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 April 1, 2002 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:
Xxxxxxx X. Xxxxxxxxxxx
Vice President
ATTEST:
Xxxxxxxxx X. Xxxxxxxx
