AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
AMERICAN CENTURY INVESTMENT TRUST
and
AMERICAN CENTURY MUTUAL FUNDS, INC.
DATED ------------------, 1998
TABLE OF CONTENTS
1. Transfer of Assets of Cash Reserve.....................................
2. Liquidating Distribution and Termination of Cash Reserve...............
3. Valuation Time.........................................................
4. Certain Representations, Warranties and Agreements of ACMF.............
5. Certain Representations, Warranties and Agreements of ACIT.............
6. Shareholder Action on Behalf of Cash Reserve...........................
7. Registration Statement and Proxy Solicitation Materials................
8. Effective Time of the Reorganization...................................
9. ACIT's Conditions......................................................
10. ACMF's Conditions......................................................
11. Tax Documents..........................................................
12. Further Assurances.....................................................
13. Termination of Representations and Warranties..........................
14. Termination of Agreement...............................................
15. Amendment and Waiver...................................................
16. Governing Law..........................................................
17. Successors and Assigns.................................................
18. Beneficiaries..........................................................
19. ACIT Liability.........................................................
20. ACMF Liability.........................................................
21. Notices................................................................
22. Expenses...............................................................
23. Entire Agreement.......................................................
24. Counterparts...........................................................
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION made as of ----------------, 1998
by and between American Century Investment Trust, a Massachusetts business trust
("ACIT"), and American Century Mutual Funds, Inc., a Maryland corporation
("ACMF").
WHEREAS, the parties desire that substantially all of the assets and
liabilities of the Cash Reserve portfolio of ACMF ("Cash Reserve") be
transferred to, and be acquired and assumed by, the Prime Money Market portfolio
of ACIT ("Prime") in exchange for shares of Prime which shall thereafter be
distributed by ACMF to the holders of shares of Cash Reserve, 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 Cash Reserve be treated as a tax-free
reorganization under Section 368(a)(1)(C), 368(a)(1)(D) or 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties intend that in connection with the Reorganization
Cash Reserve 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 ACIT agree as follows:
1. TRANSFER OF ASSETS OF CASH RESERVE.
1.1. At the Effective Time (as defined in Section 8), ACMF shall
transfer and convey to ACIT, on behalf of Prime, all property
of every description, and all interests, rights, privileges
and powers of Cash Reserve other than cash in an amount
necessary to pay any unpaid dividends and distributions as
provided in Section 4.7 (such assets, the "Cash Reserve
Assets"). Simultaneously, ACIT shall, on behalf of Prime,
accept the Cash Reserve Assets and assume all known
liabilities, whether accrued, absolute, contingent or
otherwise, of Cash Reserve reflected in the calculation of
Cash Reserve's net asset value (the "Cash Reserve
Liabilities"). As a result, at and after the Effective Time:
(i) all assets of Cash Reserve shall become and be the assets
of Prime; and (ii) all known liabilities of Cash Reserve
reflected as such in the calculation of Cash Reserve's net
asset value shall attach to Prime as aforesaid and may
thenceforth be enforced against Prime to the extent as if the
same had been incurred by it. Without limiting the generality
of the foregoing, the Cash Reserve 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 Cash Reserve, and any
deferred or prepaid expenses shown as an asset on Cash
Reserve's books at the Effective Time, and all good will,
other intangible property and books and records belonging to
Cash Reserve. Recourse by any person for the Cash Reserve
Liabilities assumed by Prime shall, at and after the Effective
Time, be limited to Prime.
1.2. In exchange for the transfer of the Cash Reserve Assets and
the assumption of the Cash Reserve Liabilities, ACIT shall
simultaneously issue at the Effective Time to Cash Reserve a
number of full and fractional shares (to the third decimal
place) of Prime, all determined and adjusted as provided in
this Agreement. The number of shares of Prime so issued will
have an aggregate net asset value equal to the value of the
Cash Reserve Assets that are represented by shares of Cash
Reserve, the holders of which shall receive shares of Prime,
all determined and adjusted as provided in this Agreement.
1.3. The net asset values of shares of Prime and of Cash Reserve
shall be determined as of the Valuation Time, as defined in
Section 3.
