EXHIBIT 4
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 2nd day of November, 2001, by and between Smith Barney California
Municipals Fund Inc., a Maryland corporation with its principal place of
business at 125 Broad Street, New York, New York 10004 (the "Acquiring Fund"),
and Greenwich Street California Municipal Fund Inc., a Maryland corporation,
with its principal place of business at 125 Broad Street, New York, New York
10004 (the "Fund").
This Agreement is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all of the assets of the Fund
in exchange for Class A shares of the Acquiring Fund (collectively, the
"Acquiring Fund Shares" and each, an "Acquiring Fund Share") and the assumption
by the Acquiring Fund of all of the outstanding liabilities of the Fund and the
distribution, after the Closing Date herein referred to, of Acquiring Fund
Shares to the shareholders of the Fund in liquidation of the Fund and the
subsequent dissolution of the Fund, all upon the terms and conditions
hereinafter set forth in this Agreement.
WHEREAS, the Acquiring Fund and the Fund are registered investment
companies of the management type and the Fund owns securities that generally are
assets of the character in which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue shares of common stock;
WHEREAS, the Board of Directors of the Fund has determined that the
exchange of all of the assets and outstanding liabilities of the Fund for
Acquiring Fund Shares and the assumption of such liabilities by the Acquiring
Fund is in the best interests of the Fund's shareholders and that the interests
of the existing shareholders of the Fund would not be diluted as a result of
this transaction;
WHEREAS, the Board of Directors of the Acquiring Fund has determined that
the exchange of all the assets and outstanding liabilities of the Fund for
Acquiring Fund Shares and the assumption of such liabilities by the Acquiring
Fund is in the best interests of the Acquiring Fund's shareholders and that the
interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE FUND IN EXCHANGE FOR ACQUIRING FUND SHARES AND
ASSUMPTION OF LIABILITIES OF THE FUND AND LIQUIDATION AND DISSOLUTION OF THE
FUND
1.1. Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Fund agrees to
transfer the Fund's assets as set forth in
paragraph 1.2 to the Acquiring Fund, and the Acquiring Fund agrees in exchange
therefor: (i) to deliver to the Fund the number of Class A Acquiring Fund
Shares, including fractional Class A Acquiring Fund Shares, determined by
dividing the value of the Fund's net assets attributable to the Fund's shares,
computed in the manner and as of the time and date set forth in paragraph 2.1,
by the net asset value of one Class A Acquiring Fund Share, computed in the
manner and as of the time and date set forth in paragraph 2.2; and (ii) to
assume all of the outstanding liabilities of the Fund, as set forth in paragraph
1.3. Such transactions shall take place at the closing provided for in paragraph
3.1 (the "Closing").
1.2. (a) The assets of the Fund to be acquired by the Acquiring Fund shall
consist of all property, including, without limitation, all cash, securities and
dividends or interest receivables which are owned by the Fund and any deferred
or prepaid expenses shown as an asset on the books of the Fund on the closing
date provided in paragraph 3.1 (the "Closing Date").
(b) The Fund has provided the Acquiring Fund with a list of the Fund's
assets as of the date of execution of this Agreement. The Fund reserves the
right to sell any securities but will not, without the prior approval of the
Acquiring Fund, acquire any additional securities other than securities of the
type in which the Acquiring Fund is permitted to invest. The Acquiring Fund
will, within a reasonable time prior to the Closing Date, furnish the Fund with
a statement of the Acquiring Fund's investment objectives, policies and
restrictions and a list of the securities, if any, on the Fund's list referred
to in the first sentence of this paragraph which do not conform to the Acquiring
Fund's investment objectives, policies and restrictions. In the event that the
Fund holds any investments which the Acquiring Fund may not hold, the Fund will
dispose of such securities prior to the Closing Date. In addition, if it is
determined that the portfolios of the Fund and the Acquiring Fund, when
aggregated, would contain investments exceeding certain percentage limitations
imposed upon the Acquiring Fund with respect to such investments, the Fund, if
requested by the Acquiring Fund, will dispose of and/or reinvest a sufficient
amount of such investments as may be necessary to avoid violating such
limitations as of the Closing Date.
