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EXHIBIT 4
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
This Agreement and Plan of Reorganization and Liquidation (the "Plan") is
made as of this day of , 1998, by and between Select Advisors
Trust A ("Trust A") on behalf of the seven of its eight separate portfolios
which are the subject of this Plan and are set forth below (hereinafter,
collectively the "Acquiring Funds" or individually an "Acquiring Fund"), and
Select Advisors Trust C ("Trust C") on behalf of all seven of its separate
portfolios of securities, all of which are the subject of this Plan and are set
forth below (hereinafter, collectively the "Acquired Funds" or individually an
"Acquired Fund").
This Plan governs the proposed issuance of shares of each Acquiring Fund in
exchange for all of the assets and liabilities of the specific Acquired Fund set
forth opposite the name of that Acquiring Fund in the table below.
ACQUIRING FUNDS OF TRUST A ACQUIRED FUNDS OF TRUST C
-------------------------- -------------------------
Touchstone Emerging Growth Fund A Touchstone Emerging Growth Fund C
Touchstone International Equity Fund A Touchstone International Equity Fund C
Touchstone Income Opportunity Fund A Touchstone Income Opportunity Fund C
Touchstone Value Plus Fund A Touchstone Value Plus Fund C
Touchstone Growth & Income Fund A Touchstone Growth & Income Fund C
Touchstone Balanced Fund A Touchstone Balanced Fund C
Touchstone Bond Fund A Touchstone Bond Fund C
This Plan is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended (the "Code"). A reorganization (each a
"Reorganization") will comprise the transfer of all of the assets of an Acquired
Fund to the corresponding Acquiring Fund in exchange solely for such
corresponding Acquiring Fund's Class C shares and the assumption by the
Acquiring Fund of certain liabilities of the corresponding Acquired Fund, and
the constructive distribution after the Closing Date (as hereinafter defined) of
such Class C shares to the shareholders of the corresponding Acquired Fund in
liquidation of the Acquired Fund, all upon the terms and conditions hereinafter
set forth in this Plan.
WHEREAS, Trust A and Trust C are each (a) a Massachusetts business Trust
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and (b) registered as an open-end series
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and each Acquired Fund owns securities which generally are assets
of the character in which the corresponding Acquiring Fund is permitted to
invest; and
WHEREAS, effective as of the Closing Date, the shares of beneficial
interest of each Acquiring Fund will be divided into three separate classes,
designated as Class A shares of beneficial interest ("Class A"), Class C shares
of beneficial interest ("Class C") and Class Y shares of beneficial interest
("Class Y"); and
WHEREAS, the Board of Trustees of Trust C has determined that the exchange
of all of the assets of each Acquired Fund for Class C shares of the
corresponding Acquiring Fund and the assumption of the liabilities of such
Acquired Fund by the corresponding Acquiring Fund is in the best interests of
each Acquired Fund's Shareholders (as defined below) and that the interests of
the existing shareholders of each Acquired Fund will not be diluted as a result
of this transaction; and
WHEREAS, the execution, delivery and performance of this Plan will have
been duly authorized prior to the Closing Date by all necessary corporate action
on the part of Trust A and Trust C, respectively, and this Plan constitutes a
valid and binding obligation of each of the parties hereto enforceable in
accordance with its terms, subject to the requisite approval of the shareholders
of each Acquired Fund.
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NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. REDESIGNATION OF PRESENTLY OUTSTANDING SHARES OF EACH ACQUIRING FUND AS
SHARES OF SUCH ACQUIRING FUND'S CLASS A SHARES
1.1 Redesignation. Effective as of the "Effective Time" (as defined in
Article 4 of this Plan), each share of each Acquiring Fund's presently
designated single class of shares then issued and outstanding automatically will
be redesignated (without otherwise affecting the rights and privileges
appertaining thereto) as a share of each Acquiring Fund's Class A shares without
any action on the part of the holder thereof, and will represent a pro rata
interest (taken together with outstanding shares of each Acquiring Fund's Class
C and Class Y shares without regard to Class) in the assets and liabilities of
each Acquiring Fund. Notwithstanding this change in designation, the rights and
privileges of outstanding shares of each Acquiring Fund's presently-designated
single class of shares will remain the same.
