Exhibit h(iii)
January 06, 2006
USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc.,
USAA State Tax-Free Trust, and
USAA Life Investment Trust, not in their individual capacities but
on behalf of and for the benefit of the series of funds comprising
each such Borrower as set forth on SCHEDULE A hereto
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx, President
Xxxxxx 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
January 06, 2006 and ending January 05, 2007 (the "FACILITY PERIOD") to USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment 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 7, 2005, as heretofore amended or modified,
between the Borrowers and CAPCO. CAPCO and the Borrowers 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. Each 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 Borrowers 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
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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 applicable 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 each
Borrower's request, and SUBJECT TO the terms and conditions contained herein,
CAPCO shall make Loans to each Borrower on behalf of and for the benefit of its
respective Fund(s) during the Facility Period, and each 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 Borrowers deem appropriate) severally shall pay to CAPCO its
allocated share of a facility fee (the "FACILITY FEE"). The Facility Fee will be
the Borrowers' 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 Borrowers and to the other CAPCO borrowers (CAPCO
affiliates and subsidiaries) based on the Borrowers' Commitment (as it may be
reduced pursuant to SECTION 6) as a percentage of the total amount of borrowing
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 Borrowers
on behalf of the applicable Funds shall have the right upon at least three
business days 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 Borrowers, or to a Borrower
on
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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 applicable Borrower, EXCEPT that such
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 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
applicable Borrower on behalf of the proposed borrowing Fund(s) of such Borrower
that all of the representations and warranties made by such Borrower on behalf
of the applicable borrowing Fund(s) of such 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 applicable 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 such 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 applicable Borrower as specified in EXHIBIT B or as such Borrower
shall otherwise specify to CAPCO in a writing signed by an Authorized Individual
(as defined in SECTION 11) of such 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 applicable
Borrower through an Authorized Individual. If any Borrower believes that the
confirmation relating to any Loan contains any error or discrepancy from the
applicable Oral Request, such Borrower will promptly notify CAPCO thereof.
11. BORROWING RESOLUTIONS AND OFFICERS' CERTIFICATES. Prior to
the making of any Loan pursuant to this Agreement, the Borrowers shall have
delivered to CAPCO (a) the duly executed Note, (b) resolutions of each
Borrower's Board of Directors/Trustees authorizing each 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
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INDIVIDUALS"), to take on behalf of each 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
Borrowers, 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, each
Borrower hereby severally, makes on behalf of each of its respective series of
Funds comprising such Borrower the following representations and warranties,
which shall survive the execution and delivery hereof and of the Note:
(a) ORGANIZATION, STANDING, ETC. Such Borrower is a
corporation or trust duly organized, validly existing, and in good standing
under applicable state laws and has all requisite corporate or 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. Such Borrower
has furnished CAPCO with certain financial statements of such 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 such 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 such 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 corporate or
trust action of such 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 such Borrower or of any borrowing
restrictions or prospectus or statement of additional information of such
Borrower or the applicable Fund(s), or of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
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. Such Borrower is not in
violation of any term of its respective charter, by-laws or trust agreement, as
applicable, and such 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 such Borrower's knowledge, of any judgment, decree, order,
statute, rule or governmental regulation applicable to them;
(d) SEC COMPLIANCE. Such 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. Such 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 such 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
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each Borrower's knowledge, threatened against such 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 such 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 applicable Borrower are SUBJECT
TO and liable for such Loans. CAPCO may only seek repayment from the assets of
the Fund of a Borrower that obtained a Loan, and may not seek repayment of that
Loan from the assets of any other Fund of that Borrower.
13. AFFIRMATIVE COVENANTS OF THE BORROWERS. Until such time as all
amounts of principal, interest and other sums due to CAPCO by a Borrower
pursuant to any Loan made to such 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 such Borrower for the benefit of the applicable Fund(s), such
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 such
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
such 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 such 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 such 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 corporate or trust existence of
such 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 such 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
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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 BORROWERS. Until such time as all
amounts of principal, interest and other sums due to CAPCO by a Borrower
pursuant to any Loan made to such 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 such Borrower for the benefit of the applicable Fund, such
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 applicable 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 applicable 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
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(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 applicable Borrower (i) terminate
its commitment to make any Loan hereunder to such 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 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 Borrowers 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
Borrowers 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 such 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
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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 applicable 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 Borrowers deem 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.
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 Borrowers, 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
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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 all Borrowers and the Bank. The Bank 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.
