Exhibit 4
AGREEMENT AND PLAN
OF REORGANIZATION AND LIQUIDATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION dated as of February
26, 1999 (the "Agreement"), by and between the Alpha Select Funds (the "Trust"),
a Delaware business trust, on behalf of the Xxxxxx Short Duration Government
Funds - One Year Portfolio (the "Acquired Fund"), and the TIP Funds ("TIP
Funds") a Massachusetts business trust, on behalf of the Xxxxxx Core High
Quality Fixed Income Fund (the "Acquiring Fund").
WHEREAS, the Trust was organized under Delaware law as a business trust
under a Declaration of Trust dated October 26, 1993 and amended on November 23,
1998. The Trust is an open-end management investment company registered under
the 1940 Act. The Trust has authorized capital consisting of an unlimited number
of units of beneficial interest of separate series of the Trust. The Acquired
Fund is a duly organized and validly existing series of the Trust;
WHEREAS, the TIP Funds was organized under Massachusetts law as a business
trust under a Declaration of Trust dated January 26, 1996, and amended on
February 21, 1997. TIP Funds is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). TIP Funds has authorized capital consisting of an unlimited number of
units of beneficial interest of separate series of TIP Funds. The Acquiring Fund
is a duly organized and validly existing series of TIP Funds;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree to effect the transfer of all of the assets of the
Acquired Fund solely in exchange for the assumption by the corresponding
Acquiring Fund of all or substantially all of the liabilities of the Acquired
Fund and units of beneficial interest of the corresponding Acquiring Fund
("Acquiring Fund Shares") followed by the distribution, at the Effective Time
(as defined in Section 9 of this Agreement), of such Acquiring Fund Shares to
the holders of units of beneficial interest of the Acquired Fund ("Acquired Fund
Shares"), on the terms and conditions hereinafter set forth in liquidation of
the Acquired Fund. The parties hereto covenant and agree as follows:
1. PLAN OF REORGANIZATION. At the Effective Time, the Acquired Fund will
assign, deliver and otherwise transfer all of their assets and good and
marketable title thereto, and assign all or substantially all of the liabilities
as are set forth in a statement of assets and responsibilities, to be prepared
as of the Effective Time (the "Statement of Assets and Liabilities") to the
Acquiring Fund free and clear of all liens, encumbrances and adverse claims
except as provided in this Agreement, and the Acquiring Fund shall acquire all
such assets, and shall assume all such liabilities of the Acquired Fund, in
exchange for delivery to the Acquired Fund by the Acquiring Fund of a number of
Acquiring Fund Shares (both full and fractional) equivalent in number and value
to the Acquired Fund Shares outstanding immediately prior to the Effective Time.
The assets and stated liabilities of the Acquired Fund, as set forth in the
Statement of Assets and Liabilities attached hereto as Exhibit A, shall be
exclusively assigned to and assumed by the Acquiring Fund. All debts,
liabilities, obligations and duties of the Acquired Fund, to the extent that
they exist at or after the Effective Time and are stated in the Statement of
Assets and Liabilities, shall after the Effective Time attach to the Acquiring
Fund and may be enforced against the Acquiring Fund to the same extent as if the
same had been incurred by the Acquiring Fund.
2. TRANSFER OF ASSETS. The assets of the Acquired Fund to be acquired by the
corresponding series of the Acquiring Fund and allocated thereto shall include,
without limitation, all cash, cash equivalents, securities, receivables
(including interest and dividends receivable) as set forth in the Statement of
Assets and Liabilities, as well as any claims or rights of action or rights to
register shares under applicable securities laws, any books or records of the
Acquired Fund and other property owned by the Acquired Fund at the Effective
Time.
3. LIQUIDATION AND DISSOLUTION OF THE ACQUIRED FUND. At the Effective Time, the
Acquired Fund will liquidate and the Acquiring Fund Shares (both full and
fractional) received by the Acquired Fund will be distributed to the
shareholders of record of the Acquired Fund as of the Effective Time in exchange
for their respective Acquired Fund Shares and in complete liquidation of the
Acquired Fund. Each shareholder of the Acquired Fund will receive a number of
Acquiring Fund Shares equal in number and value to the Acquired Fund Shares held
by that shareholder, and each Acquiring Fund and Acquired Fund share will be of
equivalent net asset value per share. Such liquidation and distribution will be
accompanied by the establishment of an open account on the share records of the
Acquiring Fund in the name of each shareholder of the Acquired Fund and
representing the respective number of Acquiring Fund Shares due such
shareholder. As soon as practicable after the Effective Time, but not later than
May 28, 1999 the Trust shall take all steps as shall be necessary and proper to
effect a complete termination of the Acquired Fund.
4. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND. The Acquiring Fund
represent and warrant to the Acquired Fund as follows:
(a) ORGANIZATION, EXISTENCE, ETC. TIP Fund is a business trust duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. TIP Fund is registered under the
1940 Act as an open-end management investment company; such registration has
not been revoked or rescinded and will be in full force and effect.
(c) FINANCIAL STATEMENTS. The unaudited financial statements, if any, of TIP
Fund relating to the Acquiring Fund dated as of _______, 199_ (the
"Acquiring Fund Financial Statements"), which will, if available, be
delivered to the Acquired Fund as of the Effective Time, will fairly present
the financial position of the Acquiring Fund as of the date thereof.
(d) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Fund Shares to be
issued in connection with the Reorganization have been duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid
and nonassessable. Prior to the
Effective Time, there shall be no issued and outstanding Acquiring Fund
Shares or any other securities issued by the Acquiring Fund.
(e) AUTHORITY RELATIVE TO THIS AGREEMENT. TIP Funds, on behalf of the
Acquiring Fund, has the power to enter into this Agreement and to carry out
its obligations hereunder. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by the TIP Funds Board of Trustees, and no other
proceedings by the Acquiring Fund are necessary to authorize its officers to
effectuate this Agreement and the transactions contemplated hereby. Each of
the Acquiring Fund is not a party to or obligated under any charter, by-law,
indenture or contract provision or any other commitment or obligation, or
subject to any order or decree, which would be violated by its executing and
carrying out this Agreement.
(f) LIABILITIES. There are no liabilities of the Acquiring Fund, whether or
not determined or determinable, other than liabilities disclosed or provided
for in the Acquiring Fund Financial Statements and liabilities incurred in
the ordinary course of business subsequent to the Effective Time or
otherwise previously disclosed to the Acquired Fund, none of which has been
materially adverse to the business, assets or results of operations of the
Acquiring Fund.
(g) LITIGATION. Except as previously disclosed to the Acquired Fund, there
are no claims, actions, suits or proceedings pending or, to the actual
knowledge of the Acquiring Fund, threatened which would materially adversely
affect the Acquiring Fund or its assets or business or which would prevent
or hinder in any material respect consummation of the transactions
contemplated hereby.
(h) CONTRACTS. Except for contracts and agreements disclosed to the Acquired
Fund, under which no default exists, each of the Acquiring Fund is not a
party to or subject to any material contract, debt instrument, plan, lease,
franchise, license or permit of any kind or nature whatsoever with respect
to the Acquiring Fund.
(i) TAXES. As of the Effective Time, all Federal and other tax returns and
reports of the Acquiring Fund required by law to have been filed shall have
been filed, and all other taxes shall have been paid so far as due, or
provision shall have been made for the payment thereof, and to the best of
the Acquiring Fund' knowledge, no such return is currently under audit and
no assessment has been asserted with respect to any of such returns.
5. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED FUND. The Acquired Fund
represent and warrant to the Acquiring Fund as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Trust is a business trust duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has the power to carry on its business as it is now being
conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Trust is registered under the
1940 Act as an open-end management investment company; such registration has
not been revoked or rescinded and is in full force and effect.
(c) FINANCIAL STATEMENTS. The audited financial statements of the Trust
relating to the Acquired Fund for the fiscal year ended September 30, 1998,
and the unaudited financial statements of the Acquired Fund dated as of
_________, 199_ (the "Acquired Fund Financial Statements"), as delivered to
the Acquiring Fund, fairly present the financial position of the Acquired
Fund as of the dates thereof, and the results of its operations and changes
in its net assets for the periods indicated.
(d) MARKETABLE TITLE TO ASSETS. Each of the Acquired Fund will have, at the
Effective Time, good and marketable title to, and full right, power and
authority to sell, assign, transfer and deliver, the assets to be
transferred to the Acquiring Fund. Upon delivery and payment for such
assets, each of the Acquiring Fund will have good and marketable title to
such assets without restriction on the transfer thereof free and clear of
all liens, encumbrances and adverse claims.
