EXHIBIT 8(g)
January 13, 1998
USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc., and
USAA State Tax-Free Trust, 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: Xxxxxxx X.X. Xxxx, President
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") may from time to time make during the period
commencing January 13, 1998 and ending January 12, 1999 (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 on
behalf of and for the benefit of the series of funds comprising each such
Borrower as set forth on Schedule A hereto (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"). USAA Investment
Management Company is the Manager and Investment Advisor of each Fund. This
Agreement replaces in its entirety that certain Facility Agreement Letter dated
January 14, 1997, between the Borrowers and CAPCO. CAPCO and the Borrowers
hereby agree as follows:
1. AMOUNT. The aggregate principal amount of the Loans which may be
advanced under this Facility shall not exceed, at any one time outstanding,
Seven Hundred Fifty Million Dollars ($750,000,000). The aggregate principal
amount of the Loans which may be borrowed by a Borrower for the benefit of a
particular Fund under this Facility shall not exceed the borrowing limit (the
"Borrowing Limit") on borrowings applicable to such Fund, as set forth on
Schedule A hereto.
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 (Schedule A) 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 or any other facility, if the aggregate
amount of such Loan and any other such loan exceeds 5% of the total assets of
such Fund.
3. BORROWING RATE AND MATURITY OF LOANS. CAPCO may make Loans to a
Borrower and the principal amount of the Loans outstanding from time to time
shall bear interest at a rate per annum equal to the rate at which CAPCO
obtains funding in the capital markets plus a standard xxxx-up to cover CAPCO's
operating costs (not to exceed 8 basis points). 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.
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, if the CAPCO rate exceeds the rate at which a
Borrower could obtain funds pursuant to the NationsBank of Texas, N.A.
("NationsBank") 364-day committed $100,000,000 Master Revolving Credit
Facility, the Borrower will in the absence of predominating circumstances,
borrow from NationsBank. 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 percent (100 basis points) 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 may
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 at CAPCO's sole and
absolute discretion, borrow, repay and reborrow funds hereunder. The Loans
shall be evidenced by a duly executed and delivered Master Grid Promissory Note
in the form of Exhibit A. Each Loan shall be in an aggregate amount not less
than Xxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars (U.S. $100,000) and increments
of One Thousand United States Dollars (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 p.m. San Antonio 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. As this Facility is uncommitted, no facility fee shall be
charged by CAPCO.
6. OPTIONAL TERMINATION. The Borrowers shall have the right upon at least
three (3) business days prior written notice to CAPCO, to terminate the
Facility.
7. MANDATORY TERMINATION OF THE FACILITY. The Facility, unless extended by
written amendment, 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.
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8. UNCOMMITTED FACILITY. The Borrowers acknowledge that the Facility is an
uncommitted facility and that CAPCO shall have no obligation to make any Loan
requested during the Facility Period under this Agreement. Further, CAPCO shall
not make any Loan if this Facility has been terminated by the Borrowers, or if
at the time of a request for a Loan by a Borrower (on behalf of the applicable
Fund(s)) 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 Borrower (or such applicable Fund(s)).
9. LOAN REQUESTS. Each request for a Loan (each a "Borrowing Notice")
shall be in writing by the applicable Borrower(s), except that such Borrower(s)
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(s) which are borrowing such
Loan and the amount of such Loan to be borrowed by each Borrower, (iv) the
Funds 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
time on the day the Loan is requested to be made.
Each Borrowing Notice shall constitute a representation to CAPCO by the
applicable Borrower(s) that all of the representations and warranties in
Section 12 hereof 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.
10. CONFIRMATIONS; CREDITING OF FUNDS; RELIANCE BY CAPCO. Upon receipt by
CAPCO of a Borrowing Notice:
(a) CAPCO shall provide each 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 any 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(s) as specified in EXHIBIT B to this Agreement or as
such Borrower(s) shall otherwise specify to CAPCO in a writing signed by an
Authorized Individual (as defined in Section 11) of such Borrower(s); and
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(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 Borrower.
