ITEM 77Q1(G)
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "PLAN") is made as of this
18th day of September, 2002, by and between Forum Funds (the "Trust"), a
Delaware business trust, for itself and on behalf of its series, BrownIA
Intermediate Bond Fund (the "Acquiring Fund") and Short-Intermediate Income
Fund, Inc. (the "Target Fund").
WHEREAS, the Trust and the Target Fund are open-end management investment
companies registered with the Securities and Exchange Commission (the "SEC")
under the Investment Company Act of 1940, as amended (the "1940 ACT");
WHEREAS, the parties desire that the Acquiring Fund acquire the assets and
assume the liabilities of the Target Fund in exchange for shares of equal value
of the Acquiring Fund and the distribution of the shares of the Acquiring Fund
to the shareholders of the Target Fund in connection with the dissolution and
liquidation of the Target Fund (the "REORGANIZATION"); and
WHEREAS, the parties intend that the Reorganization qualify as a
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "CODE"), and that the Acquiring Fund and the
Target Fund each be a "party to a reorganization," within the meaning of Section
368(b) of the Code, with respect to the Reorganization;
NOW, THEREFORE, in accordance with the mutual promises described herein,
the parties agree as follows:
1. DEFINITIONS.
The following terms shall have the following meanings:
1933 ACT The Securities Act of 1933, as amended.
1934 ACT The Securities Exchange Act of 1934, as amended.
ACQUIRING CLASS The class of the Acquiring Fund whose shares
that the Trust will issue to the shareholders of
the Corresponding Target Class set forth in
Schedule A.
ASSETS All property and assets of any kind and all
interests, rights, privileges and powers of or
attributable to the Target Fund whether or not
determinable at the Effective Time and wherever
located. Assets include all cash, cash
equivalents, securities, claims (whether
absolute or contingent, Known or unknown,
accrued or unaccrued or conditional or
unmatured), contract rights and receivables
(including dividend and interest receivables)
owned by or attributed to the Target Fund and
any deferred or prepaid expense shown as an
asset on the Target Fund's books.
ASSETS LIST A list of securities and other Assets and Known
Liabilities of or attributable to the Target
Fund as of the date provided to the Trust.
CLOSING DATE September 20, 2002, or such other date as the
parties may agree to in writing.
CORRESPONDING TARGET CLASS The Target Fund share class set forth opposite
the Acquiring Class in Schedule A.
EFFECTIVE TIME 9:00 a.m. Eastern time on the business day
following the Closing Date, or such other time
as the parties may agree to in writing.
FUND The Acquiring Fund or the Target Fund as the
context may require.
KNOW, KNOWN OR KNOWLEDGE Known after reasonable inquiry.
LIABILITIES All liabilities of, allocated or attributable to
the Target Fund, whether Known or unknown,
accrued or unaccrued, absolute or contingent or
conditional or unmatured.
N-14 REGISTRATION STATEMENT The Trust's Registration Statement on Form N-14
under the 1940 Act that will register the shares
of the Acquiring Fund to be issued in the
Reorganization and will include the proxy
materials necessary for shareholders of the
Target Fund to approve the Reorganization.
MATERIAL AGREEMENTS The agreements set forth in Schedule B.
NET VALUE OF ASSETS Value of Assets net of Liabilities.
REORGANIZATION DOCUMENTS Such bills of sale, assignments and other
instruments as desirable for the Target Fund to
transfer to the Acquiring Fund all right and
title to and interest in the Target Fund's
Assets and for the Acquiring Fund to assume the
Target Fund's Liabilities.
SCHEDULE A Schedule A to this Plan.
SCHEDULE B Schedule B to this Plan.
SCHEDULE C Schedule C to this Plan.
TARGET FINANCIAL STATEMENTS The audited financial statements of the Target
Fund for its most recently completed fiscal year
and, if applicable, the unaudited financial
statements of the Target Fund for its most
recently completed semi-annual period.
VALUATION TIME The time on the Closing Date, the business day
immediately preceding the Closing Date if the
Closing Date is not a business day, or such
other date as the parties may agree to in
writing, that the Trust determines the net asset
value of the shares of the Acquiring Fund and
determines the net value of the Assets of or
attributable to the Target Fund. Unless
otherwise agreed to in writing, the Valuation
Time shall be at the time of day then set forth
in the Acquiring Fund's and Target Fund's
Registration Statement on Form N-1A as the time
of day at which net asset value is calculated.
2. REGULATORY FILINGS AND SHAREHOLDER ACTION.
(a) The Trust shall promptly prepare and file the N-14 Registration
Statement with the SEC. The Trust and the Target Fund shall
promptly prepare and file any other appropriate regulatory
filings, including, without limitation, filings with federal,
state or foreign securities regulatory authorities.
(b) The parties shall seek an order of the SEC, if appropriate,
providing them with any necessary relief from Section 17 of the
1940 Act to permit them to consummate the transactions
contemplated by this Plan.
(c) As soon as practicable after the effective date of the N-14
Registration Statement, the Target Fund shall hold a shareholder
meeting to consider and approve this plan, the reorganization and
such other matters as the Target Fund's Board of Directors may
determine.
