AGREEMENT AND PLAN OF REORGANIZATION
THIS
AGREEMENT AND PLAN OF REORGANIZATION (the “Agreement”) is made as of this ___
day of __________, 2007, by and between Unified Series Trust (“Unified”), an
Ohio business trust, with its principal place of business at 000 Xxxxx
Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, with respect to the Leader
Short-Term Bond Fund, a separate series of Unified (the “Acquired Fund”), and
Trust for Professional Managers (“TPM”), a Delaware statutory trust, with its
principal place of business at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx
00000, with respect to the Leader Short-Term Bond Fund, a separate series of
TPM
(the “Acquiring Fund” and, collectively with the Acquired Fund, the
“Funds”).
This
Agreement is intended to be, and is adopted as, a Plan of Reorganization within
the meaning of Section 368(a) of the United States Internal Revenue Code of
1986, as amended (the “Code”). The reorganization will consist of: (i) the
transfer of all of the assets of the Acquired Fund in exchange for shares of
beneficial interest, no par value per share, of the Acquiring Fund (“Acquiring
Fund Shares”) as set forth on Schedule A attached hereto; (ii) the assumption by
the Acquiring Fund of all liabilities of the Acquired Fund; and (iii) the
distribution, after the Closing Date hereinafter referred to, of the Acquiring
Fund Shares to the shareholders of the Acquired Fund and the termination of
the
Acquired Fund as provided herein, all upon the terms and conditions set forth
in
this Agreement (the “Reorganization”). Notwithstanding anything to the contrary
contained herein, the obligations, agreements, representations and warranties
with respect to each Fund shall be the obligations, agreements, representations
and warranties of that Fund only, and in no event shall any other Fund or the
assets of any other Fund be held liable with respect to the breach or other
default by an obligated Fund of its obligations, agreements, representations
and
warranties as set forth herein.
WHEREAS,
the Acquiring Fund and the Acquired Fund are separate series of TPM and Unified,
respectively, and TPM and Unified are open-end, registered management investment
companies, and the Acquired Fund owns securities that generally are assets
of
the character in which the Acquiring Fund is permitted to invest;
WHEREAS,
each Fund is authorized to issue its shares of beneficial interest;
WHEREAS,
the Trustees of Unified have determined that the Reorganization, with respect
to
the Acquired Fund, is in the best interests of the Acquired Fund’s shareholders
and that the interests of the existing shareholders of the Acquired Fund will
not be diluted as a result of the Reorganization;
NOW,
THEREFORE, in consideration of the premises, covenants, and agreements
hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE
I
TRANSFER
OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND SHARES AND THE
ASSUMPTION OF THE ACQUIRED FUND’ LIABILITIES AND TERMINATION OF THE ACQUIRED
FUND
1.1 THE
EXCHANGE. Subject to the terms and conditions contained herein and on the basis
of the representations and warranties contained herein, the Acquired Fund agrees
to transfer all of its assets and liabilities, as set forth in paragraph 1.2,
to
the Acquiring Fund. In exchange, the Acquiring Fund agrees (i) to deliver to
the
Acquired Fund the number of full and fractional shares of the Acquiring Fund
equal in value to the value of full and fractional shares of the Acquired Fund
then outstanding and (ii) to assume the liabilities of the Acquired Fund, as
set
forth in paragraph 1.3. Such transactions shall take place at the closing date
provided for in paragraph 3.1 (“Closing Date”).
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1.2 ASSETS
TO
BE ACQUIRED. The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all property, including, without limitation, all cash,
securities, commodities, interests in futures and dividends or interest
receivables, owned by the Acquired Fund and any deferred or prepaid expenses
shown as an asset on the books of the Acquired Fund on the Closing
Date.
The
Acquired Fund has provided the Acquiring Fund with its most recent audited
financial statements, which contain a list of all of the Acquired Fund’s assets
as of the date of such statements. The Acquired Fund hereby represents that
as
of the date of the execution of this Agreement, there have been no changes
in
its financial position as reflected in such financial statements other than
those occurring in the ordinary course of business in connection with the
purchase and sale of securities and the payment of normal operating expenses
and
the payment of dividends, capital gains distributions and redemption proceeds
to
shareholders.
The
Acquired Fund will, within a reasonable period of time prior to the Closing
Date, furnish the Acquiring Fund with a list of the Acquired Fund’s portfolio
securities and other investments. The Acquiring Fund will, within a reasonable
time prior to the Closing Date, furnish the Acquired Fund with a list of the
securities, if any, on the Acquired Fund’s list referred to above that do not
conform to the Acquiring Fund’s investment objectives, policies, and
restrictions.
1.3 LIABILITIES
TO BE ASSUMED. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations to the extent possible prior to the Closing Date.
The Acquiring Fund shall assume those liabilities, expenses, costs, charges
and
reserves reflected on a Statement of Assets and Liabilities of the Acquired
Fund
prepared on behalf of the Acquired Fund, as of the Valuation Date (as defined
in
paragraph 2.1), in accordance with generally accepted accounting principles
consistently applied from the prior audited period. The Acquiring Fund shall
assume all of the liabilities of the Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Valuation Date whether or not
they
are reflected on the Statement of Assets and Liabilities.
