AGREEMENT AND PLAN OF REORGANIZATION AMONG
CALIFORNIA INVESTMENT TRUST, A MASSACHUSETTS BUSINESS TRUST,
CALIFORNIA INVESTMENT TRUST II,
A MASSACHUSETTS BUSINESS TRUST, AND CALIFORNIA INVESTMENT TRUST, A
A DELAWARE STATUTORY TRUST
This Agreement and Plan of Reorganization (this "Agreement") is made as of
this 22nd day of December, 2006 by and among California Investment Trust ("CIT")
and California Investment Trust II ("CIT II"), each a Massachusetts business
trust (each a "MA-Trust" and collectively, the "MA-Trusts"), and California
Investment Trust, a Delaware statutory trust (the "DE-Trust") (the MA-Trusts and
the DE-Trust are hereinafter collectively referred to as the "parties").
In consideration of the mutual promises contained herein, and intending to
be legally bound, the parties hereto agree as follows:
1. Plan of Reorganization.
(a) Upon satisfaction or wavier of the conditions precedent described in
Section 3 hereof, each MA-Trust, on behalf of itself and each of its respective
separately designated series, as listed on Exhibit A hereto (collectively, the
"MA-Funds"), will convey, transfer and deliver to the DE-Trust, on behalf of
each of its separately designated series (collectively, the "DE-Funds") (each of
which corresponds to the MA-Fund with the same name, as set forth in Exhibit A),
at the closing provided for in Section 2 (hereinafter referred to as the
"Closing"), all of each MA-Trust's then-existing assets, including the assets of
each MA-Fund (the "Assets"). In consideration thereof, the DE-Trust, on behalf
of each DE-Fund, agrees at the Closing (i) to assume and pay when due all
obligations and liabilities of the corresponding MA-Fund (including such
MA-Fund's pro rata portion of any obligation and liability of the corresponding
MA-Trust), existing on or after the Effective Date of the Reorganization (as
defined in Section 2 hereof), whether absolute, accrued, contingent or
otherwise, including all fees and expenses in connection with this Agreement,
which fees and expenses shall, in turn, include, without limitation, costs of
legal advice, accounting, printing, mailing, proxy solicitation and transfer
taxes, if any (collectively, the "Liabilities"), such Liabilities to become the
obligations and liabilities of the corresponding DE-Fund; and (ii) to deliver to
the corresponding MA-Trust, on behalf of each MA-Fund, in accordance with
paragraph (b) of this Section 1, full and fractional shares of each class of
shares of beneficial interest, without par value, of the corresponding DE-Fund,
equal in number to the number of full and fractional shares of the corresponding
class of shares of beneficial interest, no par value, of that MA-Fund
outstanding at the close of business on the business day immediately preceding
the Effective Date of the Reorganization. The reorganizations contemplated
hereby are each intended to qualify as a reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"). The
MA-Trusts, on behalf of each MA-Fund, shall distribute to the MA-Funds'
shareholders the shares of the corresponding DE-Funds in accordance with this
Agreement and the resolutions of the Board of Trustees of each MA-Trust (each
individually and together, the "Board of Trustees") authorizing the transactions
contemplated by this Agreement.
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(b) In order to effect the delivery of shares described in Section
1(a)(ii) hereof, the DE-Trust will establish an open account on the records of
the DE-Funds for each shareholder of the corresponding MA-Funds and, on the
Effective Date of the Reorganization, will credit to such account full and
fractional shares of beneficial interest, without par value, of the appropriate
class of the DE-Funds equal to the number of full and fractional shares of
beneficial interest such shareholder holds in the corresponding class of the
corresponding MA-Funds at the close of business on the business day immediately
preceding the Effective Date of the Reorganization. At the close of business on
the business day immediately preceding the Effective Date of the Reorganization,
the net asset value per share of each class of shares of each DE-Fund shall be
deemed to be the same as the net asset value per share of the corresponding
class of shares of the corresponding MA-Funds. On the Effective Date of the
Reorganization, each certificate representing shares of a class of an MA-Fund
will be deemed to represent the same number of shares of the corresponding class
of the corresponding DE-Fund, provided, however, new certificates representing
DE-Trust shares will not be issued to shareholders. Simultaneously with the
crediting of the shares of the DE-Funds to the shareholders of record of the
corresponding MA-Funds, the shares of the MA-Funds held by such shareholders
shall be cancelled.
