Exhibit 77 Q (1) (g)
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
as of this 23rd day of May 2012, by and between Touchstone Funds Group
Trust, a Delaware statutory trust, with its principal place of business
at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (the "Acquiring Fund
Registrant"), on behalf of Touchstone Ultra Short Duration Fixed Income
Fund (the "Acquiring Fund"), and Fifth Third Funds, a Massachusetts
business trust, with its principal place of business at ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (the "Acquired Fund Registrant"),
on behalf of Fifth Third Short Term Bond Fund (the "Acquired Fund" and,
collectively with the Acquiring Fund, the "Parties"). Fifth Third Asset
Management, Inc., an Ohio corporation ("FTAM") joins this Agreement
solely for purposes of Article VIII; and Touchstone Advisors, Inc., an
Ohio corporation ("Touchstone Advisors"), joins this Agreement solely
for purposes of Article VIII. Capitalized terms not otherwise defined
herein shall have the meaning set forth in Article XIII hereof.
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury
Regulations promulgated thereunder. The reorganization will consist of:
(i) the transfer of all of the assets of the Acquired Fund in exchange
solely for corresponding class shares of the Acquiring Fund as set forth
in the table below and on Exhibit A to this Agreement (each, a
"Corresponding Class") and the assumption by the Acquiring Fund of the
liabilities, as set forth in paragraph 1.3, of the Acquired Fund; (ii)
the distribution of the Corresponding Class shares of the Acquiring Fund
to the holders of the outstanding shares of the Acquired Fund as set
forth in the table below and on Exhibit A of this Agreement; and (iii)
the liquidation and dissolution of the Acquired Fund as provided herein,
all upon the terms and conditions set forth in this Agreement (the
"Reorganization").
The following chart shows (i) the Acquired Fund and its classes of
shares and (ii) the Acquiring Fund and its corresponding classes of
shares:
Acquired Fund, a series of Acquiring Fund, a series of
FIFTH THIRD FUND, TOUCHSTONE FUNDS GROUP TRUST,
and its Classes of Shares and its Classes of Shares
Fifth Third Short Term Bond Fund Touchstone Ultra Short Duration
Fixed Income Fund
Class A Class A
Class C Class C
Institutional Class Y
WHEREAS, the Acquiring Fund and the Acquired Fund are separate
series of the Acquiring Fund Registrant and the Acquired Fund
Registrant, respectively, and the Acquiring Fund Registrant and Acquired
Fund Registrant are both open-end, registered management investment
companies under the 1940 Act, and the Acquired Fund owns securities that
generally are assets of the character in which the Acquiring Fund is
permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue its shares of
beneficial interests;
WHEREAS, the Board of Trustees of the Acquiring Fund Registrant
("Touchstone Board") has determined that the Reorganization, with
respect to the Acquiring Fund, is in the best interests of the Acquiring
Fund; and
WHEREAS, the Board of Trustees of the Acquired Fund Registrant
("Fifth Third Board") has determined that the Reorganization, with
respect to the Acquired Fund, is in the best interests of the Acquired
Fund;
NOW THEREFORE, in consideration of the mutual premises,
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
FTAM and Touchstone Advisors to the extent indicated above, intending to
be legally bound hereby, agree as follows:
ARTICLE I
TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND
SHARES AND LIQUIDATION AND DISSOLUTION OF THE ACQUIRED FUND
1.1 THE EXCHANGE. Subject to the terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, the Acquired Fund agrees to transfer all Fund Assets,
as defined in paragraph 1.2, to the Acquiring Fund. In exchange, the
Acquiring Fund agrees to assume the liabilities of the Acquired Fund, as
set forth in paragraph 1.3, and deliver to the Acquired Fund full and
fractional shares of the Acquiring Fund ("Acquiring Fund Shares"). The
number of full and fractional shares of each Corresponding Class of
Acquiring Fund Shares (to the third decimal place) shall be determined
by dividing (a) the value of the Fund Assets attributable to the
corresponding class of the Acquired Fund, net of the Acquired Fund's
Liabilities attributed to that class of the Acquired Fund (computed as
of the Valuation Time (as defined in paragraph 2.5) in the manner set
forth in paragraph 2.1), by (b) the net asset value of one share of such
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 of the Acquiring Fund, as set forth in Exhibit A to
this Agreement. Such transactions shall take place at the closing on
the Effective Time provided for in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of the Acquired
Fund to be acquired by the Acquiring Fund shall consist of all Fund
Assets. "Fund Assets" shall mean 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.
(a) The Acquired Fund has provided the Acquiring Fund with its most
recent audited financial statements, which contain a list of all of the
Acquired Fund's assets as of the date of such statements. The Acquired
Fund hereby represents that as of the date of the execution of this
Agreement and as of the Effective Time (as defined below), there have
been no changes in its financial position as reflected in such financial
statements other than those occurring in the ordinary course of business
in connection with the purchase and sale of securities, the issuance and
redemption of Acquired Fund shares and the payment of normal operating
expenses, dividends and capital gains distributions.
(b) At least ten Business Days prior to the Valuation
Time, the Acquired Fund will provide the Acquiring Fund with a complete
schedule of the securities and other assets of the Acquired Fund. At
least five Business Days prior to the Valuation Time, the Acquiring Fund
will advise the Acquired Fund in writing of any investments of the
Acquired Fund shown on the Acquired Fund's schedule provided above which
the Acquiring Fund would not be permitted to hold (a) under its
investment goal, principal investment strategies or investment
restrictions; or (b) under applicable Law. Under such circumstances
and, to the extent practicable, the Acquired Fund will, if requested by
the Acquiring Fund in writing and, to the extent permissible and
consistent with its own investment objectives and policies, 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, if, in the reasonable
judgment of
the Fifth Third Board or FTAM, 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. The Acquired Fund shall promptly notify the Acquiring Fund of any
such determination.
1.3 LIABILITIES TO BE ASSUMED OR DISCHARGED. 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 the
Effective Time. The liabilities of the Acquired Fund to be assumed by
the Acquiring Fund shall consist of all of the liabilities set forth on
the unaudited statement of assets and liabilities to be provided
pursuant to paragraph 5.6 ("Liabilities").
