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EXHIBIT (h)(iv)
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of December 1, 1999, by and among AMR
INVESTMENT SERVICES TRUST, AMERICAN AADVANTAGE FUNDS AND AMERICAN AADVANTAGE
MILEAGE FUNDS (the "Trusts), each acting on behalf of its portfolios or funds,
as indicated on Schedule I hereto, as the same may from time to time be amended
(each such portfolio or fund being hereafter referred to as a "Borrower" and
collectively as the "Borrowers") and AMR INVESTMENT SERVICES INC. ("AMR").
WHEREAS, each of the Borrowers is authorized to borrow money for
temporary or emergency purposes to satisfy redemption requests; and
WHEREAS, from time to time and on a discretionary basis, AMR would be
willing to advance funds to the Borrowers for such purposes, on the terms and
subject to the conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the parties hereto agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the following
meanings:
Agreement. This Credit Agreement, together with any exhibits and
schedules hereto, as originally executed or as amended or supplemented from time
to time.
Business Day. Any day other than a Saturday, Sunday or legal holiday in
Dallas, Texas and which is also a day on which the New York Stock Exchange is
open for trading.
Event of Default. As defined in Section 6.1 hereof.
Base Rate. For any day, a fluctuating interest rate per annum equal to
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York (as accessible
through BLOOMBERG(R) under FEDL01 Index HP ), or if such rate is not so
published for any day that is a Business Day, the average of the quotations for
such day on such transactions received by AMR from three federal funds brokers
of recognized standing selected by AMR.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as indebtedness, including, without limitation,
all debt for money borrowed and similar extensions of credit, whether direct or
indirect.
Loan or Loans. As defined in Section 2.1 hereof.
Loan Request. As defined in Section 2.2(a) hereof.
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Total Assets. As determined for each Borrower, all assets of such
Borrower classified as such on its books and records in accordance with the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder.
2. CREDIT FACILITY.
2.1. Credit Facility. Subject to the terms and conditions set forth in
this Agreement and in its sole discretion, AMR may make loans ("Loans") to one
or more Borrowers from time to time on any Business Day during the period from
the date hereof to (but not including) the Termination Date, as may be requested
by any such Borrower. Each Loan shall be in the principal amount stated in the
applicable Loan Request, and shall be in a minimum amount of at least $100,000
and an integral multiple of $1,000.
2.2. Notice and Manner of Borrowing. All Loans shall be requested and
funded in accordance with the procedures set forth below:
(a) Loan Requests. Each request by a Borrower for a Loan
hereunder shall be made by telephonic notice to AMR (a "Loan Request") prior to
11:00 a.m., Dallas time, on a Business Day. Each Loan Request shall be
irrevocable and shall state the principal amount of the requested Loan and the
name of the Borrower for which the Loan is being requested. Each Loan Request
shall be made by a duly authorized representative of such Borrower and may be
made electronically or by telephone, provided that each telephonic Loan Request
shall be promptly confirmed to AMR in writing or by an electronic record
acceptable to AMR.
(b) Funding the Loans. If, upon receipt of a Loan Request, AMR
is willing to make a Loan to the requesting Borrower, AMR will do so by
depositing or wiring the proceeds thereof, on the same day and in immediately
available funds, to such custodial account of such Borrower as the Borrower
shall have designated by notice to AMR.
2.3. Loan Account. AMR will maintain a separate loan account on its
books for each Borrower and will recorded on the appropriate loan account: (a)
all Loans made by AMR to such Borrower, (b) all payments on such Loans made by
such Borrower, and (c) all other charges and expenses properly chargeable to
such Borrower hereunder. The debit balance of each loan account shall reflect
the amount of the applicable Borrower's indebtedness from time to time to AMR
hereunder and shall constitute evidence of such indebtedness.
2.4. Repayment of Loans. Each Loan made hereunder shall be due and
payable no later than thirty (30) days following the date on which the Loan is
made, provided, however, that any Loan may be prepaid in accordance with Section
2.7. Only the relevant Borrower shall be liable for the payment of the principal
amount of or any interest or other charges payable on or in connection with the
Loans made to such Borrower (or to a Trust for the account of such Borrower).
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2.5. Interest.
