EXHIBIT 8 (a)
TRANSFER AGENCY AGREEMENT
AGREEMENT made as of this 13th day of November, 2002, by and between USAA
TRANSFER AGENCY COMPANY, dba USAA Shareholder Account Services, a corporation
organized under the laws of the state of Delaware and having a place of business
in San Antonio, Texas ("SAS"), and USAA TAX EXEMPT FUND, INC., a corporation
organized under the laws of the State of Maryland, and having a place of
business in San Antonio, Texas (the "Company").
WHEREAS, the Company is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Company is authorized to issue shares of capital stock (the
"Shares") in separate classes with each such class representing interests in a
separate portfolio of securities and other assets; and
WHEREAS, the Company offers Shares in each of the classes identified in
SCHEDULE A hereto (the "Existing Funds") (such classes together with all other
classes subsequently established by the Company with respect to which the
Company desires to retain SAS to render transfer agent and dividend disbursement
agent services hereunder and with respect to which SAS is willing to do, being
herein collectively referred to as the "Funds"); and
WHEREAS, the Company desires to retain SAS to serve as transfer agent and
dividend disbursing agent for the Funds; and
WHEREAS, SAS is willing to perform such services;
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SAS.
(a) EXISTING FUNDS. The Company hereby appoints SAS to act as transfer
agent and dividend disbursing agent for the Existing Funds for the period and on
the terms herein set forth. SAS accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
(b) ADDITIONAL FUNDS. In the event that the Company desires to retain SAS
to render transfer agent and dividend disbursement agent services hereunder with
respect to any Fund other than an Existing Fund, it shall so notify SAS in
writing. If SAS is willing to render such services it shall notify the Company
in writing, whereupon the Company shall appoint SAS to act as transfer agent and
dividend disbursement agent for such Fund for the period and on the terms herein
set forth, and SAS shall accept such appointment and agree to render the
services herein set forth for the compensation herein provided.
2. SCOPE OF APPOINTMENT.
SAS shall serve as the transfer agent and dividend disbursing agent for
the Company, and shall perform the following services to the Company (as
described in greater detail in SCHEDULE B attached hereto):
(a) PROCESS ORDERS TO PURCHASE OR TRANSFER SHARES. Provide services as
transfer agent for the Company for processing orders for the purchase of Shares,
including the recording of issues of Shares of the Company and registering the
transfer of such Shares.
(b) RECEIVE FUNDS. Receive funds in the form of checks, wire transfers,
electronic ACH, or other order drawn or endorsed to it as transfer agent for the
Company or otherwise identified as being for the account of the Company.
(c) PROCESS SHARE REDEMPTIONS. Process all requests for redemptions or
repurchase of Shares, and, if necessary, receive and stamp with the date of
receipt all certificates delivered to it for redemption or repurchase.
(d) DISTRIBUTE DIVIDENDS AND CAPITAL GAINS. Prepare and mail or credit
income and capital gain payments to shareholders, in accordance with the
provisions of the Company's Articles of Incorporation and then current
prospectus.
(e) DELIVER REPORTS TO SHAREHOLDERS. Deliver to shareholders, at such
times and in the manner requested by the Company, shareholder reports,
prospectuses and statements of shareholder accounts.
(f) PROCESS WITHDRAWAL ORDERS. Process withdrawal orders in accordance
with the terms of any withdrawal plans instituted by the Company and duly
executed by shareholders.
(g) PREPARE TAX RETURNS. Prepare, file with the Internal Revenue Service
and with the appropriate State agencies, and, if required, mail to shareholders
such returns for reporting dividends and distributions paid as are required to
be so filed and mailed, and withhold such sums as are required to be withheld
under applicable federal and state income tax laws, rules and regulations, or as
may be requested by the Company to enable shareholders to comply with applicable
tax requirements.
(h) COUNTERSIGN CERTIFICATES. As applicable and if requested by the
Company, countersign and mail by first class mail, a share certificate to a
shareholder at the shareholder's address as set forth on the transfer books of
the Company.
(i) CORRESPONDENCE. Answer correspondence from shareholders relating to
their Share accounts and such other correspondence as may from time to time be
mutually agreed upon.
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(j) PROXIES. Mail such proxy cards and other material supplied to it by
the Company in connection with shareholder meetings of the Company and shall
receive, examine and tabulate returned proxies and certify the vote of the
Company.
(k) OTHER SERVICES. Provide such other services as the parties may from
time to time agree in writing.
3. FEES.
The Company shall pay SAS for the services to be provided by SAS under
this Agreement in accordance with, and in the manner set forth in, SCHEDULE C
hereto. Fees for any additional services to be provided by SAS shall be subject
to mutual agreement at the time such amendment to this Agreement is proposed.
4. REIMBURSEMENT OF EXPENSES.
In addition to paying SAS the annual maintenance charges set forth in
Schedule C hereto, the Company agrees to reimburse SAS for all reasonable
out-of-pocket expenses, charges, and other disbursements incurred by SAS in
connection with the performance of services under this Agreement, including, but
not limited to, the following:
(a) FORMS. The cost of any and all forms, computer paper, statements,
labels, envelopes, checks, reports, letters, tax forms, proxies, notices or
other forms of printed material which shall be required by SAS for the
performance of the services provided hereunder.
(b) DELIVERY CHARGES. The cost of all postage, couriers, express delivery
services, freight charges and other delivery and bonding charges incurred in
delivering materials to and receiving materials from the Company and its
shareholders, including all shareholder reports, prospectuses, statements of
shareholder accounts and tax filings.
(c) COMMUNICATION CHARGES. The cost of all direct telephone, telephone
transmission, telecopy, internet, or other electronic transmission expenses
(e.g., voice response systems) incurred in communicating with shareholders of
the Company, including the costs of developing, maintaining and making available
to shareholders systems that will permit shareholders to effect transactions by
telephone or electronic means.
(d) MAINTENANCE OF SHAREHOLDER RECORDS. The cost of maintaining all
records of shareholder accounts, including, but not limited to, expenses
relating to electronic imaging, microfilm and microfiche.
(e) ELECTRONIC SHAREHOLDER INFORMATION SYSTEMS. The cost of developing,
maintaining and making available to shareholders systems that will permit
shareholders to access shareholder reports, prospectuses and statements of
shareholder account via the internet or other electronic means.
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(f) TAX REPORTING SERVICES. The costs of developing and maintaining
systems and services for withholding sums required to be withheld under
applicable federal and state income tax laws, rules and regulations, or as may
be requested by the Company to enable shareholders to comply with applicable tax
requirements.
(g) COUNSEL FEES. Reimbursement for all counsel fees incurred by SAS in
connection with the performance of its duties under this Agreement, unless such
fees are incurred on a matter involving SAS's willful misconduct or gross
negligence.
(h) CASH AND ASSET MANAGEMENT SERVICES. Reimbursement of all expenses
incurred by SAS in connection with cash and asset management services
arrangements.
5. DOCUMENTS.
In connection with the appointment of SAS as transfer agent, the Company
shall file with SAS the following documents:
(a) Certified copies of the Articles of Incorporation of the Company and
all amendments thereto;
(b) A certified copy of the Bylaws of the Company as amended to date;
(c) A copy of the resolution of the Board of Directors of the Company
authorizing this Agreement;
(d) Specimens of all forms of outstanding and new share certificates in
the forms approved by the Board of Directors of the Company with a
certificate of the Secretary of the Company as to such approval.
(e) All account application forms and other documents relating to record
holders' accounts;
(f) A certified list of record holders of the Company with the name,
address and tax identification number of each record holder, the number
of Shares held by each record holder, certificate numbers and
denominations (if any have been issued), the plan account number of each
record holder having a plan, lists of any accounts against which stops
have been placed, together with the reasons for said stops, and the
number of Shares redeemed by the Company.
(g) An opinion of counsel for the Company with respect to the validity of
the Shares, the number of Shares authorized, the status of redeemed
Shares and the number of Shares with respect to which a Registration
Statement has been filed and is in effect.
6. FURTHER DOCUMENTATION.
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The Company shall also furnish from time to time the following documents:
(a) Each resolution of the Board of Directors of the Company authorizing
the original issue of its Shares;
(b) Each Registration Statement filed with the Securities and Exchange
Commission and amendments thereof and orders relating thereto in effect
with respect to the sale of the Shares of the Company;
(c) A certified copy of each amendment to the Articles of Incorporation
and the Bylaws of the Company;
(d) Certified copies of each vote of the Board of Directors authorizing
officers to give instructions to the transfer agent;
(e) Specimens of all new share certificates accompanied by the Board of
Directors' resolutions approving such forms;
(f) Such other certificates, documents or opinions which SAS may, in its
discretion, deem necessary or appropriate in the proper performance of
its duties.
