AGREEMENT AND PLAN OF REORGANIZATION
BY
AMERICAN CENTURY CALIFORNIA TAX-FREE AND MUNICIPAL FUNDS
TABLE OF CONTENTS
Preamble..........................................................................1
1. Transfer of Assets of California Insured Tax-Free.................................1
2. Liquidating Distribution and Termination of California Insured Tax-Free...........2
3. Valuation Time....................................................................3
4. Certain Representations, Warranties and Agreements of ACCTFMF.....................3
5. Certain Representations, Warranties and Agreements of ACCTFMF.....................6
6. Shareholder Action on Behalf of California Insured Tax-Free.......................7
7. Registration Statement and Proxy Solicitation Materials...........................8
8. Effective Time of the Reorganization..............................................8
9. ACCTFMF Conditions...............................................................10
10. ACCTFMF Conditions...............................................................10
11. Tax Documents....................................................................11
12. Further Assurances...............................................................11
13. Termination of Representations and Warranties....................................12
14. Termination of Agreement.........................................................12
15. Amendment and Waiver.............................................................12
16. Governing Law....................................................................13
17. Successors and Assigns...........................................................13
18. Beneficiaries....................................................................13
19. ACCTFMF Liability................................................................13
20. Notices..........................................................................13
21. Expenses.........................................................................14
22. Entire Agreement.................................................................14
23. Counterparts.....................................................................14
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION made as of _______________ , 2001
by American Century California Tax-Free and Municipal Funds, a Massachusetts
business trust ("ACCTFMF").
WHEREAS, the parties desire that substantially all of the assets and
liabilities of the California Insured Tax-Free portfolio of ACCTFMF ("California
Insured Tax-Free") be transferred to, and be acquired and assumed by, the
California Long-Term Tax-Free portfolio of ACCTFMF ("California Long-Term
Tax-Free") in exchange for shares of California Long-Term Tax-Free which shall
thereafter be distributed by ACCTFMF to the holders of shares of California
Insured Tax-Free, all as described in this Agreement (the "Reorganization");
WHEREAS, the parties intend that the transfer of assets, assumption of
liabilities and distribution of shares in California Insured Tax-Free be treated
as a tax-free reorganization under Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"); and
WHEREAS, the parties intend that in connection with the Reorganization,
California Insured Tax-Free shall be terminated and de-registered as described
in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and subject to the terms and conditions hereof, and
intending to be legally bound hereby, ACCTFMF agrees as follows:
1. TRANSFER OF ASSETS OF CALIFORNIA INSURED TAX-FREE.
1.1. At the Effective Time (as defined in Section 8), ACCTFMF shall
transfer and convey, on behalf of California Insured Tax-Free,
all property of every description, and all interests, rights,
privileges and powers of California Insured Tax-Free (such
assets, the "California Insured Tax-Free Assets").
Simultaneously, ACCTFMF shall, on behalf of California
Long-Term Tax-Free, accept the California Insured Tax-Free
Assets and assume all liabilities, whether accrued, absolute,
contingent or otherwise, of California Insured Tax-Free
reflected in the calculation of California Insured Tax-Free's
net asset value (the "California Insured Tax-Free
Liabilities"). As a result, at and after the Effective Time:
(i) all assets of California Insured Tax-Free shall become and
be the assets of California Long-Term Tax-Free; and (ii) all
known liabilities of California Insured Tax-Free reflected as
such in the calculation of California Insured Tax-Free's net
asset value shall attach to California Long-Term Tax-Free as
aforesaid and may thenceforth be enforced against California
Long-Term Tax-Free to the extent as if the same had been
incurred by it. Without limiting the generality of the
foregoing, the California Insured Tax-Free Assets shall
include all property and assets of any nature whatsoever,
including without limitation, all cash, cash equivalents,
securities, other investments, claims and receivables
(including dividend and interest receivables) owned by
California Insured Tax-Free, and any deferred or prepaid
expenses shown as an asset on California Insured Tax-Free's
books at the Effective Time, and all good will, other
intangible property and books and records belonging to
California Insured Tax-Free. Recourse by any person for the
California Insured Tax-Free Liabilities assumed by California
Long-Term Tax-Free shall, at and after the Effective Time, be
limited to California Long-Term Tax-Free.
