FORM OF AGREEMENT AND PLAN
OF REORGANIZATION AND LIQUIDATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION dated as of February
25, 2000 (the "Agreement"), by and between the TIP Funds (the "TIP Trust"), a
Massachusetts business trust, on behalf of the TIP Target Select Equity Fund
(collectively, the "Acquired Fund"), and Alpha Select Funds ("Alpha Select
Trust"), a Delaware business trust, on behalf of the Target Select Equity Fund
(the "Acquiring Fund").
WHEREAS, TIP Trust 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 Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). TIP Trust has authorized capital consisting of an unlimited number of
units of beneficial interest without par value of separate series of TIP Trust.
The Acquired Fund is a duly organized and validly existing series of TIP Trust;
WHEREAS, Alpha Select Trust was organized under Delaware law as a business
trust under a Declaration of Trust dated October 25, 1993, and amended on
December 10, 1998. Alpha Select Trust is an open-end management investment
company registered under the 1940 Act. Alpha Select Trust has authorized capital
consisting of an unlimited number of units of beneficial interest with a par
value of $.00001 of separate series of Alpha Select Trust. The Acquiring Fund is
a duly organized and validly existing series of the Alpha Select Trust;
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 Acquiring Fund of all
or substantially all of the liabilities of the Acquired Fund and units of
beneficial interest of the 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
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, TIP 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
represents and warrants to the Acquired Fund as follows:
(a) Organization, Existence, etc. Alpha Select Trust is a business trust
duly organized and validly existing 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. Alpha Select 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 unaudited financial statements, if any, of
Alpha Select Trust relating to the Acquiring Fund dated as of March 31,
2000 (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. Alpha Select Trust, 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 Alpha Select Trust 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. 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 date of the
Statements and up 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. The Alpha
Select 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 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, 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'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) Organization, Existence, etc. TIP Trust is a business trust duly
organized and validly existing 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 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 TIP Trust
relating to the Acquired Fund for the fiscal year ended September 30, 1999
and the unaudited financial statements of the Acquired Fund dated as of
March 31, 2000 (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. 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.
(e) Authority Relative to this Agreement. TIP 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 TIP 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. 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 October 23, 2000
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. TIP 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, 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 for the
Acquired Fund, 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
TIP Trust under the laws of the Commonwealth of Massachusetts; (ii) TIP
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 the Acquired Fund and this Agreement has been
duly executed and delivered by TIP 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 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 Alpha Select Trust under the laws of the State of Delaware; (ii) Alpha
Select 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 corporate action 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 after reasonable inquiry, no consent, approval,
order or other authorization of any Federal or state court or
administrative or regulatory agency is required for 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")
and state securities commissions as may be necessary to permit the parties
to carry out the transactions contemplated by this Agreement shall have
been received.
(b) With respect to the Acquired Fund, TIP 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. TIP 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; provided that the Acquiring Fund has furnished or will furnish a
current, effective Prospectus relating to the Acquiring Fund Shares for
incorporation within and/or distribution with the Proxy Materials, 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 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 the
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.
(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 the Acquired Fund entitled to vote at an annual or special
meeting.
(g) The Board of Trustees of Alpha Select Trust, 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.
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
October 23, 2000 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 TIP Trust or by a resolution of the Board of Trustees of Alpha Select Fund,
at any time prior to the Effective Time, if circumstances should develop that,
in the opinion of the respective 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's shareholders without
their further approval.
12. Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the Commonwealth of Massachusetts.
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:
Xx. Xxxxx X. Xxxxx
Xxxxxx Investment Partners, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
if to the Acquired Fund:
Xxxxxxx X. Xxxxxxx
Xxxxxx Investment Partners, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
with a copy to:
Xxxx X. Xxxxx, Xx., Esquire
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 the Acquired Fund
and the Acquiring Fund will be borne by Xxxxxx Investment Partners, Inc.
pursuant to a separate agreement. 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 its 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 Alpha Select Trust, the Acquiring Fund, the
TIP Trust 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 Commonwealth of Massachusetts
or State of Delaware, as appropriate, this Agreement was executed by the
undersigned officers of Alpha Select Trust and TIP 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, nor are they binding upon the Trust's other officers and
Trustees, 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: TIP FUNDS,
on behalf of its series,
TIP Target Select Equity Fund
By:
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Attest: ALPHA SELECT FUNDS,
on behalf of its series,
Alpha Select Target Select Equity Fund
By:
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