AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this
"Agreement") dated as of December 6, 2011, by and among: (i)
OLD MUTUAL FUNDS II, a Delaware statutory trust ("Acquired
Trust"), on behalf of each of the series reflected below in
the table contained in Recital A (each an "Acquired Fund");
and (ii) TOUCHSTONE FUNDS GROUP TRUST, a Delaware statutory
trust ("Acquiring Trust"), on behalf of each 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) each Acquired Fund and its classes of shares and
(ii) the corresponding Acquiring Fund with its classes of shares:
Acquired Fund, each a series of Acquiring Fund, each a series
OLD MUTUAL FUNDS II of TOUCHSTONE FUNDS GROUP TRUST
Old Mutual Barrow Hanley Core Touchstone Total Return Bond
Bond Fund Institutional Class Fund Institutional Class
Old Mutual Xxxxxx Xxxxx Term Touchstone Ultra Short
Fixed Income Fund Duration Fixed Income Fund
Class A Class A
Class C Class C
Class Z Class Y
Institutional Class Institutional Class
B. Each Acquired Fund
and each Acquiring Fund are each a separate series of an open-
end, registered investment company of the management type.
C. Each Acquired Fund
and each 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. Each
reorganization shall consist of: (1) all of the Fund Assets
(as defined below) of an 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
(each a "Reorganization").
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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 the Acquired Trust, has determined
with respect to each 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 each Acquiring Fund that
participation in the Reorganization is in the best interests
of the Acquiring Fund and its shareholders.
H. The consummation of
any Reorganization shall not be contingent on the consummation
of any other Reorganization and it is the intention of the
parties hereto that each Reorganization described herein shall
be conducted separately of the others.
I. For
convenience, the balance of this Agreement refers only to a
single Reorganization, one Acquired Fund and one Acquiring
Fund, but the terms and conditions hereof shall apply
separately to each Reorganization and the Acquired Fund and
Acquiring Fund participating therein.
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
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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.
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.
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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
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
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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.
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.
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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 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
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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 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
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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 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
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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 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
9
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 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.
10
(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 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 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 Acquiring Fund. The Acquiring
Fund has full power under the Acquiring Trust's Amended and
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 with a par value of $0.01 per
share. 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,
11
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 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
12
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 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
13
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 purchase in respect thereof.
(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.
(ii) Except as
set forth in the notes thereto, all such financial statements
were prepared in accordance with U.S. generally accepted
accounting principles,
14
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 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
15
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
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
16
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 statutory trust, validly existing under
the Delaware Statutory Trust Act, 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 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 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 Delaware Law; 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 Delaware 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 Funds Group 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 State of Delaware, 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 Funds Group Trust" is the designation of
the trustees for the time being under a Amended and Restated
Agreement and Declaration of Trust dated September 7, 1998, as
amended through November 17, 2006, 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,
29
along with Touchstone and Old Mutual Capital, specifically
acknowledge and agree that any 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,
30
rights, privileges and powers, owned by the Acquired Fund, and
any prepaid expenses shown on 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.
31
"Order" means any writ, judgment, decree, injunction or
similar order of any Government or Regulatory Body, in each
case whether preliminary or final.
"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 each of its separate series
reflected on Exhibit A
By:
/s/ Xxxxxx X. Sluyters
Name: Xxxxxx X. Sluyters
Title: President, PEO
TOUCHSTONE FUNDS GROUP TRUST, on behalf of each of its
separate series reflected on Exhibit A
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
33
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, each a series of Acquiring Fund, each a series
OLD MUTUAL FUNDS II of TOUCHSTONE FUNDS GROUP TRUST
Old Mutual Barrow Hanley Core Touchstone Total Return Bond
Bond Fund Institutional Class Fund Institutional Class
Old Mutual Xxxxxx Xxxxx Term Touchstone Ultra Short
Fixed Income Fund Duration Fixed Income Fund
Class A Class A
Class C Class C
Class Z Class Y
Institutional Class Institutional Class