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 such 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 to this Agreement,
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 makes with respect to itself, and as may be relevant, the 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. The 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. The Borrower has furnished
CAPCO with certain financial statements of such Borrower with respect to itself
and the applicable Funds, 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 or the
applicable Funds 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;
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(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 the Borrower and will not result in any violation of or be in conflict with
or constitute a default under any term of the charter, by- laws or trust
agreement of such Borrower or the applicable Funds, or of any borrowing
restrictions or prospectus or statement of additional information of such
Borrower or the applicable Funds, or of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Borrower, or result in the creation of any mortgage, lien, charge or
encumbrance upon any of the properties or assets of such Borrower or the
applicable Funds pursuant to any such term. The Borrower and the applicable
Funds are not in violation of any term of their respective charter, by-laws or
trust agreement, and such Borrower and the applicable Funds 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. The Borrower and the applicable Funds are in
compliance in all material respects with all federal and state securities or
similar laws and regulations, including all material rules, regulations and
administrative orders of the Securities and Exchange Commission (the "SEC") and
applicable Blue Sky authorities. The Borrower and the applicable Funds are in
compliance in all material respects with all of the provisions of the
Investment Company Act of 1940, and such Borrower has filed all reports with
the SEC that are required of it or the applicable Funds;
(e) LITIGATION. There is no action, suit or proceeding pending or, to
the best of the Borrower's knowledge, threatened against such Borrower or the
applicable Funds in any court or before any arbitrator or governmental body
which seeks to restrain any of the transactions contemplated by this Agreement
or which, if adversely determined, could have a material adverse effect on the
assets or business operations of such Borrower or the applicable Funds or the
ability of such Borrower and the applicable Funds to pay and perform their
obligations hereunder and under the Notes; and
(f) BORROWERS' RELATIONSHIP TO FUNDS. The assets of each Fund for
whose benefit Loans are borrowed by the applicable Borrower are subject to and
liable for such Loans and are available (except as subordinated to borrowings
under the NationsBank committed facility) to the applicable Borrower for the
repayment of such Loans.
13. AFFIRMATIVE COVENANTS OF THE BORROWERS. Until such time as all
amounts of principal and interest due to CAPCO by a Borrower pursuant to any
Loan made to such Borrower is irrevocably paid in full, and until the Facility
is terminated, such Borrower (for itself and on behalf of its respective Funds)
agrees:
5
(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 Funds, 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 Funds, 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 Funds
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 to
perform its 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 materially
affect the ability of such Borrower or the applicable Funds to promptly repay
the outstanding Loans or otherwise perform their obligations hereunder; and
(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.
(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 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.
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14. NEGATIVE COVENANTS OF THE BORROWERS. Until such time as all amounts of
principal and interest due to CAPCO by a Borrower pursuant to any Loan made to
such Borrower is irrevocably paid in full, and until the Facility is
terminated, such Borrower (for itself and on behalf of its respective Funds)
agrees:
(a) Not to incur any indebtedness for borrowed money (other than
pursuant to the One Hundred Million Dollar ($100,000,000) committed Master
Revolving Credit Facility with NationsBank and for overdrafts incurred at the
custodian of the Funds from time to time in the normal 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 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 or Borrower shall not constitute an Event of Default with
respect to any other Fund or Borrower):
(a) Any Borrower or Fund shall default in the payment of principal or
interest on any Loan or any other fee due hereunder for a period of five (5)
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) Any Borrower or Fund shall default in the performance of or
compliance with any term contained in Section 13 hereof and such default shall
not have been remedied within thirty (30) days after written notice thereof
shall have been given such Borrower or Fund by CAPCO;
(c) Any Borrower or Fund shall default in the performance of or
compliance with any term contained in Section 14 hereof;
(d) Any Borrower or Fund shall default in the performance or
compliance with any other term contained herein and such default shall not have
been remedied within thirty (30) days after written notice thereof shall have
been given such Borrower or Fund by CAPCO;
(e) Any representation or warranty made by a Borrower or Fund herein
or
7
pursuant hereto shall prove to have been false or incorrect in any material
respect when made;
(f) An event of default shall occur and be continuing under any other
facility; 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 or Fund (i) terminate the Facility with respect to such Borrower or
Fund and (ii) declare the principal and interest in respect of any outstanding
Loans with respect to such Borrower or Fund, and all other amounts due
hereunder with respect to such Borrower or 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.