1.4 LIQUIDATION
AND DISTRIBUTION. On or as soon after the Closing Date as is conveniently
practicable (the “Liquidation Date”): (a) the Acquired Fund will make a
liquidating distribution, pro rata to its shareholders of record (the “Acquired
Fund Shareholders”), determined as of the close of business on the Valuation
Date (as defined in paragraph 2.1), of all of the Acquiring Fund Shares received
by the Acquired Fund pursuant to paragraph 1.1; and (b) the Acquired Fund will
thereupon proceed to terminate as set forth in paragraph 1.8 below. Such
distribution will be accomplished by the transfer of Acquiring Fund Shares
credited to the account of the Acquired Fund on the books of the Acquiring
Fund
to open accounts on the share records of the Acquiring Fund in the name of
the
Acquired Fund Shareholders, and representing the respective pro
rata
number
of Acquiring Fund Shares due such shareholders. All issued and outstanding
shares of the Acquired Fund will simultaneously be canceled on the books of
the
Acquired Fund. The Acquiring Fund shall not issue certificates representing
Acquiring Fund Shares in connection with such transfer. Each Acquired Fund
Shareholder shall have the right to receive any unpaid dividends or other
distributions that were declared by the Acquired Fund before the Effective
Time
(as defined in paragraph 3.1) with respect to Acquired Fund shares that are
held
of record by the Acquired Fund Shareholder at the Effective Time on the Closing
Date.
1.5 OWNERSHIP
OF SHARES. Ownership of Acquiring Fund Shares will be shown on the books of
the
Acquiring Fund’s transfer agent. Shares of the Acquiring Fund will be issued
simultaneously to the Acquired Fund, in an amount equal in value to the NAV
of
the Acquired Fund’s shares, to be distributed to shareholders of the Acquired
Fund.
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1.6 TRANSFER
TAXES. Any transfer taxes payable upon the transfer of Acquiring Fund Shares
in
a name other than the registered holder of the Acquired Fund shares on the
books
of the Acquired Fund as of that time shall, as a condition of such issuance
and
transfer, be paid by the person to whom such Acquiring Fund Shares are to be
transferred.
1.7 REPORTING
RESPONSIBILITY. Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund, up to and including the Closing
Date, and such later date on which the Acquired Fund is terminated.
1.8 TERMINATION.
The Acquired Fund shall be terminated promptly following the Closing Date and
the making of all distributions pursuant to paragraph 1.4.
ARTICLE
II
VALUATION
2.1 VALUATION
OF ASSETS. The value of the Acquired Fund’s assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as of the
close of regular trading on the New York Stock Exchange (“NYSE”) on the business
day immediately prior to the Closing Date (such time and date being hereinafter
called a “Valuation Date”), using the valuation procedures set forth in
Unified’s Declaration of Trust and the Acquired Fund’s then current Prospectus
and Statement of Additional Information or such other valuation procedures
as
shall be mutually agreed upon by the parties. The
Acquiring Fund and Acquired Fund agree, however, to use all commercially
reasonable efforts to resolve any material pricing differences between the
prices of portfolio securities determined in accordance with the pricing
policies and procedures of the Acquiring Fund and those determined in accordance
with the pricing policies and procedures of the Acquired Fund.
2.2 VALUATION
OF SHARES. The net asset value per share of Acquiring Fund Shares shall be
the
net asset value per share computed as of the close of normal trading on the
NYSE
on the Valuation Date, using the valuation procedures set forth in TPM’s
Declaration of Trust and the Acquiring Fund’s then current Prospectus and
Statement of Additional Information.
2.3 SHARES
TO
BE ISSUED. The number of the Acquiring Fund’s shares to be issued (including
fractional shares) shall be equal in net asset value to the net asset value
of
each corresponding Acquired Fund’s shares then outstanding. Upon the Acquired
Fund’s liquidating distribution each holder of shares of the Acquired Fund will
receive shares of the corresponding Acquiring Fund equal in net asset value
to
the net asset value of shares held by such holder immediately prior to such
liquidating distribution.
2.4 DETERMINATION
OF VALUE. Except with respect to the Acquired Fund’s assets, which shall be
valued by Unified Fund Services, Inc., all computations of value shall be made
by U.S. Bancorp Fund Services, LLC, in accordance with its regular practice
in
pricing the shares and assets of the Acquiring Fund.
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ARTICLE
III
CLOSING
AND CLOSING DATE
3.1 CLOSING
DATE. The closing (the “Closing”) will be on or about March 2, 2007 or such
other date(s) as the parties may agree to in writing. All acts taking place
at
the Closing shall be deemed to take place immediately prior to the Closing
Date
unless otherwise provided. The Closing shall be held as of the close of business
(the “Effective Time”) at the offices of Unified Fund Services, Inc., 000 Xxxxx
Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000, or at such other time and/or
place as the parties may agree.
3.2 CUSTODIAN’S
CERTIFICATE. The Huntington National Bank, as custodian for the Acquired Fund,
shall deliver at the Closing a certificate of an authorized officer stating
that: (a) the Acquired Fund’s portfolio securities, cash, and any other assets
shall have been delivered in proper form to the Acquiring Fund on the Closing
Date; and (b) all necessary taxes, including all applicable federal and state
stock transfer stamps, if any, shall have been paid, or provision for payment
shall have been made, in conjunction with the delivery of portfolio securities
by the Acquired Fund.
3.3 EFFECT
OF
SUSPENSION IN TRADING. In the event that on the Valuation Date, either: (a)
the
NYSE or another primary exchange on which the portfolio securities of the
Acquiring Fund or the Acquired Fund are purchased or sold, shall be closed
to
trading or trading on such exchange shall be restricted; or (b) trading or
the
reporting of trading on the NYSE or elsewhere shall be disrupted so that
accurate appraisal of the value of the net assets of the Acquiring Fund or
the
Acquired Fund is impracticable, the Valuation Date shall be postponed until
the
first business day after the day when trading is fully resumed and reporting
is
restored.