1.2 Transfer Agent's Records. Ownership of shares of each Acquiring
Fund's Class A shares will be shown on the books of Trust A's transfer agent.
Shares of each Acquiring Fund's Class A shares will be issued in the manner
described in the then-effective Prospectus and Statement of Additional
Information of Trust A relating to the Class A shares of each Acquiring Fund.
2. TRANSFER OF ASSETS AND LIABILITIES OF EACH ACQUIRED FUND TO THE
CORRESPONDING ACQUIRING FUND IN EXCHANGE FOR SUCH CORRESPONDING ACQUIRING
FUND'S CLASS C SHARES; LIQUIDATION OF THE ACQUIRED FUNDS
2.1 Transfer and Exchange of Assets for Shares. Subject to the requisite
approval of the shareholders of each Acquired Fund and to the other terms and
conditions set forth herein and on the basis of the representations and
warranties contained herein, each of the Touchstone Emerging Growth Fund C,
Touchstone International Equity Fund C, Touchstone Income Opportunity Fund C,
Touchstone Value Plus Fund C, Touchstone Growth & Income Fund C, Touchstone
Balanced Fund C and Touchstone Bond Fund C series of Trust C shall transfer to
each of Touchstone International Equity Fund A, Touchstone Income Opportunity
Fund A, Touchstone Value Plus Fund A, Touchstone Growth & Income Fund A,
Touchstone Balanced Fund A and Touchstone Bond Fund A series of Trust A,
respectively, and each of Touchstone Emerging Growth Fund A, Touchstone
International Equity Fund A, Touchstone Income Opportunity Fund A, Touchstone
Value Plus Fund A, Touchstone Growth & Income Fund A, Touchstone Balanced Fund A
and Touchstone Bond Fund A series of Trust A shall acquire from each of the
Touchstone Emerging Growth Fund C, Touchstone International Equity Fund C,
Touchstone Income Opportunity Fund C, Touchstone Value Plus Fund C, Touchstone
Growth & Income Fund C, Touchstone Balanced Fund C and Touchstone Bond Fund C
series of Trust C, respectively, as of the Closing Date, all of the Assets (as
hereinafter defined) (i) of the Touchstone Emerging Growth Fund C in exchange
for that number of Class C shares of Touchstone Emerging Growth Fund A
determined in accordance with paragraph 3.2 hereof, and the assumption by
Touchstone Emerging Growth Fund A of the Liabilities (as hereinafter defined) of
the Touchstone Emerging Growth Fund C, (ii) of the Touchstone International
Equity Fund C in exchange for that number of Class C shares of Touchstone
International Equity Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by Touchstone International Equity Fund A of the Liabilities
of the Touchstone International Equity Fund C, (iii) of the Touchstone Income
Opportunity Fund C in exchange for that number of Class C shares of Touchstone
Income Opportunity Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by Touchstone Income Opportunity Fund A of the Liabilities of
the Touchstone Income Opportunity Fund C, (iv) of the Touchstone Value Plus Fund
C in exchange for that number of Class C shares of Touchstone Value Plus Fund A
determined in accordance with paragraph 3.2 hereof, and the assumption by
Touchstone Value Plus Fund A of the Liabilities of the Touchstone Value Plus
Fund C, (v) of the Touchstone Growth & Income Fund C in exchange for that number
of Class C shares of Touchstone Growth & Income Fund A determined in accordance
with paragraph 3.2 hereof, and the assumption by Touchstone Growth & Income Fund
A of the Liabilities of the Touchstone Growth & Income Fund C, (vi) of the
Touchstone Balanced Fund C in exchange for that number of Class C shares of
Touchstone Balanced Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by
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Touchstone Balanced Fund A of the Liabilities of the Touchstone Balanced Fund C,
and (vii) of the Touchstone Bond Fund C in exchange for that number of Class C
shares of Touchstone Bond Fund A determined in accordance with paragraph 3.2
hereof, and the assumption by Touchstone Bond Fund A of the Liabilities of the
Touchstone Bond Fund C. Such transactions shall take place at the closing
provided for in Article 4 of this Plan (the "Closing").
