AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this
"Agreement") dated as of December 9, 2011, by and among:
(i) OLD MUTUAL FUNDS II, a Delaware statutory trust ("Acquired
Trust"), on behalf of the series reflected below in the table
contained in Recital A (each an "Acquired Fund"); and
(ii) TOUCHSTONE INVESTMENT TRUST, a Massachusetts business
trust ("Acquiring Trust"), on behalf of the series reflected
below in the table contained in Recital A (each an "Acquiring
Fund") (collectively, the "Parties" and each, a "Party"). Old
Mutual Capital, Inc., a Delaware corporation ("Old Mutual
Capital"), joins this Agreement solely for purposes of
paragraphs 7.1, 7.2, 9.2, 10.5, 10.13 and 10.14 and
Article VII; Touchstone Advisors, Inc., an Ohio corporation
("Touchstone"), joins this Agreement solely for purposes of
paragraphs 7.1, 7.2, 9.2, 10.5, 10.13 and 10.14 and
Article VII. Capitalized terms not otherwise defined herein
shall have the meaning set forth in Article XI hereof.
RECITALS:
A. The following chart shows (i) the Acquired
Fund and its classes of shares and (ii) the corresponding
Acquiring Fund with its classes of shares:
Acquired Fund, a series of Acquiring Fund, a series of
OLD MUTUAL FUNDS II TOUCHSTONE INVESTMENT TRUST
Old Mutual Xxxxxx Intermediate Touchstone Core Bond Fund
Fixed Income Fund
Class A Class A
Class C Class C
Class Z Class Y
Institutional Class Institutional Class
B. The Acquired Fund and the Acquiring Fund
are each a separate series of an open-end, registered
investment company of the management type.
C. The Acquired Fund and the Acquiring Fund
are each authorized to issue shares of beneficial interest.
D. 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").
E. The reorganization shall consist of:
(1) all of the Fund Assets (as defined below) of the Acquired
Fund will be transferred to the corresponding Acquiring Fund
in exchange for the corresponding class of the Acquiring Fund
as set forth on Exhibit A to this Agreement (each, a
"Corresponding Class") and the assumption by the corresponding
Acquiring Fund of all of the Acquired Fund's Liabilities (as
defined below), and (2) Corresponding Class shares of the
corresponding Acquiring Fund will be distributed to holders of
shares of the Acquired Fund in the manner set forth in
Exhibit A of this Agreement, in complete liquidation and
termination of the Acquired Fund, all upon the terms and
conditions set forth in this Agreement (the "Reorganization").
F. The Board of Trustees of the Acquired
Trust (the "Old Mutual Board"), including a majority of
trustees who are not "interested persons" (as defined in
Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the "1940 Act")) ("Independent Trustees") of
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the Acquired Trust, has determined with respect to the
Acquired Fund that participation in the Reorganization is in
the best interests of the Acquired Fund and its shareholders.
G. The Board of Trustees of the Acquiring
Trust (the "Touchstone Board"), including a majority of
Independent Trustees of the Acquiring Trust, has determined
with respect to the Acquiring Fund that participation in the
Reorganization is in the best interests of the Acquiring Fund
and its shareholders.
H. The consummation of the Reorganization
shall not be contingent on the consummation of any other
reorganization and it is the intention of the parties hereto
that the Reorganization described herein shall be conducted
separately of the others.
AGREEMENT:
NOW THEREFORE, in consideration of the mutual promises,
representations, and warranties made herein, covenants and
agreements hereinafter contained, and for other good and
valuable consideration, the receipt and sufficiency of which
are acknowledged, the Parties, and Old Mutual Capital and
Touchstone to the extent indicated above, intending to be
legally bound hereby, agree as follows:
ARTICLE I
THE REORGANIZATION
1.1 The Reorganization In accordance with the
Amended and Restated Agreement and Declaration of Trust and
the Amended and Restated By-laws, as they may be amended from
time to time, of the Acquired Trust (the "Old Mutual Governing
Documents"), at the Effective Time (as defined below), upon
the terms and subject to the conditions of this Agreement, and
on the basis of the representations and warranties contained
herein, the Acquired Fund shall assign, deliver and otherwise
transfer all Fund Assets, subject to all of the liabilities of
the Acquired Fund as set forth on the statement of assets and
liabilities to be provided pursuant to paragraph 5.6 (the
"Liabilities"), to the Acquiring Fund, and the Acquiring Fund
shall assume all of the Liabilities of the Acquired Fund. In
consideration of the foregoing, the Acquiring Fund, at the
Effective Time shall deliver to the Acquired Fund full and
fractional (to the third decimal place) shares of the
Acquiring Fund. The aggregate number of shares of the
Acquiring Fund shall be determined as set forth in paragraph
2.3 by dividing (a) the value of the Fund Assets attributable
to the Acquired Fund, net of the Acquired Fund's Liabilities
(computed as of the Valuation Time (as defined below) in the
manner set forth in paragraph 2.1), by (b) the net asset value
of one share of the corresponding class of the Acquiring Fund
shares (computed as of the Valuation Time in the manner set
forth in paragraph 2.2). Holders of each class of shares of
the Acquired Fund will receive shares of the Corresponding
Class, as set forth in Section E of the Recitals and Exhibit A
to this Agreement, of the Acquiring Fund, as set forth in
Section A of the Recitals. At and after the Effective Time,
all of the Fund Assets of the Acquired Fund shall become and
be included in the Fund Assets of the Acquiring Fund and the
Liabilities of the Acquired Fund shall become and be the
Liabilities of and shall attach to the Acquiring Fund. At and
after the Effective Time, the Liabilities of the Acquired Fund
may be enforced only against the Acquiring Fund to the same
extent as if such Liabilities had been incurred by the
Acquiring Fund subject to any defense and/or set off that the
Acquired Fund was entitled to assert immediately prior to the
Effective Time and further subject to any defense and/or
setoff that the Acquiring Trust or the Acquiring Fund may from
time to time be entitled to assert.
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1.2 The Acquired Fund Assets.
(a) At least ten Business Days prior to
the Valuation Time, the Acquired Fund will provide the
Acquiring Fund with a schedule of the securities and other
assets and Liabilities of the Acquired Fund. Prior to the
execution of this Agreement, the Acquiring Fund has provided
the Acquired Fund with a copy of its current investment
objective, investment policies, principal investment
strategies, and restrictions and will provide the Acquired
Fund with a written notice of any changes thereto through the
Valuation Time. The Acquired Fund reserves the right to sell
any of the securities or other assets shown on the schedule it
provides to the Acquiring Fund pursuant to this paragraph
1.2(a) in the ordinary course as necessary to meet
distribution and redemption requirements prior to the
Valuation Time but will not, without the prior approval of the
Acquiring Fund, acquire any additional securities other than
securities which the Acquiring Fund may purchase in accordance
with its stated investment objective and policies.
(b) At least five Business Days prior to
the Valuation Time, the Acquiring Fund will advise the
Acquired Fund of any investments of the Acquired Fund shown on
the Acquired Fund's schedule provided pursuant to paragraph
1.2(a) which the Acquiring Fund would not be permitted to hold
(i) under its investment objective, principal investment
strategies or investment restrictions; (ii) under applicable
Law; or (iii) because the transfer of such investments would
result in material operational or administrative difficulties
to the Acquiring Fund in connection with facilitating the
orderly transition of the Acquired Fund's Fund Assets. Under
such circumstances, to the extent practicable, the Acquired
Fund will, if requested by the Acquiring Fund and, to the
extent permissible and consistent with its own investment
objectives and policies and the fiduciary duties of the
investment adviser or sub-adviser responsible for the
portfolio management of the Acquired Fund, dispose of such
investments prior to the Valuation Time. Notwithstanding the
foregoing, nothing herein will require the Acquired Fund to
dispose of any portfolio securities or other investments of
the Acquired Fund, if, in the reasonable judgment of the Old
Mutual Board or the Acquired Fund's investment adviser or sub-
adviser, such disposition would adversely affect the tax-free
nature of the Reorganization for federal income tax purposes
or would otherwise not be in the best interests of the
Acquired Fund and its shareholders.
1.3 Assumption of Liabilities. The Acquired
Fund will, to the extent permissible and consistent with its
own investment objectives and policies, use its best efforts
to discharge all of the Liabilities of the Acquired Fund prior
to or at the Effective Time. The Acquiring Fund will assume
all of the Liabilities of the Acquired Fund. If prior to the
Effective Time either Party identifies a Liability that the
Parties mutually agree should not be assumed by the Acquiring
Fund, such Liability shall be excluded from the definition of
Liabilities hereunder and shall be listed on a Schedule of
Excluded Liabilities to be signed by the Parties at the
Closing (the "Excluded Liabilities"). The Acquiring Fund
shall not assume any Liability for any obligation of the
Acquired Fund to file reports with the SEC, Internal Revenue
Service or other regulatory or tax authority covering any
reporting period ending prior to or at the Effective Time with
respect to the Acquired Fund.
1.4 Distribution of Acquiring Fund Shares.
Immediately upon receipt, the Acquired Fund will distribute
the Corresponding Class shares of the Acquiring Fund received
by the Acquired Fund from the Acquiring Fund pursuant to
paragraph 1.1 pro rata to the record holders of shares of the
Acquired Fund. Such distribution will be accomplished by
transferring the Acquiring Fund Shares then credited to the
Acquired Fund's account on the Books and Records of the
Acquiring Fund to open accounts on the Books and Records of
the Acquiring Fund established and maintained by the Acquiring
Fund's transfer agent in the names of record holders of the
Acquired Fund and representing the respective pro rata number
of the Acquiring
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Fund Shares due to such record holder. All issued and
outstanding shares of the Acquired Fund will, without further
notice, be cancelled promptly by the Acquired Fund on the
Acquired Fund's Books and Records. Any such shares issued and
outstanding prior to such cancellation shall thereafter
represent only the right to receive the Acquiring Fund Shares
issued to the Acquired Fund in accordance with paragraph 1.1
above. In addition, each record holder of the Acquired Fund
shall have the right to receive any unpaid dividends or other
distributions which were declared with respect to his/her or
its shares of the Acquired Fund at or before the Valuation
Time.
1.5 Liquidation of the Acquired Fund. As soon
as conveniently practicable after the distribution of the
Acquiring Fund Shares pursuant to paragraph 1.4 has been made,
the Acquired Fund shall take, in accordance with Delaware law,
the 1940 Act and the Old Mutual Governing Documents, all such
other steps as may be necessary or appropriate to effect a
complete liquidation and termination of the Acquired Fund.