1.2. In exchange for the transfer of the California Insured
Tax-Free Assets and the assumption of the California Insured
Tax-Free Liabilities, ACCTFMF shall simultaneously issue at
the Effective Time to California Insured Tax-Free a number of
full and fractional shares (to the third decimal place) of
California Long-Term Tax-Free, all determined and adjusted as
provided in this Agreement. The number of shares of California
Long-Term Tax-Free so issued will have an aggregate net asset
value equal to the value of the California Insured Tax-Free
Assets, less the California Insured Tax-Free Liabilities, that
are represented by shares of California Insured Tax-Free, the
holders of which shall receive shares of California Long-Term
Tax-Free, all determined and adjusted as provided in this
Agreement.
1.3. The net asset values of shares of California Long-Term
Tax-Free and of California Insured Tax-Free shall be
determined as of the Valuation Time, as defined in Section 3.
1.4. The net asset value of shares of California Long-Term Tax-Free
shall be computed in the manner set forth in California
Long-Term Tax-Free's then-current prospectus under the
Securities Act of 1933, as amended (the "1933 Act"). The net
asset value of the California Insured Tax-Free Assets to be
transferred by ACCTFMF shall be computed by ACCTFMF. In
determining the value of the securities transferred by
California Insured Tax-Free to California Long-Term Tax-Free,
each security shall be priced in accordance with the policies
and procedures of ACCTFMF as described in its then-current
prospectus and statement of additional information and adopted
by ACCTFMF's Board of Trustees. Price quotations and the
security characteristics relating to establishing such
quotations shall be determined by ACCTFMF.
2. LIQUIDATING DISTRIBUTION AND TERMINATION OF CALIFORNIA INSURED TAX-FREE.
Immediately after the Effective Time, California Insured Tax-Free shall
distribute in the complete liquidation pro rata to the record holders
of its shares at the Effective Time the shares of California Long-Term
Tax-Free to be received by the record holders of California Insured
Tax-Free. ACCTFMF shall record on its books the ownership of shares of
California Long-Term Tax-Free by the record holders of shares of
California Insured Tax-Free. All of the issued and outstanding shares
of California Insured Tax-Free shall be redeemed and canceled on the
books of ACCTFMF at the Effective Time and shall thereafter represent
only the right to receive the shares of California Long-Term Tax-Free,
and California Insured Tax-Free's transfer books shall be closed
permanently. As soon as practicable after the Effective Time, ACCTFMF
shall take all steps as shall be necessary and proper to effect the
dissolution of California Insured Tax-Free under federal and state law.
After the Effective Time, ACCTFMF shall not conduct any business with
respect to California Insured Tax-Free except in connection with
California Insured Tax-Free's liquidation and dissolution.
3. VALUATION TIME.
Subject to Section 1.4 hereof, the Valuation Time for the
Reorganization shall be on such date as may be agreed by the duly
authorized officers of ACCTFMF.
4. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACCTFMF.
ACCTFMF, on behalf of itself and California Insured Tax-Free,
represents and warrants to, and agrees with the following:
4.1. ACCTFMF is a Massachusetts business trust duly created
pursuant to a Declaration of Trust for the purpose of acting
as a management investment company under the 1940 Act and is
validly existing under the laws of, and duly authorized to
transact business in, the Commonwealth of Massachusetts,
California Insured Tax-Free is registered with the SEC as an
open-end management investment company under the 1940 Act and
such registration is in full force and effect.
4.2. ACCTFMF has power to own all of its properties and assets and,
subject to the approval of shareholders referred to herein, to
carry out and consummate the transactions contemplated hereby,
and has all necessary federal, state and local authorizations
to carry on its business as now being conducted and to
consummate the transactions contemplated by this Agreement.
4.3. This Agreement has been duly authorized, executed and
delivered by ACCTFMF, and represents ACCTFMF's valid and
binding contract, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium, and other similar
laws of general applicability relating to or affecting
creditors' rights and to general principles of equity. The
execution and delivery of this Agreement does not and will
not, and the consummation of the transactions contemplated by
this Agreement will not, violate ACCTFMF's Declaration of
Trust, By-laws, or any agreement or arrangement to which it is
a party or by which it is bound.
4.4. California Insured Tax-Free has elected to qualify and has
qualified as a "regulated investment company" under Subtitle
A, Chapter 1, Subchapter M, Part I of the Code, as of and
since its first taxable year; has been a regulated investment
company at all times since the end of its first taxable year
when it so qualified; and qualifies and shall continue to
qualify as a regulated investment company until the Effective
Time.