(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 Texas
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 any 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 Borrowers will use any
name, trademark, or trade name of the other without that other party's prior
written consent.
1505406v1
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 Borrowers (not in their 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
Signature to the Facility Agreement Letter dated January 6, 2006, between USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (not in their individual
capacities, 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 FUND, INC.,
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
USAA INVESTMENT 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
USAA TAX EXEMPT FUND, INC.,
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
USAA STATE TAX-FREE 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
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXX X. XXXXX
--------------------------------
Xxxxxx X. Xxxxx, President
1505406v1
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 Fund, Inc. 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 Investment Trust 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 Fund, Inc. USAA Long-Term "
USAA Intermediate-Term "
USAA 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 "
USAA State Tax-Free Trust USAA Florida Tax-Free Income "
USAA Florida Tax-Free Money Market "
USAA Life Investment Trust USAA Life Income "
USAA Life Growth and Income "
USAA Life World Growth "
USAA Life Diversified Assets "
USAA Life Aggressive Growth "
1505406v1
Schedule A
SCHEDULE B TO FACILITY AGREEMENT LETTER
PERMITTED SUBADVISERS
Barrow, Hanley, Xxxxxxxxx & Xxxxxxx, Inc.
Batterymarch Financial Management, Inc.
The Boston Company Asset Management, LLC
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
1505406v1
Schedule B
EXHIBIT A TO FACILITY AGREEMENT LETTER
MASTER GRID PROMISSORY NOTE
U.S. $300,000,000 Dated: January 06, 2006
FOR VALUE RECEIVED, each of the undersigned (each a "BORROWER" and
collectively the "BORROWERS"), severally and not jointly and not in their
individual capacities, but on behalf of and for the benefit of the series of
funds comprising each such 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 January 06, 2006 (as amended or
modified, the "AGREEMENT"), among the Borrowers 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 any Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
Each Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. Each 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 any 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
1505406v1
Signature to the Master Grid Promissory Note dated January 06, 2006, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust (not in their individual
capacities, 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 FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By:
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By:
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By:
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By:
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By:
-------------------------------
Xxxxxx X. Xxxxx, President
Exhibit A
1505406v1
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 06, 2006, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST and
USAA LIFE INVESTMENT TRUST (not in their individual capacity, but on behalf of
and for the benefit of the series of funds comprising each such Borrower)
payable to the order of USAA CAPITAL CORPORATION.
[GRID]
Date of
Loan
Borrower
and Fund
Amount of
Loan
Type of Rate and
Interest
Rate on Date of
Borrowing
Amount of
Principal
Repaid
Date of
Repayment
Other
Expenses
Notation made
by
Exhibit A
1505406v1
EXHIBIT B
EXHIBIT B TO FACILITY AGREEMENT LETTER
BORROWER INFORMATION SHEET
BORROWERS: USAA MUTUAL FUND, INC., USAA INVESTMENT TRUST, USAA
TAX EXEMPT FUND, INC. and USAA STATE TAX-FREE TRUST
ADDRESS FOR NOTICES AND OTHER COMMUNICATIONS TO THESE BORROWERS:
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
Telecopy: (000) 000-0000
e-mail: XXXXX.XXXXXXX@XXXX.XXX
Attention: Xxxxxx X. Xxxxxx
Vice President, Equity Investments
USAA Investment Management Company
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: XXXXXX.XXXXXX@XXXX.XXX
Attention: Xxxxx X. Xxxx
Assistant Vice President,
Senior Financial Officer & Treasurer
USAA Investment Management Company
Telephone: (000) 000-0000
Telecopy: 498-7819
e-mail: xxxxx.xxxx@xxxx.xxx
ADDRESS FOR BORROWING AND PAYMENTS:
1505406v1
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
Telecopy: 498-7819
e-mail: xxxxx.xxxx@xxxx.xxx
BORROWERS: USAA LIFE INVESTMENT TRUST
1505406v1
ADDRESS FOR NOTICES AND OTHER COMMUICATIONS TO THIS BORROWER:
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
Telecopy: 498-7819
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
Telecopy: 498-7819
e-mail: xxxxx.xxxx@xxxx.xxx
INSTRUCTIONS FOR PAYMENTS TO BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
---------- ----------
Exhibit B
1505406v1
TO: (PLEASE PLACE BANK NAME, CORRESPONDENT NAME (IF APPLICABLE), CHIPS AND/OR
FED FUNDS ACCOUNT NUMBER BELOW)
USAA MUTUAL FUND, INC.
