Exhibit h(vi)
October 2, 2006
USAA Mutual Funds Trust
not in its individual capacity but
on behalf of and for the benefit of the series of funds
comprising the Borrower as set forth on SCHEDULE A hereto
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx, President
Ladies and Gentlemen:
This Facility Agreement Letter (this "AGREEMENT") sets forth the terms
and conditions for loans (each a "LOAN" and collectively the "LOANS") which USAA
Capital Corporation ("CAPCO"), agrees to make during the period commencing
October 2, 2006 and ending October 1, 2007 (the "FACILITY PERIOD") to USAA
Mutual Funds Trust , and each investment company which may become a party hereto
pursuant to the terms of this Agreement (each a "BORROWER" and collectively the
"BORROWERS"), each of which is executing this Agreement not in its individual
capacity, but on behalf of and for the benefit of the series of funds comprising
each such Borrower as set forth on SCHEDULE A (as hereafter modified or amended
in accordance with the terms hereof) (each a "Fund" and collectively the
"FUNDS"), under a master revolving credit facility (the "FACILITY"). This
Agreement replaces in its entirety that certain Facility Agreement Letter dated
January 06, 2006, as heretofore amended or modified, between the Borrower and
CAPCO. CAPCO and the Borrower hereby agree as follows:
1. AMOUNT. The aggregate principal amount of the Loans to be advanced
under this Facility shall not exceed, at any one time outstanding, U.S.
$300,000,000 (the "COMMITMENT"). The aggregate principal amount of the Loans
which may be borrowed by a Borrower for the benefit of a particular Fund under
the Facility shall not exceed the percentage (the "BORROWING LIMIT") of the
total assets of such Fund as set forth on SCHEDULE A.
2. PURPOSE AND LIMITATIONS ON BORROWINGS. The Borrower will use the
proceeds of each Loan made to it solely for temporary or emergency purposes of
the Fund for whose benefit it is borrowing in accordance with such Fund's
Borrowing Limit and prospectus in effect at the time of such Loan. Portfolio
securities may not be purchased by a Fund while there is a Loan outstanding
under the Facility for the benefit of such Fund, if the aggregate amount of such
Loan exceeds 5% of the total assets of such Fund. The Borrower will not, and
will not permit any Fund to, directly or indirectly, use any proceeds of any
Loan for any purpose, that would violate any provision of any applicable
statute, regulation, order, or restriction.
3. BORROWING RATE AND MATURITY OF LOANS. CAPCO shall make Loans to a
Borrower and the principal amount of each Loan outstanding from time to time
shall bear interest from the date each such Loan is made to, but excluding the
date of payment in full thereof, at a rate per annum equal to the rate at which
CAPCO obtains funding in the capital markets. Interest on the Loans shall be
calculated on the basis of a year of 360 days and the actual days elapsed but
shall not exceed the highest lawful rate. Each loan will be for an established
number of days agreed upon by the Borrower and CAPCO on or before the date of
such Loan. Notwithstanding the above, all Loans to a Borrower shall be made
available at a rate per annum equal to the rate at which CAPCO would make loans
to affiliates and subsidiaries. Any past due principal and/or accrued interest
shall bear interest at a rate per annum equal to the aggregate of the "FEDERAL
FUNDS RATE" plus 1.50 percent (150 basis points), but not to exceed the highest
lawful rate, from the date of any such payment was due, but excluding the date
of payment in full thereof, and shall be payable on demand.
4. ADVANCES, PAYMENTS, PREPAYMENTS AND READVANCES. Upon the Borrower's
request, and SUBJECT TO the terms and conditions contained herein, CAPCO shall
make Loans to the Borrower on behalf of and for the benefit of its respective
Fund(s) during the Facility Period, and the Borrower may borrow, repay and
reborrow Loans hereunder. The Loans shall be evidenced by a duly executed and
delivered Master Grid Promissory Note in the form of EXHIBIT A (the "NOTE").
Each Loan shall be in an aggregate amount not less than U.S. $100,000 and
increments of U.S. $1,000 in excess thereof. Payment of principal and interest
due with respect to each Loan shall be payable at the maturity of such Loan and
shall be made in funds immediately available to CAPCO prior to 2:00 p.m. San
Antonio, Texas time on the day such payment is due, or as CAPCO shall otherwise
direct from time to time and, SUBJECT TO the terms and conditions hereof, may be
repaid with the proceeds of a new borrowing hereunder. Notwithstanding any
provision of this Agreement to the contrary, all Loans, accrued but unpaid
interest and other amounts payable hereunder shall be due and payable upon
termination of the Facility (whether by acceleration or otherwise).
5. FACILITY FEE. Beginning with the date of this Agreement and until
such time as all Loans have been irrevocably repaid to CAPCO in full, and CAPCO
is no longer obligated to make Loans, each Fund (to be allocated among the Funds
as the Borrower deems appropriate) severally shall pay to CAPCO its allocated
share of a facility fee (the "FACILITY FEE"). The Facility Fee will be the
Borrower's assessed proportionate share of CAPCO's operating expenses related to
obtaining/maintaining CAPCO's funding programs. The expense will be allocated by
CAPCO to the Borrower and to the other CAPCO borrowers (CAPCO affiliates and
subsidiaries) based on the Borrower's Commitment (as it may be reduced pursuant
to SECTION 6) as a percentage of the total amount of borrowings authorized for
all CAPCO borrowers. In no event will the Facility Fee exceed .07 of one percent
(7 basis points) of the amount of the commitment, nor will it exceed the fee
charged any other CAPCO affiliates and subsidiaries under similar loan
arrangements.
6. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. The Borrower on
behalf of the applicable Funds shall have the right upon at least three business
day's prior written notice to CAPCO, to terminate or reduce the unused portion
of the Commitment. Any such reduction of the Commitment shall be in the amount
of U.S. $5,000,000 or any larger integral multiple of U.S. $1,000,000 (EXCEPT
that any reduction may be in the aggregate amount of the unused Commitment).
Accrued fees with respect to the terminated Commitment shall be payable to CAPCO
on the effective date of such termination.
7. MANDATORY TERMINATION COMMITMENT. The Commitment shall automatically
terminate on the last day of the Facility Period and any Loans then outstanding
(TOGETHER WITH accrued interest thereon and any other amounts owing hereunder)
shall be due and payable on such date.
8. COMMITTED FACILITY. CAPCO acknowledges that the Facility is a
committed facility and that CAPCO shall be obligated to make any Loan requested
during the Facility Period under this Agreement, subject to the terms and
conditions hereof; PROVIDED, HOWEVER, that CAPCO shall not be obligated to make
any Loan if this Facility has been terminated by the Borrower, or to a Borrower
on behalf of a proposed borrowing Fund, if at the time of a request for a Loan
by a Borrower (on behalf of such applicable borrowing Fund) there exists any
Event of Default or condition which, with the passage of time or giving of
notice, or both, would constitute or become an Event of Default with respect to
such Fund.
9. LOAN REQUESTS. Each request for a Loan (each a "BORROWING NOTICE")
shall be in writing by the Borrower, EXCEPT that the Borrower may make an oral
request (each an "ORAL REQUEST") PROVIDED THAT each Oral Request shall be
followed by a written Borrowing Notice within one business day. Each Borrowing
Notice shall specify the following terms ("TERMS") of the requested Loan: (i)
the
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date on which such Loan is to be disbursed, (ii) the principal amount of such
Loan, (iii) the Borrower which is borrowing such Loan, (iv) the Fund(s) for
whose benefit the Loan is being borrowed and the amount of the Loan which is for
the benefit of each such Fund, and (v) the requested maturity date of the Loan.
Each Borrowing Notice shall also set forth the total assets of each Fund for
whose benefit a portion of the Loan is being borrowed as of the close of
business on the day immediately preceding the date of such Borrowing Notice.
Borrowing notices shall be delivered to CAPCO by 9:00 a.m. San Antonio, Texas
time on the day the Loan is requested to be made.
Each Borrowing Notice shall constitute a representation to CAPCO by the Borrower
on behalf of the proposed borrowing Fund(s) of the Borrower that all of the
representations and warranties made by the Borrower on behalf of the applicable
borrowing Fund(s) of the Borrower in SECTION 12 are true and correct as of such
date and that no Event of Default or other condition which with the passage of
time or giving of notice, or both, would result in an Event of Default, has
occurred or is occurring with respect to such borrowing Fund(s).
10. CONFIRMATIONS; CREDITING OF FUNDS; RELIANCE BY CAPCO. Upon receipt
by CAPCO of a Borrowing Notice:
(a) CAPCO shall send the Borrower written confirmation of the
Terms of such Loan via facsimile or telecopy, as soon as reasonably practicable;
PROVIDED, HOWEVER, that the failure to do so shall not affect the obligation of
the Borrower;
(b) CAPCO shall make such Loan in accordance with the Terms by
transfer of the Loan amount in immediately available funds, to the account of
the Borrower as specified in EXHIBIT B or as the Borrower shall otherwise
specify to CAPCO in a writing signed by an Authorized Individual (as defined in
SECTION 11) of the Borrower and sent to CAPCO via facsimile or telecopy; and
(c) CAPCO shall make appropriate entries on the Note or the
records of CAPCO to reflect the Terms of the Loan; PROVIDED, HOWEVER, that the
failure to do so shall not affect the obligation of any borrowing Fund.
CAPCO shall be entitled to rely upon and act hereunder pursuant to any Oral
Request, which it reasonably believes to have been made by the Borrower through
an Authorized Individual. If the Borrower believes that the confirmation
relating to any Loan contains any error or discrepancy from the applicable Oral
Request, the Borrower will promptly notify CAPCO thereof.
11. BORROWING RESOLUTIONS AND OFFICERS' CERTIFICATES. Prior to the
making of any Loan pursuant to this Agreement, the Borrower shall have delivered
to CAPCO (a) the duly executed Note, (b) resolution of the Borrower's Board of
Trustees authorizing the Borrower to execute, deliver and perform this Agreement
and the Note on behalf of the applicable Funds, (c) an Officer's Certificate in
substantially the form set forth in EXHIBIT D, authorizing certain individuals
("AUTHORIZED INDIVIDUALS"), to take on behalf of the Borrower (on behalf of the
applicable Funds) actions contemplated by this Agreement and the Note, and (d)
the opinion of counsel to USAA Investment Management Company, manager and
advisor to the Borrower, with respect to such matters as CAPCO may reasonably
request.
