AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") dated
as of December 9, 2011, by and among: (i) OLD MUTUAL FUNDS II, a
Delaware statutory trust ("Acquired Trust"), on behalf of each of the
series reflected below in the table contained in Recital A (each an
"Acquired Fund"); and (ii) TOUCHSTONE STRATEGIC TRUST, a Massachusetts
business 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 Acquiring Fund, each a series
of Old Mutual Funds II of Touchstone Strategic Trust
Old Mutual Analytic U.S. Touchstone US Long/Short Fund
Long/Short Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual Barrow Hanley Value Fund Touchstone Value Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual Copper Rock Inter- Touchstone International Small
national Small Cap Fund Cap Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual Focused Fund Touchstone Focused Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual Large Cap Growth Fund Touchstone Capital Growth Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual TS&W Small Cap Value Touchstone Small Cap Value
Fund Opportunities Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual TS&W Mid-Cap Value Fund Touchstone Mid Cap Value
Opportunities Fund
Class A Class A
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 of equal value to the net assets of the Acquired Fund
being acquired 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").
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: (1) participation in the Reorganization is in the
best interests of the Acquired Fund and its shareholders, and (2) the
value of the interests of existing shareholders of the Acquired Fund
will not be diluted as a result of its effecting the Reorganization.
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: (1) participation in the Reorganization is in the best interests
of the Acquiring Fund and its shareholders, if any, and (2) the value of
the interests of existing shareholders, if any, of the Acquiring Fund
will not be diluted as a result of its effecting the Reorganization.
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 (the "Liabilities"), to the Acquiring Fund, and the
Acquiring Fund shall assume all of the Liabilities of the Acquired
Fund. In consideration of the foregoing, the Acquiring Fund, at the
Effective Time shall deliver to the Acquired Fund full and fractional
(to the third decimal place) shares of the Acquiring Fund. The
aggregate number of shares of the Acquiring Fund shall be determined as
set forth in paragraph 2.3 by dividing (a) the value of the Fund Assets
attributable to the Acquired Fund, net of the Acquired Fund's
Liabilities (computed as of the Valuation Time (as defined below) in the
manner set forth in paragraph 2.1), by (b) the net asset value of one
share of the corresponding class of the Acquiring Fund shares (computed
as of the Valuation Time in the manner set forth in paragraph 2.2).
Holders of each class of shares of the Acquired Fund will receive shares
of the Corresponding Class, as set forth in Section E of the Recitals
and Exhibit A to this Agreement, of the Acquiring Fund, as set forth in
Section A of the Recitals. At and after the Effective Time, all of the
Fund Assets of the Acquired Fund shall become and be included in the
Fund Assets of the Acquiring Fund and the Liabilities of the Acquired
Fund shall become and be the Liabilities of and shall attach to the
Acquiring Fund. At and after the Effective Time, the Liabilities of the
Acquired Fund may be enforced only against the Acquiring Fund to the
same extent as if such Liabilities had been incurred by the Acquiring
Fund subject to any defense and/or set off that the Acquired Fund was
entitled to assert immediately prior to the Effective Time and further
subject to any defense and/or setoff that the Acquiring Trust or the
Acquiring Fund may from time to time be entitled to assert.
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.
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 per share of each Corresponding Class of the Acquiring Fund shall
be the net asset value per share of the Corresponding Class of the
Acquired Fund as of the Valuation Time. The net asset value of the
Acquiring Fund and the Acquired Fund will be determined by 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.
2.3 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 the number of outstanding Acquired Fund Shares
as of the Valuation Time.
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.
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 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 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 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 met the requirements
of Subchapter M of the Code for qualification and treatment as a
"regulated investment company" within the meaning of Sections 851
et seq. of the Code in respect of each taxable year since the
commencement of operations, and shall continue to meet such
requirements at all times through the Effective Time. The
Acquired Fund has not at any time since its inception been liable
for and is not now liable for any material income or excise tax
pursuant to Section 852 or 4982 of the Code. The Acquired Fund
has no other tax liability (foreign, state, local), except as
accrued on the Acquired Fund's Books and Records. The Acquired
Fund has no earnings and profits accumulated with respect to any
taxable year in which the provisions of Subchapter M of the Code
did not apply.
(o) The Acquired Fund is not under the
jurisdiction of a court in a "Title 11 or similar case" (within
the meaning of Section 368(a)(3)(A) of the Code).