1.3. The Fund will endeavor to discharge all the Fund's known liabilities
and obligations prior to the Closing Date. The Acquiring Fund shall assume all
liabilities, expenses, costs, charges and reserves of the Fund as of the
Valuation Date (as defined in Section 2.1).
1.4. As provided in paragraph 3.3, either on or as soon after the Closing
Date as is conveniently practicable (the "Liquidation Date"), the Fund will
liquidate and distribute pro rata to the Fund's shareholders of record
determined as of the close of business on the Closing Date (the "Fund
Shareholders"), the Acquiring Fund Shares it receives pursuant to paragraph 1.1.
Shareholders of the Fund shall receive Class A shares of the Acquiring Fund.
Such liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Fund on the books of
the Acquiring Fund to open accounts on the share records of the Acquiring Fund
in the name of the Fund Shareholders and representing the respective pro rata
number of the Acquiring Fund Shares due such shareholders. All issued and
outstanding shares of the Fund will simultaneously be canceled on the books of
the Fund, although any outstanding
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share certificates representing interests in the Fund will represent a number of
Acquiring Fund Shares after the Closing Date as determined in accordance with
paragraph 1.1.
1.5. Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Acquiring Fund Shares will be issued in the
manner described in the Acquiring Fund's current prospectus and statement of
additional information. The Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares in connection with such exchange.
1.6. Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Fund Shares on the books of
the Fund as of that time shall, as a condition of such issuance and transfer, be
paid by the person to whom such Acquiring Fund Shares are to be issued and
transferred.
1.7. Any reporting responsibility of the Fund is and shall remain the
responsibility of the Fund up to and including the Closing Date and such later
date on which the Fund is terminated.
1.8. The Fund shall, following the Closing Date and the making of all
distributions pursuant to paragraph 1.4, be dissolved under the laws of the
State of Maryland and in accordance with its governing documents.
2. VALUATION
2.1. The value of the Fund's assets to be acquired by the Acquiring Fund
hereunder shall be the value of such assets computed as of the close of regular
trading on the New York Stock Exchange, Inc. (the "NYSE") on the Closing Date
(such time and date being hereinafter called the "Valuation Date"), using the
valuation procedures set forth in the Acquiring Fund's then current prospectus
or statement of additional information.
2.2. The net asset value of Acquiring Fund Shares shall be the net asset
value per share computed as of the close of regular trading on the NYSE on the
Valuation Date, using the valuation procedures set forth in the Acquiring Fund's
then current prospectus or statement of additional information.
2.3. All computations of value shall be made by Smith Barney Fund
Management LLC (the "Manager"), as adviser of the Fund, in accordance with its
regular practice as pricing agent for the Fund and the Acquiring Fund,
respectively.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be January 18, 2002, or such later 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 provided. The Closing shall be held as of 5:00 p.m. at the
offices of Salomon Smith Barney Inc., ___________________, New York, New York
_____, or at such other time and/or place as the parties may agree.
3.2. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Fund shall be closed to trading or trading thereon shall be restricted or (b)
trading or the reporting of trading on the NYSE or elsewhere shall be disrupted
so that accurate appraisal of the value of the net assets of the Acquiring Fund
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or the 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.
3.3. The Fund shall deliver at the Closing a list of the names and
addresses of the Fund's Shareholders and the number and percentage ownership of
outstanding shares owned by each such shareholder immediately prior to the
Closing, certified on behalf of the Fund by the Chairman of the Board of the
Fund. The Acquiring Fund shall issue and deliver a confirmation evidencing the
Acquiring Fund Shares to be credited to the Fund's account on the Closing Date
to the Secretary of the Fund, or provide evidence satisfactory to the Fund that
such Acquiring Fund Shares have been credited to the Fund's account on the books
of the Acquiring Fund. At the Closing, each party shall deliver to the other
such bills of sale, checks, assignments, share certificates, if any, receipts or
other documents as such other party or its counsel may reasonably request.