7. SHARE CERTIFICATES.
To the extent that the Company wishes to issue share certificates, the
Company shall supply SAS with a sufficient supply of blank share certificates
and from time to time shall renew such supply upon request of SAS. Such blank
share certificates shall be properly signed, manually or by facsimile, if
authorized by the Company, and shall bear the Company seal or facsimile thereof;
and notwithstanding the death, resignation or removal of any officers of the
Company authorized to sign share certificates, SAS may continue to countersign
certificates which bear the manual or facsimile signature of such officer until
otherwise directed by the Company.
8. NOTICE OF DISTRIBUTION.
The Company shall promptly inform SAS of the declaration of any dividend
or distribution on account of its Shares.
9. BOOKS AND RECORDS.
SAS shall maintain records showing for each investor's account the
following:
(a) Names, addresses and tax identifying numbers;
(b) Number of Shares held;
(c) Historical information regarding the account of each shareholder,
including dividends paid and date and price for all transactions;
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(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholdings in the case of a foreign
account;
(f) Any dividend reinvestment order, plan application, dividend address
and correspondence relating to the current maintenance of the account;
(g) Certificate numbers and denominations for any shareholder holding
certificates;
(h) Any information required in order for SAS to perform the calculations
contemplated or required by this Agreement.
SAS shall preserve any such records required to be maintained by Rule
31a-1 under the 1940 Act in the manner and for the periods prescribed in Rule
31a-2 under the 1940 Act. Such record retention shall be at the expense of the
Company and records may be inspected by the Company at reasonable times. SAS,
may at its option at any time, and shall forthwith upon the Company's demand,
turn over to the Company and cease to retain in SAS files, records and documents
created and maintained by SAS pursuant to this Agreement, which are no longer
needed by SAS in performance of its services or for its protection. If not so
turned over to the Company, such records and documents will be retained by SAS
for six years from the year of creation, during the first two of which such
documents will be in readily accessible form. At the end of the six year period,
such records and documents will either be turned over to the Company, or
destroyed in accordance with the Company's authorization.
10. INFORMATION TO BE FURNISHED TO COMPANY.
SAS shall furnish to the Company periodically as agreed upon the
following information:
(a) A copy of the daily transaction register;
(b) Dividend and reinvestment amounts;
(c) The total number of Shares distributed in each state for "blue sky"
purposes as determined according to instructions delivered from time to
time by the Company to SAS.
(d) Shareholder lists and statistical information as may be agreed upon
from time to time.
11. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS.
The Company assumes full responsibility for the preparation, contents and
distribution of each prospectus of the Company for complying with all applicable
requirements of the Securities Act of 1933, as amended, the 1940 Act, and any
laws, rules and regulations of governmental authorities having jurisdiction.
Except as specifically agreed in writing between SAS and the Company, SAS shall
have no obligation, when crediting Shares or countersigning and issuing
certificates for Shares, if any, to take cognizance of any other laws relating
to the issue and sale of such Shares.
12. REFERENCES TO SAS.
The Company shall not circulate any printed matter which contains any
reference to SAS without the prior written approval of SAS, excepting solely
such printed matter as merely identifies SAS as transfer agent and dividend
disbursing agent for the Company and plan agent
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for the shareholders of the Company. The Company shall submit printed matter
requiring approval to SAS in draft form, allowing sufficient time for review by
SAS and its counsel prior to any deadline for printing.
13. FORCE MAJEURE.
SAS shall not be liable for loss of data, occurring by reason of
circumstance beyond its control, including but not limited to acts of civil or
military authority, national emergencies, fire, flood or catastrophe, acts of
God, insurrection, war, acts of terrorism, riots, or failure of transportation,
communication or power supply. SAS shall use its best efforts to minimize the
likelihood of all damage, loss of data, delays and errors resulting from
uncontrollable events, and if such damage, loss of data, delays or errors occur,
SAS shall use its best efforts to mitigate the effects of such occurrence.
14. STANDARD OF CARE.
SAS shall at all times act in good faith and agrees to use its best
efforts within reasonable limits to ensure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall not be
liable for loss or damage due to errors unless such error is caused by its gross
negligence, bad faith or willful misconduct or that of its employees.
15. INDEMNIFICATION.
The Company shall indemnify and hold SAS harmless from all loss, cost,
damage and expense, including reasonable expenses for counsel, incurred by it
resulting from any claim, demand, action or suit in connection with its
acceptance of this Agreement, any action or omission by it in the performance of
its duties hereunder, or the functions of transfer and dividend disbursing agent
and plan agent, or as a result of acting upon any instruction believed by it to
have been executed by a duly authorized officer of the Company, or upon any
information, data, records or documents provided SAS or its agents by computer
tape, telex, CRT data entry or other similar means authorized by the Company,
PROVIDED that this indemnification shall not apply to actions or omissions of
SAS in cases of its own willful misconduct or gross negligence, and FURTHER
PROVIDED, that prior to confessing any claim against it which may be the subject
of this indemnification, SAS shall give the Company reasonable opportunity to
defend against said claim in its own name or in the name of SAS.
16. FURTHER ACTIONS.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
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17. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) DURATION. This Agreement shall become effective as of the date first
set forth above and unless terminated shall continue in force from year to year
thereafter, but only so long as such continuance is specifically approved in
accordance with applicable laws and regulations.
(b) TERMINATION. This Agreement may be terminated at any time, without
payment of any penalty, by vote of the Board of Directors of the Company or by
vote of a majority of the outstanding shares (as defined in the 1940 Act), or by
SAS on sixty (60) days' written notice to the other party. This Agreement shall
automatically terminate upon its assignment by SAS.
18.AMENDMENT.
This Agreement may be modified or amended from time to time by mutual
agreement between the parties hereto.
19.USE OF THIRD PARTY SERVICES.
SAS may, from time to time, enter into arrangements with one or more
third parties (each an "Agent") to perform certain functions for the Company and
SAS. In those instances the Company shall pay SAS the lesser of (i) the amount
payable by SAS to the Agent for performing such functions and (ii) the amount of
the Transfer Agent Savings. As used herein, the term "Transfer Agent Savings"
means the amount that would have been paid by the Company to SAS if all accounts
maintained by the Agent had been maintained directly by SAS, as determined based
upon the per account charge under the Agreement, increased by out-of-pocket
charges that would have been incurred with respect to such accounts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
USAA TAX EXEMPT FUND, INC. USAA TRANSFER AGENCY
COMPANY
By:/S/ XXXXXXXXXXX X. XXXXX By: /S/ XXXXX X. XXXXXXXXX
------------------------- ------------------------
Name: Xxxxxxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxxxx
Title: President Title: Vice President
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SCHEDULE A
TO THE TRANSFER AGENCY AGREEMENT
FUNDS
California Bond Fund
California Money Market Fund
Intermediate-Term Fund
Long-Term Fund
New York Bond Fund
New York Money Market Fund
Short-Term Fund Tax
Exempt Money Market Fund
Xxxxxxxx Xxxx Fund
Virginia Money Market Fund
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SCHEDULE B
TO THE TRANSFER AGENCY AGREEMENT
TRANSFER AGENCY SERVICES
PROCESS ORDERS TO PURCHASE OR TRANSFER SHARES
-
1. Process shareholder purchase and redemption orders.
2. Withhold applicable taxes.
3. Set up account information, including address, dividend options, taxpayer
identification numbers, wire and/or ACH instructions, systematic purchase,
and systematic redemption instructions.
4. Issue confirmations in compliance with Rule 10b-10 under the Securities
Exchange Act of 1934, as amended. 5. Issue periodic statements for
shareholders. 6. Process transfers.
7. Process exchanges.
8. Maintain records relating to "as of" transactions, and ensure compliance
with the Company's policies and procedures regarding such transactions.
9. Maintain all shareholder records for each account in the Company.
10. Issue customer statements on scheduled cycle, providing duplicate second
and third party copies if required. 11. Record shareholder account
information changes. 12. Maintain account documentation files for each
shareholder.
13. Annually purge accounts per mutually agreed upon schedule.
RECEIVE FUNDS
1. Receive funds drawn or endorsed to it as Transfer Agent for the Company, or
otherwise designated as being for the account of the Company.
2. Stamp the check or other order with the date of receipt, process the same
for collection, and compute the number of Shares to be purchased according
to the price of Shares in effect for such purchases as set forth in the
Company's then current Prospectus..
3. Deposit the net amount due the Company in the bank account of the Company
maintained by the Company's bank.
4. On a daily basis, notify the Company's custodian bank (the "Custodian") of
the total amount deposited.
5. Instruct the Company's Custodian to transfer funds from Fund accounts, as
required by shareholder transactions.
6. Maintain share balances for each Fund and reconcile such balances with
records of the Company's Fund Accountant.