1.4 DISTRIBUTION OF ACQUIRING FUND SHARES. Immediately
upon receipt, the Acquired Fund will distribute the Corresponding Class
of Acquiring Fund Shares received by the Acquired Fund from the
Acquiring Fund pursuant to paragraph 1.1 pro rata to the record holders
of shares of the corresponding class 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 the record holders of shares of the
Acquired Fund and representing the respective pro rata number of the
Acquiring Fund Shares due to such record holders. 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 TRANSFER TAXES. Any transfer taxes payable upon the
issuance of Acquiring Fund Shares in a name other than the registered
holder of the Acquired Fund shares on the books of the Acquired Fund as
of that time shall, as a condition of such issuance and transfer, be
paid by the person to whom such Acquiring Fund Shares are to be issued
and transferred.
1.6 REPORTING RESPONSIBILITY. Any reporting
responsibility of the Acquired Fund is and shall remain the
responsibility of the Acquired Fund. The Acquiring Fund shall not
assume any obligation of the Acquired Fund to file reports with the SEC,
Internal Revenue Service or other regulatory or tax authority covering
any reporting period ending prior to or at the Effective Time with
respect to the Acquired Fund.
1.7 TERMINATION. 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 Massachusetts law, the 1940 Act and the Fifth Third Funds Governing
Documents, all such other steps as may be necessary or appropriate to
effect a complete liquidation and termination of the Acquired Fund.
1.8 BOOKS AND RECORDS. Upon reasonable notice and except
as previously disclosed to the Acquiring Fund in writing, copies of all
books and records of the Acquired Fund, including all books and records
required to be maintained under the 1940 Act, and the rules and
regulations thereunder, shall be available for review by the Acquiring
Fund and shall be provided to the Acquiring Fund as soon as practicable
following the Valuation Time.
1.9 OTHER REORGANIZATION SPECIFIC ITEMS. In connection
with the Reorganization, any minimum investment amounts or sales load
applicable to initial investments in the Acquiring Fund Shares shall be
waived with respect to the Acquired Fund shareholder's initial receipt
of Acquiring Fund Shares as part of the Reorganization.
ARTICLE II
VALUATION
2.1 VALUATION OF ACQUIRED FUND NET ASSETS. The value of
the Acquired Fund's Fund Assets to be acquired by the Acquiring Fund
hereunder shall be the value of such assets computed as of the Valuation
Time, after the declaration and payment of any dividends and/or other
distributions on that date, determined in accordance with the valuation
procedures approved by the Touchstone Board or such other valuation
procedures as shall be mutually agreed upon by the Parties, net of the
Liabilities of the Acquired Fund assumed by the Acquiring Fund.
2.2 VALUATION OF ACQUIRING FUND SHARES. The net asset
value per share of each class of Acquiring Fund Shares shall be the net
asset value per share of such class of Acquiring Fund Shares computed as
of the Valuation Time, in accordance with the valuation procedures
approved by the Touchstone Board or such other valuation procedures as
shall be mutually agreed upon by the Parties.
2.3 SHARES TO BE ISSUED. The number of Acquiring Fund
Shares to be issued (including fractional shares (to the third decimal
place), if any) in connection with the Reorganization shall be
determined in accordance with paragraph 1.1.
2.4 DETERMINATION OF VALUE. All computations of value
shall be made by BNY Mellon Investment Servicing (U.S.) Inc. ("BNY
Mellon") on behalf of the Acquiring Fund and the Acquired Fund.
2.5 VALUATION TIME. "Valuation Time" shall mean 4:00 PM
Eastern Time of the Business Day preceding the Effective Time.
ARTICLE III
CLOSING AND EFFECTIVE TIME
3.1 EFFECTIVE TIME. Subject to the terms and conditions
set forth herein, the Reorganization shall occur immediately prior to
the opening of business on Monday, September 10, 2012, or such other
date(s) as the Parties may agree to in writing (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 CUSTODIAN'S CERTIFICATE. The Acquired Fund shall
direct State Street Bank and Trust Company, as custodian for the
Acquired Fund (the "Custodian"), to deliver at the Closing a certificate
of an authorized officer stating that: (a) the Acquired Fund's
portfolio securities, cash, and any other assets have been delivered in
proper form to the Acquiring Fund on the Effective Time; and (b) all
necessary taxes, including all applicable federal and state stock
transfer stamps, if any, shall have been paid, or provision for payment
shall have been made, in conjunction with the delivery of portfolio
securities by the Acquired Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. If immediately
prior to the Valuation Time: (a) the New York Stock Exchange ("NYSE")
or another primary exchange on which the portfolio securities of the
Acquiring Fund or the Acquired Fund are purchased or sold, shall be
closed to trading or trading on such exchange shall be restricted; or
(b) trading or the reporting of trading on the NYSE or elsewhere shall
be disrupted so that accurate appraisal of the value of the net assets
of the Acquiring Fund or the Acquired Fund is impracticable, the
Valuation Time shall be postponed until the first Friday that is a
business day after the day when trading is fully resumed and reporting
is restored or such later date as may be mutually agreed in writing by
an authorized officer of each Party.
