March 8, 1999
Alpha Select Funds
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TIP Funds
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ 19456
Re: AGREEMENT AND PLAN OF REORGANIZATION BY AND BETWEEN
ALPHA SELECT FUNDS, ON BEHALF OF ITS ▇▇▇▇▇▇ SHORT
DURATION GOVERNMENT FUNDS - ONE YEAR PORTFOLIO,
AND TIP FUNDS ON BEHALF OF ITS ▇▇▇▇▇▇ CORE HIGH QUALITY
FIXED INCOME FUND
Ladies and Gentlemen:
We have acted as counsel to Alpha Select Funds, a Delaware business trust, and
TIP Funds, a Massachusetts business trust, in connection with the execution and
delivery of the draft Agreement and Plan of Reorganization (the "Agreement"),
dated as of February 26, 1999, by TIP Funds, on behalf of its Core High Quality
Fixed Income Fund, relating to the transfer of all the assets and liabilities of
the Alpha Select ▇▇▇▇▇▇ Short Duration Government Funds - One Year Portfolio
(the "Acquired Fund"), in exchange for shares of the ▇▇▇▇▇▇ Core High Quality
Fixed Income Fund (the "Acquiring Fund") followed by the distribution of such
Shares (the "Acquiring Fund's Shares") to the holders of shares of the Acquired
Fund ("Acquired Fund's Shares") in exchange for such Acquired Fund's Shares in
complete liquidation of such Acquired Fund (the "Reorganization"), pursuant to
the Agreement. This opinion letter is delivered to you pursuant to Section 8(e)
of the Agreement. Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Agreement.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Agreement, and (ii) such other documents as we have deemed necessary or
appropriate in order to enable us to render the opinion below. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified, conformed or photostatic copies and the authenticity of the
originals of such copies. Our
March 8, 1999
Page 2
opinion is based in part on the facts set forth below. We have not undertaken an
independent investigation or verification of these facts or of the information
set forth either in the aforementioned documents or in other documents that we
have reviewed.
1. The Reorganization will be consummated in compliance with the
material terms of the Agreement, and none of the material
terms and conditions therein have been waived or modified and
neither party has any plan or intention to waive or modify any
such material condition.
2. The fair market value of the Acquiring Fund's Shares to be
received by each shareholder of the Acquired Fund in the
Reorganization will be approximately equal to the fair market
value of the shares in the Acquired Fund surrendered in
exchange therefor.
3. No consideration other than the Acquiring Fund's Shares and
the assumption by the Acquiring Fund of the stated liabilities
of the Acquired Fund will be issued in exchange for the assets
of the Acquired Fund in the Reorganization.
4. The Acquiring Fund has no plan or intention to sell additional
shares of beneficial interest in the Acquiring Fund or to
redeem or otherwise reacquire any of the Acquiring Fund's
Shares issued in the Reorganization other than in the ordinary
course of its business as a regulated investment company.
5. The Acquiring Fund has no plan or intention to sell or
otherwise dispose of any of the Acquired Fund's assets to be
acquired by it in the Reorganization except for dispositions
made in the ordinary course of its business as a regulated
investment company.
6. Following the Reorganization, the Acquiring Fund will continue
the historic business of the Acquired Fund or use a
significant portion of the Acquired Fund's assets in its
business.
7. Immediately following consummation of the Reorganization, the
Acquiring Fund will possess the same liabilities as those
possessed by the Acquired Fund immediately prior to the
Reorganization. The fair market value of the assets of the
Acquired Fund acquired by the Acquiring Fund will exceed the
liabilities of the Acquired Fund assumed by the Acquiring Fund
plus the amount of liabilities, if any, to which the acquired
assets are subject.
8. There is no intercorporate indebtedness existing between the
Acquiring Fund and the Acquired Fund that was issued,
acquired, or will be settled at a discount.
March 8, 1999
Page 3
9. Immediately prior to the Reorganization, the Acquired Fund and
the Acquiring Fund will meet the requirements of Subchapter M
of the Internal Revenue Code of 1986 for qualification and
treatment as regulated investment companies.
10. The Acquiring Fund does not own nor will it acquire prior to
the consummation of the Reorganization any shares of common
stock in the Acquired Fund.
Our opinion summarizes certain Federal income tax consequences of the
Reorganization to holders of shares in the Acquired Fund (individually, a
"Shareholder" and, collectively, the "Shareholders"). Our opinion does not
address all aspects of Federal income taxation that may be relevant to
particular Shareholders and may not be applicable to Shareholders who are not
citizens or residents of the United States. Further, our opinion does not
address the effect of any applicable foreign, state, local or other tax laws.
In rendering our opinion, we have considered the applicable provisions of the
Internal Revenue Code of 1986 (the "Code"), Treasury Regulations, pertinent
judicial authorities, interpretive rulings of the Internal Revenue Service and
such other authorities as we have considered relevant.
Based upon and subject to the foregoing, we are of the opinion that the
Reorganization will, under current law, constitute a tax-free reorganization
under Section 368(a) of the Code, and that the Acquired Fund and Acquiring Fund
will each be a party to the reorganization within the meaning of Section 368(b)
of the Code.
The Reorganization, as a tax-free reorganization, will have the following
Federal income tax consequences for the Shareholders, the Acquired Fund and the
Acquiring Fund:
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's 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 Reorganization;
March 8, 1999
Page 4
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 Reorganization;
5. No gain or loss will be recognized by the Acquired Fund on the
distribution of the Acquiring Fund's Shares to the Acquired
Fund's shareholders in exchange for its Acquired Fund's
Shares;
6. No gain or loss will be recognized by the Acquired Fund's
shareholders as a result of the Acquired Fund's distribution
of Acquiring Fund's Shares to the Acquired Fund's shareholders
in exchange for the Acquired Fund's shareholders' Acquired
Fund's Shares;
7. The basis of the Acquiring Fund's Shares received by the
Acquired Fund's shareholders will be the same as the adjusted
basis of the Acquired Fund's shareholders' Acquired Fund's
Shares surrendered in exchange therefor; and
8. The holding period of the Acquiring Fund's Shares received by
the Acquired Fund's shareholders will include the Acquired
Fund's share holders' holding period for the Acquired Fund's
shareholders' Acquired Fund's Shares surrendered in exchange
therefor, provided that said Acquired Fund's Shares were held
as capital assets on the date of the Reorganization.
Except as set forth above, we express no opinion as to the tax consequences to
any party, whether Federal, state, local or foreign, of the Reorganization or
the Agreement or of any transactions related to the Reorganization or the
Agreement or contemplated by the Reorganization or the Agreement. This opinion
is being furnished to you on behalf of the both the Acquired and Acquiring Funds
in connection with the Reorganization and the Agreement and solely for your
benefit in connection therewith and may not be used or relied upon for any other
purpose and may not be circulated, quoted or otherwise referred to for any other
purpose without our express written consent.
Very truly yours,
/s/ ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
