AGREEMENT AND PLAN OF REORGANIZATION
Exhibit 4
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the “Plan”) is adopted on September 26, 2018, by Pacific Select Fund (the “Trust”), a Delaware statutory trust, with its principal place of business at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, on behalf of the Floating Rate Income Portfolio (the “Surviving Fund”), a separate series of the Trust, and the Floating Rate Loan Portfolio (the “Acquired Fund”), another separate series of the Trust.
Under the reorganization (the “Reorganization”), the Acquired Fund (which is comprised of Class I shares and Class P shares) will transfer all of its assets to the Surviving Fund, in exchange for Class I shares and Class P shares of the Surviving Fund, respectively (the “Surviving Fund Shares”), the Surviving Fund will assume all liabilities of the Acquired Fund, and the Surviving Fund Shares will be distributed to the shareholders of the Acquired Fund in complete Reorganization of the Acquired Fund as provided herein, all upon the terms and conditions hereinafter set forth in this Plan.
WHEREAS, the Acquired Fund and Surviving Fund are each a series of the Trust, an open-end, registered investment company of the management type, and the Acquired Fund owns securities which generally are assets of the character in which the Surviving Fund is permitted to invest; and
WHEREAS, the Board of Trustees of the Trust (the “Board”) has determined that the exchange of all of the assets of the Acquired Fund for Surviving Fund Shares and the assumption of all liabilities of the Acquired Fund by the Surviving Fund is in the best interests of the Surviving Fund and its shareholders and that the interests of the existing shareholders of the Surviving Fund would not be diluted as a result of this transaction; and
WHEREAS, the Board has also determined, with respect to the Acquired Fund, that the exchange of all of the assets of the Acquired Fund for Surviving Fund Shares and the assumption of all liabilities of the Acquired Fund by the Surviving Fund is in the best interests of the Acquired Fund and its shareholders and that the interests of the existing shareholders of the Acquired Fund would not be diluted as a result of this transaction.
NOW, THEREFORE, the Trust, on behalf of the Surviving Fund and the Acquired Fund separately, hereby approves the Plan on the following terms and conditions:
| 1. | Transfer of Assets of the Acquired Fund to the Surviving Fund in Exchange for the Surviving Fund Shares, the Assumption of All Acquired Fund Liabilities and the Reorganization of the Acquired Fund. |
1.1 Subject to the requisite approval of the Acquired Fund shareholders and the other terms and conditions herein set forth and on the basis of the representations and warranties contained herein, the Acquired Fund agrees to transfer all of the Acquired Fund’s assets, as set forth in paragraph 1.2, to the Surviving Fund, and the Surviving Fund agrees in exchange therefore: (i) to deliver to the Acquired Fund the number of full and fractional Class I and Class P shares of the Surviving Fund determined by dividing the value of the Acquired Fund’s net assets, computed in the manner and as of the time and date set forth in paragraph 2.1, by the net asset value of one Surviving Fund Share, computed in the manner and as of the time and date set forth in paragraph 2.2; and (ii) to assume all liabilities of the Acquired Fund. The proportion of Class I and Class P shares delivered by the Surviving Fund shall equal the proportion of the then outstanding Class I and Class P shares of the Acquired Fund. Such transactions shall take place at the closing provided for in paragraph 3.1 (the “Closing”).
1.2 The assets of the Acquired Fund to be acquired by the Surviving Fund shall consist of all assets and property, including, without limitation, all cash, securities, commodities and futures interests and dividends or interests receivable that are owned by the Acquired Fund and any deferred or prepaid expenses shown as an asset on the books of the Acquired Fund on the closing date provided for in paragraph 3.1 (the “Closing Date”). Whether or not shown as an asset on the books of the Acquired Fund on the Closing Date, assets consisting of any asserted or unasserted potential legal claims that may arise from the Acquired Fund as of the Closing Date or were constituted prior to the Closing Date, shall be considered part of the assets of the Acquired Fund.
1.3 The Acquired Fund will endeavor to discharge all of its known liabilities and obligations prior to the Closing Date. The Surviving Fund shall also assume all of the liabilities of the Acquired Fund, whether accrued or contingent, known or unknown, existing at the Valuation Date. Expenses, whether known or unknown as of the Valuation Date, associated with any asserted or unasserted potential legal claims that are assets of the Acquired Fund as set forth in paragraph 1.2, shall be considered liabilities of the Acquired Fund.
