Exhibit h(ii)
CREDIT AGREEMENT
among
USAA MUTUAL FUND, INC.
USAA INVESTMENT TRUST
USAA TAX EXEMPT FUND, INC.
USAA STATE TAX-FREE TRUST
(NOT IN THEIR INDIVIDUAL CAPACITIES, BUT
ON BEHALF OF AND FOR THE BENEFIT OF THE FUNDS SET FORTH HEREIN)
and
THE LENDERS PARTY HERETO
and
STATE STREET BANK AND TRUST COMPANY
AS OPERATIONS AGENT
and BANK OF AMERICA, N.A.
AS ADMINISTRATIVE AGENT
dated as of January 8, 2004
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS .................................................... 1
SECTION 1.01 Definitions ............................................. 1
SECTION 1.02 Accounting Terms and Determinations ..................... 8
ARTICLE II THE CREDIT .................................................... 8
SECTION 2.01 Commitments to Lend ..................................... 8
SECTION 2.03 Borrowing Notices ....................................... 10
SECTION 2.02 Funding of Loans ....................................... 11
SECTION 2.04 Notes ................................................... 12
SECTION 2.05 Maturity of Loans........................................ 12
SECTION 2.06 Interest Rates .......................................... 12
SECTION 2.07 Fees .................................................... 13
SECTION 2.08 Recourse to Assets ...................................... 13
SECTION 2.09 Extension of Commitments ................................ 13
SECTION 2.10 Mandatory Termination of Commitments..................... 13
SECTION 2.11 Optional Termination or Reduction of Commitments......... 13
SECTION 2.12 Optional and Mandatory Prepayments ...................... 14
SECTION 2.13 General Provisions as to Payments........................ 15
SECTION 2.14 Computation of Interest and Fees ........................ 16
SECTION 2.15 Withholding Tax Exemption ............................... 16
ARTICLE III CONDITIONS ................................................... 16
SECTION 3.01 Effectiveness ........................................... 16
SECTION 3.02 All Borrowings ......................................... 18
SECTION 3.03 New Investment Companies, New Funds, New Subadvisers .... 19
ARTICLE IV REPRESENTATIONS AND WARRANTIES ................................ 20
SECTION 4.01 Existence and Power; Investment Company ................. 20
SECTION 4.02 Authorization; No Contravention.......................... 20
SECTION 4.03 Binding Effect .......................................... 21
SECTION 4.04 Compliance with Margin Rules ............................ 21
SECTION 4.05 Non-Affiliation with Lenders ............................ 21
SECTION 4.06 Subsidiaries............................................. 21
SECTION 4.07 Financial Information ................................... 21
SECTION 4.08 Litigation .............................................. 22
SECTION 4.09 ERISA ................................................... 22
SECTION 4.10 Taxes ................................................... 22
SECTION 4.11 Compliance .............................................. 22
SECTION 4.12 Full Disclosure ......................................... 23
SECTION 4.13 Tax Shelter Regulations ................................. 23
ARTICLE V COVENANTS ...................................................... 23
SECTION 5.01 Information ............................................ 23
SECTION 5.02 Payment of Obligations .................................. 25
SECTION 5.03 Maintenance of Insurance................................. 25
SECTION 5.04 Conduct of Business and Maintenance of Existence ........ 25
SECTION 5.05 Compliance with Laws .................................... 25
SECTION 5.06 Inspection of Property, Books and Records ............... 26
SECTION 5.07 Debt .................................................... 26
SECTION 5.08 Negative Pledge ......................................... 26
SECTION 5.09 Consolidations, Mergers, and Sales of Assets ............ 27
SECTION 5.10 Use of Proceeds ......................................... 28
SECTION 5.11 Financial Condition Covenant ............................ 28
SECTION 5.12 Borrowing Limit ......................................... 28
SECTION 5.13 Compliance with Prospectus .............................. 28
SECTION 5.14 Non-Affiliation with Lenders ............................ 29
SECTION 5.15 Regulated Investment Company ............................ 29
SECTION 5.16 No Subsidiary............................................ 29
SECTION 5.17 ERISA ................................................... 29
ARTICLE VI DEFAULTS ...................................................... 29
SECTION 6.01 Events of Default ....................................... 29
SECTION 6.02 Notice of Default ....................................... 31
ARTICLE VII THE AGENTS ................................................... 31
SECTION 7.01 Appointment and Authorization ........................... 31
SECTION 7.02 Actions by the Agents.................................... 32
SECTION 7.03 Consultation with Experts ............................... 32
SECTION 7.04 Liability of Agents ..................................... 32
SECTION 7.05 Indemnification ......................................... 33
SECTION 7.06 Credit Decision ......................................... 33
SECTION 7.07 Successor Agents ....................................... 33
SECTION 7.08 Agents as Lenders ....................................... 33
SECTION 7.09 Distribution by Operations Agent ........................ 34
SECTION 7.10 Delinquent Lenders....................................... 34
SECTION 7.11 Proofs of Claim ........................................ 35
ARTICLE VIII CHANGE IN CIRCUMSTANCES...................................... 36
SECTION 8.01 Increased Cost and Reduced Return ...................... 36
ARTICLE IX MISCELLANEOUS ................................................. 37
SECTION 9.01 Notices ................................................. 37
SECTION 9.02 No Waivers .............................................. 38
SECTION 9.03 Expenses; Documentary Taxes; Indemnification .......... 39
SECTION 9.04 Set Off.................................................. 39
SECTION 9.05 Amendments and Waivers .................................. 40
SECTION 9.06 Successors and Assigns .................................. 40
SECTION 9.07 Governing Law; Submission to Jurisdiction ............... 42
SECTION 9.08 Entire Agreement ........................................ 42
SECTION 9.09 Miscellaneous ........................................... 42
SECTION 9.10 WAIVER OF JURY TRIAL ......... .......................... 42
SECTION 9.11 Limitation on Liability ................................. 42
SECTION 9.12 Trust Disclaimer ........................................ 43
SECTION 9.13 Publicity .............................................. 43
SECTION 9.14 Compliance with Laws .................................... 43
SECTION 9.15 Confidentiality ......................................... 43
SECTION 9.16 USA Patriot Act Notice ................................. 44
SCHEDULES AND EXHIBITS
SCHEDULE 1- Lenders, Commitment Amounts, Lending Offices, and Addresses
SCHEDULE 2- Investment Companies, Funds, Borrowing Limits, and
Addresses
SCHEDULE 3 Permitted Subadvisers and Permitted Affiliate Advised
Borrowers
SCHEDULE 4.11(C)- Agreements with Regulators and Borrowing Limitations
EXHIBIT A Form of Note
EXHIBIT B- Form of Borrowing Notice
EXHIBIT C- Form of Extension Request
EXHIBIT D- Form of Opinion of Counsel to USAA Investment Management
Company, Manager and Adviser to Borrowers
EXHIBIT E- Form of Assignment and Assumption
EXHIBIT F- Form of Subordination Agreement
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of January 8, 2004 (this "AGREEMENT"), by
and among USAA Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund,
Inc., and USAA State Tax-Free Trust, and each other investment company which may
become a party hereto pursuant to the terms of this Agreement (each, an
"INVESTMENT COMPANY," and collectively, the "INVESTMENT COMPANIES"), each of
which is executing this Agreement not in its individual capacity, but on behalf
of and for the benefit of the series of Funds (defined below) comprising each
such Investment Company, severally and not jointly, the Lenders (defined below)
from time to time party hereto, State Street Bank and Trust Company, as
operations agent for the Lenders, and Bank of America, N.A., as administrative
agent for the Lenders.
The parties hereto agree as follows:
ARTICLE I DEFINITIONS
SECTION 1.01 DEFINITIONS. The following terms, as used herein, have the
following meanings:
"ADDITIONAL FUND" means any fund of an Investment Company which is not listed on
the then-current SCHEDULE 2, including, without limitation, any fund of an
Investment Company which is established after the date of this Agreement.
"ADDITIONAL INVESTMENT COMPANY" means 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) as the Investment Companies and which is
not listed on the then-current SCHEDULE 2, including, without limitation, any
investment company which is established after the date of this Agreement.
"ADMINISTRATIVE AGENT" means Bank of America, acting as Administrative Agent for
the Lenders, or its successor in such capacity.
"AFFILIATE" has the meaning ascribed to the term "AFFILIATED PERSON" in the
Investment Company Act and the rules and regulations thereunder.
"AFFILIATE ADVISED BORROWER" means a Borrower that is, at the time in question,
advised or subadvised by (and therefore under the Investment Company Act is an
Affiliate of) a Person that is also an Affiliate of a Lender.
"AGENT" means Administrative Agent or Operations Agent, and "AGENTS" means both
Administrative Agent and Operations Agent.
"ASSIGNEE" is defined in SECTION 9.06(B).
"AUTHORIZED INDIVIDUAL" means any individual authorized to take on behalf of an
Investment Company (on behalf of the applicable Fund) actions contemplated by
this Agreement and the other Loan Documents.
"BANK OF AMERICA" means Bank of America, N.A., a national banking association,
and its successors.
"BASE RATE" means the higher of (a) the annual rate of interest announced from
time to time by State Street at its head office in Boston, Massachusetts, as its
"prime rate" and (b) one-half of one percent (1/2%) above the Federal Funds Rate
as in effect from time to time.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
"BORROWER" means an Investment Company acting on behalf of a particular Fund.
For example, if an Investment Company wishes to borrow on behalf of one Fund,
the term "BORROWER" would mean such Investment Company acting on behalf of the
Fund borrowing; if an Investment Company wishes to borrow on behalf of two
Funds, the term "BORROWER" would mean such Investment Company acting on behalf
of one Fund and such Investment Company acting on behalf of the other Fund,
severally. The term "BORROWERS" means all Investment Companies in such
capacities.
"BORROWING" means the aggregation of Loans of all Lenders (or Swing Line Lender)
to be made to a particular Borrower pursuant to ARTICLE II on a single date.
"BORROWING DATE" means the Business Day on which Loans are advanced hereunder as
specified in a Borrowing Notice delivered pursuant to SECTION 2.02.
"BORROWING LIMIT" means the aggregate principal amount of the Loans which may be
borrowed by a Borrower for the benefit of a particular Fund under this Agreement
and the Other Credit Facility and which shall not exceed the percentage of the
Total Assets of such Fund as set forth on SCHEDULE 2.
"BORROWING NOTICE" means a request for a Borrowing substantially in the form of
EXHIBIT B.
"BUSINESS DAY" means any day which is not (a) a day on which commercial banks
are authorized or required to be closed in Boston, Massachusetts, or Dallas,
Texas, or (b) a legal holiday on which the New York Stock Exchange is scheduled
to close.
"COMMITMENT" means the agreement of each Lender, subject to the terms and
conditions of this Agreement, to make Loans to all Borrowers hereunder.
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"COMMITMENT AMOUNT" means, with respect to each Lender, the amount set forth
opposite the name of such Lender on SCHEDULE 1, as such amount may be reduced
from time to time pursuant to SECTIONS 2.10, 2.11, or 9.06(B) or increased from
time to time pursuant to SECTION 9.06(B); and "COMMITMENT AMOUNTS" means, as of
any date, the aggregate of all such amounts on such date. On the Effective Date,
the aggregate Commitment Amounts equal $100,000,000.
"COMMITMENT PERCENTAGE" means, with respect to each Lender, the percentage set
forth opposite the name of such Lender on SCHEDULE 1 as such Lender's percentage
of the aggregate Commitment Amounts of all Lenders, as such percentage may be
modified pursuant to SECTION 9.06(B).
"CUSTODIAN" means the entity which, on the Effective Date (or, with respect to
each Additional Fund which becomes a Fund hereunder, on the date such Additional
Fund becomes a Fund hereunder), acts as the applicable Borrower's custodian for
purposes of Section 17(f) of the Investment Company Act.
