AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
AMERICAN CENTURY GOVERNMENT INCOME TRUST
and
AMERICAN CENTURY MUTUAL FUNDS, INC.
TABLE OF CONTENTS
1. Transfer of Assets of Limited-Term Bond...............................1
2. Liquidating Distribution and Termination of Limited-Term Bond.........2
3. Valuation Time........................................................3
4. Certain Representations, Warranties and Agreements of ACMF............3
5. Certain Representations, Warranties and Agreements of ACGIT...........6
6. Shareholder Action on Behalf of Limited-Term Bond.....................7
7. Registration Statement and Proxy Solicitation Materials...............8
8. Effective Time of the Reorganization..................................8
9. ACGIT's Conditions....................................................9
10. ACMF's 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. ACGIT Liability......................................................13
20. ACMF Liability.......................................................13
21. Notices..............................................................14
22. Expenses.............................................................14
23. Entire Agreement.....................................................14
24. Counterparts.........................................................14
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION made as of __________, 2001 by and
between American Century Government Income Trust, a Massachusetts business trust
("ACGIT"), and American Century Mutual Funds, Inc., a Maryland corporation
("ACMF").
WHEREAS, the parties desire that substantially all of the assets and
liabilities of the Limited-Term Bond portfolio of ACMF ("Limited-Term Bond") to
be transferred to, and be acquired and assumed by, the Short-Term Government
portfolio of ACIT ("Short-Term Government") in exchange for shares of Short-Term
Government which shall thereafter be distributed by ACMF to the holders of
shares of Limited-Term Bond, 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 Limited-Term Bond 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,
Limited-Term Bond 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, ACMF and ACGIT agree as follows:
1. TRANSFER OF ASSETS OF LIMITED-TERM BOND.
1.1. At the Effective Time (as defined in Section 8), ACMF shall
transfer and convey to ACGIT, on behalf of Short-Term
Government, all property of every description, and all
interests, rights, privileges and powers of Limited-Term Bond
(such assets, the "Limited-Term Bond Assets"). Simultaneously,
ACGIT shall, on behalf of Short-Term Government, accept the
Limited-Term Bond Assets and assume all liabilities, whether
accrued, absolute, contingent or otherwise, of Limited-Term
Bond reflected in the calculation of Limited-Term Bond's net
asset value (the "Limited-Term Bond Liabilities"). As a
result, at and after the Effective Time: (i) all assets of
Limited-Term Bond shall become and be the assets of Short-Term
Government; and (ii) all known liabilities of Limited-Term
Bond reflected as such in the calculation of Limited-Term
Bond's net asset value shall attach to Short-Term Government
as aforesaid and may thenceforth be enforced against
Short-Term Government to the extent as if the same had been
incurred by it. Without limiting the generality of the
foregoing, the Limited-Term Bond 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 Limited-Term Bond, and any
deferred or prepaid expenses shown as an asset on Limited-Term
Bond's books at the Effective Time, and all good will, other
intangible property and books and records belonging to
Limited-Term Bond. Recourse by any person for the Limited-Term
Bond Liabilities assumed by Short-Term Government shall, at
and after the Effective Time, be limited to Short-Term
Government.
1.2 In exchange for the transfer of the Limited-Term Bond Assets
and the assumption of the Limited-Term Bond Liabilities, ACGIT
shall simultaneously issue at the Effective Time to
Limited-Term Bond a number of full and fractional shares (to
the third decimal place) of Short-Term Government, all
determined and adjusted as provided in this Agreement. The
number of shares of Short-Term Government so issued will have
an aggregate net asset value equal to the value of the
Limited-Term Bond Assets, less the Limited-Term Bond
Liabilities, that are represented by shares of Limited-Term
Bond, the holders of which shall receive shares of Short-Term
Government, all determined and adjusted as provided in this
Agreement.
1.3. The net asset values of shares of Short-Term Government and of
Limited-Term Bond shall be determined as of the Valuation
Time, as defined in Section 3.
1.4. The net asset value of shares of Short-Term Government shall
be computed in the manner set forth in Short-Term Government's
then-current prospectus under the Securities Act of 1933, as
amended (the "1933 Act"). The net asset value of the
Limited-Term Bond Assets to be transferred by ACMF shall be
computed by ACMF and shall be subject to adjustment by the
amount, if any, agreed to by ACGIT and ACMF. In determining
the value of the securities transferred by Limited-Term Bond
to Short-Term Government, each security shall be priced in
accordance with the policies and procedures of ACGIT as
described in its then-current prospectus and statement of
additional information and adopted by ACGIT's Board of
Trustees, which are and shall be consistent with the policies
now in effect for ACMF. Price quotations and the security
characteristics relating to establishing such quotations shall
be determined by ACGIT, provided that such determination shall
be subject to the approval of ACMF.