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
1.4 Immediately after the transfer of assets provided for in paragraph 1.1, the Acquired Fund will distribute to the Acquired Fund’s shareholders of record, determined as of the close of business on the Closing Date (the “Acquired Fund Shareholders”), on a pro rata basis within Class I and Class P, the Surviving Fund Shares received by the Acquired Fund pursuant to paragraph 1.1, and will completely liquidate and terminate. Such distribution and Reorganization will be accomplished by the transfer of the Surviving Fund Shares then credited to the account of the Acquired Fund on the books of the Surviving Fund to open accounts on the share records of the Surviving Fund in the names of the Acquired Fund Shareholders. The aggregate net asset value of Surviving Fund Shares to be so credited to Acquired Fund Shareholders shall be equal to the aggregate net asset value of the Acquired Fund shares owned by such shareholders on the Closing Date. All issued and outstanding shares of the Acquired Fund will simultaneously be canceled on the books of the Acquired Fund, although share certificates representing interests in shares of the Acquired Fund will then represent a number of Surviving Fund Shares, as determined in accordance with Section 2.3. The Surviving Fund shall not issue certificates representing the Surviving Fund Shares in connection with such exchange.
1.5 Ownership of Surviving Fund Shares will be shown on the books of the Fund’s transfer agent. Shares of the Surviving Fund will be issued in the manner described in the Fund’s then-current prospectus and statement of additional information.
1.6 Any reporting responsibility of the Acquired Fund including, but not limited to, the responsibility for filing of regulatory reports, tax returns, or other documents with the U.S. Securities and Exchange Commission (the “Commission”), any state securities commission, and any federal, state or local tax authorities or any other relevant regulatory authority, is and shall remain the responsibility of the Acquired Fund.
| 2. | Valuation |
2.1 The value of the Acquired Fund’s assets to be acquired by the Surviving Fund hereunder shall be the value of such assets computed at or about 4:00 p.m. Eastern Time on the Closing Date (such time and date being hereinafter called the “Valuation Date”), using the valuation procedures set forth in the Acquired Fund’s then-current prospectus or statement of additional information and as established by the Board.
2.2 The net asset value of the Surviving Fund Shares shall be the net asset value per share computed at or about 4:00 p.m. Eastern time and after the declaration of any dividends on the Valuation Date, using the valuation procedures set forth in the Surviving Fund’s then-current prospectus or statement of additional information with respect to the Surviving Fund, and as established by the Board.
2.3 The number of Surviving Fund Shares to be issued (including fractional shares, if any) in exchange for the Acquired Fund’s assets shall be determined by dividing the value of the net assets of the Acquired Fund, determined using the same valuation procedures referred to in paragraph 2.1, by the net asset value of a Surviving Fund Share, determined in accordance with paragraph 2.2.
All computations of value shall be made by the Acquired Fund’s designated recordkeeping agent.
| 3. | Closing and Closing Date |
3.1 The Closing Date shall be March 1, 2019, 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 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 at or about 4:00 p.m., Eastern Time. The Closing shall be held at the offices of the Trust or at such other time and/or place as the parties may agree.
3.2 The Trust shall direct State Street Bank and Trust Company, as custodian for the Trust (the “Custodian”), to deliver, at the Closing, confirmation by an authorized officer stating that (i) the Acquired Fund’s portfolio securities, cash, and any other assets (the “Assets”) were delivered in proper form to the Surviving Fund on the Closing Date, and (ii) all necessary taxes in connection with the delivery of the Assets have been paid or provision for payment has been made. The Acquired Fund’s portfolio securities shall be transferred and delivered by the Acquired Fund as of the Closing Date for the account of the Surviving Fund duly endorsed in proper form for transfer in such condition as to constitute good delivery thereof. The Custodian shall deliver as of the Closing Date by book entry, in accordance with the customary practices of such depositories and the Custodian, the Acquired Fund’s portfolio securities and instruments deposited with a securities depository, as defined in Rule 17f-4 under the Investment Company Act of 1940, as amended (the “1940 Act”).