16. NEW BORROWERS; NEW FUNDS. 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:
(a) 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 the corresponding
Schedule and Exhibit 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
(b) 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 the corresponding Schedule and Exhibit 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 approval of CAPCO.
17. LIMITED RECOURSE. CAPCO agrees (i) 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 (ii) 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
8
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(s) and/or 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) 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.
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. The Fund(s) (to be allocated among the Funds as the
Borrowers deem appropriate) 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.
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. All notices hereunder and all written, facsimile or
telecopied confirmations of Oral Requests made hereunder shall be sent to the
Borrowers as indicated on EXHIBIT B and to CAPCO as indicated on EXHIBIT C.
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
9
construed in accordance with the laws of the state of Texas without regard to
the choice of law provisions thereof.
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.
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, the Funds and CAPCO.
Sincerely,
USAA CAPITAL CORPORATION
By: /s/ XXXXXX X. XXXXX
----------------------------
Xxxxxx X. Xxxxx
Vice President-Treasurer
AGREED AND ACCEPTED this 13th
Day of January, 1998.
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/ XXXXXXX X.X. XXXX
----------------------------
Xxxxxxx X.X. Xxxx
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/ XXXXXXX X.X. XXXX
----------------------------
Xxxxxxx X.X. Xxxx
President
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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/ XXXXXXX X.X. XXXX
----------------------------
Xxxxxxx X.X. Xxxx
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/ XXXXXXX X.X. XXXX
----------------------------
Xxxxxxx X.X. Xxxx
President
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SCHEDULE A
FUNDS FOR WHOSE BENEFIT LOANS CAN
BE BORROWED UNDER FACILITY AGREEMENT
BORROWER FUNDS BORROWING LIMIT
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 "
USAA Science & Technology "
USAA First Start Growth "
USAA Investment Trust USAA Cornerstone Strategy "
USAA Gold "
USAA International "
USAA World Growth "
USAA GNMA Trust "
USAA Treasury Money Market Trust "
USAA Emerging Markets "
USAA Growth and Tax Strategy "
USAA Balanced Strategy "
USAA Growth Strategy "
USAA Income 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 Texas Tax-Free Income "
USAA Texas Tax-Free Money Market "
.16901
EXHIBIT A
MASTER GRID PROMISSORY NOTE
U.S. $750,000,000 Dated: January 13, 1998
FOR VALUE RECEIVED, each of the undersigned (each a "Borrower" and
collectively the "Borrowers"), severally and not jointly, 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 13, 1998 (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 are subordinated to loans made
under the $100,000,000 364-day committed Master Revolving Credit Facility
Agreement between the Borrowers and NationsBank of Texas, N.A. (NationsBank),
dated January 14, 1998, in the manner and to the extent set forth in the
Agreement among the Borrowers, CAPCO and NationsBank, dated January 14, 1998.
This Note shall be governed by the laws of the state of Texas.
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/ XXXXXXX X.X. XXXX
----------------------------
Xxxxxxx X.X. Xxxx
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/ XXXXXXX X.X. XXXX
----------------------------
Xxxxxxx X.X. Xxxx
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/ XXXXXXX X.X. XXXX
----------------------------
Xxxxxxx X.X. Xxxx
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/ XXXXXXX X.X. XXXX
----------------------------
Xxxxxxx X.X. Xxxx
President
.16901
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note
dated January 13, 1998, executed by USAA MUTUAL FUND, INC., USAA INVESTMENT
TRUST, USAA TAX EXEMPT FUND, INC. AND USAA STATE TAX-FREE TRUST 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 B
USAA CAPITAL CORPORATION
MASTER REVOLVING
CREDIT FACILITY AGREEMENT
BORROWER INFORMATION SHEET
BORROWER: 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 BORROWER:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (For Federal Express, 78240)
Attention: Xxxx X. Xxxxxxxx, Xx.