3. TRANSFER OF ASSETS. The Trust and the Target Fund shall take the
following steps with respect to the Reorganization:
(a) On or prior to the Closing Date, the Target Fund shall endeavor
to pay or make reasonable provision to pay out of the Assets all
of the Liabilities, expenses, costs and charges of or
attributable to the Target Fund that are Known to the Target Fund
and that are due and payable as of the Closing Date.
(b) At the Effective Time, pursuant to Articles of Transfer accepted
for record by the State Department of Assessments and Taxation of
Maryland ("SDAT"), the Target Fund shall assign, transfer,
deliver and convey all of the Assets to the Acquiring Fund,
subject to all of the Liabilities. The Trust shall then accept
the Assets and assume the Liabilities such that at and after the
Effective Time (i) all of the Assets at or after the Effective
Time shall become and be the assets of the Acquiring Fund and
(ii) all of the Liabilities at the Effective Time shall attach to
the Acquiring Fund, enforceable against the Acquiring Fund to the
same extent as if initially incurred by the Acquiring Fund.
(c) Within a reasonable time prior to the Closing Date, the Target
Fund shall provide its Assets List to the Trust. The parties
agree that the Target Fund may sell any asset on the Assets List
prior to the Effective Time. After the Target Fund provides the
Assets List, the Target Fund will not acquire any additional
securities or permit to exist any encumbrances, rights,
restrictions or claims not reflected on the Assets List, without
the prior consent of the Trust. Within a reasonable time after
receipt of the Assets List and prior to the Closing Date, the
Trust will advise the Target Fund of any investments shown on the
Assets List that the Trust has determined to be inconsistent with
the investment objective, policies and restrictions of the
Acquiring Fund. The Target Fund will dispose of any such
securities prior to the Closing Date to the extent practicable
and consistent with applicable legal requirements, including the
Target Fund's investment objective, policies and restrictions. In
addition, if the Trust determines that, as a result of the
Reorganization the Acquiring Fund would own an aggregate amount
of an investment that would exceed a percentage limitation
applicable to the Acquiring Fund, the Trust will advise the
Target Fund in writing of any such limitation and the Target Fund
shall dispose of a sufficient amount of such investment as may be
necessary to avoid violating the limitation as of the Effective
Time, to the extent practicable and consistent with applicable
legal requirements, including the Target Fund's investment
objective, policies and restrictions.
(d) The Target Fund shall assign, transfer, deliver and convey the
Assets to the Acquiring Fund at the Effective Time on the
following bases:
(1) In exchange for the transfer of the Assets, the Trust shall
simultaneously issue and deliver to the Target Fund full and
fractional shares of beneficial interest of each Acquiring
Class. The Trust shall determine the number of shares of the
Acquiring Class to be issued by dividing the Net Value of
Assets of the Corresponding Target Class by the net asset
value of one Acquiring Class share. Based on this
calculation, the Trust shall issue shares of beneficial
interest of each Acquiring Class with an aggregate net asset
value equal to the Net Value of the Assets of the
Corresponding Target Class.
(2) The parties shall determine, as of the Valuation Time, the
net asset value of the Acquiring Fund shares to be delivered
and the net asset value of the Assets to be conveyed,
substantially in accordance with the Trust's current
valuation procedures. The parties shall make all
computations to the fourth decimal place or such other
decimal place as the parties may agree to in writing.
(3) The Target Fund shall transfer the Assets with good and
marketable title to the Trust's custodian for the account of
the Acquiring Fund. The Target Fund shall transfer all cash
in the form of immediately available funds payable to the
order of the Trust's custodian for the account of the
Acquiring Fund. The Target Fund shall transfer any of the
Assets that were not transferred to the Trust's custodian at
the Effective Time to the Trust's custodian at the earliest
practicable date thereafter.
(e) Promptly after the Closing Date, the Target Fund will deliver to
the Trust its Statement of Assets and Liabilities as of the
Closing Date (usually within one week).
4. DISSOLUTION AND LIQUIDATION OF THE TARGET FUND, REGISTRATION OF SHARES
AND ACCESS TO RECORDS. The Target Fund and the Trust also shall take
the following steps in connection with the Reorganization:
(a) At or as soon as reasonably practical after the Effective Time,
the Target Fund shall dissolve and liquidate by transferring to
shareholders of record of each Corresponding Target Class full
and fractional shares of beneficial interest of the Acquiring
Class equal in value to the shares of the Corresponding Target
Class held by the shareholder. Each Corresponding Target Class
shareholder also shall have the right to receive any unpaid
dividends or other distributions that the Target Fund declared
with respect to the shareholder's Corresponding Target Class
shares before the Effective Time. The Trust shall record on its
books the ownership by the shareholders of the respective
Acquiring Fund shares; the Target Fund shall simultaneously
redeem and cancel on its books all of its issued and outstanding
shares of each Corresponding Target Class. The Target Fund shall
then wind up its affairs and take all steps as are necessary and
proper to terminate its registration under the 1940 Act and
dissolve as soon as is reasonably possible after the Effective
Time and in accordance with all applicable laws and regulations,
including filing Articles of Dissolution with SDAT.