1.6 Transfer Taxes. Any transfer taxes payable
on issuance of the Acquiring Fund Shares in a name other than
that of the record holder of the Acquired Fund shares on the
Acquired Fund's Books and Records shall be paid by the Person
to whom such Acquiring Fund Shares are issued and transferred,
as a condition of that transfer.
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 the Valuation
Time, 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
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
Time, 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 Acquiring Fund
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 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 (U.S.) Inc. ("BNY Mellon"), sub-
administrator for the Acquired Fund, in accordance with its
regular practice and the requirements of the 1940 Act.
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2.5 Valuation Time. "Valuation Time" shall
mean 4:00 PM Eastern Time of the Business Day preceding the
Effective Time.
ARTICLE III
EFFECTIVE TIME AND CLOSING
3.1 Effective Time and Closing. Subject to the
terms and conditions set forth herein, the Reorganization
shall occur immediately prior to the opening of business on
April 16, 2012, or on such other date as may be mutually
agreed in writing by an authorized officer of each Party (the
"Effective Time"). To the extent any Fund Assets are, for any
reason, not transferred at the Effective Time, the Acquired
Fund shall cause such Fund Assets to be transferred in
accordance with this Agreement at the earliest practical date
thereafter. The closing of the Reorganization shall be held
in person, by facsimile, by e-mail or by such other
communication means as may be mutually agreed by the Parties,
at the Effective Time (the "Closing").
3.2 Transfer and Delivery of Fund Assets. The
Acquired Fund shall direct The Bank of New York Mellon
("Acquired Fund Custodian"), as custodian for the Acquired
Fund, to deliver to the Acquiring Fund at the Closing, or
promptly thereafter, consistent with commercially reasonable
standards, a certificate of an authorized officer certifying
that: (a) Acquired Fund Custodian delivered the Fund Assets of
the Acquired Fund to the Acquiring Fund at the Effective Time;
and (b) all necessary taxes in connection with the delivery of
such Fund Assets, including all applicable foreign, federal
and state stock transfer stamps and any other stamp duty
taxes, if any, have been paid or provision (as reasonably
estimated) for payment has been made.
3.3 Acquiring Fund Share Records. The Acquiring
Fund shall deliver to an officer of the Acquired Trust at the
Closing a confirmation evidencing that: (a) the appropriate
number of Acquiring Fund Shares have been credited to the
account of the Acquired Fund on the Books and Records of the
Acquired Fund pursuant to paragraph 1.1 prior to the actions
contemplated by paragraph 1.4, and (b) the appropriate number
of Acquiring Fund Shares have been credited to the accounts of
record holders of the Acquired Fund shares on the Books and
Records of the Acquiring Fund pursuant to paragraph 1.4.
3.4 Postponement of Valuation Time and
Effective Time. If immediately prior to the Valuation Time:
(a) the NYSE or another primary trading market for portfolio
securities of the Acquiring Fund or the Acquired Fund is
closed to trading, or trading thereupon is restricted, or
(b) trading or the reporting of trading on such market is
disrupted so that, in the judgment of an appropriate officer
of the Acquired Fund or the Acquiring Fund, accurate appraisal
of the value of the net assets of the Acquiring Fund or the
Acquired Fund is impracticable, the Valuation Time and
Effective Time shall be postponed until the first Business Day
that is a Friday after the day when trading shall have been
fully resumed and reporting shall have been restored or such
later date as may be mutually agreed in writing by an
authorized officer of each Party.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the
Acquired Trust. The Acquired Trust, on behalf of the Acquired
Fund, hereby represents and warrants to the Acquiring Trust,
on behalf of the Acquiring Fund, as follows, which
representations and warranties shall be true and correct on
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the date hereof and agrees to confirm the continuing accuracy
and completeness of the following at the Effective Time:
(a) The Acquired Trust is a statutory
trust duly organized, validly existing and in good standing
under the Laws of the State of Delaware and is duly qualified,
licensed or admitted to do business and is in good standing as
a foreign association under the Laws of each jurisdiction in
which the nature of the business conducted by it makes such
qualification, licensing or admission necessary, except in
such jurisdictions where the failure to be so qualified,
licensed or admitted and in good standing would not,
individually or in the aggregate, have a Material Adverse
Effect on its properties or assets or the properties or assets
of the Acquired Fund. The Acquired Fund has full power under
the Old Mutual Governing Documents to conduct its business as
it is now being conducted and to own the properties and assets
it now owns. The Acquired Fund has all necessary
authorizations, licenses and approvals from any applicable
Governmental or Regulatory Body necessary to carry on its
business as such business is now being carried on except
authorizations, licenses and approvals that the failure to so
obtain would not have a Material Adverse Effect on the
Acquired Fund.
(b) The execution, delivery and
performance of this Agreement by the Acquired Fund and the
consummation of the transactions contemplated herein will have
been duly and validly authorized by the Old Mutual Board, and
the Old Mutual Board has approved the Reorganization and has
resolved to recommend the Reorganization to the shareholders
of the Acquired Fund and to call a meeting of shareholders of
the Acquired Fund for the purpose of approving this Agreement
and the Reorganization contemplated hereby. Other than the
approval by the requisite vote of the shareholders of the
outstanding shares of the Acquired Fund in accordance with the
provisions of the Old Mutual Governing Documents, applicable
Delaware Law and the 1940 Act, no other action on the part of
the Acquired Fund or its shareholders is necessary to
authorize the execution, delivery and performance of this
Agreement by the Acquired Fund or the consummation of the
Reorganization contemplated herein. This Agreement has been
duly and validly executed and delivered by the Acquired Trust
on behalf of the Acquired Fund and assuming due authorization,
execution and delivery hereof by the Acquiring Trust on behalf
of the Acquiring Fund, is a legal, valid and binding
obligation of the Acquired Trust, as it relates to the
Acquired Fund, enforceable in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other Laws relating to or affecting creditors'
rights, to general equity principles and to any limitations on
indemnity as may be required under federal and state
securities Laws).
(c) The authorized capital of the Acquired
Fund consists of an unlimited number of shares of beneficial
interest with a par value of $0.001 per share. Each share
represents a fractional undivided interest in the Acquired
Fund. The issued and outstanding shares of the Acquired Fund
are duly authorized, validly issued, fully paid and non-
assessable. There are no outstanding options, warrants or
other rights of any kind to acquire from the Acquired Fund any
shares of any series or equity interests of the Acquired Fund
or securities convertible into or exchangeable for, or which
otherwise confer on the holder thereof any right to acquire,
any such additional shares, nor is the Acquired Fund committed
to issue any share appreciation or similar rights or options,
warrants, rights or securities in connection with any series
of shares. The Acquired Fund has no share certificates
outstanding.
(d) The Acquired Fund has no subsidiaries.
(e) Except for consents, approvals, or
waivers to be received prior to the Effective Time, including
shareholder approval by the Acquired Fund, and upon the
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effectiveness of the Registration Statement (as defined
below), the execution, delivery and performance of this
Agreement by the Acquired Trust on behalf of the Acquired Fund
does not, and the consummation of the transactions
contemplated herein will not: (i) violate or conflict with
the terms, conditions or provisions of the Old Mutual
Governing Documents, or of any material contract, agreement,
indenture, instrument, or other undertaking to which the
Acquired Trust is a party or by which the Acquired Trust or
the Acquired Fund is bound, (ii) result in the acceleration of
any obligation, or the imposition of any penalty, under any
material agreement, indenture, instrument, contract, lease or
other undertaking to which the Acquired Trust is a party or by
which the Acquired Trust or the Acquired Fund is bound,
(iii) result in a breach or violation by the Acquired Trust or
the Acquired Fund of any terms, conditions, or provisions of
any Law or Order, or (iv) require any consent or approval of,
filing with or notice to, any Governmental or Regulatory Body
other than such documents as are necessary to terminate the
Acquired Funds as a series of a Delaware statutory trust.
(f) (i) Prior to the execution
of this Agreement, the Acquired Fund has delivered to the
Acquiring Trust true and complete copies of the Acquired
Fund's audited statements of assets and liabilities of as of
March 31, 2011, and unaudited statements of assets and
liabilities as of September 30, 2011, or a later date if
available prior to the date hereof, and the related audited
schedules of investments, statements of income and changes in
net assets and financial highlights for the periods then
ended.
(ii) Except as set forth in the notes
thereto, all such financial statements were prepared in
accordance with U.S. generally accepted accounting principles,
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.
(iii) To the best of the Acquired
Fund's Knowledge, except as reflected or reserved against in
the statement of assets and liabilities included in the
Acquired Fund's audited financial statements as of March 31,
2011, and unaudited financial statements as of September 30,
2011, or in the notes thereto, or as previously disclosed in
writing to the Acquiring Trust, there are no liabilities
against, relating to or affecting the Acquired Fund, other
than those incurred in the ordinary course of business
consistent with past practice, which, individually or in the
aggregate, would have a Material Adverse Effect on the
Acquired Fund. In particular, since September 30, 2011 to the
best of the Acquired Fund's Knowledge and except as disclosed
in writing to the Acquiring Trust, there has not been any
change in the financial condition, properties, assets,
liabilities or business of the Acquired Fund that would have a
Material Adverse Effect on the Acquired Fund or its properties
or assets other than changes occurring in the ordinary course
of business.
(g) As of the date hereof, except as
previously disclosed to the Acquiring Fund in writing, and
except as have been corrected as required by applicable Law,
and to the best of the Acquired Fund's Knowledge, there have
been no material miscalculations of the net asset value of the
Acquired Fund during the twelve-month period preceding the
date hereof which would have a Material Adverse Effect on the
Acquired Fund or its properties or assets, and all such
calculations have been made in accordance with the applicable
provisions of the 1940 Act.
(h) The minute books and other similar
records of the Acquired Trust as made available to the
Acquiring Trust prior to the execution of this Agreement
contain a true and complete record in all material respects of
all material action taken at all meetings and by all
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written consents in lieu of meetings of the shareholders of
the Acquired Fund, the Old Mutual Board and committees of the
Old Mutual Board. The stock transfer ledgers and other
similar records of the Acquired Fund as made available to the
Acquiring Trust prior to the execution of this Agreement
accurately reflect all record transfers prior to the execution
of this Agreement in the shares of the Acquired Fund.