2. LIQUIDATING DISTRIBUTION AND TERMINATION OF LIMITED-TERM BOND.
Immediately after the Effective Time, Limited-Term Bond shall
distribute in the complete liquidation pro rata to the record holders
of its shares at the Effective Time the shares of Short-Term Government
to be received by the record holders of Limited-Term Bond. In
accordance with instructions it receives from ACMF, ACGIT shall record
on its books the ownership of shares of Short-Term Government by the
record holders of shares of Limited-Term Bond. All of the issued and
outstanding shares of Limited-Term Bond shall be redeemed and canceled
on the books of ACMF at the Effective Time and shall thereafter
represent only the right to receive the shares of Short-Term
Government, and Limited-Term Bond's transfer books shall be closed
permanently. As soon as practicable after the Effective Time, ACMF
shall take all steps as shall be necessary and proper to effect the
dissolution of Limited-Term Bond under federal and state law. After the
Effective Time, ACMF shall not conduct any business with respect to
Limited-Term Bond except in connection with Limited-Term Bond'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 both parties hereto.
4. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACMF.
ACMF, on behalf of itself and Limited-Term Bond, represents and
warrants to, and agrees with, ACGIT as follows:
4.1. ACMF is a Maryland corporation duly created pursuant to its
Articles of Incorporation 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 State of Maryland. Limited-Term Bond
is registered with the Securities and Exchange Commission (the
"SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"),
and such registration is in full force and effect.
4.2. ACMF 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 ACMF, and represents ACMF'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 ACMF's Articles of Incorporation, By-laws, or any
agreement or arrangement to which it is a party or by which it
is bound.
4.4. Limited-Term Bond 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 Limited-Term Bond
Assets or properly shown to be due on any return filed by
Limited-Term Bond 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
Limited-Term Bond Assets.
4.6. The financial statements of Limited-Term Bond for the fiscal
year ended October 31, 2000, audited by Deloitte & Touche,
LLP, independent auditors, copies of which have been
previously furnished to ACGIT, present fairly the financial
position of Limited-Term Bond as of October 31, 2000 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, Limited-Term Bond 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 Limited-Term Bond'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 net capital gain, if any,
realized in taxable periods or years ended on or before
Limited-Term Bond'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 Limited-Term Bond prior to the
Effective Date.
4.8. At both the Valuation Time and the Effective Time, there shall
be no known liabilities of Limited-Term Bond, 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 ACMF's knowledge threatened, against ACMF or
Limited-Term Bond which could result in liability on the part
of Limited-Term Bond.
4.10. Subject to the approval of shareholders, at both the Valuation
Time and the Effective Time, ACMF shall have full right, power
and authority to assign, transfer and deliver the Limited-Term
Bond Assets and, upon delivery and payment for the
Limited-Term Bond Assets as contemplated herein, Short-Term
Government 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
ACMF 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 ACMF, the registration
statement filed by ACGIT on Form N-14 relating to the shares
of Short-Term Government that will be registered with the SEC
pursuant to this Agreement, which, without limitation, shall
include a proxy statement of ACMF and the prospectus of ACGIT
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 ACMF for use in
the N-14 Registration Statement.
4.13. All of the issued and outstanding shares of Limited-Term Bond
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 Limited-Term Bond has any
preemptive right of subscription or purchase in respect of
such shares.
5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACGIT.
ACGIT, on behalf of itself and Short-Term Government, represents and
warrants to, and agrees with, ACMF as follows:
5.1. ACGIT 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,
Short-Term Government 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. ACGIT 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 ACGIT, and represents ACGIT'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 did not, and the consummation of the
transactions contemplated by this Agreement will not, violate
ACGIT'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. Short-Term Government 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 Short-Term Government for its
fiscal year ended March 31, 2001, audited by
PricewaterhouseCoopers LLP, independent auditors, copies of
which have been previously furnished to ACMF, present fairly
the financial position of Short-Term Government as of March
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 Short-Term Government 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 ACGIT or
Short-Term Government that could result in liability on the
part of ACGIT or Short-Term Government.
5.8. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by
ACGIT 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 ACGIT, 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
ACGIT for use in the N-14 Registration Statement.
5.10. The shares of Short-Term Government to be issued and delivered
to Limited-Term Bond for the account of record holders of
shares of Limited-Term Bond 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 ACGIT shall have any preemptive right of
subscription or purchase in respect thereto.
6. SHAREHOLDER ACTION ON BEHALF OF LIMITED-TERM BOND.
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 ACMF shall call, and ACMF shall hold, a
meeting of the shareholders of Limited-Term Bond 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 Limited-Term Bond Assets
to Short-Term Government and the assumption
by Short-Term Government of the Limited-Term
Bond Liabilities, in exchange for shares of
Short-Term Government, as described in this
Agreement; and
6.1.1.2. The liquidation of Limited-Term Bond through
the distribution to its record holders of
shares of the shares of Short-Term
Government 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 Limited-Term Bond shall constitute the waiver of the
application of any fundamental policy of Limited-Term Bond
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, ACGIT and ACMF have cooperated and shall continue to
cooperate with each other, and have furnished and shall continue to
furnish each other with the information relating to themselves 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 Limited-Term Bond Assets and the shares of Short-Term
Government to be issued pursuant to Section 1 and the liquidation of
Limited-Term Bond 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 each party hereto. The date and
time at which such actions are taken are referred to herein as the
"Effective Time." To the extent any of the Limited-Term Bond Assets
are, for any reason, not transferred at the Effective Time, ACMF shall
cause such Limited-Term Bond Assets to be transferred in accordance
with this Agreement at the earliest practicable date thereafter.