3.4. The Fund and the Acquiring Fund shall file Articles of Transfer with
the Maryland State Department of Assessments and Taxation, effective as of the
Closing Date.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Fund represents and warrants to the Acquiring Fund as follows:
(a) The Fund is a corporation which is duly organized, validly existing and
in good standing under the laws of the State of Maryland;
(b) The Fund is a registered investment company classified as a management
company of the closed-end type, and its registration with the Securities and
Exchange Commission (the "Commission") as an investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), is in full force
and effect;
(c) The Fund is not, and the execution, delivery and performance of this
Agreement will not result, in a material violation of its Articles of
Incorporation or By-laws or of any agreement, indenture, instrument, contract,
lease or other undertaking to which the Fund is a party or by which it is bound;
(d) The Fund has no material contracts or other commitments (other than
this Agreement) which will be terminated with liability to the Fund prior to the
Closing Date;
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to the Fund's
knowledge threatened against the Fund or any of the Fund's properties or assets
(other than that previously disclosed to the other party to the Agreement)
which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Fund knows of no facts
which might form the basis for the institution of such proceedings and is not
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects the Fund's
business or the ability of the Fund to consummate the transactions herein
contemplated;
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(f) The Statements of Assets and Liabilities of the Fund for each of the
fiscal years in the five year period ended _________, have been audited by KPMG
LLP, independent auditors, and are in accordance with generally accepted
accounting principles consistently applied, and such statements (copies of which
have been furnished to the Acquiring Fund) fairly reflect the financial
condition of the Fund as of such dates, and there are no known contingent
liabilities of the Fund as of such dates not disclosed therein;
(g) The Fund will file its final federal and other tax returns for the
period ending on the Closing Date in accordance with the Code. At the Closing
Date, all federal and other tax returns and reports of the Fund required by law
then to have been filed prior to the Closing Date shall have been filed, and all
federal and other taxes shown as due on such returns shall have been paid so far
as due, or provision shall have been made for the payment thereof and, to the
best of the Fund's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns;
(h) For the most recent taxable year of its operation and for the taxable
year that will end on the Closing Date, the Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company;
(i) All issued and outstanding shares of the Fund are, and at the Closing
Date will be, duly and validly issued and outstanding, fully paid and
nonassessable. All of the issued and outstanding shares of the Fund will, at the
time of Closing, be held by the persons and in the amounts set forth in the
records of the transfer agent as provided in paragraph 3.3. The Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any shares of the Fund, nor is there outstanding any security
convertible into any shares of the Fund;
(j) At the Closing Date, the Fund will have good and marketable title to
its assets to be transferred to the Fund pursuant to paragraph 1.2 and full
right, power and authority to sell, assign, transfer and deliver such assets
hereunder and, upon delivery and payment for such assets, the Acquiring Fund
will acquire good and marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as might arise under the
Securities Act of 1933, as amended (the "1933 Act"), other than as disclosed to
the Acquiring Fund;
(k) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Fund's Board of
Directors, and subject to the approval of the Fund's shareholders, this
Agreement, assuming due authorization, execution and delivery by the Acquiring
Fund, will constitute a valid and binding obligation of the 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;
(l) The information to be furnished by the Fund for use in no-action
letters, applications for exemptive orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and
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complete in all material respects and shall comply in all material respects with
federal securities and other laws and regulations thereunder applicable thereto;
and
(m) The proxy statement of the Fund (the "Proxy Statement") to be included
in the Registration Statement referred to in paragraph 5.7 (other than
information therein that relates to the Acquiring Fund) will, on the effective
date of the Registration Statement and on the Closing Date, not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading.