7. Distribute redemption proceeds to Fund shareholders.
8. Reconcile Fund DDA accounts and take appropriate corrective measures.
9. In the event that any check or other order for the payment of money is
returned unpaid for any reason, give prompt notification to the Company of
the nonpayment of said check. In the absence of other instructions from the
Company, take such steps as may be necessary to cancel promptly any Shares
purchased on the basis of such returned check and shall cancel accumulated
dividends for such account, which are due to that specific purchase.
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PROCESS SHARE REDEMPTIONS
1. Receive and process all requests for redemptions or repurchase of Shares.
2. Process exchanges.
3. Notify the Company of the total number of Shares
covered by such requests.
4. Direct the payment of the applicable redemption or repurchase price from
cash available in the bank account maintained by the Company's bank.
5. Promptly notify shareholders of any noncompliance with Company standards
for redemption approval, and assist such shareholders in complying with
applicable standards.
6. Withhold applicable taxes.
DISTRIBUTE DIVIDENDS AND CAPITAL GAINS
1. Process dividend payments, including the purchase of new shares, through
dividend reimbursement.
2. Prepare and mail or credit income and capital gain payments to
shareholders.
3. On or before the payment date of any dividend or distribution, notify the
Company's bank of the estimated amount required to pay any portion of said
dividend or distribution which is payable in cash.
4. Make appropriate credits to shareholder accounts, where required.
5. Withhold applicable taxes.
DELIVERY OF SHAREHOLDER REPORTS
1. Design, implement and maintain the Company's Internet web site and
telephonic voice response system for use by the Company's existing
shareholders (it being understood that the Company's Distributor retains
sole responsibility with respect to the design, implementation and
maintenance of those features of the web site that are used for marketing
the shares of the Company to prospective shareholders.)
2. Provide systems by which the Company's shareholders may effect transactions
by telephonic or electronic means.
3. Make information available to shareholders regarding transaction history,
including trade date, share price, current holdings, yields, and dividend
information.
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SCHEDULE C
TO THE TRANSFER AGENCY AGREEMENT
FEE SCHEDULE
ANNUAL MAINTENANCE CHARGES - The annual maintenance charge includes the
processing of all transactions and correspondence. The fee is billable on a
monthly basis at the rate of 1/12 of the annual fee. USAA Transfer Agency
Company will charge for each open account from the month the account is opened
through January of the year following the year all funds are redeemed from the
account.
California Bond Fund $25.50
California Money Market Fund $25.50
Intermediate-Term Fund $25.50
Long-Term Fund $25.50
New York Bond Fund $25.50
New York Money Market Fund $25.50
Short-Term Fund $25.50
Tax Exempt Money Market Fund $25.50
Xxxxxxxx Xxxx Fund $25.50
Virginia Money Market Fund $25.50
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EXHIBIT 8 (b)
BANK OF AMERICA, N.A.
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
January 9, 2003
USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc., and
USAA State Tax-Free 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
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 Bank of
America, N.A. (the "BANK"), agrees to make during the period commencing January
9, 2003, and ending January 8, 2004 (the "FACILITY PERIOD"), to USAA Mutual
Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., and USAA State
Tax-Free 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 10, 2002, as heretofore amended or modified, between the Borrowers and
the Bank. The Bank 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.$100,000,000
(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
and the Other Facility (defined below) 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 and/or a loan outstanding under the Other Facility (defined
below) for the benefit of such Fund, if the aggregate amount of such Loan and
such other loan under the Other Facility 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 which would violate any provision of
any applicable statute, regulation, order, or restriction, including, without
limitation, Regulation U, Regulation T, Regulation X, or any other regulation of
the Board of Governors of the Federal Reserve System or the Securities Exchange
Act of 1934, as amended. If requested by the Bank, the Borrowers will promptly
furnish the Bank with a statement in conformity with the requirements of Federal
Reserve Form U-1 as referred to in Regulation U.
3. BORROWING RATE AND MATURITY OF LOANS. 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, at the option of the applicable Borrower, (i) the aggregate of
the Federal Funds Rate (as defined below) PLUS .50 of one percent (50 basis
points) or (ii) the aggregate of the London Interbank Offered Rate (as defined
below) PLUS .50 of one percent (50 basis points). The rate of interest payable
on any Loan bearing interest on the basis of the Federal Funds Rate shall change
on each date that the Federal Funds Rate shall change. 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 to be agreed upon by the applicable Borrower and the
Bank on or before the date of such Loan and, in the absence of such agreement,
will mature on the earlier of three months after the date of such Loan or the
last day of the Facility Period. The term "FEDERAL FUNDS RATE," as used herein,
shall mean the overnight rate for Federal funds transactions between member
banks of the Federal Reserve System, as published by the Federal Reserve Bank of
New York or, if not so published, as determined in good faith by the Bank in
accordance with its customary practices; and the term "LONDON INTERBANK OFFERED
RATE," as used herein, shall mean the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. London time two business days prior to the first day of
and for the interest period (of seven or fourteen days or one, two, or three
months, as selected by the Borrower(s)) for which the London Interbank Offered
Rate is to be in effect, as adjusted by the Bank in good faith and in accordance
with its customary practices for any reserve costs imposed on the Bank under
Federal Reserve Board Regulation D with respect to "EURO-CURRENCY LIABILITIES."
The London Interbank Offered Rate shall not be available hereunder for a Loan if
it would be unlawful for the Bank to make or maintain such Loan based on such
rate or if such rate does not, in the good faith judgment of the Bank, fairly
reflect the cost to the Bank of making or maintaining such Loan. The London
Interbank Offered Rate shall not be available for any interest period which, if
such rate were available, would begin after the occurrence and during the
continuation of an Event of Default (as defined below). Any past due principal
and/or accrued interest or fee 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 any such payment was
due to, but excluding the date of payment in full thereof, and shall be payable
on demand. If the applicable Borrower does not affirmatively elect to have a
Loan or Loans bear interest based on the London Interbank Offered Rate at least
two business days prior to the first day of a possible interest period
applicable thereto, such Loan shall bear interest based on the Federal Funds
Rate until such election is affirmatively made.
4. ADVANCES, PAYMENTS, PREPAYMENTS, AND READVANCES. Upon each Borrower's
request, and SUBJECT TO the terms and conditions contained herein, the Bank
shall make Loans to each Borrower on
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 2
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 the Bank prior to 2:00 p.m. Dallas, Texas, time on the day such
payment is due, or as the Bank 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). If any Loan bearing interest based on the London
Interbank Offered Rate is repaid or prepaid OTHER THAN on the last day of an
interest period applicable thereto, the Fund which is the beneficiary of such
Loan shall pay to the Bank promptly upon demand such amount as the Bank
determines in good faith is necessary to compensate the Bank for any reasonable
cost or expense incurred by the Bank as a result of such repayment or prepayment
in connection with the reemployment of funds in an amount equal to such
repayment or prepayment. Whenever the Bank seeks to assess for any such cost or
expense, it will provide a certificate as the applicable Borrower shall
reasonably request.
5. FACILITY FEE. Beginning with the date of this Agreement and until such
time as all Loans have been irrevocably repaid to the Bank in full, and the Bank
is no longer obligated to make Loans, each Fund (to be allocated among the Funds
as the Borrowers deem appropriate) severally shall pay to the Bank its allocated
share of a facility fee (the "FACILITY Fee") in an aggregate amount equal to .09
of one percent (9 basis points) of the amount of the commitment (whether used or
unused), as it may be reduced pursuant to SECTION 6. The Facility Fee shall be
payable quarterly in arrears beginning March 31, 2003, and upon termination of
the Facility (whether by acceleration or otherwise).
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 the Bank, 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 the Bank on
the effective date of such termination.
7. MANDATORY TERMINATION OF 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. The Bank acknowledges that the Facility is a
committed facility and that the Bank 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 the Bank shall not be obligated
to make any Loan if this Facility has been terminated by the Borrowers, or to a
Borrower on behalf of a proposed borrowing Fund, if at the time of a request for
a Loan by such Borrower (on behalf of such applicable borrowing Fund) there
exists any Event of Default or condition which, with the passage
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 4
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, (v) whether such Loan shall bear interest based
on the Federal Funds Rate or the London Interbank Offered Rate, and (vi) 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 the Bank by
1:00 p.m. Dallas, Texas, time on the day the Loan is requested to be made if
such Loan is to bear interest based on the Federal Funds Rate or by 10:00 a.m.
Dallas, Texas, time on the second business day before the Loan is requested to
be made if such Loan is to bear interest based on the London Interbank Offered
Rate.
Each Borrowing Notice shall constitute a representation to the Bank 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 proposed borrowing
Fund(s).