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 HIGHYIELD 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
NORTHERN TRUST COMPANY, XXXXXXX, XXXXXXXX
XXX #000000000
XXXX S&P 500 INDEX FUND ACCT.#2616882
X X XXXXXX CHASE BANK, NEW YORK, NY ABA #000000000
USAA EXTENDED MARKET INDEX FUND ACCT.#P83544
Exhibit B
1505406v1
USAA INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
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
USAA BALANCED STRATEGY FUND ACCT.# 0000-000-0
USAA TOTAL RETURN STRATEGY FUND ACCT.# 0000-000-0
USAA TAX EXEMPT FUND, INC.
State Street Bank and Trust Company, Xxxxxx, Xxxxxxxxxxxxx XXX #000000000
XXXX LONG-TERM FUND ACCT.# 0000-000-0
USAA INTERMEDIATE-TERM FUND ACCT.# 0000-000-0
USAA 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
Exhibit B
1505406v1
USAA STATE TAX-FREE TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA FLORIDA TAX-FREE INCOME FUND ACCT.# 0000-000-0
USAA FLORIDA TAX-FREE MONEY MARKET FUND ACCT.# 0000-000-0
USAA LIFE INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA LIFE INCOME FUND ACCT.# 0000-000-0
USAA LIFE GROWTH & INCOME FUND ACCT.# 0000-000-0
USAA LIFE WORLD GROWTH FUND ACCT.# 0000-000-0
USAA LIFE DIVERSIFIED ASSETS FUND ACCT.# 0000-000-0
USAA LIFE AGGRESSIVE GROWTH FUND ACCT.# 0000-000-0
Exhibit B
1505406v1
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
1505406v1
EXHIBIT D TO FACILITY AGREEMENT LETTER
OFFICER'S CERTIFICATE
Xxxx X. Xxxxxx hereby certifies that he is the duly elected Secretary of USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (each a "BORROWER" and
collectively the "BORROWERS"), and that he is authorized to execute this
Certificate on behalf of the Borrowers. The undersigned hereby further certifies
to the following:
Any one of the Chairman 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 Borrowers, 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 January 6, 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 Chairman and Chief Executive
Officer of USAA _____________________
Xxxxx Xxxxxx, Xx. Executive Vice President-Chief
Financial Officer/Corporate
Treasurer of USAA ______________________
Xxxxx X. XxXxxxxxx Senior Vice President-Corporate
Finance and Assistant Treasurer
of USAA ______________________
Xxxxx X. Xxxx Treasurer of the Borrowers ______________________
Xxxxxxx Xxxxxxx, Xx. Assistant Treasurer of the
Borrowers ______________________
IN WITNESS WHEREOF, I have executed the Certificate as of this 6th day of
January, 2006.
--------------------
Xxxx X. Xxxxxx
Secretary
I, Xxxxxxxxxxx X. Xxxxx, officer of the Borrowers, 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 Borrowers
and that his signature set forth above is his true and correct signature.
Date: January 6, 2006
------------------------------
Xxxxxxxxxxx X. Xxxxx, Officer
Exhibit D
1505406v1
MASTER GRID PROMISSORY NOTE
U.S. $300,000,000 Dated: January 06, 2006
FOR VALUE RECEIVED, each of the undersigned (each a "BORROWER" and
collectively the "BORROWERS"), severally and not jointly and not in their
individual capacities, but on behalf of and for the benefit of the series of
funds comprising each such 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 January 06, 2006 (as amended or
modified, the "AGREEMENT"), among the Borrowers 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 any Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
Each Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. Each 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 any 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.
1505406v1
Signature to the Master Grid Promissory Note dated January 06, 2006, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust (not in their individual
capacities, 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 FUND, INC.,
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
USAA INVESTMENT 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
USAA TAX EXEMPT FUND, INC.,
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
USAA STATE TAX-FREE 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
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXX X. XXXXX
--------------------------------
Xxxxxx X. Xxxxx, President
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 06, 2006, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST and
USAA LIFE INVESTMENT TRUST (not in their individual capacity, but on behalf of
and for the benefit of the series of funds comprising each such Borrower)
payable to the order of USAA CAPITAL CORPORATION.