4.2. The Acquiring Fund represents and warrants to the Fund as follows:
(a) The Acquiring Fund is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland;
(b) The Acquiring Fund 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 is in full force and effect;
(c) The current prospectus and statement of additional information of the
Acquiring Fund conform in all material respects to the applicable requirements
of the 1933 Act and the 1940 Act and the rules and regulations of the Commission
thereunder and do not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading;
(d) At the Closing Date, the Acquiring Fund will have good and marketable
title to the Acquiring Fund's assets;
(e) The Acquiring Fund is not, and the execution, delivery and performance
of this Agreement will not result, in a material violation of its Articles of
Incorporation or By-laws or of any agreement, indenture, instrument, contract,
lease or other undertaking with respect to the Acquiring Fund to which the
Acquiring Fund is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or threatened against
the Acquiring Fund or any of the Acquiring Fund's properties or assets. The
Acquiring Fund knows of no facts which might form the basis for the institution
of such proceedings and the Acquiring Fund 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 the Acquiring Fund's business or ability
to consummate the transactions contemplated herein;
(g) The Statement of Assets and Liabilities of the Acquiring Fund for the
fiscal year ended February 28, 2001, have been audited by KPMG LLP, independent
auditors, and are in accordance with generally accepted accounting principles
consistently applied, and such statements (copies of which have been furnished
to the Fund) fairly reflect the financial
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condition of the Acquiring Fund as of such dates, and there are no known
contingent liabilities of the Acquiring Fund as of such dates not disclosed
therein;
(h) At the Closing Date, all federal and other tax returns and reports of
the Acquiring Fund required by law then to have been filed by such date shall
have been filed, and all federal and other taxes shown as due on said returns
and reports shall have been paid so far as due, or provision shall have been
made for the payment thereof and, to the best of the Acquiring Fund's knowledge,
no such return is currently under audit and no assessment has been asserted with
respect to such returns;
(i) For the most recent fiscal year of its operation, the Acquiring Fund
has met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and the Acquiring Fund intends to do
so in the future;
(j) At the date hereof, all issued and outstanding shares of the Acquiring
Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any shares of the Acquiring Fund, nor is there outstanding any security
convertible into shares of the Acquiring Fund (other than Class B shares of the
Acquiring Fund which, under certain circumstances, are convertible into Class A
shares of the Acquiring Fund);
(k) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action, if any, on the part of the Acquiring
Fund's Board of Directors, and this Agreement, assuming due authorization,
execution and delivery by the Fund, constitutes a valid and binding obligation
of the Acquiring Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(l) The Acquiring Fund Shares to be issued and delivered to the Fund, for
the account of the Fund Shareholders, pursuant to the terms of this Agreement,
will at the Closing Date have been duly authorized and, when so issued and
delivered, will be duly and validly issued Acquiring Fund Shares, and will be
fully paid and non-assessable with no personal liability attaching to the
ownership thereof;
(m) The information to be furnished by the Acquiring Fund for use in
no-action letters, applications for exemptive orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto;
(n) The Proxy Statement to be included in the Registration Statement (only
insofar as it relates to the Acquiring Fund) will, on the effective date of the
Registration Statement and on the Closing Date, not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading; and
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(o) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state Blue Sky or securities laws as it may deem appropriate in order to
continue the Acquiring Fund's operations after the Closing Date.
5. COVENANTS OF THE FUND AND THE ACQUIRING FUND
5.l. The Acquiring Fund and the Fund each will operate its business in the
ordinary course between the date hereof and the Closing Date. It is understood
that such ordinary course of business will include the declaration and payment
of customary dividends and distributions and any other dividends and
distributions deemed advisable, in each case payable either in cash or in
additional shares.
5.2. The Fund will call a meeting of its shareholders to consider and act
upon this Agreement and to take all other action necessary to obtain approval of
the transactions contemplated herein.
5.3. The Fund covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired for the purpose of making any distribution
thereof other than in accordance with the terms of this Agreement.
5.4. The Fund will assist the Acquiring Fund in obtaining such information
as the Acquiring Fund reasonably requests concerning the beneficial ownership of
the Fund's shares.
5.5. Subject to the provisions of this Agreement, the Acquiring Fund and
the Fund, each will take, or cause to be taken, all action, and do or cause to
be done, all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement.
5.6. As promptly as practicable, but in any case within sixty days after
the Closing Date, the Fund shall furnish the Acquiring Fund, in such form as is
reasonably satisfactory to the Acquiring Fund, a statement of the earnings and
profits of the Fund for federal income tax purposes which will be carried over
to the Acquiring Fund as a result of Section 381 of the Code and which will be
certified by the Chairman of the Board or President and the Treasurer of the
Fund.