3.4 TRANSFER
AGENT’S CERTIFICATE. Unified Fund Services, Inc., as transfer agent for the
Acquired Fund as of the Closing Date, shall deliver at the Closing a certificate
of an authorized officer stating that its records contain the names and
addresses of Acquired Fund Shareholders, and the number and percentage ownership
of outstanding shares owned by each such shareholder immediately prior to the
Closing. The Acquiring Fund shall issue and deliver or cause U.S. Bancorp Fund
Services, LLC, its transfer agent, to issue and deliver a confirmation
evidencing Acquiring Fund Shares to be credited on the Closing Date to the
Secretary of Unified or provide evidence satisfactory to the Acquired Fund
that
such Acquiring Fund Shares have been credited to the Acquired Fund’s account on
the books of the Acquiring Fund. At the Closing, each party shall deliver to
the
other such bills of sale, checks, assignments, share certificates, receipts
and
other documents, if any, as such other party or its counsel may reasonably
request.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
4.1 REPRESENTATIONS
OF THE ACQUIRED FUND. Unified and the Acquired Fund represent and warrant to
TPM
and the Acquiring Fund as follows:
(a) The
Acquired Fund is a separate series of a business trust, duly organized, validly
existing and in good standing under the laws of the State of Ohio.
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(b) The
Acquired Fund is a separate series of an Ohio business trust that is registered
as an open-end management investment company, and such Ohio business trust’s
registration with the U.S. Securities and Exchange Commission (the “SEC”) as an
investment company under the Investment Company Act of 1940 (the “1940 Act”) is
in full force and effect.
(c) The
current prospectus and Statement of Additional Information of the Acquired
Fund
conform in all material respects to the applicable requirements of the
Securities Act of 1933 (the “1933 Act”) and the 1940 Act, and the rules and
regulations thereunder, and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
(d) The
Acquired
Fund is not, and the execution, delivery, and performance of this Agreement
(subject to shareholder approval) will not result in the violation of any
material provision of Unified’s Declaration of Trust or By-Laws or of any
material agreement, indenture, instrument, contract, lease, or other undertaking
to which the Acquired Fund is a party or by which it is bound.
(e) The
Acquired
Fund has no material contracts or other commitments (other than this Agreement)
that will be terminated with liability to it prior to the Closing Date, except
for liabilities, if any, to be discharged or reflected in the Statement of
Assets and Liabilities as provided in paragraph 1.3 hereof.
(f) Except
as
otherwise disclosed in writing to and accepted by the Acquiring Fund, no
litigation, administrative proceeding, or investigation of or before any court
or governmental body is presently pending or to its knowledge threatened against
the Acquired Fund or any of its properties or assets, which, if adversely
determined, would materially and adversely affect its financial condition,
the
conduct of its business, or the ability of the Acquired Fund to carry out the
transactions contemplated by this Agreement. The Acquired Fund knows of no
facts
that might form the basis for the institution of such proceedings and is not
a
party to or subject to the provisions of any order, decree, or judgment of
any
court or governmental body that materially and adversely affects the Acquired
Fund’s business or its ability to consummate the transactions contemplated
herein.
(g) The
financial statements of the Acquired Fund are in accordance with generally
accepted accounting principles, and such statements (copies of which have been
furnished to the Acquiring Fund) fairly reflect the financial condition of
the
Acquired Fund as of June 30, 2006 in
all
material respects as of that date, and there are no known contingent liabilities
of the Acquired Fund as of that date not disclosed in such
statements.
(h) Since
June 30, 2006, there have been no material adverse changes in the Acquired
Fund’s financial condition, assets, liabilities or business (other than changes
occurring in the ordinary course of business), or any incurrence by the Acquired
Fund of indebtedness maturing more than one year from the date such indebtedness
was incurred, except as otherwise disclosed to and accepted by the Acquiring
Fund. For the purposes of this subparagraph (h), a decline in the net asset
value of the Acquired Fund shall not constitute a material adverse
change.
(i) At
the
Closing Date, all federal and other tax returns and reports of the Acquired
Fund
required by law to be filed by such date, shall have been filed, and all federal
and other taxes shown due on such returns and reports shall have been paid,
or
provision shall have been made for the payment thereof. To the best of the
Acquired Fund’s knowledge, no such return is currently under audit, and no
assessment has been asserted with respect to such returns.
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(j) All
issued and outstanding shares of the Acquired Fund are, and at the Closing
Date,
will be duly and validly issued and outstanding, fully paid and non-assessable
by the Acquired Fund. All of the issued and outstanding shares of the Acquired
Fund will, at the time of the Closing Date, be held by the persons and in the
amounts set forth in the records of the Acquired Fund’s transfer agent as
provided in paragraph 3.4. The Acquired Fund has no outstanding options,
warrants, or other rights to subscribe for or purchase any of the Acquired
Fund
shares, and has no outstanding securities convertible into any of the Acquired
Fund shares.
(k) At
the
Closing Date, the Acquired Fund will have good and marketable title to the
Acquired Fund’s assets to be transferred to the Acquiring Fund pursuant to
paragraph 1.2, and full right, power, and authority to sell, assign, transfer,
and deliver such assets hereunder. Upon delivery and payment for such assets,
the Acquiring Fund will acquire good and marketable title, subject to no
restrictions on the full transfer of such assets, including such restrictions
as
might arise under the 1933 Act, other than as disclosed to and accepted by
the
Acquiring Fund.
(l) The
execution, delivery, and performance of this Agreement has been duly authorized
by all necessary action on the part of the Acquired Fund. Subject to approval
by
the Acquired Fund’s Shareholders, this Agreement constitutes a valid and binding
obligation of the Acquired Fund, enforceable in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors’ rights and to
general equity principles.
(m) The
information to be furnished by the Acquired Fund for use in no-action letters,
applications for orders, registration statements, proxy materials, and other
documents that may be necessary in connection with the transactions contemplated
herein shall be accurate and complete in all material respects and shall comply
in all material respects with federal securities laws and other laws and
regulations.
(n) From
the
effective date of the Registration Statement (as defined in paragraph 5.7),
through the time of the meeting of the Acquired Fund’s Shareholders and on the
Closing Date, any written information furnished by the Acquired Fund with
respect to the Acquired Fund for use in the Proxy Statement/Prospectus (as
defined in paragraph 5.7), the Registration Statement or any other materials
provided in connection with the Reorganization, does not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated or necessary to make the statements, in light of the
circumstances under which such statements were made, not materially
misleading.