(p) Except as otherwise disclosed in writing to
the Acquiring Fund, the Acquired Fund is in compliance in all
material respects with the Code and applicable regulations
promulgated under the Code pertaining to the reporting of
dividends and other distributions on and redemptions of its
capital stock and has withheld in respect of dividends and other
distributions and paid to the proper taxing authority all taxes
required to be withheld, and is not liable for any penalties which
could be imposed thereunder.
(q) The Acquired Fund has not granted any
waiver, extension or comparable consent regarding the application
of the statute of limitations with respect to any taxes or tax
return that is outstanding, nor has any request for such waiver or
consent been made.
(r) The Acquired Fund does not own any
"converted property" (as that term is defined in Treasury
Regulation Section 1.337(d)-7(a)(1)) that is subject to the
rules of Section 1374 of the Code as a consequence of the
application of Section 337(d)(1) of the Code and Treasury
Regulations thereunder.
(s) Except as otherwise disclosed to the
Acquiring Fund, the Acquired Fund has not previously been a party
to a tax-free reorganization under the Code within the preceding
twelve months.
(t) The Acquired Fund has not received written
notification from any tax authority that asserts a position
contrary to any of the above representations.
(u) All issued and outstanding shares of the
Acquired Fund have been offered and sold by the Acquired Fund in
compliance in all material respects with applicable registration
requirements of the 1933 Act and state securities Laws, are
registered under the 1933 Act and under the Laws of all
jurisdictions in which registration is or was required, except as
may have been previously disclosed to the Acquiring Fund in
writing. Such registrations are, in all material respects,
complete, current and have been continuously effective, and all
fees required to be paid have been paid. The Acquired Fund is not
subject to any "stop order" and is, and was, fully qualified to
sell its shares in each jurisdiction in which such shares are
being, or were, registered and sold.
(v) The current prospectus and statement of
additional information of the Acquired Fund, including amendments
and supplements thereto, and each prospectus and statement of
additional information of the Acquired Fund used at all times
during the past three years prior to the date of this Agreement
conform, or conformed at the time of its or their use, in all
material respects to the applicable requirements of the 1933 Act
and the 1940 Act and the rules and regulations of the SEC
thereunder, and do not, or did not, as of their dates of
distribution to the public, include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
materially misleading. The Acquired Fund currently complies in
all material respects with all investment objectives, policies,
guidelines and restrictions and any compliance procedures
established by the Acquired Fund.
(w) The combined proxy statement and prospectus
and statement of additional information (collectively, the "Proxy
Statement/Prospectus") to be included in the Acquiring Trust's
registration statement on Form N-14 (the "Registration Statement")
and filed in connection with this Agreement, and the documents
incorporated therein by reference and any amendment or supplement
thereto insofar as they relate to the Acquired Trust or the
Acquired Fund, each comply or will comply in all material respects
with the applicable requirements of the 1933 Act, 1934 Act and the
1940 Act and the applicable rules and regulations of the SEC
thereunder on the effective date of such Registration Statement.
Each of the Proxy Statement/Prospectus, Registration Statement and
the documents incorporated therein by reference and any amendment
or supplement thereto, insofar as it relates to the Acquired Trust
or the Acquired Fund, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances
under which they were made, not materially misleading on the
effective date of such Registration Statement; provided, however,
that the Acquired Trust makes no representations or warranties as
to the information contained in the Proxy Statement/Prospectus,
Registration Statement and the documents incorporated therein by
reference and any amendment or supplement thereto in reliance upon
and in conformity with information relating to the Acquiring Trust
or the Acquiring Fund, including information furnished by the
Acquiring Trust to the Acquired Fund specifically for use in
connection with the Proxy Statement/Prospectus, Registration
Statement and the documents incorporated therein by reference and
any amendment or supplement thereto or otherwise publicly
available on the Acquiring Trust's website or the SEC's public
disclosure system.
(x) Except as previously disclosed in writing
to the Acquiring Trust, at the Effective Time, the Acquired Fund
will have good and marketable title to the Fund Assets and full
right, power, and authority to sell, assign, transfer and, upon
delivery and payment for the Fund Assets, deliver such Fund
Assets, free and clear of all liens, mortgages, pledges,
encumbrances, charges, claims and equities, and subject to no
restrictions on the subsequent transfer thereof (other than any
Fund Assets consisting of restricted securities) or as otherwise
disclosed to the Acquiring Trust at least fifteen Business Days
prior to the Effective Time, provided that the Acquiring Fund will
acquire Fund Assets that are segregated or pledged as collateral
for the Acquired Fund's short sale and derivative positions (if
any), including without limitation, as collateral for swap
positions and as margin for futures positions, subject to such
segregation and liens that apply to such Fund Assets.