(e) AUTHORITY RELATIVE TO THIS AGREEMENT. The Trust, on behalf of the
Acquired Fund, has the power to enter into this Agreement and to carry out
its obligations hereunder. The execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by the Trust's Board of Trustees, and, except for
approval by the shareholders of the Acquired Fund, no other proceedings by
the Acquired Fund are necessary to authorize its officers to effectuate this
Agreement and the transactions contemplated hereby. Each of the Acquired
Fund is not a party to or obligated under any charter, by-law, indenture or
contract provision or any other commitment or obligation, or subject to any
order or decree, which would be violated by its executing and carrying out
this Agreement.
(f) LIABILITIES. There are no liabilities of the Acquired Fund, whether or
not determined or determinable, other than liabilities disclosed or provided
for in the Acquired Fund Financial Statements and liabilities incurred in
the ordinary course of business subsequent to _________, 199_, or otherwise
previously disclosed to the Acquiring Fund, none of which has been
materially adverse to the business, assets or results of operations of the
Acquired Fund. The Trust's Registration Statement, which is on file with the
Securities and Exchange Commission, does not contain an untrue statement of
a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(g) LITIGATION. Except as previously disclosed to the Acquiring Fund, there
are no claims, actions, suits or proceedings pending or, to the knowledge of
the Acquired Fund, threatened which would materially adversely affect the
Acquired Fund or its assets or business or which would prevent or hinder in
any material respect consummation of the transactions contemplated hereby.
(h) CONTRACTS. Except for contracts and agreements disclosed to the
Acquiring Fund, under which no default exists, each of the Acquired Fund, at
the Effective Time, is not a party to or subject to any material contract,
debt instrument, plan, lease, franchise, license or permit of any kind or
nature whatsoever.
(i) TAXES. As of the Effective Time, all Federal and other tax returns and
reports of the Acquired Fund required by law to have been filed shall have
been filed, and all other taxes shall have been paid so far as due, or
provision shall have been made for the payment thereof, and to the best of
the Acquired Fund's knowledge, no such return is currently under audit and
no assessment has been asserted with respect to any of such returns.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
(a) All representations and warranties of the Acquired Fund contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same
force and effect as if made on and as of the Effective Time.
(b) The Acquiring Fund shall have received an opinion of counsel, dated as
of the Effective Time, addressed to and in form and substance satisfactory
to counsel for the Acquiring Fund, to the effect that (i) the Acquired Fund
is duly organized and validly existing series of the Trust under the laws of
the Commonwealth of Massachusetts; (ii) the Trust is an open-end management
investment company registered under the 1940 Act; (iii) this Agreement and
the Reorganization provided for herein and the execution of this Agreement
have been duly authorized and approved by all requisite action of each of
the Acquired Fund and this Agreement has been duly executed and delivered by
the Trust on behalf of the Acquired Fund and is a valid and binding
obligation of the Acquired Fund, subject to applicable bankruptcy,
insolvency, fraudulent conveyance and similar laws or court decisions
regarding enforcement of creditors' rights generally; (iv) to the best of
counsel's knowledge after reasonable inquiry, no consent, approval, order or
other authorization of any Federal or state court or administrative or
regulatory agency is required for each of the Acquired Fund to enter into
this Agreement or carry out its terms that has not been obtained other than
where the failure to obtain any such consent, approval, order or
authorization would not have a material adverse effect on the operations of
the Acquired Fund; and (v) upon consummation of this Agreement, the
Acquiring Fund shall have acquired all of the Acquired Fund's assets listed
in the Statement of Assets and Liabilities, free and clear of all liens
encumbrances or adverse claims.
(c) The Acquired Fund shall have delivered to the Acquiring Fund at the
Effective Time the Acquired Fund's Statement of Assets and Liabilities,
prepared in accordance with generally accepted accounting principles
consistently applied, together with a certificate of the Treasurer or
Assistant Treasurer of the Acquired Fund as to the aggregate asset value of
the Acquired Fund's portfolio securities.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
(a) All representations and warranties of the Acquiring Fund contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time, with the same
force and effect as if made on and as of the Effective Time.
