77Q1. Exhibits
(g) Agreement and Plan of Reorganization between The Navellier Millennium
Funds, the Navellier Performance Funds and Touchstone Strategic Trust.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is
made as of this 30th day of June, 2003, by and between THE NAVELLIER MILLENNIUM
FUNDS (the "Millennium Fund"), a Delaware business trust with its principal
place of business at Xxx Xxxx Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx, Xxxxxx 00000,
THE NAVELLIER PERFORMANCE FUNDS (the "Performance Funds"), a Delaware business
trust with its principal place of business at Xxx Xxxx Xxxxxxx Xxxxxx, Xxxxx
Xxxxx, Xxxx, Xxxxxx 00000 and TOUCHSTONE STRATEGIC TRUST, a Massachusetts
business trust with its principal place of business at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxx 00000.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), with
respect to the proposed reorganizations of the NAVELLIER LARGE CAP GROWTH
PORTFOLIO (the "Portfolio"), which portfolio is a series of the Navellier
Performance Funds and the NAVELLIER LARGE CAP GROWTH PORTFOLIO (the "Millennium
Portfolio") which portfolio is a series of the Navellier Millennium Funds),
pursuant to which the Portfolio and the Millennium Portfolio will be merged into
and become part of the Large Cap Growth Fund (the "Acquiring Fund") of the
Touchstone Strategic Trust (the "Reorganization"). Specifically, this Agreement
is intended to be and is adopted for the purpose of providing for the
Reorganization of the Portfolio and the Millennium Portfolio into the Acquiring
Fund. The Reorganization will consist of the transfer of all of the assets of
the Portfolio and the Millennium Portfolio to the Acquiring Fund in exchange
solely for (i) shares of beneficial interest in the Acquiring Fund (the
"Acquiring Fund Shares") and (ii) the assumption by the Acquiring Fund of all
valid liabilities of the Portfolio and of the Millennium Portfolio and the
distribution of the Acquiring Fund Shares to the Shareholders of the Portfolio
and the of Millennium Portfolio in complete liquidation of the Portfolio and the
Millennium Portfolio, as provided herein, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Performance Funds and the Millennium Funds and the
Touchstone Strategic Trust are each open-end, registered investment companies of
the management type and the Portfolio and the Millennium Portfolio own
securities which are assets of the character in which the Acquiring Fund is
permitted to invest;
WHEREAS, the Trustees of the Portfolio and the Trustees of the
Millennium Portfolio have each determined, with respect to such Reorganization,
that the exchange of all of the assets of the Portfolio and all the assets of
the Millennium Portfolio for Acquiring Fund shares and the assumption of all
valid liabilities of the Portfolio and of the Millennium Portfolio by the
Acquiring Fund is in the best interests of the Portfolio and the Millennium
Portfolio and their Shareholders and that the interests of the existing
Shareholders of the Portfolio and the Millennium Portfolio would not be diluted
as a result of this transaction; and
WHEREAS, the purpose of the Reorganization is to combine the assets of
the Acquiring Fund with those of the Portfolio and the Millennium Portfolio in
an attempt to achieve greater operating economies and to retain Navellier
Management, Inc. as the investment sub-advisor to manage the assets of the
Acquiring Fund after the Reorganization;
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree,
with respect to the Reorganization, as follows:
1. THE TRANSFER OF THE ASSETS OF THE PORTFOLIO AND THE ASSETS OF THE
MILLENNIUM PORTFOLIO TO THE ACQUIRING FUND IN EXCHANGE FOR ACQUIRING
FUND SHARES, THE ASSUMPTION OF ALL VALID LIABILITIES OF THE PORTFOLIO
AND OF THE MILLENNIUM PORTFOLIO BY THE ACQUIRING FUND AND THE
LIQUIDATION OF THE PORTFOLIO AND THE MILLENNIUM PORTFOLIO
1.1 For the Reorganization, the closing shall take
place as provided for in paragraph 3.1 ("Closing") and the
provisions of paragraphs 1 through 8 of this Agreement shall
apply. At the Closing, the Portfolio and the Millennium
Portfolio agree to transfer all of their assets, as set forth
in paragraph 1.2, to the Acquiring Fund, and the Acquiring
Fund agrees in exchange therefore: (1) to deliver to the
Portfolio and to the Millennium Portfolio the number of
Acquiring Fund Shares, including fractional Acquiring Fund
Shares, determined by dividing the value of the Portfolio's
net assets and the value of the Millennium Portfolio's net
assts each computed in the manner and as of the time and date
set forth in paragraph 2.1 by the net asset value of one
Acquiring Fund Share computed in the manner and as of the time
and date set forth in paragraph 2.2; and (ii) to assume all
valid liabilities of the Portfolio and of the Millennium
Portfolio, as set forth in paragraph 1.3.