12. REPRESENTATIONS AND WARRANTIES. In order to induce CAPCO to enter
into this Agreement and to make the Loans provided for hereunder, the Borrower
hereby severally, makes on behalf of each of its respective series of Funds
comprising the Borrower the following representations and warranties, which
shall survive the execution and delivery hereof and of the Note:
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(a) ORGANIZATION, STANDING, ETC. The Borrower is a trust duly
organized, validly existing, and in good standing under applicable state laws
and has all requisite trust power and authority to carry on its respective
businesses as now conducted and proposed to be conducted, to enter into this
Agreement and all other documents to be executed by it in connection with the
transactions contemplated hereby, to issue and borrow under the Note and to
carry out the terms hereof and thereof;
(b) FINANCIAL INFORMATION; DISCLOSURE, ETC. The Borrower has
furnished CAPCO with certain financial statements of the Borrower with respect
to itself and the applicable Fund(s), all of which such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis and fairly present the financial position and
results of operations of the Borrower and the applicable Funds on the dates and
for the periods indicated. Neither this Agreement nor any financial statements,
reports or other documents or certificates furnished to CAPCO by the Borrower on
behalf of the applicable Fund(s) in connection with the transactions
contemplated hereby contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements contained herein or
therein in light of the circumstances when made not misleading;
(c) AUTHORIZATION; COMPLIANCE WITH OTHER INSTRUMENTS. The
execution, delivery and performance of this Agreement and the Note, and
borrowings hereunder, have been duly authorized by all necessary trust action of
the Borrower and will not result in any violation of or be in conflict with or
constitute a default under any term of the charter, by-laws or trust agreement,
as applicable, of the Borrower or of any borrowing restrictions or prospectus or
statement of additional information of the Borrower or the applicable Fund(s),
or of any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to the Borrower on behalf of the applicable
Fund(s), or result in the creation of any mortgage, lien, charge or encumbrance
upon any of the properties or assets of the applicable Fund(s) pursuant to any
such term. The Borrower is not in violation of any term of its respective
charter, by-laws or trust agreement, as applicable, and the Borrower and the
applicable Fund(s) are not in violation of any material term of any agreement or
instrument to which they are a party, or to the best of the Borrower's
knowledge, of any judgment, decree, order, statute, rule or governmental
regulation applicable to them;
(d) SEC COMPLIANCE. The Borrower and the applicable Fund(s)
are in compliance in all material respects with all federal and state securities
or similar laws and regulations, including all material rules, regulations and
administrative orders of the Securities and Exchange Commission (the "SEC") and
applicable Blue Sky authorities. The Borrower and the applicable Fund(s) are in
compliance in all material respects with all of the provisions of the Investment
Company Act of 1940, and the Borrower has filed all reports with the SEC that
are required of it or the applicable Fund(s);
(e) LITIGATION. There is no action, suit or proceeding pending
or, to the best of the Borrower's knowledge, threatened against the Borrower or
the applicable Fund(s) in any court or before any arbitrator or governmental
body which seeks to restrain any of the transactions contemplated by this
Agreement or which could reasonably be expected to have a material adverse
effect on the assets or business operations of the Borrower or the applicable
Fund(s) or the ability of such applicable Fund(s) to pay and perform their
respective obligations hereunder and under the Notes; and
(f) FUNDS' OBLIGATION FOR REPAYMENT. The assets of each Fund
for whose benefit Loans are borrowed by the Borrower are SUBJECT TO and liable
for such Loans. CAPCO may only seek repayment from the assets of the Fund of the
Borrower that obtained a Loan, and may not seek repayment of that Loan from the
assets of any other Fund of the Borrower.
13. AFFIRMATIVE COVENANTS OF THE BORROWER. Until such time as all
amounts of principal,
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interest and other sums due to CAPCO by the Borrower pursuant to any Loan made
to the Borrower for the benefit of the applicable Fund(s) is irrevocably paid in
full, and until CAPCO is no longer obligated to make Loans to the Borrower for
the benefit of the applicable Fund(s), the Borrower (on behalf of its respective
Fund(s)) severally agrees:
(a) To deliver to CAPCO as soon as possible and in any event
within seventy-five (75) days after the end of each fiscal year of the Borrower
and the applicable Fund(s), Statements of Assets and Liabilities, Statements of
Operations and Statements of Changes in Net Assets of each applicable Fund for
such fiscal year, as set forth in each applicable Fund's Annual Report to
shareholders TOGETHER WITH a calculation of the maximum amount which each
applicable Fund could borrow under its Borrowing Limit as of the end of such
fiscal year;
(b) To deliver to CAPCO as soon as available and in any event
within seventy-five (75) days after the end of each semiannual period of the
Borrower and the applicable Fund(s), Statements of Assets and Liabilities,
Statement of Operations and Statements of Changes in Net Assets of each
applicable Fund as of the end of such semiannual period, as set forth in each
applicable Fund's Semiannual Report to shareholders, TOGETHER WITH a calculation
of the maximum amount which each applicable Fund could borrow under its
Borrowing Limit at the end of such semiannual period;
(c) To deliver to CAPCO prompt notice of the occurrence of any
event or condition which constitutes, or is likely to result in, a change in the
Borrower or any applicable Fund which could reasonably be expected to materially
adversely affect the ability of any applicable Fund to promptly repay
outstanding Loans made for its benefit or the ability of the Borrower or the
applicable Fund(s) to perform their respective obligations under this Agreement
or the Note;
(d) To do, or cause to be done, all things necessary to
preserve and keep in full force and effect the trust existence of the Borrower
and all permits, rights and privileges necessary for the conduct of its
businesses and to comply in all material respects with all applicable laws,
regulations and orders, including without limitation, all rules and regulations
promulgated by the SEC;
(e) To promptly notify CAPCO of any litigation, threatened
legal proceeding or investigation by a governmental authority which could
reasonably be expected to materially affect the ability of any applicable Fund
to promptly repay the outstanding Loans made for its benefit hereunder or the
ability of the Borrower or the applicable Fund(s) to otherwise perform their
respective obligations hereunder;
(f) In the event a Loan for the benefit of a particular Fund
is not repaid in full within 10 days after the date it is borrowed, and until
such Loan is repaid in full, to deliver to CAPCO, within two business days after
each Friday occurring after such 10th day, a statement setting forth the total
assets of such Fund as of the close of business on each such Friday; and
(g) Upon the request of CAPCO, which may be made by CAPCO from
time to time in the event CAPCO in good faith believes that there has been a
material adverse change in the capital markets generally, to deliver to CAPCO,
within two business days after any such request, a statement setting forth the
total assets of each Fund for whose benefit a Loan is outstanding on the date of
such request.