Trust C will (i) pay or cause to be paid to Trust A any interest received
on or after the Closing Date with respect to the Assets of each Acquired Fund
and (ii) transfer to Trust A any distributions, rights, stock dividends or other
property received by Trust C after the Closing Date as distributions on or with
respect to the Assets of each Acquired Fund. Any such interest, distributions,
rights, stock dividends or other property so paid or transferred or received
directly by Trust A shall be allocated by Trust A to the account of the
Acquiring Fund that acquired the Assets to which such property relates.
2.2 Description of Assets to be Acquired. The assets of each Acquired
Fund to be acquired by each Acquiring Fund shall consist of all property,
including without limitation, all cash, cash equivalents, securities,
commodities and futures interests, receivables (including interest or dividends
receivable), any claims or rights of action or rights to register shares under
applicable securities laws, and other property owned by each Acquired Fund and
any deferred or prepaid expenses shown as an asset on the books of each Acquired
Fund at the Effective Time (the "Assets").
2.3 Liabilities to be Assumed. Each Acquiring Fund shall assume from the
corresponding Acquired Fund all liabilities, expenses, costs, charges and
reserves of such Acquired Fund of whatever kind or nature, whether absolute,
accrued, contingent or otherwise, whether or not arising in the ordinary course
of business, whether or not determinable as of the Effective Time and whether or
not specifically referred to in this Plan; provided, however, that it is
understood and agreed by the parties hereto that each Acquired Fund will utilize
its best efforts to discharge all of its known debts, liabilities, obligations
and duties prior to the Effective Time. Any such liabilities and obligations of
an Acquired Fund assumed by an Acquiring Fund shall be allocated to the shares
of such Acquiring Fund's Class C shares issued to each Acquired Fund pursuant to
this Plan.
2.4 Liquidation of Each Acquired Fund. As provided in Section 4.3 of this
Plan, as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), Trust C will effect the termination and liquidation of each
Acquired Fund in the manner provided in its Declaration of Trust and in
accordance with applicable law. On the Closing Date, each Acquired Fund will
distribute pro rata to its shareholders of record, determined as of the close of
business on the Valuation Date (the "Acquired Fund's Shareholders"), each
Acquiring Fund's Class C shares received by such Acquired Fund pursuant to
Section 2.1 in exchange for each such shareholder's interest in each Acquired
Fund evidenced by such shareholder's shares of beneficial interest in each
Acquired Fund. Such liquidation and distribution will be accomplished by opening
accounts on the books of each Acquiring Fund in the names of each Acquired
Fund's Shareholders and transferring the shares credited to the account of each
Acquired Fund on the books of the corresponding Acquiring Fund. Each account
opened shall represent the respective pro rata number of shares of each
Acquiring Fund's Class C shares due each Acquired Fund Shareholder. Fractional
shares of each Acquiring Fund's Class C shares shall be rounded to the nearest
thousandth of one share. All issued and outstanding shares of each Acquired Fund
shall simultaneously be canceled on the books of the Acquired Fund.
2.5 No Issuance of Certificates. None of the Acquiring Funds will issue
certificates representing its Class C shares issued in connection with the
exchange described in paragraph 2.1 hereof.
2.6 Transfer Agent's Records. Ownership of each Acquiring Fund's Class C
shares will be shown on the books of Trust A's transfer agent. Each Acquiring
Fund's Class C shares will be issued in the manner described in the
then-effective Prospectus and Statement of Additional Information of Trust A
relating to the Class C shares of each Acquiring Fund.
2.7 Transfer Taxes. Any transfer taxes payable upon the issuance of
shares of each Acquiring Fund's Class C shares in a name other than the
registered holder of the shares on the books of each Acquired Fund as of the
time of issuance shall be paid by the person to whom such shares are to be
issued as a condition of such transfer.
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2.8 Reporting Responsibilities of each Acquired Fund. Any reporting
obligations relating to an Acquired Fund are and shall remain the responsibility
of Trust C up to and including the Closing Date and such later date on which
each Acquired Fund is liquidated and Trust C is dissolved.