1.2 The assets of the Portfolio and the assets of the
Millennium Portfolio to be acquired by the Acquiring Fund
shall consist of all property, including, without limitation,
all cash, securities, interests, and dividends or interest
receivable which are owned by the Portfolio and owned by the
Millennium Portfolio and any deferred or prepaid expenses
shown as assets on the books of the Portfolio or on the books
of the Millennium Portfolio on the closing date provided in
paragraph 3.1 (the "Closing Date").
1.3 The Portfolio and the Millennium Portfolio will
each endeavor to discharge all of their known valid
liabilities and obligations prior to the Closing Date. The
Acquiring Fund shall assume all valid liabilities, expenses,
costs, charges and reserves reflected on unaudited statements
of assets and liabilities of the Portfolio and of the
Millennium Portfolio prepared by the administrators of the
Acquiring Fund and the Portfolio and the Millennium Portfolio,
as of the Valuation Date (as defined in paragraph 2.1), in
accordance with generally accepted accounting principles
consistently applied from the prior audited period.
1.4 Immediately after the transfer of assets provided
for in paragraph 1.1, the Portfolio and the Millennium
Portfolio will each distribute pro rata to their Shareholders
of record, determined as of immediately after the close of
business on the Closing Date (the "Portfolio Shareholders")
and (the "Millennium Shareholders"), the Acquiring Fund Shares
received by the Portfolio and by the Millennium Portfolio
pursuant to paragraph 1.1 and will each completely liquidate.
Such distributions and liquidations will be accomplished by
the transfer of the Acquiring Fund Shares then credited to the
account of the Portfolio and to the account of the Millennium
Portfolio on the books of the Acquiring Fund to the share
records of the Acquiring Fund in the names of the Portfolio
Shareholders and in the names of the Millennium Portfolio
Shareholders and representing the respective pro rata number
of the Acquiring Fund Shares due such Shareholders. All issued
and outstanding shares of the Portfolio and of the Millennium
Portfolio will simultaneously be canceled on the books of the
Portfolio and of the Millennium Portfolio. The Acquiring Fund
shall not issue certificates representing the Acquiring Fund
Shares in connection with such exchange. Ownership of
Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent.
2. VALUATION
2.1 The value of the Portfolio's assets and the value
of the Millennium Portfolio's assets to be acquired by the
Acquiring Fund hereunder shall be the net asset value of such
assets computed as of immediately after the close of business
of the New York Stock Exchange on the Closing Date (such time
and date being hereinafter called the "Valuation Date"), using
the valuation procedures for computing net asset value set
forth in the Portfolio's and in the Millennium Portfolio's
then-current prospectus or statement of additional
information.
2.2 The net asset value of an Acquiring Fund Share
shall be the net asset value per share computed as of
immediately after the close of business of the New York Stock
Exchange on the Valuation Date, using the valuation procedures
for computing net asset value set forth in the Touchstone
Strategic Trust's then-current prospectus or statement of
additional information.
2.3 The number of the Acquiring Fund Shares to be
issued (including fractional shares, if any) in exchange for
the Portfolio's assets and the Millennium Portfolio's assets
shall be determined by dividing the value of the net assets of
the Portfolio and the net assets of the Acquiring Fund
determined using the same valuation procedures referred to in
paragraph 2.1 by the net asset value of Performance Large Cap
Growthdetermined in accordance with paragraph 2.2.
2.4 All computations of value for the Acquiring Fund
shall be made by Integrated Fund Services, Inc.; all
computations of value for the Portfolio and for the Millennium
Portfolio shall be made by FBR National Bank & Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing for the Reorganization shall be
September 22, 2003 or such other date as the parties may
agree to in writing. All acts taking place at the Closing
shall be deemed to take place simultaneously as of
immediately after the close of business on the Closing Date
unless otherwise agreed to by the parties. The close of
business on the Closing Date shall be as of 4:00 p.m., New
York Time. The Closing shall be held at the offices of the
Acquiring Fund, 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxx 00000, or at such other time and/or place as the
parties may agree.
3.2 FBR National Bank & Trust, Bethesda, Maryland, as
custodian for the Portfolio and for the Millennium Portfolio
(the "Custodian"), shall deliver at the Closing a certificate
of an authorized officer stating that each of: (i) the
Portfolio's and the Millennium Portfolio's portfolio
securities, cash, and any other assets shall have been
delivered in proper form to the Acquiring Fund within two
business days prior to or on the Closing Date; and (ii) 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 the Portfolio's and the Millennium
Portfolio's portfolio securities.