(i) The Acquired Fund has maintained, or
caused to be maintained on its behalf, in all material
respects, all Books and Records required of a registered
investment company in compliance with the requirements of
Section 31 of the 1940 Act and rules thereunder.
(j) Except as set forth in writing to the
Acquiring Fund, there is no Action or Proceeding pending
against the Acquired Fund or, to the best of the Acquired
Fund's Knowledge, threatened against, relating to or
affecting, the Acquired Trust or the Acquired Fund.
(k) No agent, broker, finder or investment
or commercial banker, or other Person or firm engaged by or
acting on behalf of the Acquired Trust or the Acquired Fund in
connection with the negotiation, execution or performance of
this Agreement or any other agreement contemplated hereby, or
the consummation of the transactions contemplated hereby, is
or will be entitled to any broker's or finder's or similar
fees or other commissions as a result of the consummation of
such transactions.
(l) The Acquired Trust is registered with
the SEC as an open-end management investment company under the
1940 Act, and its registration with the SEC as such an
investment company is in full force and effect and the
Acquired Fund is a separate series of the Acquired Trust duly
designated in accordance with applicable provisions of the Old
Mutual Governing Documents and in compliance in all material
respects with the 1940 Act and its rules and regulations.
(m) With respect to periods on or after
December 31, 2005, all federal and other tax returns and
reports of the Acquired Fund and, with respect to periods
prior to December 31, 2005, to the Knowledge of the Acquired
Fund all federal and other tax returns and reports of the
Acquired Fund, required by Law to have been filed were timely
filed (giving effect to extensions) and are or were true,
correct and complete in all material respects as of the time
of their filing. With respect to periods on or after
December 31, 2005, all known taxes of the Acquired Fund which
are due and payable (whether or not shown on any tax return)
and, with respect to periods prior to December 31, 2005, to
the Knowledge of the Acquired Fund all taxes of the Acquired
Fund which are or were due and payable (whether or not shown
on any tax return), 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. With
respect to periods on or after December 31, 2005, all of the
Acquired Fund's tax liabilities and, with respect to periods
prior to December 31, 2005, to the Knowledge of the Acquired
Fund the Acquired Fund's tax liabilities, shall have been
adequately provided for on its Books and Records in respect of
all periods ended on or before the date of such Books and
Records. With respect to periods on or after December 31,
2005, the Acquired Fund has not and, with respect to periods
prior to December 31, 2005, to the Knowledge of the Acquired
Fund the Acquired Fund has not, had any tax deficiency or
liability asserted against it 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
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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.
(n) 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 Effective Time. 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 tax liability (foreign, state, 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.
(o) 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).
(p) 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 capital stock and has withheld in respect
of dividends and other distributions 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.
(q) 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.
(r) 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.
(s) Except as otherwise disclosed to the
Acquiring Fund, the Acquired Fund has not previously been a
party to a tax-free reorganization under the Code within the
preceding twelve months.
(t) The Acquired Fund has not received
written notification from any tax authority that asserts a
position contrary to any of the above representations.
(u) All issued and outstanding shares of
the Acquired Fund have been offered and sold by the Acquired
Fund in compliance in all material respects with applicable
registration requirements of the 1933 Act and state securities
Laws, are registered under the 1933 Act and under the Laws of
all jurisdictions in which registration is or was required,
except as may have been previously disclosed to the Acquiring
Fund in writing. Such registrations are, in all material
respects, complete, current and have been continuously
effective, and all fees required to be paid have been paid.
The Acquired Fund is not subject to any "stop order" and is,
and was, fully qualified to sell its shares in each
jurisdiction in which such shares are being, or were,
registered and sold.
(v) The current prospectus and statement
of additional information of the Acquired Fund, including
amendments and supplements thereto, and each prospectus and
9
statement of additional information of the Acquired Fund used
at all times during the past three years prior to the date of
this Agreement conform, or conformed at the time of its or
their use, in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the
rules and regulations of the SEC thereunder, and do not, or
did not, as of their dates of distribution to the public,
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 materially
misleading. The Acquired Fund currently complies in all
material respects with all investment objectives, policies,
guidelines and restrictions and any compliance procedures
established by the Acquired Fund.
(w) The combined proxy statement and
prospectus and statement of additional information
(collectively, the "Proxy Statement/Prospectus") to be
included in the Acquiring Trust's registration statement on
Form N-14 (the "Registration Statement") and filed in
connection with this Agreement, and the documents incorporated
therein by reference and any amendment or supplement thereto
insofar as they relate to the Acquired Trust or the Acquired
Fund, each comply or will comply in all material respects with
the applicable requirements of the 1933 Act, 1934 Act and the
1940 Act and the applicable rules and regulations of the SEC
thereunder on the effective date of such Registration
Statement. Each of the Proxy Statement/Prospectus,
Registration Statement and the documents incorporated therein
by reference and any amendment or supplement thereto, insofar
as it relates to the Acquired Trust or the Acquired Fund, does
not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not materially misleading on the effective
date of such Registration Statement; provided, however, that
the Acquired Trust makes no representations or warranties as
to the information contained in the Proxy
Statement/Prospectus, Registration Statement and the documents
incorporated therein by reference and any amendment or
supplement thereto in reliance upon and in conformity with
information relating to the Acquiring Trust or the Acquiring
Fund, including information furnished by the Acquiring Trust
to the Acquired Fund specifically for use in connection with
the Proxy Statement/Prospectus, Registration Statement and the
documents incorporated therein by reference and any amendment
or supplement thereto or otherwise publicly available on the
Acquiring Trust's website or the SEC's public disclosure
system.
(x) Except as previously disclosed in
writing to the Acquiring Trust, at the Effective Time, the
Acquired Fund will have good and marketable title to the Fund
Assets and full right, power, and authority to sell, assign,
transfer and, upon delivery and payment for the Fund Assets,
deliver such Fund Assets, free and clear of all liens,
mortgages, pledges, encumbrances, charges, claims and
equities, and subject to no restrictions on the subsequent
transfer thereof (other than any Fund Assets consisting of
restricted securities) or as otherwise disclosed to the
Acquiring Trust at least fifteen Business Days prior to the
Effective Time, provided that the Acquiring Fund will acquire
Fund Assets that are segregated or pledged as collateral for
the Acquired Fund's short sale and derivative positions (if
any), including without limitation, as collateral for swap
positions and as margin for futures positions, subject to such
segregation and liens that apply to such Fund Assets.
(y) The Acquired Trust has adopted and
implemented written policies and procedures in accordance with
Rule 38a-1 under the 1940 Act.
(z) Except as disclosed in writing to the
Acquiring Fund, to the best of the Acquired Fund's Knowledge,
no events have occurred and no issues, conditions or facts
have
10
arisen which either individually or in the aggregate have had
a Material Adverse Effect on the Acquired Fund or its
properties or assets other than changes occurring in the
ordinary course of business.
4.2 Representations and Warranties of the
Acquiring Trust. The Acquiring Trust, on behalf of 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
Effective Time:
(a) The Acquiring Trust is a business
trust duly organized, validly existing and in good standing
under the Laws of the Commonwealth of Massachusetts and is
duly qualified, licensed or admitted to do business and is in
good standing as a foreign association under the Laws of each
jurisdiction in which the nature of the business conducted by
it makes such qualification, licensing or admission necessary,
except in such jurisdictions where the failure to be so
qualified, licensed or admitted and in good standing would
not, individually or in the aggregate, have a Material Adverse
Effect on its properties or assets or the properties or assets
of the Acquiring Fund. The Acquiring Fund has full power
under the Acquiring Trust's Restated Agreement and Declaration
of Trust, as amended from time to time, and By-laws
("Touchstone Governing Documents") to conduct its business as
it is now being conducted and to own the properties and assets
it now owns. The Acquiring Fund has all necessary
authorizations, licenses and approvals from any applicable
Governmental or Regulatory Body necessary to carry on its
business as such business is now being carried on except
authorizations, licenses and approvals that the failure to so
obtain would not have a Material Adverse Effect on the
Acquiring Fund.
(b) The execution, delivery and
performance of this Agreement by the Acquiring Trust on behalf
of the Acquiring Fund and the consummation of the transactions
contemplated herein have been duly and validly authorized by
the Touchstone Board and the Touchstone Board has approved the
Reorganization. No action on the part of the shareholders of
the Acquiring Fund is necessary to authorize the execution,
delivery and performance of this Agreement by the Acquiring
Trust on behalf of the Acquiring Fund or the consummation of
the Reorganization. This Agreement has been duly and validly
executed and delivered by the Acquiring Trust on behalf of the
Acquiring Fund, and assuming due authorization, execution and
delivery hereof by the Acquired Trust on behalf of the
Acquired Fund, is a legal, valid and binding obligation of the
Acquiring Trust, as it relates to the Acquiring Fund,
enforceable in accordance with its terms (subject to
applicable bankruptcy, insolvency, reorganization, moratorium
and other Laws relating to or affecting creditors' rights, to
general equity principles and to any limitations on indemnity
as may be required under federal and state securities Laws).
(c) The authorized capital of the
Acquiring Fund consists of an unlimited number of shares of
beneficial interest without par value. Each share represents
a fractional undivided interest in the Acquiring Fund. All
issued and outstanding shares of the Acquiring Fund are duly
authorized, validly issued, fully paid and non-assessable, and
all such shares have been offered and sold in compliance in
all material respects with applicable registration
requirements of the 1933 Act and state securities Laws, and
are registered under the 1933 Act and under the Laws of all
jurisdictions in which registration is or was required, except
as may have been previously disclosed to the Acquiring Fund in
writing. Such registrations are, in all material respects,
complete, current and have been continuously effective, and
all fees required to be paid have been paid. The Acquiring
Fund is not subject to any "stop order" and is, and was, fully
qualified to sell its shares in each jurisdiction in which
such shares are being registered and sold. There are no
outstanding options, warrants or other rights of any kind to
acquire from
11
the Acquiring Fund any shares of any series or equity
interests of the Acquiring Fund or securities convertible into
or exchangeable for, or which otherwise confer on the holder
thereof any right to acquire, any such additional shares, nor
is the Acquiring Fund committed to issue any share
appreciation or similar rights or options, warrants, rights or
securities in connection with any series of shares.
