Exhibit 77 Q(1) (g)
EXHIBIT A: AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is
made as of this 26th day of June 2012, by and among Touchstone Funds
Group Trust (the "Trust"), on behalf of the Touchstone Emerging Markets
Equity Fund (the "Acquiring Fund"), the Trust, on behalf of the
Touchstone Emerging Markets Equity Fund II (the "Acquired Fund") and,
for purposes of Section 9.1 only, Touchstone Advisors, Inc. The Trust is
a Delaware statutory trust with its principal place of business at 000
Xxxxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxx 00000.
WHEREAS, the following chart shows (i) the Acquired Fund and
its classes of shares and (ii) the Acquiring Fund with its classes of
shares:
Acquired Fund Acquiring Fund
Touchstone Emerging Markets Touchstone Emerging Markets
Equity Fund II Equity Fund
Class A Class A
Class C Class C
Class Y Class Y
Institutional Institutional
WHEREAS, the reorganization (the "Reorganization") will
consist of (i) the transfer of all of the assets of the Acquired Fund in
exchange for the corresponding classes of shares of beneficial interest,
with a par value of $.01 per share, of the Acquiring Fund (each, a
"Corresponding Class"); (ii) the assumption by the Acquiring Fund of all
of the liabilities of the Acquired Fund; and (iii) the distribution of
the Corresponding Class of shares to the shareholders of the Acquired
Fund in liquidation of the Acquired Fund as provided herein, all upon
the terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Fund and the Acquired Fund are separate
series of the Trust, and the Trust is an open-end, registered management
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), and the Acquired Fund owns securities that generally
are assets of the character in which the Acquiring Fund is permitted to
invest;
WHEREAS, the Acquiring Fund is authorized to issue its shares
of beneficial interest;
WHEREAS, the Board of Trustees of the Trust, including a
majority of the Trustees who are not "interested persons" of the Trust,
as defined in the 1940 Act ("Independent Trustees"), have determined
that the transactions contemplated herein will be in the best interests
of the Acquiring Fund and its shareholders and that the interests of the
existing shareholders of the Acquiring Fund will not be diluted as a
result of the transactions contemplated herein;
WHEREAS, the Board of Trustees of the Trust, including a
majority of the Independent Trustees, have determined that it is in the
best interests of the Acquired Fund to exchange all of its assets and
liabilities for Acquiring Fund Shares and that the interests of the
existing shareholders of the Acquired Fund will not be diluted as a
result of the transactions contemplated herein;
WHEREAS, the parties intend this Agreement to be, and adopt it
as, a plan of reorganization within the meaning of the regulations under
Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
NOW, THEREFORE, in consideration of the premises and of the
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
THE ACQUIRING FUND SHARES AND ASSUMPTION OF ACQUIRED FUND
LIABILITIES AND LIQUIDATION OF THE ACQUIRED FUND
1.1. THE EXCHANGE. Subject to the terms and conditions
herein set forth and on the basis of the representations and warranties
contained herein, the Acquired Fund agrees to transfer all of the
Acquired Fund's assets as set forth in paragraph 1.2 to the Acquiring
Fund. The Acquiring Fund agrees in exchange for the Acquired Fund's
assets (i) to deliver to the Acquired Fund full and fractional shares of
the Acquiring Fund ("Acquiring Fund Shares"), computed in the manner and
as of the time and date set forth in Article II; and (ii) to assume all
of the liabilities of the Acquired Fund, as set forth in paragraph 1.3.
Such transactions shall take place on the Closing Date provided for in
paragraph 3.1.
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, that is
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
unaudited financial statements, which contain a list of all of the
Acquired Fund's assets as of the date thereof. 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 said
financial statements other than those occurring in the ordinary course
of its business in connection with the purchase and sale of securities
and the payment of its normal operating expenses. The Acquired Fund
reserves the right to sell any of such securities, but will not, without
the prior written approval of the Acquiring Fund, acquire any additional
securities other than securities of the type in which the Acquiring Fund
is permitted to invest.
1.3. LIABILITIES TO BE ASSUMED. The Acquired Fund will
endeavor to discharge all of its known liabilities and obligations prior
to the Closing Date. The Acquiring Fund shall assume all of the Acquired
Fund's liabilities and obligations of any kind whatsoever, whether
absolute, accrued, contingent or otherwise in existence on the Closing
Date.