(b) If a former Target Fund shareholder requests a change in the
registration of the shareholder's Acquiring Fund shares to a
person other than the shareholder, the Acquiring Fund shall
require the shareholder to (i) furnish the Acquiring Fund with an
instrument of transfer properly endorsed, accompanied by any
required signature guarantees and otherwise in proper form for
transfer; (ii) if any of the shares are outstanding in
certificate form, deliver to the Acquiring Fund the certificate
representing such shares; and (iii) pay to the Acquiring Fund any
transfer or other taxes required by reason of such registration
or establish to the reasonable satisfaction of the Acquiring Fund
that such tax has been paid or does not apply.
(c) At and after the Closing Date, the Target Fund shall provide the
Trust and its transfer agent with immediate access to: (i) all
records containing the names, addresses and taxpayer
identification numbers of all of the Target Fund shareholders and
the number and percentage ownership of the outstanding shares of
the Corresponding Target Classes owned by each shareholder as of
the Effective Time and (ii) all original documentation (including
all applicable Internal Revenue Service forms, certificates,
certifications and correspondence) relating to the Target Fund
shareholders' taxpayer identification numbers and their liability
for or exemption from back-up withholding. The Target Fund shall
preserve and maintain, or shall direct its service providers to
preserve and maintain, its records as required by Section 31 of
and Rules 31a-1 and 31a-2 under the 1940 Act.
5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TARGET FUND.
The Target Fund represents and warrants to, and agrees with, the Trust
as follows:
(a) The Target Fund is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Maryland. The Board of Directors of the Target Fund duly
established and designated each class of the Target Fund as a
class of the Target Fund. The Target Fund is registered with the
SEC as an open-end management investment company under the 1940
Act, and such registration is in full force and effect.
(b) The Target Fund has the power and all necessary federal, state
and local qualifications and authorizations to own all of its
properties and Assets, to carry on its business as now being
conducted and described in its currently effective Registration
Statement on Form N-1A, to enter into this Plan and to consummate
the transactions contemplated herein.
(c) The Board of Directors of the Target Fund has duly authorized the
execution and delivery of the Plan and the transactions
contemplated herein. Duly authorized officers of the Target Fund
have executed and delivered the Plan. The Plan represents a valid
and binding contract, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium, and other similar laws
of general applicability relating to or affecting creditors'
rights and to general equity principles. The execution and
delivery of this Plan does not, and, subject to the approval of
shareholders referenced in Section 2(c), the consummation of the
transactions contemplated by this Plan will not, violate the
Target Fund's Articles of Incorporation, By-Laws or any Material
Agreement. Except for the approval of Target Fund shareholders,
the Target Fund does not need to take any other action to
authorize its officers to effectuate this Plan and the
transactions contemplated herein.
(d) The Target Fund has qualified as a regulated investment company
under Part I of Subchapter M of Subtitle A, Chapter 1, of the
Code, in respect of each taxable year since the commencement of
its operations and qualifies and shall continue to qualify as a
regulated investment company for its taxable year which includes
the Effective Time.
(e) The materials included within the N-14 Registration Statement
when filed with the SEC, when Part A of the N-14 Registration
Statement is distributed to shareholders, at the time of the
Target Fund shareholder meeting and at the Effective Time of the
Reorganization, insofar as they relate to the Target Fund (i)
shall comply in all material respects with the applicable
provisions of the 1933 Act and the 1940 Act, the rules and
regulations thereunder and state securities laws, and (ii) shall
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements made therein not misleading.
(f) The Target Fund has duly authorized and validly issued all of its
issued and outstanding shares and all of the shares are validly
outstanding, fully paid and non-assessable, and are offered for
sale and sold in conformity with the registration requirements of
all applicable federal and state securities laws. There are no
outstanding options, warrants or other rights to subscribe for or
purchase the Target Fund shares, nor are there any securities
convertible into Target Fund shares.
(g) The Target Fund shall operate its business in the ordinary course
between the date hereof and the Effective Time, it being agreed
that such ordinary course of business will include the
declaration and payment of customary dividends and distributions
and any other dividends and distributions deemed advisable in
anticipation of the Reorganization.
(h) At the Effective Time, the Target Fund will have good and
marketable title to the Assets and full right, power and
authority to assign, transfer, deliver and convey the Assets.
(i) The Target Financial Statements, copies of which have been
previously delivered to the Trust, fairly present the financial
position of the Target Fund as of the Target Fund's most recent
fiscal year-end and the results of the Target Fund's operations
and changes in its net Assets for the periods indicated. The
Target Financial Statements are in accordance with generally
accepted accounting principles consistently applied.
(j) To the Knowledge of the Target Fund, the Target Fund has no
liabilities, whether or not determined or determinable, other
than the Liabilities disclosed or provided for in the Target
Financial Statements or Liabilities incurred in the ordinary
course of business subsequent to the date of the Target Financial
Statements, and Liabilities set forth in the Assets List.
(k) Other than the claims, actions, suits, investigations or
proceedings set forth on Schedule C, the Target Fund does not
Know of any claims, actions, suits, investigations or proceedings
of any type pending or threatened against it or the Assets or
businesses. The Target Fund does not Know of any facts that it
currently has reason to believe are likely to form the basis for
the institution of any such claim, action, suit, investigation or
proceeding against it. For purposes of this provision, investment
underperformance or negative investment performance shall not be
deemed to constitute such facts, provided all required
performance disclosures have been made. Other than the orders,
decrees or judgments set forth on Schedule C, the Target Fund is
not a party to or subject to the provisions of any order, decree
or judgment of any court or governmental body that adversely
affects, or is reasonably likely to adversely affect, its
financial condition, results of operations, business, properties
or the Assets or its ability to consummate the transactions
contemplated by the Plan.