4.5. All federal, state, local and foreign income, profits,
franchise, sales, withholding, customs, transfer and other
taxes, including interest, additions to tax and penalties
(collectively, "Taxes") relating to the California Insured
Tax-Free Assets or properly shown to be due on any return
filed by California Insured Tax-Free with respect to taxable
periods ending on or prior to, and the portion of any interim
period up to, the date hereof have been fully and timely paid
or provided for; and there are no levies, liens, or other
encumbrances relating to Taxes existing, threatened or pending
with respect to the California Insured Tax-Free Assets.
4.6. The financial statements of California Insured Tax-Free for
the fiscal year ended August 31, 2001, audited by
PricewaterhouseCoopers, LLP, independent auditors, copies of
which have been previously furnished to ACCTFMF, present
fairly the financial position of California Insured Tax-Free
as of August 31, 2001 and the results of its operations for
the year then ending, in conformity with generally accepted
accounting principles.
4.7. Prior to the Valuation Time, California Insured Tax-Free shall
have declared a dividend or dividends, with a record date and
ex-dividend date prior to such Valuation Time, which, together
with all previous dividends, shall have the effect of
distributing to its shareholders all of its investment company
taxable income, if any, for the taxable periods or years ended
on or before California Insured Tax-Free's most recent fiscal
year end, and for the period from said date to and including
the Effective Time (computed without regard to any deduction
for dividends paid), and all of its tax-exempt income and net
capital gain, if any, realized in taxable periods or years
ended on or before California Insured Tax-Free's fiscal year
end and for the period from said date to and including the
Effective Time. Such dividends will be paid to shareholders of
California Insured Tax-Free prior to the Effective Date.
4.8. At both the Valuation Time and the Effective Time, there shall
be no known liabilities of California Insured Tax-Free,
whether accrued, absolute, contingent or otherwise, not
reflected in the net asset value per share of its outstanding
shares.
4.9. There are no legal, administrative or other proceedings
pending or, to ACCTFMF's knowledge threatened, against ACCTFMF
or California Insured Tax-Free which could result in liability
on the part of California Insured Tax-Free.
4.10. Subject to the approval of shareholders, at both the Valuation
Time and the Effective Time, ACCTFMF shall have full right,
power and authority to assign, transfer and deliver the
California Insured Tax-Free Assets and, upon delivery and
payment for the California Insured Tax-Free Assets as
contemplated herein, California Long-Term Tax-Free shall
acquire good and marketable title thereto, free and clear of
all liens and encumbrances, and subject to no restrictions on
the ownership or transfer thereof (except as imposed by
federal or state securities laws).
4.11. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by
ACCTFMF of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act"),
the 1940 Act, the rules and regulations under those Acts, and
state securities laws.
4.12. Insofar as the following relate to ACCTFMF, the registration
statement filed by ACCTFMF on Form N-14 relating to the shares
of California Long-Term Tax-Free that will be registered with
the SEC pursuant to this Agreement, which, without limitation,
shall include a proxy statement and prospectus of ACCTFMF with
respect to the transactions contemplated by this Agreement,
and any supplement or amendment thereto or to the documents
contained or incorporated therein by reference (the "N-14
Registration Statement"), on the effective date of the N-14
Registration Statement, at the time of any shareholders'
meeting referred to herein and at the Effective Time: (i)
shall comply in all material respects with the provisions of
the 1933 Act, the 1934 Act and the 1940 Act, the rules and
regulations thereunder, and state securities laws, and (ii)
shall 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 not misleading;
provided, however, that the representations and warranties in
this subsection shall apply only to statements in or omissions
from the N-14 Registration Statement made in reliance upon and
in conformity with information furnished by ACCTFMF for use in
the N-14 Registration Statement.
4.13. All of the issued and outstanding shares of California Insured
Tax-Free have been duly and validly issued, are fully paid and
non-assessable, and were offered for sale and sold in
conformity with all applicable federal and state securities
laws, and no shareholder of California Insured Tax-Free has
any preemptive right of subscription or purchase in respect of
such shares.
5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACCTFMF.
ACCTFMF, on behalf of itself and California Long-Term Tax-Free,
represents and warrants to, and agrees with the following:
5.1. ACCTFMF is a Massachusetts business trust duly created
pursuant to a Declaration of Trust for the purpose of acting
as a management investment company under the 1940 Act and is
validly existing under the laws of, and duly authorized to
transact business in, the Commonwealth of Massachusetts,
California Long-Term Tax-Free is registered with the SEC as an
open-end management investment company under the 1940 Act and
such registration is in full force and effect.