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 liquidate and distribute pro rata to the
Acquired Fund's shareholders of record (the "Acquired Fund
Shareholders"), determined as of the close of business on the Valuation
Date (as defined below), 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
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then 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 names of the Acquired Fund Shareholders and
representing the respective pro rata number of the 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 the
Acquiring Fund Shares in connection with such exchange.
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 in the manner described in
the Prospectus/Information Statement on Form N-14 which will be
distributed to shareholders of the Acquired Fund.
1.6. TRANSFER TAXES. Any transfer taxes payable upon
issuance of the 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 issued and 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 Trust shall take all necessary and
appropriate steps under applicable law to terminate the Acquired Fund
promptly following the Closing Date and the making of all distributions
pursuant to paragraph 1.4.
ARTICLE II
VALUATION
2.1. NET ASSET VALUE OF THE ACQUIRED FUND. The net asset
value of a share of each class of the Acquired Fund shall be the net
asset value computed as of 4:00 PM Eastern Time on the Business Day
preceding the Closing Date (the "Valuation Date"), after the declaration
and payment of any dividends and/or other distributions on the date
thereof, using the valuation procedures described in the then-current
prospectus and statement of additional information of the Acquired Fund
and the Acquiring Fund (the "Funds") as supplemented from time to time,
or such other valuation procedures as shall be mutually agreed upon by
the parties.
2.2. NET ASSET VALUE OF THE ACQUIRING FUND. The net asset
value of a share of each class of the Acquiring Fund shall be the net
asset value computed as of the Valuation Date, after the declaration and
payment of any dividends and/or other distributions on the date thereof,
using the valuation procedures described in the then-current prospectus
and statement of additional information of the Funds as supplemented
from time to time, or such other valuation procedures as shall be
mutually agreed upon by the parties.
2.3. CALCULATION OF NUMBER OF ACQUIRING FUND SHARES. The
number of Acquiring Fund Shares to be issued (including fractional
shares (to the third decimal place), if any) in connection with the
Reorganization shall be determined by dividing the value of (i) the net
assets of the Acquired Fund participating therein attributable to the
Corresponding Class share, determined in accordance with the valuation
procedures referred to in paragraph 2.1 by (ii) the net asset value per
share of the Acquiring Fund's corresponding share class determined in
accordance with the valuation procedures referred to in paragraph 2.2.
2.4. DETERMINATION OF NET ASSET VALUE. All computations of
net asset value and the value of securities transferred under this
Article II shall be made by BNY Mellon Investment Servicing (US) Inc.
("BNY Mellon"), sub-administrator for the Funds, in accordance with its
regular practice and the requirements of the 1940 Act.
ARTICLE III
CLOSING AND CLOSING DATE
3.1. CLOSING DATE. The closing of the Reorganization
(the "Closing") shall take place on or about September 17, 2012 or such
other date as the parties may agree to in writing (the "Closing Date").
All acts taking place at the Closing shall be deemed to take place
simultaneously immediately prior to the opening of business on the
Closing Date unless otherwise provided. The Closing shall be held as of
8:00 a.m. Eastern Time at the offices of the Trust, or at such other
time and/or place as the parties may agree.
3.2. EFFECT OF SUSPENSION IN TRADING. In the event
that on the Valuation Date (a) the New York Stock Exchange or another
primary trading market for portfolio securities of the Acquiring Fund or
the Acquired Fund shall be closed to trading or trading thereon shall be
restricted; or (b) trading or the reporting of trading on said Exchange
or elsewhere shall be disrupted so that an accurate determination of the
value of the net assets of the Acquiring Fund or the Acquired Fund is
impracticable, the Valuation Date (and 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.
3.3. TRANSFER AGENT'S CERTIFICATE. The Acquired Fund
shall cause its transfer agent to deliver at the Closing a certificate
of an authorized officer stating that its records contain the names and
addresses of the 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 its transfer agent, to issue and deliver, to
the Secretary of the Trust a confirmation evidencing the Acquiring Fund
Shares to be credited on the Closing Date 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, if any,
receipts and other documents as such other party or its counsel may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. REPRESENTATIONS OF THE ACQUIRED FUND. The
Acquired Fund hereby represents and warrants to the Acquiring Fund, as
follows, which representations and warranties shall be true and correct
on the date hereof and agrees to confirm the continuing accuracy and
completeness of the following at the Closing Date:
(a) The Acquired Fund is a separate series of the
Trust, a statutory trust duly organized, validly existing, and in good
standing under the laws of the State of Delaware.
