This Novation and Amendment Agreement is dated as of February 25, 2008.
Reference is hereby made to the Securities Lending Agency Agreement dated as of
March 17, 2003, as amended to date (the "Agreement") by and among Touchstone
Investment Trust, Touchstone Strategic Trust, and Touchstone Variable Series
Trust (each a "Trust") acting with respect to each series thereof as set forth
on Exhibit A hereto (each a "Series") (each Trust on behalf of each of its
respective Series thereof, each the "Fund"), and Xxxxx Brothers Xxxxxxxx & Co.,
a limited partnership organized under the laws of the State of New York (the
"Lending Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the terms and conditions of the Agreement the Lending
Agent acts as securities lending agent on behalf of each Fund.
WHEREAS, the Lending Agent and each Fund wish to add the Touchstone Tax
Free Trust, the Touchstone Institutional Funds Trust, and the Touchstone Funds
Group Trust and certain series thereof (each a "Novated Party") as additional
parties to the Agreement for the purpose of each Novated Party receiving
securities lending services from the Lending Agent, and certain Trusts wish to
add new Series to the Agreement.
NOW THEREFORE, the Lending Agent, each Trust and each Novated Party hereby
agree by execution of this Novation Agreement that (i) the Lending Agent is
hereby appointed as Lending Agent of the Novated Party and each series thereof
designated series thereof set forth on Exhibit A and Schedule 1 hereto, (ii)
each Novated Party and each series thereof shall hence forth be known as a
"Trust" and a "Series", respectively, as such terms are defined in the Agreement
and shall be fully bound by the terms and conditions of the Agreement effective
immediately upon execution of this Novation Agreement as if such Novated Party
were an original party to the Agreement, (iii) certain new Series have been
added to Exhibit A and Schedules 1 of the Agreement as per the request of the
respective Trust, (iv) the Agreement is amended by deleting Schedules 5 and 7
therefrom and substituting Schedules 5 and 7 attached hereto therefore, and (v)
the Agreement is further amended by adding the following new Section 26 thereto:
"26. BORROWER DEFAULT. In the event of default by an Approved Borrower
with respect to any loan entered into pursuant to a SLA, BBH&Co. will take such
actions as are set forth in the applicable SLA. In addition, the following
provisions shall apply.
26.1 REPLACEMENT OF LOANED SECURITIES. If a borrower fails, pursuant to
the SLA with BBH&Co., to return loaned securities with respect to a
loan when due ("Default Event"), then BBH&Co. shall be responsible
to the Fund as follows: BBH&Co. shall use the Collateral or the
proceeds of the liquidation of such Collateral to purchase for the
affected Fund's account, for settlement in the normal course,
replacement securities of the same issue, type, class and series as
that of the loaned securities ("Buy-In"). If the value of the
Collateral is less than the purchase cost of replacement securities
(or liquidated damages calculated under Section 26.2), BBH&Co. shall
be responsible for satisfying such shortfall but only to the extent
that such shortfall is not due to any diminution in the Collateral
Value (as defined in this Section) which is due to the reinvestment
risk borne by the Fund pursuant to this Agreement. For purposes of
this Section, "Collateral Value" shall be calculated in accordance
with the following terms:
26.1.1 VALUE OF CASH COLLATERAL. In the case of loans
collateralized solely by cash Collateral, the greater of:
(i) the amount of the cash Collateral pledged by a borrower
with respect to a loan, or (ii) the market value of the
investment of such cash Collateral.
NOVATION AGREEMENT
26.1.2 VALUE OF SECURITIES COLLATERAL. In the case of loans
collateralized solely by securities Collateral, the market
value of such Collateral.
26.1.3 VALUE OF LETTERS OF CREDIT. In the case of loans
collateralized solely by letters of credit, the respective
available undrawn amounts.
26.1.4 VALUATION DATE. Collateral Value shall be determined on the
date of the Buy-In (or the payment made pursuant to Section
26.2 below).
26.1.5 MARKET VALUE. Market value shall be determined by BBH&Co.,
where applicable, based upon prices obtained from
recognized pricing services or dealer price quotations.
26.1.6 MULTIPLE FORMS OF COLLATERAL. Where a loan is
collateralized by more than one type of Collateral, the
aggregate market value of Collateral securing such loan
(for the purpose of computing the indemnity) shall be the
sum of the market values for each relevant type of
Collateral.
26.2 IMPOSSIBILITY OF REPLACEMENT/LIQUIDATED DAMAGES. If BBH&Co.
determines that a Buy-In is commercially impracticable, BBH&Co.
shall, in lieu of effecting a Buy-In, pay to the affected Fund an
amount equal to the market value of the loaned securities determined
at the close of business on the date of the Default Event to be
reduced by any shortfall in the Collateral Value that is due to the
reinvestment risk borne by the Fund pursuant to this Agreement.