3.4 TRANSFER AGENTS' CERTIFICATE. The Acquired Fund
shall direct Boston Financial Data Services, Inc., as transfer agent for
the Acquired Fund as of the Effective Time, to deliver at the Closing a
certificate of an authorized officer stating that its records contain
the names and addresses of Acquired Fund shareholders, and the number
and percentage (to three decimal places) ownership of outstanding shares
owned by each such shareholder immediately prior to the Closing. The
Acquiring Fund shall issue and deliver or cause, BNY Mellon, its
transfer agent, to issue and deliver to an officer of the Acquired Fund
Registrant a confirmation evidencing Acquiring Fund Shares to be
credited on the Effective Time or provide evidence satisfactory to the
Acquired Fund that the Acquiring Fund Shares have been credited to the
Acquired Fund's account on the Books and Records of the Acquiring
Fund. At the Closing, each Party shall deliver to the other such bills
of sale, checks, assignments, treasurer, chief financial officer,
president/vice president or other officer certificates, custodian and/or
transfer agent instructions and certificates, receipts and other
documents, if any, as such other party or its counsel may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Acquired Fund
Registrant. The Acquired Fund Registrant, on behalf of the Acquired
Fund, hereby represents and warrants to the Acquiring Fund Registrant,
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 Fund Registrant 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 Acquired
Fund. The Acquired Fund has full power under the Fifth Third 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 Registrant on behalf of the Acquired Fund
and the consummation of the transactions contemplated herein have been
duly and validly authorized by the Fifth Third Board, and the Fifth
Third 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 Fifth Third Governing Documents,
applicable Massachusetts 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 Registrant on behalf of the Acquired Fund or the
consummation of the Reorganization contemplated herein. This Agreement
has been duly and validly executed and delivered by the Acquired Fund
Registrant on behalf of the Acquired Fund, and assuming due
authorization, execution and delivery hereof by the Acquiring Fund
Registrant on behalf of the Acquiring Fund, is a legal, valid and
binding obligation of the Acquired Fund Registrant, 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 no
par value. Each share represents a fractional undivided interest in the
Acquired Fund. All 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 Fund Registrant 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 Fifth Third Governing Documents, or of any material
contract, agreement, indenture, instrument, or other undertaking to
which the Acquired Fund Registrant is a party or by which the Acquired
Fund Registrant 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 Fund Registrant is a party or by which
the Acquired Fund Registrant or the Acquired Fund is bound, (iii) result
in a breach or violation by the Acquired Fund Registrant 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 Fund as a series of a Massachusetts
business trust.
(f) (i) Prior to the execution of this
Agreement, the Acquired Fund has delivered to the Acquiring Fund
Registrant true and complete copies of the Acquired Fund's audited
statement of assets and liabilities of as of July 31, 2011, and
unaudited statement of assets and liabilities as of January 31, 2012, 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 July 31, 2011, and unaudited financial statements as of
January 31, 2012, or in the notes thereto, or as previously disclosed in
writing to the Acquiring Fund Registrant, there are no liabilities
against, relating to or affecting the Acquired Fund or any of its
properties and assets, other than those incurred in the ordinary course
of business consistent with past practice, which, individually or in the
aggregate, would have a Material Adverse Effect on the Acquired Fund or
its properties or assets. In particular, since January 31, 2012 to the
best of the Acquired Fund's Knowledge and except as previously disclosed
in writing to the Acquiring Fund Registrant, 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) Except as previously disclosed to the Acquiring
Fund Registrant in writing, the minute books and other similar records
of the Acquired Fund Registrant as made available to the Acquiring Fund
Registrant 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 Fifth Third Board and committees
of the Fifth Third Board. The stock transfer ledgers and other similar
records of the Acquired Fund as made available to the Acquiring Fund
Registrant 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 and regulations
thereunder.
(j) Except as set forth in writing to the Acquiring
Fund, there is no Action or Proceeding pending against the Acquired Fund
Registrant or the Acquired Fund or, to the best of the Acquired Fund's
Knowledge, threatened against, relating to or affecting, the Acquired
Fund Registrant 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 Fund Registrant 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 Fund Registrant is registered with
the SEC as an open-end management investment company under the 1940 Act,
and such registration is in full force and effect, and the Acquired Fund
is a separate series of the Acquired Fund Registrant duly designated in
accordance with the applicable provisions of the Fifth Third Governing
Documents and in compliance in all material respects with the 1940 Act
and its rules and regulations.
(m) All federal and other tax returns and reports of
the Acquired Fund required by Law to have been filed (giving effect to
any extensions) have been timely filed and are or were true, correct and
complete in all material respects as of the time of their filing, and
all taxes of the Acquired Fund which are due and payable (whether or not
shown on any tax records) shall have been timely paid in full or
provision has been made for payment thereof. The Acquired Fund is not
liable for taxes of any person
other than itself and is not a party to or otherwise bound by any tax
sharing, allocation, assumption or indemnification agreement or
arrangement. All of the Acquired Fund's tax liabilities have been
adequately provided for on its Books and Records in respect of all
periods ending on or before the date of such Books and Records. The
Acquired Fund has not had any tax deficiency or liability asserted
against it that has not been previously disclosed in writing to the
Acquiring Fund or question with respect thereto raised, and no dispute,
audit, investigation, proceeding or claim concerning any tax liabilities
of the Acquired Fund has been raised by the Internal Revenue Service or
by any other governmental authority in writing, and to the Acquired
Fund's Knowledge, no such dispute, audit, investigation, proceeding or
claim is pending, being conducted or claimed.
(n) The Acquired Fund has elected to be, and has met
the requirements of Subchapter M of the Code for qualification and
treatment as, a "regulated investment company" within the meaning of
Sections 851 et seq. of the Code in respect of each taxable year since
the commencement of operations, and shall continue to meet such
requirements at all times through the Effective Time, treating the
Effective Time as the close of its tax year if the year does not
otherwise close on such date. The Acquired Fund has not at any time
since its inception been liable for and is not now liable for any
material income or excise tax pursuant to Section 852 or 4982 of the
Code. The Acquired Fund has no other material tax liability (foreign,
state, or local), except as accrued on the Acquired Fund's Books and
Records. The Acquired Fund has no earnings and profits accumulated with
respect to any taxable year in which the provisions of Subchapter M of
the Code did not apply.
(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 shares and has withheld in respect of dividends
and other distributions and redemption proceeds and paid to the proper
taxing authority all taxes required to be withheld, and is not liable
for any penalties which could be imposed thereunder.
(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
reorganization under Section 368(a) of the Code.
(t) The Acquired Fund has not received written
notification from any tax authority that asserts a position contrary to
any of the above representations in (m) through (s).
(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, and are
registered under the 1933 Act and under the Laws of all jurisdictions in
which registration is or was required, except as may have been
previously disclosed to the Acquiring Fund in writing. Such
registrations are, in all material respects, complete, current and have
been continuously effective, and all fees required to be paid have been
paid. The 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 any 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 applicable 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 Fund Registrant'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 Fund Registrant 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 Fund Registrant 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.
