Exhibit (h)(8)
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
AZOA Fixed Income Fund and AZOA Diversified Assets Fund
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of
October 4, 2002, between PIMCO Variable Insurance Trust, a Delaware business
trust, on behalf of each segregated portfolio of assets thereof ("series")
listed on Schedule A to this Agreement ("Schedule A") (each, an "Acquiring
Fund," and PIMCO Variable Insurance Trust, in such capacity, the "Acquiring
Trust"), and USAllianz Variable Insurance Products Trust, on behalf of each
corresponding series thereof listed on Schedule A (each, a "Target Fund," and
USAllianz Variable Insurance Products Trust, in such capacity, the "Target
Trust"). (Each Acquiring Fund and Target Fund is sometimes referred to herein
individually as a "Fund" and collectively as the "Funds," and Acquiring Trust
and Target Trust are sometimes referred to herein individually as an "Investment
Company" and collectively as the "Investment Companies.") All agreements,
representations and warranties, actions, and obligations described herein made
or to be taken or undertaken by a Fund are made and shall be taken or undertaken
by Acquiring Trust on behalf of each Acquiring Fund and by Target Trust on
behalf of each Target Fund. USAllianz Advisers, LLC is a party to this Agreement
solely as to Section 8.1 hereof.
The Investment Companies wish to effect two separate reorganizations, which
are not intended to qualify as "reorganizations" under section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
under section 368 of the Code (the "Regulations"). Each Target Fund has a single
class of shares and each Acquiring Fund has two classes of shares. Each
reorganization will involve the transfer of the assets of a Target Fund, subject
to the liabilities of such Target Fund, to the corresponding Acquiring Fund
listed on Schedule A, in exchange solely for shares of such Acquiring Fund
("Acquiring Fund Shares"), followed by the constructive distribution of those
shares pro rata to the holders of shares of that Target Fund ("Target Fund
Shares"), all on the terms and conditions set forth herein. (All such
transactions involving each Target Fund and its corresponding Acquiring Fund are
referred to herein as a "Reorganization.") For convenience, the balance of this
Agreement refers only to a single Reorganization, one Acquiring Fund, and one
Target Fund, but the provisions of this Agreement shall apply separately to each
Reorganization. The consummation of one Reorganization shall not be contingent
on the consummation of any other Reorganization.
In consideration of the mutual promises contained herein, the parties agree
as follows:
1. PLAN OF REORGANIZATION
1.1. Subject to approval by Target Fund shareholders and to the other terms
and conditions set forth herein and on the basis of the representations and
warranties contained herein, Target Fund agrees to assign, sell, convey,
transfer, and deliver all of its assets described in paragraph 1.2 ("Assets") to
Acquiring Fund and Acquiring Fund agrees in exchange therefor (a) to assume all
of the liabilities of Target Fund described in paragraph 1.3 ("Liabilities"),
and (b) to issue and deliver to Target Fund the number of full and fractional
(rounded to the third decimal place) Acquiring Fund Shares determined by
dividing the value of the Assets of the Target Fund less the Liabilities of the
Targextt Fund by the net asset value ("NAV") of an
Acquiring Fund Share (both computed as set forth in paragraph 2.1). Such
transactions shall take place at the Closing (as defined in paragraph 3.1).
1.2. The Assets shall include all cash, cash equivalents, securities,
receivables (including interest and dividends receivable), claims and rights of
action, rights to register shares under applicable securities laws, books and
records, deferred and prepaid expenses shown as assets on Target Fund's books,
and other property owned by Target Fund at the Effective Time (as defined in
paragraph 3.1).
1.3. The Liabilities shall include all liabilities, debts, obligations,
and duties of whatever kind or nature of the Target Fund at the Effective Time,
whether absolute, accrued, contingent, or otherwise, whether or not arising in
the ordinary course of business, and whether or not specifically referred to in
this Agreement, including any obligation to indemnify the trustees of Target
Trust, acting in their capacities as such, to the fullest extent permitted by
law and the agreement and declaration of trust ("Trust Instrument") and bylaws
of Target Trust.
1.4. At or immediately before the Effective Time, Target Fund shall
declare and pay to its shareholders a dividend and/or other distribution in an
amount large enough so that it will have distributed all of its investment
company taxable income (as defined in section 852(b)(2) of the Code but computed
without regard to any deduction for dividends paid) and substantially all of its
net capital gain (as defined in section 852(b)(3) of the Code, but computed
without regard to any deduction for capital gain dividends) for the current
taxable year through the Effective Time.