10. CONFIRMATIONS; CREDITING OF FUNDS; RELIANCE BY THE BANK. Upon receipt
by the Bank of a Borrowing Notice:
(a) The Bank 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) The Bank 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 the Bank in a writing signed by an Authorized
Individual (as defined in SECTION 11) of such Borrower and sent to the Bank
via facsimile or telecopy; and
(c) The Bank shall make appropriate entries on the Note or the records
of the Bank to reflect the Terms of the Loan; PROVIDED, HOWEVER, that the
failure to do so shall not affect the obligation of any borrowing Fund.
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 5
The Bank 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 the Bank thereof.
11. BORROWING RESOLUTIONS AND OFFICERS' CERTIFICATES; SUBORDINATION
AGREEMENT. Prior to the making of any Loan pursuant to this Agreement, the
Borrowers shall have delivered to the Bank (a) the duly executed Note, (b)
resolutions of each Borrower's Trustees or Board of Directors 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
INDIVIDUALS") to take on behalf of each Borrower (on behalf of the applicable
Funds) actions contemplated by this Agreement and the Note, (d) a subordination
agreement in substantially the form set forth in EXHIBIT E, and (e) the opinion
of counsel to USAA Investment Management Company, manager and advisor to the
Borrowers, with respect to such matters as the Bank may reasonably request.
12. REPRESENTATIONS AND WARRANTIES. In order to induce the Bank 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 the Bank 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 the Bank 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,
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 6
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 such 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' OBLIGATIONS 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. The Bank 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 the Bank 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 the Bank 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 the Bank as soon as possible and in any event within
90 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;
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 7
(b) To deliver to the Bank as soon as available and in any event
within 75 days after the end of each semiannual period 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
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 the Bank 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 the Bank 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 the Bank, 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 the Bank, which may be made by the Bank
from time to time in the event the Bank in good faith believes that there
has been a material adverse change in the capital markets generally, to
deliver to the Bank, 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 the Bank by a Borrower pursuant to
any Loan made to such Borrower for the benefit of the applicable Fund(s) are
irrevocably paid in full, and until the Bank 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 the Bank has breached its obligation to lend hereunder or
becomes insolvent or the subject of a receivership proceeding, not to incur
any indebtedness for borrowed money
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 8
(OTHER THAN (i) pursuant to a U.S.$400,000,000 committed master revolving
credit facility with USAA Capital Corporation [the "OTHER FACILITY"] and
(ii) 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 the Bank, 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 the Bank, 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 of 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 the
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 the Bank;
(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 the Bank;
(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;
(f) USAA Investment Management Company or any successor manager or
investment advisor (PROVIDED THAT such successor manager or investment
advisor is a wholly-owned subsidiary of United Services Automobile
Association and/or USAA Capital Corporation) 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 subadvisors listed on SCHEDULE B as subadvisors for any Fund and
may add new subadvisors as provided in SECTION 16(B); or
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 9
(g) An event of default shall occur and be continuing under the Other
Facility with respect to a Fund;
then, in any event, and at any time thereafter, if any Event of Default shall be
continuing, the Bank 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 SUBADVISORS.
(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 the Bank, 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 the Bank (which amended SCHEDULE A and EXHIBIT B
shall replace the SCHEDULE A and EXHIBIT B which are then a part of
this Agreement) and such other documents as the Bank 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 the Bank (which amended SCHEDULE A and
EXHIBIT B shall replace the 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 the Bank.
(b) A Borrower may, by submitting an amended SCHEDULE B to this
Agreement to the Bank (which amended SCHEDULE B shall replace the SCHEDULE
B which is then a part of this Agreement), add new subadvisors, which are
not currently subadvising any other Fund.
17. LIMITED RECOURSE. The Bank 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
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 10
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, the Bank 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 the Bank 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 the Bank 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 the Bank 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 the Bank in connection with the collection and
any other enforcement proceedings of or regarding this Agreement, any Loan or
the Note against such Fund.
21. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns, EXCEPT THAT the Borrowers or the Funds may not
assign or transfer any of their respective rights or obligations under this
Agreement without the prior written consent of the Bank.
22. ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) The Bank may, with the written consent of the Borrowers (which
consent shall not be unreasonably withheld, which consent shall be
evidenced by certified copies of resolutions of the Boards of
Directors/Trustees of such Borrowers approving such consent, and which
consent shall not be required from a Borrower with respect to which an
Event of Default has occurred and is continuing) at any time assign and
delegate to one or more Eligible Assignees (defined below) (each an
"ASSIGNEE") all, or any ratable part of all, of the Loans, the Commitment
and the other rights and obligations of the Bank hereunder, in a minimum
amount of U.S.$10,000,000; PROVIDED that if any assignment and delegation
by the Bank is to an Eligible Assignee that is an affiliate of the Bank, no
written consent of the Borrowers shall be required; and PROVIDED, FURTHER,
that the Borrowers may continue to deal solely and directly with the Bank
in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, TOGETHER WITH payment instructions,
addresses, and related information with respect to the Assignee, shall have
been given to the Borrowers by the
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 11
Bank and the Assignee; and (ii) the Bank and the Assignee shall have
delivered to the Borrowers an Assignment and Acceptance in the form of
EXHIBIT F (an "ASSIGNMENT AND ACCEPTANCE") TOGETHER WITH the Note subject
to such assignment and any tax forms required to be provided by the
Assignee under SECTION 6 of the Assignment and Acceptance. As used in this
Agreement, "ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least U.S.$500,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and surplus
of at least U.S.$500,000,000; PROVIDED THAT such bank is acting through a
branch or agency located in the United States; (c) an entity that is
primarily engaged in the business of commercial banking and that is (i) a
subsidiary of the Bank, (ii) a subsidiary of an entity of which the Bank is
a subsidiary, or (iii) an entity of which the Bank is a subsidiary; (d) an
entity that is engaged in making, purchasing, holding, or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (i)
the Bank, (ii) a subsidiary of the Bank, (iii) a subsidiary of an entity of
which the Bank is a subsidiary, or (iv) an entity of which the Bank is a
subsidiary; and (e) any other entity (OTHER THAN an affiliate of the
Borrowers) that is engaged in making, purchasing, holding, or otherwise
investing in commercial loans, that is selected by the Borrowers, and that
is reasonably acceptable to the Bank.
(b) The Bank may at any time sell to one or more Eligible Assignees
(each a "PARTICIPANT") participating interests in any Loans, the
Commitment, and the other interests of the Bank hereunder and under the
Note; PROVIDED, HOWEVER, that (i) the Bank's obligations under this
Agreement shall remain unchanged, (ii) the Bank shall remain solely
responsible for the performance of such obligations, (iii) the Borrowers
shall continue to deal solely and directly with the Bank in connection with
the Bank's rights and obligations under this Agreement and the Note, and
(iv) the Bank shall not transfer or grant any participating interest under
which the Partic ipant has rights to approve any amendment to, or any
consent or waiver with respect to, this Agreement or the Note, EXCEPT to
the extent such amendment, consent, or waiver would do any of the
following:
(A) increase or extend the Commitment;
(B) postpone or delay any date fixed by this Agreement or the
Note for any payment of principal, interest, fees, or other amounts
due hereunder or under the Note; or
(C) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or
under the Note.
In the case of any such participation, the Participant shall be entitled to
the benefit of (and shall be obligated under) SECTIONS 4 and 25 as though
it were also the Bank hereunder, and if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly
to it
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 12
as the Bank under this Agreement. Notwithstanding the foregoing, no
Participant shall be entitled to receive a greater payment under SECTIONS 4
and 25 than the Bank would have been entitled to receive with respect to
the participation sold to such Participant, UNLESS the Borrowers have
consented thereto in writing at the time of the sale of such participation
or otherwise prior to such payment.
(c) If the Bank assigns and delegates all or any part of the Loans,
the Commitment, and its other rights and obligations hereunder pursuant to
SECTION 22(A), the Bank and the Borrowers shall promptly amend or otherwise
modify this Agreement and any related agreements and enter into such
additional agreements as may be reasonably necessary to create an
arrangement whereby the Bank shall act as agent for itself and any
Assignees.
(d) Notwithstanding any other provision in this Agreement, the Bank
may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and the Note
held by it in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 CFR SS.203.14, and
such Federal Reserve Bank may enforce such pledge or security interest in
any manner permitted under applicable law.
23. 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, 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 the Bank, 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.
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 13
(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.
24. 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.