(o) The
Acquired Fund has elected to qualify and has qualified as a “regulated
investment company” (a “RIC”) under the Code as of and since its first taxable
period; has been a RIC under the Code at all times since the end of its first
taxable year when it so qualified; and qualifies and shall continue to qualify
as a RIC under the Code for its taxable year ending upon the Closing
Date.
(p) No
governmental consents, approvals, authorizations or filings are required under
the 1933 Act, the Securities Exchange Act of 1934 (the “1934 Act”), the 1940 Act
or Ohio law for the execution of this Agreement by Unified, for itself and
on
behalf of the Acquired Fund, except for the effectiveness of the Registration
Statement and such other consents, approvals, authorizations and filings as
have
been made or received, and such consents, approvals, authorizations and filings
as may be required subsequent to the Closing Date, it being understood, however,
that this Agreement and the transactions contemplated herein must be approved
by
the shareholders of the Acquired Fund as described in paragraph
5.2.
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4.2 REPRESENTATIONS
OF THE ACQUIRING FUND. TPM and the Acquiring Fund represent and warrant to
Unified and the Acquired Fund as follows:
(a) The
Acquiring Fund is a separate series of a statutory trust, duly organized,
validly existing and in good standing under the laws of the State of
Delaware.
(b) The
Acquiring Fund is a separate series of a Delaware statutory trust that is
registered as an open-end management investment company, and such Delaware
statutory trust’s registration with the SEC as an investment company under the
1940 Act is in full force and effect.
(c) The
current Prospectus and Statement of Additional Information of the Acquiring
Fund
conform in all material respects to the applicable requirements of the 1933
Act
and the 1940 Act and the rules and regulations thereunder, and do not include
any untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make such statements therein, in light
of
the circumstances under which they were made, not misleading.
(d) The
Acquiring Fund is not, and the execution, delivery and performance of this
Agreement will not result in a violation of any material provision of TPM’s
Declaration of Trust or of any material agreement, indenture, instrument,
contract, lease, or other undertaking to which the Acquiring Fund is a party
or
by which it is bound.
(e) Except
as
otherwise disclosed in writing to the Acquired Fund and accepted by the Acquired
Fund, no litigation, administrative proceeding or investigation of or before
any
court or governmental body is presently pending, or to its knowledge, threatened
against the Acquiring Fund or any of its properties or assets, which, if
adversely determined, would materially and adversely affect its financial
condition and the conduct of its business or the ability of the Acquiring Fund
to carry out the transactions contemplated by this Agreement. The Acquiring
Fund
knows of no facts that might form the basis for the institution of such
proceedings and it is not a party to or subject to the provisions of any order,
decree, or judgment of any court or governmental body that materially and
adversely affects its business or its ability to consummate the transaction
contemplated herein.
(f) If
the
Reorganization is a shell reorganization, there shall be no issued and
outstanding shares of the Acquiring Fund prior to the Closing Date other than
those issued to a seed capital investor (which shall be an affiliate of the
Acquiring Fund) in order to commence operations of the Acquiring
Fund;
(g) All
issued and outstanding Acquiring Fund Shares are, and at the Closing Date will
be, duly and validly issued and outstanding, fully paid and non-assessable
by
the Acquiring Fund. The Acquiring Fund has no outstanding options, warrants,
or
other rights to subscribe for or purchase any Acquiring Fund Shares, and there
are no outstanding securities convertible into any Acquiring Fund
Shares.
(h) The
execution, delivery, and performance of this Agreement has been duly authorized
by all necessary action on the part of the Acquiring Fund, and this Agreement
constitutes a valid and binding obligation of the Acquiring Fund, enforceable
in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors’
rights and to general equity principles.
(i) The
information to be furnished by the Acquiring Fund for use in no-action letters,
applications for orders, registration statements, proxy materials, and other
documents that may be necessary in connection with the transactions contemplated
herein shall be accurate and complete in all material respects and shall comply
in all material respects with federal securities laws and other laws and
regulations.
(j) From
the
effective date of the Registration Statement (as defined in paragraph 5.7),
through the time of the meeting of the Acquired Fund Shareholders and on the
Closing Date, any written information furnished by TPM with respect to the
Acquiring Fund for use in the Proxy Statement/Prospectus (as defined paragraph
5.7), the Registration Statement or any other materials provided in connection
with the Reorganization, does not and will not contain any untrue statement
of a
material fact or omit to state a material fact required to be stated or
necessary to make the statements, in light of the circumstances under which
such
statements were made, not materially misleading.
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(k) The
Acquiring Fund agrees to use all reasonable efforts to obtain the approvals
and
authorizations required by the 1933 Act, the 1940 Act, and any state blue sky
or
securities laws as it may deem appropriate in order to continue its operations
after the Closing Date.
(l) No
governmental consents, approvals, authorizations or filings are required under
the 1933 Act, the 1934 Act, the 1940 Act or Delaware law for the execution
of
this Agreement by TPM, for itself and on behalf of the Acquiring Fund, or the
performance of the Agreement by TPM, for itself and on behalf of the Acquiring
Fund, except for the effectiveness of the Registration Statement and such other
consents, approvals, authorizations and filings as have been made or received,
and except for such consents, approvals, authorizations and filings as may
be
required subsequent to the Closing Date.
(m) The
Acquiring
Fund intends to qualify as a RIC under the Code and will continue to qualify
as
a RIC through the end of its first taxable year.
4.3 REPRESENTATIONS
OF TPM. TPM represents and warrants to its as follows:
(a) TPM
has
filed a post-effective amendment to its registration statement on Form N-1A
for
the purpose of creating the Acquiring Fund. The post-effective amendment will
be
effective on or before the Closing Date.
