AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") is made as of
this 9th day of December, 2004, by and between Forum Funds (the "Trust"), a
Delaware statutory trust, for itself and on behalf of its series, Xxxxxx Focus
Fund (the "Acquiring Fund") and Unified Series Trust ("Unified"), an Ohio
business trust, for itself and on behalf of its series Xxxxxx Focus Fund (the
"Target Fund").
WHEREAS, the Trust and Unified 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 liquidation
and termination 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.
--------
ACQUIRING CLASS The class of shares of the Acquiring
--------- Fund to be issued by the Trust and
distributed 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 The list of securities and other Assets
------- and Known Liabilities of or attributable to
the Target Fund that is provided to the
Trust within a reasonable time prior to the
Closing Date.
CLOSING DATE December 9, 2004 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.
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 and Unified shall promptly prepare and file any
appropriate regulatory filings, including, without limitation,
filings with federal, state or foreign securities regulatory
authorities.
(b) The Trust 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.
3. TRANSFER OF ASSETS. The Trust and Unified shall take the following
steps with respect to the Reorganization:
(a) On or prior to the Closing Date, Unified 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.
-2-
(b) Within a reasonable time prior to the Closing Date, Unified shall
provide the Assets List to the Trust. The parties agree that the
Target Fund may sell any Asset on the Assets List prior to
delivery of the Assets List to the Trust. 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 written consent of the Trust.
(c) At the Effective Time, Unified shall assign, transfer, deliver
and convey the Assets to the Acquiring Fund, subject to 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.
(d) Unified 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 distribute to the Target Fund full
and fractional shares of beneficial interest of the
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 the 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
distributed 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) Unified shall instruct the Target Fund's custodian to
transfer the Assets with good and marketable title to the
Trust's custodian for the account of the Acquiring Fund.
Unified 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. Unified
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, Unified will deliver to the
Trust its Statement of Assets and Liabilities as of the Closing
Date (usually within one week).
4. LIQUIDATION AND TERMINATION OF THE TARGET FUND, REGISTRATION OF SHARES
AND ACCESS TO RECORDS. Unified 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 liquidate by transferring to shareholders
of record of the 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 Unified 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 Acquiring Fund shares; Unified shall
-3-
simultaneously redeem and cancel on its books all of its issued
and outstanding shares of the Target Fund. Unified shall then
wind up the affairs of the Target Fund and take all steps as are
necessary and proper to terminate the Target Fund as soon as is
reasonably possible after the Effective Time and in accordance
with all applicable laws and regulations.
(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, Unified 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 Class owned by each shareholder as of the
Valuation 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. Unified 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.
Unified, on behalf of itself, and, as appropriate, the Target Fund,
represents and warrants to, and agrees with, the Trust as follows:
(a) Unified is an Ohio business trust duly created, validly existing
and in good standing under the laws of the State of Ohio. The
Board of Trustees of Unified duly established and designated the
Target Fund as a series of Unified. Unified 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) On behalf of the Target Fund, Unified 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 Trustees of Unified has duly authorized the
execution and delivery of the Plan and the transactions
contemplated herein. Duly authorized officers of Unified 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
Unified's Certificate of Trust, By-Laws or any Material
Agreement. Unified 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
-4-
the commencement of its operations and qualifies and shall
continue to qualify as a regulated investment company for its
current taxable year which includes the Effective Time.
(e) Unified has duly authorized and validly issued all of the issued
and outstanding shares of the Target Fund 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.
(f) Unified shall operate the business of the Target Fund 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.
(g) 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.
(h) 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 for the most recent semi-annual period, if
applicable, 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.
(i) To the Knowledge of Unified, 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.
(j) Other than the claims, actions, suits, investigations or
proceedings set forth on Schedule C, Unified does not Know of any
claims, actions, suits, investigations or proceedings of any type
pending or threatened against it or the Assets or businesses.
Unified 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
the Target Fund. 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.
(k) 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, Unified 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.
(l) Unified has filed the federal income tax returns of the Target
Fund, copies of which have been previously delivered to the
Trust, for all taxable years up to and including the Target
Fund's most recent taxable year, and has paid all taxes payable
pursuant to such returns.
-5-
No such return is currently under audit and no assessment has
been asserted with respect to such returns.
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 Unified as follows:
(a) The Trust is organized as a Delaware statutory 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. 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 the Acquiring Class
will be effective with the SEC on or before the Effective Date.