(d) Except for consents, approvals, or
waivers to be received prior to the Effective Time, including
shareholder approval by the Acquired Fund, and upon the
effectiveness of the Registration Statement, the execution,
delivery and performance of this Agreement by the Acquiring
Trust on behalf of the Acquiring Fund does not, and the
consummation of the transactions contemplated herein will
not: (i) violate or conflict with the terms, conditions or
provisions of the Touchstone Governing Documents, or of any
material contract, agreement, indenture, instrument, or other
undertaking to which the Acquiring Trust is a party or by
which the Acquiring Trust or the Acquiring Fund is bound,
(ii) result in the acceleration of any obligation, or the
imposition of any penalty, under any material agreement,
indenture, instrument, contract, lease or other undertaking to
which the Acquiring Trust is a party or by which the Acquiring
Trust or the Acquiring Fund is bound, (iii) result in a breach
or violation by the Acquiring Trust or the Acquiring Fund of
any terms, conditions, or provisions of any Law or Order, or
(iv) require any consent or approval of, filing with or notice
to, any Governmental or Regulatory Body.
(e) Except as set forth in writing to the
Acquired Fund, there is no Action or Proceeding pending
against the Acquiring Trust or the Acquiring Fund or, to the
best of the Acquiring Trust's Knowledge, threatened against,
relating to or affecting, the Acquiring Trust or the Acquiring
Fund.
(f) No agent, broker, finder or
investment or commercial banker, or other Person or firm
engaged by or acting on behalf of the Acquiring Trust or the
Acquiring Fund in connection with the negotiation, execution
or performance of this Agreement or any other agreement
contemplated hereby, or the consummation of the transactions
contemplated hereby, is or will be entitled to any broker's or
finder's or similar fees or other commissions as a result of
the consummation of such transactions.
(g) The Acquiring Trust is registered with
the SEC as an open-end management investment company under the
1940 Act, and its registration with the SEC as such an
investment company is in full force and effect, and the
Acquiring Fund is a separate series of the Acquiring Trust
duly designated in accordance with the applicable provisions
of the Touchstone Governing Documents and in and compliance in
all material respects with the 1940 Act and its rules and
regulations.
(h) All federal and other tax returns and
reports of the Acquiring Fund required by Law to have been
filed (giving effect to extensions) shall 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 return) 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 shall 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 or question with respect thereto raised, and no dispute,
audit, investigation, proceeding or claim
12
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.
(i) 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 Effective Time. The Acquiring Fund is
treated as a separate corporation under Section 851(g) of the
Code. 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 tax liability
(foreign, state, 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.
(j) The Acquiring Fund has not had any
tax deficiency or liability asserted against it 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.
(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 capital stock and has withheld in respect
of dividends and other distributions 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 received
written notification from any tax authority that asserts a
position contrary to any of the above representations.
(n) 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.
(o) 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.
(p) The shares of the Acquiring Fund to be
issued and delivered to the Acquired Fund for the account of
the Acquired Fund (and to be distributed immediately
thereafter to its shareholders) pursuant to the terms of this
Agreement will have been duly authorized at the Effective Time
and, when so issued and delivered, will be registered under
the 1933 Act, duly and validly issued, fully paid and non-
assessable and no shareholder of the Acquiring Fund shall have
any statutory or contractual preemptive right of subscription
or
13
purchase in respect thereof. In regard to the statement above
that the Acquiring Fund shares will be non-assessable, it is
noted that the Acquiring Trust is a "Massachusetts business
trust" and under Massachusetts' Law, shareholders could, under
certain circumstances, be held personally liable for the
obligations of the Acquiring Fund; however, the Acquiring Fund
has included appropriate provisions disclaiming such liability
in all material contracts entered into between the Acquiring
Fund and any third-party.
(q) The current prospectus and statement
of additional information of the Acquiring Fund, including
amendments and supplements thereto, conform in all material
respects to the applicable requirements of the 1933 Act and
the 1940 Act and the applicable rules and regulations of the
SEC 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
materially misleading. To the best of the Acquiring Fund's
Knowledge, the Acquiring Fund currently complies in all
material respects with all investment objectives, policies,
guidelines and restrictions and any compliance procedures
established by the Acquiring Fund.
(r) The Proxy Statement/Prospectus to be
included in the Registration Statement and filed in connection
with this Agreement, and the documents incorporated therein by
reference and any amendment or supplement thereto insofar as
they relate to the Acquiring Trust and the Acquiring Fund,
each comply or will comply in all material respects with the
applicable requirements of the 1933 Act, 1934 Act and the 1940
Act and the applicable rules and regulations of the SEC
thereunder on the effective date of such Registration
Statement. Each of the Proxy Statement/Prospectus,
Registration Statement and the documents incorporated therein
by reference and any amendment or supplement thereto, insofar
as it relates to the Acquiring Trust and the Acquiring Fund,
does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not materially misleading on the effective
date of such Registration Statement; provided, however, that
the Acquiring Trust makes no representations or warranties as
to the information contained in the Proxy
Statement/Prospectus, Registration Statement and the documents
incorporated therein by reference and any amendment or
supplement thereto in reliance upon and in conformity with
information relating to the Acquired Trust or the Acquired
Fund and furnished by the Acquired Fund to the Acquiring Trust
specifically for use in connection with the Proxy
Statement/Prospectus, Registration Statement and the documents
incorporated therein by reference and any amendment or
supplement thereto.
(s) The Acquiring Trust has adopted and
implemented written policies and procedures in accordance with
Rule 38a-1 under the 1940 Act.
(t) The Acquiring Fund has maintained, or
caused to be maintained on its behalf, in all material
respects, all Books and Records required of a registered
investment company in compliance with the requirements of
Section 31 of the 1940 Act and rules thereunder.
(u) (i) Prior to the execution
of this Agreement, the Acquiring Fund has delivered to the
Acquired Trust true and complete copies of the Acquiring
Fund's audited statements of assets and liabilities of as of
September 30, 2011, or a later date if available prior to the
date hereof, and the related audited schedules of investments,
statements of income and changes in net assets and financial
highlights for the periods then ended.
14
(ii) Except as set forth in the notes
thereto, all such financial statements were prepared in
accordance with U.S. generally accepted accounting principles,
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.
(iii) To the best of the Acquiring
Fund's Knowledge, except as reflected or reserved against in
the statement of assets and liabilities included in the
Acquiring Fund's audited financial statements as of
September 30, 2011, or in the notes thereto, or as previously
disclosed in writing to the Acquired Trust, there are no
liabilities against, relating to or affecting the Acquiring
Fund or any of its properties and assets, other than those
incurred in the ordinary course of business consistent with
past practice, which, individually or in the aggregate, would
have a Material Adverse Effect on the Acquiring Fund or its
properties or assets. In particular, since September 30, 2011
to the best of the Acquiring Fund's Knowledge and except as
disclosed in writing to the Acquired Trust, there has not been
any change in the financial condition, properties, assets,
liabilities or business of the Acquiring Fund that would have
a Material Adverse Effect on the Acquiring Fund or its
properties or assets other than changes occurring in the
ordinary course of business.
(v) As of the date hereof, except as
previously disclosed to the Acquired Fund in writing, and
except as have been corrected as required by applicable Law,
and to the best of the Acquiring Fund's Knowledge, there have
been no material miscalculations of the net asset value of the
Acquiring Fund during the twelve-month period preceding the
date hereof which would have a Material Adverse Effect on the
Acquiring Fund or its properties or assets, and all such
calculations have been made in accordance with the applicable
provisions of the 1940 Act.
(w) Except as disclosed in writing to the
Acquired Fund, to the best of the Acquiring Fund's Knowledge,
no events have occurred and no issues, conditions or facts
have arisen which either individually or in the aggregate have
had a Material Adverse Effect on the Acquiring Fund or its
properties or assets other than changes occurring in the
ordinary course of business.
(x) The Acquiring Fund has no unamortized
or unpaid organizational fees or expenses for which it does
not expect to be reimbursed by Touchstone or its Affiliates.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1 Conduct of Business. After the date of
this Agreement and at or prior to the Effective Time, the
Parties will conduct the businesses of the Acquired Fund and
the Acquiring Fund, respectively, only in the ordinary course
and in accordance with this Agreement and the current
prospectuses and statements of additional information of the
Acquired Fund or the Acquiring Fund, as applicable. It is
understood that such ordinary course of business shall include
(a) the declaration and payment of customary dividends and
other distributions; (b) shareholder purchases and
redemptions; and (c) the continued good faith performance by
the investment adviser, sub-adviser(s), administrator,
distributor and other service providers of their respective
responsibilities in accordance with their agreements with the
Acquired Fund or the Acquiring Fund, as applicable, and
applicable Law. No Party shall take any action that would, or
would reasonably be expected to, result in any of its
representations and warranties set forth in
15
this Agreement being or becoming untrue in any material
respect. 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 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.
5.2 Shareholders' Meeting. The Acquired Trust
will call, convene and hold a meeting of shareholders of the
Acquired Fund as soon as practicable, in accordance with
applicable Law and the Old Mutual Governing Documents, for the
purpose of approving this Agreement and the transactions
contemplated herein as set forth in the Proxy
Statement/Prospectus, and for such other purposes as may be
necessary or desirable. In the event that, insufficient votes
are received from shareholders, the meeting may be adjourned
as permitted under the Old Mutual Governing Documents and
applicable Law, and as set forth in the Proxy
Statement/Prospectus in order to permit further solicitation
of proxies.
5.3 Proxy Statement/Prospectus and Registration
Statement. The Parties will cooperate with each other in the
preparation of the Proxy Statement/Prospectus and Registration
Statement and cause the Registration Statement to be filed
with the SEC in a form satisfactory to the Parties and their
respective counsel as promptly as practicable. Upon
effectiveness of the Registration Statement, the Acquired Fund
will cause the Proxy Statement/Prospectus to be delivered to
shareholders of the Acquired Fund entitled to vote on this
Agreement and the transactions contemplated herein in
accordance with the Old Mutual Governing Documents. Each
Party will provide the materials and information necessary to
prepare the Registration Statement, for inclusion therein, in
connection with the shareholder meeting of the Acquired Fund
to consider the approval of this Agreement and the
transactions contemplated herein. If, at any time prior to the
Effective Time, a Party becomes aware of any untrue statement
of material fact or omission to state a material fact required
to be stated therein or necessary to make the statements made
not misleading in light of the circumstances under which they
were made, the Party discovering the item shall notify the
other Parties and the Parties shall cooperate in promptly
preparing, filing and clearing with the SEC and, if
appropriate, distributing to shareholders appropriate
disclosure with respect to the item.