Senior Vice President,
Fixed Income Investments
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Xxxxx X. Xxxxxx
Senior Vice President,
Equity Investments
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 498-7819
Telex: 767424
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)
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #011-00-0028
USAA MUTUAL FUND, INC.
----------------------
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 S&P 500 Index Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA Science & Technology Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA First Start Growth Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA INVESTMENT TRUST
---------------------
USAA Cornerstone Strategy Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA Gold 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 Growth Strategy Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA Income Strategy Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA TAX EXEMPT FUND, INC.
--------------------------
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
-----------------------------------------------------------------
USAA STATE TAX-FREE TRUST
-------------------------
USAA Florida Tax-Free Income Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA Florida Tax-Free Money Market Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA Texas Tax-Free Income Fund Acct.# 0000-000-0
-----------------------------------------------------------------
USAA Texas Tax-Free Money Market Fund Acct.# 0000-000-0
-----------------------------------------------------------------
.16901
EXHIBIT C
ADDRESS FOR USAA CAPITAL CORPORATION
USAA Capital Corporation
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
.16901
EXHIBIT D
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 and that he is authorized to execute this Certificate on
behalf of USAA Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund,
Inc. and USAA State Tax-Free Trust. The undersigned hereby further certifies to
the following:
The following individuals are duly authorized to act on behalf of USAA Mutual
Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc. and USAA State
Tax-Free Trust, by transmitting telephonic, telex, or telecopy instructions and
other communications with regard to borrowing and payments pursuant to the
uncommitted Master Revolving Credit Agreement with USAA Capital Corporation.
The signature set opposite the name of each individual below is that
individual's genuine signature.
NAME OFFICE SIGNATURE
---- ------ ---------
Xxxxxxx X.X. Xxxx President /s/ Xxxxxxx X.X. Xxxx
-------------------------
Xxxx X. Xxxxxxxx, Xx. Senior Vice President,
Fixed Income Investments /s/ Xxxx X. Xxxxxxxx, Xx.
-------------------------
Xxxxx X. Xxxxxx Senior Vice President,
Equity Investments /s/ Xxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxxxx Vice President,
Mutual Fund Portfolios /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Xxxxx X. Xxxxxxx Vice President,
Equity Investments /s/ Xxxxx X. Xxxxxxx
-------------------------
Xxxxxxx X. Xxxx Vice President,
Controller /s/ Xxxxxxx X. Xxxx
-------------------------
Xxxxx X. Xxxxx Manager,
Mutual Fund Accounting /s/ Xxxxx X. Xxxxx
-------------------------
IN WITNESS WHEREOF, I have executed this Certificate as of this 13th day of
January, 1998.
/s/ XXXXXXX X. XXXXXX
------------------------
XXXXXXX X. XXXXXX
Secretary
I, Xxxxxxx X.X. Xxxx, President of USAA Mutual Fund, Inc., USAA Investment
Trust, USAA Tax Exempt Fund, Inc. And USAA State Tax-Free Trust hereby certify
that Xxxxxxx 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
USAA Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc. And
USAA State Tax-Free Trust and that the signature set forth above is his true
and correct signature.
DATE: January 13, 1998 /s/ XXXXXXX X. XXXXXX
------------------------
XXXXXXX X.X. XXXX
President
.16901
EXHIBIT 8(h)
January 14, 1998
USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc., and
USAA State Tax-Free Trust, 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: Xxxxxxx X.X. Xxxx, President
Gentlemen:
This Facility Agreement Letter (this "Agreement") sets forth the terms and
conditions for loans (each a "Loan" and collectively the "Loans") which
NationsBank of Texas, N.A. (the "Bank") agrees to make during the period
commencing January 14, 1998 and ending January 13, 1999 (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 on
behalf of and for the benefit of the series of funds comprising each such
Borrower as set forth on Schedule A hereto (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
15, 1997, 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, Xxx Xxxxxxx
Xxxxxxx Xxxxxx Xxxxxx Dollars (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 (hereinafter defined) shall not exceed the percentage
(the "Borrowing Limit") of the total assets of such Fund as set forth on
Schedule A hereto.