(a) Interest Rate on Loans. The outstanding principal amount
of each Loan shall bear interest until maturity at the Base Rate. Interest
accrued on each Loan shall be paid by the applicable Borrower on the last day of
each month and upon the maturity of such Loan.
(b) Overdue Principal and Interest. Overdue principal and (to
the extent permitted by applicable law) interest on each Loan and all other
overdue amounts payable hereunder shall bear interest compounded monthly and
payable on demand at a rate per annum equal to two percent above the Base Rate
until such amount is paid in full.
(c) Limitation on Interest. No provision of this Agreement
shall require the payment or permit the collection of interest in excess of the
rate then permitted by applicable law.
2.6. Place and Mode of Payments; Computations.
(a) Each payment made or caused to be made by a Borrower to
AMR under this Agreement shall be made directly to AMR at its principal offices
in Dallas, Texas, or at such other address as AMR may specify by notice to the
Borrowers from time to time, not later than 11:00 a.m., Dallas time, on the due
date of each such payment, in immediately available and freely transferable
funds.
(b) If any sum would, but for the provisions of this paragraph
(b), become due and payable to AMR by any Borrower on any day that is not a
Business Day, then such sum shall become due and payable on the next succeeding
Business Day, and interest payable to AMR under this Agreement shall be adjusted
by AMR accordingly.
(c) All computations of interest and fees hereunder shall be
made by AMR on the basis of a 360-day year and paid for the actual number of
days elapsed.
(d) AMR will determine the Base Rate in effect from time to
time. Any change in the Base Rate shall, for all purposes of this Agreement,
become effective on, and from the beginning of, the day on which such change
shall first be determined by AMR. AMR shall notify each Borrower having
outstanding Loans of any change in the Base Rate.
(e) Each payment by a Borrower under this Agreement shall be
made without set-off or counterclaim and free and clear of and without deduction
or withholding of any kind.
2.7. Optional and Mandatory Prepayments.
(a) Each Borrower may prepay any outstanding Loan to it, in
whole or in part, at any time and without charge or penalty, upon telephonic
notice to AMR of its intention to repay such Loan prior to 2:00 p.m., Dallas
time, on the date such prepayment is to be made.
(b) Upon each repayment or prepayment of any principal of any
Loan pursuant to
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any of the provisions of this Agreement, the applicable Borrower shall pay to
AMR, and there shall become due and payable on the date of each such repayment
or prepayment, all of the unpaid interest accrued to such date on the amount of
the principal of the Loans being repaid or prepaid by such Borrower on such
date. Whenever any interest on and any principal of the Loans are paid
simultaneously hereunder, the whole amount paid shall be applied first to
interest then due and payable.
2.8. Use of Proceeds. The proceeds of each Loan shall be used by the
applicable Borrower for temporary or emergency purposes to meet requests for
shareholder redemptions.
2.9. Discretionary Facility. It is acknowledged and agreed by each
Borrower that AMR has no obligation to make any Loan hereunder, and that the
decision whether or not to make any Loan requested by any Borrower is within the
sole and exclusive discretion of AMR. AMR may terminate the credit facilities
provided for herein either in whole or in part with respect to one or more
Borrowers at any time by written notice to the affected Borrower(s).
3. EFFECTIVENESS AND TERM OF AGREEMENT; CONDITIONS PRECEDENT.
3.1. Effectiveness of Agreement; Termination. This Agreement shall
become effective upon the receipt by AMR of executed original counterparts of
this Agreement, signed by AMR and each Borrower and shall remain in effect until
terminated by AMR by at least thirty (30) days notice to the Borrowers,
provided, however, that no such termination shall affect the obligations of any
Borrower with respect to any outstanding Loan.
3.2. Conditions of Loans. The willingness of AMR in its discretion to
make any Loan to a Borrower shall be subject to the satisfaction, at or before
the time each such Loan is made, of each of the following conditions precedent
(unless and to the extent that satisfaction of such conditions precedent or any
of them is waived by AMR):
(a) AMR shall have received a Loan Request from the applicable
Borrower, as required by Section 2.2(a);
(b) the representations made by such Borrower hereunder are
true and correct as of the date of such request and will be true and correct
after giving effect to the requested Loan;
(c) no Event of Default shall have occurred and be continuing
with respect to such Borrower; and
(d) the making of such Loan shall not contravene any law,
regulation, decree or order binding on such Borrower or AMR.