3.3 FBR National Bank & Trust, (the "Transfer
Agent"), on behalf of the Portfolio and on behalf of the
Millennium Portfolio, shall deliver at the Closing a
certificate of an authorized officer stating that their
records contain the names and addresses of the Portfolio
Shareholders and of the Millennium Portfolio Shareholders and
the number and percentage ownership of outstanding shares
owned by each such shareholder immediately prior to the
Closing. The Acquiring Fund by an authorized officer of
Integrated Fund Services, Inc. shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be
credited on the Closing Date to the Secretary of the Portfolio
and to the Secretary of the Millennium Portfolio or provide
evidence satisfactory to the Portfolio and to the Millennium
Portfolio that such Acquiring Fund Shares have been credited
to the Portfolio's account and to the Millennium Portfolio's
account on the books of the Acquiring Fund. At the Closing,
each party shall deliver to the other such bills of sales,
checks, assignments, share certificates, if any, receipts or
other documents as such other party or its counsel may
reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Performance Funds, on its own and on behalf
of the Portfolio, and the Millennium Funds on its own and on
behalf of the Millennium Portfolio each represents and
warrants to the Touchstone Strategic Trust and the Acquiring
Fund as follows:
(a) The Performance Funds and the Millennium Funds
are each a business trust duly organized, validly existing,
and in good standing under the laws of the State of Delaware;
(b) The Performance Funds and the Millennium Funds
are each a registered investment company classified as a
management company of the open-end type, and their
registrations with the Securities and Exchange Commission (the
"Commission"), as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the
registration of their shares, under the Securities Act of
1933, as amended (the "1933 Act") are in full force and
effect;
(c) Neither the Performance Funds nor the Portfolio
nor the Millennium Funds nor the Millennium Portfolio is in,
and the execution, delivery and performance of this Agreement
will not result in, a material violation of the Performance
Funds' or the Millennium Funds' Declarations of Trust or
By-Laws or of any agreement, indenture, instrument, contract,
lease or other undertaking to which the Performance Funds or
the Portfolio or the Millennium Funds or the Millennium
Portfolio is a party or by which any of them are bound;
(d) Neither the Performance Funds nor the Portfolio
nor the Millennium Funds nor the Millennium Portfolio has any
material contracts or other commitments (other than this
Agreement) which will be terminated with liability to them
prior to the Closing Date;
(e) Except as otherwise disclosed in writing to and
accepted by the Touchstone Strategic Trust or the Acquiring
Fund, no material litigation or administrative proceeding or
investigation of or before any court or governmental body is
presently pending or to their knowledge threatened against the
Performance Funds or the Portfolio or the Millennium Funds or
the Millennium Portfolio or any of their properties or assets
which, if adversely determined, would materially and adversely
affect their financial condition or the conduct of their
business. Neither the Portfolio or the Millennium Portfolio
knows of any facts which might form the basis for the
institution of such proceedings and neither the Portfolio nor
the Millennium Portfolio is a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the
business or the ability of the Portfolio or the Millennium
Portfolio to consummate the transactions herein contemplated;
(f) The Statement of Assets and Liabilities of the
Portfolio and the Statement of Assets and Liabilities of the
Millennium Portfolio each at December 31, 2002 have been
audited by Xxxx, Xxxxxx & Xxxxx, independent accountants, and
are in accordance with generally accepted accounting
principles consistently applied, and such statements (copies
of which have been furnished to the Acquiring Fund) fairly
reflect the financial conditions of the Portfolio and of the
Millennium Portfolio as of such date, and there are no
contingent liabilities of the Portfolio or of the Millennium
Portfolio as of such date not disclosed therein;
(g) Since December 31, 2002, there have not been any
material adverse changes in the Portfolio's or in the
Millennium Portfolio's financial condition, assets,
liabilities or business other than changes occurring in the
ordinary course of business, or any incurrence by the
Portfolio or by the Millennium Portfolio of indebtedness
maturing more than one year from the date such indebtedness
was incurred, except as otherwise disclosed to and accepted by
the Acquiring Fund. For the purposes of this subparagraph (g),
a decline in net asset value per share of the Portfolio or of
the Millennium Portfolio, the discharge of Portfolio or of the
Millennium Portfolio liabilities, or the redemption of
Portfolio or Millennium Portfolio shares by Portfolio or
Millennium Portfolio Shareholders shall not constitute a
material adverse change;
(h) At the Closing Date, all material Federal and
other tax returns and reports of the Millennium Portfolio and
the Portfolio required by law to have been filed by such date
or due after request for extension, if any, shall have been
filed and are or will be correct, and all Federal and other
taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provisions shall
have been made for the payment thereof, and to the best
knowledge of the Millennium Portfolio and the Portfolio, no
such return is currently under audit and no assessment has
been asserted with respect to such returns;
(i) For each taxable year of its operation, the