5.2. ACCTFMF has the power to own all of its properties and assets
and to carry out and consummate the transactions contemplated
herein, and has all necessary federal, state and local
authorizations to carry on its business as now being conducted
and to consummate the transactions contemplated by this
Agreement.
5.3. This Agreement has been duly authorized, executed and
delivered by ACCTFMF, and represents ACCTFMF's valid and
binding contract, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium, and other similar
laws of general applicability relating to or affecting
creditors' rights and to general principles of equity. The
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this
Agreement will not, violate ACCTFMF's Declaration of Trust or
By-laws or any agreement or arrangement to which it is a party
or by which it is bound.
5.4. California Long-Term Tax-Free has elected to qualify, and has
qualified, as a "regulated investment company" under Subtitle
A, Chapter 1, Subchapter M, Part I of the Code, as of and
since its first taxable year; and has been a regulated
investment company at all times since the end of its first
taxable year when it so qualified and intends to continue to
qualify as a regulated investment company.
5.5. The financial statements of California Long-Term Tax-Free for
its fiscal year ended August 31, 2001, audited by
PricewaterhouseCoopers LLP, independent auditors, copies of
which have been previously furnished to ACCTFMF, present
fairly the financial position of California Long-Term Tax-Free
as of August 31, 2001 and the results of its operations for
the year then ending, in conformity with generally accepted
accounting principles.
5.6. At both the Valuation Time and the Effective Time, there shall
be no known liabilities of California Long-Term Tax-Free
whether accrued, absolute, contingent or otherwise, not
reflected in the net asset value per share of its shares to be
issued pursuant to this Agreement.
5.7. There are no legal, administrative or other proceedings
pending or, to its knowledge, threatened against ACCTFMF or
California Long-Term Tax-Free that could result in liability
on the part of ACCTFMF or California Long-Term Tax-Free.
5.8. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by
ACCTFMF of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act, the 1934
Act, the 1940 Act, the rules and regulations under those Acts,
and state securities laws.
5.9. Insofar as the following relate to ACCTFMF, the N-14
Registration Statement on its effective date, at the time of
any shareholders' meetings referred to herein and at the
Effective Time: (i) shall comply in all material respects with
the provisions of the 1933 Act, the 1934 Act and the 1940 Act,
the rules and regulations thereunder, and state securities
laws, and (ii) shall 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 not
misleading; provided, however, that the representations and
warranties in this subsection shall apply only to statements
in or omissions from the N-14 Registration Statement made in
reliance upon and in conformity with information furnished by
ACCTFMF for use in the N-14 Registration Statement.
5.10. The shares of California Long-Term Tax-Free to be issued and
delivered to California Insured Tax-Free for the account of
record holders of shares of California Insured Tax-Free
pursuant to the terms hereof shall have been duly authorized
as of the Effective Time and, when so issued and delivered,
shall be registered under the 1933 Act, duly and validly
issued, fully paid and non-assessable, and no shareholder of
ACCTFMF shall have any preemptive right of subscription or
purchase in respect thereto.
6. SHAREHOLDER ACTION ON BEHALF OF CALIFORNIA INSURED TAX-FREE.
6.1. As soon as practicable after the effective date of the N-14
Registration Statement, but in any event prior to the
Effective Time and as a condition to the Reorganization, the
Board of Directors of ACCTFMF shall call, and ACCTFMF shall
hold, a meeting of the shareholders of California Insured
Tax-Free for the purpose of considering and voting upon:
6.1.1. Approval of this Agreement and the transactions
contemplated hereby, including, without limitation:
6.1.1.1. The transfer of the California Insured
Tax-Free Assets to California Long-Term
Tax-Free and the assumption by California
Long-Term Tax-Free of the California Insured
Tax-Free Liabilities, in exchange for shares
of California Long-Term Tax-Free, as
described in this Agreement; and
6.1.1.2. The liquidation of California Insured
Tax-Free through the distribution to its
record holders of the shares of California
Long-Term Tax-Free as described in this
Agreement; and
6.1.2. Such other matters as may be determined by the Board of
Directors or authorized officers of the parties.
6.2. Approval of this Reorganization Agreement by the shareholders
of California Insured Tax-Free shall constitute the waiver of
the application of any fundamental policy of California
Insured Tax-Free that might be deemed to prevent them from
taking the actions necessary to effectuate the Reorganization
as described, and such policies, if any, shall be deemed to
have been amended accordingly.