(l) Except for contracts, agreements, franchises, licenses or permits
entered into or granted in the ordinary course of its business or
listed in Schedule B, in each case under which no material
default exists, the Target Fund is not a party to or subject to
any material contract, debt instrument, employee benefit plan,
lease, franchise, license or permit of any kind or nature
whatsoever on behalf of the Target Fund.
(m) The Target Fund has filed its federal income tax returns, copies
of which have been previously delivered to the Trust, for all
taxable years to and including the Target Fund's most recent
taxable year, and has paid all taxes payable pursuant to such
returns. No such return is currently under audit and no
assessment has been asserted with respect to such returns.
(n) Since the date of the Target Financial Statements, there has been
no material adverse change in the financial condition, results of
operations, business, properties or Assets of the Target Fund.
For all purposes under this Plan, investment underperformance,
negative investment performance and/or investor redemptions shall
not be considered material adverse changes, provided all required
performance disclosures have been made.
6. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE TRUST. The
Trust, on behalf of itself and, as appropriate, the Acquiring Fund,
represents and warrants to, and agrees with the Target Fund as
follows:
(a) The Trust is organized as a Delaware business trust duly created,
validly existing and in good standing under the laws of the State
of Delaware. The Board of Trustees of the Trust duly established
and designated the Acquiring Fund as a series of the Trust and
each Acquiring Class as a class of the Acquiring Fund. The Trust
is registered with the SEC as an open-end management investment
company under the 1940 Act, and such registration is full force
and effect. The Trust's Registration Statement relating to the
Acquiring Fund and each Acquiring Class will be effective with
the SEC prior to the Effective Date.
(b) The Trust has the power and all necessary federal, state and
local qualifications and authorizations to own all of its
properties and assets, to carry on its business as described in
its Registration Statement on Form N-1A as filed with the SEC, to
enter into this Plan and to consummate the transactions
contemplated herein.
(c) The Board of Trustees of the Trust has duly authorized the
execution and delivery of the Plan and the transactions
contemplated herein. Duly authorized officers of the Trust have
executed and delivered the Plan. The Plan represents a valid and
binding contract, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights
and to general equity principles. The execution and delivery of
this Plan does not, and the consummation of the transactions
contemplated by this Plan will not, violate the Trust's Trust
Instrument, By-Laws or any Material Agreement. The Trust does not
need to take any other action to authorize its officers to
effectuate the Plan and the transactions contemplated herein.
(d) The Acquiring Fund shall qualify as a regulated investment
company under Part I of Subchapter M of Subtitle A, Chapter 1, of
the Code in respect of its current taxable year.
(e) The materials included within the N-14 Registration Statement
when filed with the SEC, when Part A of the N-14 Registration
Statement is distributed to shareholders, at the time of the
Target Fund shareholder meeting and at the Effective Time of the
Reorganization, insofar as they relate to the Trust and the
Acquiring Fund (i) shall comply in all material respects with the
applicable provisions of the 1933 Act and the 1940 Act, the rules
and regulations thereunder and state securities laws, and (ii)
shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading.
(f) There shall be no issued and outstanding shares of the Acquiring
Fund or any Acquiring Class prior to the Closing Date other than
shares issued to Forum Financial Group, LLC or its affiliates in
order to approve certain Acquiring Class start-up matters. The
Trust shall duly authorize the Acquiring Fund shares to be issued
and delivered to the Corresponding Target Fund as of the
Effective Time. When issued and delivered, the Acquiring Fund
shares shall be duly and validly issued, fully paid and
non-assessable, and no shareholder of the Acquiring Fund shall
have any preemptive right of subscription or purchase in respect
of them. There are no outstanding options, warrants or other
rights to subscribe for or purchase the Acquiring Fund shares,
nor are there any securities convertible into Acquiring Fund
shares.
(g) The Trust will not commence the operations of the Acquiring Fund
or any Acquiring Class prior to the Effective Time.
(h) The Trust does not Know of any claims, actions, suits,
investigations or proceedings of any type pending or threatened
against the Acquiring Fund or its assets or businesses. There are
no facts that the Trust currently has reason to believe are
likely to form the basis for the institution of any such claim,
action, suit, investigation or proceeding against it. The
Acquiring Fund is not a party to or subject to the provisions of
any order, decree or judgment of any court or governmental body
that adversely affects, or is reasonably likely to adversely
affect, its financial condition, results of operations, business,
properties or assets or its ability to consummate the
transactions contemplated herein.
(i) Except for contracts, agreements, franchises, licenses or permits
entered into or granted in the ordinary course of its business,
in each case under which no material default exists, the Trust is
not a party to or subject to any material contract, debt
instrument, employee benefit plan, lease, franchise, license or
permit of any kind or nature whatsoever on behalf of the
Acquiring Fund.
(j) The Trust has made all state filings to register each Acquiring
Class in each jurisdiction that the Corresponding Target Class is
currently registered and all necessary steps have been taken
under all relevant jurisdictions' securities laws to consummate
the Reorganization.