5.7. The Fund will provide the Acquiring Fund with information reasonably
necessary for the preparation of a prospectus (the "Prospectus") which will
include the Proxy Statement, referred to in paragraph 4.1(m), all to be included
in a Registration Statement on Form N-14 of the Acquiring Fund (the
"Registration Statement"), in compliance with the 1933 Act, the Securities
Exchange Act of 1934 (the " 1934 Act") and the 1940 Act in connection with the
meeting of the Fund's shareholders to consider approval of this Agreement and
the transactions contemplated herein.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUND
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The obligations of the Fund to consummate the transactions provided for
herein shall be subject, at its election, to the performance by the Acquiring
Fund of all of 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 Acquiring Fund contained in
this Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
6.2. The Acquiring Fund shall have delivered to the Fund a certificate
executed in its name by its Chairman of the Board, President or Vice President
and its Treasurer or Assistant Treasurer, in a form reasonably satisfactory to
the Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Fund made in this Agreement are
true and correct in all material respects at and as of the Closing Date, except
as they may be affected by the transactions contemplated by this Agreement; and
6.3. The Fund shall have received on the Closing Date a favorable opinion
from Willkie Farr & Gallagher, counsel to the Acquiring Fund, dated as of the
Closing Date, in a form reasonably satisfactory to Christina T. Sydor, Esq.,
Secretary of the Fund, covering the following points:
That (a) the Acquiring Fund is a corporation duly organized and validly
existing under the laws of the State of Maryland; (b) the Acquiring Fund is an
open-end management investment company registered under the 1940 Act; (c) this
Agreement, the Reorganization provided for hereunder and the execution of this
Agreement have been duly authorized and approved by all requisite action of the
Acquiring Fund, and this Agreement has been duly executed and delivered by the
Acquiring Fund and, assuming due authorization by the Fund, is a valid and
binding obligation of the Acquiring Fund, enforceable in accordance with its
terms against the assets of the Acquiring Fund, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles; and (d) the Acquiring Fund Shares to be issued to the Fund
for distribution to its shareholders pursuant to this Agreement have been, to
the extent of the number of Acquiring Fund Shares of the particular class
authorized to be issued by the Acquiring Fund in its Articles of Incorporation
and then unissued, duly authorized and, subject to the receipt by the Acquiring
Fund of consideration equal to the respective net asset values thereof (but in
no event less than the par value thereof), such Acquiring Fund Shares, when
issued in accordance with this Agreement, will be validly issued and fully paid
and non-assessable.
Such opinion may state that it is solely for the benefit of the Fund, its
Directors and its officers. Such counsel may rely, as to matters governed by the
laws of the State of Maryland, on an opinion of Maryland counsel.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
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The obligations of the Acquiring Fund to complete the transactions provided
for herein shall be subject, at its election, to the performance by the Fund of
all 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 Fund contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
7.2. The Fund shall have delivered to the Acquiring Fund a statement of the
Fund's assets and liabilities, together with a list of the Fund's portfolio
securities showing the tax basis of such securities by lot and the holding
periods of such securities, as of the Closing Date, certified by the Treasurer
or Assistant Treasurer of the Fund;
7.3. The Fund shall have delivered to the Acquiring Fund on the Closing
Date a certificate executed in its name by its Chairman of the Board, President
or Vice President and its Treasurer or Assistant Treasurer, in form and
substance satisfactory to the Acquiring Fund and dated as of the Closing Date,
to the effect that the representations and warranties of the Fund made in this
Agreement are true and correct in all material respects at and as of the Closing
Date, except as they may be affected by the transactions contemplated by this
Agreement; and
7.4. The Acquiring Fund shall have received on the Closing Date a favorable
opinion of Willkie Farr & Gallagher, counsel to the Fund, in a form satisfactory
to Christina T. Sydor, Esq., Secretary of the Acquiring Fund, covering the
following points:
That (a) the Fund is a corporation duly organized and validly existing
under the laws of the State of Maryland; (b) the Fund is a closed-end management
investment company registered under the 1940 Act; and (c) this Agreement, the
Reorganization provided for hereunder and the execution of this Agreement have