(b) The Trust 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 the Acquired Fund 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) The Acquired Fund is not, and the execution,
delivery, and performance of this Agreement will not result, in
violation of any provision of the Trust's Amended and Restated Agreement
and Declaration of Trust of the Trust dated September 7, 1998, as
amended through November 20, 2006 ("Declaration of Trust"), or By-Laws,
as amended and restated November 18, 2004 ("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 as provided in paragraph 1.3 hereof.
(f) Except as otherwise disclosed in writing to
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 its business or its ability to
consummate the transactions contemplated herein.
(g) The Acquired Fund's audited statement of
assets and liabilities as of September 30, 2011, and unaudited statement
of assets and liabilities as of March 31, 2012, were prepared in
accordance with U.S. generally accepted accounting principles (except as
set forth in the notes thereto), consistently applied throughout the
periods then ended, and fairly present the financial condition and
results of operations of the Acquired Fund as of the respective dates
thereof and for the respective periods covered thereby subject, in the
case of the unaudited financial statements, to normal year-end audit
adjustments.
(h) Since March 31, 2012, there has not been any
material adverse change 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 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) All federal and other tax returns and
reports of the Acquired Fund required by law to have been filed (giving
effect to any extensions) have been timely filed and are or were true,
correct and complete in all material respects as of the time of their
filing, and all taxes of the Acquired Fund which are due and payable
(whether or not shown on any tax records) shall have been timely paid in
full or provision has been made for payment thereof. The Acquired Fund
is not liable for taxes of any person other than itself and is not a
party to or otherwise bound by any tax sharing, allocation, assumption
or indemnification agreement or arrangement. All of the Acquired Fund's
tax liabilities have been adequately provided for on its books and
records in respect of all periods ending on or before the date of such
books and records. The Acquired Fund has not had any tax deficiency or
liability asserted against it that has not been previously disclosed in
writing to the Acquiring Fund or question with respect thereto raised,
and no dispute, audit, investigation, proceeding or claim concerning any
tax liabilities of the Acquired Fund has been raised by the Internal
Revenue Service or by any other governmental authority in writing, and
to the Acquired Fund's knowledge, no such dispute, audit, investigation,
proceeding or claim is pending, being conducted or claimed.
(j) The Acquired Fund has elected to be, and has
met the requirements of Subchapter M of the Code for qualification and
treatment as, a "regulated investment company" within the meaning of
Sections 851 et seq. of the Code in respect of each taxable year since
the commencement of operations, and shall continue to meet such
requirements at all times through the Closing Date, treating the Closing
Date as the close of its tax year if the year does not otherwise close
on such date. The Acquired Fund has not at any time since its inception
been liable for and is not now liable for any material income or excise
tax pursuant to Section 852 or 4982 of the Code. The Acquired Fund has
no other material tax liability (foreign, state, or local), except as
accrued on the Acquired Fund's books and records. The Acquired Fund has
no earnings and profits accumulated with respect to any taxable year in
which the provisions of Subchapter M of the Code did not apply.
(k) The Acquired Fund is not under the
jurisdiction of a court in a "Title 11 or similar case" (within the
meaning of Section 368(a)(3)(A) of the Code).
(l) Except as otherwise disclosed in writing to
the Acquiring Fund, the Acquired Fund is in compliance in all material
respects with the Code and applicable regulations promulgated under the
Code pertaining to the reporting of dividends and other distributions on
and redemptions of its shares and has withheld in respect of dividends
and other distributions and redemption proceeds and paid to the proper
taxing authority all taxes required to be withheld, and is not liable
for any penalties which could be imposed thereunder.
(m) The Acquired Fund has not granted any
waiver, extension or comparable consent regarding the application of the
statute of limitations with respect to any taxes or tax return that is
outstanding, nor has any request for such waiver or consent been made.
(n) The Acquired Fund does not own any
"converted property" (as that term is defined in Treasury Regulation
Section 1.337(d)-7(a)(1)) that is subject to the rules of Section 1374
of the Code as a consequence of the application of Section 337(d)(1) of
the Code and Treasury Regulations thereunder.
(o) The Acquired Fund has not previously been a
party to a reorganization under Section 368(a) of the Code.
(p) The Acquired Fund has not received written
notification from any tax authority that asserts a position contrary to
any of the above representations in (i) through (o).