(c) As soon as practicable after the Effective Date of the Reorganization,
each MA-Trust shall take all necessary steps under Massachusetts business trust
law to effect a complete dissolution of such MA-Trust.
(d) The expenses of entering into and carrying out this Agreement will be
borne by the MA-Trusts in such proportion that the net assets of each MA-Trust
bears to the total net assets of both MA-Trusts.
2. Closing and Effective Date of the Reorganization.
The Closing shall consist of (i) the conveyance, transfer and delivery of
the Assets to the DE-Trust, on behalf of the DE-Funds, in exchange for the
assumption and payment, when due, by the DE-Trust, on behalf of the DE-Funds, of
the Liabilities of the corresponding MA-Funds; and (ii) the issuance and
delivery of the DE-Funds' shares in accordance with Section 1(b), together with
related acts necessary to consummate such transactions. The Closing shall occur
either on (a) the business day immediately following the later of the receipt of
all necessary regulatory approvals and the final adjournment of the meeting of
shareholders of each MA-Trust at which this Agreement is considered and
approved, or (b) such later date as the parties may mutually agree ("Effective
Date of the Reorganization"). Solely for purposes of subsection (a) above, the
effectiveness of one or more post-effective amendments to each MA-Trust's
Registration Statement as described below in Section 3(b)(i) shall not be deemed
to be a necessary regulatory approval.
3. Conditions Precedent.
The obligations of the MA-Trusts and the DE-Trust to effectuate the
transactions hereunder shall be subject to the satisfaction of each of the
following conditions, unless waived by the parties:
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(a) Such authority and orders from the U.S. Securities and Exchange
Commission (the "Commission") and state securities commissions as may be
necessary to permit the parties to carry out the transactions contemplated by
this Agreement shall have been received;
(b) (i) One or more post-effective amendments to each MA-Trust's
Registration Statement on Form N-lA ("Registration Statement") under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended (the "1940 Act"), containing such amendments to such Registration
Statement as are determined by the officers of each Trust to be necessary and
appropriate as a result of this Agreement, shall have been filed with the
Commission; (ii) the DE-Trust shall have adopted as its own such Registration
Statement, as so amended; (iii) the most recent post-effective amendment or
amendments to each MA-Trust's Registration Statement shall have become
effective, and no stop order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the Commission (other than any such stop order,
proceeding or threatened proceeding which shall have been withdrawn or
terminated); and (iv) for each MA-Trust, an amendment of the Form N-8A
Notification of Registration filed pursuant to Section 8(a) of the 1940 Act
("Form N-8A") reflecting the change in legal form of such MA-Trust to a Delaware
statutory trust shall have been filed with the Commission and the DE-Trust shall
have expressly adopted each such amended Form N-8A as its own for purposes of
the 1940 Act;
(c) Each party shall have received legal opinion(s), to the effect that,
assuming the reorganization contemplated hereby is carried out in accordance
with this Agreement and the laws of the State of Delaware, and in accordance
with customary representations provided by the parties in a certificate(s)
delivered to counsel, the reorganizations contemplated by this Agreement each
qualify as a "reorganization" under Section 368 of the Code, and thus will not
give rise to the recognition of income, gain or loss for federal income tax