(x) Except as previously disclosed in writing to the
Acquiring Fund Registrant, 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 in writing to the Acquiring Fund Registrant 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 Fund Registrant 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 Fund
Registrant. The Acquiring Fund Registrant, on behalf of the Acquiring
Fund, hereby represents and warrants to the Acquired Fund Registrant, on
behalf of 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 Fund Registrant is a statutory
trust duly organized, validly existing and in good standing under the
Laws of the State of Delaware and is duly qualified, licensed or
admitted to do business and is in good standing as a foreign association
under the Laws of each jurisdiction in which the nature of the business
conducted by it makes such qualification, licensing or admission
necessary, except in such jurisdictions where the failure to be so
qualified, licensed or admitted and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect on its
properties or assets or the properties or assets of the Acquiring
Fund. The Acquiring Fund has full power under the Touchstone Governing
Documents to conduct its business as it is now being conducted and to
own the properties and assets it now owns. The Acquiring Fund has all
necessary authorizations, licenses and approvals from any applicable
Governmental or Regulatory Body necessary to carry on its business as
such business is now being carried on except authorizations, licenses
and approvals that the failure to so obtain would not have a Material
Adverse Effect on the Acquiring Fund.
(b) The execution, delivery and performance of this
Agreement by the Acquiring Fund Registrant 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
Fund Registrant on behalf of the Acquiring Fund or the consummation of
the Reorganization contemplated herein. This Agreement has been duly
and validly executed and delivered by the Acquiring Fund Registrant on
behalf of the Acquiring Fund, and assuming due authorization, execution
and delivery hereof by the Acquired Fund Registrant on behalf of the
Acquired Fund, is a legal, valid and binding obligation of the Acquiring
Fund Registrant, as it relates to the Acquiring Fund, enforceable in
accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other Laws relating to or affecting
creditors' rights, to general equity principles and to any limitations
on indemnity as may be required under federal and state securities
Laws).
(c) The authorized capital of the Acquiring Fund
consists of an unlimited number of shares of beneficial interest with a
par value of $0.01 per share. Each share represents a fractional
undivided interest in the Acquiring Fund. All issued and outstanding
shares of the Acquiring Fund are duly authorized, validly issued, fully
paid and non-assessable, and all such shares have been offered and sold
in compliance in all material respects with applicable registration
requirements of the 1933 Act and state securities Laws, and are
registered under the 1933 Act and under the Laws of all jurisdictions in
which registration is or was required, except as may have been
previously disclosed to the Acquired Fund in writing. Such
registrations are, in all material respects, complete, current and have
been continuously effective, and all fees required to be paid have been
paid. The Acquiring Fund is not subject to any "stop order" and is, and
was, fully qualified to sell its shares in each jurisdiction in which
such shares are being registered and sold. There are no outstanding
options, warrants or other rights of any kind to acquire from 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 Fund Registrant 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 Fund
Registrant is a party or by which the Acquiring Fund Registrant 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 Fund Registrant is a party or by which the
Acquiring Fund Registrant or the Acquiring Fund is bound, (iii) result
in a breach or violation by the Acquiring Fund Registrant 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
Fund Registrant or the Acquiring Fund or, to the best of the Acquiring
Fund Registrant's Knowledge, threatened against, relating to or
affecting, the Acquiring Fund Registrant 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 Fund Registrant 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 Fund Registrant is registered with
the SEC as an open-end management investment company under the 1940 Act,
and such registration is in full force and effect, and the Acquiring
Fund is a separate series of the Acquiring Fund Registrant duly
designated in accordance with the applicable provisions of the
Touchstone Governing Documents and in compliance in all material
respects with the 1940 Act and its rules and regulations.
(h) All federal and other tax returns and reports of
the Acquiring Fund required by Law to have been filed (giving effect to
any extensions) have been timely filed and are or were true, correct and
complete in all material respects as of the time of their filing, and
all taxes of the Acquiring Fund which are due and payable (whether or
not shown on any tax return) shall have been timely paid in full or
provision has been made for payment thereof. The Acquiring Fund is not
liable for taxes of any person other than itself and is not a party to
or otherwise bound by any tax sharing, allocation, assumption or
indemnification agreement or arrangement. All of the Acquiring Fund's
tax liabilities have been adequately provided for on its Books and
Records in respect of all periods ending on or before the date of such
Books and Records. The Acquiring Fund has not had any tax deficiency or
liability asserted against it that has not been previously disclosed in
writing to the Acquired Fund or question with respect thereto raised,
and no dispute, audit, investigation, proceeding or claim concerning any
tax liabilities of the Acquiring Fund has been raised by the Internal
Revenue Service or by any other governmental authority in writing, and
to the Acquiring Fund's Knowledge, no such dispute, audit,
investigation, proceeding or claim is pending, being conducted or
claimed.
(i) The Acquiring Fund has elected to be, and has
met the requirements of Subchapter M of the Code for qualification and
treatment as, a "regulated investment company" within the meaning of
Sections 851 et seq. of the Code in respect of each taxable year since
the commencement of operations, and shall continue to meet such
requirements for its taxable year that includes the Effective Time, and
intends to continue to meet such requirements for its subsequent taxable
years. The Acquiring Fund is treated as a separate corporation under
Section 851(g) of the Code. The Acquiring Fund has not at any time
since its inception been liable for and is not now liable for any
material income or excise tax pursuant to Section 852 or 4982 of the
Code. The Acquiring Fund has no other tax liability (foreign, state, or
local), except as accrued on the Acquiring Fund's Books and
Records. The Acquiring Fund has no earnings and profits accumulated
with respect to any taxable year in which the provisions of Subchapter M
of the Code did not apply.
(j) The Acquiring Fund is not under the jurisdiction
of a court in a "Title 11 or similar case" (within the meaning of
Section 368(a)(3)(A) of the Code).
(k) Except as otherwise disclosed in writing to the
Acquired Fund, the Acquiring Fund is in compliance in all material
respects with the Code and applicable regulations promulgated under the
Code pertaining to the reporting of dividends and other distributions on
and redemptions of its shares and has withheld in respect of dividends
and other distributions and redemption proceeds and paid to the proper
taxing authority all taxes required to be withheld, and is not liable
for any penalties which could be imposed thereunder.
(l) The Acquiring Fund has not granted any waiver,
extension or comparable consent regarding the application of the statute
of limitations with respect to any taxes or tax return that is
outstanding, nor has any request for such waiver or consent been made.
(m) The Acquiring Fund does not own any "converted
property" (as that term is defined in Treasury Regulation Section
1.337(d)-7(a)(1)) that is subject to the rules of Section 1374 of the
Code as a consequence of the application of Section 337(d)(1) of the
Code and Treasury Regulations thereunder.