(y) The Acquired Trust has adopted and
implemented written policies and procedures in accordance with
Rule 38a-1 under the 1940 Act.
(z) Except as disclosed in writing to the
Acquiring Fund, to the best of the Acquired Fund's Knowledge, no
events have occurred and no issues, conditions or facts have
arisen which either individually or in the aggregate have had a
Material Adverse Effect on the Acquired Fund or its properties or
assets other than changes occurring in the ordinary course of
business.
4.2 Representations and Warranties of the Acquiring
Trust. The Acquiring Trust, on behalf of the Acquiring Fund, hereby
represents and warrants to the Acquired Fund as follows, which
representations and warranties shall be true and correct on the date
hereof and agrees to confirm the continuing accuracy and completeness of
the following at the Effective Time:
(a) The Acquiring Trust is a business trust
duly organized, validly existing and in good standing under the
Laws of the Commonwealth of Massachusetts and is duly qualified,
licensed or admitted to do business and is in good standing as a
foreign association under the Laws of each jurisdiction in which
the nature of the business conducted by it makes such
qualification, licensing or admission necessary, except in such
jurisdictions where the failure to be so qualified, licensed or
admitted and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on its properties or
assets or the properties or assets of the Acquiring Fund. The
Acquiring Fund has full power under the Acquiring Trust's Restated
Agreement and Declaration of Trust, as amended from time to time,
and By-laws ("Touchstone Governing Documents") to conduct its
business as it is now being conducted and to own properties and
assets for itself. The Acquiring Fund will prior to the Effective
Time have all necessary authorizations, licenses and approvals
from any applicable Governmental or Regulatory Body necessary to
carry on its business.
(b) The execution, delivery and performance of
this Agreement by the Acquiring Trust on behalf of the Acquiring
Fund and the consummation of the transactions contemplated herein
have been duly and validly authorized by the Touchstone Board and
the Touchstone Board has approved the Reorganization. No action
on the part of the shareholders of the Acquiring Fund is necessary
to authorize the execution, delivery and performance of this
Agreement by the Acquiring Trust on behalf of the Acquiring Fund
or the consummation of the Reorganization. This Agreement has
been duly and validly executed and delivered by the Acquiring
Trust on behalf of the Acquiring Fund, and assuming due
authorization, execution and delivery hereof by the Acquired Trust
on behalf of the Acquired Fund, is a legal, valid and binding
obligation of the Acquiring Trust, as it relates to the Acquiring
Fund, enforceable in accordance with its terms (subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
other Laws relating to or affecting creditors' rights, to general
equity principles and to any limitations on indemnity as may be
required under federal and state securities Laws).
(c) The authorized capital of the Acquiring
Fund consists of an unlimited number of shares of beneficial
interest without par value. As of the date of this Agreement, the
Acquiring Fund has no outstanding shares of any class. As of the
Valuation Time, the outstanding shares of beneficial interest of
the Acquiring Fund will consist solely of shares having the
characteristics described in the Acquiring Fund's prospectus
effective at such time. 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) The Acquiring Fund is, and will at the
Effective Time be, a new series portfolio of the Acquiring Trust
created within the last 12 months, and such Acquiring Fund will
not have had any assets (other than assets required to meet the
requirements of Section 14(a) of the 1940 Act or other seed
capital) or operations at any time prior to the Effective Time.
(i) The Acquiring Fund was established in
order to effect the transactions described in this Agreement, and,
prior to the Effective Time, shall not have carried on any
business activity (other than such activities as are customary to
the organization of a new series prior to its commencement of
investment operations). It has not yet filed its first federal
income tax return and, thus, has not yet elected to be treated as
a "regulated investment company" for federal income tax purposes.
However, upon filing its first federal income tax return at the
completion of its first taxable year, the Acquiring Fund shall
elect to be a "regulated investment company" under Subchapter M of
the Code and until such time shall take all steps reasonably
necessary to ensure that it qualifies for taxation as a "regulated
investment company" under Sections 851 and 852 of the Code. The
Acquiring Fund is and will at the Effective Time be treated as a
separate corporation under Section 851(g) of the Code.