ARTICLE
V
COVENANTS
OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 OPERATION
IN ORDINARY COURSE. Subject to paragraphs 8.5, each of the Acquiring Fund and
the Acquired Fund will operate their businesses in the ordinary course between
the date of this Agreement and the Closing Date, it being understood that such
ordinary course of business will include customary dividends and distributions
and shareholder redemptions in the case of the Acquired Fund.
5.2 APPROVAL
OF SHAREHOLDERS. Unified will call a special meeting of Acquired Fund’s
Shareholders to consider and act upon this Agreement and to take all other
action necessary to obtain approval of the transactions contemplated
herein.
5.3 INVESTMENT
REPRESENTATION. The Acquired Fund covenants that the Acquiring Fund Shares
to be
issued pursuant to this Agreement are not being acquired for the purpose of
making any distribution, other than in connection with the Reorganization and
in
accordance with the terms of this Agreement.
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5.4 ADDITIONAL
INFORMATION. The Acquired Fund will assist the Acquiring Fund in obtaining
such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund’s shares.
5.5 FURTHER
ACTION. Subject to the provisions of this Agreement, the Acquiring Fund and
the
Acquired Fund will each take or cause to be taken, all action, and do or cause
to be done, all things reasonably necessary, proper or advisable to consummate
and make effective the transactions contemplated by this Agreement, including
any actions required to be taken after the Closing Date.
5.6 STATEMENT
OF
EARNINGS AND PROFITS. As promptly as practicable, but in any case within sixty
days after the applicable Closing Date, the Acquired Fund shall furnish the
Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring
Fund, a statement of the earnings and profits of the Acquired Fund for federal
income tax purposes that will be carried over by the Acquiring Fund as a result
of Section 381 of the Code, and which will be reviewed by Xxxxx Fund Audit
Services, Ltd. and certified by the Unified’s Treasurer.
5.7 PREPARATION
OF FORM N-14 REGISTRATION STATEMENT. TPM will prepare and file with the SEC
a
registration statement on Form N-14 (the “Registration Statement”), under the
1933 Act, relating to the Acquiring Fund Shares, which, without limitation,
shall include a proxy statement of the Acquired Fund and the prospectus of
the
Acquiring Fund relating to the transaction contemplated by this Agreement (the
“Proxy Statement/Prospectus”). The Registration Statement shall be in compliance
with the 1933 Act, the 1934 Act and the 1940 Act. The Acquired Fund will provide
the Acquiring Fund with the materials and information necessary to prepare
the
Proxy Statement/Prospectus for inclusion in the Registration Statement in
connection with the meeting of the Acquired Fund’s Shareholders to consider the
approval of this Agreement and the transactions contemplated
herein.
5.8 INDEMNIFICATION.
(a) TPM
will
assume all liabilities and obligations of Unified relating to any obligation
of
Unified to indemnify its current and former Trustees and officers, acting in
their capacities as such with respect to the Acquired Fund, to the fullest
extent permitted by law and Unified’s Declaration of Trust, as in effect as of
the date of this Agreement. Without limiting the foregoing, TPM 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
with respect to the Acquired Fund, under the Unified’s Declaration of Trust as
in effect as of the date of this Agreement shall survive the Reorganization
and
shall continue in full force and effect, without any amendment thereto, and
shall constitute rights that may be asserted against TPM its successors or
assigns.
(b) The
Acquiring Fund agrees to indemnify and hold harmless the Acquired Fund and
each
of the Acquired Fund’s Trustees and officers from and against any and all
losses, claims, damages, liabilities or expenses (including, without limitation,
the payment of reasonable legal fees and reasonable costs of investigation)
to
which the Acquired Fund or any of its Trustees or officers may become subject,
insofar as any such loss, claim, damage, liability or expense (or actions with
respect thereto) arises out of or is based on any breach by the Acquiring Fund
of any of its representations, warranties, covenants or agreements set forth
in
this Agreement.
(c) The
Acquired
Fund agrees to indemnify and hold harmless the Acquiring Fund and each of the
Acquiring Fund’s Trustees and officers from and against any and all losses,
claims, damages, liabilities or expenses (including, without limitation, the
payment of reasonable legal fees and reasonable costs of investigation) to
which
the Acquiring Fund or any of its Trustees or officers may become subject,
insofar as any such loss, claim damage liability or expense (or actions with
respect thereto) arises out of or is based on any breach by the Acquired Fund
of
any of its representations, warranties, covenants or agreements set forth in
this Agreement.
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ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The
obligations of the Acquired Fund to consummate the transactions provided for
herein shall be subject, at its election, to the performance by the Acquiring
Fund of all the obligations to be performed by it pursuant to this Agreement
on
or before the Closing Date, and, in addition, subject to the following
conditions:
6.1 All
representations, covenants, and warranties of the Acquiring Fund contained in
this Agreement shall be true and correct in all material respects as of the
date
hereof and as of the Closing Date, with the same force and effect as if made
on
and as of that Closing Date. The Acquiring Fund shall have delivered to the
Acquired Fund a certificate executed in the Acquiring Fund’s name by TPM’s
President or Vice President and its Treasurer or Assistant Treasurer, in form
and substance satisfactory to the Acquired Fund and dated as of the Closing
Date, to such effect and as to such other matters as the Acquired Fund shall
reasonably request.
6.2 The
Acquired
Fund shall have received on the Closing Date an opinion from Xxxxxxx & Xxxx,
S.C., counsel to TPM, dated as of such Closing Date, in a form reasonably
satisfactory to the Acquired Fund, covering the following points:
(a) TPM
is a
statutory trust duly organized, validly existing and in good standing under
the
laws of the State of Delaware, and, to such counsel’s knowledge, has the power
to own all of its properties and assets and to carry on its business as
presently conducted.
(b) TPM
is
registered as an investment company under the 1940 Act, and, to such counsel’s
knowledge, such registration with the SEC is in full force and
effect.