2.9 Operating Plan. From and after the Closing Date, the rights and
privileges of the Class A, Class C and Class Y shares shall be determined under
the provisions of Massachusetts law, Trust A's Declaration of Trust, as amended
from time to time, Trust A's Bylaws and the operating plan adopted by Trust A's
Board of Trustees which establishes policies and procedures for allocating
income and expenses between each Acquiring Fund's Class A shares, Class C shares
and Class Y shares, which further defines the relative voting rights of the
Classes and which otherwise delineates the relative rights, privileges and
liabilities of shares of the Classes.
3. VALUATION
3.1 Net Asset Value of each Acquired Fund. The value of the net assets to
be acquired by each Acquiring Fund hereunder shall be the value of the Assets of
the corresponding Acquired Fund, less the Liabilities of such Acquired Fund, and
shall be computed at the time and in the manner set forth in Trust A's
then-current Prospectus and Statement of Additional Information on December 31,
1998 (such time and date being hereinafter called the "Valuation Date").
3.2 Exchange Ratio. The number of shares of each Acquiring Fund's Class C
shares to be issued (including fractional shares, if any) in exchange for the
Assets of each Acquired Fund and the assumption of its Liabilities shall be
equivalent to the number of shares of the Acquired Fund outstanding as of the
close of business on the Valuation Date.
3.3 Documentation. All computations of value shall be made by Investors
Bank & Trust Company, in accordance with its regular practice as pricing agent
for Trust A. In addition, Trust C shall furnish to Trust A within 60 days of the
Closing Date a statement of each Acquired Fund's assets and liabilities as of
the Effective Time, which statement shall be prepared in accordance with
generally accepted accounting principles consistently applied and shall be
certified by the Treasurer of Trust C. In addition, Trust C shall supply to
Trust A, in such form as is reasonably satisfactory to Trust A, a statement of
earnings and profits of each Acquired Fund for federal income tax purposes which
may be carried over to each Acquiring Fund's Class C shares as a result of
Section 381 of the Code. This statement shall be provided within 180 days of the
Closing Date.
4. CLOSING AND CLOSING DATE
4.1 Establishment of Closing Date; Description of Closing. The "Closing
Date" shall be the next full business day following the Valuation Date (December
31, 1998), or such later date as the parties may agree in writing. All acts
taking place at the Closing shall be deemed to take place simultaneously as of
the close of business on the last business day immediately preceding the Closing
(the "Effective Time"), unless otherwise provided. The Closing shall be held on
the Closing Date at 9:00 a.m., Central Time, at the principal offices of Frost &
Xxxxxx LLP, or such other time and/or place as the parties may agree.
4.2 Deliveries by Transfer Agent. Investors Bank & Trust Company, as
custodian for Trust C and for each portfolio of Select Advisors Portfolios,
shall deliver at the Closing a certificate of an authorized officer stating
that: (a) each Acquired Fund's portfolio securities, cash and any other assets
shall have been delivered in proper form to Trust A 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 connection with the delivery of portfolio securities.
4.3 Closing of New York Stock Exchange. In the event that on the
Valuation Date: (a) the New York Stock Exchange is closed to trading or trading
thereon is restricted; or (b) trading or the reporting of trading on said
Exchange or elsewhere is disrupted so that accurate appraisal of the value of
the total net assets of each Acquired Fund is impracticable, then the Closing
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
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4.4 List of each Acquired Fund's Shareholders. Trust C shall deliver at
the Closing a list of names and addresses of the shareholders of each Acquired
Fund and the number and percentage ownership of outstanding shares owned by each
such shareholder, all as of the Effective Time, certified by the Secretary or
Assistant Secretary of Trust C. Trust A shall issue and deliver to said
Secretary or Assistant Secretary of Trust C a confirmation evidencing each
Acquiring Fund's Class C shares to be credited to the corresponding Acquired
Fund on the [Liquidation Date], or provide other evidence satisfactory to Trust
C that such Acquiring Fund's Class C shares have been credited to the account of
the corresponding Acquired Fund on the records of Trust A's transfer agent
maintained with respect to each Acquiring Fund's Class C shares. At the Closing,
each party shall deliver to the other such bills of sale, checks, assignments,
share certificates, receipts or other transfer documents as such other party may
reasonably request.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Trust C, on behalf of each Acquired Fund, represents and warrants to
Trust A, on behalf of each Acquiring Fund, as follows:
(a) Trust C is a voluntary association with transferable shares of the
type commonly referred to as a Massachusetts business trust, duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) Trust C is registered as an investment company classified as a
management company of the open-end type and its registration with the
Securities and Exchange Commission (the "Commission") as an investment
company under the 1940 Act, is in full force and effect;
(c) The current prospectus and statement of additional information of
Trust C relating to the Acquired Funds conform in all material respects to
the applicable requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act and the rules and regulations of the
Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(d) Trust C is not, and the execution, delivery and performance of
this Agreement will not result, in a material violation of its Declaration
of Trust or By-Laws, as each may have been amended to the date hereof, or
of any agreement, indenture, instrument, contract, lease or other
undertaking to which Trust C is a party or by which it is bound;
(e) Trust C has no material contracts or other commitments (other than
this Agreement) which, if terminated prior to the Closing Date, would
result in an additional liability of any of the Acquired Funds;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its