(q) 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, and, upon delivery and payment for such assets, the
Acquiring Fund 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 Fund and accepted by the Acquiring Fund.
(r) The execution, delivery, and performance of
this Agreement have been duly authorized by all necessary action on the
part of the Acquired Fund and 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.
(s) The information furnished by the Acquired
Fund for use in no-action letters, applications for orders, registration
statements and other documents that may be necessary in connection with
the transactions contemplated hereby is accurate and complete in all
material respects and complies in all material respects with federal
securities and other laws and regulations thereunder applicable thereto.
(t) The Acquired Fund has provided the Acquiring
Fund with information reasonably necessary for the preparation of a
Registration Statement on Form N-14 of the Acquiring Fund (the
"Registration Statement"), in compliance with the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the
1940 Act. The Prospectus/Information Statement included in the
Registration Statement does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
4.2. REPRESENTATIONS OF THE ACQUIRING FUND. The Acquiring
Fund hereby represents and warrants to the Acquired Fund, as follows,
which representations and warranties shall be true and correct on the
date hereof and agrees to confirm the continuing accuracy and
completeness of the following at the Closing Date:
(a) The Acquiring Fund is a separate series of
the Trust, a statutory trust, duly organized, validly existing, and in
good standing under the laws of the State of Delaware.
(b) The Trust 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 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 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) The Acquiring Fund is not, and the
execution, delivery and performance of this Agreement will not result,
in violation of the Trust's Declaration of Trust or By-laws 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, 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, 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 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 transactions contemplated herein.
(f) The Acquiring Fund's audited statement of
assets and liabilities as of September 30, 2011, and unaudited statement
of assets and liabilities as of March 31, 2012, were prepared in
accordance with U.S. generally accepted accounting principles (except as
set forth in the notes thereto), consistently applied throughout the
periods then ended, and fairly present the financial condition and
results of operations of the Acquiring Fund as of the respective dates
thereof and for the respective periods covered thereby subject, in the
case of the unaudited financial statements, to normal year-end audit
adjustments.
(g) Since March 31, 2012, there has not been any
material adverse change in the Acquiring Fund's financial condition,
assets, liabilities, or business other than changes occurring in the
ordinary course of business, or any incurrence by the Acquiring Fund of
indebtedness maturing more than one year from the date such indebtedness
was incurred, except as otherwise disclosed to the Acquired Fund. For
the purposes of this subparagraph (g), a decline in the net asset value
of the Acquiring Fund shall not constitute a material adverse change.
(h) All issued and outstanding shares of the
Acquiring Fund are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and non-assessable. The Acquiring
Fund does not have outstanding any options, warrants, or other rights to
subscribe for or purchase any shares of the Acquiring Fund, nor is there
outstanding any security convertible into any shares of the Acquiring
Fund.
(i) All federal and other tax returns and
reports of the Acquiring Fund required by law to have been filed (giving
effect to any extensions) have been timely filed and are or were true,
correct and complete in all material respects as of the time of their
filing, and all taxes of the Acquiring Fund which are due and payable
(whether or not shown on any tax records) shall have been timely paid in
full or provision has been made for payment thereof. The Acquiring Fund
is not liable for taxes of any person other than itself and is not a
party to or otherwise bound by any tax sharing, allocation, assumption
or indemnification agreement or arrangement. All of the Acquiring Fund's
tax liabilities have been adequately provided for on its books and
records in respect of all periods ending on or before the date of such
books and records. The Acquiring Fund has not had any tax deficiency or
liability asserted against it that has not been previously disclosed in
writing to the Acquired Fund or question with respect thereto raised,
and no dispute, audit, investigation, proceeding or claim concerning any
tax liabilities of the Acquiring Fund has been raised by the Internal
Revenue Service or by any other governmental authority in writing, and
to the Acquiring Fund's knowledge, no such dispute, audit,
investigation, proceeding or claim is pending, being conducted or
claimed.
(j) The Acquiring Fund has elected to be, and
has met the requirements of Subchapter M of the Code for qualification
and treatment as, a "regulated investment company" within the meaning of
Sections 851 et seq. of the Code in respect of each taxable year since
the commencement of operations, and shall continue to meet such
requirements at all times through the Closing Date. The Acquiring Fund
has not at any time since its inception been liable for and is not now
liable for any material income or excise tax pursuant to Section 852 or
4982 of the Code. The Acquiring Fund has no other material tax liability
(foreign, state, or local), except as accrued on the Acquiring Fund's
books and records. The Acquiring Fund has no earnings and profits
accumulated with respect to any taxable year in which the provisions of
Subchapter M of the Code did not apply.