Portfolio and the Millennium Portfolio has met the
requirements of Subchapter M of the Code for qualification as
a regulated investment company and each has elected to be
treated as such;
(j) All issued and outstanding shares of the
Portfolio and of the Millennium Portfolio are, and at the
Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable by the Portfolio and by the
Millennium Portfolio. All of the issued and outstanding shares
of the Portfolio and of the Millennium Portfolio will, at the
time of Closing, be held by the persons and in the amounts set
forth in the records of the Transfer Agent, on behalf of the
Portfolio and on behalf of the Millennium Portfolio as
provided in paragraph 3.3. Neither the Portfolio nor the
Millennium Portfolio have outstanding any options, warrants or
other rights to subscribe for or to purchase any of their
shares, nor is there outstanding any security convertible into
any of their shares;
(k) At the Closing Date, both the Portfolio and the
Millennium Portfolio will each have good and marketable title
to their assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.2 and full right, power and authority
to sell, assign, transfer and deliver such assets hereunder
and, upon delivery and payment for such assets, the Acquiring
Fund will acquire good and marketable title thereto, subject
to any restrictions as might arise under the 1933 Act, other
than as disclosed to the Acquiring Fund;
(l) The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing
Date by all necessary action on the part of the Performance
Funds' and the Millennium Funds' Trustees and, subject to the
approval of the Portfolio's Shareholders and of the Millennium
Portfolio's Shareholders, this Agreement will constitute a
valid and binding obligation of the Performance Funds and of
the Portfolio and of the Millennium Funds and of the
Millennium Portfolio, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(m) The information to be furnished by the
Performance Funds and the Portfolio and by the Millennium
Funds and the Millennium Portfolio for use in registration
statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated
hereby shall be accurate and complete in all material respects
and shall comply in all material respects with Federal
securities and other laws and regulations thereunder
applicable thereto; and
(n) The proxy statements of the Performance Funds and
of the Millennium Funds (the "Proxy Statement") to be included
in the Registration Statement referred to in paragraph 5.6
(other than information therein that relates to the Touchstone
Strategic Trust and the Acquiring Fund) will, on the effective
date of the Registration Statement and on the Closing Date,
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which such statements were made, not
materially misleading.
4.2 Touchstone Strategic Trust, on its own behalf and
on behalf of the Acquiring Fund, represents and warrants to
the Performance Funds and the Portfolio and to the Millennium
Funds and the Millennium Portfolio as follows:
(a) Touchstone Strategic Trust is a business trust
duly organized, validly existing and in good standing under
the laws of the State of Massachusetts;
(b) Touchstone Strategic Trust is a registered
investment company classified as a management company of the
open-end type, and its registration with the Commission, as an
investment company under the 1940 Act, and the registration of
its shares, under the 1933 Act, are in full force and effect;
(c) The current prospectus and statement of
additional information of Touchstone Strategic Trust conform
in all material respects to the applicable requirements of the
1933 Act and the 1940 Act and the rules and regulations of the
Commission 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;
(d) At the Closing Date, the Acquiring Fund will have
good and marketable title to the Acquiring Fund's assets;
(e) Neither Touchstone Strategic Trust nor the
Acquiring Fund is in, and the execution, delivery and
performance of this Agreement will not result in, a material
violation of Touchstone Strategic Trust's Declaration of Trust
or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which Touchstone
Strategic Trust or the Acquiring Fund is a party or by which
Touchstone Strategic Trust or the Acquiring Fund are bound;
(f) No material litigation or administrative
proceeding or investigation of or before any court or
governmental body is presently pending or threatened against
Touchstone Strategic Trust or the Acquiring Fund or any of
their properties or assets, except as previously disclosed in
writing to the Portfolio or the Millennium Portfolio. Neither
Touchstone Strategic Trust nor the Acquiring Fund knows of any
facts which might form the basis for the institution of such
proceedings and neither Touchstone Strategic Trust nor the
Acquiring Fund is a party to or subject to the provisions of
any order, decree or judgment of any court or governmental
body which materially and adversely affects the business or
the ability of Touchstone Strategic Trust or the Acquiring
Fund to consummate the transactions contemplated herein;
(g) The Statement of Assets and Liabilities of the
Acquiring Fund at March 31, 2003, audited by Ernst & Young
LLP, independentauditors, and a copy of which has been
furnished to the Portfolio and to the Millennium Portfolio,
fairly and accurately reflects the financial condition of the
Acquiring Fund as of such date in accordance with generally
accepted accounting principles consistently applied;
(h) Since March 31, 2003, there has not been any
material adverse change in the Acquiring Fund's financial
condition, assets, liabilities or business other than changes
occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more
than one year from the date such indebtedness was incurred.