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
3.3 In the event that on the Valuation Date (a) the New York Stock Exchange or another primary trading market for portfolio securities of the Surviving Fund or the Acquired Fund shall be closed to trading or trading thereupon shall be restricted, or (b) trading or the reporting of trading on such Exchange or elsewhere shall be disrupted so that, in the judgment of the Board, accurate appraisal of the value of the net assets of the Surviving Fund or the Acquired Fund is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored or on such other day as the parties may agree.
| 4. | Representations and Warranties |
4.1 Except as has been fully disclosed to and accepted by the Surviving Fund prior to the date of this Plan in a written instrument executed by an officer of the Trust, the Trust, on behalf of the Acquired Fund, represents and warrants to the Surviving Fund as follows:
(a) The Acquired Fund is duly organized as a series of the Trust, which is a statutory trust duly organized and validly existing under the laws of the State of Delaware, with power under the Trust’s Agreement and Declaration of Trust dated June 22, 2016 (the “Declaration of Trust”), to own all of its properties and assets and to carry on its business as it is now being conducted;
(b) The 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 Securities Act of 1933, as amended (the “1933 Act”), including the shares of the Acquired Fund, are in full force and effect;
(c) No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by the Acquired Fund of the transactions contemplated herein, except such as have been obtained under the 1933 Act, the Securities Exchange Act of 1934, as amended (the “1934 Act”) and the 1940 Act, and such as may be required by state securities laws;
(d) The current prospectus and statement of additional information of the Acquired Fund and each prospectus and statement of additional information of the Acquired Fund used during the three years previous to the date of this Plan conforms or conformed at the time of its use 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 does not or did not at the time of its use 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;
(e) On the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Fund’s assets to be transferred to the Surviving Fund pursuant to paragraph 1.1 and full right, power, and authority to sell, assign, transfer and deliver such assets hereunder free of any liens or other encumbrances, and upon delivery and payment for such assets, the Surviving Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, including such restrictions as might arise under the 1933 Act, other than as disclosed to the Surviving Fund;
(f) The Acquired Fund is not engaged currently, and the execution, delivery and performance of this Plan will not result, in (i) a material violation of the Trust’s Declaration of Trust, or By-Laws or of any agreement, indenture, instrument, contract, lease or other undertaking to which the Acquired Fund is a party or by which it is bound, or (ii) the acceleration of any obligation, or the imposition of any penalty, under any agreement, indenture, instrument, contract, lease, judgment or decree to which the Acquired Fund is a party or by which it is bound;
(g) The Acquired Fund has no material contracts or other commitments (other than this Plan) that will be terminated with liability to it prior to the Closing Date;
(h) No litigation or administrative proceeding or investigation of or before any court or governmental body is presently pending or, to its knowledge, threatened against the Acquired Fund or any of its properties or assets that, if adversely determined, would materially and adversely affect its financial condition or the conduct of its business. The Acquired Fund knows of no facts that might form the basis for the institution of such proceedings and is not 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 its business or its ability to consummate the transactions herein contemplated;
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
(i) The statement of assets and liabilities, including the schedule of investments, of the Acquired Fund as of December 31, 2017, and the related statement of operations for the year then ended and the statements of changes in net assets for each of the two years in the period then ended, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, and are in accordance with generally accepted accounting principles (“GAAP”) consistently applied, and such statements (copies of which have been furnished to the Surviving Fund) present fairly, in all material respects, the financial condition of the Acquired Fund as of such date in accordance with GAAP, and there are no known contingent liabilities of the Acquired Fund required to be reflected on a balance sheet (including the notes thereto) in accordance with GAAP as of such date not disclosed therein;
(j) Since December 31, 2017, there has not been any material adverse change in the Acquired Fund’s financial condition, assets, liabilities or business, other than changes occurring in the ordinary course of business, or any incurrence by the Acquired Fund of indebtedness maturing more than one year from the date such indebtedness was incurred, except as otherwise disclosed to and accepted by the Surviving Fund. For the purposes of this subparagraph (j), a decline in net asset value per share of the Acquired Fund due to declines in market values of securities in the Acquired Fund, the discharge of Acquired Fund liabilities, or the redemption of Acquired Fund Shares by shareholders of the Acquired Fund shall not constitute a material adverse change;
(k) On the Closing Date, all Federal and other tax returns and reports of the Acquired Fund required by law to have been filed by such date (including any extensions) shall have been filed and are or will be correct in all material respects, 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 of the Acquired Fund’s knowledge, no such return is currently under audit and no assessment has been asserted with respect to such returns;