25. INCREASED COST AND REDUCED RETURN. If at any time after the date
hereof, the Bank (which shall include, for purposes of this Section, any
corporation controlling the Bank) determines that the adoption or modification
of any applicable law regarding the Bank's required levels of reserves, OTHER
THAN the reserve requirement taken into account when computing the London
Interbank Offered Rate as provided in SECTION 3, or capital (including any
allocation of capital requirements or conditions), or similar requirements, or
any interpretation or administration thereof by a governmental body or
compliance by the Bank with any of such requirements, has or would have the
effect of (a) increasing the Bank's costs relating to the Loans, or (b) reducing
the yield or rate of return of the Bank on the Loans, to a level below that
which the Bank could have achieved but for the adoption or modification of any
such requirements, the Funds (to be allocated among the Funds as the Borrowers
deem appropriate) severally shall, within 15 days of any request by the Bank,
pay to the Bank such additional amounts as (in the Bank's sole judgment, after
good faith and reasonable computation) will compensate the Bank for such
increase in costs or reduction in yield or rate of return of the Bank. Whenever
the Bank shall seek compensation for any increase in costs or reduction in yield
or rate of return, the Bank shall provide a certificate as the Borrower(s) shall
reasonably request. Failure by the Bank to demand payment within 90 days of any
additional amounts payable hereunder shall constitute a waiver of the Bank's
right to demand payment of such amounts at any subsequent time. Nothing herein
contained shall be construed or so operate as to require the Funds to pay any
interest, fees, costs, or charges greater than is permitted by applicable law.
USAA Mutual Fund, Inc. et al
January 9, 2003
Page 14
26. 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.
27. 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.
28. PUBLICITY. Neither the Bank nor the Borrowers will use any name,
trademark, or trade name of the other without that other party's prior written
consent.
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 capacities, but on behalf of and for
the benefit of their respective Funds listed on SCHEDULE A) and the Bank.
Sincerely,
BANK OF AMERICA, N.A.
By: /S/ XXXX X'XXXXX
---------------------
Xxxx X'Xxxxx, Managing Director
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE(S) FOLLOW]
Signature to the Facility Agreement Letter dated January 9, 2003, between USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., and USAA
State Tax-Free 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 Bank
of America, N.A.
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
SIGNATURE PAGE TO FACILITY AGREEMENT LETTER
USAA 1067293_10.DOC
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 AND
OTHER FACILITY
USAA Mutual Fund, Inc. USAA Aggressive Growth 25%
USAA Growth & Income 25
USAA Income Stock 25
USAA Short-Term Bond 25
USAA Money Market 25
USAA Growth 25
USAA Income 25
USAA S&P 500 Index 25
USAA Science & Technology 25
USAA First Start Growth 25
ies USAA High Yield Opportunit 25
d USAA Intermediate-Term Bon 25
USAA Small Cap Stock 25
USAA Extended Market Index 25
USAA Nasdaq-100 Index 25
USAA Global Titans Index 25
USAA Capital Growth 25
USAA Value 25
USAA Investment Trust USAA Cornerstone Strategy 25
USAA Precious Metals and Minerals 25
USAA International 25
USAA World Growth 25
USAA GNMA Trust 25
USAA Treasury Money Market Trust 25
USAA Emerging Markets 25
USAA Growth and Tax Strategy 25
USAA Balanced Strategy 25
USAA Tax Exempt Fund, Inc. USAA Long-Term 15
USAA Intermediate-Term 15
USAA Short-Term 15
USAA Tax Exempt Money Market 15
USAA California Bond 15
USAA California Money Market 15
USAA New York Bond 15
USAA New York Money Market 15
USAA Xxxxxxxx Xxxx 15
USAA Virginia Money Market 15
USAA State Tax-Free Trust USAA Florida Tax-Free Income 15
USAA Florida Tax-Free Money Market 15
SCHEDULE A
USAA 1067293_10.DOC
SCHEDULE B TO FACILITY AGREEMENT LETTER
PERMITTED SUBADVISORS
Barclays Global Fund Advisors
Batterymarch Financial Management, Inc.
The Boston Company Asset Management, LLC
Deutsche Asset Management, Inc.
Dresdner RCM Global Investors LLC
Eagle Asset Management, Inc.
Xxxxxxx Capital Management, LLC
Xxxxxxx Xxxxx Quantitative Advisers
MFS Investment Management
Wellington Management Company, LLP
Westwood Management Corporation
SCHEDULE B
EXHIBIT A TO FACILITY AGREEMENT LETTER
MASTER GRID PROMISSORY NOTE
U.S.$100,000,000 Dated: January 9, 2003
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 BANK OF AMERICA, N.A. (the "BANK") at the Bank's office located at
000 Xxxx Xxxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000, in lawful money of the
United States of America, in immediately available funds, the principal amount
of all Loans made by the Bank to such Borrower for the benefit of the applicable
Funds under the Facility Agreement Letter dated January 9, 2003 (as amended or
modified, the "AGREEMENT"), among the Borrowers and the Bank, 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.
The Bank 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 the Bank 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. The Bank hereby agrees (i) that any claim, lia bility,
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.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE(S) FOLLOW]
EXHIBIT A
Signature to the Master Grid Promissory Note dated January 9, 2003, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., and USAA
State Tax-Free 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 Bank of America, N.A.
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 Funnds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
---------------------------------
Xxxxxxxxxxx X. Xxxxx, President
EXHIBIT A
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 9, 2003, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., and USAA STATE TAX-FREE TRUST
(not in their individual capacities, but on behalf of and for the benefit of the
series of funds comprising each such Borrower) payable to the order of BANK OF
AMERICA, N.A.
[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
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 THE BORROWERS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxxxxx X. Xxxxxxx
Senior Vice President, Fixed Income Investments (USAA)
Telephone: (000) 000-0000
Cellphone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: XXXXX.XXXXXXX@XXXX.XXX
Xxxxxx X. Xxxxxx
Vice President, Equity Investments (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: XXXXXX.XXXXXXX@XXXX.XXX
Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President, Mutual Fund Accounting and
Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: XXX.XXXXXXX@XXXX.XXX
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President, Mutual Fund Accounting and
Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: XXX.XXXXXXX@XXXX.XXX
EXHIBIT B
INSTRUCTIONS FOR PAYMENTS TO BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
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 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 Global Titans Index Fund Acct. # 0000-000-0
USAA Capital Growth Fund Acct. # 0000-000-0
USAA Value Fund Acct. # 0000-000-0
EXHIBIT B
BANKERS TRUST COMPANY, NEW YORK, NEW YORK
ABA #000000000
USAA S&P 500 Index Fund Acct.# 096699
THE CHASE MANHATTAN BANK, NEW YORK, NEW YORK
ABA #000000000
USAA Extended Market Index Fund Acct.# P83544
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 TAX EXEMPT FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA Long-Term Fund Acct. # 0000-000-0
USAA Intermediate-Term Fund Acct. # 0000-000-0
EXHIBIT B
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
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
EXHIBIT C
EXHIBIT C TO FACILITY AGREEMENT LETTER
ADDRESS FOR THE BANK
Bank of America, N.A.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx X'Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
EXHIBIT D
EXHIBIT D TO FACILITY AGREEMENT LETTER
OFFICER'S CERTIFICATE
The undersigned hereby certifies that he is the duly elected Secretary of USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., and USAA
State Tax-Free 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 Services
Automobile Association ("USAA"), the Senior 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 Letter dated January 9, 2003, with Bank of
America, N.A. 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. Senior 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. Xxxxxx Treasurer of the Borrowers /S/ XXXXX X. XXXXXX
-----------------------
Xxxxxxx Xxxxxxx, Xx. Assistant Treasurer of the
Borrowers /S/ XXXXXXX XXXXXXX, XX.
------------------------
IN WITNESS WHEREOF, I have executed the Certificate as of this 9th day of
January, 2003.
/S/ XXXX X. XXXXXX
-------------------------
Xxxx X. Xxxxxx, Secretary
I, Xxxxxxxxxxx X. Xxxxx, President 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 the signature set forth above is his true and correct signature.
DATE: January 9, 2003
/S/ XXXXXXXXXXX X. XXXXX
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
EXHIBIT E
BANK OF AMERICA
SUBORDINATION EXHIBIT E
Bank of America, N.A. AGREEMENT
--------------------------------------------------------------------------------
THIS IS AN AGREEMENT AMONG: DATED: January 9, 2003
--------------------------------------------------------------------------------
NAME AND ADDRESS NAME AND ADDRESS OF BORROWER: NAME AND ADDRESS
OF LENDER USAA Mutual Fund, Inc. OF CREDITOR:
(INCLUDING COUNTY): USAA Investment Trust USAA Capital Corporation
Bank of America, N.A. USAA Tax Exempt Fund, Inc. 0000 Xxxxxxxxxxxxxx Xxxx
000 Xxxx Xxxxxx XXXX Xxxxx Tax-Free Trust San Antonio, Texas 78288
Dallas, Dallas County, (Each on behalf of the Funds
Texas 75202 listed on Schedule A to the (CREDITOR)
(LENDER) Senior Facility Agreement
defined below)
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
(EACH SUCH FUND A DEBTOR)
--------------------------------------------------------------------------------
1. BACKGROUND. Debtor is or may be indebted to Lender pursuant to that certain
Facility Agreement Letter dated January 9, 2003, between Debtor and Lender
("Senior Facility Agreement"). Debtor also is or may be indebted to Creditor
pursuant to that certain Facility Agreement Letter dated January 9, 2003,
between Debtor and Creditor ("Subordinated Facility Agreement"). All debt (as
hereinafter defined) of a Debtor under the Senior Facility Agreement is
hereinafter referred to as "senior debt" and all debt (as hereinafter
defined) of a Debtor under the Subordinated Facility Agreement is hereinafter
referred to as "subordinated debt".