1.5. At the Effective Time (or as soon thereafter as is reasonably
practicable), Target Fund shall distribute the Acquiring Fund Shares it receives
pursuant to paragraph 1.1 to Target Fund's shareholders of record, determined as
of the Effective Time (each, a "Shareholder"), in constructive exchange for
their Target Fund Shares. Such distribution shall be accomplished by Acquiring
Trust's transfer agent's opening accounts on Acquiring Fund's share transfer
books in the Shareholders' names and transferring such Acquiring Fund Shares
thereto. Each Shareholder's account shall be credited with the respective pro
rata number of full and fractional (rounded to the third decimal place)
Acquiring Fund Shares due that Shareholder. All outstanding Target Fund Shares,
including any represented by certificates, shall simultaneously be canceled on
Target Fund's share transfer books. Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares issued in connection with the
Reorganization.
1.6. As soon as reasonably practicable after distribution of the Acquiring
Fund Shares pursuant to paragraph 1.5, Target Trust shall wind up the affairs of
Target Fund and shall file any required final regulatory reports, including but
not limited to any Form N-SAR and Rule 24f-2 filings with respect to Target
Fund.
1.7. Any transfer taxes payable on issuance of Acquiring Fund Shares in a
name other than that of the registered holder on Target Fund's books of the
Target Fund Shares constructively exchanged therefor shall be paid by the person
to whom such Acquiring Fund Shares are to be issued, as a condition of such
transfer.
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2. VALUATION
For purposes of paragraph 1.1(b), the value of the Assets and the
Liabilities and the NAV of an Acquiring Fund Share shall be computed as of the
close of business on the date of the Closing (the "Valuation Time"). The NAV of
an Acquiring Fund Share shall be computed using the valuation procedures set
forth in the Acquiring Fund's then current prospectus and statement of
additional information ("SAI"). The value of the Assets and Liabilities shall be
computed using the valuation procedures set forth in the Acquiring Fund's then
current prospectus and SAI, subject to adjustment by the amount, if any, agreed
to by Acquiring Trust and Target Trust. Acquiring Trust and Target Trust agree
to use all commercially reasonable efforts to resolve any material differences
between the value of the Assets and Liabilities determined in accordance with
the valuation procedures of the Target Fund and the value of the Assets and
Liabilities determined in accordance with the valuation procedures of the
Acquiring Fund prior to the Valuation Time.
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with related acts necessary to
consummate the same (the "Closing"), shall occur at the offices of Xxxxxx &
Xxxxxxx LLP, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, on or about
November 15, 2002, or at such other place and/or on such other date as to which
the Investment Companies may agree. All acts taking place at the Closing shall
be deemed to take place simultaneously as of the close of business on the date
thereof or at such other time as to which the Investment Companies may agree
(the "Effective Time"). If, immediately before the Valuation Time, (a) the New
York Stock Exchange is closed to trading or trading thereon is restricted or (b)
trading or the reporting of trading on that exchange or elsewhere is disrupted,
so that accurate appraisal of the value of the Assets and Liabilities and the
NAV of an Acquiring Fund Share is impracticable, the Effective Time shall be
postponed until the first business day after the day when such trading has fully
resumed and such reporting has been restored.
3.2. Target Trust shall deliver to Acquiring Trust at the Closing a
schedule of the Assets and Liabilities as of the Effective Time, with values
determined as provided in Section 2 of this Agreement, which shall set forth for
all portfolio securities included therein and all other Assets, their adjusted
basis and holding period, by lot, for federal income tax purposes all as of the
Valuation Time, certified on the Acquired Fund's behalf by the Target Trust's
President (or any Vice President) and Treasurer. Target Trust's custodian shall
deliver at the Closing a certificate of an authorized officer stating that (a)
the Assets held by the custodian will be transferred in proper form to Acquiring
Fund at the Effective Time and (b) all necessary taxes in conjunction with the
delivery of the Assets, including all applicable federal and state stock
transfer stamps, if any, have been paid or provision for payment has been made.