14. NEGATIVE COVENANTS OF THE BORROWER. Until such time as all amounts
of principal, interest and other sums due to CAPCO by the Borrower pursuant to
any Loan made to the Borrower for the benefit of the applicable Fund(s) is
irrevocably paid in full, and until CAPCO is no longer obligated to
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make Loans to the Borrower for the benefit of the applicable Fund, the Borrower
(on behalf of its respective Fund(s)) severally agrees:
(a) Unless CAPCO has breached its obligations to lend
hereunder or becomes insolvent or the subject of a receivership proceeding, not
to incur any indebtedness for borrowed money (other than overdrafts incurred at
the custodian of the Funds from time to time in the ordinary course of business)
EXCEPT the Loans, without the prior written consent of CAPCO, which consent will
not be unreasonably withheld; and
(b) Not to dissolve or terminate its existence, or merge or
consolidate with any other person or entity, or sell all or substantially all of
its assets in a single transaction or series of related transactions (OTHER THAN
assets consisting of margin stock), each without the prior written consent of
CAPCO, which consent will not be unreasonably withheld; PROVIDED THAT a Borrower
or Fund may without such consent merge, consolidate with, or purchase
substantially all of the assets of, or sell substantially all of its assets to,
an affiliated investment company or series thereof, as provided for in Rule
17a-8 under the Investment Company Act of 1940.
15. EVENTS OF DEFAULT. If any of the following events (each an "EVENT
OF DEFAULT") shall occur (it being understood that an Event of Default with
respect to one Fund shall not constitute an Event of Default with respect to any
other Fund):
(a) A Fund shall default in the payment of principal or
interest on any Loan or any other fee due hereunder for a period of five days
after the same becomes due and payable, whether at maturity or, with respect to
any Facility Fee, at a date fixed for the payment thereof;
(b) A Fund shall default in the performance of or compliance
with any term contained in SECTION 13 and such default shall not have been
remedied within 30 days after written notice thereof shall have been given to
the Borrower on behalf of such Fund by CAPCO;
(c) A Fund shall default in the performance of or compliance
with any term contained in SECTION 14;
(d) A Fund shall default in the performance of or compliance
with any other term contained herein and such default shall not have been
remedied within 30 days after written notice thereof shall have been given to
the Borrower on behalf of such Fund by CAPCO;
(e) Any representation or warranty made by or on behalf of a
Fund herein or pursuant hereto shall prove to have been false or incorrect in
any material respect when made; or
(f) USAA Investment Management Company or any successor
manager or investment adviser (PROVIDED THAT such successor manager or
investment advisor is a wholly-owned subsidiary of United Services Automobile
Association and/or CAPCO) shall cease to be the manager and investment advisor
of a Fund; PROVIDED THAT USAA Investment Management Company (or its successor)
shall be permitted to hire one or more of the existing subadvisers listed on
SCHEDULE B as subadvisers for any Fund and may add new subadvisers as provided
in SECTION 16(B);
then, in any event, and at any time thereafter, if any Event of Default shall be
continuing, CAPCO may by written notice to the Borrower (i) terminate its
commitment to make any Loan hereunder to the Borrower with respect to such Fund,
whereupon said commitment shall forthwith terminate without any other notice of
any kind and (ii) declare the principal and interest in respect of any
outstanding Loans with
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respect to such Fund, and all other amounts due hereunder with respect to such
Fund, to be immediately due and payable whereupon the principal and interest in
respect thereof and all other amounts due hereunder shall become forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are expressly waived by the Borrower on behalf of the applicable
Funds.
16. NEW BORROWERS; NEW FUNDS; NEW SUBADVISERS
(a) So long as no Event of Default or condition which, with
the passage of time or the giving of notice, or both, would constitute
or become an Event of Default has occurred and is continuing, and with
the prior consent of CAPCO, which consent will not be unreasonably
withheld:
(i) Any investment company that becomes part of the
same "GROUP OF INVESTMENT COMPANIES" (as that term is defined in Rule
11a-3 under the Investment Company Act of 1940) as the original
Borrower to this Agreement, may, by submitting an amended SCHEDULE A
and EXHIBIT B to this Agreement to CAPCO (which amended SCHEDULE A and
EXHIBIT B shall replace SCHEDULE A and EXHIBIT B which are then a part
of this Agreement) and such other documents as CAPCO may reasonably
request, become a party to this Agreement and may become a "BORROWER"
hereunder; and
(ii) A Borrower may, by submitting an amended
SCHEDULE A and EXHIBIT B to this Agreement to CAPCO (which amended
SCHEDULE A and EXHIBIT B shall replace SCHEDULE A and EXHIBIT B which
are then a part of this Agreement), add additional Funds for whose
benefit the Borrower may borrow Loans. No such amendment of SCHEDULE A
to this Agreement shall amend the Borrowing Limit applicable to any
Fund without the prior consent of CAPCO.