(b) The Acquired Fund shall have received an opinion of counsel for the
Acquiring Fund, dated as of the Effective Time, addressed to and in form and
substance satisfactory to counsel for the Acquired Fund, to the effect that:
(i) the Acquiring Fund is duly organized and validly existing series of TIP
Funds under the laws of the Commonwealth of Massachusetts; (ii) TIP Funds is
an open-end management investment company registered
under the 1940 Act; (iii) this Agreement and the Reorganization provided for
herein and the execution of this Agreement have been duly authorized and
approved by all requisite corporate action of each of the Acquiring Fund and
this Agreement has been duly executed and delivered by the Acquiring Fund
and is a valid and binding obligation of the Acquiring Fund, subject to
applicable bankruptcy, insolvency, fraudulent conveyance and similar laws or
court decisions regarding enforcement of creditors' rights generally; (iv)
to the best of counsel's knowledge, no consent, approval, order or other
authorization of any Federal or state court or administrative or regulatory
agency is required for each of the Acquiring Fund to enter into this
Agreement or carry out its terms that has not already been obtained, other
than where the failure to obtain any such consent, approval, order or
authorization would not have a material adverse effect on the operations of
the Acquiring Fund; and (v) the Acquiring Fund Shares to be issued in the
Reorganization have been duly authorized and upon issuance thereof in
accordance with this Agreement will be validly issued, fully paid and
nonassessable.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND AND THE
ACQUIRING FUND. The obligations of the Acquired Fund and the Acquiring Fund to
effectuate this Agreement shall be subject to the satisfaction of each of the
following conditions:
(a) Such authority from the Securities and Exchange Commission (the "SEC")
as may be necessary to permit the parties to carry out the transactions
contemplated by this Agreement shall have been received.
(b) With respect to the Acquired Fund, the Trust will call a meeting of
shareholders to consider and act upon this Agreement and to take all other
actions reasonably necessary to obtain the approval by shareholders of each
of the Acquired Fund of this Agreement and the transactions contemplated
herein, including the Reorganization and the termination of the Acquired
Fund if the Reorganization is consummated. The Trust has prepared or will
prepare the notice of meeting, form of proxy and proxy statement
(collectively, "Proxy Materials") to be used in connection with such
meeting, and with such other information relating to the Acquiring Fund as
is reasonably necessary for the preparation of the Proxy Materials.
(c) The Registration Statement on Form N-1A of the Acquiring Fund shall be
effective under the Securities Act of 1933 and, to the best knowledge of the
Acquiring Fund, no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated under the 1933
Act.
(d) The shares of the Acquiring Fund shall have been duly qualified for
offering to the public in all states of the United States, the Commonwealth
of Puerto Rico and the District of Columbia (except where such
qualifications are not required) so as to permit the transfer contemplated
by this Agreement to be consummated.
(e) The Acquired Fund and the Acquiring Fund shall have received on or
before the Effective Time an opinion of counsel satisfactory to the Acquired
Fund and the Acquiring Fund substantially to the effect that for Federal
income tax purposes:
(1) No gain or loss will be recognized to the Acquired Fund upon the
transfer of its assets in exchange solely for the Acquiring Fund Shares
and the assumption by the Acquiring Fund of the corresponding Acquired
Fund's stated liabilities;
(2) No gain or loss will be recognized to the Acquiring Fund on its
receipt of the Acquired Fund's assets in exchange for the Acquiring Fund
Shares and the assumption by the Acquiring Fund of the corresponding
Acquired Fund's liabilities;
(3) The basis of an Acquired Fund's assets in the Acquiring Fund's hands
will be the same as the basis of those assets in the Acquired Fund's
hands immediately before the Reorganization;
(4) The Acquiring Fund's holding period for the assets transferred to
the Acquiring Fund by the Acquired Fund will include the holding period
of those assets in the corresponding Acquired Fund's hands immediately
before the conversion;
(5) No gain or loss will be recognized to the Acquired Fund on the
distribution of the Acquiring Fund Shares to the Acquired Fund's
shareholders in exchange for their Acquired Fund Shares;
(6) No gain or loss will be recognized to the Acquired Fund's
shareholders as a result of the Acquired Fund's distribution of
Acquiring Fund Shares to the Acquired Fund's shareholders in exchange
for the Acquired Fund's shareholders' Acquired Fund Shares;
(7) The basis of the Acquiring Fund Shares received by the Acquired
Fund's shareholders will be the same as the adjusted basis of that
Acquired Fund's shareholders' Acquired Fund Shares surrendered in
exchange therefor; and
(8) The holding period of the Acquiring Fund Shares received by the
Acquired Fund's shareholders will include the Acquired Fund's
shareholders' holding period for the Acquired Fund's shareholders'
Acquired Fund Shares surrendered in exchange therefor, provided that
said Acquired Fund Shares were held as capital assets on the date of the
Reorganization.