knowledge threatened against Trust C or any Acquired Fund or any of their
respective properties or assets which, if adversely determined, would
materially and adversely affect their financial condition or the conduct of
their business. Trust C knows of no facts which 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 which materially or adversely affects its business or its ability to
consummate the transactions herein contemplated;
(g) At the Closing Date, all federal and other tax returns and reports
of the Acquired Funds required by law to have been filed by such date shall
have been filed, and all federal and other taxes shall have been paid so
far as due, or provision shall have been made for the payment thereof and,
to the best of Trust C's knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such returns;
(h) For each fiscal year of its operation, each of the Acquired Funds
has (i) met the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and (ii) been treated as a
separate corporation for federal income tax purposes pursuant to section
851(h) of
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the Code, and each of the Acquired Funds intends to be so treated as a
separate corporation and meet such qualification requirements for its
current taxable year;
(i) All issued and outstanding shares of each Acquired Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof (recognizing that, under Massachusetts law, each Acquired
Fund's Shareholders could, under certain circumstances, be held personally
liable for obligations of the respective Acquired Fund);
(j) At the Closing Date, Trust C, on behalf of the Acquired Funds,
will have good and marketable title to the Assets to be transferred to the
Acquiring Funds pursuant hereto and full right, power and authority to
sell, assign, transfer and deliver such Assets hereunder and, upon delivery
and payment for such Assets, the Acquiring Funds will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Acquiring Funds;
(k) The execution, delivery and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Trust C's Board of Trustees, and on the date hereof and on the
Closing Date this Agreement will constitute a valid and binding obligation
of Trust C on behalf of each respective Acquired Fund enforceable against
Trust C 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 principles of equity;
(l) On the Closing Date, the performance of this Agreement shall have
been duly authorized by all necessary action by the shareholders of each
Acquired Fund.
5.2 Trust A, on behalf of each Acquiring Fund, represents and warrants to
Trust C, on behalf of each Acquired Fund, as follows:
(a) Trust A is a voluntary association with transferable shares of the
type commonly referred to as a Massachusetts business trust, duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) Trust A is registered as an investment company classified as a
management company of the open-end type and its registration with the
Commission as an investment company under the 1940 Act, is in full force
and effect;
(c) The current prospectus and statement of additional information of
Trust A relating to the Acquiring Funds conform in all material respects to
the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(d) Trust A is not, and the execution, delivery and performance of
this Agreement will not result, in a material violation of its Declaration
of Trust or By-Laws, as each may have been amended to the date hereof, or
of any agreement, indenture, instrument, contract, lease or other
undertaking to which Trust A is a party or by which it is bound;
(e) Trust A has no material contracts or other commitments (other than
this Agreement) which, if terminated prior to the Closing Date, would
result in an additional liability of any of the Acquiring Funds;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its
knowledge threatened against Trust A or any Acquiring Fund or any of their
respective properties or assets which, if adversely determined, would
materially and adversely affect their financial condition or the conduct of
their business. Trust A knows of no facts which 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 which materially or adversely affects its business or its ability to
consummate the transactions herein contemplated;
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(g) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Funds required by law to have been filed by such date
shall have been filed, and all federal and other taxes shall have been paid
so far as due, or provision shall have been made for the payment thereof
and, to the best of Trust A's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to such returns;
(h) For each fiscal year of its operation, each of the Acquiring Funds
has (i) met the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and (ii) been treated as a
separate corporation for federal income tax purposes pursuant to section
851(h) of the Code, and each of the Acquiring Funds intends to be so
treated as a separate corporation and meet such qualification requirements
for its current taxable year;
(i) All issued and outstanding shares of each Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof (recognizing that, under Massachusetts law, each Acquired
Fund's Shareholders could, under certain circumstances, be held personally
liable for obligations of the respective Acquiring Fund);
(k) The execution, delivery and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Trust A's Board of Trustees, and on the date hereof and on the
Closing Date this Agreement will constitute a valid and binding obligation
of Trust A on behalf of each respective Acquiring Fund enforceable against
Trust A 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 principles of equity.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
The obligations of Trust A hereunder and the obligations of Trust C
hereunder are subject to the conditions that on or before the Closing Date:
6.1 Representations and Warranties. All representations and warranties of
each of Trust A and Trust C set forth herein shall be true and correct in all
material respects as of the date hereof and, except as may be affected by the
transactions contemplated by this Plan, as of the Effective Time with the same
force and effect as if made on and as of the Effective Time.