2. DEFINITION OF DEBT. The term "de bt" as used in the terms "senior debt" and
"subordinated debt" means all debts, obligations and liabilities, now or
hereafter existing, direct or indirect, absolute or contingent, joint or
several, secured or unsecured, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise,
irrespective of the person in whose favor such debt may originally have been
created and regardless of the manner in which such debt has been or may
hereafter be acquired by Lender or Creditor, as the case may be, and includes
all costs incurred to obtain, preserve, perfect or enforce any security
interest, lien or mortgage, or to collect any debt or to maintain, preserve,
collect and enforce any collateral, and interest on such amounts.
3. SUBORDINATION OF DEBT. Until senior debt has been paid in full, Debtor will
not pay and Creditor will not accept any payment on subordinated debt at any
time that an Event of Default (as defined in the Senior Facility Agreement)
has occurred and is continuing in respect of senior debt. Anything of value
received by Creditor on account of subordinated debt in violation of this
agreement will be held by Creditor in trust and immediately will be turned
over to Lender in the form received to be applied by Lender on senior debt.
4. REMEDIES OF CREDITOR. Until all senior debt has been paid in full, without
Lender's permission, Creditor will not be a party to any action or proceeding
against any person to recover subordinated debt. Upon written request of
Lender, Creditor will file any claim or proof of claim or take any other
action to collect subordinated debt in any bankruptcy, receivership,
liquidation, reorganization or other proceeding for relief of debtors or in
connection with Debtor's insolvency, or in liquidation or marshaling of
Debtor's assets or liabilities, or in any probate proceeding, and if any
distribution shall be made to Creditor, Creditor will hold the same in trust
for Lender and immediately pay to Lender, in the form received to be applied
on senior debt, all money or other assets received in any such proceedings on
account of subordinated debt until senior debt shall have been paid in full.
If Creditor shall fail to take any such action when requested by Lender,
Lender may enforce this agreement or as attorney in fact for Creditor and
Debtor may take any such action on Creditor's behalf. Creditor hereby
irrevocably appoints Lender Creditor's attorney in fact to take any such
action that Lender might request Creditor to take hereunder, and to xxx for,
compromise, collect and receive all such money and other assets and take any
other action in Lender's own name or in Creditor's name that Lender shall
consider advisable for enforcement and collection of subordinated debt, and
to apply any amounts received on senior debt.
5. MODIFICATIONS. At any time and from time to time, without Creditor's consent
or notice to Creditor and without liability to Creditor and without releasing
or impairing any of Lender's rights against Creditor or any of Creditor's
obligations hereunder, Lender may take additional or other security for
senior debt; release, exchange, subordinated or lose any security for senior
debt; release any person obligated on senior debt, modify, amend or waive
compliance with any agreement relating to senior debt; grant any adjustment,
indulgence or forbearance to, or compromise with, any person liable for
senior debt; neglect, delay, omit, fail or refuse to take or prosecute any
action for collection of any senior debt or t o foreclose upon any collateral
or take or prosecute any action on any agreement securing any senior debt.
6. SUBORDINATION OF LIENS. Creditor subordinates and makes inferior to any
security interests, liens or mortgages now or hereafter securing senior debt
all security interests, liens, or mortgages now or hereafter securing
subordinated debt. Any foreclosure against any property securing senior debt
shall foreclose, extinguish and discharge all security interests, liens and
mortgages securing subordinated debt, and any purchaser at any such
foreclosure sale shall take title to the property so sold free of all
security interest, liens and mortgages securing subordinated debt.
7. STATEMENT OF SUBORDINATION; ASSIGNMENT BY CREDITOR; ADDITIONAL INSTRUMENTS.
Debtor and Creditor will cause any instrument evidencing or securing
subordinated debt to bear upon its face a statement that such instrument is
subordinated to senior debt as set forth herein and will take all actions and
execute all documents appropriate to carry out this agreement. Creditor will
notify Lender not less than 10 days before any assignment of any subordinated
debt.
8. ASSIGNMENT BY LENDER. Lender's rights under this agreement may be assigned in
connection with any assignment or transfer of any senior debt.
9. VENUE. Debtor and Creditor agree that this agreement is performable in the
county of Lender's address set out above.
10.CUMULATIVE RIGHTS; WAIVERS. This instrument is cumulative of all other rights
and securities of the Lender. No waiver by Lender of any right hereunder,
with respect to a particular payment, shall affect or impair its rights in
any matters thereafter occurring.
11.SUCCESSORS AND ASSIGNS. This instrument is binding upon and shall inure to
the benefit of the heirs, executors, administrators, successors and assigns
of each of the parties hereto, but Creditor covenants that it will not assign
subordinated debt, or any part thereof, without making the rights and
interests of the assignee subject in all respects to the terms of this
instrument.
12.TERMINATION. This agreement shall terminate upon the termination of the
Senior Facility Agreement and repayment in full of the senior debt.
(LENDER) (EACH SUCH FUND A DEBTOR) (CREDITOR)
Bank of America, N.A. USAA Mutual Fund, Inc. USAA Capital Corporation
USAA Investment Trust
USAA Tax Exempt Fund, Inc.
USAA State Tax-Free Trust
By /S/ XXXX X'XXXXX By /S/ XXXXXXXXXXX X. XXXXX By /S/ XXXXX X. XXXXXXXXX
-------------------- --------------------------- ----------------------
Xxxx X'Xxxxx, its Xxxxxxxxxxx X. Xxxxx Xxxxx X. XxXxxxxxx,
Managing Director its President, its SVP - Treasurer
EXHIBIT F
EXHIBIT F TO FACILITY AGREEMENT LETTER
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT") dated as
of__________________, 20__ is made between __________________ (the "ASSIGNOR")
and _________________________ (the "ASSIGNEE").
RECITALS
WHEREAS, the Assignor is a lender under that certain Facility Agreement
Letter dated as of January 9, 2003, between USAA Mutual Fund, Inc., USAA
Investment Trust, USAA Tax Exempt Fund, Inc., and USAA State Tax-Free Trust
(each a "BORROWER" and collectively the "BORROWERS"), 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 to such Facility
Agreement Letter, and the lenders thereunder (the "FACILITY AGREEMENT"). Terms
defined in the Facility Agreement are used herein with the same meaning;
WHEREAS, as provided under the Facility Agreement, the Assignor has
committed to make loans to the Borrowers in an aggregate amount not to exceed
U.S.$________ (the "ASSIGNOR'S COMMITMENT");
WHEREAS, the Assignor wishes to assign to the Assignee part of the rights
and obligations of the Assignor under the Facility Agreement in respect of the
Assignor's Commitment, TOGETHER WITH a corresponding portion of each of its
outstanding Loans, in an amount equal to U.S.$_____________ (the "ASSIGNED
AMOUNT") on the terms listed on SCHEDULE I hereto and subject to the conditions
set forth in the Facility Agreement and herein, and the Assignee wishes to
accept assignment of such rights and to assume such obligations from the
Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ASSUMPTION.
(a) With effect on and after the Effective Date (as defined in SECTION 5
hereof), the Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, the Assigned Amount, which shall
be equal to _____% (the "ASSIGNEE'S PERCENTAGE SHARE") of the aggregate
Commitment under the Facility Agreement, including, without limitation, the
Assignee's Percentage Share of the aggregate Commitment and any outstanding
Loans. The assignment set forth in this SECTION 1(A) shall be without recourse
to, or representation or warranty (EXCEPT as expressly provided in this
Agreement) by, the Assignor.
(b) With effect on and after the Effective Date, the Assignee shall be a
party to the Facility Agreement and succeed to all of the rights and be
obligated to perform all of the obligations of the Assignor under the Facility
Agreement with a Commitment in an amount equal to the Assigned Amount. The
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the
EXHIBIT F
terms of the Facility Agreement are required to be performed by it as a Bank. It
is the intent of the parties hereto that the Assignor's Commitment shall, as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Facility Agreement to the extent such obligations have been assumed by the
Assignee.
(c) After giving effect to the assignment and assumption, on the
Effective Date, the Assignee's Commitment will be U.S.$_____________.