(f) A vote approving this Agreement and the Reorganization contemplated
hereby shall have been adopted by at least a majority of the outstanding
shares of each of the Acquired Fund entitled to vote at an annual or special
meeting.
(g) The Board of Trustees of TIP Funds, at a meeting duly called for such
purpose, shall have authorized the issuance by each of the Acquiring Fund of
Acquiring Fund Shares at the
Effective Time in exchange for the assets of the Acquired Fund pursuant to
the terms and provisions of this Agreement.
9. EFFECTIVE TIME OF THE REORGANIZATION. The exchange of the Acquired Fund's
assets for Acquiring Fund Shares shall be effective as of close of business on
May 28, 1999, or at such other time and date as fixed by the mutual consent of
the parties (the "Effective Time").
10. TERMINATION. This Agreement and the transactions contemplated hereby may be
terminated and abandoned without penalty by resolution of the Board of Trustees
of the Trust, at any time prior to the Effective Time, if circumstances should
develop that, in the opinion of the Board, make proceeding with the Agreement
inadvisable.
11. AMENDMENT. This Agreement may be amended, modified or supplemented in such
manner as may be mutually agreed upon in writing by the parties; provided,
however, that following the Shareholders' Meeting called on behalf of the
Acquired Fund pursuant to Section 8 of this Agreement, no such amendment may
have the effect of changing the provisions for determining the number or value
of Acquiring Fund Shares to be paid to the Acquired Fund's shareholders under
this Agreement to the detriment of the Acquired Fund, shareholders without their
further approval.
12. GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware.
13. NOTICES. Any notice, report, statement or demand required or permitted by
and provision of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy, certified mail or overnight express courier
addressed as follows:
if to the Acquiring Fund:
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with a copy to:
Xxxx X. Xxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
if to the Acquired Fund:
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with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
14. FEES AND EXPENSES.
(a) Each of the Acquiring Fund and the Acquired Fund represents and warrants
to the other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
(b) Except as otherwise provided for herein, all expenses of the
transactions contemplated by this Agreement incurred by each of the Acquired
Fund and the Acquiring Fund will be borne by Xxxxxx Investment Partners,
Inc. Such expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of
this Agreement; (ii) expenses associated with the preparation and filing of
the Proxy Statement under the 1934 Act; (iii) registration or qualification
fees and expenses of preparing and filing such forms as are necessary under
applicable state securities laws to qualify the Acquiring Fund Shares to be
issued in connection herewith in each state in which the Acquired Fund's
shareholders are resident as of the date of the mailing of the Proxy
Statement to such shareholders; (iv) postage; (v) printing; (iv) accounting
fees; (vii) legal fees; and (viii) solicitation costs of the transaction.
Notwithstanding the foregoing, the Acquiring Fund shall pay their own
Federal and state registration fees.
15. HEADINGS, COUNTERPARTS, ASSIGNMENT.
(a) The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
(c) This Agreement shall be binding upon 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 their respective successors and assigns any rights or remedies
under or by reason of this Agreement.
16. ENTIRE AGREEMENT. Each of the Acquiring Fund and the Acquired Fund agree
that neither party has made any representation, warranty or covenant not set
forth herein and that this Agreement constitutes the entire agreement between
the parties. The representations, warranties and covenants contained herein or
in any document delivered pursuant hereto or in connection herewith shall
survive the consummation of the transactions contemplated hereunder.
17. FURTHER ASSURANCES. Each of the Acquiring Fund and the Acquired Fund shall
take such further action as may be necessary or desirable and proper to
consummate the transactions contemplated hereby.
18. BINDING NATURE OF AGREEMENT. As provided in each Trust's Declaration of
Trust on file with the Secretary of State of the State of Delaware or the
Commonwealth of Massachusetts, this Agreement was executed by the undersigned
officers of TIP Funds and the Trust, on behalf of each of the Acquiring Fund and
the Acquired Fund, respectively, as officers and not individually, and the
obligations of this Agreement are not binding upon the undersigned officers
individually, but are binding only upon the assets and property of each Trust.
Moreover, no series of a trust shall be liable for the obligations of any other
series of that trust.
Attest: ALPHA SELECT FUNDS,
on behalf of its series, the Xxxxxx Short Duration
Government Funds - One Year Portfolio
________________________ By:___________________________________
Attest: TIP FUNDS,
on behalf of its series, the Xxxxxx Core High Quality
Fixed Income Fund
________________________ By:___________________________________