(b) A Borrower may, by submitting an amended SCHEDULE B to
this Agreement to CAPCO (which amended SCHEDULE B shall replace the
SCHEDULE B which is then a part of this Agreement), add new
subadvisers, which are not currently subadvising any other Fund.
17. LIMITED RECOURSE. CAPCO agrees (a) that any claim, liability, or
obligation arising hereunder or under the Note whether on account of the
principal of any Loan, interest thereon, or any other amount due hereunder or
thereunder shall be satisfied only from the assets of the specific Fund for
whose benefit a Loan is borrowed and in any event in an amount not to exceed the
outstanding principal amount of any Loan borrowed for such Fund's benefit,
TOGETHER WITH accrued and unpaid interest due and owing thereon, and such Fund's
share of any other amount due hereunder and under the Note (as determined in
accordance with the provisions hereof) and (b) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Note with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Note (as determined in accordance with the provisions
hereof).
18. REMEDIES ON DEFAULT. In case any one or more Events of Default
shall occur and be continuing, CAPCO may proceed to protect and enforce its
rights by an action at law, suit in equity or other appropriate proceedings,
against the Borrower on behalf of the applicable defaulting Fund(s), as the case
may be. In the case of a default in the payment of any principal or interest on
any Loan or in the payment of any fee due hereunder, the relevant Fund(s) (to be
allocated among such Funds as the Borrower deems appropriate) severally shall
pay to CAPCO such further amount as shall be sufficient to cover the cost and
expense of collection, including, without limitation, reasonable attorney's fees
and expenses from the relevant Fund.
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19. NO WAIVER OF REMEDIES. No course of dealing or failure or delay on
the part of CAPCO in exercising any right or remedy hereunder or under the Note
shall constitute a waiver of any right or remedy hereunder or under the Note,
nor shall any partial exercise of any right or remedy hereunder or under the
Note preclude any further exercise thereof or the exercise of any other right or
remedy hereunder or under the Note. Such rights and remedies expressly provided
are cumulative and not exclusive of any rights or remedies which CAPCO would
otherwise have.
20. EXPENSES. Each of the Funds severally shall pay on demand all
reasonable out-of-pocket costs and expenses (including reasonable attorney's
fees and expenses) incurred by CAPCO in connection with the collection and any
other enforcement proceedings of or regarding this Agreement, any Loan or the
Note against such Fund.
21. BENEFIT OF AGREEMENT. This Agreement and the Note shall be binding
upon and inure for the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; PROVIDED THAT no party to this
Agreement or the Note may assign any of its rights hereunder or thereunder
without the prior written consent of the other parties.
22. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES
(a) GENERAL. Unless otherwise expressly provided herein, all notices,
requests and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed, or delivered to the applicable address or facsimile number, or (subject
to SUBSECTION (C) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
(i) if to the Borrower, to the address, facsimile number,
electronic mail address, or telephone number specified for such Person
on EXHIBIT B or to such other address, facsimile number, electronic
mail address, or telephone number as shall be designated by such party
in a notice to the other parties; and
(ii) if to CAPCO, to the address, facsimile number, electronic
mail address, or telephone number specified on EXHIBIT C or to such
other address, facsimile number, electronic mail address, or telephone
number as shall be designated by such party in a notice to the other
parties.
All such notices and other communications shall be deemed to be given or made
upon the EARLIER to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by certified mail, when signed for
by or on behalf of the relevant party hereto; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
SUBSECTION (C) below), when delivered. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. This Agreement
and all other documents to be executed by it in connection with the transactions
contemplated hereby may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually-signed originals and shall be
binding on the Borrower and CAPCO. CAPCO may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
PROVIDED HOWEVER, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
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(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
drafts of loan documents and financial statements and other information as
provided in Section 13, and to distribute this Agreement and the other documents
to be executed in connection herewith for execution by the parties thereto, and
may not be used for any other purpose.
23. MODIFICATIONS. No provision of this Agreement or the Note may be
waived, modified or discharged EXCEPT by mutual written agreement of all
parties. THIS WRITTEN LOAN AGREEMENT AND THE NOTE REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
24. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the state of StateplaceTexas
without regard to the choice of law provisions thereof. Chapter 346 of the Texas
Finance Code shall not apply to this Agreement or the Loans made hereunder.
25. TRUST DISCLAIMER. Neither the shareholders, trustees, officers,
employees and other agents of the Borrower or Fund shall be personally bound by
or liable for any indebtedness, liability or obligation hereunder or under the
Note nor shall resort be had to their private property for the satisfaction of
any obligation or claim hereunder.
26. PUBLICITY. Neither CAPCO nor the Borrower will use any name,
trademark, or trade name of the other without that other party's prior written
consent.
9
If this letter correctly reflects your agreement with us, please execute both
copies hereof and return one to us, whereupon this Agreement shall be binding
upon the Borrower (not in its individual capacity, but on behalf of their
respective Funds listed on SCHEDULE A hereto) and CAPCO.