3.3. Target Trust's transfer agent shall deliver to Acquiring Trust at the
Closing a statement of an authorized officer thereof certifying that its records
contain the names and addresses of the Shareholders and the number and
percentage ownership of outstanding Target Fund Shares owned by each
Shareholder, all as of the Effective Time. Acquiring Trust's transfer agent
shall deliver at the Closing a certificate as to the opening on Acquiring Fund's
share transfer books of accounts in the Shareholders' names. Acquiring Trust
shall issue and deliver a confirmation to Target Trust evidencing the Acquiring
Fund Shares to be credited to Target Fund
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at the Effective Time or provide evidence satisfactory to Target Trust that such
Acquiring Fund Shares have been credited to Target Fund's account on Acquiring
Fund's books. At the Closing, each Investment Company shall deliver to the other
bills of sale, checks, assignments, stock certificates, receipts, or other
documents the other Investment Company or its counsel reasonably requests.
3.4. Each Investment Company shall deliver to the other at the Closing a
certificate executed in its name by its President or a Vice President in form
and substance reasonably satisfactory to the recipient and dated the Effective
Time, to the effect that the representations and warranties it made in this
Agreement are true and correct at the Effective Time except as they may be
affected by the transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1. Target Trust represents and warrants as follows:
4.1.1. Trust is a business trust that is duly organized, validly
existing, and in good standing under the laws of the State of Delaware,
with the power under its Declaration of Trust to own all of its properties
and assets and to carry on the business being conducted; and its
certificate of trust is on file with the Secretary of the State of
Delaware;
4.1.2. Target Trust is duly registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), and such registration is in full force and effect; and
the registration of shares of the Acquired Funds under the Securities Act
of 1933, as amended, (the "1933 Act") is in full force and effect;
4.1.3. Fund is a duly established and designated series of Target
Trust; and all Target Fund Shares outstanding at the Effective Time will
have been h duly authorized and duly and validly issued and outstanding
shares of Target Fund, fully paid and non-assessable;
4.1.4. At the Closing, Target Fund will have good and marketable title
to the Assets and full right, power, and authority to sell, assign,
transfer, and deliver the Assets free of any liens or other encumbrances;
and on delivery and payment for the Assets, Acquiring Fund will acquire
good and marketable title thereto;
4.1.5. Target Fund's current prospectus and SAI conform in all
material respects to the applicable requirements of the 1933 Act, and the
1940 Act and the rules and regulations 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 misleading;
4.1.6. Target Fund is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, applicable law or
any provision of Target Trust's Trust Instrument or bylaws or of any
agreement, instrument, lease, or other undertaking to which Target Fund
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is a party or by which it is bound or result in the acceleration of any
obligation, or the imposition of any penalty, under any agreement,
judgment, or decree to which Target Fund is a party or by which it is
bound, except as previously disclosed in writing to and accepted by
Acquiring Trust;
4.1.7. Except as otherwise disclosed in writing to and accepted by
Acquiring Trust, all contracts and other commitments and liabilities of or
applicable to Target Fund (including, but not limited to, amounts owed to
service providers or vendors for any operating expenses incurred by Target
Fund up to the Effective Time, and any amounts owed by the Target Fund
under applicable expense limitation or waiver agreements) (other than this
Agreement and investment contracts, including options, futures, and forward
contracts) will be terminated, discharged, and paid in full by Target Fund,
at or prior to the Effective Time, without either Fund's incurring any
liability or penalty with respect thereto and without diminishing or
releasing any rights Target Fund may have had with respect to actions taken
or omitted or to be taken by any other party thereto prior to the Closing;
4.1.8. Except as otherwise disclosed in writing to and accepted by
Acquiring Trust, no litigation, administrative proceeding, or investigation
of or before any court or governmental body is presently pending or (to
Target Trust's knowledge) threatened against Target Trust or any of its
properties or assets that, if adversely determined, would materially and
adversely affect Target Fund's financial condition or the conduct of its
business; and Target Trust knows of no facts that might form the basis for
the institution of any such litigation, proceeding, or investigation and is
not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially or adversely
affects its business or its ability to consummate the transactions
contemplated hereby;
4.1.9. The execution, delivery, and performance of this Agreement
have been duly authorized as of the date hereof by all necessary action on
the part of Target Trust's board of trustees; and, subject to approval by
Target Fund's shareholders, this Agreement constitutes a valid and legally
binding obligation of Target Fund, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws relating
to or affecting creditors' rights and by general principles of equity;