4. REPRESENTATIONS AND WARRANTIES BY BORROWERS. Each Borrower, severally and not
jointly, represents and warrants to AMR that, as of the date hereof and at the
time of each Loan Request by such Borrower:
4.1. Organization. The Trust of which such Borrower is a part is duly
organized and
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validly existing as a business trust under the laws of its jurisdiction of
organization.
4.2. Authorization. The execution, delivery and performance by such
Borrower of this Agreement and the borrowing of Loans for its account are within
the powers of such Borrower, have been duly authorized by all necessary and
proper action on the part of such Borrower, and do not and will not (i) violate
or contravene any provision of such Borrower's charter documents or bylaws, or
any amendment thereof; (ii) violate or contravene any provision of such
Borrower's investment policies; (iii) conflict with, or result in a breach of
any material term, condition or provision of, or constitute a default under, any
material agreement to which such Borrower is a party or by which such Borrower
or any of its assets are bound; or (iv) violate or contravene any provision of
any material law, regulation, order, ruling or interpretation thereunder or any
decree, order or judgment of any court or governmental or regulatory authority.
4.3. Compliance with Borrowing Limits. The Loan requested by each Loan
Request by such Borrower:
(a) Is permitted under the Borrower's investment policies;
(b) Will not, when made, cause the aggregate principal amount
of all outstanding Loans to such Borrower to exceed 5%, or cause the aggregate
principal amount of all outstanding Loans plus all other outstanding
Indebtedness of such Borrower to exceed 10%, of the current market value of such
Borrower Total Assets; and
(c) The proceeds of such Loan will be applied by such Borrower
to meet shareholder redemptions.
5. REPRESENTATIONS AND WARRANTIES BY AMR. AMR represents and warrants to each of
the Borrowers that:
5.1. Organization. AMR is duly organized and validly existing as a
corporation under the laws of its jurisdiction of organization.
5.2. Authorization. The execution, delivery and performance by such AMR
of this Agreement and the making of the Loans to Borrowers as contemplated
hereby are within the powers of AMR, have been duly authorized by all necessary
and proper action on the part of AMR, and do not and will not (i) violate or
contravene any provision of AMR's charter documents or bylaws, or any amendment
thereof; (ii) conflict with, or result in a breach of any material term,
condition or provision of, or constitute a default under, any material agreement
to which AMR is a party or by which AMR or any of its assets are bound; or (iii)
violate or contravene any provision of any material law, regulation, order,
ruling or interpretation thereunder or any decree, order or judgment of any
court or governmental or regulatory authority.
6. EVENTS OF DEFAULT; ACCELERATION. If any of the following events ("Events of
Default") shall occur:
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(a) if any Borrower shall fail to pay any principal of or
interest on any Loan to it when due and payable, and such failure shall continue
for three Business Days;
(b) if any Borrower shall fail to perform, discharge, observe
or comply with any other term, covenant and agreement contained herein, and such
failure shall continue unremedied for 30 days after written notice of such
failure has been given to such Borrower by AMR;
(c) if an representation or warranty of any Borrower contained
in this Agreement shall prove to have been materially false or misleading when
made;
(d) if any Borrower (or a Trust of which it is a portfolio or
fund) makes an assignment for the benefit of creditors, or admits in writing its
inability to pay or generally fails to pay its debts as the mature or become
due, or petitions or applies for the appointment of a trustee in bankruptcy or
other custodian, liquidator or receiver for such Borrower or of any substantial
part of its assets, or commences any case or other proceeding relating to such
Borrower under any bankruptcy, reorganization, arrangement, insolvency,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or authorizes the foregoing; or
(e) if any such petition or application is filed or any such
case or other proceeding is commenced against such Borrower (or Trust) and such
Borrower (or Trust) indicates its approval thereof or consent thereto, or an
order for relief or appointing any such trustee in bankruptcy or other
custodian, liquidator or receiver is entered adjudicating such Borrower (or
Trust) bankrupt or insolvent, or approving a petition in any such case or other
proceeding, and such order remains unstayed and in effect for more than 60 days;
then, in such event and without notice or demand by AMR, all outstanding Loans
to such Borrower, all interest thereon and all other amounts payable by such
Borrower under this Agreement shall become and be due and payable without
presentment, demand, protest or notice, all of which are expressly waived by
such Borrower. If any Event of Default shall have occurred and be continuing,
AMR may proceed to protect or enforce its rights against such Borrower by suit
in equity, action at law or other appropriate proceeding, and may proceed to
enforce the payment of all amounts that shall have become due. No remedy
conferred upon AMR herein is intended to be exclusive of any other remedy and
each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or existing at law or in equity.