(j) The shares of the Acquiring Fund to be
issued and delivered to the Acquired Fund for the account of the
Acquired Fund (and to be distributed immediately thereafter to its
shareholders) pursuant to the terms of this Agreement will have
been duly authorized at the Effective Time and, when so issued and
delivered, will be registered under the 1933 Act, duly and validly
issued, fully paid and non-assessable and no shareholder of the
Acquiring Fund shall have any statutory or contractual preemptive
right of subscription or purchase in respect thereof. In regard
to the statement above that the Acquiring Fund shares will be non-
assessable, it is noted that the Acquiring Trust is a
"Massachusetts business trust" and under Massachusetts' Law,
shareholders could, under certain circumstances, be held
personally liable for the obligations of the Acquiring Fund;
however, the Acquiring Fund has included appropriate provisions
disclaiming such liability in all material contracts entered into
between the Acquiring Fund and any third-party.
(k) As of the Valuation Time, the Acquiring
Fund's prospectus and statement of additional information will
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 will 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.
(l) 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.
(m) The Acquiring Trust has adopted and
implemented written policies and procedures in accordance with
Rule 38a-1 under the 1940 Act.
(n) 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.
(o) 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 other than changes
occurring in the ordinary course of business.
(p) The Acquiring Trust 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).
(q) 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 only
in the ordinary course and in accordance with this Agreement. It is
understood that such ordinary course of business with respect to the
Acquired Fund shall include (a) the declaration and payment of customary
dividends and other distributions; (b) shareholder purchases and
redemptions; (c) the continued good faith performance by the investment
adviser, sub-adviser, administrator, distributor and other service
providers of their respective responsibilities in accordance with their
agreements with the Acquired Fund and applicable Law; and (d) the
continued compliance with the Acquired Fund's prospectus and statement
of additional information. It is understood that such ordinary course
of business with respect to the Acquiring Fund shall be limited to such
actions as are customary to the organization of a new series prior to
its commencement of investment operations. 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 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 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 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.
5.9 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.
5.10 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.
5.11 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.
5.12 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.
5.13 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 from the date on which any such
representation or warranty shall not be true and correct in all
material respects to cure such condition.
(b) The Acquiring Fund shall have furnished to
the Acquired Fund the opinion of Xxxxxx Xxxxxxxx LLP dated as of
the Effective Time, substantially to the effect that:
(i) the Acquiring Trust is a business trust,
validly existing under Massachusetts Law, and has power under the
Touchstone Governing Documents to conduct its business and own its
assets as described in its currently effective registration statement on
Form N-1A;
(ii) the Acquiring Trust is registered with the
SEC under the 1940 Act as an open-end management investment company and
its registration with the SEC is in full force and effect;
(iii) the Acquiring Fund Shares to be issued and
delivered by the Acquiring Trust pursuant to this Agreement have been
duly authorized for issuance and, when issued and delivered as provided
herein, will be validly issued, fully paid and non-assessable under
Massachusetts Law and no preemptive rights of shareholders exist with
respect to any such shares or the issue or delivery thereof;
(iv) except as disclosed in writing to the
Acquired Fund, such counsel knows of no material legal proceedings
pending or threatened in writing against the Acquiring Trust;
(v) this Agreement has been duly authorized,
executed and delivered by the Acquiring Trust on behalf of the Acquiring
Fund and, assuming due authorization, execution and delivery by the
Acquired Trust on behalf of the Acquired Fund, constitutes a valid and
legally binding obligation of the Acquiring Trust, on behalf of the
Acquiring Fund, enforceable against the Acquiring Trust in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization, moratorium and other Laws relating to or
affecting creditors' rights generally, fraudulent conveyance,
receivership, and to general equity principles (whether considered in a
proceeding in equity or at law) and to an implied covenant of good faith
and fair dealing;
(vi) the Registration Statement has become
effective under the 1933 Act and, to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or threatened by the SEC;
(vii) the execution and delivery of this
Agreement did not and the consummation of the transactions herein
contemplated will not conflict with or result in a material breach of
the terms or provisions of, or constitute a material default under, the
Touchstone Governing Documents or any material agreement or instrument
pertaining to the Acquiring Fund identified as an Exhibit in Part C of
the registration statement on Form N-1A last filed by the Acquiring
Trust;
(viii) the execution and delivery
of this Agreement did not and the consummation of the transactions
herein contemplated will not conflict with or result in a material
violation by the Acquiring Trust or the Acquiring Fund of any terms,
conditions, or provisions of any federal securities Law or Massachusetts
Law as it relates to voluntary associations commonly referred to as
"Massachusetts business trusts;" and
(ix) to the knowledge of
such counsel, no consent, approval, authorization, or other action by or
filing with any Governmental or Regulatory Body is required in
connection with the consummation of the transactions herein
contemplated, except such as have been obtained or made under the 1933
Act, 1934 Act and the 1940 Act and the applicable rules and regulations
of the SEC thereunder and Massachusetts Law.