4.1.10. At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by Target Fund's
shareholders;
4.1.11. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), the 1940 Act, or applicable state
securities laws for the execution or performance of this Agreement by
Target Trust, except for (a) the filing with the Securities and Exchange
Commission (the "SEC") of a registration statement by Acquiring Trust on
Form N-14 relating to the Acquiring Fund Shares issuable hereunder, and any
supplement or amendment thereto (the "Registration Statement"), including
therein a prospectus/proxy statement (the "Proxy Statement"), and (b) such
consents,
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approvals, authorizations, and filings as have been made or received or as
may be required subsequent to the Effective Time;
4.1.12. On the effective date of the Registration Statement, at the
time of the shareholders' meeting referred to in paragraph 5.2, and at the
Effective Time, the Proxy Statement will (a) comply in all material
respects with the applicable provisions of the 1933 Act, the 1934 Act, and
the 1940 Act and the rules and regulations thereunder and (b) 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
misleading; provided that the foregoing shall not apply to statements in or
omissions from the Proxy Statement made in reliance on and in conformity
with information furnished by Acquiring Trust for use therein;
4.1.13. There are no Liabilities other than Liabilities disclosed or
provided for in Target Trust's financial statements referred to in
paragraph 4.1.16 and Liabilities incurred by Target Fund in the ordinary
course of its business subsequent to December 31, 2001, or otherwise
previously disclosed to Acquiring Trust, none of which has been materially
adverse to the business, assets, or results of Target Fund's operations;
4.1.14. Target Fund is a "fund" as defined in section 851(g)(2) of the
Code; it qualified for treatment as a regulated investment company under
Subchapter M of the Code (a "RIC") for each past taxable year since it
commenced operations and will continue to meet all the requirements for
such qualification for its current taxable year; the Assets will be
invested at all times through the Effective Time in a manner that ensures
compliance with the foregoing; and Target Fund has no earnings and profits
accumulated in any taxable year in which the provisions of Subchapter M did
not apply to it;
4.1.15. Target Fund's federal income tax returns, and all applicable
state and local tax returns, for all taxable years through and including
the taxable year ended December 31, 2001 have been timely filed and all
taxes payable pursuant to such returns have been timely paid; and
4.1.16. Target Trust's financial statements for the year ended
December 31, 2001 delivered to Acquiring Trust fairly represent Target
Fund's financial position as of such date and the results of its operations
and changes in its net assets for the period then ended.
4.2. Acquiring Trust represents and warrants as follows:
4.2.1. Acquiring Trust is a business trust that is duly organized,
validly existing, and in good standing under the laws of the State of
Delaware, with the power under its Declaration of Trust to own all of its
properties and assets and to carry on the business being conducted; and its
certificate of trust is on file with the Secretary of the State of
Delaware;
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4.2.2. Acquiring Trust is duly registered as an open-end management
investment company under the 1940 Act, and such registration will be in
full force and effect at the Effective Time; and the registration of shares
of the Acquiring Funds under the 1933 Act is in full force and effect;
4.2.3. Acquiring Fund is a duly established and designated series of
Acquiring Trust;
4.2.4. No consideration other than Acquiring Fund Shares will be
issued in exchange for the Assets in the Reorganization;
4.2.5. The Acquiring Fund Shares to be issued and delivered to Target
Fund hereunder will, at the Effective Time, have been duly authorized and,
when issued and delivered as provided herein, will be duly and validly
issued and outstanding shares of Acquiring Fund, fully paid and
non-assessable;
4.2.6. Acquiring Fund's current prospectus and SAI conform in all
material respects to the applicable requirements of the 1933 Act and the
1940 Act and the rules and regulations 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 misleading;
4.2.7. Acquiring Fund is not in violation of, and the execution and
delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, applicable law or
any provision of Acquiring Trust's agreement and declaration of trust
("Trust Instrument") or bylaws or of any provision of any agreement,
instrument, lease, or other undertaking to which Acquiring Fund is a party
or by which it is bound or result in the acceleration of any obligation, or
the imposition of any penalty, under any agreement, judgment, or decree to
which Acquiring Fund is a party or by which it is bound, except as
previously disclosed in writing to and accepted by Target Trust;
4.2.8. Except as otherwise disclosed in writing to and accepted by
Target Trust, no litigation, administrative proceeding, or investigation of
or before any court or governmental body is presently pending or (to
Acquiring Trust's knowledge) threatened against Acquiring Trust or any of
its properties or assets that, if adversely determined, would materially
and adversely affect Acquiring Fund's financial condition or the conduct of
its business; and Acquiring Trust knows of no facts that might form the
basis for the institution of any such litigation, proceeding, or