For the purposes of this subparagraph (h), a decline in net
asset value per share of the Acquiring Fund shares, the
discharge of Acquiring Fund liabilities or the redemption of
Acquiring Fund shares by Acquiring Fund Shareholders, shall
not constitute a material adverse change;
(i) At the Closing Date all material Federal and
other tax returns and reports of Touchstone Strategic Trust
and the Acquiring Fund required by law to have been filed by
such date or due after request for extension, if any, shall
have been filed and are or will be correct, and all Federal
and other taxes shown as due or required to be shown as due on
said returns and reports shall have been paid or provision
shall have been made for the payment thereof, and, to the best
knowledge of Touchstone Strategic Trust and the Acquiring
Fund, no such return is currently under audit and no
assessment has been asserted with respect to such returns;
(j) For each taxable year of its operation, the
Acquiring Fund has met the requirements of Subchapter M of the
Code for qualification as a regulated investment company and
has elected to be treated as such;
(k) All issued and outstanding Acquiring Fund Shares
are, and at the Closing Date will be, duly and validly issued
and outstanding, fully paid and non-assessable by the
Acquiring Fund. The Acquiring Fund does not have outstanding
any options, warrants or other rights to subscribe for or to
purchase any Acquiring Fund Shares, nor is there outstanding
any security convertible into any Acquiring Fund Shares;
(l) The execution, delivery and performance of this
Agreement will have been fully authorized prior to the Closing
Date by all necessary action, if any, on the part of the
Trustees of Touchstone Strategic Trust and this Agreement will
constitute a valid and binding obligation of the Acquiring
Fund enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors'
rights, and to general equity principles;
(m) The Acquiring Fund Shares to be issued and
delivered (transferred on the Acquiring Fund's books) to the
Portfolio and to the Millennium Portfolio for the accounts
of the Portfolio Shareholders and for the accounts of the
Millennium Portfolio Shareholders, pursuant to the terms
of this Agreement, will, at the Closing Date, have been duly
authorized and, when so issued and delivered, will be duly and
validly issued Acquiring Fund Shares, and will be fully paid
and non-assessable by the Acquiring Fund;
(n) The information to be furnished by the Acquiring
Fund for use in registration statements, proxy materials and
other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and
complete in all material respects and shall comply in all
material respects with Federal securities and other laws and
regulations applicable thereto;
(o) The Proxy Statement to be included in the
Registration Statement (only insofar as it relates to
Touchstone Strategic Trust and the Acquiring Fund) will, on
the effective date of the Registration Statement and on the
Closing Date, not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statement therein, in light
of the circumstances under which such statements were made,
not materially misleading; and
(p) Touchstone Strategic Trust and the Acquiring Fund
each agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the
1940 Act and such of the state blue sky or securities laws as
may be necessary in order to continue their operations after
the Closing Date.
5. COVENANTS OF THE ACQUIRING FUND, THE PORTFOLIO AND THE MILLENNIUM
PORTFOLIO
The following covenants of the Acquiring Fund and of the Portfolio and
of the Millennium Portfolio, as applicable, are made respectively by Touchstone
Strategic Trust and by the Performance Funds and by the Millennium Funds:
5.1 The Acquiring Fund and the Portfolio and the Millennium
Portfolio each will operate its business in the ordinary course between
the date hereof and the Closing Date, it being understood that such
ordinary course of business will include the declaration and payment of
customary dividends and distributions and any other distribution that
may be advisable.
5.2 The Portfolio and the Millennium Portfolio will each call
a meeting of their Shareholders to consider and act upon this Agreement
and to take all other action necessary to obtain approval of the
transactions contemplated herein.
5.3 The Portfolio and the Millennium Portfolio each covenant
that the Acquiring Fund Shares to be issued hereunder are not being
acquired for the purpose of making any distribution thereof other than
in accordance with the terms of this Agreement.
5.4 The Portfolio and the Millennium Portfolio will each
assist the Acquiring Fund in obtaining such information as the
Acquiring Fund reasonably requests concerning the beneficial ownership
of the shares of the Portfolio and of the Millennium Portfolio.
5.5 Subject to the provisions of this Agreement, the Acquiring
Fund and the Portfolio and the Millennium Portfolio will each take, or
cause to be taken, all actions 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.
5.6 The Portfolio and the Millennium Portfolio will each
provide the Acquiring Fund with information reasonably necessary for
the preparation of a prospectus (the "Prospectus") which will include
the Proxy Statement referred to in paragraph 4.1(n), all to be included
in a Registration Statement on Form N-14 of the Touchstone Strategic
Trust (the "Registration Statement"), in compliance with the 1933 Act,
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
the 1940 Act, in connection with the meetings of the Portfolio
Shareholders and the Millennium Portfolio Shareholders to consider
approval of this Agreement and the transactions contemplated herein
(the "Meeting").