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 for the
benefit of such Fund, if the aggregate amount of such Loan and such other loan
exceeds 5% of the total assets of such Fund. The Borrowers will not, and will
not permit any Fund to, directly or indirectly, use any proceeds of any Loan
for any purpose 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 the
Loans outstanding from time to time shall bear interest at a rate per annum
equal to, at the option of the applicable Borrower(s), (i) the aggregate of the
Federal Funds Rate (as defined below) plus .125 of one percent (1%) (12.5 basis
points) or (ii) the aggregate of the London Interbank Offered Rate (as defined
below) plus 12.5 basis points. The rate of interest payable on such
outstanding amounts 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(s) and the Bank 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 at which United States dollar deposits are offered by the Bank in the
London interbank market at approximately 11:00 a.m. London time two business
days prior to the first day of the interest period (of 7 or 14 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 if it would be unlawful for the Bank to make or maintain Loans 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 Loans. 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 shall bear interest at a rate per annum equal to the
aggregate of the Federal Funds Rate plus 1.125 percent (112.5 basis points) and
shall be payable on demand. If the applicable Borrowers do 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 or Loans 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 behalf of and for the benefit of its
respective Fund(s) during the Facility Period, and each Borrower may borrow,
repay and reborrow funds hereunder. The Loans shall be evidenced by a duly
executed and delivered Master Grid Promissory Note in the form of EXHIBIT A.
Each Loan shall be in an aggregate amount not less than Xxx Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx Dollars (U.S. $100,000) and increments of One Thousand United
States Dollars (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
p.m. Dallas 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 Borrower(s) 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, the Funds (to be allocated
among the Funds as the Borrowers deem appropriate) shall pay to the Bank a
facility fee (the "Facility Fee") in the amount of .05 of one percent (5 basis
points) of the amount of the Commitment, as it may be reduced pursuant to
section 6. The Facility Fee shall be payable quarterly in arrears beginning
March 31, 1998, and upon termination of the Facility (whether by acceleration
or otherwise).
6. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. The Borrowers shall
have the right upon at least three (3) 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 Five Million United
States Dollars (U.S. $5,000,000) or any larger integral multiple of One Million
United States Dollars (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 if at the time of a request for a Loan by a Borrower (on behalf
of the applicable Fund(s)) 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 Borrower (or such applicable
Fund(s)).
9. LOAN REQUESTS. Each request for a Loan (each a "Borrowing Notice")
shall be in writing by the applicable Borrower(s), except that such Borrower(s)
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(s) which are borrowing such
Loan and the amount of such Loan to be borrowed by each Borrower, (iv) the
Funds 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 at 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 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 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(s) that all of the representations and warranties in
Section 12 hereof 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.
10. CONFIRMATIONS; CREDITING OF FUNDS; RELIANCE BY THE BANK. Upon
receipt by the Bank of a Borrowing Notice:
(a) The Bank shall send each 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 any 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(s) as specified in EXHIBIT B to this Agreement or as
such Borrower(s) shall otherwise specify to the Bank in a writing signed by an
Authorized Individual (as defined in Section 11) of such Borrower(s) 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 Borrower.