investigation and is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially or adversely affects its business or its ability to consummate
the transactions contemplated hereby;
4.2.9. The execution, delivery, and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Acquiring Trust's board of trustees (together with Target Trust's
board of trustees, the "Boards");
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no approval of this Agreement by Acquiring Fund's shareholders is required
under Acquiring Trust's Trust Instrument or bylaws, or applicable law; and
this Agreement constitutes a valid and legally binding obligation of
Acquiring Fund, enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity;
4.2.10. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the 1934 Act, the 1940 Act, or
applicable state securities laws for the execution or performance of this
Agreement by Acquiring Trust, except for (a) the filing with the SEC of the
Registration Statement and (b) such consents, approvals, authorizations,
and filings as have been made or received or as may be required subsequent
to the Effective Time;
4.2.11. On the effective date of the Registration Statement, at the
time of the shareholders' meeting referred to in paragraph 5.2, and at the
Effective Time, the Proxy Statement will (a) comply in all material
respects with the applicable provisions of the 1933 Act, the 1934 Act, and
the 1940 Act and the rules and regulations thereunder and (b) 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
misleading; provided that the foregoing shall not apply to statements in or
omissions from the Proxy Statement made in reliance on and in conformity
with information furnished by Target Trust for use therein;
4.2.12. Acquiring Fund is a "fund" as defined in section 851(g)(2) of
the Code; it qualified for treatment as a RIC for each past taxable year
since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; Acquiring
Fund intends to continue to meet all such requirements for the next taxable
year; and it has no earnings and profits accumulated in any taxable year in
which the provisions of Subchapter M of the Code did not apply to it;
4.2.13. Acquiring Fund's federal income tax returns, and all
applicable state and local tax returns, for all taxable years through and
including the taxable year ended December 31, 2001 have been timely filed
and all taxes payable pursuant to such returns have been timely paid; and
4.2.14. Acquiring Trust's financial statements for the year ended
December 31, 2001 delivered to Target Trust fairly represent Acquiring
Fund's financial position as of that date and the results of its operations
and changes in its net assets for the year then ended.
4.3. Each Investment Company represents and warrants as follows:
4.3.1. The fair market value of the Acquiring Fund Shares received by
each Shareholder will be approximately equal to the fair market value of
its Target Fund Shares constructively surrendered in exchange therefor;
4.3.2. The Shareholders will pay their own expenses, if any, incurred
in connection with the Reorganization; and
4.3.3. There is no intercompany indebtedness between the Funds that
was issued or acquired, or will be settled, at a discount.
5. COVENANTS
5.1. Each Fund covenants to operate its respective business in the ordinary
course between the date hereof and the Closing, it being understood that such
ordinary course will include declaring and paying customary dividends and other
distributions (including the dividend and/or other distribution referred to in
paragraph 1.4) and changes in operations contemplated by each Fund's normal
business activities.
5.2. Target Fund covenants to call a shareholders' meeting to consider and
act on this Agreement and to take all other action necessary to obtain approval
of the transactions contemplated hereby.
5.3. Target Fund covenants that the Acquiring Fund Shares to be delivered
hereunder are not being acquired for the purpose of making any distribution
thereof, other than in accordance with the terms hereof.
5.4. Target Fund covenants that it will assist Acquiring Trust in obtaining
information Acquiring Trust reasonably requests concerning the beneficial
ownership of Target Fund Shares.
5.5. Target Fund covenants that its books and records (including all books
and records required to be maintained under the 1940 Act and the rules and
regulations thereunder) will be turned over to Acquiring Trust at the Closing.
5.6. Each Fund covenants to cooperate in preparing the Proxy Statement in
compliance with applicable federal and state securities laws.
5.7. Each Fund covenants that it will, from time to time, as and when
requested by the other Fund, execute and deliver or cause to be executed and
delivered all such assignments and other instruments, and will take or cause to
be taken such further action, as the other Fund may deem necessary or desirable
in order to vest in, and confirm to, (a) Acquiring Fund, title to and possession
of all the Assets, and (b) Target Fund, title to and possession of the Acquiring
Fund Shares to be delivered hereunder, and otherwise to carry out the intent and
purpose hereof.
5.8. Acquiring Fund covenants to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act, and state
securities laws it deems appropriate to continue its operations after the
Effective Time.
5.9. Target Fund covenants that immediately prior to the Effective Time, it
will not hold: (a) any Assets which are not permitted investments for Acquiring
Fund by reason of charter limitations or investment restrictions disclosed in
the Acquiring Fund's prospectus and statement of additional information in
effect at the Effective Time; or (b) any other Assets that the Acquiring Fund
requests that the Target Fund dispose of prior to the Effective Time.