(l) For taxable years beginning on or after January 1, 2007, including the taxable year ending with the Closing Date, the Acquired Fund has met the requirements for taxation as a partnership for federal income tax purposes. For each taxable year, including the taxable year ending with the Closing Date, the Acquired Fund has met the diversification requirements of Section 817(h) of the Code and the Treasury Regulations promulgated thereunder;
(m) All issued and outstanding shares of the Acquired Fund are, and on the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable by the Trust and have been offered and sold in compliance in all material respects with applicable registration requirements of the 1933 Act and state securities laws. All of the issued and outstanding shares of the Acquired Fund will, at the time of Closing, be held by the same persons and in the same amounts set forth in the records of the Transfer Agent immediately prior to the Closing, on behalf of the Acquired Fund;
(n) The adoption and performance of this Plan will have been duly authorized prior to the Closing Date by all necessary action, if any, on the part of the Board, and, subject to the approval of the shareholders of the Acquired Fund, this Plan will constitute a valid and binding obligation of the Acquired 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; and performance of this Plan will have been duly authorized prior to the Closing Date by all necessary action, if any, on the part of the Board, and, subject to the approval of the shareholders of the Acquired Fund, this Plan will constitute a valid and binding obligation of the Acquired 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; and
(o) The information to be furnished by the Acquired Fund for use in registration statements, proxy materials and other documents filed or to be filed with any federal, state or local regulatory authority (including the Financial Industry Regulatory Authority, Inc.), 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
(p) The proxy statement of the Acquired Fund (the “Proxy Statement”) to be included in the Proxy Statement/Prospectus referred to in paragraph 5.5, insofar as it relates to the Acquired Fund, will, on the effective date of the Proxy Statement/Prospectus and on the Closing Date (i) 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 provided, however, that the representations and warranties in this subparagraph (p) shall not apply to statements in or omissions from the Proxy Statement/Registration Statement made in reliance upon and in conformity with information that was furnished by the Acquired Fund for use therein; and (ii) comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations thereunder.
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
(q) On the Closing Date, the shares of beneficial interest of the Acquired Fund that are authorized, established, issued and outstanding shall consist of two classes, which are designated Class I and Class P shares, and no other class of shares of beneficial interest of the Acquired Fund shall be authorized, established, issued or outstanding.
4.2 Except as has been fully disclosed to and accepted by the Acquired Fund prior to the date of this Plan in a written instrument executed by an officer of the Trust, the Trust, on behalf of the Surviving Fund, represents and warrants to the Acquired Fund as follows:
(a) The Surviving Fund is duly organized as a series of the Trust, which is a statutory trust duly organized and validly existing under the laws of the State of Delaware, with power under the Trust’s Declaration of Trust, to own all of its properties and assets and to carry on its business as it is now being conducted;
(b) The 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, including the shares of the Surviving Fund, are in full force and effect;
(c) No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by the Surviving Fund of the transactions contemplated herein, except such as have been obtained under the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required by state securities laws;
(d) The current prospectus and statement of additional information of the Surviving Fund and each prospectus and statement of additional information of the Surviving Fund used during the three years previous to the date of this Plan conforms or conformed at the time of its use 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 does not or did not at the time of its use 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;
(e) On the Closing Date, the Surviving Fund will have good and marketable title to the Surviving Fund’s assets, free of any liens or other encumbrances, except those liens or encumbrances as to which the Acquired Fund has received notice and necessary documentation at or prior to the Closing;
(f) The Surviving Fund is not engaged currently, and the adoption and performance of this Plan will not result, in (i) a material violation of the Trust’s Declaration of Trust, or By-Laws or of any agreement, indenture, instrument, contract, lease or other undertaking to which the Surviving Fund is a party or by which it is bound, or (ii) the acceleration of any obligation, or the imposition of any penalty, under any agreement, indenture, instrument, contract, lease, judgment or decree to which the Surviving Fund is a party or by which it is bound;
(g) No litigation or administrative proceeding or investigation of or before any court or governmental body is presently pending or, to its knowledge, threatened against the Surviving Fund or any of its properties or assets that, if adversely determined, would materially and adversely affect its financial condition or the conduct of its business. The Surviving Fund knows of no facts that might form the basis for the institution of such proceedings and is not 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 its business or its ability to consummate the transactions herein contemplated;