purposes to the MA-Funds, the DE-Funds or the shareholders of the MA-Funds or
the DE-Funds;
(d) Each MA-Trust shall have received legal opinion(s), dated the
Effective Date of the Reorganization, addressed to and in form and substance
reasonably satisfactory to the MA-Trusts, to the effect that (i) the DE-Trust is
a statutory trust duly formed, validly existing, and in good standing under the
laws of the State of Delaware; (ii) this Agreement and the transactions
contemplated thereby and the execution and delivery of this Agreement have been
duly authorized and approved by all requisite statutory trust action of the
DE-Trust and this Agreement, assuming due execution and delivery by the
DE-Trust, is a legal, valid and binding agreement of the DE-Trust, enforceable
in accordance with its terms; and (iii) the shares of the DE-Trust to be issued
in the reorganization have been duly authorized and, upon issuance thereof in
accordance with this Agreement, will have been validly issued and fully paid and
will be nonassessable by the DE-Trust;
(e) The DE-Trust shall have received legal opinion(s), dated the Effective
Date of the Reorganization, addressed to and in form and substance reasonably
satisfactory to the DE-Trust, to the effect that: (i) each MA-Trust is validly
existing and is in good standing under the laws of the Commonwealth of
Massachusetts; (ii) each MA-Trust is an open-end investment company of the
management type registered under the 1940 Act; and (iii) this Agreement and the
transactions contemplated hereby and the execution and delivery of this
Agreement have been duly authorized and approved by all requisite business trust
action of each MA-Trust and this Agreement, assuming due execution and delivery
by the MA-Trusts, is a legal, valid and binding agreement of each MA-Trust,
enforceable against each MA-Trust in accordance with its terms;
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(f) The shares of the DE-Funds are eligible for offering to the public in
those states of the United States and jurisdictions in which the shares of the
corresponding MA-Funds are currently eligible for offering to the public so as
to permit the issuance and delivery by the DE-Trust, on behalf of the DE-Funds,
of the shares contemplated by this Agreement to be consummated;
(g) This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by the appropriate action of the Board of
Trustees and the shareholders of the MA-Trusts;
(h) The shareholders of each MA-Trust shall have voted to direct the
corresponding MA-Trust to vote, and each MA-Trust shall have voted, as the
initial shareholders of each class of the DE-Trust, to:
(1) Elect as Trustees of the DE-Trust the following individuals:
Messrs. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇;
(2) Approve an Investment Advisory Agreement between CCM Partners
("CCM") and the DE-Trust which is substantially identical to the then-current
Investment Advisory Agreement, as amended to date, between CCM and CIT, on
behalf of each of its respective series;
(3) Approve an Investment Advisory Agreement between CCM and the
DE-Trust, which is substantially identical to the then-current Investment
Advisory Agreement, as amended to date, between CCM and CIT II, on behalf of
each of its respective series;
(i) The Trustees of the DE-Trust shall have duly adopted and approved this
Agreement and the transactions contemplated hereby and shall have taken the
following actions at a meeting duly called for such purposes:
(1) Approval of the Investment Advisory Agreements described in
paragraphs (h)(2) and (3) of this Section 3 between CCM and the DE-Trust;
(2) Approval of the assignment to the DE-Trust of the Custody
Agreement, dated January 3, 2005, as amended to date, among CIT, CIT II and U.S.
