AGREEMENT AND PLAN
OF REORGANIZATION AND LIQUIDATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION dated as of
___________ (the "Agreement"), by and between the MAS Funds Municipal Portfolio
(the "Acquiring Fund") and the MAS Funds PA Municipal Portfolio (the "Acquired
Fund").
WHEREAS, MAS Funds ("MAS") was organized under Pennsylvania law as a
business trust under a Declaration of Trust dated February 15, 1984, as amended
and restated; MAS Funds is an open-end management investment company registered
under the 1940 Act; and the Acquiring and Acquired Funds are duly organized and
validly existing series of MAS Funds;
NOW, THEREFORE, in consideration of the mutual premises herein
contained, the parties hereto agree to effect (i) the transfer of all of the
assets of the Acquired Fund solely in exchange for (a) the assumption by the
Acquiring Fund of all or substantially all of the liabilities of the Acquired
Fund and (b) beneficial shares of the Acquiring Fund followed by the
distribution, at the Effective Time (as defined in Section 9 of this Agreement),
of such beneficial shares of the Acquiring Fund to the holders of beneficial
shares of the Acquired Fund on the terms and conditions hereinafter set forth in
liquidation of the Acquired Fund. For convenience: the beneficial shares of the
Acquiring Fund that are given in exchange for the assets of the Acquired Fund
are referred to hereinafter as the "Acquiring Fund Shares"; and the beneficial
shares of the Acquired Fund that are held by the holders of such shares at the
Effective Time are referred to hereinafter as the "Acquired Fund Shares." 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 its assets and good and
marketable title thereto, free and clear of all liens, encumbrances and adverse
claims except as provided in this Agreement, and assign all or substantially all
of its liabilities as are set forth in a statement of assets and liabilities, to
be prepared as of the Effective Time (the "Statement of Assets and Liabilities")
to the Acquiring Fund 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 its Acquiring Fund
Shares (both full and fractional) equivalent in value to the Acquired Fund
Shares of the Acquired Fund outstanding immediately prior to the Effective Time.
The assets and stated liabilities of the Acquired Fund, as set forth in a
statement of assets and liabilities 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 a 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 Acquiring Fund shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable) as set forth in a 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 such Acquired Fund and other property
owned by such Acquired Fund at the Effective Time.
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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 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 value to the Acquired Fund Shares held by that shareholder. 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 record 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 November 30, 1998, MAS 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 represents and warrants to the Acquired Fund as follows:
(a) 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.
(b) 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's
statement of assets and liabilities, if any, and liabilities
incurred in the ordinary course of business prior 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.
(c) 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 any of the
Acquiring Fund or its assets or business or which would
prevent or hinder in any material respect consummation of the
transactions contemplated hereby.
(d) 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's 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 represents and warrants to the Acquiring Fund as follows:
(a) Marketable Title to Assets. 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, 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.
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(b) 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's
statement of assets and liabilities, and liabilities incurred
in the ordinary course of business prior to the Effective Time
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.
(c) 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.
(d) 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. Condition Precedent to Obligations of the Acquiring Fund. 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.
7. Condition Precedent to Obligations of the Acquired Fund. 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.
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) The Registration Statement on Form N-1A of the Acquiring
Fund shall be effective under the Securities Act of 1933 (the
"1933 Act"), 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.
(c) The Acquiring Fund has filed all documents and paid all
fees required to permit their shares to be offered 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.
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(d) 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 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 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 conversion;
(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 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 conversion.
(e) A vote approving this Agreement and the Reorganization
contemplated hereby shall have been adopted by at least a
majority of the outstanding shares of the Acquired Fund
entitled to vote at an annual or special meeting.
(f) The Board of Trustees of MAS, at a meeting duly called for
such purpose, shall have authorized the issuance by 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.
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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 November 13, 1998, 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 with respect to the Acquiring Fund and/or
the Acquired Fund without penalty by resolution of the Board of Trustees of MAS
Funds or at the discretion of any duly authorized officer of MAS Funds, at any
time prior to the Effective Time, if circumstances should develop that, in the
opinion of such Board or officer, make proceeding with the Agreement
inadvisable.
11. Amendment and Waiver. This Agreement may be amended, modified or
supplemented in such manner as may be mutually agreed upon in writing by the
parties; PROVIDED, that 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's shareholders without their further approval. Furthermore,
either party may waive any breach by the other party or the failure to satisfy
any of the conditions to its obligations (such waiver to be in writing and
authorized by the President or any Vice President of the waiving party with or
without the approval of such party's shareholders).
12. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
13. Fees and Expenses.
(a) 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 Fund will be borne by such Fund. 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 Securities
Exchange Act of 1934; (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; (vi)
accounting fees; (vii) legal fees; and (viii) solicitation
costs of the transaction. The Acquiring Fund shall pay its own
Federal and state registration fees.
14. 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.
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(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.
15. Entire Agreement. 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.
16. Further Assurances. 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.
17. Binding Nature of Agreement. As provided in the MAS Funds
Declaration of Trust, as amended and supplemented to date, on file with the
Pennsylvania Corporation Bureau of the Department of State, this Agreement was
executed by the undersigned officers of MAS Funds, on behalf of the Acquiring
Fund and the Acquired Fund, 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 the
corporation or trust. Moreover, no series of a trust shall be liable for the
obligations of any other series of that trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
MAS Funds, on behalf of its series, PA Municipal Portfolio
By
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Name:
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Title:
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MAS Funds, on behalf of its series, Municipal Portfolio
By
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Name:
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Title:
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