(h) The statement of assets and liabilities, including the schedule of investments, of the Surviving Fund as of December 31, 2017, and the related statement of operations for the year then ended and the statements of changes in net assets for each of the two years in the period then ended, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, and are in accordance with GAAP consistently applied, and such statements (copies of which have been furnished to the Acquired Fund) present fairly, in all material respects, the financial condition of the Surviving Fund as of such date in accordance with GAAP, and there are no known contingent liabilities of the Surviving Fund required to be reflected on a balance sheet (including the notes thereto) in accordance with GAAP as of such date not disclosed therein;
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
(i) Since December 31, 2017, there has not been any material adverse change in the Surviving Fund’s financial condition, assets, liabilities or business, other than changes occurring in the ordinary course of business, or any incurrence by the Surviving Fund of indebtedness maturing more than one year from the date such indebtedness was incurred, except as otherwise disclosed to and accepted by the Acquired Fund. For purposes of this subparagraph (i), a decline in net asset value per share of the Surviving Fund due to declines in market values of securities in the Surviving Fund’s portfolio, the discharge of Surviving Fund liabilities, or the redemption of Surviving Fund shares by shareholders of the Surviving Fund, shall not constitute a material adverse change;
(j) On the Closing Date, all Federal and other tax returns and reports of the Surviving Fund required by law to have been filed by such date (including any extensions) shall have been filed and are or will be correct in all material respects, 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 of the Surviving Fund’s knowledge, no such return is currently under audit and no assessment has been asserted with respect to such returns;
(k) For taxable years beginning on or after January 1, 2013, the Surviving Fund has met the requirements for taxation as a partnership for federal income tax purposes. For each taxable year, the Surviving Fund has met the diversification requirements of Section 817(h) of the Code and the Treasury Regulations promulgated thereunder;
(l) All issued and outstanding Surviving Fund Shares are, and on the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable by the Trust and have been offered and sold in compliance in all material respects with applicable registration requirements of the 1933 Act and state securities laws;
(m) The adoption and performance of this Plan will have been fully authorized prior to the Closing Date by all necessary action, if any, on the part of the Board on behalf of the Surviving Fund and this Plan will constitute a valid and binding obligation of the Surviving 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;
(n) The Surviving Fund Shares to be issued and delivered to the Acquired Fund, for the account of the Acquired Fund Shareholders, pursuant to the terms of this Plan, will on the Closing Date have been duly authorized and, when so issued and delivered, will be duly and validly issued Surviving Fund Shares, and will be fully paid and non-assessable by the Trust;
(o) The information to be furnished by the Surviving Fund for use in the registration statements, proxy materials and other documents that 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; and
(p) That insofar as it relates to the Trust or the Surviving Fund, the Proxy Statement/Prospectus (as defined in Section 5.5 herein) relating to the Surviving Fund shares issuable hereunder, and the proxy materials of the Acquired Fund to be included in the Proxy Statement/Prospectus, and any amendment or supplement to the foregoing, will, from the effective date of the Proxy Statement/Prospectus through the date of the meeting of shareholders of the Acquired Fund contemplated therein, (i) 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, however, that the representations and warranties in this subparagraph (p) shall not apply to statements in or omissions from the Proxy Statement/Prospectus made in reliance upon and in conformity with information that was furnished by the Acquired Fund for use therein, and (ii) comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act, and the rules and regulations thereunder.
| 5. | Covenants of the Surviving Fund and the Acquired Fund |
5.1 The Surviving Fund and the Acquired Fund 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 Trust will call a meeting of the shareholders of the Acquired Fund to consider and act upon this Plan and to take all other action necessary to obtain approval of the transactions contemplated herein.
5.3 The Acquired Fund covenants that the Surviving 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 Plan.
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
5.4 Subject to the provisions of this Plan, the Surviving Fund and the Acquired Fund will each take, or cause to be taken, all action, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Plan.
5.5 The Acquired Fund will provide the Surviving Fund with information reasonably necessary for the preparation of a registration statement (the “Prospectus”), which will include the Proxy Statement referred to in paragraph 4.1(p), all to be included in a combined Proxy Statement/Prospectus on Form N-14 of the Surviving Fund (the “Proxy Statement/Prospectus”), in compliance with the 1933 Act, the 1934 Act and the 1940 Act, in connection with the meeting of the shareholders of the Acquired Fund to consider approval of this Plan and the transactions contemplated herein.