(k) Since May 31, 2002, there has been no material adverse change in
the financial condition, business, properties or assets of the
Acquiring Fund.
7. CONDITIONS TO THE TARGET FUND'S OBLIGATIONS. The obligations of the
Target Fund with respect to the Reorganization shall be subject to the
following conditions precedent:
(a) The Trust shall have duly executed and delivered the applicable
Reorganization Documents to the Target Fund.
(b) The Target Fund's shareholders shall have approved the
Reorganization in the manner required by the Target Fund's
Articles of Incorporation and applicable law. If the Target Fund
shareholders fail to approve the Reorganization, that failure
shall release the Target Fund of its obligations under this Plan.
(c) The Trust shall have delivered to the Target Fund a certificate
dated as of the Closing Date and executed in its name by the
Secretary or Assistant Secretary of the Trust, in a form
reasonably satisfactory to the Target Fund, stating that the
representations and warranties of the Trust in this Plan that
apply to the Reorganization are true and correct in all material
respects at and as of the Valuation Time.
(d) The Target Fund shall have received an opinion of Xxxxxx & Xxxxxx
LLP, as counsel to the Trust, in form and substance reasonably
satisfactory to the Target Fund and dated as of the Closing Date,
substantially to the effect that:
(1) The Trust is a Delaware business trust duly created, validly
existing and in good standing under the laws of the State of
Delaware and is an open-end, management investment company
registered under the 1940 Act;
(2) The Plan has been duly authorized, executed and delivered by
the Trust, and assuming due authorization, execution, and
delivery of this Plan by the Target Fund, represents a
legal, valid and binding contract, enforceable in accordance
with its terms, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance and transfer
and similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and
further subject to the application of equitable principles
in any proceeding whether at law or in equity or with
respect to the enforcement of provisions of the Plan and the
effect of judicial decisions which have held that certain
provisions are unenforceable when their enforcement would
violate an implied covenant of good faith and fair dealing
or would be commercially unreasonable or when default under
the Plan is not material;
(3) The shares of the Acquiring Fund to be delivered as provided
for by this Plan are duly authorized and upon delivery will
be validly issued, fully paid and non-assessable by the
Trust;
(4) The execution and delivery of this Plan did not, and the
consummation of the Reorganization will not, violate the
Trust Instrument or By-Laws of the Trust or any Material
Agreement to which the Trust is a party or by which it is
bound; and
(5) To the Knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental
authority, other than the acceptance of record of Articles
of Transfer by SDAT, is required for the consummation by the
Trust of the Reorganization or for the execution and
delivery of the Acquiring Fund's Reorganization Documents,
except those that have been obtained under the 1933 Act, the
1940 Act and the rules and regulations under those Acts or
that may be required under state securities laws or
subsequent to the Effective Time or when the failure to
obtain the consent, approval, authorization or order would
not have a material adverse effect on the operation of the
Acquiring Fund.
In rendering such opinion, such counsel may (i) rely on the
opinion of other counsel to the extent set forth in such opinion,
(ii) make assumptions regarding the authenticity, genuineness
and/or conformity of documents and copies thereof without
independent verification thereof, (iii) limit such opinion to
applicable federal and state law, (iv) define the word
"Knowledge" and related terms to mean the Knowledge of attorneys
then with such firm who have devoted substantive attention to
matters directly related to this Plan and (v) rely on
certificates of officers or trustees of the Trust.
(e) The Target Fund shall have received an opinion of Xxxxx Xxxxxxx
LLP with respect to the tax matters specified in Section 8(e)
addressed to the Target Fund and the Trust in form and substance
reasonably satisfactory to them, and dated as of the Closing
Date.
(f) The N-14 Registration Statement shall have become effective under
the 1933 Act as to the Acquiring Fund's shares and the SEC shall
not have instituted or, to the Knowledge of the Trust,
contemplated instituting, any stop order suspending the
effectiveness of the N-14 Registration Statement.
(g) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief
in connection with the Reorganization.
(h) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any proceeding
seeking to enjoin consummation of the Reorganization under
Section 25(c) of the 1940 Act.
(i) The Trust shall have performed and complied in all material
respects with each of its agreements and covenants required by
this Plan to be performed or complied with by it prior to or at
the Reorganization's Valuation Time and Effective Time.
(j) The Target Fund shall have received from the Trust a duly
executed instrument whereby the Acquiring Fund assumes all of the
Liabilities of or attributable to the Target Fund.
(k) Neither party shall have terminated this Plan with respect to the
Reorganization pursuant to Section 10 of this Plan.
(l) The parties shall have received any necessary order of the SEC
exempting the parties from the prohibitions of Section 17 of the
1940 Act or any similar relief necessary to permit the
Reorganization.
(m) The parties shall have received a certificate from Xxxxx
Investment Advisory Incorporated stating that it will pay all of
the expenses incurred by the Target Fund and the Trust in
connection with the Reorganization.
(n) The Board of Directors of the Target Fund shall have determined
that the Target Fund's participation in the Reorganization is in
the best interests of the Target Fund and that the interests of
the Target Fund's existing shareholders will not be diluted as a
result of effecting the Reorganization.