(k) The Acquiring Fund is not under the
jurisdiction of a court in a "Title 11 or similar case" (within the
meaning of Section 368(a)(3)(A) of the Code).
(l) Except as otherwise disclosed in writing to
the Acquired Fund, the Acquiring Fund is in compliance in all material
respects with the Code and applicable regulations promulgated under the
Code pertaining to the reporting of dividends and other distributions on
and redemptions of its shares and has withheld in respect of dividends
and other distributions and redemption proceeds and paid to the proper
taxing authority all taxes required to be withheld, and is not liable
for any penalties which could be imposed thereunder.
(m) The Acquiring Fund has not granted any
waiver, extension or comparable consent regarding the application of the
statute of limitations with respect to any taxes or tax return that is
outstanding, nor has any request for such waiver or consent been made.
(n) The Acquiring Fund does not own any
"converted property" (as that term is defined in Treasury Regulation
Section 1.337(d)-7(a)(1)) that is subject to the rules of Section 1374
of the Code as a consequence of the application of Section 337(d)(1) of
the Code and Treasury Regulations thereunder.
(o) The Acquiring Fund has not previously been a
party to a reorganization under Section 368(a) of the Code.
(p) The Acquiring Fund has not received written
notification from any tax authority that asserts a position contrary to
any of the above representations in (i) through (o).
(q) The execution, delivery, and performance of
this Agreement have 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.
(r) The Acquiring Fund Shares to be issued and
delivered to the Acquired Fund, for the account of the Acquired Fund
Shareholders, pursuant to the terms of this Agreement will, at the
Closing Date, have been duly authorized and, when so issued and
delivered, will be duly and validly issued Acquiring Fund Shares, and
will be fully paid and non-assessable.
(s) The information furnished by the Acquiring
Fund for use in no-action letters, applications for orders, registration
statements, and other documents that may be necessary in connection with
the transactions contemplated hereby is accurate and complete in all
material respects and complies in all material respects with federal
securities and other laws and regulations thereunder applicable thereto.
(t) The Prospectus/Information Statement
included in the Registration Statement does not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading.
(u) The Acquiring Fund agrees to use all
reasonable efforts to obtain the approvals and authorizations required
by the 1933 Act, the 1940 Act, and such of the state Blue Sky or
securities laws as it may deem appropriate in order to continue its
operations after the Closing Date.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1. OPERATION IN ORDINARY COURSE. The Acquiring Fund and
the Acquired Fund each will operate its business in the ordinary course
between the date hereof and the Closing Date, it being understood that
such ordinary course of business will include customary dividends and
distributions.
5.2. INVESTMENT REPRESENTATION. The Acquired Fund covenants
that the Acquiring Fund Shares to be issued hereunder are not being
acquired for the purpose of making any distribution thereof other than
in accordance with the terms of this Agreement.
5.3. 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 shares.
5.4. 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.
5.5. TAX-FREE REORGANIZATION. It is the intention of the
parties that the transaction contemplated by this Agreement with respect
to the Acquired Fund and the Acquiring Fund will qualify as a
reorganization within the meaning of Section 368(a) of the Code. None of
the parties to this Agreement shall take any action or cause any action
to be taken, including, without limitation, the filing of any tax
return, that is inconsistent with such treatment or that results in the
failure of the transaction to qualify as a reorganization within the
meaning of Section 368(a) of the Code.
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 hereunder on or before the Closing Date, and, in addition thereto,
the following further conditions:
6.1. All representations and warranties of the Acquiring
Fund contained in this Agreement shall be true and correct as of the
date hereof and as of the Closing Date with the same force and effect as
if made on and as of the Closing Date, and the Acquiring Fund shall have
delivered to the Acquired Fund on the Closing Date a certificate
executed in its name by the Trust's President or Vice President, in form
and substance reasonably 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.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to complete 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 it hereunder on or before the Closing Date and, in addition thereto,
the following conditions:
7.1. All representations and warranties of the Acquired Fund
contained in this Agreement shall be true and correct as of the date
hereof and as of the Closing Date with the same force and effect as if
made on and as of the Closing Date, and the Acquired Fund shall have
delivered to the Acquiring Fund on the Closing Date a certificate
executed in its name by the Trust's President or Vice President, in form
and substance satisfactory to the Acquiring Fund and dated as of the
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 an unaudited 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 Valuation Date, certified
by the Treasurer or Assistant Treasurer of the Trust.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING
FUND AND THE 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. On the Closing Date, the Commission shall not have