been duly authorized and approved by all requisite action of the Fund, and this
Agreement has been duly executed and delivered by the Fund and, assuming due
authorization, execution and delivery by the Acquiring Fund, is a valid and
binding obligation of the Fund enforceable in accordance with its terms against
the Fund, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
Such opinion may state that it is solely for the benefit of the Acquiring
Fund, its Directors and its officers. Such counsel may rely, as to matters
governed by the laws of the State of Maryland, on an opinion of Maryland
counsel.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE FUND AND THE ACQUIRING
FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquiring Fund or the Fund, the other party to
this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
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8.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Fund in accordance with the provisions of its Articles of Incorporation and
By-laws and certified copies of the votes evidencing such approval shall have
been delivered to the Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the 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 before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including
"no-action" positions of and exemptive orders from such federal and state
authorities) (and including the filing of Articles of Transfer with the Maryland
State Department of Assessments and Taxation) deemed necessary by the Acquiring
Fund or the 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 Acquiring Fund or the
Fund, provided that either party hereto may for itself waive any of such
conditions;
8.4. The Registration Statement 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;
8.5. The Fund shall have declared and paid a dividend or dividends on the
outstanding shares of the Fund which, together with all previous such dividends,
shall have the effect of distributing to the shareholders of the Fund all of the
investment company taxable income of the Fund for all taxable years ending on or
prior to the Closing Date. The dividend declared and paid by the Fund shall also
include all of such Fund's net capital gain realized in all taxable years ending
on or prior to the Closing Date (after reduction for any capital loss carry
forward);
8.6. The parties shall have received a favorable opinion of Willkie Farr &
Gallagher, addressed to the Acquiring Fund and the Fund and satisfactory to
Christina T. Sydor, Esq., as Secretary of each of the Funds, substantially to
the effect that for federal income tax purposes:
(a) the transfer of all of the Fund's assets in exchange for Acquiring Fund
Shares and the assumption by the Acquiring Fund of all of the outstanding
liabilities of the Fund will constitute a "reorganization" within the meaning of
Section 368(a)(1) of the Code, and the Acquiring Fund and the Fund are each a
"party to a reorganization" within the meaning of Section 368(b) of the Code;
(b) no gain or loss will be recognized by the Acquiring Fund upon the receipt of
the assets of the Fund in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of all of the outstanding liabilities of the
Fund; (c) no gain or loss will be recognized by the Fund upon the transfer of
the Fund's assets to the Acquiring Fund in exchange for Acquiring Fund Shares
and the assumption by the Acquiring Fund of all of the outstanding liabilities
of the
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Fund or upon the distribution (whether actual or constructive) of Acquiring Fund
Shares to Fund's shareholders; (d) no gain or loss will be recognized by
shareholders of the Fund upon the exchange of their Fund shares for the
Acquiring Fund Shares; (e) the aggregate tax basis for the Acquiring Fund Shares
received by each of the Fund's shareholders pursuant to the Reorganization will
be the same as the aggregate tax basis of the Fund shares held by such
shareholder immediately prior to the Reorganization, and the holding period of
Acquiring Fund Shares to be received by each Fund shareholder will include the
period during which the Fund shares exchanged therefor were held by such
shareholder (provided that such Fund shares were held as capital assets on the
date of the Reorganization); and (f) the tax basis to the Acquiring Fund of the
Fund's assets acquired by the Acquiring Fund will be the same as the tax basis
of such assets to the Fund immediately prior to the Reorganization, and the
holding period of the assets of the Fund in the hands of the Acquiring Fund will
include the period during which those assets were held by the Fund.
Notwithstanding anything herein to the contrary, neither the Acquiring Fund
nor the Fund may waive the conditions set forth in this paragraph 8.6.
9. BROKERAGE FEES AND EXPENSES
9.1. The Acquiring Fund represents and warrants to the Fund, and the Fund
represents and warrants to the Acquiring Fund, that there are no brokers or
finders entitled to receive any payments in connection with the transactions
provided for herein.