6.2 Approval of Plan by Shareholders of Each Acquired Fund. This Plan and
the transactions contemplated hereby shall have been approved by the requisite
vote of the holders of the outstanding shares of each Acquired Fund in
accordance with the provisions of the law of business trusts of the Commonwealth
of Massachusetts, the provisions of the 1940 Act and the provisions of Trust A's
Declaration of Trust and Bylaws;
6.3 No Adverse Actions. On the Closing Date, no action, suit or other
proceeding shall be 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 Plan or the transactions contemplated hereby;
6.4 Consents and Approvals. (a) All consents of other parties and all
other consents, orders and permits of federal, state and local regulatory
authorities (including those of the Commission and of state Blue Sky or
securities authorities, including "no-action" positions of such federal or state
authorities) deemed necessary by Trust A or Trust C to permit consummation, in
all material respects, of the transactions contemplated hereby, 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
any Acquired Fund or any Acquiring Fund, provided that either party hereto may
for itself waive any of such conditions; and
(b) The Board of Trustees of Trust A and Trust C shall have approved the
terms of the Reorganization and this Plan and shall have determined that (i)
participation by Trust A and Trust C, respectively, in the Reorganization is in
the best interests of the shareholders of such Trust, (ii) the interests of
existing shareholders of each of Trust A and Trust C, respectively, will not be
diluted as a result of the Reorganization,
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(iii) the terms of the Reorganization, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on the part of
any person, (iv) the Reorganization is consistent with the policies of Trust A
and Trust C, respectively, as recited in its respective registration statement
and reports filed under the 1940 Act, and (v) the Reorganization is consistent
with the general purposes of the 1940 Act.
6.5 Effectiveness of Registration Statement on Form N-14; No-Action
Relief. A Registration Statement on Form N-14 relating to the shares of each
Acquiring Fund's Class C shares issuable hereunder, including the combined Proxy
Statement of each Acquired Fund and the Prospectus of Trust A (relating to the
shares of each Acquiring Fund's Class C shares issuable pursuant to the terms of
this Plan) constituting a part thereof, shall have become effective under the
1933 Act and no stop order suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act. Additionally, Trust A and Trust C shall have
received a favorable written response to the no-action request originally
submitted to the Office of the Chief Counsel of the Commission's Division of
Investment Management under a letter by Frost & Xxxxxx LLP of June 25, 1998, as
may be resubmitted (the "No-Action Request"), or the issues raised in the
No-Action Request shall have otherwise been resolved to the mutual satisfaction
of the parties.