(c) This
Agreement has been duly authorized, executed, and delivered by TPM on behalf
of
the Acquiring Fund and, assuming due authorization, execution and delivery
of
this Agreement by the Acquired Fund, is a valid and binding obligation of the
Acquiring Fund enforceable against the Acquiring Fund in accordance with its
terms, subject as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and other laws relating to or affecting
creditors’ rights generally and to general equity principles.
(d) Assuming
that a consideration of not less than the net asset value of Acquiring Fund
Shares has been paid, Acquiring Fund Shares to be issued and delivered to the
Acquired Fund on behalf of the Acquired Fund Shareholders, as provided by this
Agreement, are duly authorized and upon such delivery will be legally issued
and
outstanding and fully paid and non-assessable, and no shareholder of the
Acquiring Fund has any preemptive rights with respect to Acquiring Fund
Shares.
(e) The
Registration Statement has been declared effective by the SEC and to such
counsel’s knowledge, no stop order under the 1933 Act pertaining thereto has
been issued, and to the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or the State of Delaware is required for consummation by the Acquiring
Fund of the transactions contemplated herein, except as have been obtained
under
the 1933 Act, the 1934 Act and the 1940 Act, and as may be required under state
securities laws.
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(f) The
execution and delivery of this Agreement did not, and the consummation of the
transactions contemplated herein will not, result in a violation of TPM’s
Declaration of Trust or any provision of any material agreement, indenture,
instrument, contract, lease or other undertaking (in each case known to such
counsel) to which the Acquiring Fund is a party or by which the Acquiring Fund
or any of its properties may be bound or, to the knowledge of such counsel,
result in the acceleration of any obligation or the imposition of any penalty,
under any agreement, judgment, or decree to which the Acquiring Fund is a party
or by which it is bound.
(g) In
the
ordinary course of such counsel’s representation of the Acquiring Fund, and
without having made any investigation, such counsel does not know of any legal
or governmental proceedings (only insofar as they relate to the Acquiring Fund)
existing on or before the effective date of the Registration Statement or the
Closing Date that are required to be described in the Registration Statement
or
to be filed as exhibits to the Registration Statement that are not described
or
filed as required.
(h) To
the
knowledge of such counsel no consent, approval, authorization or order of any
court or governmental authority of the United States or the State of Delaware
is
required for consummation by the Acquiring Fund of the transactions contemplated
herein, except as have been obtained under the 1933 Act, the 1934 Act and the
1940 Act, and as may be required under state securities laws.
(i) In
the
ordinary course of such counsel’s representation of the Acquiring Fund, and
without having made any investigation, and except as otherwise disclosed, such
counsel is not aware of any litigation or administrative proceeding of or before
any court or governmental body that is presently pending or threatened as to
the
Acquiring Fund or any of its properties or assets. In the ordinary course of
such counsel’s representation of the Acquiring Fund, and without having made any
investigation, to the knowledge of such counsel, the Acquiring Fund are not
a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body that materially and adversely affects the Acquiring
Fund’s business, other than as previously disclosed in the Registration
Statement.
In
this
paragraph 6.2, references to the Proxy Statement/Prospectus include and relate
to only the text of such Proxy Statement/Prospectus and not to any exhibits
or
attachments thereto or to any documents incorporated by reference
therein.
6.3 The
post-effective amendment on Form N-1A filed by TPM with the SEC to create the
Acquiring Fund has been declared effective by the Commission.
6.4 Subject
to Section 6.3 as of the Closing Date with respect to the Reorganization of
the
Acquired Fund, there shall have been no material change in the investment
objective, policies and restrictions nor any material change in the investment
management fees, fee levels payable pursuant to the 12b-1 plan of distribution,
other fees payable for services provided to the Acquiring Fund, fee waiver
or
expense reimbursement undertakings, or sales loads of the Acquiring Fund from
those fee amounts, undertakings and sales load amounts of the Acquiring Fund
described in the Proxy Statement/Prospectus.
6.5 For
the
period beginning at the Closing Date and ending not less than three years
thereafter, TPM, its successor or assigns shall provide, or cause to be
provided, liability coverage at least as comparable to the liability coverage
currently applicable to both former and current Trustees and officers of
Unified, covering the actions of such Trustees and officers of Unified for
the
period they served as such.
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6.6 Unified
shall have received a letter of indemnification from the Leader Capital
Corporation stating that it agrees to indemnify Unified, its employees, agents,
directors, 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 expenses (including
settlement costs) arising out of any litigation or regulatory action (including,
without limitation, any shareholder litigation and any, SEC staff inquiries,
investigation, enforcement action or disciplinary action) in any way relating
to
the Fund, or relating to or resulting from (a) the Reorganization, (b) the
management of the Fund by Leader Capital Corporation, or (c) Leader Capital
Corporations duties to the Fund under the Management Agreement between the
Trust
and Leader Capital Corporation, or the Investment Advisers Act of 1940, as
amended (a “Claim”); except to the extent that such claims, demands, actions,
suits, judgments, liabilities, losses, damages, costs, charges, reasonable
legal
fees or other expenses relate to or result from the action or inaction of any
Indemnified Party with respect to which the Trust is indemnified and held
harmless under the Mutual Fund Services Agreement between Unified and the Trust.
Leader Capital Corporation shall remain liable for indemnification as
contemplated herein regardless of whether the transactions contemplated by
this
Agreement occur and this Section 6.6 shall survive the Closing and any
termination of this Agreement pursuant to Section 11.1.