(n) The Acquiring Fund has not received written
notification from any tax authority that asserts a position contrary to
any of the above representations in (h) through (n).
(o) 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 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.
(p) The current prospectus and statement of
additional information of the Acquiring Fund, including any amendments
and supplements thereto, conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the
applicable rules and regulations of the SEC thereunder, and do not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not materially misleading. To the best of the Acquiring Fund's
Knowledge, the Acquiring Fund currently complies in all material
respects with all investment goals, policies, guidelines and
restrictions and any compliance procedures established by the Acquiring
Fund.
(q) 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 (i) 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, and
(ii) each 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 Fund Registrant 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 Fund Registrant or the Acquired Fund and furnished by the
Acquired Fund to the Acquiring Fund Registrant 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.
(r) The Acquiring Fund Registrant has adopted and
implemented written policies and procedures in accordance with Rule 38a-
1 under the 1940 Act.
(s) 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 and regulations
thereunder.
(t) (i) Prior to the execution of this
Agreement, the Acquiring Fund has delivered to the Acquired Fund
Registrant true and complete copies of the Acquiring Fund's audited
statement of assets and liabilities of as of September 30, 2011, or a
later date if available prior to the date hereof, and the related
audited schedules of investments, statements of income and changes in
net assets and financial highlights for the periods then ended.
(ii) Except as set forth in the notes thereto,
all such financial statements were prepared in accordance with U.S.
generally accepted accounting principles, consistently applied
throughout the periods then ended, and fairly present the financial
condition and results of operations of the Acquiring Fund as of the
respective dates thereof and for the respective periods covered thereby
subject, in the case of the unaudited financial statements, to normal
year-end audit adjustments.
(iii) To the best of the Acquiring Fund's
Knowledge, except as reflected or reserved against in the statement of
assets and liabilities included in the Acquiring Fund's audited
financial statements as of September 30, 2011, or in the notes thereto,
or as previously disclosed in writing to the Acquired Fund Registrant,
there are no liabilities against, relating to or affecting the Acquiring
Fund or any of its properties and assets, other than those incurred in
the ordinary course of business consistent with past practice, which,
individually or in the aggregate, would have a Material Adverse Effect
on the Acquiring Fund or its properties or assets. In particular, since
September 30, 2011, to the best of the Acquiring Fund's Knowledge and
except as disclosed in writing to the Acquired Fund Registrant, there
has not been any change in the financial condition, properties, assets,
liabilities or business of the Acquiring Fund that would have a Material
Adverse Effect on the Acquiring Fund or its properties or assets other
than changes occurring in the ordinary course of business.
(u) As of the date hereof, except as previously
disclosed to the Acquired Fund in writing, and except as have been
corrected as required by applicable Law, and to the best of the
Acquiring Fund's Knowledge, there have been no material miscalculations
of the net asset value of the Acquiring Fund during the twelve-month
period preceding the date hereof which would have a Material Adverse
Effect on the Acquiring Fund or its properties or assets, and all such
calculations have been made in accordance with the applicable provisions
of the 1940 Act.
(v) Except as disclosed in writing to the Acquired
Fund, to the best of the Acquiring Fund's Knowledge, no events have
occurred and no issues, conditions or facts have arisen which either
individually or in the aggregate have had a Material Adverse Effect on
the Acquiring Fund or its properties or assets other than changes
occurring in the ordinary course of business.
(w) The Acquiring Fund has no unamortized or unpaid
organizational fees or expenses for which it does not expect to be
reimbursed by Touchstone Advisors or its Affiliates.
ARTICLE V
COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 OPERATION IN ORDINARY COURSE. The Acquiring Fund and
the Acquired Fund will each operate its respective business in the
ordinary course between the date of this Agreement and the Effective
Time, it being understood that such ordinary course of business will
include (a) customary dividends; (b) shareholder purchases and
redemptions and (c) seeking to cause the continued good faith
performance by the investment adviser, sub-adviser(s), administrator,
distributor and other service providers of their respective
responsibilities in accordance with their agreements with the Acquired
Fund or the Acquiring Fund, as applicable, and applicable Law. No Party
shall take any action that would, or would reasonably be expected to,
result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect.
5.2 APPROVAL OF SHAREHOLDERS. The Acquired Fund
Registrant will call a special meeting of the Acquired Fund shareholders
to consider and act upon this Agreement and to take all other
appropriate action necessary to obtain approval of the transactions
contemplated herein.
5.3 INVESTMENT REPRESENTATION. The Acquired Fund
covenants that the Acquiring Fund Shares to be issued pursuant to this
Agreement are not being acquired for the purpose of making any
distribution, other than in connection with the Reorganization and in
accordance with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. The Acquired Fund will
assist the Acquiring Fund in obtaining such information as the Acquiring
Fund reasonably requests concerning the beneficial ownership of the
Acquired Fund's shares.
5.5 FURTHER ACTION. Subject to the provisions of this
Agreement, the Acquiring Fund and the Acquired Fund will each take or
cause to be taken, all action, and do or cause to be done, all things
reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, including any
actions required to be taken after the Effective Time.
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 Fund
Registrant 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 the Treasurer of the Acquired Fund Registrant.
5.7 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 Fifth
Third 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.
5.8 PRE-CLOSING DIVIDEND. On or before the Effective
Time, the Acquired Fund shall have declared and paid to its shareholders
of record a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing all of the Acquired
Fund's investment company taxable income (computed without regard to any
deduction for dividends paid), if any, plus the excess, if any, of its
interest income excludible from gross income under Section 103(a) of the
Code over its deductions disallowed under Sections 265 and 171(a)(2) of
the Code for all taxable years ending on or before the Effective Time,
and all of its net capital gains realized (after reduction for any
capital loss carry forward), if any, in all taxable years ending on or
before the Effective Time.
5.9 TAX-FREE REORGANIZATION. It is the intention of the
parties that the transaction contemplated by this Agreement with respect
to the Acquired Fund and the Acquiring Fund will qualify as a
reorganization within the meaning of Section 368(a) of the Code. None
of the Parties to this Agreement shall take any action or cause any
action to be taken, including, without limitation, the filing of any tax
return, that is inconsistent with such treatment or that results in the
failure of the transaction to qualify as a reorganization within the
meaning of Section 368(a) of the Code.