issued an unfavorable report under Section 25(b) of the 1940 Act, nor
instituted any proceeding seeking to enjoin the consummation of the
transactions contemplated by this Agreement under Section 25(c) of the
1940 Act and 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.
8.2. All required 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
securities authorities, including any necessary "no-action" positions of
and exemptive orders from such federal and state authorities) to permit
consummation 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 the Acquiring Fund or the Acquired Fund,
provided that either party hereto may for itself waive any of such
conditions.
8.3. The Registration Statement shall have become effective
under the 1933 Act, and no stop orders suspending the effectiveness of
the Registration Statement 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 0000 Xxx.
8.4. The Acquired Fund shall have declared a dividend or
dividends which, together with all previous such dividends shall have
the effect of distributing to the Acquired Fund Shareholders all of the
Acquired Fund's investment company taxable income for all taxable
periods ending on the Closing Date (computed without regard to any
deduction for dividends paid), all of the Acquired Fund's net tax exempt
income and all of the net capital gains realized in all taxable periods
ending on the Closing Date (after reduction for any capital loss
carryforward).
8.5. The Trust shall have received a favorable opinion of
Xxxxxx Xxxxxxxx LLP addressed to the Acquiring Fund and the Acquired
Fund substantially to the effect that, for federal income tax purposes:
(a) The acquisition by the Acquiring Fund of all
of the assets of the Acquired Fund solely in exchange for the Acquiring
Fund's assumption of all of the liabilities of the Acquired Fund and
issuance of the Acquiring Fund Shares, followed by the distribution of
such Acquiring Fund Shares by the Acquired Fund in complete liquidation
to the Acquired Fund shareholders in exchange for their Acquired Fund
shares, all as provided in this Agreement, will constitute a
reorganization within the meaning of Section 368(a) of the Code, and the
Acquired Fund and the Acquiring Fund each will be "a party to a
reorganization" within the meaning of Section 368(b) of the Code;
(b) Under Code Section 361, no gain or loss will
be recognized by the Acquired Fund (i) upon the transfer of its assets
to the Acquiring Fund solely in exchange for the Acquiring Fund Shares
and the assumption by the Acquiring Fund of all of the liabilities of
the Acquired Fund or (ii) upon the distribution of the Acquiring Fund
Shares by the Acquired Fund to the Acquired Fund Shareholders in
complete liquidation, as contemplated in this Agreement;
(c) Under Code Section 1032, 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 the assumption of all of the
liabilities of the Acquired Fund and issuance of the Acquiring Fund
Shares as contemplated in this Agreement;
(d) Under Code Section 362(b), the tax basis of
the assets of the Acquired Fund received by the Acquiring Fund will be
the same as the tax basis of such assets in the hands of the Acquired
Fund immediately prior to the Reorganization;
(e) Under Code Section 1223(2), the holding
periods of the assets of the Acquired Fund in the hands of the Acquiring
Fund will include the periods during which such assets were held by the
Acquired Fund;
(f) Under Code Section 354, no gain or loss will
be recognized by the Acquired Fund Shareholders upon the exchange of all
of their Acquired Fund shares solely for the Acquiring Fund Shares in
the Reorganization;
(g) Under Code Section 358, the aggregate tax
basis of the Acquiring Fund Shares to be received by each Acquired Fund
Shareholder pursuant to the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund shares exchanged therefor; and
(h) Under Code Section 1223(1), an Acquired Fund
Shareholder's holding period for the Acquiring Fund Shares to be
received will include the period during which the Acquired Fund shares
exchanged therefor were held by such shareholder, provided that the
Acquired Fund Shareholder held the Acquired Fund shares as a capital
asset at the time of the Reorganization.