Bank National Association;
(3) Selection of ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP as the DE-Trust's
independent auditors for the fiscal year ending August 31, 2006;
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(4) Approval of the assignment to the DE-Trust of the Fund
Accounting and Services Agreement, dated December 3, 2004, among CIT, CIT II and
ALPS Mutual Funds Services, Inc.;
(5) Approval of the assignment to the DE-Trust of the Transfer
Agency and Service Agreement, dated December 3, 2004, among CIT, CIT II and ALPS
Mutual Funds Services, Inc.;
(6) Approval of the assignment to the DE-Trust of the Underwriting
Agreement between CIT and RFS Partners;
(7) Approval of the assignment to the DE-Trust of the Underwriting
Agreement between CIT II and RFS Partners;
(8) Approval of the assignment to the DE-Trust of the Restated Fund
Administration Servicing Agreement between CIT and CCM;
(9) Approval of the assignment to the DE-Trust of the Restated Fund
Administration Servicing Agreement between CIT II and CCM;
(10) Approval of the assignment to the DE-Trust of (a) the
Distribution Plan of CIT II pursuant to Rule 12b-1 under the 1940 Act; and (b)
the Rule 18f-3 Plan of CIT II;
(11) Authorization of the issuance by the DE-Trust, on behalf of
each DE-Fund, prior to the Effective Date of the Reorganization, of one share of
each series of shares of beneficial interest of each DE-Fund to the
corresponding MA-Trust, on behalf of the corresponding MA-Fund, in consideration
for the payment of $1.00 for each such share for the purpose of enabling each
MA-Trust to vote on the matters referred to in paragraph (h) of this Section 3,
it being agreed that each such share issued shall be redeemed immediately prior
to the consummation of the Reorganization;
(12) Submission of the matters referred to in paragraph (h) of this
Section 3 to the MA-Trusts as initial shareholders of each class of each
DE-Fund; and
(13) Authorization of the issuance and delivery by the DE-Trust, on
behalf of each DE-Fund, of shares of the DE-Funds on the Effective Date of the
Reorganization and the assumption by the DE-Funds of the Liabilities of the
corresponding MA-Funds in exchange for the Assets of the corresponding MA-Funds
pursuant to the terms and provisions of this Agreement.
At any time prior to the Closing, any of the foregoing conditions may be
waived or amended, or any additional terms and conditions may be fixed, in the
discretion of the management or the Board of Trustees of either MA-Trust or the
management or Board of Trustees of the DE-Trust.
4. Dissolution of the MA-Trusts.
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Promptly following the consummation of the distribution of each class of
shares of the DE-Funds to holders of the corresponding class of shares of the
corresponding MA-Funds under this Agreement, the officers of each MA-Trust shall
take all steps necessary under Massachusetts business trust law to dissolve its
business trust status, including publication of any necessary notices to
creditors.
5. Termination.
The Board of Trustees of either MA-Trust may terminate this Agreement and
abandon the reorganization contemplated hereby, notwithstanding approval thereof
by the shareholders of the MA-Trusts, at any time prior to the Effective Date of
the Reorganization if, in the judgment of such Board, the facts and
circumstances make proceeding with this Agreement inadvisable.
6. Entire Agreement.
This Agreement embodies the entire agreement between the parties hereto
and there are no agreements, understandings, restrictions or warranties among
the parties hereto other than those set forth herein or herein provided for.
7. Further Assurances.
The MA-Trusts and the DE-Trust shall each take such further action as may
be reasonably requested by another party or necessary or desirable and proper to
consummate the transactions contemplated hereby.
8. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
9. Governing Law.
This Agreement and the transactions contemplated hereby shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware.
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IN WITNESS WHEREOF, the MA-Trusts and the DE-Trust have each caused this
Agreement and Plan of Reorganization to be executed on its behalf by its duly
authorized representatives, all as of the day and year first-above written.
CALIFORNIA INVESTMENT TRUST,
a Massachusetts business trust
By _____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CALIFORNIA INVESTMENT TRUST II,
a Massachusetts business trust
By _____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
CALIFORNIA INVESTMENT TRUST,
a Delaware statutory trust
By_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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Exhibit A
Corresponds to:
MA-Funds DE-Funds
California Tax-Free Income Fund California Tax-Free Income Fund
California Insured Intermediate Fund California Insured Intermediate Fund
California Tax-Free Money Market Fund California Tax-Free Money Market Fund
S&P 500 Index Fund S&P 500 Index Fund
S&P MidCap Index Fund S&P MidCap Index Fund
S&P SmallCap Index Fund S&P SmallCap Index Fund
Equity Income Fund Equity Income Fund
European Growth & Income Fund European Growth & Income Fund
Nasdaq-100 Index Fund Nasdaq-100 Index Fund
U.S. Government Securities Fund U.S. Government Securities Fund
The United States Treasury Trust The United States Treasury Trust
Short-Term U.S. Government Bond Fund Short-Term U.S. Government Bond Fund