26.3 REPLACEMENT OF DISTRIBUTIONS. In addition to making the purchases or
payments required above, BBH&Co. shall pay to the Fund the value of
all distributions on the loaned securities, the record dates for
which occur before the date that BBH&Co. executes a Buy-In or makes
the payments to the Fund required pursuant to Section 26.2 and that
have not otherwise been credited to the Fund's Custody Account. For
purposes of this Section, the value of such distributions shall be
calculated net of taxes, expenses or other deductions that would
normally accrue to such distributions. BBH&Co. shall use Collateral
or the proceeds of such Collateral to the extent available to make
such payments of distributions and BBH&Co. shall be responsible for
satisfying any shortfall, but only to the extent that such shortfall
in the Collateral Value is not due to the reinvestment risk borne by
the Fund pursuant to the Agreement.
26.4 COLLATERAL NOT IN POSSESSION OR CONTROL OF BBH&CO. If, on the date
of the Default Event by reason of the Fund's request or actions,
BBH&Co. is not in possession or control of the Collateral allocated
to the defaulted Loan, the Fund shall cause such Collateral to be
transferred to BBH&Co. by the close of business on the day BBH&Co.
requests such a transfer. Upon BBH&Co.'s timely receipt such
Collateral shall be applied by BBH&Co. against the cost of any
Buy-In or replacement payment in accordance with Section 26.2. In
the event that such Collateral is not timely transferred to BBH&Co.,
the Buy-In or replacement provisions of Section 8.2 shall not apply
and the compensation to the Fund shall be limited to the shortfall,
if any, between the Collateral Value and the market value of the
loaned securities as determined at the close of business on (i) the
date of the Default Event or (ii) the date such Collateral is so
transferred, but only to the extent that any such shortfall in the
Collateral Value is not due to the reinvestment risk borne by the
Fund pursuant to this Agreement. The date of the valuation of the
loaned securities pursuant to (i) or (ii) of this Section 26.4 shall
be determined by BBH&Co. in its sole discretion.
2
NOVATION AGREEMENT
26.5 SUBROGATION AND ASSIGNMENT OF RIGHTS IN COLLATERAL. In the event
that BBH&Co. is required to perform a Buy-In, make any payment of
distributions, and/or make any payment of liquidated damages under
this Section, the Fund agrees that, to the extent of such
performance or payment, each of them shall be subrogated to, and the
Fund shall assign, and be deemed to have assigned, to them all of
such Fund's rights in, to and against the Borrower in respect of the
related loan, any Collateral pledged by the Borrower in respect of
such loan (including any letters of credit and the issuers thereof)
and all proceeds of such Collateral. In the event that the Fund
receives or is credited with any payment, benefit or value from or
on behalf of the Borrower in respect of rights to which BBH&Co. is
subrogated as provided herein, the Fund shall promptly remit or pay
to BBH&Co. the same (or, where applicable, its United States dollar
equivalent)."
This Novation and Amendment Agreement together with the Agreement
represents the entire agreement and understanding of the parties hereto and
shall be governed by the laws of the State of New York.
The undersigned acknowledges that (I/we) have received a copy of this document .
XXXXX BROTHERS XXXXXXXX & CO.
By:_/s/ Xxxxx X. Kent_______________________
Name:
Title: Managing Director
TOUCHSTONE INVESTMENT TRUST FOR ITSELF
AND ON BEHALF OF EACH SERIES THEREOF SET FORTH
IN EXHIBIT A HERETO
By: _/s/ Xxxxxxx Dent___________________
Name: Xxxxxxx Xxxx
Title: X.X.
XXXXXXXXXX STRATEGIC TRUST FOR ITSELF
AND ON BEHALF OF EACH SERIES THEREOF SET FORTH
IN EXHIBIT A HERETO
By: _/s/ Xxxxxxx Dent_________________
Name: Xxxxxxx Xxxx
Title: V.P.
3
NOVATION AGREEMENT
TOUCHSTONE VARIABLE SERIES TRUST FOR ITSELF
AND ON BEHALF OF EACH SERIES THEREOF SET FORTH
IN EXHIBIT A HERETO
By: _/s/ Xxxxxxx Dent__________________
Name: Xxxxxxx Xxxx
Title: X.X.