ARTICLE
VII
CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The
obligations of the Acquiring Fund to consummate the transactions provided for
herein shall be subject, at its election, to the performance by the Acquired
Fund of all the obligations to be performed by the Acquired Fund pursuant to
this Agreement, on or before the Closing Date and, in addition, shall be subject
to the following conditions:
7.1 All
representations, covenants, and warranties of the Acquired Fund contained in
this Agreement shall be true and correct in all material respects as of the
date
hereof and as of the Closing Date, with the same force and effect as if made
on
and as of such Closing Date. The Acquired Fund shall have delivered to the
Acquiring Fund on such Closing Date a certificate executed in the Acquired
Fund’s name by Unified’s President or Vice President and the Treasurer or
Assistant Treasurer, in form and substance satisfactory to the Acquiring Fund
and dated as of such Closing Date, to such effect and as to such other matters
as the Acquiring Fund shall reasonably request.
7.2 The
Acquired Fund shall have delivered to the Acquiring Fund a statement of the
Acquired Fund’s assets and liabilities, together with a list of the Acquired
Fund’s portfolio securities showing the tax costs of such securities by lot and
the holding periods of such securities, as of the Closing Date, certified by
the
Treasurer of Unified.
ARTICLE
VIII
FURTHER
CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH
ACQUIRING
FUND AND ACQUIRED FUND
If
any of
the conditions set forth below do not exist on or before the Closing Date with
respect to the Acquired Fund or the Acquiring Fund, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
8.1 This
Agreement and the transactions contemplated herein, with respect to the Acquired
Fund, shall have been approved by the requisite vote of the holders of the
outstanding shares of the Acquired Fund in accordance with Ohio law and the
provisions of Unified’s Declaration of Trust and By-Laws. Certified copies of
the resolutions evidencing such approval shall have been delivered to the
respective Acquiring Fund. Notwithstanding anything herein to the contrary,
neither the Acquiring Fund nor the Acquired Fund may waive the conditions set
forth in this paragraph 8.1.
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8.2 On
the
Closing Date, the SEC shall not have issued an unfavorable report under Section
25(b) of the 1940 Act, or instituted any proceeding seeking to enjoin the
consummation of the transactions contemplated by this Agreement under Section
25(c) of the 1940 Act. Furthermore, 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 this Agreement or the transactions contemplated herein.
8.3 All
required consents of other parties and all other consents, orders, and permits
of federal, state and local regulatory authorities (including those of the
SEC
and of state blue sky securities authorities, including any necessary
“no-action” positions and exemptive orders from such federal and state
authorities) to permit consummation of the transactions contemplated herein
shall have been obtained, except where failure to obtain any such consent,
order, or permit would not involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or the Acquired Fund, provided that
either party hereto may waive any such conditions for itself.
8.4 The
Registration Statement shall have become effective under the 1933 Act and no
stop orders suspending the effectiveness thereof shall have been issued. To
the
best knowledge of the parties to this Agreement, no investigation or proceeding
for that purpose shall have been instituted or be pending, threatened or
contemplated under the 0000 Xxx.
8.5 The
Acquired Fund shall have declared and paid a dividend or dividends, which,
together with all previous such dividends, shall have the effect of distributing
to its shareholders all of the Acquired Fund’s net investment company taxable
income for all taxable periods ending on or prior to the Closing Date (computed
without regard to any deduction for dividends paid) and all of its net capital
gains realized in all taxable periods ending on or prior to such Closing Date
(after reduction for any capital loss carry forward).
8.6 The
parties
shall have received a favorable opinion of Xxxxxxx & Xxxx, S.C. dated as of
the Closing Date and addressed to the Acquiring Fund and Acquired Fund
substantially to the effect that for federal income tax purposes with respect
to
the Acquired Fund:
(a) The
transfer of all of the Acquired Fund’s assets in exchange for Acquiring Fund
Shares and the assumption by the Acquiring Fund of the liabilities of the
Acquired Fund (followed by the distribution of Acquiring Fund Shares to the
Acquired Fund Shareholders and the termination of the Acquired Fund) will
constitute a “reorganization” within the meaning of Section 368(a) of the Code
and the Acquiring Fund and the Acquired Fund will each be a “party to a
reorganization” within the meaning of Section 368(b) of the Code.
(b) No
gain
or loss will be recognized by the Acquiring Fund upon the receipt of the assets
of the Acquired Fund solely in exchange for Acquiring Fund Shares and the
assumption by the Acquiring Fund of the liabilities of the Acquired
Fund.
(c) No
gain or
loss will be recognized by the Acquired Fund upon the transfer of the Acquired
Fund’s assets to the Acquiring Fund in exchange for Acquiring Fund Shares and
the assumption by the Acquiring Fund of the liabilities of the Acquired Fund
or
upon the distribution (whether actual or constructive) of Acquiring Fund Shares
to the Acquired Fund’s Shareholders in exchange for such shareholders’ shares of
the Acquired Fund.
A-13
(d) No
gain
or loss will be recognized by the Acquired Fund’s Shareholders upon the exchange
of their Acquired Fund shares for Acquiring Fund Shares in the
Reorganization.
(e) The
aggregate
tax basis for Acquiring Fund Shares received by each of the Acquired Fund’s
Shareholders pursuant to the Reorganization will be the same as the aggregate
tax basis of the Acquired Fund shares exchanged therefor by such shareholder.
The holding period of Acquiring Fund Shares to be received by each of the
Acquired Fund’s Shareholders will include the period during which the Acquired
Fund shares exchanged therefore were held by such shareholder, provided the
Acquired Fund shares are held as capital assets at the time of the
Reorganization.
(f) The
tax
basis of the Acquired Fund’s assets acquired by the Acquiring Fund will be the
same as the tax basis of such assets to the Acquired Fund immediately prior
to
the Reorganization. The holding period of the assets of the Acquired Fund in
the
hands of the Acquiring Fund will include the period during which those assets
were held by the Acquired Fund.
(g) The
Acquiring Fund will succeed to and take into account the items of the Acquired
Fund described in Section 381(c) of the Code, subject to any applicable
conditions and limitations specified in Sections 381, 382, 383 and 384 of the
Code and the regulations thereunder.