(o) The parties shall have received such assurances as they deem
appropriate with respect to the audited and pro forma financial
information of the Acquiring Fund and the Target Fund contained
in the N-14 Registration Statement.
8. CONDITIONS TO TRUST'S OBLIGATIONS. The obligations of the Trust with
respect to the Reorganization shall be subject to the following
conditions precedent:
(a) The Target Fund shall have duly executed and delivered its
applicable Reorganization Documents to the Trust.
(b) The Target Fund's shareholders shall have approved the
Reorganization in the manner required by the Target Fund's
Articles of Incorporation and applicable law. If the Target Fund
shareholders fail to approve the Reorganization, that failure
shall release the Acquiring Fund of its obligations under this
Plan.
(c) The Target Fund shall have delivered to the Trust a certificate
dated as of the Closing Date and executed in its name by its
Secretary or Assistant Secretary, in a form reasonably
satisfactory to the Trust, stating that the representations and
warranties of the Target Fund in this Plan that apply to the
Reorganization are true and correct in all material respects at
and as of the Valuation Time.
(d) The Trust shall have received an opinion of Xxxxxx, Xxxxx &
Bockius, LLP, as counsel to the Target Fund, in form and
substance reasonably satisfactory to the Trust and dated as of
the Closing Date, substantially to the effect that:
(1) The Target Fund is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Maryland and is an open-end, management investment company
registered under the 1940 Act;
(2) The Plan has been duly authorized, executed and delivered by
the Target Fund and, assuming due authorization, execution
and delivery of this Plan by the Trust on behalf of the
Acquiring Fund, represents a legal, valid and binding
contract, enforceable in accordance with its terms, subject
to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance and transfer and similar laws relating
to or affecting creditors' rights generally and court
decisions with respect thereto, and further subject to the
application of equitable principles in any proceeding,
whether at law or in equity or with respect to the
enforcement of provisions of the Plan and the effect of
judicial decisions which have held that certain provisions
are unenforceable when their enforcement would violate an
implied covenant of good faith and fair dealing or would be
commercially unreasonable or when default under the Plan is
not material;
(3) The execution and delivery of this Plan did not, and the
consummation of the Reorganization will not, violate the
Articles of Incorporation or By-Laws of the Target Fund or
any Material Agreement to which the Target Fund is a party
or by which it is bound; and
(4) To the Knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental
authority, other than the acceptance of record of Articles
of Transfer by SDAT, is required for the consummation by the
Target Fund of the Reorganization or the execution and
delivery of the Target Fund's Reorganization Documents,
except those that have been obtained under the 1933 Act, the
1940 Act and the rules and regulations under those Acts or
that may be required under state securities laws or
subsequent to the Effective Time or when the failure to
obtain the consent, approval, authorization or order would
not have a material adverse effect on the operation of the
Target Fund.
In rendering such opinion, such counsel may (i) rely on the
opinion of other counsel to the extent set forth in such opinion,
(ii) make assumptions regarding the authenticity, genuineness
and/or conformity of documents and copies thereof without
independent verification thereof, (iii) limit such opinion to
applicable federal and state law, (iv) define the word
"Knowledge" and related terms to mean the Knowledge of attorneys
then with such firm who have devoted substantive attention to
matters directly related to this Plan and (v) rely on
certificates of officers or directors of the Target Fund.
(e) The Trust shall have received an opinion of Xxxxx Xxxxxxx LLP
addressed to the Target Fund and the Trust in form and substance
reasonably satisfactory to them, based upon representations made
in certificates provided by them, their affiliates and/or
principal shareholders and dated as of the Closing Date,
substantially to the effect that, for federal income tax
purposes:
(1) The Reorganization will constitute a "reorganization" within
the meaning of Code Section 368(a). The Acquiring Fund and
the Target Fund each will be a "party to a reorganization."
Code Section 368(b).
(2) The Target Fund shareholders will recognize no gain or loss
on their receipt of voting shares of the Acquiring Fund in
exchange for their voting shares of the Target Fund pursuant
to the Reorganization. Code Section 354(a)(1).
(3) The Target Fund will not recognize gain or loss on the
transfer of all of the Assets to the Acquiring Fund solely
in exchange for voting shares of the Acquiring Fund and the
assumption by the Acquiring Fund of the Liabilities pursuant
to the Reorganization. Code Sections 357(a) and 361(a).
(4) The Target Fund will not recognize gain or loss on its
distribution of voting shares of the Acquiring Fund to its
shareholders pursuant to the liquidation of the Target Fund.
Code Section 361(c).
(5) The Acquiring Fund will not recognize gain or loss on its
acquisition of all of the Assets solely in exchange for
voting shares of the Acquiring Fund and the assumption by
the Acquiring Fund of the Liabilities. Code Section 1032(a).
(6) The aggregate tax basis of the voting shares of the
Acquiring Fund received by each of the Target Fund's
shareholders pursuant to the Reorganization will equal the
aggregate tax basis of the voting shares of the Target Fund
surrendered in exchange therefor. Code Section 358(a)(1).
(7) The holding period of the voting shares of the Acquiring
Fund received by each of the Target Fund's shareholders
pursuant to the Reorganization will include the period that
the shareholder held the voting shares of the Target Fund
exchanged therefor, provided that the shareholder held such
shares as a capital asset on the date of the Reorganization.