"DEBT" of any Person means at any date, without duplication, (a) all obligations
of such Person for borrowed money or extensions of credit, (b) all obligations
of such Person evidenced by bonds, debentures, notes, or other similar
instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable arising in the
ordinary course of business and payable in accordance with customary practices,
(d) all obligations of such Person as lessee which are or should be capitalized
in accordance with generally accepted accounting principles, (e) all Debt of
others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed or Guaranteed by such Person, (f) all obligations of such Person
under Guarantees, all obligations to reimburse the issuer in respect of letters
of credit or under performance or surety bonds, or other similar obligations,
(g) all obligations of such Person in respect of judgments, (h) all obligations
of such Person in respect of banker's acceptances and under reverse repurchase
agreements, and (i) all obligations of such Person in respect of futures
contracts, swaps, and other obligations that are, or would be but for the
segregation of assets therefor, senior securities for purposes of the Investment
Company Act.
"DEFAULT" means any condition or event which with the giving of notice or lapse
of time or both would, unless cured or waived, become an Event of Default.
"DELINQUENT LENDER" is defined in SECTION 7.10(A).
"EFFECTIVE DATE" means the date this Agreement becomes effective in accordance
with SECTION 3.01.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized under the laws of the
United States, or any state thereof, and having a combined capital and surplus
of at least $500,000,000; (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of any such
3
country, and having a combined capital and surplus of at least $500,000,000;
provided that such bank is acting through a branch or agency located in the
United States; (c) an entity that is primarily engaged in the business of
commercial banking and that is (i) a subsidiary of any Lender, (ii) a subsidiary
of an entity of which any Lender is a subsidiary, or (iii) an entity of which
any Lender is a subsidiary; (d) an entity that is engaged in making, purchasing,
holding, or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business and that is administered or
managed by (i) any Lender, (ii) a subsidiary of any Lender, (iii) a subsidiary
of an entity of which any Lender is a subsidiary, or (iv) an entity of which any
Lender is a subsidiary; and (e) any other entity (other than an affiliate of
Borrowers) that is engaged in making, purchasing, holding, or otherwise
investing in commercial loans, that is selected by Borrowers, and that is
reasonably acceptable to Agents; provided that no Person shall be an Eligible
Assignee unless such Person is a "bank" (as such term is defined in Section
2(a)(5) of the Investment Company Act) in the reasonable judgment of Borrowers
and Administrative Agent; and provided, further, that no Person shall be an
Eligible Assignee if any Borrower would become an Affiliate Advised Borrower
upon such Person becoming a Lender hereunder, unless such amendments and
modifications are made to this Agreement as are necessary or appropriate to
insure that such Lender makes no Loans hereunder to such Affiliate Advised
Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute.
"ERISA GROUP" means with respect to each Borrower, such Borrower and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with such Borrower, are
treated as a single employer under Section 414 of the Internal Revenue Code.
"EVENT OF DEFAULT" is defined in SECTION 6.01.
"FACILITY FEE" is defined in SECTION 2.07.
"FAILURE" is defined in SECTION 7.10(B).
"FEDERAL FUNDS RATE" means, for any day, an interest rate per annum (expressed
as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%)
equal to the floating rate of interest quoted by Operations Agent as its Federal
Funds Rate for overnight loans.
"FUND" means, individually, each fund of an Investment Company that is listed on
SCHEDULE 2, and with the prior written consent of the Agents and each Lender
(which consent will not be unreasonably withheld) and from and after delivery of
each document, in form and substance satisfactory to Administrative Agent,
required by SECTION 3.03(B), each Additional Fund that becomes a Fund hereunder,
and, "FUNDS" means, as the context may require, two or more of such Funds.
"GUARANTEE" by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt or other obligation of any
other Person and,
4
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (b) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "GUARANTEE" used as a verb has a corresponding meaning.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended, or
any successor statute.
"INVESTMENT ADVISER" means USAA Investment Management Company or any successor
manager or investment adviser (provided that such successor manager or
investment adviser is a wholly-owned subsidiary of United Services Automobile
Association and/or USAA Capital Corporation).
"INVESTMENT COMPANY" and "INVESTMENT COMPANIES" are defined in the preamble to
this Agreement.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as amended.
"LENDERS" means Swing Line Lender, each lender named on the signature pages
hereof, each Assignee which becomes a Lender pursuant to SECTION 9.06(B), and
their respective successors.
"LENDING OFFICE" means, initially, the office of each Lender designated as such
in SCHEDULE 1; and thereafter such other office of such Lender, if any, located
in the United States that shall be making or maintaining Loans.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, or encumbrance of any kind in respect of such asset,
including any agreement preventing a Person from encumbering such asset.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, and any and all
other documents and instruments required to be delivered pursuant to this
Agreement, in each case as amended and in effect from time to time.
"LOANS" means the Revolving Credit Loans made or to be made by Lenders pursuant
to SECTION 2.01(A) and the Swing Line Advances made or to be made by State
Street individually pursuant to SECTION 2.01(B).
5
"MAXIMUM AMOUNT" means with respect to a Borrower, the maximum amount such
Borrower is permitted to borrow under the lowest borrowing limitation imposed by
the following:
(a) applicable laws and regulations, including the Investment
Company Act;
(b) its Borrowing Limit;
(c) the limitations on borrowings adopted by such Borrower in its
Prospectus, Statement of Additional Information, or elsewhere; and
(d) any agreements with federal, state, local, or foreign
governmental authorities or regulators;
in each case as in effect from time to time.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan within
the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NOTES" means promissory notes executed by each Borrower, substantially in the
form of EXHIBIT A, and "NOTE" means any one of such promissory notes issued
hereunder.
"OBLIGATIONS" means, with respect to each Borrower, all indebtedness,
obligations, and liabilities of such Borrower to any Lender or Agent, existing
on the date of this Agreement or arising hereafter, direct or indirect, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law, or otherwise, arising or
incurred under this Agreement or any other Loan Document or in respect of any
Loan to such Borrower or any Note or other instrument at any time evidencing any
thereof.
"OPERATIONS AGENT" means State Street acting as Operations Agent for Lenders, or
its successor in such capacity.
"ORAL REQUEST" is defined in SECTION 2.02.
"OTHER CREDIT FACILITY" means a $400,000,000 committed master revolving credit
facility between Borrowers and USAA Capital Corporation, which shall be subject
to a subordination agreement in substantially the form set forth on EXHIBIT F.
"OVERNIGHT RATE" means, for any day, 0.50% above the Federal Funds Rate as in
effect on that day.
"PARTICIPANT" is defined in SECTION 9.06(C).
6
"PERSON" means an individual, a corporation (or series thereof), a partnership,
an association, a trust (or series thereof), or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (a) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (b) has at any time within the
preceding five years been maintained, or contributed to, by any Person which was
at such time a member of the ERISA Group for employees of any Person which was
at such time a member of the ERISA Group.
"PRO RATA SHARE" means for each Borrower a share based on the relative Maximum
Amount of such Borrower as compared to the Maximum Amounts of all Borrowers or
based on such other method as Investment Companies shall determine with prior
written notice to Operations Agent, provided that, for purposes of SECTION
2.12(D), "PRO RATA SHARE" means for each Borrower a share based on the relative
aggregate principal amount of Loans outstanding to such Borrower as compared to
the aggregate principal amount of Loans outstanding to all Borrowers.
"PROSPECTUS" means the prospectus required to be delivered by a Borrower to
offerees of its securities pursuant to the Securities Act of 1933, as amended,
and all supplements thereto.
"REGULATION U" and "REGULATION X" mean, respectively, Regulation U and
Regulation X of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"REQUIRED LENDERS" means at any time Lenders holding at least 66-2/3% of the
aggregate unpaid principal amount of the Loans at such time; and, if no
principal is outstanding, Lenders having at least 66-2/3% of the aggregate
Commitment Amounts with respect to Borrowers.
"REVOLVING CREDIT LOAN(S)" means a loan or loans made pursuant to SECTION
2.01(A).
"REVOLVING CREDIT PERIOD" means the period from and including the Effective Date
to but excluding the Termination Date.
"SEC" means the Securities and Exchange Commission.
"STATE STREET" means State Street Bank and Trust Company, a Massachusetts trust
company, and its successors.
"STATEMENT OF ADDITIONAL INFORMATION" means the Statement of Additional
Information (and all supplements thereto) which must be provided by a Borrower
to recipients of its Prospectus upon request pursuant to rules and regulations
adopted by the SEC.
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"SUBSIDIARY" of any Borrower means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Borrower.
"SWING LINE ADVANCE(S)" is defined in SECTION 2.01(B).
"SWING LINE LENDER" means State Street acting as Swing Line Lender, or its
successors in such capacity.
"TERMINATION DATE" means January 6, 2005, or such earlier date on which the
Commitments terminate or are terminated pursuant to the terms of this Agreement,
provided that the Termination Date (and each Lender's Commitment to make Loans
to Borrowers hereunder) may be extended in accordance with SECTION 2.09.
"TOTAL ASSETS" means, at any date, all assets of a Borrower which in accordance
with generally accepted accounting principles would be classified as assets upon
a balance sheet of such Borrower prepared as of such date, valued in accordance
with the methods and procedures described in such Borrower's Prospectus and
Statement of Additional Information.
"TOTAL LIABILITIES" means, at any date, all liabilities of a Borrower as
determined in accordance with generally accepted accounting principles plus,
without duplication, the aggregate amount of such Borrower's Debt.
SECTION 1.02 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time in the United States of
America, applied on a basis consistent (except for changes concurred to by the
applicable Borrower's independent public accountants) with the most recent
audited financial statements of such Borrower delivered to Lenders hereunder.
ARTICLE II THE CREDIT
SECTION 2.01 COMMITMENTS TO LEND. (a) Subject to the terms and conditions set
forth in this Agreement, each Lender severally agrees to lend to each Borrower
(other than a Borrower that is an Affiliate Advised Borrower with respect to
such Lender), and such Borrower may borrow, repay, and reborrow from time to
time during the Revolving Credit Period, upon notice by such Borrower to
Operations Agent given in accordance with SECTION 2.02, such Revolving Credit
Loans as are requested by such Borrower up to a maximum aggregate amount
outstanding to such Borrower and all other Borrowers (after giving effect to all
amounts requested) at any one time equal to such Lender's Commitment Amount,
provided that (i) the aggregate principal amount of all Loans outstanding (after
giving
8
effect to all amounts requested) to any Borrower shall not exceed at any time
the Maximum Amount for such Borrower at such time and (ii) the aggregate
principal amount of all Loans outstanding to all Borrowers (after giving effect
to all amounts requested) shall not exceed at any time the aggregate Commitment
Amounts. Each Borrowing under this SECTION 2.01(A) shall be in an aggregate
principal amount of not less than $100,000 or a larger whole multiple of $10,000
and shall, subject to SECTION 2.01(C), be made from the several Lenders pro rata
in accordance with each Lender's Commitment Percentage. Each Revolving Credit
Loan shall mature and become due and payable as provided in SECTION 2.05.