5.6 Immediately after the Closing, the Acquired Fund will make a liquidating distribution to its shareholders consisting of the Surviving Fund Shares received at the Closing.
5.7 The Surviving Fund and the Acquired Fund shall each use its reasonable best efforts to fulfill or obtain the fulfillment of the conditions precedent to effect the transactions contemplated by this Plan as promptly as practicable.
5.8 The Acquired Fund covenants that it will, from time to time, as and when reasonably requested by the Surviving 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 Surviving Fund may reasonably deem necessary or desirable in order to vest in and confirm the Surviving Fund’s title to and possession of all the assets and otherwise to carry out the intent and purpose of this Plan.
5.9 The Surviving Fund will use all reasonable efforts to obtain such regulatory approvals and authorizations as may be necessary, including those required by the 1933 Act and the 1940 Act, in order to continue its operations after the Closing Date.
| 6. | Conditions Precedent to Obligations of the Acquired Fund |
The obligations of the Acquired Fund to consummate the transactions provided for herein shall be subject, at the Acquired Fund’s election, to the performance by the Surviving Fund of all the obligations to be performed by it hereunder on or before the Closing Date, and, in addition thereto, the following further conditions:
6.1 All representations and warranties of the Surviving Fund and the Trust contained in this Plan 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 Plan, as of the Closing Date, with the same force and effect as if made on and as of the Closing Date;
6.2 The Trust and the Surviving Fund shall have performed all of the covenants and complied with all of the provisions required by this Plan to be performed or complied with by the Trust and the Surviving Fund on or before the Closing Date; and
6.3 The Acquired Fund and the Surviving Fund shall have agreed on the number of full and fractional Class I and Class P shares of the Surviving Fund to be issued in connection with the Reorganization after such number has been calculated in accordance with paragraph 1.1.
| 7. | Conditions Precedent to Obligations of the Surviving Fund |
The obligations of the Surviving Fund to complete the transactions provided for herein shall be subject, at the Surviving Fund’s election, to the performance by the Acquired Fund of all of the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties of the Acquired Fund and the Trust contained in this Plan 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 Plan, as of the Closing Date, with the same force and effect as if made on and as of the Closing Date;
7.2 The Trust and the Acquired Fund shall have performed all of the covenants and complied with all of the provisions required by this Plan to be performed or complied with by the Trust or the Acquired Fund on or before the Closing Date; and
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
7.3 The Acquired Fund and the Surviving Fund shall have agreed on the number of full and fractional Class I and Class P shares of the Surviving Fund to be issued in connection with the Reorganization after such number has been calculated in accordance with paragraph 1.1.
| 8. | Further Conditions Precedent to Obligations of the Surviving Fund and the Acquired Fund |
If any of the conditions set forth below do not exist on or before the Closing Date with respect to the Acquired Fund or the Surviving Fund, the other party to this Plan shall, at its option, not be required to consummate the transactions contemplated by this Plan:
8.1 The Plan and the transactions contemplated herein shall have been approved by the requisite vote of the holders of the outstanding shares of the Acquired Fund in accordance with the provisions of the Trust’s Declaration of Trust, By-Laws, applicable Delaware law and the 1940 Act. Notwithstanding anything herein to the contrary, neither the Surviving Fund nor the Acquired Fund may waive the conditions set forth in this paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be pending or, to its knowledge, threatened before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Plan or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and permits of Federal, state and local regulatory authorities deemed necessary by the Surviving Fund or the Acquired Fund 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 Surviving Fund or the Acquired Fund, provided that either party hereto may for itself waive any of such conditions;
8.4 The Proxy Statement/Prospectus shall have become effective under the 1933 Act and no stop orders suspending the effectiveness thereof shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the 1933 Act; and
8.5 The parties shall have received the opinion of Dechert LLP addressed to the Trust substantially to the effect that, based upon certain facts, assumptions, and representations, the transaction contemplated by this Plan will not result in any taxable income or gains being recognized for Federal income tax purposes, by the contract holders who hold interests on the Closing Date in the Surviving Fund and/or the Acquired Fund through certain variable annuity contracts and variable life insurance policies issued or administered by Pacific Life Insurance Company or Pacific Life & Annuity Company. The delivery of such opinion is conditioned upon receipt by Dechert LLP of representations it shall request of Pacific Life Insurance Company and Pacific Life & Annuity Company. Notwithstanding anything herein to the contrary, the Trust may not waive the condition set forth in this paragraph 8.5.