Code Section 1223(1).
(8) The Acquiring Fund's basis in the Assets received pursuant
to the Reorganization will equal the Target Fund's basis in
the Assets immediately before the Reorganization. Code
Section 362(b).
(9) The Acquiring Fund's holding period in the Assets received
pursuant to the Reorganization will include the period
during which the Target Fund held the Assets. Code Section
1223(2).
(10) The Acquiring Fund will succeed to and take into account the
items of the Target Fund described in Code Section 381(c),
including the earnings and profits, or deficit in earnings
and profits, of the Target Fund as of the date of the
Reorganization. The Acquiring Fund will take these items
into account subject to the conditions and limitations
specified in Code Sections 381, 382, 383 and 384 and
applicable regulations thereunder.
(f) The N-14 Registration Statement shall have become effective under
the 1933 Act as to the Acquiring Fund's shares and no stop order
suspending the effectiveness of the N-14 Registration Statement
shall have been instituted or, the Knowledge of the Trust,
contemplated by the SEC.
(g) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit or obtain damages or other relief
in connection with the Reorganization.
(h) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any proceeding
seeking to enjoin consummation of the Reorganization under
Section 25(c) of the 1940 Act.
(i) The Target Fund shall have performed and complied in all material
respects with each of its agreements and covenants required by
this Plan to be performed or complied with by it prior to or at
the Valuation Time and Effective Time.
(j) Neither party shall have terminated this Plan with respect to the
Reorganization pursuant to Section 10 of this Plan.
(k) The parties shall have received any necessary order of the SEC
exempting the parties from the prohibitions of Section 17 of the
1940 Act or any similar relief necessary to permit the
Reorganization.
(l) The parties shall have received a certificate from Xxxxx
Investment Advisory Incorporated stating that it will pay all of
the expenses incurred by the Acquiring Fund and the Target Fund
in connection with the Reorganization.
(m) The Board of Trustees of the Trust shall have determined that the
Acquiring Fund's participation in the Reorganization is in the
best interests of the Acquiring Fund and that the interests of
the Acquiring Fund's existing shareholders will not be diluted as
a result of effecting the Reorganization.
(n) The parties shall have received such assurances as they deem
appropriate with respect to the audited and pro forma financial
information of the Acquiring Fund and the Target Fund contained
in the N-14 Registration Statement.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the parties hereto shall survive the completion of the
transactions contemplated herein.
10. TERMINATION OF PLAN. A majority of a party's Board of
Trustees/Directors may terminate this Plan with respect to the
Acquiring Fund or Target Fund, as appropriate, at any time before the
applicable Effective Time if: (i) the party's conditions precedent set
forth in Sections 7 or 8, as appropriate, are not satisfied or (ii)
the Board of Trustees/Directors determines that the consummation of
the Reorganization is not in the best interests of shareholders and
gives notice to the other party.
11. GOVERNING LAW. This Plan and the transactions contemplated hereby
shall be governed, construed and enforced in accordance with the laws
of the State of Delaware, except to the extent preempted by federal
law, without regard to conflicts of law principles.
12. BROKERAGE FEES. Each party represents and warrants that there are no
brokers or finders entitled to receive any payments in connection with
the transactions provided for in the Plan.
13. AMENDMENTS. The parties may, by agreement in writing authorized by
their respective Boards of Trustees/Directors, amend this Plan at
anytime before or after the Target Fund's shareholders approve the
Reorganization. However, after the Target Fund shareholders approve
the Reorganization, the parties may not amend this Plan in a manner
that materially alters the obligations of either party with respect to
the Reorganization. The parties shall not deem this Section to
preclude them from changing the Closing Date or the Effective Time by
mutual agreement.
14. WAIVERS. At any time prior to the Closing Date, either party may by
written instrument signed by it (i) waive the effect of any
inaccuracies in the representations and warranties made to it
contained herein and (ii) waive compliance with any of the agreements,
covenants or conditions made for its benefit contained herein. The
parties agree that any waiver shall apply only to the particular
inaccuracy or requirement for compliance waived, and not any other or
future inaccuracy or lack of compliance.
15. COOPERATION AND FURTHER ASSURANCES. Each party will cooperate with the
other in fulfilling its obligations under this Plan and will provide
such information and documentation as is reasonably requested by the
other in carrying out this Plan's terms. Each party will provide such
further assurances concerning the performance of obligations under
this Plan and the consummation of the Reorganization as the other
shall deem necessary, advisable or appropriate.
16. UPDATING OF N-14 REGISTRATION STATEMENT. If at any time prior to the
Effective Date, a party becomes aware of any material information that
is not reflected in the N-14 Registration Statement, the party
discovering the information shall notify the other party and the
parties shall cooperate in promptly preparing, filing and clearing
with the SEC, and, if appropriate, distributing to shareholders
appropriate disclosure with respect to the information.
17. LIMITATION ON LIABILITIES. The obligations of the Target Fund, the
Trust, and the Acquiring Fund shall not bind any of the Trustees/
Directors, shareholders, nominees, officers, agents, or
employees of the Target Fund or the Trust personally, but shall bind
only the assets and property of the Acquiring Fund and Target Fund,
respectively. The execution and delivery of this Plan by the parties'
officers shall not be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but
shall bind only the Assets and the property of the Acquiring Fund or
Target Fund, as appropriate.