Such
opinion shall be based on customary assumptions and such representations as
Xxxxxxx & Xxxx, S.C. may reasonably request, and the Acquired Fund and
Acquiring Fund will cooperate to make and certify the accuracy of such
representations. Notwithstanding anything herein to the contrary, neither the
Acquiring Fund nor the Acquired Fund may waive the conditions set forth in
this
paragraph 8.6.
ARTICLE
IX
EXPENSES
9.1 Except
as
otherwise provided for herein, Leader Capital Corporation, or an affiliate
thereof, shall bear all expenses of the transactions contemplated by this
Agreement. Such expenses include, without limitation: (a) expenses associated
with the preparation and filing of the Registration Statement/Proxy Statement
on
Form N-14 under the 1933 Act covering Acquiring Fund Shares to be issued
pursuant to the provisions of this Agreement; (b) postage; (c) printing; (d)
accounting fees; (e) legal and audit fees; (f) solicitation costs of the
transactions, (g) the cost of winding up and liquidating the Acquired Fund,
and
(h) all fees listed on the closing/merger schedule provided by United Fund
Services. Leader Capital Corporation, or an affiliate thereof, shall remain
liable for expenses, regardless of whether the transactions contemplated by
this
Agreement occur, and this Section 9.1 shall survive the Closing and any
termination of this Agreement, pursuant to paragraph 11.1.
A-14
ARTICLE
X
ENTIRE
AGREEMENT; SURVIVAL
10.1 TPM,
on
behalf of the Acquiring Fund, and Unified, on behalf of the Acquired Fund,
agrees that neither party has made to the other party any representation,
warranty and/or covenant not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
10.2 The
representations, warranties, and covenants contained in this Agreement or in
any
document delivered pursuant to or in connection with this Agreement, shall
survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing Date, and the obligations of the
Acquiring Fund, shall continue in effect beyond the consummation of the
transactions contemplated hereunder.
ARTICLE
XI
TERMINATION
11.1 This
Agreement may be terminated by the mutual agreement of TPM and Unified. In
addition, either TPM or Unified may at its option terminate this Agreement
at or
prior to either Closing Date due to:
(a) a
breach
by the other of any representation, warranty, or agreement contained herein
to
be performed at or prior to the Closing Date, if not cured within 30
days;
(b) a
condition herein expressed to be precedent to the obligations of the terminating
party that has not been met and it reasonably appears that it will not or cannot
be met; or
(c) a
determination by the party’s Board of Trustees, as appropriate, that the
consummation of the transactions contemplated herein is not in the best interest
of the party, and to give notice to the other party hereto.
11.2 In
the
event of any such termination, in the absence of willful default, there shall
be
no liability for damages on the part of either the Acquiring Fund, the Acquired
Fund, TPM, Unified, or the respective Trustees or officers to the other party
or
its Trustees or officers, but paragraph 9.1 shall continue to
apply.
ARTICLE
XII
AMENDMENTS
12.1 This
Agreement may be amended, modified, or supplemented in such manner as may be
mutually agreed upon in writing by the authorized officers of the Acquired
Fund
and the Acquiring Fund; provided, however, that following the meeting of the
Acquired Fund’s Shareholders called by the Acquired Fund pursuant to paragraph
5.2 of this Agreement, no such amendment may have the effect of changing the
provisions to the detriment of such shareholders.
A-15
ARTICLE
XIII
HEADINGS;
COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION
OF LIABILITY
13.1 The
Article and paragraph headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of
this Agreement.
13.2 This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original.
13.3 This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Ohio, without giving effect to the conflicts of laws provisions
thereof.
13.4 This
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns, but, except as provided in this paragraph,
no
assignment or transfer hereof or of any rights or obligations hereunder shall
be
made by any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm, or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason
of
this Agreement.
13.5 It
is
expressly agreed that the obligations of the Acquiring Fund hereunder shall
not
be binding upon any of the Trustees, shareholders, nominees, officers, agents,
or employees of TPM personally, but shall bind only the trust property of the
Acquiring Fund, as provided in the Agreement and Declaration of Trust of TPM.
The execution and delivery of this Agreement have been authorized by the
Trustees of TPM on behalf of the Acquiring Fund and signed by authorized
officers of TPM, acting as such. Such authorization by such Trustees and such
execution and delivery by such 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 trust property of the Acquiring Fund as provided in
TPM’s Agreement and Declaration of Trust.
13.6 It
is
expressly agreed that the obligations of the Acquired Fund hereunder shall
not
be binding upon any of the Trustees, shareholders, nominees, officers, agents,
or employees of Unified personally, but shall bind only the trust property
of
the Acquired Fund, as provided in the Agreement and Declaration of Trust of
Unified. The execution and delivery of this Agreement have been authorized
by
the Trustees of Unified on behalf of the Acquired Fund and signed by authorized
officers of Unified, acting as such. Such authorization by such Trustees and
such execution and delivery by such 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 trust property of the Acquired Fund as
provided in Unified’s Agreement and Declaration of Trust.
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IN
WITNESS WHEREOF, the parties have duly executed this Agreement, all as of the
date first written above.
behalf
of the Acquiring Fund
By:
Name: Xxxxxx
X.
Xxxxxxxxx
Title: President
UNIFIED
SERIES TRUST, on behalf of the
Acquired
Fund
By:
Name: Xxxxxxx
X. Xxxxxxx
Title: President
LEADER
CAPITAL CORPORATION, with respect
to
Paragraphs 6.6 and 9.1 only
By:
Name: Xxxx
X.
Xxxxx
Title: President
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Schedule
A
Shareholders
of the Acquired Fund will receive shares of the corresponding Acquiring
Fund
Unified
Fund (Acquired Fund)
|
TPM
Fund (Acquiring Fund)
|
Leader
Short-Term Bond Fund
|
Leader
Short-Term Bond Fund
|
A-18