SYNOPSIS OF UNA/UNAAA MERGER AGREEMENT (03/08/98)

Proposed Agreement of merger between the UNA and the UNAAA

SYNOPSIS OF UNA/UNAAA MERGER AGREEMENT

In accordance with the New Jersey Statutes, a fraternal benefit association domiciled in New Jersey, such as the UNA, may merge with another fraternal association upon the performance of certain statutory duties. One of them is that at least sixty (60) days prior to the action of the Convention, the body authorized to vote on the merger, the full text of the contract between the two merging societies is to be furnished to all members of each society either by mail or by publication in full in the press of each society. Due to the legal language used in this and any other contracts of this nature and in order that our membership understand each Article of the Agreement of Merger, the Executive Committee of the Ukrainian National Association is issuing this synopsis for purposes of explanation of the contract.

Article One sets forth that the two associations shall merge into one and shall be known as the Ukrainian National Association. All branches and property shall become Ukrainian National Association branches and property and all officers of branches of the UNAAA shall become officers of branches of the Ukrainian National Association. The Supreme Executive Assembly consisting of the Supreme Executive Committee, the Supreme Auditors and the Supreme Advisers of the UNAAA shall no longer be in office after the merger is completed.

Article Two sets forth that all certificates and contracts of insurance of either pre-existing society become certificates and contracts of the merged society, which shall administer them in accordance with current and future Ukrainian National Association laws and by-laws. All future premiums shall be payable to the Ukrainian National Association, all property shall become the property of the Ukrainian National Association, and all obligations under all policies and contracts shall become those of the Ukrainian National Association. Pending the final merger, however, the UNAAA may operate in the usual course of business and may spend such money as is customary and reasonable in its normal business. The same applies to UNAAA branches. Finally, there will be no liens imposed on any UNAAA policy or certificate in force due to any insufficiency of UNAAA's reserves.

Article Three. The UNAAA has sold its headquarters in Chicago as of January 30, 1998. The language in the contract assumed that such would be the case. Each society will investigate thoroughly all assets, obligations and liabilities of the other society, review financial information and all policies, inspect properties so that each society will be satisfied that this merger is in the best financial interest of its members. This is called due diligence. In the event the merger does not take place, all information learned about the other society shall be kept confidential and all records will be returned to the property party. Neither society will utilize any of this information to the detriment of the other or to its own advantage. Both New Jersey and Pennsylvania law require consent of each state's insurance commissioner before the merger is final. The contract is specifically made dependent on that consent. The contract is also made dependent upon satisfaction by each party with its investigation of the existence and liabilities of the other party within a period of sixty-one (61) days of the signing of the contract. The contract may also be voided by either party if the financial condition of either party deteriorates to the extent of $20,000 or more from the latest financial statement exchanged between the parties. The contract further sets forth an acknowledgment by the Ukrainian National Association that it recognizes that UNAAA reserves our insufficiency in excess of $659,000 due to the exchange rate of the Canadian dollar. The contract contains a window for the UNA to terminate the merger if the Canadian dollar is traded for less than 68 cents for every U.S. dollar. The contracts further provide for an injunction by a court in favor of either party in the event of a breach of the contract by the other. The contract is governed by the laws of the State of New Jersey but must not conflict with Pennsylvania law.

Article Four is a standard representation article wherein each society makes representations to the other of the accuracy of all financial statements of its ability to enter into this agreement, of the absence of any liabilities or obligations except those which are or have been disclosed. The article further contains a list and description of all policies being sold by each society, all insurance policies bought by each society for its own use and protection, all employee benefit plans and all employee contracts. Each society represents to the other that it is a tax exempt organization free from the requirement to pay income tax. Any and all law suits are also disclosed in the contract. Each society also agreed to make no untrue statements about the merger or the contract in public.

Article Five requires the formal vote by each society to be taken no later than May 29, 1998, at its convention and indicates, as required by law, that there must be a 2 to 1 margin in favor of the merger and acceptance of the merger contract. Afterwards, the insurance commissioners of each state will receive the contracts, proof of publication of the contracts for the benefit of the members, proof of a 2/3 majority vote at a convention, a certified true copy of the accepted contract, the latest financial statement of each society and thereafter, if each commissioner feels the merger is in the best interest of each society, the commissioner will approve the contract and the merger shall become final.

Further in Article Six, each party states to the other that it knows of no reason why the merger cannot be completed and that the merger will not violate any existing contracts of that society.

Article Seven further sets forth the obligations of each society to continue to proceed to the merger and obtain all necessary consents of any other governmental entity to allow the merger.

The UNAAA has not required any statutory changes to the by-laws of the Ukrainian National Association nor did it reserve any position in the General Assembly of the merged society for itself or any of its officers or members, any of whom, however, is free to run for office at the first convention after the merger, which is the convention of 2002.