5.4 Information. The Parties will furnish to
each other, and each other's accountants, legal counsel and
other representatives, as appropriate, throughout the period
prior to the Effective Time, all such documents and other
information concerning the Acquired Fund and the Acquiring
Fund, respectively, and their business and properties as may
reasonably be requested by the other Party. Such cooperation
shall include providing copies of reasonably requested
documents and other information. Each Party shall make its
employees and officers available on a mutually convenient
basis to provide an explanation of any documents or
information provided hereunder to the extent that such Party's
employees are familiar with such documents or information.
5.5 Notice of Material Changes. Each Party
will notify the other Parties of any event causing a Material
Adverse Effect to such Party as soon as practicable following
such Party's Knowledge of any event causing such a Material
Adverse Effect.
5.6 Financial Statements. At the Closing, the
Acquired Fund will deliver to the Acquiring Fund an unaudited
statement of assets and liabilities of the Acquired Fund,
together with a schedule of portfolio investments as of and
for the interim period ending at the Valuation Time. These
financial statements will present fairly in all material
respects the financial position
16
and portfolio investments of the Acquired Fund as of the
Valuation Time in conformity with U.S. generally accepted
accounting principles applied on a consistent basis, and there
will be no material contingent liabilities of the Acquired
Fund not disclosed in said financial statements. These
financial statements shall be certified by the Treasurer of
the Acquired Trust as, to the best of his or her Knowledge,
complying with the requirements of the preceding sentence.
The Acquired Fund also will deliver to the Acquiring Fund at
the Effective Time (i) the detailed tax-basis accounting
records for each security or other investment to be
transferred to the Acquiring Fund hereunder, which shall be
prepared in accordance with the requirements for specific
identification tax-lot accounting and clearly reflect the
basis used for determination of gain and loss realized on the
partial sale of any security to be transferred to the
Acquiring Fund and (ii) a statement of earnings and profits of
the Acquired Fund for federal income tax purposes that shall
be carried over by the Acquired Fund as a result of Code
Section 381 and which shall be certified by an officer of the
Acquired Fund.
5.7 Other Necessary Action. The Parties will
each take all necessary action and use their reasonable best
efforts to complete all filings, obtain all governmental and
other consents and approvals and satisfy any other provision
required for consummation of the transactions contemplated by
this Agreement.
5.8 Dividends. On or before the Effective
Time, each Acquired Fund shall have declared and paid a
dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to its
shareholders (i) all of an Acquired Fund's investment company
taxable income for the taxable year ended prior to the
Effective Time and substantially all of such investment
company taxable income for the final taxable year ending with
its complete liquidation (in each case determined without
regard to any deductions for dividends paid); (ii) all of an
Acquired Fund's net capital gain recognized in its taxable
year ended prior to the Effective Time and substantially all
of any such net capital gain recognized in such final taxable
year (in each case after reduction for any capital loss
carryover); and (iii) at least 90 percent of the excess, if
any, of an Acquired Fund's interest income excludible from
gross income under Section 103(a) of the Code over its
deductions disallowed under Sections 265 and 171(a)(2) of the
Code for the taxable year prior to the Effective Time and at
least 90 percent of such net tax-exempt income for such final
taxable year.
5.9 Books and Records. Upon reasonable notice,
each Party will make available to each other Party for review
any Books and Records which are reasonably requested by such
other Party in connection with this Reorganization.
5.10 Issued Shares. The Acquiring Fund Shares to
be issued and delivered to the Acquired Fund for the account
of the Acquired Fund (and to be distributed immediately
thereafter to its shareholders) pursuant to this Agreement,
will have been duly authorized at the Effective Time. Said
shares when issued and delivered will be registered under the
1933 Act, will be duly and validly issued, fully paid and non-
assessable. No shareholder of the Acquiring Fund shall have
any statutory or contractual preemptive right of subscription
or purchase in respect thereof. The shareholders of the
Acquired Fund shall not pay any front-end or deferred sales
charge in connection with the Reorganization. The contingent
deferred sales charge ("CDSC") applicable to Class A and
Class C shares of the Acquiring Fund issued in connection with
the Reorganization will be calculated based on the CDSC
schedule of Class A and Class C shares, respectively, of the
Acquired Fund and, for purposes of calculating the CDSC,
recipients of such Class A and Class C shares of the Acquiring
Fund shall be deemed to have acquired such shares on the
date(s) that the corresponding shares of the Acquired Fund
were acquired by the shareholder.
17
5.11 Liquidation of Acquired Fund. The Acquired
Trust and the Acquired Fund agree that the liquidation and
termination of the Acquired Fund shall be effected in the
manner provided in the Old Mutual Governing Documents in
accordance with applicable Law, and that on and after the
Effective Time, the Acquired Fund shall not conduct any
business except in connection with its liquidation and
termination, or the satisfaction of any provisions of this
Agreement as set forth in Section 10.5.
5.12 Final Tax Returns and Forms 1099 of Acquired
Fund. After the Effective Time, except as otherwise agreed to
by the parties, the Acquired Fund shall or shall cause its
agents to prepare any federal, state or local returns,
including any Forms 1099, required to be filed by the Acquired
Fund with respect to the taxable year ending on or prior to
the Effective Time and for any prior periods or taxable years
and shall further cause such tax returns and Forms 1099 to be
duly filed with the appropriate taxing authorities.
5.13 Regulatory Filings. The Acquired Trust and
the Acquired Fund agree to file all necessary or appropriate
reports with the SEC, Internal Revenue Service or other
regulatory or tax authority covering any reporting period
ending prior to or at the Effective Time with respect to the
Acquired Trust and the Acquired Fund.
5.14 Compliance Section 15(f). The Acquiring
Trust agrees that, for the minimum time periods specified in
Section 15(f) of the 1940 Act it shall take (or refrain from
taking, as the case may be) such actions as are necessary to
ensure that: (i) at least seventy-five percent (75%) of the
trustees of the Acquiring Fund shall not be "interested
persons" (as that term is defined in the 0000 Xxx) of the
Acquiring Fund's investment adviser or the Acquired Fund's
investment adviser; (ii) no "unfair burden" (as that term is
defined in Section 15(f)(2)(B) of the 0000 Xxx) shall be
imposed on the Acquiring Fund; and (iii) each vacancy among
the trustees of the Acquiring Fund which must be filled by a
person who is an interested person neither of the Acquiring
Fund's investment adviser nor of the Acquired Fund's
investment adviser so as to comply with Section 15(f) of the
1940 Act, as if such Section were applicable, shall be filled
in the manner specified by Section 16(b) of the 1940 Act. The
Acquiring Trust may elect, in lieu of the covenants set forth
in the preceding sentence, to apply for and obtain an
exemptive order under Section 6(c) of the 1940 Act from the
provisions of Section 15(f)(1)(A) of the 1940 Act, in form and
substance reasonably acceptable to the Acquired Fund's
investment adviser.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Obligations of the
Acquired Trust. The obligation of the Acquired Trust, on
behalf of the Acquired Fund to conclude the transactions
provided for herein shall be subject, at its election, to the
performance by the Acquiring Trust and the Acquiring Fund of
all of the obligations to be performed by it hereunder at or
before the Effective Time, and, in addition thereto, to the
following further conditions unless waived by the Acquired
Trust in writing:
(a) All representations and warranties of
the Acquiring Trust, on behalf of the Acquiring Fund,
contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they
may be affected by the transactions contemplated by this
Agreement, as of the Effective Time with the same force and
effect as if made at and as of the Effective Time; provided
that the Acquiring Trust shall be given a period of 10
Business Days
18
from the date on which any such representation or warranty
shall not be true and correct in all material respects to cure
such condition.
(b) The Acquiring Fund shall have
furnished to the Acquired Fund the opinion of Xxxxxx Xxxxxxxx
LLP dated as of the Effective Time, substantially to the
effect that:
(i) the Acquiring Trust is a business
trust, validly existing under Massachusetts Law, and has power
under the Touchstone Governing Documents to conduct its
business and own its assets as described in its currently
effective registration statement on Form N-1A;
(ii) the Acquiring Trust is registered
with the SEC under the 1940 Act as an open-end management
investment company and its registration with the SEC is in
full force and effect;
(iii) the Acquiring Fund Shares to be
issued and delivered by the Acquiring Trust pursuant to this
Agreement have been duly authorized for issuance and, when
issued and delivered as provided herein, will be validly
issued, fully paid and non-assessable under Massachusetts Law
and no preemptive rights of shareholders exist with respect to
any such shares or the issue or delivery thereof;
(iv) except as disclosed in writing to
the Acquired Fund, such counsel knows of no material legal
proceedings pending or threatened in writing against the
Acquiring Trust;
(v) this Agreement has been duly
authorized, executed and delivered by the Acquiring Trust on
behalf of the Acquiring Fund and, assuming due authorization,
execution and delivery by the Acquired Trust on behalf of the
Acquired Fund, constitutes a valid and legally binding
obligation of the Acquiring Trust, on behalf of the Acquiring
Fund, enforceable against the Acquiring Trust in accordance
with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, moratorium and other
Laws relating to or affecting creditors' rights generally,
fraudulent conveyance, receivership, and to general equity
principles (whether considered in a proceeding in equity or at
law) and to an implied covenant of good faith and fair
dealing;
(vi) the Registration Statement has
become effective under the 1933 Act and, to the knowledge of
such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act
and no proceedings for that purpose have been instituted or
threatened by the SEC;
(vii) the execution and delivery of this
Agreement did not and the consummation of the transactions
herein contemplated will not conflict with or result in a
material breach of the terms or provisions of, or constitute a
material default under, the Touchstone Governing Documents or
any material agreement or instrument pertaining to the
Acquiring Fund identified as an Exhibit in Part C of the
registration statement on Form N-1A last filed by the
Acquiring Trust;
(viii) the execution and delivery of this
Agreement did not and the consummation of the transactions
herein contemplated will not conflict with or result in a
material violation by the Acquiring Trust or the Acquiring
Fund of any terms, conditions, or provisions of any federal
securities Law or Massachusetts Law as it relates to voluntary
associations commonly referred to as "Massachusetts business
trusts"; and
19
(ix) to the knowledge of such counsel,
no consent, approval, authorization, or other action by or
filing with any Governmental or Regulatory Body is required in
connection with the consummation of the transactions herein
contemplated, except such as have been obtained or made under
the 1933 Act, 1934 Act and the 1940 Act and the applicable
rules and regulations of the SEC thereunder and Massachusetts
Law.