1.4. The net asset value of shares of Prime shall be computed in
the manner set forth in Prime's then-current prospectus under
the Securities Act of 1933, as amended (the "1933 Act"). The
net asset value of the Cash Reserve 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 ACIT and ACMF.
In determining the value of the securities transferred by Cash
Reserve to Prime, each security shall be priced in accordance
with the policies and procedures of ACIT as described in its
then current prospectus and statement of additional
information and adopted by ACIT'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 ACIT, provided that such determination shall be subject to
the approval of ACMF.
2. LIQUIDATING DISTRIBUTION AND TERMINATION OF CASH RESERVE.
Immediately after the Effective Time, Cash Reserve shall distribute in
complete liquidation pro rata to the record holders of its shares at
the Effective Time the shares of Prime to be received by the record
holders of Cash Reserve. In addition, each shareholder of record of
Cash Reserve shall have the right to receive any unpaid dividends or
other distributions that were declared before the Effective Time with
respect to the shares of Cash Reserve that are held by the shareholder
at the Effective Time. In accordance with instructions it receives from
ACMF, ACIT shall record on its books the ownership of shares of Prime
by the record holders of shares of Cash Reserve. All of the issued and
outstanding shares of Cash Reserve 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 Prime, and Cash Reserve'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 Cash Reserve under
federal and state law. After the Effective Time, ACMF shall not conduct
any business with respect to Cash Reserve except in connection with
Cash Reserve's liquidation and dissolution.
3. VALUATION TIME.
Subject to Section 1.4 hereof, the Valuation Time for the
Reorganization shall be as of 4:00 p.m. Eastern Time, 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 Cash Reserve, represents and warrants to,
and agrees with, ACIT 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. Cash Reserve 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. It 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. Cash Reserve 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 Cash Reserve Assets or
properly shown to be due on any return filed by Cash Reserve
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 Cash
Reserve Assets.
4.6. The financial statements of Cash Reserve for the fiscal year
ended October 31, 1997, audited by Deloitte & Touche LLP,
independent auditors, copies of which have been previously
furnished to ACIT, present fairly the financial position of
Cash Reserve as of October 31, 1997 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, Cash Reserve 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
Cash Reserve'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 Cash Reserve's fiscal year end and
for the period from said date to and including the Effective
Time.
4.8. At both the Valuation Time and the Effective Time, there shall
be no known liabilities of Cash Reserve, 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
Cash Reserve which could result in liability on the part of
Cash Reserve.
4.10. Subject to the approval of shareholders, at both the Valuation
Time and the Effective Time, it shall have full right, power
and authority to sell, assign, transfer and deliver the Cash
Reserve Assets and, upon delivery and payment for the Cash
Reserve Assets as contemplated herein, Prime 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 ACIT on Form N-14 relating to the shares of
Prime 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 ACIT 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 Cash Reserve 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 Cash Reserve has any preemptive
right of subscription or purchase in respect of such shares.
5. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF ACIT.
ACIT, on behalf of itself and Prime, represents and warrants to, and
agrees with, ACMF as follows:
5.1. ACIT 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. Prime
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. It 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 ACIT, and represents ACIT'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
ACIT'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. Prime 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 Prime for its fiscal year ended
March 31, 1998, audited by Coopers & Lybrand, independent
auditors, copies of which have been previously furnished to
ACMF, present fairly the financial position of Prime as of
March 31, 1998 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 Prime, 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 ACIT or Prime
that could result in liability on the part of ACIT or Prime.
5.8. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by
ACIT 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 ACIT, 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
ACIT for use in the N-14 Registration Statement.
5.10. The shares of Prime to be issued and delivered to Cash Reserve
for the account of record holders of shares of Cash Reserve
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
ACIT shall have any preemptive right of subscription or
purchase in respect thereto.
6. SHAREHOLDER ACTION ON BEHALF OF CASH RESERVE.
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 Cash Reserve 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 Cash Reserve Assets to
Prime, and the assumption by Prime of the
Cash Reserve Liabilities, in exchange for
shares of Prime, as described in this
Agreement; and
6.1.1.2. The liquidation of Cash Reserve through the
distribution to its record holders of shares
of the shares of Prime 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 Cash Reserve shall constitute the waiver of the application
of any fundamental policy of Cash Reserve 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. ACIT 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 Cash Reserve Assets and the shares of Prime to be
issued pursuant to Section 1 and the liquidation of Cash Reserve
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 Cash Reserve Assets are, for any reason, not
transferred at the Effective Time, ACMF shall cause such Cash Reserve
Assets to be transferred in accordance with this Agreement at the
earliest practicable date thereafter.