In rendering such opinion, Xxxxxx Xxxxxxxx LLP may rely upon
certificates of officers of the Acquiring Trust and of public officials
as to matters of fact.
(c) The Acquiring Fund
shall have furnished to the Acquired Fund a certificate of the
Acquiring Fund, signed by the President or Vice President and
Treasurer of the Acquiring Trust, dated as of the Effective Time,
to the effect that they have examined the Proxy
Statement/Prospectus and the Registration Statement (and any
supplement thereto) and this Agreement and that:
(i) To the best of
their Knowledge, the representations and warranties of the Acquiring
Trust in this Agreement are true and correct in all material respects on
and as of the Effective Time and the Acquiring Trust has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Effective Time; and
(ii) no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose are pending or, to the
Acquiring Trust's Knowledge, threatened in writing.
(d) An officer of the
Acquired Trust shall have received the confirmation from the
Acquiring Fund required under paragraph 3.3 of this Agreement.
(e) The Acquiring Fund
shall have duly executed and delivered to the Acquired Fund such
assumptions of Liabilities and other instruments as the Acquired
Fund may reasonably deem necessary or desirable to evidence the
transactions contemplated by this Agreement, including the
assumption of all of the Liabilities of the Acquired Fund by the
Acquiring Fund.
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:
(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 1940 Act and the applicable 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 therefore.
(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 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 all of the assets of the Acquired Fund solely
in exchange for the Acquiring Fund's assumption 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 its assets to the Acquiring Fund solely in
exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund 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 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;
(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 therefor;
(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.
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 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 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 Strategic Trust
000 Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
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, 5.10, 5.11, 5.12,
5.13, 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.
10.8 Governing Law. This Agreement shall be
governed by and construed in accordance with the Laws of the
Commonwealth of Massachusetts, without regard to its principles of
conflicts of Laws.
10.9 Further Assurances. Subject to the
terms and conditions herein provided, each of the Parties hereto shall
use its reasonable best efforts to take, or cause to be taken, such
action to execute and deliver, or cause to be executed and delivered,
such additional documents and instruments and to do, or cause to be
done, all things necessary, proper or advisable under the provisions of
this Agreement and under applicable Law to consummate and make effective
the Reorganization contemplated by this Agreement, including, without
limitation, delivering and/or causing to be delivered to each Party
hereto each of the items required under this Agreement as a condition to
such Party's obligations hereunder. In addition, the Acquired Fund
shall deliver or cause to be delivered to the Acquiring Trust at the
Closing, the Books and Records of the Acquired Fund (regardless of whose
possession they are in).
10.10 Beneficiaries. Nothing contained in this
Agreement shall be deemed to create rights in Persons not Parties
(including, without limitation, any shareholder of the Acquiring Fund or
the Acquired Fund).
10.11 Validity. Whenever possible, each provision
and term of this Agreement shall be interpreted in a manner to be
effective and valid, but if any provision or term of this Agreement is
held to be prohibited by Law or invalid, then such provision or term
shall be ineffective only in the jurisdiction or jurisdictions so
holding and only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder
of such provision or term or the remaining provisions or terms of this
Agreement.
10.12 Effect of Facsimile Signature. A facsimile
signature of an authorized officer of a Party hereto on any Transfer
Document shall have the same effect as if executed in the original by
such officer.