In rendering such opinion, Xxxxxx Xxxxxxxx LLP may rely
upon certificates of officers of the Acquiring Trust and of
public officials as to matters of fact.
(c) The Acquiring Fund shall have
furnished to the Acquired Fund a certificate of the Acquiring
Fund, signed by the President or Vice President and Treasurer
of the Acquiring Trust, dated as of the Effective Time, to the
effect that they have examined the Proxy Statement/Prospectus
and the Registration Statement (and any supplement thereto)
and this Agreement and that:
(i) to the best of their Knowledge,
the representations and warranties of the Acquiring Trust in
this Agreement are true and correct in all material respects
on and as of the Effective Time and the Acquiring Trust has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Effective Time; and
(ii) no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose are pending or, to the
Acquiring Trust's Knowledge, threatened in writing.
(d) An officer of the Acquired Trust shall
have received the confirmation from the Acquiring Fund
required under paragraph 3.3 of this Agreement.
(e) The Acquiring Fund shall have duly
executed and delivered to the Acquired Fund such assumptions
of Liabilities and other instruments as the Acquired Fund may
reasonably deem necessary or desirable to evidence the
transactions contemplated by this Agreement, including the
assumption of all of the Liabilities of the Acquired Fund by
the Acquiring Fund, other than the Excluded Liabilities.
6.2 Conditions Precedent to Obligations of the
Acquiring Trust. The obligation of the Acquiring Trust, on
behalf of the Acquiring Fund, to conclude the transactions
provided for herein shall be subject, at its election, to the
performance by the Acquired Trust and the Acquired Fund of all
of their obligations to be performed by them hereunder at or
before the Effective Time, and, in addition thereto, to the
following further conditions unless waived by the Acquiring
Trust in writing:
(a) All representations and warranties of
the Acquired Trust, on behalf of the Acquired Fund, contained
in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be
affected by the transactions contemplated by this Agreement,
as of the Effective Time with the same force and effect as if
made at and as of the Effective Time; provided that the
Acquired Fund and the Acquired Trust shall be given a period
of 10 Business Days from the date on which any such
representation or warranty shall not be true and correct in
all material respects to cure such condition.
(b) The Acquired Fund shall have furnished
to the Acquiring Fund the opinion of Xxxxxxxx Ronon Xxxxxxx &
Xxxxx, LLP dated as of the Effective Time, substantially to
the effect that:
20
(i) the Acquired Trust is a statutory
trust, validly existing and in good standing under the
Delaware Statutory Trust Act, and has power under the Old
Mutual Governing Documents to conduct its business and own its
assets as described in its currently effective registration
statement on Form N-1A;
(ii) the Acquired Trust is registered
with the SEC under the 1940 Act as an open-end management
investment company and its registration with the SEC is in
full force and effect;
(iii) all issued and outstanding shares
of the Acquired Fund as of the Effective Time are duly
authorized, validly issued, fully paid and non-assessable
under Delaware Law and no preemptive rights of shareholders
exist with respect to any such shares or the issue or delivery
thereof;
(iv) except as disclosed in writing to
the Acquiring Fund, such counsel knows of no material legal
proceedings pending or threatened in writing against the
Acquired Trust;
(v) this Agreement has been duly
authorized, executed and delivered by the Acquired Trust on
behalf of the Acquired Fund and, assuming due authorization,
execution and delivery by the Acquiring Trust on behalf of the
Acquiring Fund, constitutes a valid and legally binding
obligation of the Acquired Trust, on behalf of the Acquired
Fund, enforceable against the Acquired Trust in accordance
with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, moratorium and other
Laws relating to or affecting creditors' rights generally,
fraudulent conveyance, receivership, and to general equity
principles (whether considered in a proceeding in equity or at
law) and to an implied covenant of good faith and fair
dealing;
(vi) to the knowledge of such counsel,
as of the date of its mailing, the Proxy Statement/Prospectus,
and as of the date of its filing, the Registration Statement
(other than the financial statements and other financial and
statistical information contained therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the 1933
Act, 1934 Act and the 1940 Act and the applicable rules and
regulations of the SEC thereunder;
(vii) the execution and delivery of this
Agreement did not and the consummation of the transactions
herein contemplated will not result in a material breach of
the terms or provisions of, or constitute a material default
under, the Old Mutual Governing Documents or any material
agreement or instrument pertaining to the Acquired Fund
identified as an Exhibit in Part C of the registration
statement on Form N-1A last filed by the Acquired Trust;
(viii) the execution and delivery of this
Agreement did not and the consummation of the transactions
herein contemplated will not result in a material violation by
the Acquired Fund of any terms, conditions, or provisions of
any federal securities Law or the Delaware Statutory Trust
Act; and
(ix) to the knowledge of such counsel,
no consent, approval, authorization or other action by or
filing with any Governmental or Regulatory Body is required in
connection with the consummation of the transactions herein
contemplated, except such as have been obtained or made under
the 1933 Act, 1934 Act and the 0000 Xxx and the applicable
21
rules and regulations of the SEC thereunder and Delaware Law
and such authorizations and filings as are necessary to
terminate the Acquired Funds as series of a Delaware statutory
trust.
In rendering such opinion, Xxxxxxxx Ronon Xxxxxxx &
Xxxxx, LLP may rely upon certificates of officers of the
Acquired Trust and of public officials as to matters of fact.
(c) The Acquired Fund shall have furnished
to the Acquiring Fund the unaudited statements required by
paragraph 5.6.
(d) The Acquired Fund shall have furnished
to the Acquiring Fund a certificate of the Acquired Fund,
signed by the President or Vice President and Treasurer of the
Acquired Trust, dated as of the Effective Time, to the effect
that they have examined the Proxy Statement/Prospectus and the
Registration Statement (and any supplement thereto) and this
Agreement and that:
(i) to the best of their Knowledge,
the representations and warranties of the Acquired Trust in
this Agreement are true and correct in all material respects
on and as of the Effective Time and the Acquired Trust has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Effective Time; and
(ii) since the date of the most recent
financial statements of the Acquired Fund included in the
Proxy Statement/Prospectus (or any supplement thereto), there
has been no Material Adverse Effect on the business of the
Acquired Fund (other than changes in the ordinary course of
business, including, without limitation, dividends and other
distributions in the ordinary course and changes in net asset
value per share), except as set forth in or contemplated in
the Proxy Statement/Prospectus (or any supplement thereto).
(e) The Acquired Fund shall have duly
executed and delivered to the Acquiring Trust such bills of
sale, assignments, certificates and other instruments of
transfer, including transfer instructions to the Acquired
Fund's custodian and instructions to the Acquiring Trust's
transfer agent ("Transfer Documents") as the Acquiring Trust
may reasonably deem necessary or desirable to evidence the
transfer to the Acquiring Fund of all of the right, title and
interest of the Acquired Fund in and to the respective Fund
Assets of the Acquired Fund. In each case, the Fund Assets of
the Acquired Fund shall be accompanied by all necessary state
stock transfer stamps or cash for the appropriate purchase
price therefor.
(f) The Acquiring Fund shall have
received: (i) a certificate of an authorized signatory of
Acquired Fund Custodian, as custodian for the Acquired Fund,
stating that the Fund Assets of the Acquired Fund have been
delivered to the Acquiring Fund; (ii) a certificate of an
authorized signatory from Xxxxx Brothers Xxxxxxxx & Co., as
custodian for the Acquiring Fund, stating that the Fund Assets
of the Acquired Fund have been received; and (iii) a
certificate of an authorized signatory of the Acquired Fund
confirming that the Acquired Fund has delivered its records
containing the names and addresses of the record holders of
each series of the Acquired Fund shares and the number and
percentage (to three decimal places) of ownership of each
series of the Acquired Fund shares owned by each such holder
as of the close of business at the Valuation Time.
(g) At the Valuation Time and Effective
Time, except as previously disclosed to the Acquiring Fund in
writing, and except as have been corrected as required by
applicable Law, there shall have been no material
miscalculations of the net asset value of the Acquired Fund
during the twelve-month period preceding the Valuation Time
and Effective Time, and all such calculations shall have been
made in accordance with the applicable provisions of the 1940
22
Act. At the Valuation Time and Effective Time, all
Liabilities chargeable to the Acquired Fund which are required
to be reflected in the net asset value per share of a share
class of the Acquired Fund in accordance with applicable Law
will be reflected in the net asset value per share of the
Acquired Fund.
(h) Except for those agreements set forth
on Schedule 6.2(h), the Acquired Fund's agreements with each
of its service contractors shall have terminated at the
Effective Time, and each Party has received assurance that no
claims for damages (liquidated or otherwise) will arise as a
result of such termination.
6.3 Other Conditions Precedent. Unless waived
in writing by the Parties with the consent of their respective
boards of trustees, the consummation of the Reorganization is
subject to the fulfillment, prior to or at the Effective Time,
of each of the following conditions:
(a) This Agreement and the transactions
contemplated herein shall have been approved by the requisite
vote of the holders of the outstanding shares of the Acquired
Fund in accordance with the provisions of the Old Mutual
Governing Documents, applicable Delaware Law and the 1940
Act. Notwithstanding anything herein to the contrary, neither
the Acquired Trust nor the Acquiring Trust may waive the
conditions set forth in this paragraph 6.3(a).
(b) The Registration Statement shall have
become effective under the 1933 Act, and no stop order
suspending effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall
have been pending or threatened in writing.
(c) Each of the Acquiring Fund and the
Acquired Fund shall have received a favorable opinion of
Xxxxxx Xxxxxxxx LLP substantially to the effect that, for
federal income tax purposes:
(i) The acquisition by the Acquiring
Fund of substantially all of the assets of the Acquired Fund
solely in exchange for the Acquiring Fund's assumption of
certain 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 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;
(ii) Under Code Section 361, no gain
or loss will be recognized by the Acquired Fund (i) upon the
transfer of substantially all of its assets to the Acquiring
Fund solely in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of certain 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 liquidation, as contemplated in this
Agreement
(iii) 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 certain of the liabilities of the
Acquired Fund and issuance of the Acquiring Fund Shares as
contemplated in this Agreement;
(iv) Under Code Section 362(b), the tax
basis of the assets of the Acquired Fund acquired 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;
23
(v) 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;
(vi) 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;
(vii) 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 therefore;
(viii) 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,
provided that the Acquired Fund shareholder held the Acquired
Fund shares as a capital asset on the date 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 and (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 6.3(c).