(b) Notwithstanding the provisions of SECTION 2.01(A) and
subject to the terms of this Agreement, each Borrower (other than a Borrower
that is an Affiliate Advised Borrower with respect to Swing Line Lender) may
request Loans (Swing Line Advances) in an aggregate principal amount of not less
than $50,000 or a larger integral multiple of $10,000, and if:
(i) the aggregate principal amount of such requested Loans
(Swing Line Advances) to such Borrower and of all other Loans
outstanding to all Borrowers which were made pursuant to the
operation of this SECTION 2.01(B) do not exceed $50,000,000;
(ii) the aggregate principal amount of all Loans outstanding
from Swing Line Lender (after giving effect to all amounts
requested) does not exceed Swing Line Lender's Commitment Amount;
(iii) the aggregate principal amount of all Loans
outstanding to such Borrower (after giving effect to all amounts
requested) does not exceed the Maximum Amount for such Borrower;
and
(iv) the aggregate principal amount of all Loans outstanding
to all Borrowers (after giving effect to all amounts requested)
does not exceed the aggregate Commitment Amounts,
then Swing Line Lender (subject to all of the terms and conditions of this
Agreement) shall make all of such Loans (each, a "SWING LINE ADVANCE," and
collectively, the "SWING LINE ADVANCES"). Each Borrower promises to pay any
Swing Line Advance made to it in full (together with any accrued and unpaid
interest thereon) on the earliest of (A) 10 days after the date such Swing Line
Advance was made, (B) the date of the next Loan made to such Borrower by Lenders
pursuant to SECTION 2.01(A), and (C) the Termination Date. If:
(w) any Swing Line Advance remains outstanding to any
Borrower 10 days from the date of the advance thereof,
(x) Loans are not or may not be requested pursuant to
SECTION 2.01(A) by a Borrower to whom a Swing Line Advance is
outstanding prior to the Termination Date,
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(y) any event described in SECTION 6.01(G) or (H) occurs
with respect to a Borrower to whom a Swing Line Advance is
outstanding or the applicable Investment Company, or
(z) Swing Line Lender so requests at any time in its sole
discretion,
then each Lender (including Swing Line Lender in its capacity as a Lender but
excluding any Lender that may not make Loans to such Borrower under SECTION
2.01) shall, subject to SECTION 2.01(C), fund its pro rata share (based upon
such Lender's Commitment Percentage) of the principal amount of such Swing Line
Advance with a Revolving Credit Loan (or, if a Revolving Credit Loan cannot be
made, with the purchase of a participation in such Swing Line Advance),
regardless of (1) the satisfaction of any conditions precedent to the borrowing
of Revolving Credit Loans, (2) the occurrence of any Default or Event of Default
with respect to such Borrower or any breach of this Agreement by any Lender, (3)
any right of setoff, counterclaim, recoupment, defense, or other right which
such Lender may have against Swing Line Lender, (4) any adverse change in the
condition (financial or otherwise) of such Borrower, or (5) any other
circumstance, happening, or event whatsoever, whether or not similar to any of
the foregoing.
(c) In the event that any Loans (including Swing Line
Advances) are outstanding to any Affiliate Advised Borrower, any Loans
(including Swing Line Advances), or participations therein, thereafter made by
Lenders shall be adjusted and made, to the extent permitted by this Agreement,
so that the aggregate principal amount of Loans owing to each Lender (including
by way of participation) shall be equal to such Lender's Commitment Percentage
of the aggregate principal amount of Loans owing to all Lenders (including by
way of participation).
SECTION 2.02 BORROWING NOTICES. (a) Each Borrower requesting a Loan (including a
Swing Line Advance) shall give Operations Agent a written Borrowing Notice, not
later than 12:00 p.m. (Boston, Massachusetts, time) on the Business Day of each
requested Loan, except that the applicable Borrower may make an oral request
(each, an "ORAL REQUEST") not later than 11:00 a.m. (Boston, Massachusetts,
time) on such Business Day, provided that each Oral Request is followed by a
written Borrowing Notice no later than 1:00 p.m. (Boston, Massachusetts, time)
on such Business Day.
(b) Each Borrowing Notice or Oral Request shall specify the following
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 Fund for whose benefit the
Loan is being borrowed and the amount of the Loan which is for the benefit of
such Fund, (iv) the Total Assets of the Fund for whose benefit the Loan is being
borrowed as of the close of business on the Business Day immediately preceding
the date of such Borrowing Notice, (v) the type of Loan requested (whether a
Revolving Credit Loan or a Swing Line Advance), and (vi) whether such Fund is an
Affiliate Advised Borrower and, if so, the name of the affected Lender.
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(c) Each Borrowing Notice or Oral Request shall constitute a
representation and warranty to Agents and Lenders by the applicable Borrower
that the conditions set forth in SECTION 3.02 have been satisfied on the date of
such notice and will be satisfied on the Borrowing Date.
(d) Each Borrowing Notice or Oral Request shall be irrevocable and
shall obligate the Borrower named therein to accept the Loan requested on the
Borrowing Date. SECTION 2.03 FUNDING OF LOANS. (a) Upon receipt of a Borrowing
Notice or an Oral Request for a Borrowing in accordance with SECTION 2.02,
Operations Agent shall promptly notify each Lender of the contents thereof and
of such Lender's ratable share, if any, of such Borrowing.
(b) Not later than 2:00 p.m. (Boston, Massachusetts, time) on the
Borrowing Date of each Borrowing, each Lender shall (except as provided in
SECTION 2.03(C)) make available its share of such Borrowing, in Federal or other
funds immediately available in Boston, Massachusetts, to Operations Agent at its
address referred to in SECTION 9.01. Unless Operations Agent determines that any
applicable condition specified in ARTICLE III has not been satisfied, Operations
Agent will make the funds so received from each Lender available to the Borrower
requesting the Loan at Operations Agent's aforesaid address. The failure or
refusal of any Lender to make available to Operations Agent as provided herein
its share of any Borrowing shall not relieve any other Lender from its several
obligations hereunder.
(c) If any Lender makes a new Loan for the use of a particular
Borrower on a day on which such Borrower is to repay all or any part of an
outstanding Loan to it from such Lender, such Lender shall apply the proceeds of
its new Loan to make such repayment.
(d) If any Loan is to be made to a particular Borrower on a day on
which any Swing Line Advance is outstanding to such Borrower, the proceeds of
the Loan shall be applied first to the repayment of the outstanding Swing Line
Advance.
(e) Unless Operations Agent shall have received notice from a Lender
prior to any Borrowing Date that such Lender will not make available to
Operations Agent such Lender's share of such Borrowing, Operations Agent may
assume that such Lender has made such share available to Operations Agent on
such Borrowing Date in accordance with SECTION 2.03(B) of this Section and
Operations Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the applicable Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such share available to Operations Agent, such Lender and the Borrower
receiving such amount severally agree to repay to Operations Agent, within three
days after demand by Operations Agent, such amount together with interest
thereon, for each day from the date such amount is made available to such
Borrower until the date such amount is repaid to Operations Agent, at (i) in the
case of the Borrower receiving such amount, a rate per annum equal to the
interest rate applicable thereto pursuant to SECTION 2.06 and (ii) in the case
of such Lender, the Federal Funds Rate. If such Lender shall repay to Operations
Agent such amount, such amount so
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repaid shall constitute such Lender's Loan included in such Borrowing for
purposes of this Agreement.
SECTION 2.04 NOTES. (a) The Loans of each Lender to Borrowers shall be evidenced
by a single Note payable to the order of such Lender in an amount equal to such
Lender's Commitment Amount or, if less, the aggregate unpaid principal amount of
such Lender's Loans, plus interest thereon as provided below.
(b) Each Lender shall record on its Note the date and amount
of each Loan made by it to each Borrower and the date and amount of each payment
of principal made by such Borrower with respect thereto, and prior to any
transfer of its Note in accordance with this Agreement shall endorse on the
schedule forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding; provided that the
failure of any Lender to make, or any error by any Lender in making, any such
recordation or endorsement shall not affect the obligations of any Borrower
hereunder or under any Note. Each Lender is hereby irrevocably authorized by
each Borrower so to endorse its Note and to attach to and make a part of its
Note a continuation of any such schedule as and when required.
SECTION 2.05 MATURITY OF LOANS. Each Revolving Credit Loan shall mature, and the
principal amount thereof, together with any and all accrued and unpaid interest
thereon, shall be due and payable, on the earlier of (a) the day which is 60
days after the date such Revolving Credit Loan was made, or (b) the Termination
Date. Each Swing Line Advance shall mature as provided in SECTION 2.01(B).
SECTION 2.06 INTEREST RATES. (a) Subject to SECTION 2.06(B), each Loan shall
bear interest on the outstanding principal amount thereof, for the period
commencing with the date such Loan is made up to but not including the maturity
date for such Loan, at a rate per annum equal to the Overnight Rate as in effect
from time to time. The rate of interest payable on any Loan bearing interest at
the Overnight Rate shall change on each date that the Federal Funds Rate shall
change.
(b) Any overdue principal of (whether at stated maturity, by
acceleration, or otherwise) and (to the extent permitted by applicable law)
interest on the Loans and all other overdue amounts payable hereunder shall bear
interest, payable on demand, for each day from and including the date payment
thereof was due (whether at stated maturity, by acceleration, or otherwise)
through and including the date of actual payment, at a rate per annum equal to
the sum of 2% plus the Base Rate until such amount shall be paid in full (after,
as well as before, judgment). During the continuance of a Default or an Event of
Default with respect to a Borrower, the principal of the Loans to the defaulting
Borrower which are not overdue shall, until such Default or Event of Default has
been cured or remedied or such Default or Event of Default has been waived by
Lenders pursuant to SECTION 9.05, bear interest at a rate per annum equal to the
greater of (i) 2% above the rate of interest otherwise applicable to such Loans
pursuant to SECTION 2.06(A) and (ii) the rate of interest applicable to overdue
principal.
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SECTION 2.07 FEES. (a) During the Revolving Credit Period, each Borrower shall
pay to Operations Agent, for the account of each Lender, such Borrower's Pro
Rata Share of a facility fee (the "FACILITY FEE") at the rate of 0.09% per annum
of the amount of each Lender's Commitment Amount (whether used or unused).
(b) The Facility Fee shall accrue from and including the Effective
Date to but excluding the Termination Date. Facility Fees for each calendar
quarter shall be payable in arrears on the fifteenth day of each April, July,
October, and January, commencing on the first such day after the Effective Date,
and on the Termination Date.
SECTION 2.08 RECOURSE TO ASSETS. Loans made to each Borrower shall be paid
solely to the account of such Borrower and used by such Borrower solely in
accordance with SECTION 5.10. The obligations of each Borrower under this
Agreement and the other Loan Documents are several and not joint. The principal
amount of the Loans made to a particular Borrower and accrued interest thereon,
and any fees or additional amounts payable in connection with or relating to
such Loans pursuant to this Agreement, including, without limitation, SECTIONS
2.07, 8.01, and 9.03, shall be paid or repaid solely from the assets of such
Borrower only, and Lenders shall have no right of recourse or offset against the
assets of any other Borrower with respect to such Loans or such other
obligations or amounts, or on account of any default in respect thereto.
SECTION 2.09 EXTENSION OF COMMITMENTS. No later than 60 days prior to the
Termination Date then in effect, each Investment Company, on behalf of each
Fund, may deliver to Agents and Lenders a written request substantially in the
form of EXHIBIT C in order to request that the Commitments to Borrowers be
extended for an additional 364 days from the Termination Date then in effect.
Each Lender, in its sole discretion, may consent to such extension. If all
Lenders so consent, Administrative Agent shall deliver a written consent to each
Investment Company on a date no earlier than 30 days or later than 15 days prior
to the Termination Date then in effect, whereupon such Termination Date shall be
extended to that day which is the 364th day following the Termination Date. In
no event shall the Termination Date be extended without the consent of each
Lender in its sole discretion.
SECTION 2.10 MANDATORY TERMINATION OF COMMITMENTS. Each Lender's Commitment
shall terminate on the Termination Date. The aggregate principal amount of all
Loans outstanding to each Borrower, together with any and all accrued and unpaid
interest thereon, shall become absolutely due and payable on the Termination
Date, and each Borrower promises to pay such principal amount and interest on
the Termination Date.
SECTION 2.11 OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS (a) Each Borrower
shall have the right at any time and from time to time upon five Business Days'
prior written notice to Agents to terminate entirely each Lender's Commitment to
such Borrower, whereupon each Lender's Commitment to such Borrower shall be
terminated. Promptly after receiving a notice from a Borrower delivered pursuant
to this SECTION 2.11(A), Administrative Agent will notify Lenders of the
substance thereof. Upon the effective date of the termination, the applicable
Borrower shall pay to Operations Agent for the accounts of Lenders all of the
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Loans outstanding to such Borrower on such date, together with any and all
accrued and unpaid interest thereon, as well as the full amount of the Facility
Fee then accrued and allocated to such Borrower. No termination of any
Commitment by any Borrower may be reinstated without the consent of all Lenders.