Sincerely,
USAA CAPITAL CORPORATION
By: /S/ XXXXX X. XXXXXXXXX
______________________________
Xxxxx X. XxXxxxxxx
Senior Vice President-Treasurer
10
Signature to the Facility Agreement Letter dated October 2, 2006, between USAA
Mutual Funds Trust (not in its individual capacity, but on behalf of and for the
benefit of the series of funds set forth on SCHEDULE A hereto) and CAPCO.
AGREED AND ACCEPTED
USAA MUTUAL FUNDS TRUST
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
______________________________
Xxxxxxxxxxx X. Xxxxx, President
11
SCHEDULE A TO FACILITY AGREEMENT LETTER
FUNDS FOR WHOSE BENEFIT LOANS CAN BE BORROWED
UNDER FACILITY AGREEMENT LETTER AND BORROWING LIMIT
BORROWER FUNDS MAXIMUM PERCENT OF THE TOTAL ASSETS
WHICH CAN BE BORROWED UNDER
FACILITY AGREEMENT WITH CAPCO
USAA Mutual Funds Trust . USAA Aggressive Growth 5% of Total Assets
USAA Growth & Income "
USAA Income Stock "
USAA Short-Term Bond "
USAA Money Market "
USAA Growth "
USAA Income "
USAA S&P 500 Index (Member and Reward classes) "
USAA Science & Technology "
USAA First Start Growth "
USAA High Yield Opportunities "
USAA Intermediate-Term Bond "
USAA Small Cap Stock "
USAA Extended Market Index "
USAA Nasdaq-100 Index "
USAA Capital Growth "
USAA Value "
USAA Cornerstone Strategy "
USAA Precious Metals and Minerals "
USAA International "
USAA World Growth "
USAA GNMA Trust "
USAA Treasury Money Market Trust "
USAA Emerging Markets "
USAA Growth and Tax Strategy "
USAA Balanced Strategy "
USAA Total Return Strategy "
USAA Tax Exempt Long-Term "
USAA Tax Exempt Intermediate-Term "
USAA Tax Exempt Short-Term "
USAA Tax Exempt Money Market "
USAA California Bond "
USAA California Money Market "
USAA New York Bond "
USAA New York Money Market "
USAA Xxxxxxxx Xxxx "
USAA Virginia Money Market "
12
USAA Florida Tax-Free Income "
USAA Florida Tax-Free Money Market "
Schedule A
13
SCHEDULE B TO FACILITY AGREEMENT LETTER
PERMITTED SUBADVISERS
Barrow, Hanley, Xxxxxxxxx & Xxxxxxx, Inc.
Batterymarch Financial Management, Inc.
The Boston Company Asset Management, LLC
Credit Suisse Asset Management, LLC
Deutsche Asset Management
Grantham, Mayo, Van Otterloo & Co. LLC
Xxxxxx, Xxxxxx & Company, X.X.
Xxxxxxx Capital Management, LLC
Xxxxxxx Xxxxx Quantitative Advisers
MFS Investment Management
Northern Trust Investments, N.A.
OFI Institutional Asset Management, Inc.
Wellington Management Company, LLP
Schedule B
14
EXHIBIT A TO FACILITY AGREEMENT LETTER
MASTER GRID PROMISSORY NOTE
U.S. $300,000,000 Dated: October 2, 2006
FOR VALUE RECEIVED, the undersigned ( the "BORROWER") , not in its
individual capacity, but on behalf of and for the benefit of the series of funds
comprising the Borrower as listed on SCHEDULE A to the Agreement as defined
below (each a "FUND" and collectively the "FUNDS") promises to pay to the order
of USAA Capital Corporation ("CAPCO") at CAPCO's office located at 0000
Xxxxxxxxxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000, in lawful money of the United
States of America, in immediately available funds, the principal amount of all
Loans made by CAPCO to the Borrower for the benefit of the applicable Funds
under the Facility Agreement Letter dated October 2, 2006 (as amended or
modified, the "AGREEMENT"), between the Borrower and CAPCO, together with
interest thereon at the rate or rates set forth in the Agreement. All payments
of interest and principal outstanding shall be made in accordance with the terms
of the Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Agreement. Terms not defined in this Note shall be as set forth
in the Agreement.
CAPCO is authorized to endorse the particulars of each Loan evidenced
hereby on the attached Schedule and to attach additional Schedules as necessary,
provided that the failure of CAPCO to do so or to do so accurately shall not
affect the obligations of the Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
The Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. The Borrower agrees to pay all reasonable costs of
collection, including reasonable attorney's fees in connection with the
enforcement of this Note.
CAPCO hereby agrees (i) that any claim, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit a
Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, TOGETHER WITH
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other
agents of the Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
This Note shall be governed by the laws of the state of Texas.
Exhibit A
15
Signature to the Master Grid Promissory Note dated October 2, 2006, by USAA
Mutual Funds Trust (not in its individual capacity, but on behalf of and for the
benefit of the series of funds set forth on SCHEDULE A to the Agreement) payable
to CAPCO.
USAA MUTUAL FUNDS TRUST
on behalf of and
for the benefit of
its series of
Funds as set forth
on SCHEDULE A to
the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
______________________________
Xxxxxxxxxxx X. Xxxxx, President
Exhibit A
16
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
October 2, 2006, executed by USAA MUTUAL FUNDS TRUST (not in its individual
capacity, but on behalf of and for the benefit of the series of funds comprising
the Borrower) payable to the order of USAA CAPITAL CORPORATION.