5.10 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 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 officers
are familiar with such documents or information.
5.11 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.
5.12 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.
5.13 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.
5.14 FINAL TAX RETURNS AND FORMS 1099 OF ACQUIRED
FUND. After the Effective Time, except as otherwise agreed to in
writing 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
its final taxable year ending with its complete liquidation 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.
5.15 COMPLIANCE WITH SECTION 15(f). The Acquiring Fund
Registrant 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: (a) at
least seventy-five percent (75%) of the trustees of the Acquiring Fund
Registrant shall not be "interested persons" (as that term is defined in
the ▇▇▇▇ ▇▇▇) of the Acquiring Fund's investment adviser or the Acquired
Fund's investment adviser; (b) no "unfair burden" (as that term is
defined in Section 15(f)(2)(B) of the ▇▇▇▇ ▇▇▇) shall be imposed on the
Acquired Fund; and (c) each vacancy among the trustees of the Acquiring
Fund Registrant which must be filled by a person who is neither an
interested person 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 Fund
Registrant 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 FTAM.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Obligations of the Acquired
Fund Registrant. The obligations of the Acquired Fund Registrant, on
behalf of the Acquired Fund, to consummate the transactions provided for
herein shall be subject, at its election, to the performance by the
Acquiring Fund Registrant and the Acquiring Fund of all of their
obligations to be performed by them pursuant to this Agreement on or
before the Effective Time, and, in addition thereto, subject to the
following further conditions unless waived by the Acquired Fund
Registrant in writing:
(a)
All representations and warranties of the Acquiring Fund
Registrant, 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 Fund and the
Acquiring Fund Registrant shall be given a period of ten
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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP dated as of the Effective Time,
substantially to the effect that:
(i) the Acquiring Fund Registrant is a
statutory trust, validly existing under the Delaware Statutory Trust
Act, and, to such counsel's knowledge, 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 Fund Registrant is registered
with the SEC under the 1940 Act as an open-end management investment
company and, to such counsel's knowledge, its registration with the SEC
is in full force and effect;
(iii) the Acquiring Fund Shares to be issued and
delivered by the Acquiring Fund Registrant 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 the Delaware Statutory Trust Act 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 against the Acquiring Fund Registrant;
(v) the execution and delivery of this Agreement
has been duly authorized by all requisite trust action; this Agreement
has been duly executed and delivered by the Acquiring Fund Registrant on
behalf of the Acquiring Fund, and, assuming due authorization, execution
and delivery by the Acquired Fund Registrant on behalf of the Acquired
Fund, constitutes a valid and legally binding obligation of the
Acquiring Fund Registrant, on behalf of the Acquiring Fund, enforceable
against the Acquiring Fund Registrant in accordance with its terms;
(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
by the Acquiring Fund Registrant did not and the consummation of the
transactions herein contemplated by the Acquiring Fund Registrant will
not result in a material breach of the terms or provisions of, or
constitute a material default under the Touchstone Governing Documents;
(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 Acquiring Fund Registrant
or the Acquiring Fund of any provisions of any statutory 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 to be made on the part of
the Acquiring Fund Registrant 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 the Delaware Statutory
Trust Act.
Such opinion shall be subject to such qualifications or limitations
as are customary with respect to the subject matter thereof. In
rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP may rely upon certificates
of officers of the Acquiring Fund Registrant 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 Fund Registrant,
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 Fund Registrant in this Agreement are true and correct
in all material respects on and as of the Effective Time and the
Acquiring Fund Registrant 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 such officers' Knowledge, threatened in writing.
(d)
An officer of the Acquired Fund Registrant shall have received
the confirmation from the Acquiring Fund or BNY Mellon required
under paragraph 3.4 of this Agreement.
17
(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 the Liabilities of the
Acquired Fund by the Acquiring Fund.
(f)
The Acquiring Fund Registrant, on behalf of the Acquiring Fund,
shall have entered into an expense limitation agreement with
Touchstone Advisors consistent with the form of expense
limitation agreement filed with the Registration Statement and
in the amounts and duration as disclosed in the Registration
Statement.
6.2 Conditions Precedent to Obligations of the Acquiring
Fund Registrant. The obligations of the Acquiring Fund Registrant, on
behalf of the Acquiring Fund, to consummate the transactions provided
for herein shall be subject, at its election, to the performance by the
Acquired Fund Registrant and the Acquired Fund of all of their
obligations to be performed by them pursuant to this Agreement on or
before the Effective Time, and, in addition thereto, subject to the
following further conditions unless waived by the Acquiring Fund
Registrant in writing:
(a) All representations and warranties of the
Acquired Fund Registrant, 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 Fund Registrant shall be given a
period of ten 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 ▇▇▇▇▇▇ Price P.C. dated as of the
Effective Time, substantially to the effect that:
(i) the Acquired Fund Registrant is a business
trust, validly existing under the laws of the Commonwealth of
Massachusetts, and, to such counsel's knowledge, has power under the
Fifth Third 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 Fund Registrant is registered
with the SEC under the 1940 Act as an open-end management investment
company and, to such counsel's knowledge, its registration with the SEC
is in full force and effect;
(iii) except as disclosed in writing to the
Acquiring Fund, such counsel knows of no material legal proceedings
pending against the Acquired Fund Registrant;
(iv) the execution and delivery of this Agreement
has been duly authorized by all requisite trust action; this Agreement
has been duly executed and delivered by the Acquired Fund Registrant on
behalf of the Acquired Fund and, assuming due authorization, execution
and delivery by the Acquiring Fund Registrant on behalf of the Acquiring
Fund, constitutes a valid and legally binding obligation of the Acquired
Fund Registrant, on behalf of the Acquired Fund, enforceable against the
Acquired Fund Registrant in accordance with its terms;
(v) the execution and delivery of this Agreement
by the Acquired Fund Registrant did not and the consummation of the
transactions herein contemplated by the Acquired Fund Registrant will
not result in a material breach of the terms or provisions of, or
constitute a material default under, the Fifth Third Governing Documents
(assuming that approval of shareholders of the Acquired Fund has been
obtained);
(vi) 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 Registrant or the Acquired Fund of any provisions of any statutory
federal securities Law or the statutory laws of the Commonwealth of
Massachusetts as they relate to voluntary associations commonly referred
to as "Massachusetts business trusts;" and
(vii) to the knowledge of such counsel, no
consent, approval, authorization, or other action by or filing with any
Governmental or Regulatory Body is required to be made on the part of
the Acquired Fund Registrant 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 the laws of the
Commonwealth of Massachusetts and such authorizations and filings as are
necessary to terminate the Acquired Fund as a series of a Massachusetts
business trust.