XXXXXXXXXX FUNDS GROUP TRUST FOR ITSELF
AND ON BEHALF OF EACH SERIES THEREOF SET FORTH
IN EXHIBIT A HERETO
By: _/s/ Xxxxxxx Dent___________________
Name:
Title: X.X.
XXXXXXXXXX TAX FREE TRUST FOR ITSELF
AND ON BEHALF OF EACH SERIES THEREOF SET FORTH
IN EXHIBIT A HERETO
By: _/s/ Xxxxxxx Dent_________________
Name:
Title: X.X.
XXXXXXXXXX INSTITUTIONAL FUNDS TRUST FOR ITSELF
AND ON BEHALF OF EACH SERIES THEREOF SET FORTH
IN EXHIBIT A HERETO
By: __/s/ Xxxxxxx Dent__________________
Name:
Title: V.P.
4
NOVATION AGREEMENT
EXHIBIT A
Touchstone Investment Trust on behalf
of the following Series thereof:
Touchstone High Yield Fund
Touchstone Core Bond Fund
Touchstone US Government Money Market Fund
Touchstone Institutional Money Market Fund
Touchstone Money Market Fund
Touchstone Strategic Trust on behalf
of each of the following Series thereof:
Touchstone Large Cap Growth Fund
Touchstone Growth Opportunities Fund
Touchstone Small Cap Growth Fund
Touchstone Micro Cap Growth Fund
Touchstone Large Cap Value Fund
Touchstone Mid Cap Growth Fund
Touchstone Diversified Small Cap Growth Fund
Touchstone Large Cap Core Equity Fund
Touchstone Variable Series Trust on behalf
of each of the following Series thereof:
Touchstone Balanced Fund
Touchstone Value Plus Fund
Touchstone Enhanced Dividend 30 Fund
Touchstone Eagle Capital Appreciation Fund
Touchstone Growth & Income Fund
Touchstone High Yield Fund
Touchstone Third Avenue Value Fund
Touchstone Mid Cap Growth Fund
Touchstone Baron Small Cap Fund
Touchstone Bond Fund
Touchstone Money Market
Touchstone Conservative ETF
Touchstone Moderate ETF
Touchstone Aggressive ETF
Touchstone Enhanced ETF
Touchstone Tax Free Trust on behalf
of each of the following Series thereof:
Touchstone Florida Tax Free Money Market Fund
Touchstone Ohio Insured Tax Free Fund
Touchstone Ohio Tax Free Money Market Fund
Touchstone Tax Free Money Market Fund
5
NOVATION AGREEMENT
Touchstone Institutional Funds Trust on behalf
of each of the following Series thereof:
Touchstone Sands Capital Institutional Growth Fund
Touchstone JSAM Institutional Large Cap Value Fund
Touchstone JSAM Institutional Value Fund
Touchstone Mazama Institutional Growth Fund
Touchstone Funds Group Trust on behalf
of each of the following Series thereof:
Touchstone Value Opportunities Fund
Touchstone Health Care and Biotechnology Fund
Touchstone Ultra Short Duration Fixed Income Fund
Touchstone Sands Capital Select Growth Fund
Touchstone International Equity Fund
Touchstone Mid Cap Fund
Touchstone Strategic Value and High Income Fund
Touchstone Clover Core Fixed Income Fund
Touchstone Short Duration Fixed Income Fund
Touchstone Small Cap Value Opportunities Fund
Touchstone Small Cap Value Opportunities Fund
Touchstone Small Cap Value Opportunities Fund
Touchstone Diversified Small Cap Value Fund
Touchstone Diversified Small Cap Value Fund
6
NOVATION AGREEMENT
SCHEDULE 1
All Securities held in each series set forth on Exhibit A hereto of Touchstone
Investment Trust, Touchstone Strategic Trust, Touchstone Variable Series Trust,
Touchstone Tax Free Trust, Touchstone Institutional Funds Trust, and Touchstone
Institutional Funds Group Trust held in custody at BBH.
7
NOVATION AGREEMENT
SCHEDULE 5
PERMITTED INVESTMENTS
FOR CASH COLLATERAL
o Securities Lending Investment Fund, a Series of the Xxxxx Brothers
Investment Trust
o Touchstone Institutional Money Market Fund
8
SCHEDULE 7
FEES
For each cash collateralized loans effected hereunder, 20% of the difference
between (i) the income earned on the investment of cash Collateral held with
respect to such loan (after deduction of any custody, investment, management or
related fees) and (ii) the Cash Collateral Fee (as defined in the applicable
SLA) paid to the borrower in respect of such loan.
For each non-cash collateralized loan effected hereunder, 20% of the Loan Fee
(as defined in the applicable SLA) paid by the borrower with respect to such
loan.
9