9. ACIT'S CONDITIONS.
The obligations of ACIT hereunder with respect to Prime 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 Cash
Reserve, in the manner required by law.
9.2. ACMF shall have duly executed and delivered to ACIT 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 Cash Reserve in and to the Cash Reserve Assets. The Cash
Reserve 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
Cash Reserve since October 31, 1997 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. ACIT shall have received an opinion of counsel acceptable to
ACMF, addressed to ACIT 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 Cash Reserve Assets
hereunder, and the assumption by Prime of the Cash Reserve
Liabilities, in exchange for shares of Prime, and the
distribution of said shares to the shareholders of Cash
Reserve, as provided in this Agreement, will constitute a
reorganization within the meaning of Section 368 of the Code,
and Cash Reserve and Prime 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 Cash Reserve
as a result of such transaction; (iii) no gain or loss will be
recognized by Prime as a result of such transaction; (iv) no
gain or loss will be recognized by the shareholders of Cash
Reserve on the distribution to them by Cash Reserve of shares
of Prime in exchange for their shares of Cash Reserve; (v) the
aggregate basis of Prime shares received by each shareholder
of Cash Reserve will be the same as the aggregate basis of the
shareholder's Cash Reserve shares immediately prior to the
transaction; (vi) the basis of the Cash Reserve Assets to
Prime will be the same as the basis of the Cash Reserve Assets
in the hands of Cash Reserve immediately prior to the
exchange; (vii) a shareholder's holding period for Prime
shares will be determined by including the period for which
the shareholder held the shares of Cash Reserve exchanged
therefor, provided that the shareholder held such shares of
Cash Reserve as a capital asset; and (viii) the holding period
of Prime with respect to the Cash Reserve Assets will include
the period for which the Cash Reserve Assets were held by Cash
Reserve.
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 ACIT, 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 Cash Reserve 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 Cash
Reserve, in the manner required by law.
10.2. All representations and warranties of ACIT 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 Prime since March 31, 1998 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 an opinion of counsel acceptable to
ACMF, addressed to ACIT 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 ACIT, 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
Prime 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 ACIT shall have certified
that ACIT 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 ACIT at the Effective Time confirmations or other
adequate evidence as to the adjusted tax basis of the Cash Reserve
Assets then delivered to Prime 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 ACIT or the Board of Directors of
ACMF, as provided below:
14.1.1. By ACIT if the conditions set forth in Section 9 are
not satisfied as specified 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 ACIT 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 ACIT 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. ACIT LIABILITY.
19.1. The name "American Century Investment Trust" and "Trustees of
American Century Investment Trust" refer respectively to the
trust created and the trustees, as trustees but not
individually or personally, acting from time to time under an
Agreement and Declaration of Trust dated June 16, 1993, 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
ACIT. The obligations of ACIT 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 ACIT personally, but bind only the trust
property, and all persons dealing with any portfolio of ACIT
must look solely to the trust property belonging to such
portfolio for the enforcement of any claims against ACIT.
19.2. Both parties specifically acknowledge and agree that any
liability of ACIT under this Agreement with respect to Prime,
or in connection with the transactions contemplated herein
with respect to Prime, shall be discharged only out of the
assets of Prime and that no other portfolio of ACIT, 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 Cash Reserve, or in
connection with the transactions contemplated herein with respect to
Cash Reserve, shall be discharged only out of the Cash Reserve 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 Investment Trust or American Century Mutual
Funds, Inc.:
Patrick A. Looby
4500 Main Street
Kansas City, Missouri 64111
22. EXPENSES.
Each party represents to the other that its expenses incurred in
connection with the Reorganization 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 above.
AMERICAN CENTURY INVESTMENT TRUST
ATTEST:
- ----------------------------------------- By:----------------------------
AMERICAN CENTURY MUTUAL FUNDS, INC.
ATTEST:
- ----------------------------------------- By:----------------------------