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 such
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 to this Agreement, 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 to
this Agreement, 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 makes with respect to itself, and as may be relevant, the 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. The 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. The Borrower has
furnished the Bank with certain financial statements of such Borrower with
respect to itself and the applicable Funds, 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 or the applicable Funds 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 the Borrower and will not result in any violation of or be in
conflict with or constitute a default under any term of the charter, by-laws or
trust agreement of such Borrower or the applicable Funds, or of any borrowing
restrictions or prospectus or statement of additional information of such
Borrower or the applicable Funds, or of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Borrower, or result in the creation of any mortgage, lien, charge or
encumbrance upon any of the properties or assets of such Borrower or the
applicable Funds pursuant to any such term. The Borrower and the applicable
Funds are not in violation of any term of their respective charter, by-laws or
trust
agreement, and such Borrower and the applicable Funds 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. The Borrower and the applicable Funds are in
compliance in all material respects with all federal and state securities or
similar laws and regulations, including all material rules, regulations and
administrative orders of the Securities and Exchange Commission (the "SEC") and
applicable Blue Sky authorities. The Borrower and the applicable Funds are in
compliance in all material respects with all of the provisions of the
Investment Company Act of 1940, and such Borrower has filed all reports with
the SEC that are required of it or the applicable Funds;
(e) LITIGATION. There is no action, suit or proceeding pending or,
to the best of the Borrower's knowledge, threatened against such Borrower or
the applicable Funds in any court or before any arbitrator or governmental body
which seeks to restrain any of the transactions contemplated by this Agreement
or which, if adversely determined, could have a material adverse effect on the
assets or business operations of such Borrower or the applicable Funds or the
ability of such Borrower and the applicable Funds to pay and perform their
obligations hereunder and under the Notes; and
(f) BORROWERS' RELATIONSHIP TO FUNDS. The assets of each Fund for
whose benefit Loans are borrowed by the applicable Borrower are subject to and
liable for such Loans and are available to the applicable Borrower for the
repayment of such Loans.
13. AFFIRMATIVE COVENANTS OF THE BORROWERS. Until such time as all
amounts of principal and interest due to the Bank by a Borrower pursuant to any
Loan made to such Borrower is irrevocably paid in full, and until the Bank is
no longer obligated to make Loans to such Borrower, such Borrower (for itself
and on behalf of its respective Funds) agrees:
(a) To deliver to the Bank 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 Funds, 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 the Bank 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 Funds, 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 to
perform its 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 materially
affect the ability of such Borrower or the applicable Funds to promptly repay
the outstanding Loans or otherwise perform their 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 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 and interest due to the Bank by a Borrower pursuant to any Loan
made to such Borrower is irrevocably paid in full, and until the Bank is no
longer obligated to make Loans to such Borrower, such Borrower (for itself and
on behalf of its respective Funds) agrees:
(a) Not to incur any indebtedness for borrowed money (other than
pursuant to a $750,000,000 uncommitted master revolving credit facility with
USAA Capital Corporation (the "Other Facility") and 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 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 or Borrower shall not constitute an Event of Default with
respect to any other Fund or Borrower):
(a) Any Borrower or Fund shall default in the payment of principal
or interest on any Loan or any other fee due hereunder for a period of five (5)
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) Any Borrower or Fund shall default in the performance of or
compliance with any term contained in Section 13 hereof and such default shall
not have been remedied within thirty (30) days after written notice thereof
shall have been given such Borrower or Fund by the Bank;
(c) Any Borrower or Fund shall default in the performance of or
compliance with any term contained in Section 14 hereof;
(d) Any Borrower or Fund shall default in the performance or
compliance with any other term contained herein and such default shall not have
been remedied within thirty (30) days after written notice thereof shall have
been given such Borrower or Fund by the Bank;
(e) Any representation or warranty made by a Borrower or 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 is a wholly-owned subsidiary
of USAA Capital Corporation, shall cease to be the Manager and investment
advisor of each Fund; or
(g) An event of default shall occur and be continuing under the
Other Facility;
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 or
Fund (i) terminate its commitment to make any Loan hereunder, whereupon said
commitment shall forthwith terminate without any other notice of any kind with
respect to such Borrower or Fund and (ii) declare the principal and interest in
respect of any outstanding Loans with respect to such Borrower or Fund, and all
other amounts due hereunder with respect to such Borrower or 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.
16. NEW BORROWERS; NEW FUNDS. 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:
(a) 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
(b) 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.
17. LIMITED RECOURSE. The Bank agrees (i) 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 (ii) 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, 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(s) and/or 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) 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.
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. The Fund(s) (to be allocated among the Funds as the
Borrowers deem appropriate) 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.
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. The Bank may not sell
participations and subparticipations in all or any part of the Loans made
hereunder without the prior consent of the Borrowers, which consent shall not
be unreasonably withheld.