18. NOTICES. Any notice, report, statement, certificate or demand required
or permitted by any provision of this Plan shall be in writing and
shall be given by prepaid telegraph, telecopy, certified mail or
overnight express courier to:
For the Target Fund:
Xxxxx X. Xxxxxxxxx, Esq.
Deutsche Asset Management, Inc.
Xxx Xxxxx Xxxxx, XXX00-0000
Xxxxxxxxx, Xxxxxxxx 00000
With copies to:
Xxxxxxx Xxxxxxx, Esq.
Xxxxxx, Xxxxx & Xxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
For the Trust:
Xxxxxx X. Xxxxx, Esq.
Forum Financial Group, LLC
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
With copies to:
Xxxxxxx X.X. Xxxxxx, Esq.
Xxxxxx & Xxxxxx LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, XX 00000
19. GENERAL. This Plan supersedes all prior agreements between the parties
(written or oral), is intended as a complete and exclusive statement
of the terms of the agreement between the parties and may not be
changed or terminated orally. The parties may execute this Plan in
counterparts, which shall be considered one and the same agreement,
and shall become effective when the counterparts have been executed by
and delivered to both parties. The headings contained in this Plan are
for reference only and shall not affect in any way the meaning or
interpretation of this Plan. Nothing in this Plan, expressed or
implied, confers upon any other person any rights or remedies under or
by reason of this Plan. Neither party may assign or transfer any right
or obligation under this Plan without the written consent of the other
party.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers designated below to execute this Plan as of the date first written
above.
ATTEST:
/S/ XXXXX X. XXXXXXXXX By: /S/ XXXXXX X. XXXXXX
------------------ --------------------
Name: Xxxxx X. Xxxxxxxxx Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Secretary
THE TRUST, FOR ITSELF AND ON BEHALF OF
BROWNIA INTERMEDIATE BOND FUND
(ACQUIRING FUND)
ATTEST:
/S/ XXXXXX X. XXXXX By: /S/ XXXXXX X. XXXXXXX
------------------- -----------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: Vice President
SCHEDULE A
CORRESPONDING CLASS TABLE
------------------------------------------------------------------ ---------------------------------------------------------------
ACQUIRING CLASS CORRESPONDING TARGET CLASS
------------------------------------------------------------------ ---------------------------------------------------------------
BrownIA Intermediate Bond Fund Institutional Shares Short-Intermediate Income Fund, Inc. Institutional Shares
-------------------------------------------- --------------------- ----------------------------------------- ---------------------
A Shares A Shares
-------------------------------------------- --------------------- ----------------------------------------- ---------------------
SCHEDULE B
MATERIAL AGREEMENTS
(1) The following agreements are the Material Agreements of the Target Fund
related to the Reorganization:
- Investment Advisory Agreement between Flag Investors
Short-Intermediate Income Fund, Inc. (now known as Short-Intermediate
Income Fund, Inc.) and Investment Company Capital Corp. dated June 4, 1999.
- Sub-Advisory Agreement by and among Short-Intermediate Income Fund,
Inc., Investment Company Capital Corp. and Xxxxx Advisory Incorporated
dated May 1, 2001.
- Expense Limitation Agreement by and between Short-Intermediate Income
Fund, Inc. and Investment Company Capital Corp. dated May 1, 2002.
- Distribution Agreement between Flag Investors Short-Intermediate
Income Fund, Inc. (now known as Short-Intermediate Income Fund, Inc.) and
ICC Distributors, Inc. dated August 31, 1997, amended through May 1, 2001.
- Amended and Restated Master Services Agreement with Investment Company
Capital Corp. dated July 24, 2002.
- Custodian Agreement between Flag Investors Short-Intermediate Income
Fund, Inc. (now known as Short-Intermediate Income Fund, Inc.) and Bankers
Trust Company dated June 5, 1998, amended through 1999.
(2) The following agreements are the Material Agreements of the Trust related
to the Reorganization:
- Administration Agreement between the Trust and Forum Administrative
Services, LLC dated June 19, 1997 as amended and restated May 13, 2002.
- Form of Investment Advisory Agreement between the Trust and Xxxxx
Investment Advisory Incorporated.
- Distribution Agreement between the Trust and Forum Fund Services, LLC
dated February 28, 1999 as amended and restated May 13, 2002.
- Custodian Agreement between the Trust and Forum Trust, LLC dated May
12, 1999.
- Transfer Agency and Services Agreement between the Trust and Forum
Shareholder Services, LLC dated May 18, 1998 as amended and restated May
13, 2002.
- Fund Accounting Agreement between the Trust and Forum Accounting
Services, LLC dated June 19, 1997 as amended and restated May 13, 2002.
SCHEDULE C
(1) Claims, actions, suits, investigations or proceedings pending or
threatened against the Target Fund or the Assets or its businesses:
None
(2) Orders, decrees or judgments to which the Target Fund is a party that
adversely affect, or are reasonably likely to adversely affect, the Target
Fund's financial condition, results of operations, business, properties or
the Assets or ability to consummate the transactions contemplated by the
Plan:
None