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PERFORMANCE FUNDS AND THE
PORTFOLIO AND THE MILLENNIUM FUNDS AND THE MILLENNIUM PORTFOLIO
The obligations of the Performance Funds and the Portfolio and the
Millennium Funds and the Millennium Portfolio to consummate the transactions
provided for herein shall be subject, at their election, to the performance by
Touchstone Strategic Trust and the Acquiring Fund of all the obligations to be
performed by Touchstone Strategic Trust and the Acquiring Fund hereunder on or
before the Closing Date and, in addition thereto, to the following further
conditions:
6.1 All representations and warranties of Touchstone Strategic
Trust and 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 Closing Date with the same force and effect as if
made on and as of the Closing Date; and
6.2 Touchstone Strategic Trust shall have delivered to the
Performance Funds and to the Millennium Funds, on the Closing Date, a
certificate executed in the name of Touchstone Strategic Trust by
Touchstone Strategic Trust's President and Treasurer, in a form
reasonably satisfactory to the Performance Funds and to the Millennium
Funds and dated as of the Closing Date, to the effect that the
representations and warranties of the Touchstone Strategic Trust and
the Acquiring Fund made in this Agreement are true and correct at and
as of the Closing Date, except as these representations and warranties
may be affected by the transactions contemplated by this Agreement and
as to such other matters as Touchstone Strategic Trust shall reasonably
request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF TOUCHSTONE STRATEGIC TRUST
AND THE ACQUIRING FUND
The obligations of Touchstone Strategic Trust and the Acquiring Fund to
complete the transactions provided for herein shall be subject, at their
election, to the performance by the Performance Funds and the Millennium Funds
and the Portfolio and the Millennium Portfolio of all of the obligations to be
performed by them hereunder on or before the Closing Date and, in addition
thereto, to the following conditions:
7.1 All representations and warranties of the Performance
Funds and the Millennium Funds and the Portfolio and the Millennium
Portfolio contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as these
representations and warranties may be affected by the transactions
contemplated by this Agreement, as of the Closing Date, with the same
force and effect as if made on and as of the Closing Date;
7.2 The Performance Funds and the Millennium Funds shall each
have delivered to Touchstone Strategic Trust statements of the
Portfolio's and of the Millennium Portfolio's assets and liabilities,
as of the Closing Date, each certified by the Treasurer of the
Performance Funds and the Millennium Funds; and
7.3 The Performance Funds and the Millennium Funds shall each
have delivered to Touchstone Strategic Trust, on the Closing Date,
certificates executed in their respective names and in the Portfolio's
and Millennium Portfolio's names by the Performance Funds' President
and Treasurer and by the Millennium Funds' President and Treasurer, in
form and substance satisfactory to Touchstone Strategic Trust and dated
as of the Closing Date, to the effect that the representations and
warranties of the Performance Funds and the Millennium Funds and the
Portfolio and the Millennium Portfolio, with respect to the Performance
Funds and the Millennium Funds and the Portfolio and the Millennium
Portfolio made in this Agreement are true are correct at and as of
the Closing Date, except as these representations and warranties
may be affected by the transactions contemplated by this Agreement.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
AND THE PORTFOLIO AND THE MILLENNIUM PORTFOLIO
If any of the conditions set forth below do not exist on or before the
Closing Date, with respect to the Portfolio or the Millennium Portfolio or the
Acquiring Fund, then the other party to this Agreement shall, at its option, not
be required to consummate the transactions contemplated by this Agreement:
8.1 The Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders of the
outstanding shares of beneficial interest of the Portfolio and of the
Millennium Portfolio in accordance with the provisions of each of the
Performance Funds' and the Millennium Funds' Declaration of Trust and
By-Laws and copies of the resolutions evidencing such approvals shall
have been delivered to the Acquiring Fund. Notwithstanding anything
herein to the contrary, neither Touchstone Strategic Trust nor the
Acquiring Fund nor the Performance Funds nor the Portfolio nor the
Millennium Funds nor the Millennium Portfolio may waive the conditions
set forth in this paragraph 8.1;
8.2 All consents of other parties and all other consents,
orders and permits of Federal, state and local regulatory authorities
deemed necessary by Touchstone Strategic Trust or the Performance Funds
or the Millennium Funds to permit consummation, in all material
respects, of the transactions contemplated hereby 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 Touchstone Strategic Trust or the Acquiring
Fund or the Performance Funds or the Millennium Funds or the Portfolio
or the Millennium Portfolio, provided that any party hereto may, for
itself, waive any of such conditions;
8.3 The Registration Statement shall have become effective
under the 1933 Act and no stop orders suspending the effectiveness
thereof shall have been issued; and
8.4 The Selling Fund shall have declared a dividend or
dividends which, together with all previous such dividends shall have
the effect of distributing to the Selling Fund Shareholders all of the
Selling Fund's investment company taxable income for all taxable
periods ending on the Closing Date (computed without regard to any
deduction for dividends paid) and all of the net capital gains realized
in all taxable periods ending on the Closing Date (after reduction
for any capital loss carryforward).
