Pepper Hamilton LLP
--------- Attorneys at Law
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799
215.981.4000
Fax 215.981.4750
March [XX], 2010
Touchstone Mazama Institutional Growth Fund
Touchstone Institutional Funds Trust
303 Broadway
Suite 1100
Cincinnati, Ohio 45202
Touchstone Mazama Growth Fund
Touchstone Funds Group Trust
303 Broadway
Suite 1100
Cincinnati, Ohio 45202
Ladies and Gentlemen:
Pursuant to the Agreement and Plan of Reorganization, dated as of [DATE] (the
"Agreement"), by and between Touchstone Funds Group Trust, a Delaware statutory
trust (the "TFGT"), on behalf of its Touchstone Mazama Growth Fund (the
"Acquiring Fund"), a separate series of the Trust, and the Touchstone
Institutional Funds Trust, a Delaware statutory trust (the "TIFT") on behalf of
its Touchstone Mazama Institutional Growth Fund (the "Selling Fund," and
together with the Acquiring Fund, the "Funds"), a separate series of the Trust,
the Selling Fund will transfer all of its assets to the Acquiring Fund in
exchange solely for voting shares of the Acquiring Fund (the "Shares") and the
assumption of all of the liabilities of the Selling Fund by the Acquiring Fund,
immediately after which the Selling Fund will distribute the Shares to its
shareholders (the "Selling Fund Shareholders") in complete liquidation and
termination of the Selling Fund (these transactions together, the
"Reorganization").
We have acted as legal counsel to the Funds in connection with the
Reorganization and in that connection you have requested our opinion regarding
certain U.S. federal income tax consequences of the Reorganization. As such, and
for the purpose of rendering our opinion, we have examined and are relying, with
your permission (without any independent investigation or review thereof other
than such investigation and review as we have deemed necessary to comply with
our professional obligations under IRS Circular 230 or otherwise), upon the
truth and accuracy, at all relevant times, of the statements, covenants,
representations and warranties contained in the following documents (the
"Documents"):
Philadelphia Boston Washington, D.C. Detroit New York Pittsburgh
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Berwyn Harrisburg Orange County Princeton Wilmington
www.pepperlaw.com
Pepper Hamilton LLP
--------- Attorneys at Law
Mazama Institutional Growth Fund
Mazama Growth Fund
Page 2
[DATE]
1. The Agreement;
2. The registration statement of the TIFT on Form N-14 to which this opinion is
an exhibit, filed with the Securities and Exchange Commission with respect to
the Shares to be issued in connection with the Reorganization (the "Registration
Statement"), and the proxy statement/prospectus included in the Registration
Statement (the "Proxy/Prospectus");
3. The representations made to us by the Funds in their letters to us dated the
date hereof; and
4. Such other instruments and documents as we have deemed necessary or
appropriate for purposes of our opinion.
For purposes of this opinion, we have assumed, with your permission and without
independent investigation (other than such investigation as we have deemed
necessary to comply with our professional obligations under IRS Circular 230 or
otherwise), (i) that the Reorganization will be consummated in the manner
contemplated by the Proxy/Prospectus and in accordance with the provisions of
the Agreement without the waiver of any conditions to any party's obligation to
effect the Reorganization, (ii) that original documents (including signatures)
are authentic, (iii) that documents submitted to us as copies conform to the
original documents, (iv) that there has been (or will be by the date of the
Reorganization) due execution and delivery of all documents where due execution
and delivery are prerequisites to the effectiveness of those documents, (v) the
accuracy of statements and representations contained in the Documents, (vi) that
covenants and warranties set forth in the Documents will be complied with and
(vii) that the Reorganization will be effective under applicable law.
Furthermore, we have assumed, with your permission and without independent
investigation (other than such investigation as we have deemed necessary to
comply with our professional obligations under IRS Circular 230 or otherwise),
that, as to all matters in which a person or entity making a representation has
represented that such person or entity or a related party is not a party to,
does not have, or is not aware of, any plan, intention, understanding or
agreement to take action, there is in fact no plan, intention, understanding or
agreement and such action will not be taken, and we have further assumed that
any statement made "to the knowledge of" or otherwise similarly qualified is
correct without such qualification.