No opinion will be expressed as to (1) the effect of the
Reorganization on (A) the Acquired Fund or the Acquiring Fund with
respect to any asset as to which any unrealized gain or loss is required
to be recognized for U.S. federal income tax purposes at the end of a
taxable year (or on the termination or transfer thereof) under a xxxx-
to-market system of accounting, (B) any Acquired Fund shareholder or
Acquiring Fund shareholder that is required to recognize unrealized
gains and losses for U.S. federal income tax purposes under a xxxx-to-
market system of accounting, or (C) the Acquired Fund or the Acquiring
Fund with respect to any stock held in a passive foreign investment
company as defined in Section 1297(a) of the Code or (2) any other
federal tax issues (except those set forth above) and all state, local
or foreign tax issues of any kind.
Such opinion shall be based on customary assumptions,
limitations and such representations as Xxxxxx Xxxxxxxx LLP may
reasonably request, and the Acquired Fund and Acquiring Fund will
cooperate to make and certify the accuracy of such representations. Such
opinion may contain such assumptions and limitations as shall be in the
opinion of such counsel appropriate to render the opinions expressed
therein. Notwithstanding anything herein to the contrary, neither the
Acquiring Fund nor the Acquired Fund may waive the conditions set forth
in this paragraph 8.5.
ARTICLE IX
EXPENSES
9.1 Except as otherwise provided for herein, all expenses
of the transactions contemplated by this Agreement incurred by the
Acquired Fund and the Acquiring Fund, whether incurred before or after
the date of this Agreement, will be borne by Touchstone Advisors, Inc.,
the investment advisor to the Funds. Such expenses include, without
limitation, (a) expenses incurred in connection with the entering into
and the carrying out of the provisions of this Agreement; (b) expenses
associated with the preparation and filing of the Registration Statement
under the 1933 Act covering the Acquiring Fund Shares to be issued
pursuant to the provisions of this Agreement; (c) registration or
qualification fees and expenses of preparing and filing such forms as
are necessary under applicable state securities laws to qualify the
Acquiring Fund Shares to be issued in connection herewith in each state
in which the Acquired Fund Shareholders are residents as of the date of
the mailing of the Prospectus/Information Statement to such
shareholders; (d) postage; (e) printing; (f) accounting fees; and (g)
legal fees.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1. The Acquiring Fund and the Acquired Fund agree that
neither party has made any representation, warranty 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 hereto
or in connection herewith shall not survive the consummation of the
transactions contemplated hereunder.
ARTICLE XI
TERMINATION
11.1. This Agreement may be terminated by the mutual
agreement of the Acquiring Fund and the Acquired Fund. In addition,
either the Acquiring Fund or the Acquired Fund may at its option
terminate this Agreement at or prior to the Closing Date because:
(a) of 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; or
(b) a condition herein expressed to be precedent
to the obligations of the terminating party has not been met and it
reasonably appears that it will not or cannot be met.
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 the Acquiring Fund, the Acquired Fund, the Trust, or its Trustees or
officers, to the other party, but Touchstone Advisors, Inc. shall bear
the expenses incurred by it incidental to the preparation and carrying
out of this Agreement as provided in paragraph 9.1.
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 Trust.
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 Delaware, 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
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 permitted
assigns, any rights or remedies under or by reason of this Agreement.
13.5. With respect to the Trust, the name used herein refers
respectively to the trust created and, as the case may be, the Trustees,
as trustees but not individually or personally, acting from time to time
under organizational documents filed in Delaware, which are hereby
referred to and are also on file at the principal offices of the Funds.
The obligations of the Funds entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents of the Funds,
are made not individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders or representatives of the Funds
personally, but bind only the trust property, and all persons dealing
with the Acquired Fund and the Acquiring Fund must look solely to the
trust property belonging to the Acquired Fund and the Acquiring Fund for
the enforcement of any claims against the Acquired Fund and the
Acquiring Fund, respectively.
IN WITNESS WHEREOF, the parties have duly executed this Agreement,
all as of the date first written above.
TOUCHSTONE FUNDS GROUP TRUST, ON
BEHALF OF TOUCHSTONE EMERGING
MARKETS EQUITY FUND
By: /s/ Xxxxxx Xxxxxxxxxx
Name: Xxxxxx Xxxxxxxxxx
Title: Treasurer
TOUCHSTONE FUNDS GROUP TRUST, ON
BEHALF OF TOUCHSTONE EMERGING
MARKETS EQUITY FUND II
By: /s/ Xxxxxx Xxxxxxxxxx
Name: Xxxxxx Xxxxxxxxxx
Title: Treasurer
For purposes of 9.1 only:
Touchstone Advisors, Inc.
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: President
By: /s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: VP