8.5 The Company and the Trust shall have received a favorable
opinion of Xxxxxxxx & Worcester LLP substantially to the effect that,
for federal income tax purposes:
(a) The transfer of all of the Selling Fund assets in exchange
solely for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of the liabilities of the Selling Fund followed by the
distribution of the Acquiring Fund Shares to the Selling Fund
Shareholders in dissolution and liquidation of the Selling Fund will
constitute a "reorganization" within the meaning of Section
368(a)(1)(D) of the Code, and the Acquiring Fund and the Selling Fund
will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code.
(b) No gain or loss will be recognized by the Acquiring Fund
upon the receipt of the assets of the Selling Fund solely in exchange
for the Acquiring Fund Shares and the assumption by the Acquiring Fund
of the liabilities of the Selling Fund.
(c) No gain or loss will be recognized by the Selling Fund
upon the transfer of the Selling Fund assets to the Acquiring Fund in
exchange for the Acquiring Fund Shares and the assumption by the
Acquiring Fund of the liabilities of the Selling Fund or upon the
distribution (whether actual or constructive) of the Acquiring
Fund Shares to Selling Fund Shareholders in exchange for their
shares of the Selling Fund.
(d) No gain or loss will be recognized by the Selling Fund
Shareholders upon the exchange of their Selling Fund shares for the
Acquiring Fund Shares in liquidation of the Selling Fund.
(e) The aggregate tax basis of the Acquiring Fund Shares
received by each Selling Fund Shareholder pursuant to the
Reorganization will be the same as the aggregate tax basis of the
Selling Fund shares held by such Selling Fund Shareholder immediately
prior to the Closing, and the holding period of the Acquiring Fund
Shares received by each Selling Fund Shareholder will include the
period during which the Selling Fund shares exchanged therefor were
held by such Selling Fund Shareholder (provided the Selling Fund shares
were held as capital assets on the date of the Closing).
(f) The tax basis of the Selling Fund assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the
Selling Fund immediately prior to the Closing, and the holding period
of the assets of the Selling Fund in the hands of the Acquiring Fund
will include the period during which those assets were held by the
Selling Fund.
8.6 The Acquiring Fund shall have received from Ernst & Young
LLP a letter addressed to the Acquiring Fund, in form and substance
satisfactory to the Acquiring Fund, to the effect that:
(a) they are independent auditors with respect to the Selling
Fund within the meaning of the 1933 Act and the applicable published
rules and regulations thereunder;
(b) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter (but not an examination in
accordance with generally accepted auditing standards), the
Capitalization Table appearing in the Registration Statement and
Prospectus/Proxy Statement has been obtained from and is consistent
with the accounting records of the Selling Fund;
(c) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter (but not an examination in
accordance with generally accepted auditing standards), the pro forma
financial statements that are included in the Registration Statement
and Prospectus/Proxy Statement agree to the underlying accounting
records of the Acquiring Fund and the Selling Fund or with written
estimates provided by each Fund's management, and were found to be
mathematically correct; and
(d) on the basis of limited procedures agreed upon by the
Acquiring Fund and described in such letter (but not an examination in
accordance with generally accepted auditing standards), the data
utilized in the calculations of the pro forma expense ratios appearing
in the Registration Statement and Prospectus/Proxy Statement agree with
underlying accounting records of the Selling Fund or with written
estimates by the Selling Fund's management and were found to be
mathematically correct.
In addition, unless waived by the Acquiring Fund, the Acquiring Fund
shall have received from Ernst & Young LLP a letter addressed to the
Acquiring Fund dated on the Closing Date, in form and substance
satisfactory to the Acquiring Fund, to the effect that on the basis of
limited procedures agreed upon by the Acquiring Fund (but not an
examination in accordance with generally accepted auditing standards),
the net asset value per share of the Selling Fund as of the Valuation
Date was computed and the valuation of the portfolio was consistent in
the valuation practices of the Acquiring Fund.
8.7 The Selling Fund shall have received from Xxxx
Xxxxxx & Xxxxx LLP a letter addressed to the Selling Fund, in form
and substance satisfactory to the Selling Fund, to the effect
that:
(a) they are independent auditors with respect to the
Acquiring Fund within the meaning of the 1933 Act and the
applicable published rules and regulations thereunder;
(b) they had performed limited procedures agreed
upon by the Selling Fund and described in such letter (but not an
examination in accordance with generally accepted auditing
standards) which consisted of a reading of any unaudited pro forma
financial statements included in the Registration Statement and
Prospectus/Proxy Statement, and making inquiries of appropriate
officials of the Trust responsible for financial and accounting
matters whether such unaudited pro forma financial statements
comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the published rules
and regulations thereunder;
(c) on the basis of limited procedures agreed upon by
the Selling Fund and described in such letter (but not an
examination in accordance with generally accepted auditing
standards), the Capitalization Table appearing in the Registration
Statement and Prospectus/Proxy Statement has been obtained from
and is consistent with the accounting records of the Acquiring
Fund; and
(d) on the basis of limited procedures agreed upon by the
Selling Fund (but not an examination in accordance with generally
accepted auditing standards), the data utilized in the calculations of
the pro forma expense ratios appearing in the Registration Statement
and Prospectus/Proxy Statement agree with underlying accounting records
of the Acquiring Fund or with written estimates by the Acquiring Fund's
management and were found to be mathematically correct.