2. Payments.
(a) As consideration for the sale, assignment, and transfer contemplated in
SECTION 1 hereof, the Assignee shall pay to the Assignor on the Effective Date
in immediately available funds an amount equal to U.S.$_____________,
representing the Assignee's Percentage Share of the principal amount of all
Loans previously made, and currently outstanding, to the Borrowers under the
Facility Agreement on the Effective Date.
(b) All payments to the Assignor pursuant to this SECTION 2 shall be made
by wire transfer in immediately available funds to ________________, ABA:
___________, Account: _________, Attention: _____________, Reference:
______________, or to such other person or place as the Assignor may designate
in writing to the Assignee from time to time.
3. Reallocation of Payments. Any interest, commissions, fees, and other
payments accrued to but excluding the Effective Date with respect to the
Assigned Amount of the Loans and the aggregate Commitment, shall be for the
account of the Assignor. Any interest, fees, and other payments accrued on and
after the Effective Date with respect to the Assigned Amount shall be for the
account of the Assignee. Each of the Assignor and the Assignee agree that it
will hold in trust for the other party any interest, commissions, fees, and
other amounts which it may receive to which the other party is entitled pursuant
to the preceding sentence and pay to the other party any such amounts which it
may receive promptly upon receipt. The Assignor and the Assignee's obligations
to make the payments referred to in this SECTION 3 are non-assignable.
4. Independent Credit Decision. The Assignee (a) acknowledges that it has
received a copy of the Facility Agreement, TOGETHER WITH copies of the financial
statements referred to in SECTION 12(B) thereof, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Agreement; and (b) agrees that it will,
independently and without reliance upon the Assignor or any other lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit and legal decisions in taking or not
taking action under the Facility Agreement.
5. Effective Date. The effective date for this Agreement shall be
_______________ (the "EFFECTIVE DATE"); provided that the following conditions
precedent have been satisfied on or before the Effective Date:
(a) this Agreement shall be executed and delivered by the Assignor and
the Assignee, and a copy shall be sent to the Borrowers;
EXHIBIT F
(b)the requirements for an effective assignment by the Assignor set
forth in SECTION 22(A) of the Facility Agreement shall be satisfied with respect
to the Assigned Amount; and any consents required for an effective assignment of
the Assigned Amount by the Assignor to the Assignee shall have been duly
obtained and shall be in full force and effect as of the Effective Date; and
(c) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Agreement.
6. Withholding Tax. If the Assignee is organized under the laws of any
jurisdiction OTHER THAN the United States or any state or other political
subdivision thereof it agrees that it will furnish the Borrowers, concurrently
with the execution of this Agreement, either U.S. Internal Revenue Service FORM
W-8BEN or U.S. Internal Revenue Service FORM W8-8ECI (wherein the Assignee
claims entitlement to complete exemption from or reduced rate of U.S. federal
withholding tax on all interest payments under the Facility Agreement) and, upon
the expiration or obsolescence of any previously delivered form, with a new U.S.
Internal Revenue Service FORM W-8BEN or FORM W8-8ECI and comparable statements
in accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by the Assignee, PROVIDED, HOWEVER, that the Assignee
shall not be required to deliver a FORM W-8BEN or W8-8ECI under this SECTION 6
to the extent that the delivery of such form is not authorized by law.
7. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any lien, security interest, or other adverse
claim; (ii) it is duly organized and existing and it has the full power and
authority to take, and has taken, all action necessary to execute and deliver
this Agreement and any other documents required or permitted to be executed or
delivered by it in connection with this Agreement and to fulfill its obligations
hereunder, (iii) no notices to, or consents, authorizations, or approvals of,
any person are required (OTHER THAN any already given or obtained) for its due
execution, delivery, and performance of this Agreement, and apart from any
agreements or undertakings or filings required by the Facility Agreement, no
further action by, or notice to, or filing with, any person is required of it
for such execution, delivery, or performance; and (iv) this Agreement has been
duly executed and delivered by it and constitutes the legal, valid, and binding
obligations of the Assignor, enforceable against the Assignor in accordance with
the terms hereof, except subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization, and other laws of general application relating to or
affecting creditors' rights and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties, or representations
made in or in connection with the Facility Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency, or value of the Facility
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition, or statements
of the Borrowers or any guarantor or the performance or observance by the
Borrowers or any guarantor of any of their respective obligations under the
Facility Agreement or any other instrument or document furnished in connection
therewith.
EXHIBIT F
(c) The Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Agreement and any other documents
required or permitted to be executed or delivered by it in connection with this
Agreement, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations, or approvals of, any person are required (OTHER THAN
any already given or obtained) for its due execution, delivery, and performance
of this Agreement; and apart from any agreements or undertaking or filings
required by the Facility Agreement, no further action by, or notice to, or
filing with, any person is required of it for such execution, delivery, or
performance; (iii) this Agreement has been duly executed and delivered by it and
constitutes the legal, valid, and binding obligations of the Assignee,
enforceable against the Assignee in accordance with the terms hereof, EXCEPT
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization, and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; (iv) it is an Eligible
Assignee under the Facility Agreement; and (v) to the best of its knowledge, no
action, suit, or proceeding is pending or threatened against it in any court or
before any arbitrator or governmental body which seeks to restrain any of the
transactions contemplated by this Agreement.
8. FURTHER ASSURANCES. The Assignor and the Assignee each hereby agrees to
execute and deliver such other instruments, and take such other action, as
either party may reasonably request in connection with the transactions
contemplated by this Agreement, including, without limitation, the delivery of
any notices or other documents or instruments to the Borrowers or any guarantor
which may be required in connection with the assignment and assumption
contemplated hereby.
9. INDEMNITY. The Assignee agrees to indemnify and hold harmless the
Assignor against any and all losses, costs, expenses (including, without
limitation, reasonable attorneys' fees and the allocated cost of internal legal
services and all disbursements of internal counsel) and liabilities incurred by
the Assignor in connection with or arising in any manner from the
non-performance by the Assignee of any obligation assumed by the Assignee under
this Agreement.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Agreement shall
be in writing signed by the parties hereto. No failure or delay by either party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof and any waiver of any breach of the provisions of this Agreement
shall be without prejudice to any rights with respect to any other or further
breach hereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) All communications among the parties or notices in connection
herewith shall be in writing, hand-delivered or facsimile transmitted (with
confirmed receipt), addressed as follows: (i) if to the Assignor or the
Assignee, at their respective addresses set forth on the signature pages hereof
and (ii) if to the Borrowers, at their respective addresses set forth in the
Facility Agreement or other documents or instruments. All such communications
and notices shall be effective upon receipt. The Assignee specifies as its
lending office the office set forth beneath its name on the signature pages
hereof.
(d) The Assignor and the Assignee shall each pay its own costs and
expenses (including attorney's fees) incurred in connection with the
negotiation, preparation, execution, and performance of this Agreement.
EXHIBIT F
(e) The representations and warranties made herein shall survive the
consummation of the transactions contemplated hereby.
(f) This Agreement shall be binding upon and inure to the benefit of
the Assignor and the Assignee and their respective successors and assigns,
subject to the provisions of the Facility Agreement.
(g) The Assignor may at any time or from time to time grant to others
assignments or participations in Assignor's Commitment or the Loans, subject to
the provision of the Facility Agreement, but not in the portions thereof
assigned to the Assignee pursuant to this Agreement.
(h) This Agreement may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
(i) This Agreement shall be governed by and construed in accordance
with the law of the State of Texas. The Assignor and the Assignee each
irrevocably submits to the non-exclusive jurisdiction of any Texas State or
Federal court sitting in The City of Dallas, Texas, over any suit, action, or
proceeding arising out of or relating to this Agreement and irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such Texas State or Federal court. Each party to this Agreement
hereby irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding.
(j) This Agreement and any agreement, document, or instrument attached
hereto or referred to herein integrate all the terms and conditions mentioned
herein or incidental hereto, constitutes the entire agreement and understanding
between the parties hereto and supersedes any and all prior agreements and
understandings related to the subject matter hereof. In the event of any
conflict between the terms, conditions, and provisions of this Agreement and any
such agreement, document, or instrument, the terms, conditions, and provisions
of this Agreement shall prevail.
(k) In the event of any inconsistency between the provisions of this
Agreement and SCHEDULE I hereto, this Agreement shall control. Headings are for
reference only and are to be ignored in interpreting this Agreement.
(l) The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in any way
affect or impair the legality or enforceability of the remaining provisions of
this Agreement or any instrument or agreement required hereunder.