9. ACGIT CONDITIONS.
The obligations of ACGIT hereunder with respect to Short-Term
Government 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
Limited-Term Bond, in the manner required by law.
9.2. ACMF shall have duly executed and delivered to ACGIT 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 ACMF
and Limited-Term Bond in and to the Limited-Term Bond Assets.
The Limited-Term Bond 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
Limited-Term Bond since October 31, 2000, 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. ACGIT shall have received a tax opinion acceptable to ACMF,
addressed to ACGIT and ACMF in a form reasonably satisfactory
to them and dated the Effective Time, substantially to the
effect that for federal income tax purposes: (i) the transfer
of the Limited-Term Bond Assets hereunder, and the assumption
by Short-Term Government of the Limited-Term Bond Liabilities,
in exchange for shares of Short-Term Government, and the
distribution of said shares to the shareholders of
Limited-Term Bond, as provided in this Agreement, will
constitute a reorganization within the meaning of Section 368
of the Code, and Limited-Term Bond and Short-Term Government
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 Limited-Term Bond as a result of
such transaction; (iii) no gain or loss will be recognized by
Short-Term Government as a result of such transaction; (iv) no
gain or loss will be recognized by the shareholders of
Limited-Term Bond on the distribution to them by Limited-Term
Bond of shares of Short-Term Government in exchange for their
shares of Limited-Term Bond; (v) the aggregate basis of
Short-Term Government shares received by each shareholder of
Limited-Term Bond will be the same as the aggregate basis of
the shareholder's Limited-Term Bond shares immediately prior
to the transaction; (vi) the basis of the Limited-Term Bond
Assets to Short-Term Government will be the same as the basis
of the Limited-Term Bond Assets in the hands of Limited-Term
Bond immediately prior to the exchange; (vii) a shareholder's
holding period for Short-Term Government shares will be
determined by including the period for which the shareholder
held the shares of Limited-Term Bond exchanged therefor,
provided that the shareholder held such shares of Limited-Term
Bond as a capital asset; and (viii) the holding period of
Short-Term Government with respect to the Limited-Term Bond
Assets will include the period for which the Limited-Term Bond
Assets were held by Limited-Term Bond (except to the extent
that an activity or investment of Short-Term Government 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 ACGIT, 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 ACMF shall have certified
that ACMF 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. ACMF'S CONDITIONS.
The obligations of ACMF hereunder with respect to Limited-Term Bond
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
Limited-Term Bond in the manner required by law.
10.2. All representations and warranties of ACGIT 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 Short-Term Government since March 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. ACMF shall have received a tax opinion acceptable to ACMF,
addressed to ACGIT and ACMF in a form reasonably satisfactory
to them 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 ACGIT, 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. ACMF shall not sell or otherwise dispose of any shares of
Short-Term Government 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 ACGIT shall have
certified that ACGIT 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.
ACMF shall deliver to ACGIT at the Effective Time confirmations or
other adequate evidence as to the adjusted tax basis of the
Limited-Term Bond Assets then delivered to Short-Term Government 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 ACGIT or the Board of Directors of
ACMF, as provided below:
14.1.1. By ACGIT if the conditions set forth in Section 9 are
not satisfied in said Section;
14.1.2. By ACMF 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 ACGIT pursuant to
Section 14.1.1 as a result of a breach by ACMF of any of its
representations, warranties or covenants in this Agreement, or
such termination is by ACMF pursuant to Section 14.1.2 as a
result of a breach by ACGIT 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 ACMF, (a) the parties
hereto may, by written agreement authorized by their respective Board
of Directors or Trustees, as the case may be, 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. ACGIT LIABILITY.
19.1. The name "American Century Government Income Trust" and
"Trustees of American Century Government Income Trust" 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 9, 1998, 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 ACGIT. The
obligations of ACGIT 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 ACGIT personally, but bind only the trust
property, and all persons dealing with any portfolio of ACGIT
must look solely to the trust property belonging to such
portfolio for the enforcement of any claims against ACGIT.
19.2. Both parties specifically acknowledge and agree that any
liability of ACGIT under this Agreement with respect to
Short-Term Government, or in connection with the transactions
contemplated herein with respect to Short-Term Government,
shall be discharged only out of the assets of Short-Term
Government and that no other portfolio of ACGIT, if any, shall
be liable with respect thereto.
20. ACMF LIABILITY.
Both parties specifically acknowledge and agree that any liability of
ACMF under this Agreement with respect to Limited-Term Bond or in
connection with the transactions contemplated herein with respect to
Limited-Term Bond, shall be discharged only out of the Limited-Term
Bond Assets and that no other portfolio of ACMF shall be liable with
respect thereto.
21. 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 Government Income Trust or American Century
Mutual Funds, Inc.:
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22. 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.
23. 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.
24. 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 GOVERNMENT
INCOME TRUST
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Vice President
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AMERICAN CENTURY MUTUAL FUNDS,
INC.
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Vice President
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