(b) On behalf of the Acquiring Fund, 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) There shall be no issued and outstanding shares of the Acquiring
Fund prior to the Closing Date other than shares issued to Forum
Fund Services, LLC in order to approve certain start-up matters.
The Trust shall duly authorize the Acquiring Fund shares to be
issued and distributed to the Target Fund as of the Effective
Time. When issued and distributed, 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.
(f) 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.
(g) 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
-6-
plan,lease, franchise, license or permit of any kind or nature
whatsoever on behalf of the Acquiring Fund.
(h) The Trust has made all state filings to register the 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.
7. CONDITIONS TO UNIFIED'S OBLIGATIONS. The obligations of Unified
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 Unified.
(b) The Trust shall have delivered to Unified 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 Unified, 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.
(c) Unified shall have received an opinion of Xxxxxx & Xxxxxx LLP, as
counsel to the Trust, in form and substance reasonably
satisfactory to Unified and dated as of the Closing Date,
substantially to the effect that:
(1) The Trust is a Delaware statutory 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 Unified, 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
-7-
(5) To the Knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental
authority 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.
(d) Unified shall have received an opinion of Xxxxxx & Xxxxxx
LLP with respect to the tax matters specified in Section
8(d) addressed to Unified and the Target Fund and the Trust
in form and substance reasonably satisfactory to them, and
dated as of the Closing Date.
(e) 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.
(f) 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 0000 Xxx.
(g) 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 Valuation Time and Effective Time.
(h) Unified 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.
(i) Neither party shall have terminated this Plan with respect
to the Reorganization pursuant to Section 10 of this Plan.
(j) 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.
(k) The parties shall have received a certificate from Xxxxxx
Asset Management LLC (the "Adviser") stating that it will
pay all of the expenses incurred by Unified and the Trust in
connection with the Reorganization.
(l) Unified shall have received a letter of indemnification from
the Adviser stating that it agrees to indemnify Unified, its
employees, agents, trustees and officers (each, an
"Indemnified Party") against and from any and all claims,
demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, reasonable counsel fees and other
direct (but not indirect, special or consequential) expenses
arising out of any shareholder litigation, SEC staff
inquiries, investigations or SEC disciplinary action taken
due to the consummation of the Reorganization without a
shareholder vote, except to the extent that such claims,
demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, fees and expenses are a result of
breach of the Plan by an Indemnified Party.
-8-
(m) The Board of Trustees of Unified shall have determined that
the Target Fund's participation in the Reorganization is in
the best interests of the Target Fund.
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) Unified shall have duly executed and delivered its
applicable Reorganization Documents to the Trust.
(b) Unified 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 Unified in this Plan that apply to the
Reorganization are true and correct in all material respects
at and as of the Valuation Time.
(c) The Trust shall have received an opinion of Xxxxxxxx Xxxxxx
LLP, as counsel to Unified, in form and substance reasonably
satisfactory to the Trust and dated as of the Closing Date,
substantially to the effect that:
(1) Unified Trust is a business trust duly organized under
the laws of the State of Ohio.
(2) The Target Fund is a validly existing series of
Unified.
(3) Unified is an open-end management investment company
registered under the 0000 Xxx.
(4) The execution and delivery of the Plan did not, and
consummation of the Reorganization will not, violate
the Agreement and Declaration of Trust or Bylaws of
Unified.
(5) The Plan and the Reorganization provided for therein
and the execution of the Plan have been duly authorized
and approved by the Board of Trustees of Unified on
behalf of the Target Fund.
(6) The Plan has been duly executed and delivered by an
authorized officer of Unified on behalf of the Target
Fund and, assuming due authorization, execution and
delivery by the Trust, is a valid and binding
obligation of Unified on behalf of the Target Fund.
(7) To the best of such counsel's knowledge, no consent,
approval, order or other authorization of any federal
court or federal administrative or regulatory agency is
required for Unified to enter into the Plan on behalf
of the Target Fund or carry out its terms, 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 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 trustees of Unified.
-9-
(d) The Trust shall have received an opinion of Xxxxxx & Xxxxxx
LLP addressed to Unified 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.
(e) 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.
-10-
(f) 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.
(g) Unified 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.