7. REGISTRATION STATEMENT AND PROXY SOLICITATION MATERIALS.
The N-14 Registration Statement under the 1933 Act, including the
combined prospectus/proxy statement contained therein under the 1934
Act and 1940 Act proxy rules, shall be filed with the SEC as promptly
as practicable, ACCTFMF shall have furnished and shall continue to
furnish the information relating to California Insured Tax-Free and
California Long-Term Tax-Free that is required by the 1933 Act, the
1934 Act, the 1940 Act, the rules and regulations under each of those
Acts and state securities laws, to be included in the N-14 Registration
Statement.
8. EFFECTIVE TIME OF THE REORGANIZATION.
Delivery of the California Insured Tax-Free Assets and the shares of
California Long-Term Tax-Free to be issued pursuant to Section 1 and
the liquidation of California Insured Tax-Free pursuant to Section 2
shall occur at the opening of business on the next business day
following the Valuation Time, or on such other date, and at such place
and time, as may be determined by the President or any Vice President
of ACCTFMF. The date and time at which such actions are taken are
referred to herein as the "Effective Time." To the extent any of the
California Insured Tax-Free Assets are, for any reason, not transferred
at the Effective Time, ACCTFMF shall cause such California Insured
Tax-Free Assets to be transferred in accordance with this Agreement at
the earliest practicable date thereafter.
9. ACCTFMF CONDITIONS.
The obligations of ACCTFMF hereunder with respect to California
Long-Term Tax-Free shall be subject to the following conditions
precedent:
9.1. This Agreement and the transactions contemplated by this
Agreement shall have been approved by the shareholders of
California Insured Tax-Free, in the manner required by law.
9.2. ACCTFMF shall have duly executed and delivered such bills of
sale, assignments, certificates and other instruments of
transfer ("Transfer Documents") as may be necessary or
desirable to transfer all right, title and interest of ACCTFMF
and California Insured Tax-Free in and to the California
Insured Tax-Free Assets. The California Insured Tax-Free
Assets shall be accompanied by all necessary state stock
transfer stamps or cash for the appropriate purchase price
therefor.
9.3. All representations and warranties made in this Agreement
shall be true and correct in all material respects as if made
at and as of the Valuation Time and the Effective Time. As of
the Valuation Time and the Effective Time, there shall have
been no material adverse change in the financial position of
California Insured Tax-Free since August 31, 2001, other than
those changes incurred in the ordinary course of business as
an investment company. No action, suit or other proceeding
shall be threatened or 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.
9.4. ACCTFMF shall have received a tax opinion addressed to ACCTFMF
in a form reasonably satisfactory to it and dated the
Effective Time, substantially to the effect that for federal
income tax purposes: (i) the transfer of the California
Insured Tax-Free Assets hereunder, and the assumption by
California Long-Term Tax-Free of the California Insured
Tax-Free Liabilities, in exchange for shares of California
Long-Term Tax-Free, and the distribution of said shares to the
shareholders of California Insured Tax-Free, as provided in
this Agreement, will constitute a reorganization within the
meaning of Section 368 of the Code, and California Insured
Tax-Free and California Long-Term Tax-Free will each be
considered "a party to a reorganization" within the meaning of
Section 368(b) of the Code; (ii) no gain or loss will be
recognized by California Insured Tax-Free as a result of such
transaction; (iii) no gain or loss will be recognized by
California Long-Term Tax-Free as a result of such transaction;
(iv) no gain or loss will be recognized by the shareholders of
California Insured Tax-Free on the distribution to them by
California Insured Tax-Free of shares of California Long-Term
Tax-Free in exchange for their shares of California Insured
Tax-Free; (v) the aggregate basis of California Long-Term
Tax-Free shares received by each shareholder of California
Insured Tax-Free will be the same as the aggregate basis of
the shareholder's California Insured Tax-Free shares
immediately prior to the transaction; (vi) the basis of the
California Insured Tax-Free Assets to California Long-Term
Tax-Free will be the same as the basis of the California
Insured Tax-Free Assets in the hands of California Insured
Tax-Free immediately prior to the exchange; (vii) a
shareholder's holding period for California Long-Term Tax-Free
shares will be determined by including the period for which
the shareholder held the shares of California Insured Tax-Free
exchanged therefor, provided that the shareholder held such
shares of California Insured Tax-Free as a capital asset; and
(viii) the holding period of California Long-Term Tax-Free
with respect to the California Insured Tax-Free Assets will
include the period for which the California Insured Tax-Free
Assets were held by California Insured Tax-Free (except to the
extent that an activity or investment of California Long-Term
Tax-Free has the effect of diminishing a holding period with
respect to an asset).