(b) Borrowers shall have the right at any time and from time to time
upon five Business Days' prior written notice to Agents to reduce by $5,000,000,
or an integral multiple of $1,000,000 in excess thereof, the unborrowed portion
of the aggregate Commitment Amounts, whereupon the Commitment Amounts of Lenders
shall be reduced pro rata in accordance with their Commitment Percentages of the
amount specified in such notice. Promptly after receiving any notice delivered
pursuant to this Section, Administrative Agent will notify Lenders of the
substance thereof and revise SCHEDULE 1 accordingly. Upon the effective date of
any such reduction, each Borrower shall pay to Operations Agent, for the
accounts of Lenders, its Pro Rata Share of the amount of any unpaid Facility Fee
then accrued on the amount of the reduction. No reduction in the Commitment
Amounts may be reinstated without the consent of all Lenders.
SECTION 2.12 OPTIONAL AND MANDATORY PREPAYMENTS.
(a) Each Borrower may, upon notice to Operations Agent not later than
11:00 a.m. (Boston, Massachusetts, time) on the Business Day of such prepayment
(whichnotice shall not thereafter be revocable by such Borrower), prepay any
Loans in whole at any time, or from time to time in part in an aggregate
principal amount not less than $100,000 and in larger integral multiples of
$10,000, by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such optional prepayment shall
be applied to prepay ratably the Loans of the several Lenders included in such
Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to SUBSECTION (A),
Operations Agent shall promptly notify Administrative Agent and each Lender of
the contents thereof and of each Lender's ratable share of such prepayment. (c)
If at any time the aggregate principal amount of all Loans outstanding to any
Borrower exceeds the Maximum Amount for such Borrower, such Borrower immediately
shall prepay the principal amount of one or more such Loans (together with
accrued interest thereon) as may be necessary so that after such prepayment the
aggregate principal amount of all Loans outstanding to such Borrower does not
exceed the Maximum Amount for such Borrower.
(d) If at any time (i) the aggregate principal amount of all Loans outstanding
to all Borrowers exceeds the aggregate Commitment Amounts or (ii) the aggregate
principal amount of all Loans made by any Lender exceeds the Commitment Amount
of such Lender, each Borrower that has an outstanding Loan shall immediately
prepay such Borrower's Pro Rata Share of the principal amount of one or more
such Loans (together with accrued interest thereon) as may be necessary to
eliminate such excess.
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SECTION 2.13 GENERAL PROVISIONS AS TO PAYMENTS. (a) Payment of principal of and
interest on the Loans and of fees and all other amounts due hereunder shall be
made not later than 2:00 p.m. (Boston, Massachusetts, time) on the date when
due, in United States dollars and in Federal or other funds immediately
available in Boston, Massachusetts, to Operations Agent at its address referred
to in SECTION 9.01. Operations Agent will promptly distribute to each Lender its
ratable share of each such payment received by Operations Agent for the account
of Lenders. Whenever any payment of principal of, or interest on, the Loans or
of fees or any other amount due hereunder shall be due on a day which is not a
Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day and interest shall accrue during such extension. If the
date for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
(b) UNLESS Operations Agent shall have received notice from a Borrower
prior to the date on which any payment is due to Lenders hereunder that such
Borrower will not make such payment in full, Operations Agent may assume that
such Borrower has made such payment in full to Operations Agent on such date and
Operations Agent may (but it shall not be required to), in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent that a Borrower
shall not have so made such payment, each Lender shall repay to Operations Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to Operations Agent, at the
Federal Funds Rate.
(c) Each Borrower agrees that payments hereunder and under any other
Loan Document shall be made without setoff or counterclaim and free and clear of
and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions, or conditions of any
nature now or hereafter imposed or levied by the United States or any political
subdivision thereof or taxing or other authority therein, UNLESS such Borrower
is compelled by law to make such deduction or withholding. If any such
obligation is imposed upon a Borrower with respect to any amount payable by it
hereunder or under any other Loan Document, such Borrower will pay to Operations
Agent, for the account of Lenders or (as the case may be) Operations Agent or
Administrative Agent, on the date on which such amount is due and payable
hereunder or under such other Loan Document, such additional amount in United
States dollars as shall be necessary to enable Lenders or Operations Agent or
Administrative Agent to receive the same net amount which Lenders or Operations
Agent or Administrative Agent would have received on such due date had no such
obligation been imposed upon such Borrower, PROVIDED, HOWEVER, that the
obligation to pay additional amounts pursuant to this SECTION 2.13(C) shall not
apply to any tax, assessment, or other governmental charge that is (i) imposed
upon or by reference to a Lender's overall net income, profits, or gains, or
(ii) imposed on a Lender that has failed to comply with SECTION 2.15. Each
Borrower will deliver promptly to Operations Agent certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect to
payments made by such Borrower hereunder or under such other Loan Document.
15
SECTION 2.14 COMPUTATION OF INTEREST AND FEES. All interest and fees hereunder
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed, but shall not exceed the highest lawful rate of interest
permitted by applicable law. Operations Agent's determination of interest rates
and Facility Fees shall be conclusive and binding for all purposes, absent
demonstrable error.
SECTION 2.15 WITHHOLDING TAX EXEMPTION. Each Lender that is not incorporated
under the laws of the United States of America or a state thereof agrees that it
((x) if such Lender is an original Lender party to this Agreement, on or prior
to the first Borrowing Date, and (y) if such Lender becomes a Lender party to
this Agreement after the first Borrowing Date, on or prior to the date such
Lender becomes a Lender party hereto) will deliver to Investment Companies, on
behalf of the Funds, and Operations Agent copies of EITHER U.S. Internal Revenue
Service FORM W-8BEN or FORM W-8ECI as to such Lender's exemption from deduction
and withholding of any United States federal income taxes. Each Lender which so
delivers either U.S. Internal Revenue Service FORM W-8BEN or FORM W-8ECI
pursuant to the previous sentence further undertakes to deliver to Investment
Companies, on behalf of the Funds, and Operations Agent additional copies of
such form (or a successor form) on or before the date that such form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent form so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by Borrowers or Operations
Agent, in each case certifying that such Lender is entitled to receive payments
under this Agreement and its Note without deduction or withholding of any United
States federal income taxes, UNLESS an event (including without limitation any
change in treaty, law, or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises Borrowers
and Operations Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
ARTICLE III CONDITIONS
SECTION 3.01 EFFECTIVENESS. This Agreement shall become effective on the date
that each of the following conditions shall have been satisfied (or waived in
accordance with SECTION 9.05):
(a) receipt by Administrative Agent of counterparts of this Agreement
signed by each of the parties hereto;
(b) receipt by Administrative Agent, for the account of each Lender,
of a duly executed Note dated on or before the Effective Date complying with the
provisions of SECTION 2.04;
16
(c) receipt by Administrative Agent of an executed subordination
agreement in substantially the form set forth on EXHIBIT F.
(d) receipt by Administrative Agent of an opinion of counsel to USAA
Investment Management Company (manager and adviser to Borrowers) addressed to
Agents and Lenders, substantially in the form of EXHIBIT D, and satisfactory to
Administrative Agent in all respects;
(e) receipt by Administrative Agent of a certificate manually signed
by an Authorized Individual of each Investment Company, on behalf of each Fund,
to the effect set forth in SECTIONS 3.02(B) (if a Borrowing will occur on the
Effective Date), (C), and (D), such certificate to be dated the Effective Date
and to be in form and substance satisfactory to Administrative Agent;
(f) receipt by Administrative Agent of a manually signed certificate
from the Secretary of each Investment Company in form and substance satisfactory
to Administrative Agent and dated the Effective Date (i) as to the incumbency
of, and bearing manual specimen signatures of, Authorized Individuals of each
Investment Company who are authorized to execute and take actions under the Loan
Documents on behalf of each Fund, (ii) as to the Custodian and Investment
Adviser of each Borrower, and (iii) certifying and attaching copies of (A) each
Investment Company's declaration of trust, articles of incorporation, and
by-laws (as applicable) as then in effect, and (B) duly authorized resolutions
of each Investment Company's Board of Trustees or Board of Directors authorizing
each Investment Company on behalf of each of its applicable Funds the execution,
delivery, and performance of this Agreement and the other Loan Documents and the
borrowings and transactions contemplated hereby and thereby;
(g) receipt by Administrative Agent of a manually signed
certificate from the Secretary of each Investment Company in form and substance
satisfactory to Administrative Agent and dated the Effective Date and certifying
and attaching copies of (i) the current Prospectus and Statement of Additional
Information for each Fund, (ii) the Annual Reports to the Shareholders of each
Fund for the two most recently ended fiscal years and (iii) the most recent
Semi-Annual Report to the Shareholders of each Fund;
(h) receipt by Administrative Agent of legal existence and good
standing certificates for each Investment Company from the Secretary of State of
the applicable state dated no more than ten days prior to the Effective Date;
(i) receipt by Administrative Agent of a copy of the articles of
incorporation or declaration of trust of each Investment Company, with all
amendments, certified as of a date no more than ten days prior to the Effective
Date, by the Secretary of State of the applicable state;
(j) receipt by Administrative Agent of a statement in conformity with
the requirements of FEDERAL RESERVE FORM U-1 as referred to in REGULATION U;
17
(k) satisfactory completion by Lenders of due diligence with respect
to Borrowers;
(l) Lenders being satisfied that there has been no material adverse change in
the business, financial position, or results of operations of any Borrower since
the date of the most recent financial statements of the applicable Borrower
referred to in SECTION 4.07;
(m) receipt by Administrative Agent of all documents, opinions, and
instruments it may reasonably request prior to the execution of this Agreement
relating to compliance with applicable rules and regulations promulgated by the
Federal Reserve Board and other governmental and regulatory authorities, the
existence of each Borrower, the authority for and the validity and
enforceability of this Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to Administrative Agent;
(n) receipt by Administrative Agent of payment of all fees and
expenses (including fees and disbursements of special counsel for Administrative
Agent) then payable hereunder; and
(o) all representations and warranties contained in this Agreement
shall be true and correct;
PROVIDED that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied NOT LATER THAN
January 8, 2004. Receipt by Administrative Agent of a Lender's signature to this
Agreement shall mean that the conditions in SECTIONS 3.01 (K) and (L) have been
satisfied as to that Lender. Administrative Agent shall promptly notify
Borrowers and Lenders of the Effective Date, and such notice shall be conclusive
and binding on all parties to this Agreement.