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5.10. Target Fund and Acquiring Fund covenant that if they are advised by
counsel that exemptive relief from Section 17(a) of the 1940 Act is required in
order to complete the transactions contemplated hereby, they will use all
reasonable efforts to obtain such exemptive relief from the SEC.
5.11. Subject to this Agreement, each Fund covenants to take or cause to be
taken all actions, and to do or cause to be done all things, reasonably
necessary, proper, or advisable to consummate and effectuate the transactions
contemplated hereby.
6. CONDITIONS PRECEDENT
Each Fund's obligations hereunder shall be subject to (a) performance by
the corresponding Fund of all its obligations and covenants to be performed
hereunder at or before the Effective Time, (b) all representations and
warranties of the corresponding Fund contained herein being true and correct in
all material respects as of the date hereof and, except as they may be affected
by the transactions contemplated hereby, as of the Effective Time, with the same
force and effect as if made at and as of the Effective Time, and (c) the
following further conditions that, at or before the Effective Time:
6.1. This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by each Board and shall have been approved by
Target Fund's shareholders in accordance with Target Trust's Trust Instrument
and bylaws and applicable law.
6.2. All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. The Registration Statement shall have become
effective under the 1933 Act, no stop orders suspending the effectiveness
thereof shall have been issued, and the SEC shall not have issued an unfavorable
report with respect to the Reorganization under section 25(b) of the 1940 Act
nor instituted any proceedings seeking to enjoin consummation of the
transactions contemplated hereby under section 25(c) of the 1940 Act. All
consents, orders, and permits of federal, state, and local regulatory
authorities (including the SEC and state securities authorities) deemed
necessary by either Investment Company to permit consummation, in all material
respects, of the transactions contemplated hereby (including, without
limitation, the exemptive relief from Section 17(a) of the 1940 Act referred to
in paragraph 5.10 if such is required) shall have been obtained, except where
failure to obtain same would not involve a risk of a material adverse effect on
either Fund's assets or properties, provided that either Investment Company may
for itself waive any of such conditions.
6.3. At the Effective Time, no action, suit, or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or to obtain damages or other relief in connection with,
the transactions contemplated hereby.
6.4. Target Trust shall have received an opinion of Dechert, counsel to
Acquiring Trust, substantially to the effect that:
6.4.1. Acquiring Fund is a duly established series of Acquiring Trust,
a business trust duly organized, validly existing, and in good standing
under the laws of the State of
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Delaware with power under its Trust Instrument to own all its properties
and assets and, to the knowledge of such counsel, to carry on its business
as presently conducted;
6.4.2. This Agreement has been duly authorized, executed, and
delivered by Acquiring Trust on behalf of Acquiring Fund; no approval of
this Agreement by Acquiring Fund's shareholders is required under Acquiring
Trust's Trust Instrument or bylaws, or applicable law; and assuming due
authorization, execution, and delivery of this Agreement by Target Trust on
behalf of Target Fund, this Agreement is a valid and legally binding
obligation of Acquiring Trust with respect to Acquiring Fund, enforceable
in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium,
and similar laws relating to or affecting creditors' rights and by general
principles of equity;
6.4.3. The Acquiring Fund Shares to be issued and distributed to the
Shareholders under this Agreement, assuming their due delivery as
contemplated by this Agreement, will be duly authorized, validly issued and
outstanding, and fully paid and non-assessable;
6.4.4. The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, violate
Acquiring Trust's Trust Instrument or bylaws or any provision of any
agreement (known to such counsel, without any independent inquiry or
investigation) to which Acquiring Trust (with respect to Acquiring Fund) is
a party or by which it is bound or (to the knowledge of such counsel,
without any independent inquiry or investigation) result in the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree to which Acquiring Trust (with respect to
Acquiring Fund) is a party or by which it is bound, except as set forth in
such opinion or as previously disclosed in writing to and accepted by
Target Trust;
6.4.5. No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Acquiring Trust
(on behalf of Acquiring Fund) of the transactions contemplated herein,
except those obtained under the 1933 Act, the 1934 Act, and the 1940 Act
and those that may be required under state securities laws;
6.4.6. Acquiring Trust is registered with the SEC as an investment
company, and to the knowledge of such counsel no order has been issued or
proceeding instituted to suspend such registration; and
6.4.7. To the knowledge of such counsel (without any independent
inquiry or investigation), (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is pending or
threatened as to Acquiring Trust (with respect to Acquiring Fund) or any of
its properties or assets attributable or allocable to Acquiring Fund and
(b) Acquiring Trust (with respect to Acquiring Fund) is not a party to or
subject to the provisions of any order, decree, or judgment of any court or
governmental body that materially and adversely affects Acquiring Fund's
business,
11
except as set forth in such opinion or as otherwise disclosed in writing to
and accepted by Target Trust.