9.2. (a) Except as may be otherwise provided herein, the Fund shall be
liable for the expenses incurred in connection with entering into and carrying
out the provisions of this Agreement, including the expenses of: (i) counsel and
independent accountants associated with the Reorganization; (ii) printing and
mailing the Prospectus/Proxy Statement and soliciting proxies in connection with
the meeting of shareholders of the Fund referred to in paragraph 5.2 hereof,
(iii) any special pricing fees associated with the valuation of the Fund's or
the Acquiring Fund's portfolio on the Closing Date; (iv) expenses associated
with preparing this Agreement and preparing and filing the Registration
Statement under the 1933 Act covering the Acquiring Fund Shares to be issued in
the Reorganization; (v) registration or qualification fees and expenses of
preparing and filing such forms, if any, necessary under applicable state
securities laws to qualify the Acquiring Fund Shares to be issued in connection
with the Reorganization. The Fund shall be liable for: (x) all fees and expenses
related to the liquidation and dissolution of the Fund; and (y) fees and
expenses of the Fund's custodian and transfer agent incurred in connection with
the Reorganization.
(b) Consistent with the provisions of paragraph 1.3, the Fund, prior to the
Closing, shall pay for or include in the unaudited Statement of Assets and
Liabilities prepared pursuant to paragraph 1.3 all of its known and reasonably
estimated expenses associated with the transactions contemplated by this
Agreement.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
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10.1. The parties hereto agree that no party has made any representation,
warranty or covenant not set forth herein and that this Agreement constitutes
the entire agreement between the parties.
10.2. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall not survive the consummation of the transactions contemplated hereunder.
11. TERMINATION
11.1. This Agreement may be terminated at any time prior to the Closing
Date by: (i) the mutual agreement of the Fund and the Acquiring Fund; (ii) the
Fund in the event that the Acquiring Fund shall, or the Acquiring Fund in the
event that the Fund shall, materially breach any representation, warranty or
agreement contained herein to be performed at or prior to the Closing Date; or
(iii) the Fund or by the Acquiring Fund, if a condition herein expressed to be
precedent to the obligations of the terminating party has not been met and it
reasonably appears that it will not or cannot be met.
11.2. In the event of any such termination, there shall be no liability for
damages on the part of either the Fund or the Acquiring Fund or their respective
Directors or officers to the other party, but each shall bear the expenses
incurred by it incidental to the preparation and carrying out of this Agreement
as provided in paragraph 9.
12. AMENDMENTS; WAIVERS
12.1. This Agreement may be amended, modified or supplemented in such
manner as may be mutually agreed upon in writing by the authorized officers of
the Fund and the Acquiring Fund; provided, however, that following the meeting
of the Fund shareholders called by the Fund pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be issued to the Fund's
shareholders under this Agreement to the detriment of such shareholders without
their further approval.
12.2. At any time prior to the Closing Date either party hereto may by
written instrument signed by it (i) waive any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the covenants or conditions (other than those contained
in paragraph 8.1 of this Agreement) made for its benefit contained herein.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by hand
delivery, fax, or certified mail addressed to Greenwich Street Municipal Fund
Inc., 125 Broad Street, New York, New York 10004, Attention: Heath B. McLendon;
or to Smith Barney California Municipals Fund Inc., 125 Broad Street, New York,
New York 10004, Attention: Heath B. McLendon.
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14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.l. The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
14.3. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
14.4. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm, corporation or other entity, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its Chairman of the Board, President or Vice President and
attested by its Secretary or Assistant Secretary.
Attest:
GREENWICH STREET CALIFORNIA MUNICIPAL FUND INC.
By:
- ---------------------------------- ------------------------------
Name: Christina T. Sydor Name: Heath B. McLendon
Title: Secretary Title: Chairman of the Board/President
Attest:
SMITH BARNEY CALIFORNIA MUNICIPALS FUND INC.
By:
- ---------------------------------- ------------------------------
Name: Christina T. Sydor Name: Heath B. McLendon
Title: Secretary Title: Chairman of the Board/President
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