SECTION 3.02 ALL BORROWINGS. The obligation of any Lender to make a Loan on the
occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) receipt by Operations Agent of a Borrowing Notice as required by
SECTION 2.02, ALONG WITH all documents and information it may reasonably request
to establish compliance with applicable rules and regulations promulgated by the
Federal Reserve Board (which, as of the Effective Date, may include a list of
all Margin Stock (as defined below) which directly or indirectly secures the
Loan), and receipt by such Lender of all such documents and instruments from
Operations Agent;
(b) immediately after such Borrowing, the aggregate principal amount
of all Loans outstanding to the Borrower requesting the Loan will not exceed the
Maximum Amount for such Borrower, and, immediately after such Borrowing, the
aggregate principal amount of all Loans outstanding to all Borrowers will not
exceed the aggregate Commitment Amounts;
18
(c) immediately before and after such Borrowing, no Default or Event
of Default with respect to the Borrower requesting the Loan shall have occurred
and be continuing;
(d) immediately before and after such Borrowing, the representations
and warranties contained in this Agreement (except those set forth in SECTIONS
4.07(B) and 4.08) of the Borrower requesting the Loan shall be true and correct;
(e) if Margin Stock constitutes 25% or more of the assets of the Fund
for whose benefit the Loan is being requested, the aggregate principal amount of
the Loans made to such Borrower do not exceed the sum of (i) 50% of the Fair
Market Value (as defined below) of all Margin Stock held by such Fund and (ii)
the sum of the Applicable Percentages (as defined below) of the Fair Market
Value of all securities and other assets held by such Fund that are not Margin
Stock. For purposes of the foregoing, (A) "APPLICABLE PERCENTAGE" means 95% in
the case of U.S. Government and agency securities, 85% in the case of
investment-grade municipal securities, 95% in the case of investment-grade money
market instruments, 80% in the case of investment-grade corporate debt
securities, and zero percent in all other cases; (B) "MARGIN STOCK" shall have
the meaning assigned to such term in Regulation U; and (C) "FAIR MARKET VALUE"
means, with respect to any security owned by a Fund, the value assigned to such
security in accordance with the methods described in the Prospectus of such Fund
in the most recent calculation by or for such Fund of the net asset value per
share of such Fund;
(f) no change shall have occurred in any law or regulation thereunder
or in the interpretation thereof that in the good faith opinion of a Lender
would make it illegal for such Lender to make such Loan; and
(g) immediately before and after such Borrowing, no other Loan to the
Borrower requesting the Loan shall have remained outstanding for 60 or more
consecutive days.
Each Borrowing hereunder shall be deemed to be a representation and warranty on
the date of such Borrowing by the Borrower requesting the Loan as to the facts
specified in SECTIONS 3.02(B), (C), (D), and (E).
SECTION 3.03 NEW INVESTMENT COMPANIES, NEW FUNDS, NEW SUBADVISERS. (a) After the
Effective Date, so long as no Default or Event of Default has occurred and is
continuing, and with the prior written consent of Agents and Lenders, which
consent will not be unreasonably withheld:
(i) Any Additional Investment Company may become an Investment
Company hereunder and for all purposes of the Loan Documents by submitting an
amended SCHEDULE 2 to this Agreement to Agents (which amended SCHEDULE 2 shall
replace the SCHEDULE 2 which is then a part of this Agreement) and such other
documents as either Agent may reasonably request.
19
(ii) Any Additional Fund may become a Fund hereunder and for all
purposes of the Loan Documents by submitting an amended SCHEDULE 2 to this
Agreement to Agents (which amended SCHEDULE 2 shall replace the SCHEDULE 2 which
is then a part of this Agreement) and such other documents as either Agent may
reasonably request; provided that no such amendment of SCHEDULE 2 shall
establish or amend the Borrowing Limit applicable to any Fund without the prior
consent of Agents and Lenders.
(b) After the Effective Date, so long as no Default or Event of
Default has occurred and is continuing, any Investment Company may, by
submitting an amended SCHEDULE 3 to this Agreement to Agents (which amended
SCHEDULE 3 shall replace the SCHEDULE 3 which is then a part of this Agreement),
add new subadvisers, which are not currently subadvising any other Fund;
provided that no such amendment of SCHEDULE 3 would cause any Borrower to become
an Affiliate Advised Borrower without the prior written consent of Lenders.
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Each Borrower severally represents and warrants that:
SECTION 4.01 EXISTENCE AND POWER; INVESTMENT COMPANY. (a) The Investment Company
of which it is a part is validly existing and in good standing under the laws of
the state of its formation. Such Investment Company has all corporate or trust
powers, and such Investment Company and such Borrower has all authorizations and
approvals, in each case, required to carry on its business as now conducted.
(b) The Investment Company of which it is a part is an open-end
management investment company registered as such under the Investment Company
Act, and the outstanding shares of each class of its stock (i) have been duly
issued and are fully paid and non-assessable, (ii) have been duly registered
under the Securities Act of 1933, as amended (EXCEPT in the case of initial seed
capital shares which were issued in a transaction exempt from any registration),
and (iii) have been sold only in states or other jurisdictions in which all
filings required to be made under applicable state securities laws have been
made.
(c) Such Borrower has been duly established as a separate fund of the
Investment Company of which it is a part, and its assets and liabilities are
segregated from the assets and liabilities of each other Borrower. Such Borrower
is not subject to any liabilities of any other Borrower, OTHER THAN expenses
that are not chargeable to a particular Borrower but which are appropriately
allocated among all Borrowers.
SECTION 4.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery, and
performance by such Borrower of this Agreement, the Notes, and each other Loan
Document to which it is a party are within such Borrower's powers, have been
duly authorized by all necessary action, require no authorization or action by
or in respect of, or filing with, any
20
governmental body, agency, or official or any shareholder or creditor of such
Borrower, and do not contravene, or constitute a default under, any provision of
applicable law or regulation (including, without limitation, the Investment
Company Act), the declaration of trust, articles of incorporation, or by-laws of
the Investment Company of which it is a part, any agreement, judgment,
injunction, order, decree, or other instrument binding upon such Borrower's most
recent Prospectus or Statement of Additional Information, or result in the
creation or imposition of any Lien on any asset of such Borrower.
SECTION 4.03 BINDING EFFECT. Each Loan Document has been duly executed and
delivered by such Borrower and constitutes valid and binding obligations of such
Borrower, in each case enforceable in accordance with their terms. Such
Borrower's assets are subject to and liable for the repayment of the Obligations
owing by such Borrower.
SECTION 4.04 COMPLIANCE WITH MARGIN RULES. The execution, delivery, and
performance by such Borrower of this Agreement, the Notes, and the other Loan
Documents and the transactions contemplated hereunder and thereunder will not
violate REGULATION U or REGULATION X.
SECTION 4.05 NON-AFFILIATION WITH LENDERS. So far as appears from the records of
such Borrower, neither any Lender nor any Affiliate of any Lender known to such
Borrower is an Affiliate of such Borrower, and neither such Borrower nor any
Affiliate of such Borrower is an Affiliate of any Lender or any Affiliate of any
Lender known to such Borrower, except as set forth on SCHEDULE 3.
SECTION 4.06 SUBSIDIARIES. Such Borrower has no Subsidiaries.
SECTION 4.07 FINANCIAL INFORMATION. (a) The statement of assets and liabilities
of such Borrower, as of the last day of such Borrower's fiscal year most
recently ended prior to the Effective Date (or, with respect to each Additional
Fund which becomes a Fund hereunder, on the date such Additional Fund becomes a
Fund hereunder), and the related statements of operations and changes in net
assets for the fiscal year ended on such date, reported on by independent public
accountants of nationally recognized standing and set forth in the Annual Report
for the fiscal year ended on such date, TOGETHER WITH the notes and schedules
thereto, present fairly, in all material respects, in conformity with generally
accepted accounting principles, the financial position of such Borrower as of
such date.
(b) With respect to each Borrower party to this Agreement on
the Effective Date, as of the Effective Date, there has been no material adverse
change in the business, financial position, or results of operations of such
Borrower since the last day of such Borrower's fiscal year most recently ended
prior to the Effective Date. With respect to each Additional Fund which becomes
a Fund after the Effective Date, as of the date on which such Additional Fund
becomes a Fund hereunder, there has been no material adverse change in the
business, financial position, or results of operations of such Borrower since
the last day of such Borrower's fiscal year most recently ended prior to the
date on which such Additional Fund becomes a Fund hereunder.
21
SECTION 4.08 LITIGATION. As of the Effective Date, there is no action, suit, or
proceeding pending against, or to the knowledge of such Borrower threatened
against or affecting, such Borrower before any court or arbitrator or any
governmental body, agency, or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, financial position, or results of operations of such Borrower, or
which in any manner draws into question the validity or enforceability of this
Agreement, the Notes, or any other Loan Document.
SECTION 4.09 ERISA. (a) Such Borrower is not a member of an ERISA Group or has
liability in respect of any Benefit Arrangement, Plan, or Multiemployer Plan
subject to ERISA.
(b) No Loan to such Borrower will constitute a "PROHIBITED
TRANSACTION" within the meaning of SECTION 406 of ERISA or SECTION 4975 of the
Internal Revenue Code for which an exemption is not available.
SECTION 4.10 TAXES. Such Borrower has elected to be treated and qualifies, and
has qualified for treatment as such for each taxable year of its operation, as a
"regulated investment company" within the meaning of the Internal Revenue Code.
Such Borrower has timely filed all United States Federal income tax returns and
all other material tax returns which are required to be filed by it and has paid
all taxes due pursuant to such returns or pursuant to any assessment received by
it. The charges, accruals, and reserves on the books of such Borrower in respect
of taxes or other governmental charges are, in the opinion of such Borrower,
adequate.
SECTION 4.11 COMPLIANCE. (a) Such Borrower is in compliance in all material
respects with all applicable federal and state securities or similar laws and
regulations, including without limitation, all material rules, regulations, and
administrative orders of the SEC and applicable Blue Sky authorities. Such
Borrower has filed all reports with the SEC that are required of it. Such
Borrower is in compliance in all material respects with all of the provisions of
the Investment Company Act and all regulations thereunder, including Section 18.
Such Borrower is in compliance in all material respects with all other
applicable laws and regulations and all applicable ordinances, decrees,
requirements, orders, and judgments of, and all of the terms of any applicable
licenses and permits issued by, any governmental body, agency, or official, and
all agreements and instruments to which it may be subject or any of its
properties may be bound, in each case where the violation thereof may have a
material adverse effect on its business, financial position, or results of
operations. Such Borrower is in compliance in all material respects with all
investment policies and restrictions set forth in its Prospectus and Statement
of Additional Information.
(b) No Default or Event of Default has occurred and is continuing with
respect to such Borrower.
22
(c) Such Borrower is not subject to regulation under any federal,
state, local, or foreign statute or regulation (OTHER THAN the Investment
Company Act) which limits its ability to incur indebtedness. EXCEPT as set forth
on SCHEDULE 4.11(C), such Borrower has not entered into any agreement with any
federal, state, local, or foreign governmental authority or regulator limiting
its ability to incur indebtedness. The borrowing limitations adopted by such
Borrower in its Prospectus, Statement of Additional Information, or elsewhere
are set forth on SCHEDULE 4.11(C).
SECTION 4.12 FULL DISCLOSURE. All information heretofore furnished in writing by
or on behalf of such Borrower to Lenders for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by such Borrower to Lenders will be, true and
accurate in all material respects on the date as of which such information is
stated or certified. Such information, taken as a whole, does not omit and will
not omit to state a material fact necessary to make the statements contained in
such information, in light of the circumstances under which they were made, not
misleading.
SECTION 4.13 TAX SHELTER REGULATIONS. Such Borrower does not intend to treat any
Loan or other transaction contemplated by this Agreement as being a "REPORTABLE
TRANSACTION" (within the meaning of TREASURY REGULATION SECTION 1.6011-4). If
such Borrower determines to take any action inconsistent with such intention, it
will promptly notify Administrative Agent thereof. Such Borrower acknowledges
that Administrative Agent and/or one or more Lenders may treat its Loans as part
of a transaction that is subject to TREASURY REGULATION SECTION 1.6011-4 or
SECTION 301.6112-1, and Administrative Agent and such Lender or Lenders, as
applicable, may file such IRS forms or maintain such lists and other records as
they may determine is required by such Treasury Regulations.