(h) Except to the extent prohibited by Rule 19b-1 under the 1940 Act,
the Target Fund shall have declared a dividend or dividends that,
together with all previous such dividends, shall have the effect
of distributing to the Target Fund's shareholder substantially
all investment company taxable income of or attributable to the
Target Fund earned prior to the Closing Date and substantially
all net capital gain of or attributable to the Target Fund
realized prior to such date.
(i) Neither party shall have terminated this Plan with respect to the
Reorganization pursuant to Section 10 of this Plan.
(j) 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.
(k) The parties shall have received a certificate from the Adviser
stating that it will pay all of the expenses incurred by the
Acquiring Fund and the Target Fund in connection with the
Reorganization.
(l) 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.
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 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
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 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.
-11-
15. INDEMNIFICATION OF TRUSTEES. The Acquiring Fund agrees that it will
assume all liabilities and obligations of the Target Fund relating to
any obligation of the Target Fund and Unified to indemnify Unified's
current and former Trustees and officers, acting in their capacities
as such, to the fullest extent permitted by law and Unified's
Agreement and Declaration of Trust, as in effect as of the date of
this Plan. The Trust on behalf of the Acquiring Fund also agrees that
all rights to indemnification and all limitations of liability
existing in favor of the current and former Trustees and officers,
acting in their capacities as such, under Unified's Certificate of
Trust as in effect as of the date of this Plan shall survive the
Reorganization and shall continue in full force and effect, without
any amendment thereto, and shall constitute rights which may be
asserted against the Acquiring Fund, its successors and assigns. The
provisions of this paragraph shall survive the completion of the
transactions contemplated by this Plan. The indemnification obligation
provided by the Acquiring Fund will be reduced by any indemnification
provided by the Adviser under Section 7(l).
16. 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.
17. LIMITATION ON LIABILITIES. The obligations of Unified, the Trust, and
the Acquiring Fund shall not bind any of the Trustees, shareholders,
nominees, officers, agents, or employees of Unified 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 Unified:
Xxxxxxx Xxxxxxx, President
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
With copies to:
Dee Xxxx Xxxxxxx, Esq.
Xxxxxxxx Xxxxxx LLP
One XX Xxxx Xxxxx
Xx. Xxxxx, XX 00000
For the Trust:
Xxxxx X. Xxxxxxxx
Citigroup Global Transaction Services
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
-12-
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.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
-13-
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.
UNIFIED, FOR ITSELF AND ON BEHALF
OF XXXXXX FOCUS FUND(TARGET FUND)
ATTEST:
____________________________________________ By: __________________________
Name: Name:
Title: Title:
THE TRUST, FOR ITSELF AND ON
BEHALF OF XXXXXX FOCUS FUND
(ACQUIRING FUND)
ATTEST:
____________________________________________ By: __________________________
Name: Name: Xxxxx X. Xxxxxxxxx
Title: Title: President
-14-
SCHEDULE A
CORRESPONDING CLASS TABLE
------------------------------------------------------------------ ---------------------------------------------------------------
ACQUIRING CLASS CORRESPONDING TARGET CLASS
------------------------------------------------------------------ ---------------------------------------------------------------
Xxxxxx Focus Fund Investor Shares Xxxxxx Focus Fund NAV Shares
-------------------------------------------- --------------------- ----------------------------------------- ---------------------
-A1-
SCHEDULE B
MATERIAL AGREEMENTS
(1) The following agreements are the Material Agreements of Unified related to
the Reorganization:
- Management Agreement between Xxxxxx Asset Management LLC and Unified for
Xxxxxx Focus Fund
- Mutual Fund Services Agreement between Unified and Unified Fund Services,
Inc..
- Distribution Agreement between Unified and Unified Financial Securities,
Inc.
- Custody Agreement between Unified and Huntington National Bank
(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.
- Management Agreement between the Trust and Xxxxxx Asset Management LLC.
- Distribution Agreement between the Trust and Forum Fund Services, LLC.
- Custodian Agreement between the Trust and Forum Trust, LLC.
- Transfer Agency and Services Agreement between the Trust and Forum
Shareholder Services, LLC.
- Fund Accounting Agreement between the Trust and Forum Accounting Services.
-B1-
SCHEDULE C
(1) Claims, actions, suits, investigations or proceedings pending or threatened
against Unified or the Target Fund or its Assets or its businesses:
None
(2) Orders, decrees or judgments to which Unified or the Target Fund is a
party that adversely affect, or are reasonably likely to adversely
affect Unified's or 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