9.5. The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any
proceeding seeking to enjoin consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940
Act.
9.6. The N-14 Registration Statement shall have become effective
under the 1933 Act and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge
of ACCTFMF, contemplated by the SEC, and the parties shall
have received all permits and other authorizations necessary
under state securities laws to consummate the transactions
contemplated by this Agreement.
9.7. The President or a Vice President of ACCTFMF shall have
certified that ACCTFMF has performed and complied in all
material respects with each of its agreements and covenants
required by this Agreement to be performed or complied with by
it prior to or at the Valuation Time and the Effective Time.
10. ACCTFMF CONDITIONS.
The obligations of ACCTFMF hereunder with respect to California Insured
Tax-Free shall be subject to the following conditions precedent:
10.1. This Agreement and the transactions contemplated by this
Agreement shall have been approved by the shareholders of
California Insured Tax-Free in the manner required by law.
10.2. All representations and warranties of ACCTFMF made in this
Agreement shall be true and correct in all material respects
as if made at and as of the Valuation Time and the Effective
Time. As of the Valuation Time and the Effective Time, there
shall have been no material adverse change in the financial
condition of California Long-Term Tax-Free since August 31,
2001, other than those changes incurred in the ordinary course
of business as an investment company. No action, suit or other
proceeding shall be threatened or 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.
10.3. ACCTFMF shall have received a tax opinion, addressed to
ACCTFMF in a form reasonably satisfactory to it and dated the
Effective Time, with respect to the matters specified in
Section 9.4.
10.4. The N-14 Registration Statement shall have become effective
under the 1933 Act and no stop order suspending such
effectiveness shall have been instituted, or to the knowledge
of ACCTFMF, contemplated by the SEC, and the parties shall
have received all permits and other authorizations necessary
under state securities laws to consummate the transactions
contemplated by this Agreement.
10.5. ACCTFMF shall not sell or otherwise dispose of any shares of
California Long-Term Tax-Free to be received in the
transactions contemplated herein, except in distribution to
its shareholders as contemplated herein.
10.6. The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any
proceeding seeking to enjoin consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940
Act.
10.7. The President or a Vice President of ACCTFMF shall have
certified that ACCTFMF has performed and complied in all
material respects with each of its agreements and covenants
required by this Agreement to be performed or complied with by
it prior to or at the Valuation Time and the Effective Time.
11. TAX DOCUMENTS.
ACCTFMF shall have at the Effective Time confirmations or other
adequate evidence as to the adjusted tax basis of the California
Insured Tax-Free Assets then delivered to California Long-Term Tax-Free
in accordance with the terms of this Agreement.
12. FURTHER ASSURANCES.
Subject to the terms and conditions herein provided, each of the
parties hereto shall use its best efforts to take, or cause to be
taken, such action, to execute and deliver, or cause to be executed and
delivered, such additional documents and instruments, and to do, or
cause to be done, all things necessary, proper or advisable under the
provisions of this Agreement and under applicable law to consummate and
make effective the transactions contemplated by this Agreement.
13. TERMINATION OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the parties set forth in this
Agreement shall terminate at the Effective Time.
14. TERMINATION OF AGREEMENT.
14.1. This Agreement may be terminated prior to the Effective Time
by the Board of Trustees of ACCTFMF, as provided below:
14.1.1. With respect to California Long-Term Tax-Free, by
ACCTFMF if the conditions set forth in Section 9 are
not satisfied as specified in said Section;
14.1.2. With respect to California Insured Tax-Free, by
ACCTFMF if the conditions set forth in Section 10 are
not satisfied as specified in said Section;
14.1.3. By the mutual consent of the parties.
14.2. If a party terminates this Agreement because one or more of
its conditions precedent have not been fulfilled, or if this
Agreement is terminated by mutual consent, this Agreement will
become null and void without any liability of either party or
any of their investment portfolios to the other; provided,
however, that if such termination is by ACCTFMF with respect
to California Long-Term Tax-Free pursuant to Section 14.1.1 as
a result of a breach by ACCTFMF with respect to California
Insured Tax-Free of any of its representations, warranties or
covenants in this Agreement, or such termination is by ACCTFMF
with respect to California Insured Tax-Free pursuant to
Section 14.1.2 as a result of a breach by ACCTFMF with respect
to California Long-Term Tax-Free of any of its
representations, warranties or covenants in this Agreement,
nothing herein shall affect the non-breaching party's right to
damages on account of such other party's breach.