8.8 The change of the Acquiring Fund from a
diversified series of the Trust to a non-diversified series of the
Trust upon completion of the Reorganization shall have been
approved by the requisite vote of the holders of the outstanding
shares of the Acquiring Fund in accordance with the provisions of
the Trust's Agreement and Declaration of Trust and Bylaws.
9. BROKERAGE FEES AND EXPENSES
9.1 Touchstone Strategic Trust and the Performance
Funds and the Millennium Funds each represents and warrants to the
others that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
9.2 Navellier Management Inc. will bear the aggregate
expenses and costs of its solicitation of this Proxy Solicitation
regarding the Reorganization.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 Touchstone Strategic Trust and the Performance
Funds and the Millennium Funds agree that no party to this
Agreement has made any representation, warranty or covenant not set
forth herein and that this Agreement constitutes the entire
agreement between the parties.
10.2 The representations, warranties and covenants
contained in this Agreement, or in any document delivered pursuant
hereto or in connection herewith, shall survive the consummation of
the transactions contemplated hereunder.
11. TERMINATION
This Agreement and the transactions contemplated hereby may be
terminated and abandoned by any party by resolution of the party's Board of
Trustees or Board of Trustees and resolution passed by the requisite number of
Shareholders of that party at any time prior to the Closing Date if
circumstances should develop that make proceeding with the Agreement
inadvisable.
12. WAIVER
Touchstone Strategic Trust and the Performance Funds and the Millennium
Funds, by mutual consent of their respective Boards of Trustees, may waive in
writing any condition to their respective obligations hereunder, except as
provided herein.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of
Touchstone Strategic Trust and the Performance Funds and the Millennium Funds;
provided, however, that following the meetings of the Portfolio Shareholders and
of the Millennium Portfolio Shareholders called 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
Portfolio Shareholders or to the Millennium Portfolio Shareholders under this
Agreement to the detriment of such Shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to Touchstone Strategic Trust at
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx 00000, or to the Performance
Funds or the Millennium Funds at Xxx Xxxx Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx,
Xxxxxx 00000.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
15.1 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.
15.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
15.3 This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts.
15.4 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 to give any person, firm or corporation, other
than the parties hereto and their respective successors and
assigns, any rights or remedies under or by reason of this
Agreement.
15.5 It is expressly agreed that the obligations of
the Performance Funds and of the Millennium Funds and of the
Portfolio and of the Millennium Portfolio hereunder shall not
be binding upon any of the Trustees, Shareholders, nominees,
officers, agents or employees of the Performance Funds and of
the Millennium Funds personally, but shall bind only the Trust
property of the Performance Funds and the Millennium Funds and
the Portfolio and the Millennium Portfolio, as provided in the
Declarations of Trust of the Performance Funds and of the
Millennium Funds. The execution and delivery by such officers
of the Performance Funds and of the Millennium Funds shall
not 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 trust property of the Performance Funds and of
the Millennium Funds and the Portfolio and the Millennium
Portfolio as provided in the Declarations of Trust of the
Performance Funds and of the Millennium Funds.
15.6 It is expressly agreed that the obligations of
the Touchstone Strategic Trust and the Acquiring Fund
hereunder shall not be binding upon any of the Trustees,
Shareholders, nominees, officers, agents or employees of
Touchstone Strategic Trust personally, but shall bind only the
trust property of the Touchstone Strategic Trust and the
Acquiring Fund, as provided in Touchstone Strategic Trust's
Declaration of Trust. The execution and delivery by such
officers of Touchstone Strategic Trust shall not 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
trust property of the Touchstone Strategic Trust and the
Acquiring Fund, as provided in the Touchstone Strategic
Trust's Declaration of Trust.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its President and attested by its Secretary.
Attest: TOUCHSTONE STRATEGIC TRUST
By:/s/ Xxxx Xxxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Secretary Vice President
Attest: THE NAVELLIER MILLENNIUM FUNDS
By: /s/Xxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxxx
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Treasurer President
Attest: THE NAVELLIER PERFORMANCE FUNDS
By: /s/Xxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxxx
--------------- -----------------------
Treasurer President