(d) At the Effective Time, the SEC shall
not have issued an unfavorable report under Section 25(b) of
the 1940 Act, and there shall be no proceedings pending that
would seek to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940
Act. No Action or Proceeding against the Acquired Fund or the
Acquiring Trust or their respective officers or trustees shall
be threatened in writing or pending before any court or other
Governmental or Regulatory Body in which it will seek, or
seeks to restrain or prohibit any of the transactions
contemplated by this Agreement or to obtain damages or other
relief in connection with this Agreement or the transactions
contemplated hereby.
(e) Closing of the purchase agreement by
and among Touchstone Advisors, Inc., Old Mutual Capital, Inc.
and Old Mutual (US) Holdings Inc., dated October 4, 2011 shall
have occurred.
24
ARTICLE VII
EXPENSES
7.1 Touchstone (or any Affiliate thereof)
and/or Old Mutual Capital (or any Affiliate thereof) will bear
and pay, in such proportion as may be agreed upon by such
parties, all fees and expenses associated with the Parties'
participation in the Reorganization without regard to whether
the Reorganization is consummated. Reorganization expenses
include, without limitation, obtaining shareholder approval of
the Reorganization.
7.2 All such fees and expenses so borne and
paid by Touchstone, Old Mutual Capital and/or their Affiliates
shall be solely and directly related to the transactions
contemplated by this Agreement and shall be paid directly by
Touchstone, Old Mutual Capital and/or their Affiliates to the
relevant providers of services or other payees in accordance
with the principles set forth in the Internal Revenue Service
Rev. Ruling 73-54, 1973-1 C.B. 187. The responsibility for
payment shall be allocated between Touchstone and Old Mutual
Capital (or any Affiliate thereof) as may be agreed by and
between Touchstone and Old Mutual Capital.
ARTICLE VIII
AMENDMENTS AND TERMINATION
8.1 Amendments. The Parties may amend this
Agreement in such manner as may be agreed upon, whether before
or after the meeting of shareholders of the Acquired Fund at
which action upon this Agreement and the transactions
contemplated hereby is to be taken; provided, however, that
after the requisite approval of the shareholders of the
Acquired Fund has been obtained, this Agreement shall not be
amended or modified so as to change the provisions with
respect to the transactions herein contemplated in any manner
that would materially and adversely affect the rights of such
shareholders without their further shareholder approval.
Nothing in this paragraph 8.1 shall be construed to prohibit
the Parties from amending this Agreement to change the
Valuation Time or Effective Time.
8.2 Termination. Notwithstanding anything in
this Agreement to the contrary, this Agreement may be
terminated at any time prior to the Effective Time:
(a) by the mutual written consent of the
Parties;
(b) by the Acquired Trust (i) following a
material breach by the Acquiring Trust of any of its
representations, warranties or covenants contained in this
Agreement, provided that the Acquiring Trust shall have been
given a period of 10 Business Days from the date of the
occurrence of such material breach to cure such breach and
shall have failed to do so; (ii) if any of the conditions set
forth in paragraphs 6.1 and 6.3 are not satisfied as specified
in said paragraphs on or before the Effective Time; or
(iii) upon the occurrence of an event which has a Material
Adverse Effect upon the Acquiring Trust or the Acquiring Fund;
(c) by the Acquiring Trust (i) following a
material breach by the Acquired Trust of any of its
representations, warranties or covenants contained in this
Agreement, provided that the Acquired Trust shall have been
given a period of 10 Business Days from the date of the
occurrence of such material breach to cure such breach and
shall have failed to do so; (ii) if any of the conditions set
forth in paragraphs 6.2 and 6.3 (other than 6.3(a) if the
shareholder meeting has been duly adjourned to a date prior to
the Final Effective Time) are not
25
satisfied as specified in said paragraphs on or before the
Effective Time; or (iii) upon the occurrence of an event which
has a Material Adverse Effect upon the Acquired Trust or the
Acquired Fund;
(d) by either the Acquiring Trust or the
Acquired Trust by written notice to the other following a
determination by the terminating Party's Board that the
consummation of the Reorganization is not in the best interest
of its shareholders; or
(e) by either the Acquiring Trust or the
Acquired Trust if the Effective Time does not occur by
June 29, 2012 (the "Final Effective Time"), unless extended by
mutual agreement and evidenced by a writing signed by an
authorized officer of each Party.
If a Party terminates this Agreement in accordance with
this paragraph 8.2, there shall be no liability for damages on
the part of any Party, or the trustees or officers of such
Party.
ARTICLE IX
PUBLICITY; CONFIDENTIALITY
9.1 Publicity. Any public announcements or
similar publicity with respect to this Agreement or the
transactions contemplated herein will be made at such time and
in such manner as the Parties mutually shall agree in writing,
provided that nothing herein shall prevent either Party from
making such public announcements as may be required by Law or
otherwise reasonably deemed necessary or appropriate by
authorized officers of the Funds, on the written advice of
counsel, in which case the Party issuing such statement or
communication shall advise the other Parties prior to such
issuance.
9.2 Confidentiality. (a) The Parties,
Touchstone and Old Mutual Capital (for purposes of this
paragraph 9.2, the "Protected Persons") will hold, and will
cause their board members, officers, employees,
representatives, agents and Affiliated Persons to hold, in
strict confidence, and not disclose to any other Person, and
not use in any way except in connection with the transactions
herein contemplated, without the prior written consent of the
other Protected Persons, all confidential information obtained
from the other Protected Persons in connection with the
transactions contemplated by this Agreement, except such
information may be disclosed: (i) to Governmental or
Regulatory Bodies, and, where necessary, to any other Person
in connection with the obtaining of consents or waivers as
contemplated by this Agreement; (ii) if required by court
order or decree or applicable Law; (iii) if it is publicly
available through no act or failure to act of such Party;
(iv) if it was already known to such Party on a non-
confidential basis on the date of receipt; (v) during the
course of or in connection with any litigation, government
investigation, arbitration, or other proceedings based upon or
in connection with the subject matter of this Agreement,
including, without limitation, the failure of the transactions
contemplated hereby to be consummated; or (vi) if it is
otherwise expressly provided for herein.
(b) In the event of a termination of this
Agreement, the Parties, Touchstone and Old Mutual Capital
agree that they along with their board members, employees,
representative agents and Affiliated Persons shall, and shall
cause their Affiliates to, except with the prior written
consent of the other Protected Persons, keep secret and retain
in strict confidence, and not use for the benefit of itself or
themselves, nor disclose to any other Persons, any and all
confidential or proprietary information relating to the other
Protected Persons and their related parties and Affiliates,
whether obtained through their due diligence investigation,
this Agreement or otherwise, except such information may be
disclosed: (i) if required by court
26
order or decree or applicable Law; (ii) if it is publicly
available through no act or failure to act of such Party;
(iii) if it was already known to such Party on a non-
confidential basis on the date of receipt; (iv) during the
course of or in connection with any litigation, government
investigation, arbitration, or other proceedings based upon or
in connection with the subject matter of this Agreement,
including, without limitation, the failure of the transactions
contemplated hereby to be consummated; or (v) if it is
otherwise expressly provided for herein.
ARTICLE X
MISCELLANEOUS
10.1 Entire Agreement. This Agreement (including
any schedules delivered pursuant hereto, which are a part
hereof) constitutes the entire agreement of the Parties with
respect to the matters covered by this Agreement. This
Agreement supersedes any and all prior understandings, written
or oral, between the Parties and may be amended, modified,
waived, discharged or terminated only by an instrument in
writing signed by an authorized executive officer of the Party
against which enforcement of the amendment, modification,
waiver, discharge or termination is sought.
10.2 Notices. All notices or other
communications under this Agreement shall be in writing and
sufficient if delivered personally, by overnight courier, by
facsimile, telecopied (if confirmed) or sent via registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows (notices or other communication sent via
e-mail shall not constitute notice):
If to the Acquired Trust:
Xxxx X. Xxxxxxxxx, Esq.
Old Mutual Asset Management
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
E-mail: xxxxxxxxxx@xxxxxxxxxxx.xxx
With a copy (which shall not constitute notice) to:
Xxxxxxx X. XxXxxxxxxx, Esq.
Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
E-mail: xxxxxxxxxxx@xxxxxxxx.xxx
If to the Acquiring Trust:
Touchstone Investment Trust
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
27
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
E-mail: xxxxx.xxxxxxxx@xxxxxxxxxxxxxxxxxxxxx.xxx
With a copy (which shall not constitute notice) to:
Law Department
Western & Southern Financial Group, Inc.
000 Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
E-mail: xxxxx.xxxxxx@xxxxxx.xxx
Xxxx X. Xxxx, Esq.
Xxxxxx Xxxxxxxx LLP
3000 Two Xxxxx Square
Eighteenth and Xxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxx.xxx
10.3 Waiver. The failure of either Party hereto
to enforce at any time any of the provisions of this Agreement
shall in no way be construed to be a waiver of any such
provision, nor in any way to affect the validity of this
Agreement or any part hereof or the right of either Party
thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to be a
waiver of any other or subsequent breach. Except as provided
in paragraph 6.3(a), a Party may waive any condition to its
obligations hereunder (such waiver to be in writing and
authorized by an authorized officer of the waiving Party).
10.4 Assignment. This Agreement shall inure to
the benefit of and be binding upon 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 all
other Parties. Nothing herein express or implied is intended
to or shall confer any rights, remedies or benefits upon any
Person other than the Parties hereto.
10.5 Survival. Except as provided in the next
sentence, the respective representations, warranties and
covenants contained in this Agreement and in any certificates
or other instruments exchanged at the Effective Time as
provided in Article VI hereto shall not survive the
consummation of the transactions contemplated hereunder. The
covenants in paragraphs 1.3, 1.5, 5.11, 5.12, 5.13, 5.14, 7.1,
7.2, 9.2, 10.9, 10.13 and 10.14, this paragraph 10.5 and
Article VII shall survive the consummation of the transactions
contemplated hereunder.
10.6 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
10.7 Counterparts. This Agreement may be
executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same agreement.
28
10.8 Governing Law. This Agreement shall be
governed by and construed in accordance with the Laws of the
Commonwealth of Massachusetts, without regard to its
principles of conflicts of Laws.