15. AMENDMENT AND WAIVER.
At any time prior to or (to the fullest extent permitted by law) after
approval of this Agreement by the shareholders of ACCTFMF, (a) the
parties hereto may, by written agreement authorized by their Board of
Trustees, or their respective Presidents or any Vice Presidents, and
with or without the approval of their shareholders, amend any of the
provisions of this Agreement, and (b) either party may waive any breach
by the other party or the failure to satisfy any of the conditions to
its obligations (such waiver to be in writing and executed by the
President or Vice President of the waiving party with or without the
approval of such party's shareholders).
16. GOVERNING LAW.
This Agreement and the transactions contemplated hereby shall be
governed, construed and enforced in accordance with the laws of
Massachusetts without giving effect to the conflicts of law principles
otherwise applicable therein.
17. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the respective successors and
permitted assigns of the parties hereto. This Agreement and the rights,
obligations and liabilities hereunder may not be assigned by either
party without the consent of the other party.
18. BENEFICIARIES.
Nothing contained in this Agreement shall be deemed to create rights in
persons not parties hereto, other than the successors and permitted
assigns of the parties.
19. ACCTFMF LIABILITY.
19.1. The name "American Century California Tax-Free and Municipal
Funds" and "Trustees of American Century California Tax-Free
and Municipal Funds" refer respectively to the trust created
and the trustees, as trustees but not individually or
personally, acting from time to time under an Amended and
Restated Agreement and Declaration of Trust dated as of March
1, 1999, as amended, which is hereby referred to and copies of
which are on file at the office of the State Secretary of the
Commonwealth of Massachusetts and at the principal office of
ACCTFMF. The obligations of ACCTFMF entered into in the name
or on behalf thereof by any of its trustees, representatives
or agents are made not individually, but in such capacities,
and are not binding upon any of the trustees, shareholders or
representatives of ACCTFMF personally, but bind only the trust
property, and all persons dealing with any portfolio of
ACCTFMF must look solely to the trust property belonging to
such portfolio for the enforcement of any claims against
ACCTFMF.
19.2. Both parties specifically acknowledge and agree that any
liability of ACCTFMF under this Agreement with respect to
California Long-Term Tax-Free, or in connection with the
transactions contemplated herein with respect to California
Long-Term Tax-Free, shall be discharged only out of the assets
of California Long-Term Tax-Free and that no other portfolio
of ACCTFMF, if any, shall be liable with respect thereto.
19.3. Both parties specifically acknowledge and agree that any
liability of ACCTFMF under this Agreement with respect to
California Insured Tax-Free, or in connection with the
transactions contemplated herein with respect to California
Insured Tax-Free, shall be discharged only out of the assets
of California Insured Tax-Free and that no other portfolio of
ACCTFMF, if any, shall be liable with respect thereto.
20. NOTICES.
All notices required or permitted herein shall be in writing and shall
be deemed to be properly given when delivered personally or by
telecopier to the party entitled to receive the notice or when sent by
certified or registered mail, postage prepaid, or delivered to a
nationally recognized overnight courier service, in each case properly
addressed to the party entitled to receive such notice at the address
or telecopier number stated below or to such other address or
telecopier number as may hereafter be furnished in writing by notice
similarly given by one party to the other party hereto:
If to American Century California Tax-Free and Municipal Funds :
Xxxxxxx X. Xxxxxxxxxxx
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
21. EXPENSES.
Expenses incurred in connection with the Reorganization are the sole
responsibility of and will be borne by American Century Investment
Management, Inc. or one or more of its affiliates.
22. ENTIRE AGREEMENT.
This Agreement embodies the entire agreement and understanding of the
parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to matters provided for
herein.
23. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers designated below as of the date
first written.
AMERICAN CENTURY CALIFORNIA
MUNICIPAL AND TAX-FREE FUNDS
By: /s/Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Vice President
ATTEST: /s/Xxxxxxxxx X. Xxxxxxxx
Xxxxxxxxx X. Xxxxxxxx