10.13 The Acquiring Trust Liability. The name
"Touchstone Strategic Trust" is the designation of the trustees for the
time being under a Restated Agreement and Declaration of Trust of the
Trust dated May 19, 1993, as amended through November 17, 2011, and all
Persons dealing with the Acquiring Trust or the Acquiring Fund must look
solely to the property of the Acquiring Trust or the Acquiring Fund for
the enforcement of any claims as none of its trustees, officers, agents
or shareholders assume any personal liability for obligations entered
into on behalf of the Acquiring Trust. No other portfolio of the
Acquiring Trust shall be liable for any claims against the Acquiring
Fund. The Parties, along with Touchstone and Old Mutual Capital,
specifically acknowledge and agree that any liability of the Acquiring
Trust under this Agreement with respect to the Acquiring Fund, or in
connection with the transactions contemplated herein with respect to the
Acquiring Fund, shall be discharged only out of the assets of the
Acquiring Fund and that no other portfolio of the Acquiring Trust shall
be liable with respect thereto.
10.14 The Acquired Trust Liability. The name "Old
Mutual Funds II" is the designation of the trustees for the time being
under an Agreement and Declaration of Trust, dated March 1, 2006, as
amended through May 20, 2011, and all Persons dealing with the Acquired
Trust or the Acquired Fund must look solely to the property of the
Acquired Trust or the Acquired Fund for the enforcement of any claims as
none of its trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the
Acquired Trust. No other portfolio of the Acquired Trust shall be
liable for any claims against the Acquired Fund. The Parties, along
with Touchstone and Old Mutual Capital, specifically acknowledge and
agree that any 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.
"Fund Assets" means all properties and assets of every kind and
description whatsoever, including, without limitation, all cash, cash
equivalents, securities, claims (whether absolute or contingent, known
or unknown, accrued or unaccrued and including, but not limited to, any
claims that the Acquired Fund may have against any Person), litigation
proceeds of any type (including, without limitation, proceeds resulting
from litigation involving portfolio securities as well as market
timing/late trading actions or settlements) and receivables (including
dividend and interest receivable), goodwill and other intangible
property, Books and Records, and all interests, rights, privileges and
powers, owned by the Acquired Fund, and any prepaid expenses shown on
the Acquired Fund's books at the Valuation Time, excluding 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 liabilities of the Acquired Fund.
"Material Adverse Effect" as to any Person means a material adverse
effect on the business, results of operations or financial condition of
such Person. For purposes of this definition, a decline in net asset
value of the Acquired Fund or Acquiring Fund arising out of its
investment operations or declines in market values of securities in its
portfolio, the discharge of liabilities, or the redemption of shares
representing interests in such fund, shall not constitute a "Material
Adverse Effect."
"Acquired Fund" has the meaning specified in the preamble.
"Old Mutual Board" has the meaning specified in the recitals.
"Acquired Trust" has the meaning specified in the preamble.
"NYSE" means New York Stock Exchange.
"1940 Act" means the Investment Company Act of 1940, as amended.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Order" means any writ, judgment, decree, injunction or similar
order of any Government or Regulatory Body, in each case whether
preliminary or final.
"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.
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 the following of its separate
series identified on Exhibit A hereto
By: /s/ Xxxxxx X. Sluyters
Name: Xxxxxx X. Sluyters
Title: President, PEO
TOUCHSTONE STRATEGIC TRUST, on behalf of each of its separate series
identified on Exhibit A hereto
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Vice President
OLD MUTUAL CAPITAL, INC.
By: /s/ Xxxxxx X. Sluyters
Name: Xxxxxx X. Sluyters
Title: President
Solely for purposes of Article VII and
Paragraphs 7.1, 7.2, 9.2, 10.5, 10.13 and 10.14
TOUCHSTONE ADVISORS, INC.
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: President
By: /s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: VP, Investment Research and Product Mgt.
Solely for purposes of Article VII and
Paragraphs 7.1, 7.2, 9.2, 10.5, 10.13 and 10.14
EXHIBIT A
The following chart shows (i) each Acquired Fund and its classes of
shares and (ii) the corresponding Acquiring Fund with its classes of
shares:
Acquired Fund, each a series Acquiring Fund, each a series
of Old Mutual Funds II of Touchstone
Old Mutual Analytic U.S. Long/Short Fund Touchstone US Long/Short Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual Barrow Hanley Value Fund Touchstone Value Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual Copper Rock Touchstone International
International Small Cap Fund Small Cap Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual Focused Fund Touchstone Focused Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual Large Cap Growth Fund Touchstone Capital Growth Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual TS&W Small Cap Value Fund Touchstone Small Cap Value
Opportunities Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class
Old Mutual TS&W Mid-Cap Value Fund Touchstone Mid Cap Value
Opportunities Fund
Class A Class A
Class Z Class Y
Institutional Class Institutional Class