Subject to the foregoing and any other assumptions, limitations and
qualifications specified herein, it is our opinion that for U.S. federal income
tax purposes:
1. The transfer of all of the assets of the Selling Fund solely in exchange for
the Shares and the assumption by the Acquiring Fund of all of the liabilities of
the Selling Fund followed by the distribution of the Shares to the Selling Fund
Shareholders in complete liquidation and termination of the Selling Fund will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and each of the Funds will be a
party to the reorganization within the meaning of Section 368(b) of the Code;
Pepper Hamilton LLP
--------- Attorneys at Law
Mazama Institutional Growth Fund
Mazama Growth Fund
Page 3
[DATE]
2. 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 Shares and the
assumption by the Acquiring Fund of all of the liabilities of the Selling Fund;
3. No gain or loss will be recognized by the Selling Fund upon the transfer of
all of its assets to the Acquiring Fund solely in exchange for the Shares and
the assumption by the Acquiring Fund of all of the liabilities of the Selling
Fund, or upon the distribution by the Selling Fund of the Shares to the Selling
Fund Shareholders in complete liquidation in exchange for their shares of the
Selling Fund;
4. No gain or loss will be recognized by the Selling Fund Shareholders upon the
exchange of their shares of the Selling Fund for the Shares in the
Reorganization;
5. The aggregate tax basis of the Shares received by each Selling Fund
Shareholder pursuant to the Reorganization will be the same as the aggregate tax
basis of the shares of the Selling Fund held by such shareholder immediately
prior to the Reorganization, and the holding period of the Shares received by a
Selling Fund Shareholder will include the period during which the shares of the
Selling Fund exchanged therefor were held by such shareholder (provided that the
shares of the Selling Fund were held as a capital asset by the Selling Fund
Shareholder on the date of the Reorganization); and
6. The tax basis of the assets of the Selling Fund acquired by the Acquiring
Fund will be the same as the tax basis of such assets to the Selling Fund
immediately prior to the Reorganization, and the holding period of such assets
in the hands of the Acquiring Fund will include the period during which the
assets were held by the Selling Fund.
This opinion is limited to the issues set forth above and does not address any
other tax issues, including without limitation, the following: (1) the effect of
the Reorganization on (i) the Funds (x) with respect to any asset as to which
any unrealized gain or loss is required to be recognized for federal income tax
purposes at the end of a taxable year (or on the termination or transfer
thereof) under a mark-to-market system of accounting, (y) with respect to any
stock held of a passive foreign investment company as defined in Section 1297(a)
of the Code, or (z) any limitations on the use or availability of capital
losses, net operating losses, unrealized gain or loss or other losses under the
Code, or (ii) any Selling Fund Shareholder that is required to recognize
unrealized gains and losses for federal income tax purposes under a
mark-to-market system of accounting and (2) any other federal, state, local or
foreign tax issues of any kind.
Our opinion expressed herein is based upon the Code, regulations promulgated
thereunder, administrative pronouncements and judicial authority, all as in
effect as of the date hereof. It represents our best legal judgment as to the
matters addressed herein but is not binding on the Internal Revenue Service or
the courts. Accordingly, no assurance can be given that the Internal Revenue
Service would agree with the opinion expressed herein or, if contested, the
opinion would be sustained by a court. Furthermore, the authorities upon which
we rely may be changed at any time, potentially with retroactive effect. No
assurances can be given as to the effect of any such changes on the conclusions
expressed in this opinion. We undertake no responsibility to advise you of any
new developments in the application or interpretation of relevant federal tax
laws. If any of the facts or assumptions pertinent to the U.S. federal income
tax treatment of the Reorganization specified herein or any of the statements,
covenants, representations or warranties contained in the Documents are, or
later become, inaccurate, such inaccuracy may adversely affect the conclusions
expressed in this opinion. In addition, our opinion is limited to the tax
matters specifically covered hereby, and we have not been asked to address, nor
have we addressed, any other tax consequences of the Reorganization or any other
transactions.
Pepper Hamilton LLP
--------- Attorneys at Law
Mazama Institutional Grwoth Fund
Mazama Growth Fund
Page 4
[DATE]
This opinion is being provided solely for the benefit of the Funds. No other
person or party shall be entitled to rely on this opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the section captioned
"Information About the Reorganization - Federal Income Tax Consequences"
therein. In giving this consent we do not hereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
Pepper Hamilton LLP