[GRID]
Date of
Loan
Borrower
and Fund
Amount of
Loan
Type of Rate and
Interest
Rate on Date of
Borrowing
Amount of
Principal
Repaid
Date of
Repayment
Other
Expenses
Notation made
by
1505406v1
OFFICER'S CERTIFICATE
Xxxx X. Xxxxxx hereby certifies that he is the duly elected Secretary of USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (each a "BORROWER" and
collectively the "BORROWERS"), and that he is authorized to execute this
Certificate on behalf of the Borrowers. The undersigned hereby further certifies
to the following:
Any one of the Chairman 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 Borrowers, 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 January 6, 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 Chairman 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 Borrowers /S/ XXXXX X. XXXX
Xxxxxxx Xxxxxxx, Xx. Assistant Treasurer of the
Borrowers /S/ XXXXXX XXXXXXX, XX.
IN WITNESS WHEREOF, I have executed the Certificate as of this 6th day of
January, 2006.
/S/ XXXX X. XXXXXX
-----------------------------
Xxxx X. Xxxxxx
Secretary
I, Xxxxxxxxxxx X. Xxxxx, officer of the Borrowers, 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 Borrowers
and that his signature set forth above is his true and correct signature.
Date: January 6, 2006
/S/ XXXXXXXXXXX X. XXXXX
------------------------------
Xxxxxxxxxxx X. Xxxxx, Officer
SECRETARY'S CERTIFICATE
USAA MUTUAL FUND, INC.
USAA INVESTMENT TRUST
USAA TAX EXEMPT FUND, INC.
USAA STATE TAX-FREE TRUST
USAA LIFE INVESTMENT TRUST
I, Xxxx X. Xxxxxx being the Secretary of USAA Mutual Fund, Inc., USAA
Investment Trust, USAA Tax Exempt Fund, Inc., USAA State Tax-Free Trust and USAA
Life Investment Trust (each a "Borrower" and collectively the "Borrowers")
hereby certify to, and for the benefit of, USAA Capital Corporation that the
following are true and correct:
1. Resolution. The attached resolutions were approved by all of the
Board of Directors/Trustees of each Borrower on November 29, 2005 (USAA Mutual
Fund, Inc.; USAA Investment Trust; USAA Tax Exempt Fund, Inc.; and USAA State
Tax-Free Trust) and December 8 , 2005 (USAA Life Investment Trust) and such
resolutions are now in full force and effect.
2. Organization. Each of the Borrowers is duly organized and existing.
3. Power. The Board of Directors/Trustees of each of the Borrowers
which took the action called for by the resolutions attached hereto have the
power to take such action.
4. Incumbency. The following-named individuals are duly elected,
qualified, and acting officers of the Borrowers and hold the offices set forth
opposite their respective names as of the date hereof, and the signatures set
opposite the respective names and titles of said officers are their true and
authentic signatures:
NAME TITLE SPECIMEN SIGNATURE
Xxxxxxxxxxx X. Xxxxx President /S/ XXXXXXXXXXX XXXXX
Xxxxxx X. Xxxxx President /S/ XXXXXX X. XXXXX
USAA Life Investment Trust
Xxxx X. Xxxxxx Secretary /S/ XXXX X. XXXXXX
IN WITNESS WHEREOF, I have executed this Certificate as of this 6th day of
January, 2006.
/S/ XXXX X. XXXXXX
-------------------------
Xxxx X. Xxxxxx, Secretary
I, Xxxxxxxxxxx X. Xxxxx, Officer of the Borrowers, 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 Borrowers
and that his signature set forth above is his true and correct signature.
/S/ XXXXXXXXXXX X. XXXXX
Date: January 6, 2006 -----------------------------
Xxxxxxxxxxx X. Xxxxx, Officer
January 6, 2006
USAA Capital Corporation
0000 Xxxxxxxxxxxxxx Xx.
Xxx Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
I have acted as counsel to USAA Investment Management Company, Manager and
Investment Adviser of USAA Mutual Fund, Inc., USAA Investment Trust, USAA Tax
Exempt Fund, Inc., USAA State Tax-Free Trust and USAA Life Investment Trust
(each a "Borrower" and collectively the "Borrowers"), in connection with (i) the
$300,000,000 committed Master Revolving Credit Facility Agreement dated January
6, 2006 (the "Credit Agreement") between the Borrowers, for the benefit of each
Borrower's series of funds (the "Funds"), and USAA Capital Corporation (the
"CAPCO") and (ii) the Note (as such term is defined in the Credit Agreement)
dated January 6, 2006 made by each Borrower in favor of the Bank (the "Note"). I
am a Senior Vice President of USAA Investment Management Company, an indirect
wholly-owned subsidiary of United Services Automobile Association ("USAA"). All
capitalized terms used in this opinion and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement.