10.9 Further Assurances. Subject to the terms
and conditions herein provided, each of the Parties hereto
shall use its reasonable best efforts to take, or cause to be
taken, such action to execute and deliver, or cause to be
executed and delivered, such additional documents and
instruments and to do, or cause to be done, all things
necessary, proper or advisable under the provisions of this
Agreement and under applicable Law to consummate and make
effective the Reorganization contemplated by this Agreement,
including, without limitation, delivering and/or causing to be
delivered to each Party hereto each of the items required
under this Agreement as a condition to such Party's
obligations hereunder. In addition, the Acquired Fund shall
deliver or cause to be delivered to the Acquiring Trust at the
Closing, the Books and Records of the Acquired Fund
(regardless of whose possession they are in).
10.10 Beneficiaries. Nothing contained in this
Agreement shall be deemed to create rights in Persons not
Parties (including, without limitation, any shareholder of the
Acquiring Fund or the Acquired Fund).
10.11 Validity. Whenever possible, each provision
and term of this Agreement shall be interpreted in a manner to
be effective and valid, but if any provision or term of this
Agreement is held to be prohibited by Law or invalid, then
such provision or term shall be ineffective only in the
jurisdiction or jurisdictions so holding and only to the
extent of such prohibition or invalidity, without invalidating
or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this
Agreement.
10.12 Effect of Facsimile Signature. A facsimile
signature of an authorized officer of a Party hereto on any
Transfer Document shall have the same effect as if executed in
the original by such officer.
10.13 The Acquiring Trust Liability. The name
"Touchstone Investment Trust" is the designation of the
trustees for the time being under a Restated Agreement and
Declaration of Trust dated August 26, 1993, as amended through
November 17, 2011, and all Persons dealing with the Acquiring
Trust or the Acquiring Fund must look solely to the property
of the Acquiring Trust or the Acquiring Fund for the
enforcement of any claims as none of its trustees, officers,
agents or shareholders assume any personal liability for
obligations entered into on behalf of the Acquiring Trust. No
other portfolio of the Acquiring Trust shall be liable for any
claims against the Acquiring Fund. The Parties, along with
Touchstone and Old Mutual Capital, specifically acknowledge
and agree that any liability of the Acquiring Trust under this
Agreement with respect to the Acquiring Fund, or in connection
with the transactions contemplated herein with respect to the
Acquiring Fund, shall be discharged only out of the assets of
the Acquiring Fund and that no other portfolio of the
Acquiring Trust shall be liable with respect thereto.
10.14 The Acquired Trust Liability. The name "Old
Mutual Funds II" is the designation of the trustees for the
time being under an Agreement and Declaration of Trust, dated
March 1, 2006, as amended through May 20, 2011, and all
Persons dealing with the Acquired Trust or the Acquired Fund
must look solely to the property of the Acquired Trust or the
Acquired Fund for the enforcement of any claims as none of its
trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the
Acquired Trust. No other portfolio of the Acquired Trust
shall be liable for any claims against the Acquired Fund. The
Parties, along with Touchstone and Old Mutual Capital,
specifically acknowledge and agree that any
29
liability of the Acquired Trust under this Agreement with
respect to the Acquired Fund, or in connection with the
transactions contemplated herein with respect to the Acquired
Fund, shall be discharged only out of the assets of the
Acquired Fund and that no other portfolio of the Acquired
Trust shall be liable with respect thereto.
ARTICLE XI
DEFINITIONS
As used in this Agreement, the following terms have the
following meanings:
"Action or Proceeding" means any action, suit or
proceeding by any Person, or any investigation or audit by any
Governmental or Regulatory Body.
"Acquiring Fund" has the meaning specified in the
preamble.
"Acquiring Fund Shares" has the meaning specified in
paragraph 1.4.
"Affiliate" means, with respect to any Person, any other
Person controlling, controlled by or under common control with
such first Person.
"Affiliated Person" shall mean, with respect to any
Person, an "affiliated person" of such Person as such term is
defined in Section 2(a)(3) of the 1940 Act.
"Agreement" has the meaning specified in the preamble.
"Books and Records" means a Parties' accounts, books,
records or other documents (including but not limited to
minute books, stock transfer ledgers, financial statements,
tax returns and related work papers and letters from
accountants, and other similar records) required to be
maintained by the Parties with respect to the Acquired Fund or
the Acquiring Fund, as applicable, pursuant to
Section 31(a) of the 1940 Act and Rules 31a-1 to 31a-3
thereunder.
"Business Day" means a day other than Saturday, Sunday or
a day on which banks located in New York City are authorized
or obligated to close.
"Closing" has the meaning specified in paragraph 3.1.
"Code" has the meaning specified in the recitals.
"Old Mutual Capital" has the meaning specified in the
preamble.
"Effective Time" has the meaning specified in paragraph
3.1.
"Excluded Liabilities" has the meaning specified in
paragraph 1.3.
"Fund Assets" means all properties and assets of every
kind and description whatsoever, including, without
limitation, all cash, cash equivalents, securities, claims
(whether absolute or contingent, known or unknown, accrued or
unaccrued and including, but not limited to, any claims that
the Acquired Fund may have against any Person) , litigation
proceeds of any type (including, without limitation, proceeds
resulting from litigation involving portfolio securities as
well as market timing/late trading actions or settlements) and
receivables (including dividend and interest receivable),
goodwill and other intangible property, Books and Records, and
all interests, rights, privileges and powers, owned by the
Acquired Fund, and any prepaid expenses shown on
30
the Acquired Fund's books at the Valuation Time, excluding
(a) the estimated costs of extinguishing any Excluded
Liability; (b) cash in an amount necessary to pay dividends
pursuant to paragraph 5.8, and (c) the Acquired Fund's rights
under this Agreement.
"Governmental or Regulatory Body" means any court,
tribunal, or government or political subdivision, whether
federal, state, county, local or foreign, or any agency,
authority, official or instrumentality of any such government
or political subdivision.
"Independent Trustees" has the meaning specified in the
recitals.
"BNY Mellon" has the meaning specified in paragraph 2.4.
"Knowledge" means (i) with respect to the Acquired Trust
and the Acquired Fund, the actual knowledge after reasonable
inquiry of the Acquired Trust's trustees or officers and Old
Mutual Capital in its capacity as adviser to the Acquired
Fund; and (ii) with respect to the Acquiring Trust and the
Acquiring Fund, the actual knowledge after reasonable inquiry
of the Acquiring Trust's trustees or officers, or Touchstone
in its respective capacity as a service provider to the
Acquiring Trust.
"Law" means any law, statute, rule, regulation or
ordinance of any Governmental or Regulatory Body.
"Liabilities" means all existing liabilities of the
Acquired Fund reflected on the unaudited statement of assets
and liabilities of the Acquired Fund prepared by the Acquired
Fund or its agent as of the Valuation Time in accordance with
U.S. generally accepted accounting principles consistently
applied from the prior audited reporting period and reviewed
and approved by the respective Treasurers of the Acquiring
Trust and the Acquired Trust at the Effective Time.
"Liabilities" does not include, and the Acquiring Trust and
the Acquiring Fund shall not assume, any Excluded Liabilities.
"Material Adverse Effect" as to any Person means a
material adverse effect on the business, results of operations
or financial condition of such Person. For purposes of this
definition, a decline in net asset value of the Acquired Fund
or Acquiring Fund arising out of its investment operations or
declines in market values of securities in its portfolio, the
discharge of liabilities, or the redemption of shares
representing interests in such fund, shall not constitute a
"Material Adverse Effect."
"Acquired Fund" has the meaning specified in the
preamble.
"Old Mutual Board" has the meaning specified in the
recitals.
"Acquired Trust" has the meaning specified in the
preamble.
"NYSE" means New York Stock Exchange.
"1940 Act" means the Investment Company Act of 1940, as
amended.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as
amended.
"Order" means any writ, judgment, decree, injunction or
similar order of any Government or Regulatory Body, in each
case whether preliminary or final.
31
"Party" and "Parties" each has the meaning specified in
the preamble.
"Person" means any individual, corporation, partnership,
limited liability company, firm, joint venture, association,
joint-stock company, trust, unincorporated organization,
Governmental or Regulatory Body or other entity.
"Protected Persons" has the meaning specified in
paragraph 9.2.
"Proxy Statement/Prospectus" has the meaning specified in
paragraph 4.1(p).
"Registration Statement" has the meaning specified in
paragraph 4.1(p).
"Reorganization" has the meaning specified in the
recitals.
"Acquired Fund" has the meaning specified in the
preamble.
"Old Mutual Governing Documents" has the meaning
specified in paragraph 1.1.
"SEC" means the U.S. Securities and Exchange Commission.
"Acquiring Trust" has the meaning specified in the
preamble.
"Touchstone Board" has the meaning specified in the
recitals.
"Touchstone Governing Documents" has the meaning
specified in paragraph 4.3(a).
"Transfer Documents" has the meaning specified in
paragraph 6.2(e).
"Valuation Time" has the meaning specified in paragraph 2.5.
32
IN WITNESS WHEREOF, the Parties, Touchstone and Old
Mutual Capital have caused this Agreement to be duly executed
and delivered by their duly authorized officers, as of the day
and year first above written.
OLD MUTUAL FUNDS II, on behalf of the Old Mutual Xxxxxx
Intermediate Fixed Income Fund
By: /s/ Xxxxxx X. Sluyters
Name: Xxxxxx X. Sluyters
Title: President, PEO
TOUCHSTONE INVESTMENT TRUST, on behalf of the Touchstone Core
Bond Fund
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
OLD MUTUAL CAPITAL, INC.
By: /s/ Xxxxxx X. Sluyters
Name: Xxxxxx X. Sluyters
Title: President
Solely for purposes of
Article VII and
Paragraphs 7.1, 7.2, 9.2, 10.5,
10.13 and 10.14
TOUCHSTONE ADVISORS, INC.
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: President
By:/s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: VP, Investment Research
and Product Mgt.
Solely for purposes of
Article VII and
Paragraphs 7.1, 7.2, 9.2, 10.5,
10.13 and 10.14
EXHIBIT A
The following chart shows (i) each Acquired Fund and its
classes of shares and (ii) the corresponding Acquiring Fund
with its classes of shares:
Acquired Fund, a series of Acquiring Fund, a series of
OLD MUTUAL FUNDS II TOUCHSTONE INVESTMENT TRUST
Old Mutual Xxxxxx Intermediate Touchstone Core Bond Fund
Fixed Income Fund
Class A Class A
Class C Class C
Class Z Class Y
Institutional Class Institutional Class