In rendering such opinion, such counsel may (1) make assumptions regarding the
authenticity, genuineness, and/or conformity of documents and copies thereof
without independent verification thereof, (2) limit such opinion to applicable
federal and state law, and (3) define the word "knowledge" and related terms to
mean the knowledge of attorneys then with such counsel who have devoted
substantive attention to matters directly related to this Agreement and the
Reorganization.
6.5. Acquiring Trust shall have received an opinion of Xxxxxx & Xxxxxxx
LLP, counsel to Target Trust, substantially to the effect that:
6.5.1. Target Fund is a duly established series of Target Trust, a
business trust duly organized, validly existing, and in good standing under
the laws of the State of Delaware with power under its Trust Instrument to
own all its properties and assets and, to the knowledge of such counsel, to
carry on its business as presently conducted.;
6.5.2. This Agreement (a) has been duly authorized, executed, and
delivered by Target Trust on behalf of Target Fund and (b) assuming due
authorization, execution, and delivery of this Agreement by Acquiring Trust
on behalf of Acquiring Fund, is a valid and legally binding obligation of
Target Trust with respect to Target Fund, enforceable in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws relating
to or affecting creditors' rights and by general principles of equity;
6.5.3. The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, violate
Target Trust's Trust Instrument or bylaws or any provision of any agreement
(known to such counsel, without any independent inquiry or investigation)
to which Target Trust (with respect to Target Fund) is a party or by which
it is bound or (to the knowledge of such counsel, without any independent
inquiry or investigation) result in the acceleration of any obligation, or
the imposition of any penalty, under any agreement, judgment, or decree to
which Target Trust (with respect to Target Fund) is a party or by which it
is bound, except as set forth in such opinion or as previously disclosed in
writing to and accepted by Acquiring Trust;
6.5.4. No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Target Trust (on
behalf of Target Fund) of the transactions contemplated herein, except
those obtained under the 1933 Act, the 1934 Act, and the 1940 Act and those
that may be required under state securities laws;
6.5.5. Target Trust is registered with the SEC as an investment
company, and to the knowledge of such counsel no order has been issued or
proceeding instituted to suspend such registration; and
6.5.6. To the knowledge of such counsel (without any independent
inquiry or investigation), (a) no litigation, administrative proceeding, or
investigation of or before any court or governmental body is pending or
threatened as to Target Trust (with respect
12
to Target Fund) or any of its properties or assets attributable or
allocable to Target Fund and (b) Target Trust (with respect to Target Fund)
is not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body that materially and adversely
affects Target Fund's business, except as set forth in such opinion or as
otherwise disclosed in writing to and accepted by Acquiring Trust.
In rendering such opinion, such counsel may (1) make assumptions regarding the
authenticity, genuineness, and/or conformity of documents and copies thereof
without independent verification thereof, (2) limit such opinion to applicable
federal and state law, and (3) define the word "knowledge" and related terms to
mean the knowledge of attorneys then with such counsel who have devoted
substantive attention to matters directly related to this Agreement and the
Reorganization.
6.6. Each Investment Company shall have received an opinion of Xxxxxx &
Whitney LLP, addressed to and in form and substance reasonably satisfactory to
it, as to the federal income tax consequences of the Reorganization (the "Tax
Opinion"). In rendering the Tax Opinion, such counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations and warranties made in this Agreement, which such counsel may
treat as representations and warranties made to it, and in separate letters
addressed to such counsel and the certificates delivered pursuant to paragraph
3.4. The Tax Opinion shall be substantially to the effect that, based on the
facts and assumptions stated therein and conditioned on consummation of the
Reorganization in accordance with this Agreement, the Reorganization will be
treated as a taxable purchase and sale of assets for federal income tax purposes
and will not qualify as a reorganization within the meaning of section 368(a)(1)
of the Code.
At any time before the Closing, either Investment Company may waive any of the
foregoing conditions (except those set forth in paragraphs 6.1 and 6.2) if, in
the judgment of its Board, such waiver will not have a material adverse effect
on its Fund's shareholders' interests.