I have examined such records, certificates and documents, and such questions of
fact and law as I have deemed necessary or appropriate for the basis of the
opinions hereinafter expressed.
Based upon and subject to the foregoing, but subject to the assumptions and
qualifications set forth herein I am of the opinion that:
1. Each Borrower is a corporation or trust duly organized,
validly existing, and in good standing under applicable state laws and
has all requisite corporate or trust power and authority to carry on
its respective businesses as now conducted and proposed to be
conducted, to enter into the Credit 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
thereof.
2. The execution, delivery and performance of the Credit
Agreement and the Note, and borrowings hereunder, have been duly
authorized by all necessary corporate or trust action of each Borrower
and will not result in any violation of or be in conflict with or
constitute a default under any term of the applicable Funds, or of any
Borrowing Limit or prospectus or statement of additional information of
such Borrower or its applicable Funds, or of any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Borrower, or result in the creation of any mortgage,
lien, charge or encumbrance upon any of the properties or assets of
such Borrower or its applicable Funds pursuant to any such term. No
Borrower or its applicable Funds are in violation of any term of its
respective charter, by-laws or trust agreement, and no Borrower or its
applicable Funds are in violation of any material term of any agreement
or instrument to which they are a party, or to the best of my
knowledge, of any judgment, decree, order, statute, rule or
governmental regulation applicable to them.
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3. Each Borrower and its applicable Funds 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. Each Borrower and its
applicable Funds are in compliance in all material respects with all of
the provisions of the Investment Company Act of 1940, and such Borrower
has filed all reports with the SEC that are required of it or its
applicable Funds.
4. There is no action, suit or proceeding pending or, to the best
of my knowledge, threatened against any Borrower or its applicable
Funds in any court or before any arbitrator or governmental body which
seeks to restrain any of the transactions contemplated by the Credit
Agreement or which, if adversely determined, could have a material
adverse effect on the assets or business operations of any Borrower or
its applicable Funds or the ability of any Borrower and its applicable
Funds to pay and perform their obligations under the Credit Agreement
and under the Note.
5. The Credit Agreement and the Note have been duly executed and
delivered by each Borrower, for the benefit of its applicable Funds,
and constitute the valid and binding obligations of each Borrower, for
the benefit of its applicable Funds, enforceable in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, receivership, moratorium or other applicable
debtor relief laws and by general principles of equity.
6. The assets of each Fund for whose benefit Loans are borrowed
by the applicable Borrower are subject to and liable for such Loans and
are available to the applicable Borrower for the repayment of such
Loans.
In rendering the opinion expressed above, I have further assumed: (i) that the
terms of the Credit Agreement will be strictly complied with by CAPCO; (ii) that
there is not, nor shall there be, any form of compensation or charge, whether
direct or indirect, by CAPCO in connection with any of the Loans, except as
expressly set forth in the Credit Agreement; (iii) that there are not, nor will
there be, any compensating balances, frozen funds, deposits or other funds of
any Borrower or its applicable Funds which are pledged or hypothecated as
security or which are given as any other form of compensation, whether direct or
indirect, for the account or benefit of CAPCO in connection with Loans other
than as provided in the Credit Agreement; (iv) that any fees which have been
paid or may be paid to CAPCO or to any other party in connection with the Loans
are for services actually rendered and that such fees will not exceed just and
reasonable compensation for such services rendered; and (v) that the utilization
fees, and any other fees to be paid to CAPCO in connection with the Loans shall
be treated as interest by CAPCO for purposes of assuring that the interest
charged by CAPCO on the Loans does not exceed the Maximum Lawful Rate.
In giving the foregoing opinions, I express no opinion other than as to the
federal laws of the United States of America, and the laws of the state of
Texas.
I am furnishing this letter to you in my capacity as counsel to USAA Investment
Management Company, Manager and Investment Adviser of the Borrowers, and this
letter is solely for the benefit of CAPCO. This letter is not to be used,
circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
/S/ XXXX X. XXXXXX
------------------
Xxxx X. Xxxxxx
Senior Vice President, Secretary and Counsel
USAA Investment Management Company
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