22. NOTICES. All notices hereunder and all written, facsimiled or
telecopied confirmations of Oral Requests made hereunder shall be sent to the
Borrowers as indicated on EXHIBIT B and to the Bank as indicated on EXHIBIT C.
Written communications shall be deemed to have been duly given and made as
follows: If sent by mail, seventy-two (72) hours after deposit in the mail
with first-class postage prepaid, addressed as provided in EXHIBIT B (the
Borrowers) and EXHIBIT C (the Bank); and in the case of facsimile or telecopy,
when the facsimile or telecopy is received if on a business day or otherwise on
the next business day.
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. 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) shall, within fifteen (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
Borrowers or the Funds to pay any interest, fees, costs or charges greater than
is permitted by applicable law.
25. 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.
26. 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.
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, the Funds and the Bank.
Sincerely,
NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxx X. Xxxxxxx
-------------------------
Title: Vice President
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/ Xxxxxxx X.X. Xxxx
-------------------------
Xxxxxxx X.X. Xxxx
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/ Xxxxxxx X.X. Xxxx
-------------------------
Xxxxxxx X.X. Xxxx
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/ Xxxxxxx X.X. Xxxx
-------------------------
Xxxxxxx X.X. Xxxx
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/ Xxxxxxx X.X. Xxxx
-------------------------
Xxxxxxx X.X. Xxxx
President
SCHEDULE A
FUNDS FOR WHOSE BENEFIT LOANS CAN
BE BORROWED UNDER FACILITY AGREEMENT
AND BORROWING LIMIT
MAXIMUM PERCENT OF THE
TOTAL ASSETS WHICH CAN
BE BORROWED UNDER FACILITY
BORROWER FUNDS 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
USAA Investment Trust USAA Cornerstone Strategy 25
USAA Gold 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 Growth Strategy 25
USAA Income 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
USAA Texas Tax-Free Income 15
USAA Texas Tax-Free Money Market 15
EXHIBIT A
MASTER GRID PROMISSORY NOTE
U.S. $100,000,000 Dated: January 14, 1998
FOR VALUE RECEIVED, each of the undersigned (each a "Borrower" and
collectively the "Borrowers"), severally and not jointly, 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 NATIONSBANK OF TEXAS, 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 14, 1998 (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, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit
a Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, together with
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any
Loan borrowed for the benefit of any other Fund or any accrued and unpaid
interest due and owing thereon or such other Fund's share of any other amount
due hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other agents
of any Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
This Note shall be governed by the laws of the state of Texas.
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/ Xxxxxxx X.X. Xxxx
-------------------------------
Xxxxxxx X.X. Xxxx
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/ Xxxxxxx X.X. Xxxx
-------------------------------
Xxxxxxx X.X. Xxxx
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/ Xxxxxxx X.X. Xxxx
-------------------------------
Xxxxxxx X.X. Xxxx
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/ Xxxxxxx X.X. Xxxx
-------------------------------
Xxxxxxx X.X. Xxxx
President
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note
dated January 14, 1998, executed by USAA MUTUAL FUND, INC., USAA INVESTMENT
TRUST, USAA TAX EXEMPT FUND, INC. AND USAA STATE TAX-FREE TRUST on behalf of
and for the benefit of the series of funds comprising each such Borrower
payable to the order of NATIONSBANK OF TEXAS, 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 B
NATIONSBANK OF TEXAS, N.A.
MASTER REVOLVING
CREDIT FACILITY AGREEMENT
BORROWER INFORMATION SHEET
BORROWER: 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 BORROWER:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxx X. Xxxxxxxx, Xx.
Senior Vice President,
Fixed Income Investments
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Xxxxx X. Xxxxxx
Senior Vice President,
Equity Investments
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 498-7819
Telex: 767424
INSTRUCTIONS FOR PAYMENTS TO BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
------- -------
TO: (PLEASE PLACE BANK NAME, CORESPONDENT NAME (IF APPLICABLE),
CHIPS AND/OR FED FUNDS ACCOUNT NUMBER BELOW)
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #011-00-0028
USAA MUTUAL FUND, INC.