| 9. | Expenses of the Reorganization |
9.1 The Surviving Fund 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.
9.2 Pacific Life Fund Advisors, LLC, the investment adviser to the Acquired Fund and the Surviving Fund, will bear one-half of the expenses associated with the Reorganization. The Acquired Fund and the Surviving Fund will each bear one quarter of the Reorganization expenses. The costs of the Reorganization shall include: preparation of the Proxy Statement/Prospectus, printing and distributing the Surviving Fund’s prospectus and the Acquired Fund’s proxy materials, the costs of solicitation of voting instructions and any necessary filings with the SEC, legal fees, accounting fees, securities registration fees, and expenses of holding shareholders’ meetings. These expenses are considered extraordinary expenses and fall outside of the Acquired Fund’s expense limitation agreement. Brokerage fees and other transaction costs associated with the purchase and sale of holdings by and for the Acquired Fund, either prior to or after the Reorganization, in connection with the restructuring of the Acquired Fund in anticipation of or in connection with the Reorganization or otherwise, are not considered expenses of the Reorganization. Brokerage fees and certain transaction costs associated with the purchase and sale of securities, are part of the cost of such securities (and are not Reorganization expenses). The principal solicitation will be by mail, but voting instructions also may be solicited by telephone, Internet or in person. AST has been retained to assist with voting instruction solicitation activities (including assembly and mailing of materials to owners of Variable Contracts).
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
| 10. | Entire Agreement; Survival of Warranties |
10.1 The Trust has not made any representation, warranty or covenant, on behalf of either the Acquired Fund or the Surviving Fund, not set forth herein, and this Agreement constitutes the entire agreement between the Surviving Fund and Acquired Fund with respect to the Reorganization.
10.2 The representations, warranties and covenants contained in this Plan or in any document delivered pursuant hereto or in connection herewith shall survive the consummation of the transactions contemplated hereunder. The covenants to be performed after the Closing shall survive the Closing.
| 11. | Termination |
This Plan and the transactions contemplated hereby may be terminated and abandoned by resolution of the Board, at any time prior to the Closing Date, if circumstances should develop that, in the opinion of such Board, make proceeding with the Plan inadvisable.
| 12. | Amendments |
This Plan may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the authorized officers of the Trust; provided, however, that following the meeting of the shareholders of the Acquired Fund called by the Trust pursuant to paragraph 5.2 of this Plan, no such amendment may have the effect of changing the provisions for determining the number of Surviving Fund shares to be issued to the Acquired Fund Shareholders under this Plan to the detriment of such shareholders without their further approval.
| 13. | Notices |
Any notice, report, statement or demand required or permitted by any provision of this Plan shall be in writing and shall be given by personal service, a form of express mail service which requires signature of the recipient, or by prepaid or certified mail addressed to the Pacific Select Fund at 700 Newport Center Drive, Post Office Box 7500, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attn: Xxxxx X. Xxxxx, Esq. General Counsel in each case with a copy to Dechert LLP, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx, XX 00000, Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
| 14. | Headings; Counterparts; Governing Law; Assignment; Limitation of Liability |
14.1 The Article and paragraph headings contained in this Plan are for reference purposes only and shall not affect in any way the meaning or interpretation of this Plan.
14.2 This Plan shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its principles of conflicts of laws.
14.3 This Plan shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by any party without the written consent of the other party. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Plan.
14.4 The obligations imposed by this Plan shall not be binding upon any of the trustees, shareholders, nominees, officers, agents, or employees of either party hereto personally, but shall bind only the trust property of such party, as provided in the Trust’s Declaration of Trust. The execution and delivery by such officers 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 property of each party.
IN WITNESS WHEREOF, the Board has caused this Plan to be approved on behalf of the Surviving Fund and the Acquired Fund, respectively.
| PACIFIC SELECT FUND | |||
| By: | /s/ Xxxxx X. Xxxxx | ||
| Name: | Xxxxx X. Xxxxx | ||
| Title: | Vice President and General Counsel | ||
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Agreement and Plan of Reorganization – Floating Rate Income Portfolio