Such opinion shall be subject to such qualifications or limitations as
are customary with respect to the subject matter thereof. In rendering
such opinion, ▇▇▇▇▇▇ Price P.C. may rely upon certificates of officers
of the Acquired Fund Registrant and of public officials as to matters of
fact.
(c) The Acquired Fund shall have furnished to the
Acquiring Fund the unaudited financial 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 Fund
Registrant, dated as of the Effective Time, to the effect that they have
examined the Proxy Statement/Prospectus, 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 Fund Registrant in this
Agreement are true and correct in all material respects on and as of the
Effective Time and the Acquired Fund Registrant 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 Fund Registrant 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 Fund Registrant's transfer agent ("Transfer Documents")
as the Acquiring Fund Registrant may reasonably deem necessary or
desirable to evidence the transfer to the Acquiring Fund of all of the
right, title and interest of the Acquired Fund in and to the respective
Fund Assets of the Acquired Fund. In each case, the Fund Assets of the
Acquired Fund shall be accompanied by all necessary state stock transfer
stamps or cash for the appropriate purchase price therefor.
(f) The Acquiring Fund shall have received: (i) a
certificate of an authorized signatory of Acquired Fund Custodian, as
custodian for the Acquired Fund, stating that the Fund Assets of the
Acquired Fund have been delivered to the Acquiring Fund; (ii) a
certificate of an authorized signatory of ▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇ & 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 the Acquired Fund shares and the number and percentage
(to three decimal places) of ownership 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) 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.
ARTICLE VII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
ACQUIRING FUND AND ACQUIRED FUND
If any of the conditions set forth below do not exist on or before
the Effective Time with respect to the Acquired Fund or the Acquiring
Fund, the other party to this Agreement shall, at its option, not be
required to consummate the transactions contemplated by this Agreement:
7.1 This Agreement and the transactions contemplated
herein, with respect to the Acquired Fund, shall have been approved by
the requisite vote of the holders of the outstanding shares of the
Acquired Fund in accordance with applicable law and the provisions of
the Fifth Third Governing Documents. Notwithstanding anything herein to
the contrary, neither the Acquiring Fund nor the Acquired Fund may waive
the conditions set forth in this paragraph 7.1.
7.2 At the Effective Time, the SEC shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, or instituted
any proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940
Act. Furthermore, no action, suit or other proceeding shall be
threatened or pending before any court or governmental agency in which
it is sought to restrain or prohibit, or obtain damages or other relief
in connection with this Agreement or the transactions contemplated
herein.
7.3 All required consents of other parties and all other
consents, orders, and permits of federal, state and local regulatory
authorities (including those of the SEC and of state securities
authorities, including any necessary "no-action" positions and exemptive
orders from such federal and state authorities) to permit consummation
of the transactions contemplated herein shall have been obtained, except
where failure to obtain any such consent, order, or permit would not
involve a risk of a Material Adverse Effect on the assets or properties
of the Acquiring Fund or the Acquired Fund, provided that either party
hereto may waive any such conditions for itself.
7.4 The Registration Statement shall have become effective
under the 1933 Act, and no stop orders suspending the effectiveness
thereof shall have been issued. To the best knowledge of the parties to
this Agreement, no investigation or proceeding relating to the
Registration Statement shall have been instituted or be pending,
threatened or contemplated under the ▇▇▇▇ ▇▇▇.
7.5 Each of the Acquiring Fund and the Acquired Fund shall
have received a favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 complete liquidation
to the Acquired Fund shareholders in exchange for their Acquired Fund
shares, all as provided in this Agreement, will constitute a
reorganization within the meaning of Section 368(a) of the Code, and the
Acquired Fund and the Acquiring Fund each will be "a party to a
reorganization" within the meaning of Section 368(b) of the Code;
(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
complete 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 received by the Acquiring Fund will be
the same as the tax basis of such assets in the hands of the Acquired
Fund immediately prior to the Reorganization;
(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 by such shareholder, provided that the
Acquired Fund shareholder held the Acquired Fund shares as a capital
asset at the time of the Reorganization.
No opinion will be expressed as to (1) the effect of the Reorganization
on (A) the Acquired Fund or the Acquiring Fund with respect to any asset
as to which any unrealized gain or loss is required to be recognized for
U.S. federal income tax purposes at the end of a taxable year (or on the
termination or transfer thereof) under a ▇▇▇▇-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 ▇▇▇▇-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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 7.5.
ARTICLE VIII
EXPENSES
8.1 The Acquired Fund and the Acquiring Fund will not
bear any expenses associated with their participation in the
Reorganization, except as contemplated in this Article VIII. Touchstone
Advisors, FTAM and/or their respective Affiliates will bear and pay, in
such proportion as may be agreed upon in writing 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 shall include, without limitation,
obtaining shareholder approval of the Reorganization. The Acquiring
Fund shall bear expenses associated with the qualification of Acquiring
Fund Shares for sale in the various states.
8.2 All such fees and expenses so borne and paid by
Touchstone Advisors, FTAM and/or their respective Affiliates shall be
solely and directly related to the transactions contemplated by this
Agreement and shall be paid directly by Touchstone Advisors, FTAM 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 Advisors and FTAM (and/or
any Affiliate thereof) as may be agreed in writing by and between
Touchstone Advisors and FTAM.
ARTICLE IX
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
9.1 The Acquiring Fund Registrant, on behalf of the
Acquiring Fund, and the Acquired Fund Registrant, on behalf of the
Acquired Fund, agree that neither party has made to the other party any
representation, warranty and/or covenant not set forth herein, and that
this Agreement constitutes the entire agreement between the parties.
9.2 Except as specified in the next sentence set forth in
this paragraph 9.2, the representations, warranties, and covenants
contained in this Agreement or in any document delivered pursuant to or
in connection with this Agreement, shall not survive the consummation of
the transactions contemplated hereunder. The covenants to be performed
after the Effective Time shall continue in effect beyond the
consummation of the transactions contemplated hereunder.