7. BROKERAGE FEES
Each Investment Company represents and warrants to the other that there are
no brokers or finders entitled to receive any payments in connection with the
transactions provided for herein.
8. EXPENSES; INDEMNIFICATION
8.1. USAllianz Advisers, LLC hereby agrees that the cost of the
transactions contemplated by this Agreement shall be borne by it and/or its
affiliates. USAllianz Advisers, LLC further agrees to indemnify and hold
harmless each Shareholder and each beneficial owner of Target Fund shares, each
shareholder of record and each beneficial owner of Acquiring Fund shares, the
Target Fund, and the Acquiring Fund, from and against any taxes, penalties and
interest imposed upon them as a result of (a) the Reorganization not qualifying
as a "reorganization" under section 368(a)(1) of the Code or (b) any final
determination by a court of competent jurisdiction or administrative
determination that the Reorganization, although treated by the parties for
Federal income tax purposes as not qualifying as a "reorganization" under
section 368(a)(1) of the Code, in fact was such a "reorganization."
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8.2. Acquiring Trust and Acquiring Fund agree to indemnify and hold
harmless Target Trust, Target Fund and each of Target Trust's trustees and
officers from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which, jointly or severally, Target
Trust, Target Fund or any of Target Trust's trustees or officers may become
subject, insofar as any such loss, claim, damage, liability or expense (or
actions with respect thereto) arises out of or is based on (a) any breach by
Acquiring Trust or Acquiring Fund of any of their representations, warranties,
covenants or agreements set forth in this Agreement; or (b) the Target Trust's
signature of the Acquiring Trust's registration statement on Form N-14 under the
0000 Xxx.
8.3. Target Trust and Target Fund agree to indemnify and hold harmless
Acquiring Trust, Acquiring Fund and each of Acquiring Trust's trustees and
officers from and against any and all losses, claims, damages, liabilities or
expenses (including, without limitation, the payment of reasonable legal fees
and reasonable costs of investigation) to which, jointly or severally, Acquiring
Trust, Acquiring Fund or any of Acquiring Trust's trustees or officers may
become subject, insofar as any such loss, claim, damage, liability or expense
(or actions with respect thereto) arises out of or is based on (a) any breach by
Target Trust or Target Fund of any of their representations, warranties,
covenants or agreements set forth in this Agreement; or (b) the Acquiring
Trust's signature of the Target Trust's registration statement on Form N-14
under the 1933 Act.
9. ENTIRE AGREEMENT; NO SURVIVAL
Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties. The representations, warranties, and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall not
survive the Closing.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by Target Fund's shareholders:
10.1. By either Fund (a) in the event of the other Fund's material breach
of any representation, warranty, or covenant contained herein to be performed at
or prior to the Effective Time, (b) if a condition to its obligations has not
been met and it reasonably appears that such condition will not or cannot be
met, or (c) if the Closing has not occurred on or before December 31, 2002; or
10.2. By the parties' mutual agreement.
In the event of termination under paragraphs 10.1(c) or 10.2, there shall be no
liability for damages on the part of either Fund to the other Fund.
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11. AMENDMENT
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Target Fund's shareholders, in any manner
mutually agreed on in writing by the parties; provided that following such
approval no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund shares to be issued to Target Fund
shareholders under this Agreement to the detriment of such shareholders without
their further approval.
12. MISCELLANEOUS
12.1. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.
12.2. Nothing expressed or implied herein is intended or shall be construed
to confer upon or give any person, firm, trust, or corporation other than the
parties and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.
12.3. The Trust Instrument of each Investment Company provides that the
trustees and officers of such Investment Company are not personally liable for
the obligations of such Investment Company.
12.4. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been executed by each Investment Company and
delivered to the other party hereto. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
[signature page follows]
15
IN WITNESS WHEREOF, each party has caused this Agreement to be executed and
delivered by its duly authorized officers as of the day and year first written
above.
PIMCO VARIABLE INSURANCE TRUST
on behalf of its series,
PVIT Total Return Portfolio
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
USALLIANZ VARIABLE INSURANCE
PRODUCTS TRUST
on behalf of its series,
AZOA Fixed Income Fund
AZOA Diversified Assets Fund
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Solely as to Section 8.1 above:
USALLIANZ ADVISERS, LLC
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
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SCHEDULE A
TARGET FUND CORRESPONDING ACQUIRING
----------- -----------------------
FUND
----
AZOA Fixed Income Fund PVIT Total Return Portfolio
AZOA Diversified Assets Fund PVIT Total Return Portfolio
17
