of reasonable legal fees and reasonable costs of
investigation) to which jointly and severally, the Latin America
Equity Fund or any of its directors or officers may become subject,
insofar as any such loss, claim, damage, liability or expense (or
actions with respect thereto) arises out of or is based on any
breach by the Latin America Investment Fund of any of its
representations, warranties, covenants or agreements set forth in
this Agreement.
11.2. The Latin America Investment Fund, Inc. The Latin America
Equity Fund agrees to indemnify and hold harmless the Latin America
Investment Fund and each of the Latin America Investment Fund's
directors and officers from and against any and all losses, claims,
liabilities or expenses (including, without limitation, the payment
of reasonable legal fees and reasonable costs of investigation) to
which jointly and severally, the Latin America Investment Fund or
any of its directors or officers may become subject, insofar as any
such loss, claim, damage, liability or expense (or actions with
respect thereto) arises out of or is based on any breach by the Latin
America Equity Fund of any of its representations, warranties,
covenants or agreements set forth in this Agreement.
12. TERMINATION, POSTPONEMENT AND WAIVERS
12.1. Termination.
(a) Notwithstanding anything to the contrary in this Agreement, this
Agreement may be terminated and the Merger abandoned at any time
(whether before or after adoption by the shareholders of each of
the Parties) prior to the Effective Date, or the Effective Date
may be postponed, (i) by mutual agreement of the Parties' Board
of Directors; (ii) by the Board of Directors of the Latin America
Investment Fund if any of the obligations of the Latin America
Equity Fund set forth in this Agreement has not been fulfilled or
waived by such Board or if the Latin America Equity Fund has made
a material and intentional misrepresentation herein or in connection
herewith; or (iii) by the Board of Directors of the Latin America
Equity Fund if any of the obligations of the Latin America Investment
Fund set forth in this Agreement has not been fulfilled or waived by
such Board or if the Latin America Investment Fund has made a material
and intentional misrepresentation herein or in connection herewith.
(b) If the transaction contemplated by this Agreement shall not have
been consummated by December 31, 2000, this Agreement automatically
shall terminate on that date, unless a later date is mutually agreed
to by the Boards of Directors of the Parties.
(c) In the event of termination of this Agreement pursuant to the
provisions hereof, the Agreement shall become void and have no
further effect, and there shall not be any liability hereunder on
the part of either of the Parties or their respective directors or
officers, except for any such material breach or intentional
misrepresentation, as to each of which all remedies at law or in
equity of the party adversely affected shall survive.
12.2. Waiver. At any time prior to the Effective Date, any of the
terms or conditions of this Agreement may be waived by the Board of
Directors of either the Latin America Equity Fund or the Latin
America Investment Fund (whichever is entitled to the benefit
thereof), if, in the judgment of such Board after consultation with
its counsel, such action or waiver will not have a material adverse
effect on the benefits intended in this Agreement to the shareholders
of their respective fund, on behalf of which such action is taken.
12.3. Expiration of Representations and Warranties.
(a) The respective representations and warranties contained in
Articles 3 and 4 of this Agreement shall expire with, and be
terminated by, the consummation of the Merger, and neither of the
Parties nor any of their officers, directors, agents or shareholders
shall have any liability with respect to such representations or
warranties after the Effective Date. This provision shall not protect
any officer, director, agent or shareholder of the Parties against
any liability to the entity for which that officer, director, agent
or shareholder so acts or to its shareholders to which that officer,
director, 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.
(b) If any order or orders of the SEC with respect to this Agreement
shall be issued prior to the Effective Date and shall impose any
terms or conditions which are determined by action of the Boards of
Directors of the Parties to be acceptable, such terms and conditions
shall be binding as if a part of this Agreement without further vote
or approval of the shareholders of the Parties, unless such terms
and conditions shall result in a change in the method of computing
the number of shares of Latin America Investment Fund Common Stock
to be issued pursuant to this Agreement, in which event, unless such
terms and conditions shall have been included in the proxy
solicitation materials furnished to the shareholders of the Parties
prior to the meetings at which the Merger shall have been approved,
this Agreement shall not be consummated and shall terminate unless
the Parties call special meetings of shareholders at which such
conditions so imposed shall be submitted for approval.
13. MISCELLANEOUS
13.1. Transfer Restriction. Pursuant to Rule 145 under the 1933 Act,
and in connection with the issuance of any shares to any person who
at the time of the Merger is, to its knowledge, an affiliate of a
party to the Merger pursuant to Rule 145(c), the Latin America
Investment Fund will cause to be affixed upon the certificate(s)
issued to such person (if any) a legend as follows:
THESE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
EXCEPT TO THE LATIN AMERICA INVESTMENT FUND, INC. (OR ITS STATUTORY
SUCCESSOR) UNLESS (I) A REGISTRATION STATEMENT WITH RESPECT THERETO
IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933 OR (II) IN THE OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE FUND, SUCH REGISTRATION IS
NOT REQUIRED.
and, further, that stop transfer instructions will be issued to the
Latin America Investment Fund's transfer agent with respect to such
shares. The Latin America Equity Fund will provide the Latin America
Investment Fund on the Effective Date with the name of any Latin
America Equity Fund Shareholder who is to the knowledge of the Latin
America Equity Fund an affiliate of it on such date.
13.2. Material Provisions. All covenants, agreements, representations
and warranties made under this Agreement and any certificates
delivered pursuant to this Agreement shall be deemed to have been
material and relied upon by each of the parties, notwithstanding
any investigation made by them or on their behalf.
13.3. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim or other communication hereunder shall be deemed duly
given if (and then two business days after) it is sent by registered
or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to the Latin America Investment Fund:
Xxx Xxxxxx, Esq.
Senior Vice President
The Latin America Investment Fund, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With copies to:
Xxxxxx Xxxxxxxxxxx, Esq.
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
If to the Latin America Equity Fund:
Xxx Xxxxxx, Esq.
Senior Vice President
The Latin America Equity Fund, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With copies to:
Xxxxxx Xxxxxxxxxxx, Esq.
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Any Party may send any notice, request, demand, claim or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary
mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices,
requests, demands, claims and other communications hereunder are
to be delivered by giving the other Parties notice in the manner
herein set forth.
13.4. Amendments. This Agreement may be amended, modified or
supplemented in such manner as may be mutually agreed upon in
writing by the authorized officers of the Latin America Investment
Fund and the Latin America Equity Fund; provided, however, that
following the meeting of the Latin America Investment Fund and Latin
America Equity Fund shareholders to approve the Merger, no such
amendment may have the effect of changing the provisions for
determining the number of the Latin America Investment Fund shares
to be issued to the Latin America Equity Fund shareholders under
this Agreement to the detriment of such shareholders without their
further approval.
13.5. Headings. The Article headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
13.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
13.7. Enforceability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining
terms and provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other
jurisdiction.
13.8. Successors and Assigns. This Agreement shall bind and inure
to the benefit of the parties hereto and their respective successors
and assigns, but no assignment or transfer hereof or of any rights
or obligations hereunder shall be made by any party without the
written consent of the other party. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give
any person, firm or corporation, other than the parties hereto
and the shareholders of the Parties and their respective successors
and assigns, any rights or remedies under or by reason of this
Agreement.
13.9. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State
of Maryland, without regard to its principles of conflicts of law.
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed by its President or Vice President and
attested by its Secretary or Assistant Secretary.
THE LATIN AMERICA INVESTMENT FUND, INC.
By:_____________________________________________
Name:
Attest:
Title:
THE LATIN AMERICA EQUITY FUND, INC.
By:______________________________________________
Name:
Attest:
Title:
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