ARTICLE V COVENANTS
Each Borrower severally agrees that, SO LONG AS any Lender has any Commitment to
any Borrower hereunder or any amount payable by such Borrower under any Note or
any other Loan Document remains unpaid:
SECTION 5.01 INFORMATION. Such Borrower will deliver to each Lender:
(a) as soon as available and in any event within 75 days after the end
of each fiscal year of such Borrower, (i) a statement of its assets and
liabilities, including the portfolio of investments, as of the end of such
fiscal year and the related statements of operations and changes in net assets
for such fiscal year, or (ii) if different from the foregoing, the statements
which such Borrower is required to prepare under applicable laws and regulations
as of the end of such period, all reported in a manner acceptable to the SEC,
together, in each case, with an audit report thereon issued by independent
public accountants of nationally recognized standing;
23
(b) as soon as available and in any event within 75 days after the end
of the first semi-annual period of each fiscal year of such Borrower, (i) a
statement of its assets and liabilities, including the portfolio of investments,
as of the end of such period, (ii) if different from the foregoing, the
statements which such Borrower is required to prepare under applicable laws and
regulations as of the end of such period, all certified (subject to normal
year-end adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the treasurer or vice president of such
Borrower or accompanied by an audit report thereon issued by independent public
accountants of nationally recognized standing;
(c) simultaneously with the delivery of each document referred to in
SECTIONS 5.01(A) and (B), and not later than 1:00 p.m. (Boston, Massachusetts,
time) on each Business Day on which a Loan is made to such Borrower, a
certificate of an Authorized Individual of the applicable Investment Company (i)
stating whether any Default or Event of Default with respect to such Borrower
exists on the date of such certificate and, if any Default or Event of Default
with respect to such Borrower then exists, setting forth the details thereof and
the action which it is taking or proposes to take with respect thereto, and (ii)
setting forth in reasonable detail the calculations required to establish
whether such Borrower is in compliance with the Borrowing Limit on the date of
such certificate;
(d) promptly after such Borrower obtains knowledge of any Default or
Event of Default with respect to such Borrower, a certificate of an Authorized
Individual of the applicable Investment Company setting forth the details
thereof and the action which such Borrower is taking or proposes to take with
respect thereto;
(e) promptly upon the filing thereof with the SEC or the mailing
thereof to shareholders of such Borrower, copies of all reports to shareholders,
amendments, and supplements to such Borrower's Prospectus and Statement of
Additional Information, proxy statements, and other materials of a financial or
otherwise material nature;
(f) promptly upon any officer of the applicable Investment Company
becoming aware of any action, suit, or proceeding of the type described in
SECTION 4.08 with respect to such Borrower, notice and a description thereof
(without waiving the attorney client or other applicable privileges related
thereto) and copies of any filed complaint relating thereto;
(g) from time to time such additional information regarding the
financial position or business of such Borrower as either Agent in its sole
discretion or at the request of any Lender may reasonably request;
(h) if a Loan to such Borrower is not repaid in full within 10 days
after the Borrowing Date, and until such Loan is repaid in full, to deliver to
Agents, within two Business Days after each Friday occurring after such 10th
day, a statement setting forth the Total Assets of such Borrower as of the close
of business on each such Friday;
24
(i) promptly after such Borrower has notified Administrative Agent of
any intention by such Borrower to treat the Loans and other transactions
contemplated by this Agreement as being a "REPORTABLE TRANSACTION" (within the
meaning of TREASURY REGULATION SECTION 1.6011-4), a duly completed copy of IRS
FORM 8886 or any successor form; and
(j) within two Business Days after the request of either Agent or any
Lender (which may be made by such Agent or Lender from time to time if such
Agent or Lender in good faith believes that there has been a material adverse
change in the capital markets generally), a statement setting forth the Total
Assets of each Borrower for whose benefit a Loan is outstanding on the date of
such request.
SECTION 5.02 PAYMENT OF OBLIGATIONS. Such Borrower will duly and punctually pay
or cause to be paid the principal and interest on the Loans made to it and all
other amounts payable by it provided for in this Agreement and the other Loan
Documents. Such Borrower will pay and discharge, at or before maturity or within
any applicable grace period, all of its material obligations and liabilities,
including, without limitation, the Other Credit Facility and tax liabilities,
EXCEPT where the same may be contested in good faith by appropriate proceedings,
and will maintain, in accordance with generally accepted accounting principles,
appropriate reserves for the accrual of any of the same.
SECTION 5.03 MAINTENANCE OF INSURANCE. Such Borrower will maintain with
financially sound and reputable insurance companies, policies with respect to
its business against at least such risks (and with no greater risk retentions)
and in at least such amounts as are required by the Investment Company Act; and
will furnish to Lenders, upon request, information presented in reasonable
detail as to the insurance so carried.
SECTION 5.04 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Such Borrower
will continue to engage in business of the same general type as now conducted by
it and the applicable Investment Company will preserve, renew, and keep in full
force and effect its existence under applicable state law and its rights,
privileges, and franchises necessary in the normal conduct of its business. The
applicable Investment Company will maintain in full force and effect its
registration as an open-end management company under the Investment Company Act
and keep in full force and effect the existence of such Borrower as a separate
fund of the applicable Investment Company, EXCEPT as provided in SECTION
5.09(C).
SECTION 5.05 COMPLIANCE WITH LAWS. Such Borrower will comply in all material
respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation, ERISA
and the Investment Company Act and the rules and regulations thereunder) except
where the necessity of compliance therewith is contested in good faith by
appropriate proceedings or exemptive relief has been obtained therefrom and
remains in effect. Such Borrower will file all federal and other tax returns,
reports, and declarations required by all relevant jurisdictions on or before
the due dates for such returns, reports, and declarations and will pay all taxes
and other governmental assessments and charges as and when they become due
(EXCEPT those that are being contested
25
in good faith by such Borrower and as to which such Borrower has established
appropriate reserves on its books and records).
SECTION 5.06 INSPECTION OF PROPERTY, BOOKS AND RECORDS. Such Borrower will keep
proper books of record and account in which full, true, and correct entries
shall be made of all dealings and transactions in relation to its business and
activities; and, subject to applicable confidentiality obligations of this
Agreement, will permit representatives of any Lender, at such Lender's expense,
to visit and inspect any of its offices, to examine and make abstracts from any
of its books and records, and to discuss its affairs, finances, and accounts
with its officers, employees, and independent public accountants, all at such
reasonable times and as often as may reasonably be desired.
SECTION 5.07 DEBT. Without the prior written consent of Required Lenders, such
Borrower will not create, assume or suffer to exist any Debt other than:
(a) Debt arising under this Agreement and the Notes;
(b) Debt in favor of such Borrower's Custodian consisting of overnight
extensions of credit from such Custodian in the ordinary course of business;
(c) Debt pursuant to the Other Credit Facility; and (d) Debt arising
in connection with portfolio investments and investment techniques permissible
under the Investment Company Act and other applicable laws, rules, and
regulations and consistent with such Borrower's investment objectives and
fundamental and operating investment restrictions;
PROVIDED that in no event shall such Borrower (A) enter into or utilize swaps,
caps, options, futures contracts, options on futures contracts, or other similar
portfolio investments or investment techniques, except to the extent permissible
under the Investment Company Act and consistent with such Borrower's investment
objectives and fundamental and operating investment restrictions, (B) enter into
reverse repurchase agreements for an aggregate amount which exceeds 10% of such
Borrower's Total Assets at any time, (C) borrow money or create leverage under
any arrangement OTHER THAN (v) from Lenders hereunder, (w) on an overnight basis
from such Borrower's Custodian to the extent provided in SECTION 5.07(B), (x)
pursuant to the Other Credit Facility, (y) pursuant to investment techniques to
the extent provided in CLAUSE (A) preceding, or (z) pursuant to reverse
repurchase agreements to the extent provided in CLAUSE (B) preceding, or (D)
issue or be or remain liable for or have outstanding any "SENIOR SECURITY" (as
defined in the Investment Company Act), except that such Borrower may borrow
from Lenders pursuant to this Agreement. Such Borrower will not issue or have
outstanding any preferred stock.
SECTION 5.08 NEGATIVE PLEDGE. Such Borrower will not create, assume, or suffer
to exist any Lien on any of its assets (including the income and profits
thereon), whether such asset is now owned or hereafter acquired, EXCEPT (a)
Liens for taxes, assessments, or
governmental charges or levies the payment of which is not at the time required,
(b) Liens in favor of such Borrower's Custodian granted pursuant to the custody
agreement with such Custodian to secure obligations arising under such custody
agreement, PROVIDED that the aggregate amount of assets encumbered by such
Borrower pursuant to this SECTION 5.08(B) does not at any time exceed 10% of
such Borrower's Total Assets, (c) Liens arising out of judgments which are being
contested in good faith and by appropriate proceedings diligently conducted, and
for which adequate reserves have been set aside in accordance with generally
accepted accounting principles, provided that enforcement thereof is stayed
pending such contest, (d) encumbrances consisting of the segregation of assets
covering obligations under reverse repurchase agreement to the extent permitted
by CLAUSE (B) of SECTION 5.07, and (d) other encumbrances created in connection
with such Borrower's portfolio investments (and not for the primary purpose of
borrowing money) to the extent permitted by the provisions of such Borrower's
Prospectus and Statement of Additional Information and SECTION 5.07, provided
that the aggregate amount of such encumbered assets of such Borrower pursuant to
this SECTION 5.08(D) does not at any time exceed 10% of such Borrower's Total
Assets.
SECTION 5.09 CONSOLIDATIONS, MERGERS, AND SALES OF ASSETS. Such Borrower will
not consolidate or merge with or into any other Person or reorganize its assets
into a non-series entity, nor will such Borrower sell, lease, or otherwise
transfer, directly or indirectly, all or any substantial part of its assets to
any other Person except that:
(a) such Borrower may sell its assets in the ordinary course of
business as described in its Prospectus;
(b) such Borrower may merge, consolidate, or reorganize its assets
with another Fund, another fund of the applicable Investment Company, or a fund
of an Affiliate of the applicable Investment Company, provided that (i) such
Borrower shall be the surviving entity, and (ii) such Borrower shall notify
Lenders in writing of its intention to so consolidate, merge, or reorganize no
later than 15 days prior to the date of the proposed consolidation, merger, or
reorganization; and
(c) such Borrower may consolidate, merge, or reorganize its assets
with or into any other entity, liquidate its assets, or transfer any of its
assets to any other entity, PROVIDED THAT, in each case, (i) such Borrower shall
notify Lenders in writing of its intention to so consolidate, merge, reorganize,
liquidate, or transfer its assets no later than 15 days prior to the date of
such proposed consolidation, merger, reorganization, liquidation, or transfer,
ALONG with a revised SCHEDULE 2 which gives effect to such consolidation,
merger, reorganization, liquidation, or transfer, (ii) all Obligations of such
Borrower shall have been paid in full on or prior to the date of such
consolidation, merger, reorganization, liquidation, or transfer, and(iii) from
and after the date of such consolidation, merger, reorganization, liquidation,
or transfer such Borrower shall no longer be a Borrower under this Agreement and
such Borrower shall no longer be permitted to request any Borrowing.
Such Borrower will not invest all of its investable assets in any other open-end
management investment company or otherwise employ a master-feeder or fund of
funds investment
27
structure or any other multiple investment company structure, except to the
extent permissible under the Investment Company Act and consistent with such
Borrower's investment objectives and fundamental and operating investment
restrictions.
SECTION 5.10 USE OF PROCEEDS. Such Borrower will use the proceeds of each Loan
made to it solely for temporary or emergency purposes in accordance with such
Borrower's Borrowing Limit and Prospectus in effect at the time of such Loan,
including but not limited to, the funding of redemption requests. Such Borrower
will not purchase portfolio securities while there is a Loan outstanding under
this Agreement and/or a loan outstanding under the Other Credit Facility for its
benefit, if the aggregate amount of such Loan and such other loan under the
Other Credit Facility exceeds 10% of the Total Assets of such Borrower. Such
Borrower will not, 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
X, or any other regulation of the Board of Governors of the Federal Reserve
System or the Securities Exchange Act of 1934, as amended.