================= ============ ============== ==================== ================ =============== ============== ===============
Date of Borrower Amount of Type of Rate and Amount of Date of Other Notation made
Loan and Fund Loan Interest Principal Repayment Expenses by
Rate on Date of Repaid
Borrowing
Exhibit A
17
EXHIBIT B
EXHIBIT B TO FACILITY AGREEMENT LETTER
BORROWER INFORMATION SHEET
: USAA MUTUAL FUNDS TRUST (BORROWER)
ADDRESS FOR NOTICES AND OTHER COMMUNICATIONS TO THE BORROWER:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxxxxx X. Xxxxxxx
Senior Vice President, Fixed Income Investments
USAA Investment Management Company
Telephone: (000) 000-0000
Cellphone: (000) 000-0000
Fax: (000) 000-0000
e-mail: XXXXX.XXXXXXX@XXXX.XXX
Attention: Xxxxxx X. Xxxxx
Vice President, Equity Investments
USAA Investment Management Company
Telephone: (000) 000-0000
Fax: (000) 000-0000
e-mail: XXX.XXXXX@XXXX.XXX
Attention: Xxxxx X. Xxxx
Assistant Vice President,
Senior Financial Officer & Treasurer
USAA Investment Management Company
Telephone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxx.xxxx@xxxx.xxx
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxx X. Xxxx
Assistant Vice President,
Senior Financial Officer & Treasurer
USAA Investment Management Company
Telephone: (000) 000-0000
Fax: (000) 000-0000
e-mail: xxxxx.xxxx@xxxx.xxx
18
INSTRUCTIONS FOR PAYMENTS TO BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
---------- ----------
Exhibit B
19
TO: (PLEASE PLACE BANK NAME, CORRESPONDENT NAME (IF APPLICABLE), CHIPS AND/
OR FED FUNDS ACCOUNT NUMBER BELOW)
USAA MUTUAL FUNDS TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA AGGRESSIVE GROWTH FUND ACCT.# 0000-000-0
USAA GROWTH & INCOME FUND ACCT.# 0000-000-0
USAA INCOME STOCK FUND ACCT.# 0000-000-0
USAA SHORT-TERM BOND FUND ACCT.# 0000-000-0
USAA MONEY MARKET FUND ACCT.# 0000-000-0
USAA GROWTH FUND ACCT.# 0000-000-0
USAA INCOME FUND ACCT.# 0000-000-0
USAA SCIENCE & TECHNOLOGY FUND ACCT.# 0000-000-0
USAA FIRST START GROWTH FUND ACCT.# 0000-000-0
USAA HIGH-YIELD OPPORTUNITIES FUND ACCT.# 0000-000-0
USAA INTERMEDIATE-TERM BOND FUND ACCT.# 0000-000-0
USAA SMALL CAP STOCK FUND ACCT.# 0000-000-0
USAA NASDAQ-100 INDEX FUND ACCT.# 0000-000-0
USAA CAPITAL GROWTH FUND ACCT.# 0000-000-0
USAA VALUE FUND ACCT.# 0000-000-0
USAA CORNERSTONE STRATEGY FUND ACCT.# 0000-000-0
USAA PRECIOUS METALS AND MINERALS FUND ACCT.# 0000-000-0
USAA INTERNATIONAL FUND ACCT.# 0000-000-0
USAA WORLD GROWTH FUND ACCT.# 0000-000-0
USAA GNMA TRUST ACCT.# 0000-000-0
USAA TREASURY MONEY MARKET TRUST ACCT.# 0000-000-0
USAA EMERGING MARKETS FUND ACCT.# 0000-000-0
USAA GROWTH AND TAX STRATEGY FUND ACCT.# 0000-000-0
20
USAA BALANCED STRATEGY FUND ACCT.# 0000-000-0
USAA TOTAL RETURN STRATEGY FUND ACCT.# 0000-000-0
USAA TAX EXEMPT LONG-TERM FUND ACCT.# 0000-000-0
USAA TAX EXEMPT INTERMEDIATE-TERM FUND ACCT.# 0000-000-0
USAA TAX EXEMPT SHORT-TERM FUND ACCT.# 0000-000-0
USAA TAX EXEMPT MONEY MARKET FUND ACCT.# 0000-000-0
USAA CALIFORNIA BOND FUND ACCT.# 0000-000-0
USAA CALIFORNIA MONEY MARKET FUND ACCT.# 0000-000-0
USAA NEW YORK BOND FUND ACCT.# 0000-000-0
USAA NEW YORK MONEY MARKET FUND ACCT.# 0000-000-0
USAA XXXXXXXX XXXX FUND ACCT.# 0000-000-0
USAA VIRGINIA MONEY MARKET FUND ACCT.# 0000-000-0
USAA FLORIDA TAX-FREE INCOME FUND ACCT.# 0000-000-0
USAA FLORIDA TAX-FREE MONEY MARKET FUND ACCT.# 0000-000-0
NORTHERN TRUST COMPANY, XXXXXXX, XXXXXXXX
XXX #000000000
XXXX S&P 500 INDEX FUND-MEMBER SHARES ACCT.# 800138-20
USAA S&P 500 INDEX FUND-REWARD SHARES ACCT.# 800138-30
X X XXXXXX XXXXX BANK, NEW YORK, NY
ABA #000000000
USAA EXTENDED MARKET INDEX FUND ACCT.# P83544
Exhibit B
21
EXHIBIT C
ADDRESS FOR USAA CAPITAL CORPORATION
USAA Capital Corporation
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. XxXxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Exhibit C
22
EXHIBIT D TO FACILITY AGREEMENT LETTER
OFFICER'S CERTIFICATE
Xxxx X. Xxxxxx hereby certifies that he is the duly elected Secretary of USAA
Mutual Funds Trust ( the "BORROWER"), and that he is authorized to execute this
Certificate on behalf of the Borrower. The undersigned hereby further certifies
to the following:
Any one of the President and Chief Executive Officer of United States Automobile
Association ("USAA"), the Executive Vice President-Chief Financial
Officer/Corporate Treasurer of USAA, or the Senior Vice President-Corporate
Finance and Assistant Treasurer of USAA, together with either the Treasurer or
Assistant Treasurer of the Borrower, are duly authorized to act on behalf of the
Funds, by transmitting telephonic, electronic mail, telex, or telecopy
instructions and other communications with regard to borrowings and payments
pursuant to the Facility Agreement dated October 2, 2006, with USAA Capital
Corporation. The signature set opposite the name of each individual below is
that individual's genuine signature.