ARTICLE X
TERMINATION
This Agreement may be terminated by the mutual agreement of the
Acquiring Fund Registrant and the Acquired Fund Registrant. In
addition, either the Acquiring Fund Registrant or the Acquired Fund
Registrant may at its option terminate this Agreement at or before the
Effective Time due to:
a)
a material breach by the other of any representation, warranty, or
agreement contained herein to be performed at or before the
Effective Time, if not cured within 30 days; or
b)
a condition herein expressed to be precedent to the obligations of
the terminating party that has not been met and it reasonably
appears that it will not or cannot be met.
In addition to the foregoing, this Agreement shall terminate
automatically upon the termination of the Purchase Agreement.
In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of any of
the Acquiring Fund, the Acquiring Fund Registrant, the Acquired Fund,
the Acquired Fund Registrant, or their respective trustees or their
respective officers.
ARTICLE XI
AMENDMENTS
This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the officers of the
Acquired Fund Registrant, on behalf of the Acquired Fund, and the
Acquiring Fund Registrant, on behalf of the Acquiring Fund, and as
specifically authorized by their respective Boards; provided, however,
that following the meeting of the Acquired Fund shareholders called by
the Acquired Fund pursuant to paragraph 5.2 of this Agreement, no such
amendment may have the effect of changing the provisions for determining
the number of Acquiring Fund Shares to be issued to the Acquired Fund
shareholders under this Agreement to the detriment of such shareholders
without their further approval.
ARTICLE XII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the
conflict of laws rules thereof that would require the application of the
laws of another jurisdiction.
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made
by any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm, or corporation, trust, or entities other
than the parties hereto and their respective successors and assigns, any
rights or remedies under or by reason of this Agreement.
It is expressly agreed that the obligations of the Acquiring Fund
hereunder shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents, or employees of the Acquiring Fund
Registrant personally, but shall bind only the property of the Acquiring
Fund, as provided in the Declaration of Trust of the Acquiring Fund
Registrant. The execution and delivery of this Agreement have been
authorized by the Touchstone Board on behalf of the Acquiring Fund and
signed by authorized officers of the Acquiring Fund Registrant, acting
as such. Neither the authorization by the Touchstone Board nor the
execution and delivery by such officers shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, but shall bind only the property of the Acquiring Fund
as provided in the Declaration of Trust of the Acquiring Fund
Registrant.
It is expressly agreed that the obligations of the Acquired Fund
hereunder shall not be binding upon any of the trustees, shareholders,
nominees, officers, agents, or employees of the Acquired Fund Registrant
personally, but shall bind only the property of the Acquired Fund, as
provided in the Declaration of Trust of the Acquired Fund
Registrant. The execution and delivery of this Agreement have been
authorized by the Fifth Third Board on behalf of the Acquired Fund and
signed by authorized officers of the Acquired Fund Registrant, acting as
such. Neither the authorization by the Fifth Third Board nor the
execution and delivery by such officers shall be deemed to have been
made by any of them individually or to impose any liability on any of
them personally, but shall bind only the property of the Acquired Fund
as provided in the Declaration of Trust of the Acquired Fund Registrant.
ARTICLE XIII
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.
"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.
"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 (a) a day which the New York Stock
Exchange is closed, (b) Saturday or Sunday or (c) a day during which
trading on the New York Stock Exchange is restricted.
"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.
"Knowledge" means (i) with respect to the Acquired Fund Registrant and
the Acquired Fund, the actual knowledge of the Acquired Fund
Registrant's officers and FTAM in its capacity as adviser to the
Acquired Fund; and (ii) with respect to the Acquiring Fund Registrant
and the Acquiring Fund, the actual knowledge of the Acquiring Fund
Registrant's officers, or Touchstone Advisors in its respective capacity
as a service provider to the Acquiring Fund Registrant.
"Law" means any law, statute, rule, regulation or ordinance of any
Governmental or Regulatory Body.
"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."
"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.
"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.
"Purchase Agreement" means the Stock and Bond Mutual Funds Purchase
Agreement by and among Touchstone Advisers, FTAM and Fifth Third
Financial Corporation, dated April 4, 2012.
"Fifth Third Governing Documents" means the Amended and Restated
By-Laws of Fifth Third Funds dated December 10, 2008 and the Amended and
Restated Declaration of Trust of Fifth Third Funds dated November 6,
2003, as they may be amended from time to time.
"SEC" means the U.S. Securities and Exchange Commission.
"Touchstone Governing Documents" means the By-laws of Constellation
Funds as amended and restated November 18, 2004 and the Amended and
Restated Agreement and Declaration of Trust dated September 7, 1998, as
amended through November 17, 2006, as they may be amended from time to
time.
IN WITNESS WHEREOF, the Parties, Touchstone Advisors, Inc. and
Fifth Third Asset Management, Inc. have caused this Agreement to be duly
executed and delivered by their duly authorized officers, as of the day
and year first above written.
FIFTH THIRD FUNDS, on behalf of Fifth Third Short Term Bond Fund
By: /s/ E. ▇▇▇▇▇ ▇▇▇▇▇
Name: E. ▇▇▇▇▇ ▇▇▇▇▇
Title: President
TOUCHSTONE FUNDS GROUP TRUST, on behalf of Touchstone Ultra Short
Duration Fixed Income Fund
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: VP
FIFTH THIRD ASSET MANAGEMENT, INC.
By: /s/ E. ▇▇▇▇▇ ▇▇▇▇▇
Name: E. ▇▇▇▇▇ ▇▇▇▇▇
Title: President
Solely for purposes of Article VIII
TOUCHSTONE ADVISORS, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: VP
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
Solely for purposes of Article VIII
EXHIBIT A
The following chart shows (i) the Acquired Fund and its classes of
shares and (ii) the Acquiring Fund and its classes of shares:
Acquired Fund, a series of Acquiring Fund, a series of
FIFTH THIRD FUND, TOUCHSTONE FUNDS GROUP TRUST,
and its Classes of Shares and its Classes of Shares
Fifth Third Short Term Bond Fund Touchstone Ultra Short Duration
Fixed Income Fund
Class A Class A
Class C Class C
Institutional Class Y