SECTION 5.11 FINANCIAL CONDITION COVENANT. Such Borrower will not (a) permit its
Asset Coverage Ratio to be less than 300%, (b) allow its borrowings and/or Debt
to exceed the limits set forth in its Prospectus, or (c) allow borrowings and/or
Debt to exceed the requirement of the Investment Company Act. As used in this
Section: "ASSET COVERAGE RATIO," means, with respect to any Borrower, the ratio
which the value of Total Assets of such Borrower less all liabilities and
indebtedness of such Borrower not represented by Senior Securities, bears to the
aggregate amount of all Senior Securities representing indebtedness of such
Borrower; "SENIOR Security" means any bond, debenture, note, or similar
obligation or instrument constituting a security and evidencing indebtedness
(including without limitation all Loans under this Agreement and the Other
Credit Facility), and any share of beneficial interest of a Borrower of a class
having priority over any other class of shares of such Borrower as to
distribution of assets or payment of dividends; and "SENIOR SECURITY
REPRESENTING INDEBTEDNESS" means any Senior Security OTHER THAN stock. For the
purpose of calculating the Asset Coverage Ratio, the amount of any liability or
indebtedness owed by such Borrower deducted from Total Assets shall be equal to
the GREATER of (x) the outstanding amount of such liability or indebtedness, and
(y) the fair market value of all assets owned by such Borrower securing such
liability or indebtedness.
SECTION 5.12 BORROWING LIMIT. Such Borrower will not permit, at any time, the
aggregate amount of its Loans outstanding under this Agreement plus its loans
outstanding under the Other Credit Facility to exceed its Borrowing Limit.
SECTION 5.13 COMPLIANCE WITH PROSPECTUS. Such Borrower will at all times comply
in all material respects with the investment objectives, limitations, and
policies set forth in its Prospectus and Statement of Additional Information,
and will not make any investment, loan, advance, or extension of credit
inconsistent with those investment objectives, limitations, and policies. Such
Borrower will not permit its investment objective or any fundamental policy or
its diversified status (if it is diversified) to be changed from those in effect
on the Effective
28
Date (or, with respect to each Additional Fund which becomes a Fund hereunder,
on the date such Additional Fund becomes a Fund hereunder) and reflected in its
Prospectus and Statement of Additional Information delivered to Lenders on the
Effective Date (or, with respect to each Additional Fund, on the date such
Additional Fund becomes a Fund hereunder) without written notice to Agents and
Lenders at least 30 days prior to the date of such proposed investment objective
or any fundamental policy becoming effective. Upon receipt of such notice,
Required Lenders may reduce the Borrowing Limit for any affected Borrower.
SECTION 5.14 NON-AFFILIATION WITH LENDERS. Such Borrower will not at any time
become an Affiliate of any Lender or any Affiliate of any Lender known to such
Borrower without Lenders' prior written consent, and such Borrower will use its
best efforts to ensure that none of its Affiliates is or becomes an Affiliate of
any Lender or any Affiliate of any Lender known to such Borrower UNLESS such
Borrower complies with all obligations hereunder in connection therewith.
SECTION 5.15 REGULATED INVESTMENT COMPANY. The applicable Investment Company
will maintain its status as a "REGULATED INVESTMENT COMPANY" under the Internal
Revenue Code at all times and will make sufficient distributions to qualify to
be taxed as a "REGULATED INVESTMENT COMPANY" pursuant to SUBCHAPTER M of the
Internal Revenue Code.
SECTION 5.16 NO SUBSIDIARY. Such Borrower will not have at any time any
Subsidiary.
SECTION 5.17 ERISA. Such Borrower will not become a member of any ERISA Group or
have any liability in respect of any Benefit Arrangement, Plan, or Multiemployer
Plan subject to ERISA.
ARTICLE VI DEFAULTS
SECTION 6.01 EVENTS OF DEFAULT. If one or more of the following events ("EVENTS
OF DEFAULT") shall have occurred and be continuing with respect to any Borrower:
(a) such Borrower shall (i) fail to pay any principal of any Loan to
such Borrower when due or (ii) fail to pay any interest on any Loan to such
Borrower or any fee or any other amount payable under this Agreement within five
days of the date when due;
(b) such Borrower shall fail to observe or perform any term, covenant,
or agreement contained in ARTICLE V;
(c) such Borrower shall fail to observe or perform any term, covenant,
or agreement (other than those specified in SECTIONS 6.01(A) and (B)) contained
in this Agreement or in any other Loan Document for 30 Business Days after
written notice of such failure has been given to such Borrower by Operations
Agent at the request of any Agent or Lender;
29
(d) any representation, warranty, certification, or written statement
made by such Borrower in this Agreement or in any certificate, financial
statement or other document delivered pursuant to this Agreement shall prove to
have been incorrect in any material respect when made;
(e) such Borrower shall fail to make any payment in respect of any of
its Debt with an aggregate principal amount of 0.5% of its Total Assets or
greater (OTHER THAN a Loan under this Agreement), including under the Other
Credit Facility, when due or within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any of its Debt with an aggregate principal
amount of 0.5% of its Total Assets or greater, including under the Other Credit
Facility, or enables (or, with the giving of notice or lapse of time or both,
would enable) the holder of such Debt or any Person acting on such holder's
behalf to accelerate the maturity thereof;
(g) such Borrower or applicable Investment Company shall seek the
appointment of a trustee, receiver, liquidator, custodian, or other similar
official for it or any of its series or any substantial part of its property or
the property of any of its series, or shall commence a voluntary case or other
proceeding seeking liquidation, reorganization, or other relief with respect to
itself or any of its series or any of its or its series' debts under any
bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, or other similar
official for it or any of its series or any substantial part of its or any of
its series' property, or shall consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or other
proceeding commenced against it or such series, or such Borrower or applicable
Investment Company, as applicable, shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its or its series' debts as
they become due, or shall take any action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against
such Borrower or applicable Investment Company seeking liquidation,
reorganization, or other relief with respect to it or any of its series' debts
under any bankruptcy, insolvency, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian,
or other similar official of it or any of its series, and such involuntary case
or other proceeding shall remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against such Borrower or
applicable Investment Company under the federal bankruptcy laws as now or
hereafter in effect;
(i) a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against such Borrower and such judgment or order
shall not be stayed, vacated, discharged, satisfied, or bonded pending appeal
for a period of 30 days;
(j) the investment advisory agreement or management agreement with the
Investment Adviser which is in effect for such Borrower on the Effective Date
(or, with
30
respect to each Additional Fund which becomes a Fund hereunder, on the date such
Additional Fund becomes a Fund hereunder) shall terminate and not be replaced
with an investment advisory agreement or management agreement with the
Investment Adviser, or the Investment Adviser shall otherwise cease to be the
investment adviser to such Borrower; provided that, subject to the terms and
conditions hereof, the Investment Adviser shall be permitted to (i) hire one or
more of the existing subadvisers listed on SCHEDULE 3 as subadvisers for any
Fund unless such action would result in any Borrower becoming an Affiliate
Advised Borrower and (ii) add new subadvisers as provided in SECTION 3.03(C); or
(k) the Custodian of such Borrower shall cease to be its Custodian and
such Custodian is not replaced by a Custodian reasonably acceptable to Required
Lenders;
then, and in every such event, Administrative Agent shall (i) if requested by
Required Lenders, by notice to the defaulting Borrower terminate the Commitments
as to such Borrower, and they shall thereupon terminate, and (ii) if requested
by Required Lenders, by notice to the defaulting Borrower declare the Loans to
such Borrower (TOGETHER WITH accrued interest thereon) to be, and such Loans
(TOGETHER WITH accrued interest thereon) shall thereupon become, immediately due
and payable without presentment, demand, protest, or other notice of any kind,
all of which are hereby waived by such Borrower; PROVIDED that in the case of
any Event of Default specified in SECTION 6.01(G) or (H), automatically without
any notice to the defaulting Borrower or any other act by Agents or Lenders, the
Commitments shall thereupon terminate as to the defaulting Borrower and the
aggregate outstanding principal amount of the Loans to such Borrower (TOGETHER
WITH accrued interest thereon) shall become immediately due and payable without
presentment, demand, protest, or other notice of any kind, all of which are
hereby waived by such Borrower.
Notwithstanding any provision of this Agreement to the contrary, if
there occurs any Default or Event of Default solely with respect to a particular
Borrower, such Default or Event of Default shall not constitute, in and of
itself, a Default or an Event of Default with respect to any other Borrower and
shall not permit Lenders to terminate the Commitments or exercise any of their
other remedies as to any other Borrower.
SECTION 6.02 NOTICE OF DEFAULT. Administrative Agent shall give notice to a
defaulting Borrower under SECTION 6.01(C) promptly upon being requested to do so
by any Agent or Lender and shall thereupon notify all Lenders thereof.
ARTICLE VII
THE AGENTS
SECTION 7.01 APPOINTMENT AND AUTHORIZATION. Subject to SECTION 7.07, each Lender
irrevocably appoints and authorizes Operations Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement, the Notes,
and the other Loan Documents as are delegated to Operations Agent by the terms
hereof or thereof, TOGETHER WITH all such powers as are reasonably incidental
thereto. Subject to SECTION 7.07, each Lender irrevocably appoints and
authorizes Administrative Agent to take such action as agent on its
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behalf and to exercise such powers under this Agreement, the Notes, and the
other Loan Documents as are delegated to Administrative Agent by the terms
hereof or thereof, TOGETHER WITH all such powers as are reasonably incidental
thereto. Either Agent may execute any of its respective duties under this
Agreement or any other Loan Document by or through agents, employees, or
attorneys-in-fact. Neither Agent shall be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
SECTION 7.02 ACTIONS BY THE AGENTS. The duties and responsibilities of each
Agent are only those expressly set forth herein. The relationship between each
Agent and Lenders is and shall be that of agent and principal only, and nothing
contained in this Agreement or any other Loans Document shall be construed to
constitute either Agent as a trustee for any Lender. Without limiting the
generality of the foregoing, no Agent shall be required to take any action with
respect to any Default or Event of Default, EXCEPT as expressly provided in
ARTICLE VI. Neither Agent shall have or shall be deemed to have any fiduciary
relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against either
Agent. Without limiting the generality of the foregoing sentence, the use of the
term "AGENT" herein and in the other Loan Documents with reference to
Administrative Agent or Operations Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative or
operational relationship between independent contracting parties.
SECTION 7.03 CONSULTATION WITH EXPERTS. Each Agent may consult with, and shall
be entitled to advise of, legal counsel, independent public accountants, and
other consultants or experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants, consultants, or experts.
SECTION 7.04 LIABILITY OF AGENTS. Neither Agent nor any of its respective
directors, officers, agents, or employees shall be liable for any action taken
or not taken by it in connection herewith (a) with the consent or at the request
of the Required Lenders (or all Lenders, as may be required hereunder) or (b) in
the absence of its own gross negligence or willful misconduct. Neither Agent nor
any of its respective directors, officers, agents, or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty, or representation made by any other Person in connection
with this Agreement or any Borrowing hereunder; (ii) the performance or
observance of any covenant or agreement of any Borrower; (iii) the satisfaction
of any condition specified in ARTICLE III, EXCEPT receipt of items required to
be delivered to it; or (iv) the validity, enforceability, effectiveness, or
genuineness of this Agreement (EXCEPT as to its own execution of this
Agreement), the Notes, the other Loan Documents, or any other instrument or
writing furnished in connection herewith or therewith. No Agent shall incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex, or similar
writing) reasonably believed by it to be genuine or to be signed by the proper
party or parties.
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SECTION 7.05 INDEMNIFICATION. Each Lender shall, ratably in accordance with its
Commitment, indemnify each Agent (to the extent not reimbursed by Borrowers)
against any cost, expense (including counsel fees and disbursements), claim,
demand, action, loss, or liability (EXCEPT such as directly result from such
Agent's gross negligence or willful misconduct) that such Agent may suffer or
incur in connection with this Agreement or any other Loan Document or any action
taken or omitted by such Agent hereunder or thereunder; PROVIDED, HOWEVER, that
no action taken in accordance with the directions of Required Lenders (or all
Lenders, as may be required hereunder) shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section. The undertaking
in this Section shall survive termination of the aggregate Commitments, the
payment of all other obligations of Borrowers under this Agreement and the other
Loan Documents, and the resignation of Agents.