(m) EACH OF THE ASSIGNOR AND THE ASSIGNEE WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY IN ANY ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE(S) FOLLOW]
EXHIBIT F
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
---------------------------------------------
Assignor
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
---------------------------------------------
Assignee
By: ______________________________________
Name: ______________________________________
Title: ______________________________________
Lending Office:
_____________________________________________
_____________________________________________
EXHIBIT F
SCHEDULE I
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
--------------------------------------------------------------------------------
1. BORROWERS USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc., and
USAA State Tax-Free 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 to the Facility
Agreement)
--------------------------------------------------------------------------------
2. DATE OF FACILITY AGREEMENT January 9, 2003
--------------------------------------------------------------------------------
3. ASSIGNOR
--------------------------------------------------------------------------------
4. ASSIGNEE
--------------------------------------------------------------------------------
5. DATE OF ASSIGNMENT AGREEMENT
--------------------------------------------------------------------------------
6. EFFECTIVE DATE
--------------------------------------------------------------------------------
7. ASSIGNEE'S SHARE
--------------------------------------------------------------------------------
(A) ASSIGNEE'S PERCENTAGE SHARE
--------------------------------------------------------------------------------
(B) ASSIGNED AMOUNT
--------------------------------------------------------------------------------
8. PAYMENT INSTRUCTIONS
--------------------------------------------------------------------------------
ASSIGNOR
--------------------------------------------------------------------------------
ASSIGNEE
--------------------------------------------------------------------------------
9. ASSIGNEE'S NOTICE INSTRUCTIONS
--------------------------------------------------------------------------------
10. OTHER INFORMATION
--------------------------------------------------------------------------------
EXHIBIT F
EXHIBIT 8 (c)
January 09, 2003
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
Xxxxx X. Xxxxxxxxx, 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 09, 2003 and ending January 08, 2004 (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 10, 2002, 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.
$400,000,000 (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 and the Other Facility (defined below) 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 and/or a loan outstanding under the Other Facility (defined
below) for the benefit of such Fund, if the aggregate amount of such Loan and
such other loan under the Other Facility 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, which 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 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. Further, as to the investment companies except
USAA Life Investment Trust, if the CAPCO rate exceeds the rate at which a
Borrower could obtain funds pursuant to the Bank of America, N.A. ("Bank of
America") 364-day committed $100,000,000 Master Revolving Credit Facility, the
Borrower will in the absence of predominating circumstances, borrow from Bank of
America. 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 Borrower's 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 .09 of one percent
(9 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 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 Trustees or Board of Directors 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 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 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 ninety (90) 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 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 (i) pursuant to a U.S.
$100,000,000 committed master revolving credit facility with Bank of America
N.A. (the "OTHER FACILITY") and (ii) 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;
(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 subadvisors listed on
SCHEDULE B as subadvisors for any Fund and may add new subadvisors as provided
in SECTION 16(B); or
(g) An event of default shall occur and be continuing under
the Other Facility with respect to a Fund;
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 SUBADVISORS
(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
subadvisors, 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 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 b given or made
upon the EARLIER to occur of (i) actual receipt by the relevant party hereto ad
(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 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.
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 9, 2003, 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/ XXXXXXXXXXXX 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/ XXXXX X. XXXXXXXXX
-----------------------------
Xxxxx X. Xxxxxxxxx, President
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 Global Titans 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 Fund "
USAA Balanced 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 Fund "
USAA Life Growth and Income Fund "
USAA Life World Growth Fund "
USAA Life Diversified Assets Fund "
USAA Life Aggressive Growth Fund "
Schedule A
SCHEDULE B TO FACILITY AGREEMENT LETTER
PERMITTED SUBADVISORS
Barclays Global Fund Advisors
Batterymarch Financial Management, Inc.
The Boston Company Asset Management, LLC
Deutsche Asset Management, Inc.
Dresdner RCM Global Investors LLC
Eagle Asset Management, Inc.
Xxxxxxx Capital Management, LLC
Xxxxxxx Xxxxx Quantitative Advisers
MFS Investment Management
Wellington Management Company, LLP
Westwood Management Corporation
Schedule B
EXHIBIT A TO FACILITY AGREEMENT LETTER
MASTER GRID PROMISSORY NOTE
U.S. $400,000,000 Dated: January 09, 2003
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 09, 2003 (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.
Loans under the Agreement and this Note (except to USAA Life Investment
Trust) are subordinated to loans made under the $100,000,000 364-day committed
Master Revolving Credit Facility Agreement between the Borrowers and Bank of
America, N.A. (Bank of America), dated January 09, 2003, in the manner and to
the extent set forth in the Agreement among the Borrowers, CAPCO and Bank of
America, dated January 09, 2003.
This Note shall be governed by the laws of the state of Texas.
Exhibit A
Signature to the Master Grid Promissory Note dated January 09, 2003, 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/ XXXXX X. XXXXXXXXX
-----------------------------------
Xxxxx X. Xxxxxxxxx, President
Exhibit A
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 09, 2003, 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
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 THE BORROWERS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxxxxx X. Xxxxxxx
Senior Vice President, Fixed Income Investments (USAA)
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)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: XXXXXX.XXXXXXX@XXXX.XXX
Attention: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President,
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: xxx.xxxxxxx@xxxx.xxx
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 ( for Federal Express, 78240)
Attention: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President,
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: xxx.xxxxxxx@xxxx.xxx
Exhibit B
BORROWERS: USAA LIFE INVESTMENT TRUST
ADDRESS FOR NOTICES AND OTHER COMMUICATIONS TO THE BORROWERS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 ( for Federal Express, 78240)
Attention: Xxxxx X. Xxxxxx
Senior Vice President
USAA Investment Management Company
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: xxxxx.xxxxxx@xxxx.xxx
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 ( for Federal Express, 78240)
Attention: Primary - Xxxxx X. Xxxxxx
Senior Vice President
USAA Investment Management Company
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: xxxxx.xxxxxx@xxxx.xxx
Copies to: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: xxx.xxxxxxx@xxxx.xxx
INSTRUCTIONS FOR PAYMENTS TO BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
-------- ----------
Exhibit B
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 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 GLOBAL TITANS INDEX FUND ACCT.#0000-000-0
USAA CAPITAL GROWTH FUND ACCT.#0000-000-0
USAA VALUE FUND ACCT.#0000-000-0
BANKERS TRUST COMPANY, NEW YORK, NEW YORK
ABA #000000000
USAA S&P 500 INDEX FUND ACCT.#096699
Exhibit B
THE CHASE MANHATTAN BANK, NEW YORK, NEW YORK
ABA #000000000
USAA EXTENDED MARKET INDEX FUND ACCT.#P83544
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 TAX EXEMPT FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA 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
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 AND INCOME FUND ACCT.# 0000-000-0
USAA 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
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
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. and USAA
State Tax-Free Trust; and Xxxxxxx X. Xxxxx hereby certifies she is the duly
elected Secretary of USAA Life Investment Trust (each a "BORROWER" and
collectively the "BORROWERS"), and that they are 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 Senior 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 9, 2003, 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. Senior 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. Xxxxxx Treasurer of the Borrowers /S/ XXXXX X. XXXXXX
-----------------------
Xxxxxxx Xxxxxxx, Xx. Assistant Treasurer of the
Borrowers /S/ XXXXXX XXXXXXX, XX.
-----------------------
IN WITNESS WHEREOF, we have executed the Certificate as of this 9th day of
January, 2003.
/S/ XXXX X. XXXXXX /S/ XXXXXX X. XXXXX
--------------------- -----------------------------
Xxxx X. Xxxxxx Xxxxxxx X. Xxxxx
Secretary Secretary
I, Xxxxxxxxxxx X. Xxxxx, officer of the Borrowers hereby certify that Xxxx X.
Xxxxxx and Xxxxxxx X. Xxxxx are, and have been at all times since a date prior
to the date of this Certificate, the duly elected, qualified, and acting
Secretaries of the Borrowers and that their signatures set forth above are their
true and correct signature.
Date: January 9, 2003
/S/ XXXXXXXXXXX X. XXXXX
-----------------------------
Xxxxxxxxxxx X. Xxxxx, Officer
Exhibit D
MASTER GRID PROMISSORY NOTE
U.S. $400,000,000 Dated: January 09, 2003
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 09, 2003 (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.
Loans under the Agreement and this Note (except to USAA Life Investment
Trust) are subordinated to loans made under the $100,000,000 364-day committed
Mater Revolving Credit Facility Agreement between the Borrowers and Bank of
America, N.A. (Bank of America), dated January 09, 2003, in the manner and to
the extent set forth in the Agreement among the Borrowers, CAPCO and Bank of
America, dated January 09, 2003.
This Note shall be governed by the laws of the state of Texas.
Signature to the Master Grid Promissory Note dated January 09, 2003, 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/ XXXXX X. XXXXXXXXX
-----------------------------------
Xxxxx X. Xxxxxxxxx, President
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 09, 2003, 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