6.6 Tax Opinions. Each of Trust A and Trust C shall have obtained an
opinion of Frost & Xxxxxx LLP, legal counsel to Trust A and Trust C, in form and
substance reasonably satisfactory to their respective Boards, to the effect
that:
(a) The transfer of all of an Acquired Fund's Assets solely in
exchange for the corresponding Acquiring Fund's Class C shares and the
assumption by the Acquiring Fund of the Liabilities of the Acquired Fund,
and the distribution of such Shares to the shareholders of the Acquired
Fund, will constitute a "reorganization" within the meaning of section
368(a)(1)(C) of the Code and the Acquiring Fund and the Acquired Fund are
each a "party to a reorganization" within the meaning of section 368(b) of
the Code;
(b) No gain or loss will be recognized by an Acquired Fund upon the
transfer of the Acquired Fund's Assets to the corresponding Acquiring Fund
in exchange for the Acquiring Fund's Class C shares and the assumption by
the Acquiring Fund of the Liabilities of the Acquired Fund or upon the
distribution (whether actual or constructive) of the Acquiring Fund's Class
C shares to the Acquired Fund's Shareholders in exchange for their shares
of the Acquired Fund;
(c) The tax basis of each Acquired Fund's Assets acquired by an
Acquiring Fund will be the same to the Acquiring Fund as the tax basis of
such Assets to the Acquired Fund immediately prior to the Reorganization,
and the holding period of the Assets of each Acquired Fund in the hands of
the corresponding Acquiring Fund will include the period during which those
assets were held by the Acquired Fund;
(d) No gain or loss will be recognized by an Acquiring Fund upon the
receipt of the Assets of an Acquired Fund solely in exchange for the
Acquiring Fund's Class C shares and the assumption by the Acquiring Fund of
the Liabilities of the Acquired Fund;
(e) No gain or loss will be recognized by shareholders of any Acquired
Fund upon the distribution of the corresponding Acquiring Fund's Class C
shares to such shareholders, provided such shareholders receive solely such
corresponding Acquiring Fund's Class C shares (including fractional shares)
in exchange for their Acquired Fund shares; and
(f) The aggregate tax basis for the Acquiring Fund's Class C shares,
including any fractional shares, received by each shareholder of each
Acquired Fund pursuant to the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund's shares held by such shareholder
immediately prior to the Reorganization, and the holding period of the
Acquiring Fund's Class C shares, including any fractional shares, to be
received by each shareholder of the Acquired Fund will include the period
during which the Acquired Fund's shares exchanged therefor were held by
such shareholder (provided that the Acquired Fund's shares were held as a
capital asset on the date of the Reorganization).
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7. EXPENSES
The expenses incurred in connection with the entering into and carrying out
the provisions of this Plan will be borne and paid by Touchstone Advisors, Inc.,
and not by each Acquiring Fund or each Acquired Fund.
8. TERMINATION
8.1 Mutual Agreement. This Plan may be terminated by the mutual agreement
of Trust A and Trust C.
8.2 Material Breach. In addition, either Trust A or Trust C may, at its
option, terminate this Plan at or prior to the Closing Date on account of a
material breach by the other of any agreement contained herein to be performed
by such other party at or prior to the Closing Date.
8.3 Failure of Condition Precedent. In addition, either Trust A or Trust
C may, at its option, terminate this Plan at or prior to the Closing Date on
account of a condition herein expressed to be precedent to the obligation of
such party which has not been met and which appears cannot reasonably, or will
not, be met.
8.4 Effects of Termination. In the event of any such termination, there
shall be no liability for damage on the part of Trust A or Trust C or their
respective Trustees or officers.
9. AMENDMENT
This Plan may be amended, modified or supplemented in such manner as may be
mutually agreed upon in writing by the parties hereto; provided, however, that
following the meeting of the shareholders of each Acquired Fund described in
Section 6.2 of this Plan, no such amendment may have the effect of changing the
provisions for determining the number of shares of each Acquiring Fund's Class C
shares to be issued to an Acquired Fund's Shareholders under this Plan to the
detriment of such shareholders without their further approval.
10. MISCELLANEOUS
10.1 Headings. The section headings contained in this Plan will have
reference purposes only and shall not effect in any way the meaning or
interpretation of this Plan.
10.2 Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Plan to be
executed on its behalf by its duly authorized officer as of the day and year
first written above.
SELECT ADVISORS TRUST C
(ON BEHALF OF EACH OF ITS SERIES)
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxx, President
SELECT ADVISORS TRUST A
(ON BEHALF OF EACH OF ITS SERIES,
EXCEPT TOUCHSTONE STANDBY INCOME FUND)
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxx, President
TOUCHSTONE ADVISORS, INC.
(SOLELY TO EVIDENCE ITS CONCURRENCE
WITH SECTION 7 HEREOF)
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxx, President
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