----------------------
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 S&P 500 Index Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA Science & Technology Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA First Start Growth Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA INVESTMENT TRUST
---------------------
USAA Cornerstone Strategy Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA Gold 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 Growth Strategy Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA Income Strategy Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA Balanced Strategy Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA TAX EXEMPT FUND, INC.
--------------------------
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
-------------------------------------------------------------------------
USAA STATE TAX-FREE TRUST
-------------------------
USAA Florida Tax-Free Income Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA Florida Tax-Free Money Market Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA Texas Tax-Free Income Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
USAA Texas Tax-Free Money Market Fund Acct.# 0000-000-0
-------------------------------------------------------------------------
EXHIBIT C
ADDRESS FOR THE BANK
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
EXHIBIT D
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 and that he is authorized to execute this Certificate on
behalf of USAA Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund,
Inc. and USAA State Tax-Free Trust. The undersigned hereby further certifies
to the following:
The following individuals are duly authorized to act on behalf of USAA Mutual
Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc. and USAA State
Tax-Free Trust, by transmitting telephonic, telex, or telecopy instructions and
other communications with regard to borrowings and payments pursuant to the
Master Revolving Credit Facility Agreement with NationsBank of Texas, N.A. The
signature set opposite the name of each individual below is that individual's
genuine signature.
NAME OFFICE SIGNATURE
Xxxxxxx X. X. Xxxx President /s/ Xxxxxxx X.X. Xxxx
---------------------------
Xxxx X. Xxxxxxxx, Xx. Senior Vice President
Fixed Income Investments /s/ Xxxx X. Xxxxxxxx, Xx.
---------------------------
Xxxxx X. Xxxxxx Senior Vice President
Equity Investments /s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxx Vice President
Mutual Fund Portfolios /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxx Vice President
Equity Investments /s/ Xxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxx Vice President
Controller /s/ Xxxxxxx X. Xxxx
---------------------------
Xxxxx X. Xxxxx Manager
Mutual Fund Accounting /s/ Xxxxx X. Xxxxx
---------------------------
IN WITNESS WHEREOF, I have executed the Certificate as of this 14th day of
January, 1998.
/s/ Xxxxxxx X. Xxxxxx
---------------------------
XXXXXXX X. XXXXXX
Secretary
I, Xxxxxxx X. X. Xxxx, President of USAA Mutual Fund, Inc., USAA Investment
Trust, USAA Tax Exempt Fund, Inc. and USAA State Tax-Free Trust hereby certify
that Xxxxxxx 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
USAA Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc. and
USAA State Tax-Free Trust and that the signature set forth above is his true
and correct signature.
DATE: January 14, 1998
/s/ Xxxxxxx X.X. Xxxx
---------------------------
XXXXXXX X. X. XXXX
President
Subordination EXHIBIT E
NationsBank of Texas, N.A. Agreement
This is an agreement among: Dated: January 14, 1998
Name and Address of Lender (Including County):
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
(Lender)
Name and Address of Borrower:
USAA Mutual Fund, Inc.
USAA Investment Trust
USAA Tax Exempt Fund, Inc.
USAA State Tax-Free Trust
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
(Debtor)
Name and Address of Creditor:
USAA Capital Corporation
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
(Creditor)
1. Background. Debtor is or may be indebted to Lender pursuant to that
certain Facility Agreement Letter dated January 14, 1998 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
13, 1998 between Debtor and Creditor ("Subordinated Facility Agreement").
All debt (as hereinafter defined) under the Senior Facility Agreement is
hereinafter referred to as "senior debt" and all debt (as hereinafter
defined) under the Subordinated Facility Agreement is hereinafter referred
to as "subordinated debt".
2. Definition of Debt. The term "debt" 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
to 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 o f 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) (Debtor) (Creditor)
NationsBank of Texas, 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. Xxxxxxx By /s/ Xxxxxxx X.X. Xxxx By /s/ Xxxxxx X. Xxxxx
Its Vice President Its President Its Treasurer