NAME OFFICE SIGNATURE
---- ------ ---------
Xxxxxx X. Xxxxx President and Chief Executive
Officer of USAA /S/XXXXXX X. XXXXX
---------------------
Xxxxx Xxxxxx, Xx. Executive Vice President-Chief
Financial Officer/Corporate
Treasurer of USAA /S/XXXXX XXXXXX, XX.
---------------------
Xxxxx X. XxXxxxxxx Senior Vice President-Corporate
Finance and Assistant Treasurer
of USAA /S/XXXXX X. XXXXXXXXX
---------------------
Xxxxx X. Xxxx Treasurer of the
Borrower /S/XXXXX X. XXXX
---------------------
Xxxxxxx Xxxxxxx, Xx. Assistant Treasurer of the
Borrower /S/XXXXXXX XXXXXXX, XX.
-----------------------
IN WITNESS WHEREOF, I have executed the Certificate as of this 2nd day of
October, 2006.
/S/XXXX X. XXXXXX
-----------------------
Xxxx X. Xxxxxx
Secretary
I, Xxxxxxxxxxx X. Xxxxx, officer of the Borrower, hereby certify that Xxxx X.
Xxxxxx is, and has been at all times since a date prior to the date of this
Certificate, the duly elected, qualified, and acting Secretary of the Borrower
and that his signature set forth above is his true and correct signature.
Date: October 2, 2006
/S/XXXXXXXXXXX X. XXXXX
-----------------------------
Xxxxxxxxxxx X. Xxxxx, Officer
Exhibit D
23
MASTER GRID PROMISSORY NOTE
U.S. $300,000,000 Dated: October 2, 2006
FOR VALUE RECEIVED, the undersigned ( the "BORROWER") not in its
individual capacity, but on behalf of and for the benefit of the series of funds
comprising the Borrower as listed on SCHEDULE A to the Agreement as defined
below (each a "FUND" and collectively the "FUNDS") promises to pay to the order
of USAA Capital Corporation ("CAPCO") at CAPCO's office located at 0000
Xxxxxxxxxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000, in lawful money of the United
States of America, in immediately available funds, the principal amount of all
Loans made by CAPCO to such Borrower for the benefit of the applicable Funds
under the Facility Agreement Letter dated October 2, 2006 (as amended or
modified, the "AGREEMENT"), between the Borrower and CAPCO, together with
interest thereon at the rate or rates set forth in the Agreement. All payments
of interest and principal outstanding shall be made in accordance with the terms
of the Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Agreement. Terms not defined in this Note shall be as set forth
in the Agreement.
CAPCO is authorized to endorse the particulars of each Loan evidenced
hereby on the attached Schedule and to attach additional Schedules as necessary,
provided that the failure of CAPCO to do so or to do so accurately shall not
affect the obligations of the Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
The Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. The Borrower agrees to pay all reasonable costs of
collection, including reasonable attorney's fees in connection with the
enforcement of this Note.
CAPCO hereby agrees (i) that any claim, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit a
Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, together with
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other
agents of the Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
This Note shall be governed by the laws of the state of Texas.
24
Signature to the Master Grid Promissory Note dated October 2, 2006, by USAA
Mutual Funds Trust (not in its individual capacity, but on behalf of and for the
benefit of the series of funds set forth on SCHEDULE A TO THE AGREEMENT) payable
to CAPCO.
USAA MUTUAL FUNDS TRUST
on behalf of and for
the benefit of its series
of Funds as set forth on
SCHEDULE A to the Agreement
By: /S/XXXXXXXXXXX X. XXXXX
---------------------------
Xxxxxxxxxxx X. Xxxxx, President
25
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
October 2, 2006, executed by USAA MUTUAL FUNDS TRUST (not in its individual
capacity, but on behalf of and for the benefit of the series of funds comprising
the Borrower) payable to the order of USAA CAPITAL CORPORATION.
================= ============ ============== ==================== ================ =============== ============== ===============
Date of Loan Borrower Amount of Type of Rate and Amount of Date of Other Notation made
and Fund Loan Interest Principal Repayment Expenses by
Rate on Date of Repaid
Borrowing
----------------- ------------ -------------- -------------------- ---------------- --------------- -------------- ---------------
----------------- ------------ -------------- -------------------- ---------------- --------------- -------------- ---------------
26