7. NOTICES. Except as otherwise expressly provided in this Agreement, all
notices, demands and other communications made or required to be given pursuant
to this agreement shall be in writing and shall be delivered to the principal
offices of the recipient, addressed to the attention of such person or persons
as the recipient may specify from time to time.
8. Governing Law; Miscellaneous. This Agreement shall be deemed to be a contract
under the laws of the State of Texas and shall for all purposes be construed in
accordance with and governed by the laws of such State. The rights and remedies
herein expressed are cumulative and not exclusive of any other rights that AMR
or any Borrower as the case may be, would otherwise have. The captions in this
Agreement are for convenience of reference only and shall
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not define or limit the provisions hereof. This Agreement and any amendment
hereof may be executed in several counterparts, each of which shall be an
original, but all of which together shall constitute one instrument. In proving
this Agreement, it shall not be necessary to produce or account for more than
one such counterpart signed by the party against whom enforcement is sought.
9. Severability. If any of the provisions of this Agreement or the application
thereof to any party is held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other term or provision hereof or the application thereof to any other party
hereto or to any other person or entity or circumstance.
10. Entire Agreement, AMENDMENTS, Etc. This Agreement constitutes the entire
understanding of the parties with respect to the transactions contemplated
hereby. Any consent or approval required or permitted by this Agreement to be
given by AMR may be given, and any term of this Agreement may be amended, and
the performance or observance by any Borrower of any terms of this Agreement or
the continuance of any Event or Default by such Borrower, or any condition or
term hereof, may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of such Borrower and AMR. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of AMR in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand on
any Borrower shall entitle such Borrower to other or further notice in similar
or other circumstances.
11. WAIVER OF JURY TRIAL. AMR AND EACH BORROWER AGREE THAT NONE OF THEM NOR ANY
ASSIGNEE OR SUCESSOR SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT.
12. OBLIGATIONS SEVERAL; BUSINESS TRUSTS. AMR acknowledges that the Obligations
of each Borrower hereunder are several and that AMR shall have no recourse
against any Borrower for the payment or performance of the Obligations of any
other Borrower. AMR acknowledges that the Trusts are business trusts organized
under the laws of the Commonwealth of Massachusetts and that the trustees of
each Trust are entering into this Agreement as trustees and not personally. AMR
agrees that neither the officers, trustees nor shareholders of the Borrowers
shall be personally liable for any obligation, loss, claim, expense, fee or
other charge arising hereunder.
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IN WITNESS WHREOF, each Trust, acting for and on behalf of each of its
Borrower portfolios or funds, and AMR have caused this Agreement to be duly
executed as an instrument under seal by its duly authorized representatives as
of the date first above written.
AMR INVESTMENT SERVICES TRUST
AMERICAN AADVANTAGE FUNDS
AMERICAN AADVANTAGE MILAGE FUNDS
For and on behalf of each
Borrower listed on Schedule I
hereto
By:
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Title:
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AMR INVESTMENT SERVICES INC.
By:
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Title:
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SCHEDULE I
BORROWERS
Investment Company Portfolio or Fund
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AMR INVESTMENT SERVICES TRUST
Balanced Portfolio
Large Cap Value Portfolio
Small Cap Value Portfolio
International Equity Portfolio
AMERICAN AADVANTAGE FUNDS
American AAdvantage Balanced Fund
American AAdvantage Large Cap Value Fund
American AAdvantage Small Cap Value Fund
American AAdvantage International Equity Fund
AMERICAN AADVANTAGE MILEAGE FUNDS
American AAdvantage Balanced Mileage Fund
American AAdvantage Large Cap Value Mileage Fund
American AAdvantage Small Cap Value Mileage Fund
American AAdvantage International Equity Mileage Fund