SECTION 7.06 CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon either Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon either Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action under this Agreement.
SECTION 7.07 SUCCESSOR AGENTS. Each Agent may resign at any time by giving
written notice thereof to Lenders and Borrowers. Upon any such resignation,
Required Lenders shall have the right to appoint a successor Agent with the
prior written consent of each Borrower that is not in default hereunder, which
consent shall not be unreasonably withheld or delayed. If no successor Agent
shall have been so appointed by Required Lenders within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of Lenders, appoint a successor Agent, which shall be a commercial bank
organized or licensed under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of its appointment as an Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as an Agent, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent. If no successor agent has accepted
appointment as Administrative Agent or Operations Agent, as applicable, by the
date which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
Lenders shall perform all of the duties of Administrative Agent or Operations
Agent, as applicable, hereunder until such time, if any, as Required Lenders
appoint a successor agent as provided for above.
SECTION 7.08 AGENTS AS LENDERS. Bank of America, State Street, and their
respective Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from,
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acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, custodial, fund servicing, or other business
with any Investment Company, Borrower, Fund, and their respective Affiliates as
though Bank of America and State Street were not Administrative Agent and
Operations Agent, respectively, hereunder and without notice to or consent of
Lenders. Lenders acknowledge that, pursuant to such activities, Bank of America,
State Street, and their respective Affiliates may receive information regarding
any Investment Company, Borrower, Fund, or respective Affiliate (including
information that may be subject to confidentiality obligations in favor of such
Investment Company, Borrower, Fund, or Affiliate) and acknowledge that Agents
shall be under no obligation to provide such information to them. With respect
to their respective Commitments and Loans, Bank of America and State Street
shall each have the same rights and powers under this Agreement as any other
Lender and may exercise such rights and powers as though it were not the
Administrative Agent or the Operations Agent, and the terms "LENDER" and
"LENDERS" include Bank of America and State Street in their respective
individual capacities.
SECTION 7.09 DISTRIBUTION BY OPERATIONS AGENT.. If in the opinion of Operations
Agent the distribution of any amount received by it in such capacity hereunder,
under the Notes, or under any other Loan Document might involve it in liability,
it may refrain from making such distribution UNTIL its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by Operations Agent is to be repaid, each Person to whom any such
distribution shall have been made shall EITHER repay to Operations Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
SECTION 7.10 DELINQUENT LENDERS. (a) Notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, any Lender that (i)
willfully does not or (ii) does not as a result of a Failure (as defined below)
(A) make available to Operations Agent its PRO RATA share of any Loan, or (B)
comply with the provisions of SECTION 9.04 with respect to making dispositions
and arrangements with the other Lenders, where such Lender's share of any
payment received, whether by setoff or otherwise, is in excess of its PRO RATA
share of such payments due and to payable to all Lenders, in each case as, when
and to the full extent required by the provisions of this Agreement, shall be
deemed delinquent (a "DELINQUENT LENDER") and shall be deemed a Delinquent
Lender until such time as such delinquency is satisfied. A Delinquent Lender
shall be deemed to have assigned any and all payments due to it from each
Borrower, whether on account of outstanding Loans, interest, fees, or otherwise,
to the remaining nondelinquent Lenders for application to, and reduction of,
their respective PRO RATA shares of all outstanding Loans to such Borrower. The
Delinquent Lender hereby authorizes Operations Agent to distribute such payments
to the nondelinquent Lenders in proportion to their respective pro rata shares
of all such outstanding Loans. A Delinquent Lender shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the nondelinquent Lenders,
Lenders' respective PRO RATA shares of all outstanding Loans have returned to
those in effect
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immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
(b) For purposes of this SECTION 7.10, a "FAILURE" of a Lender means
(i) it shall seek the appointment of a trustee, receiver, liquidator, custodian,
or other similar official for it or any substantial part of its property, or
shall commence a voluntary case or other proceeding seeking liquidation,
reorganization, or other relief with respect to itself or its debts under any
bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, or other similar
official for it or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or (ii) it
makes a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due, or shall take any corporate action to
authorize any of the foregoing, or (iii) an involuntary case or other proceeding
shall be commenced against it seeking liquidation, reorganization, or other
relief with respect to it or its debts under any bankruptcy, insolvency, or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian, or other similar official of it, or
(iv) an order for relief shall be entered against it under the federal
bankruptcy laws as now or hereafter in effect.
SECTION 7.11 PROOFS OF CLAIM. In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, or reorganization, or other judicial
proceeding relative to any Borrower, either Agent shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other
obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of Lenders and
Agents (including any claim for the reasonable compensation, expenses,
disbursements, and advances of Lenders and Agents and their respective
agents and counsel and all other amounts due Lenders and Agents under
SECTIONS 2.07 and 9.03) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator,
or other similar official in any such judicial proceeding is hereby
authorized by each Lender to make such payments to Operations Agent and, in
the event that Operations Agent shall consent to the making of such
payments directly to Lenders, to pay to each Agent any amount due for the
reasonable compensation, expenses, disbursements, and advances of such
Agent and its agents and counsel, and any other amounts due each Agent
under SECTIONS 2.07 and 9.03.
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Nothing contained herein shall be deemed to authorize either Agent to authorize
or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment, or composition affecting the
obligations of Borrowers under this Agreement or the other Loan Documents or the
rights of any Lender or to authorize either Agent to vote in respect of the
claim of any Lender in any such proceeding.
ARTICLE VIII CHANGE IN CIRCUMSTANCES
SECTION 8.01 INCREASED COST AND REDUCED RETURN. (a) If any future applicable
law, rule, or regulation, or any change in any present or future applicable law,
rule, or regulation, or any change in the interpretation or administration of
any present or future applicable law, rule or regulation by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Lending Office) with
any new request or new directive (whether or not having the force of law) of any
such authority, central bank or comparable agency in connection therewith:
(i) shall subject any Lender (or its Lending Office) to any tax,
duty, or other charge with respect to its Loans, its Note, or its
Commitment, or shall change the basis of taxation of payments to any
Lender (or its Lending Office) of the principal of or interest on its
Loans or any other amounts due under this Agreement or its Commitment,
in each case except for any tax on, or changes in the rate of tax on
the overall net income of such Lender or its Lending Office imposed by
the jurisdiction in which such Lender's principal executive office or
Lending Office is located; or
(ii) shall impose, modify, or deem applicable any reserve
(including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System), special deposit,
insurance assessment, or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender
(or its Lending Office) or shall impose on any Lender (or its Lending
Office) any other condition affecting its Loans, its Note, or its
Commitment;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making or maintaining any Loan to any Borrower, or to
reduce the amount of any sum received or receivable by such Lender (or its
Lending Office) from any Borrower under this Agreement or under its Note with
respect thereto, by an amount that such Lender in good faith believes to be
material, then, within 15 days after demand by such Lender and delivery to such
Borrower of the certificate required by SECTION 8.01(C) (with a copy to each
Agent), such Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such increased cost or reduction.
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(b) If any Lender in good faith determines that any existing
applicable law, rule, or regulation or any new law, rule, or regulation,
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or any new request or directive of general applicability regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank, or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Lender (or its parent corporation) as a
consequence of such Lender's obligations hereunder to a level below that which
such Lender (or its parent corporation) could have achieved but for such law,
change, request, or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Lender in good faith to
be material, then from time to time, within 15 days after demand by such Lender
(with a copy to each Agent), Borrowers shall pay to such Lender such additional
amount or amounts as will compensate such Lender (or its parent corporation) for
such reduction.
(c) Each Lender will promptly notify each Borrower and each Agent of
any event of which it has knowledge, occurring after the Effective Date, which
will entitle such Lender to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender, be otherwise disadvantageous to such Lender. A certificate of any
Lender claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder and the calculations used in
determining such additional amount or amounts shall be conclusive in the absence
of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
ARTICLE IX MISCELLANEOUS
SECTION 9.01 NOTICES.
(a) General. Unless otherwise expressly provided herein, all
notices, requests, and other communications provided for hereunder shall be in
writing (including by facsimile transmission). All such written notices shall be
mailed, faxed, or delivered to the applicable address, facsimile number, or
(subject to SUBSECTION (C) below) electronic mail address, and all notices and
other communications expressly permitted hereunder to be given by telephone
shall be made to the applicable telephone number, as follows:
(i) if to any Investment Company or Borrower, to the address,
facsimile number, electronic mail address, or telephone number
specified for such Person on SCHEDULE 2 or to such other address,
facsimile number, electronic mail address, or telephone number as
shall be designated by such party in a notice to the other parties;
and
37
(ii) if to any Agent or Lender, to the address, facsimile number,
electronic mail address, or telephone number specified on SCHEDULE 1
or to such other address, facsimile number, electronic mail address,
or telephone number as shall be designated by such party in a notice
to the other parties.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by certified mail, when signed for
by or on behalf of the relevant party hereto; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
SUBSECTION (C) below), when delivered; provided that notices to an Agent under
ARTICLE II, ARTICLE III, or ARTICLE VIII shall not be effective UNTIL received.
In no event shall a voicemail message be effective as a notice, communication,
or confirmation hereunder.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. This
Agreement and all other documents to be executed by it in connection with the
transactions contemplated hereby may be transmitted and/or signed by facsimile.
The effectiveness of any such documents and signatures shall, subject to
applicable law, have the same force and effect as manually-signed originals and
shall be binding on all Investment Companies, Borrowers, Agents, and Lenders.
Agents and Lenders may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; PROVIDED, HOWEVER, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.
(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
drafts of loan documents and financial statements and other information as
provided in SECTION 5.01, and to distribute this Agreement and the other
documents to be executed in connection herewith for execution by the parties
thereto, and may not be used for any other purpose.
(d) RELIANCE BY AGENTS AND LENDERS. Agents and Lenders shall be
entitled to rely and act upon any notices (including telephonic Borrowing
Notices) purportedly given by or on behalf of Borrowers EVEN IF (i) such notices
were not made in a manner specified herein, were incomplete, or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. Each Borrower shall indemnify each Agent-and its Affiliates and each
Lender from all losses, costs, expenses, and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of such
Borrower. All telephonic notices to and other communications with any Agent may
be recorded by such Agent, and each of the parties hereto hereby consents to
such recording."
SECTION 9.02 NO WAIVERS. No failure or delay by either Agent or any Lender in
exercising any right, power, or privilege hereunder, or under any Note, or under
any other Loan Document shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power, or
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privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.03 EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION.(a) Each Borrower,
severally and not jointly, agrees to pay (i) its Pro Rata Share of all
reasonable out-of-pocket expenses of Agents, including the fees and
disbursements of special counsel for Administrative Agent, in connection with
the preparation, negotiation and closing of this Agreement and the other Loan
Documents, the syndication of the facility established hereby, any general
waiver or consent hereunder, or any amendment hereof, and any termination
hereof, and (ii) if a Default or an Event of Default occurs with respect to such
Borrower, all reasonable out-of-pocket expenses incurred by either Agent and
each Lender, including fees and disbursements of counsel (including reasonable
allocated costs of in-house counsel), in connection with such Default or Event
of Default and any collection, bankruptcy, insolvency, and other enforcement
proceedings resulting therefrom. Each Borrower, severally and not jointly,
agrees to indemnify each Lender against any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the Notes. All amounts to be paid
pursuant to this SECTION 9.03(A) (OTHER THAN pursuant to CLAUSE (II) of the
first sentence of this SECTION 9.03(A)) shall be paid by each Borrower based on
its Pro Rata Share.
(b) Each Borrower, severally and not jointly, agrees to indemnify each
Agent and each Lender and hold each Agent and each Lender harmless from and
against any and all liabilities, losses, damages, costs, and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by either Agent or any Lender in connection with
any investigative, administrative, or judicial proceeding (whether or not either
Agent or any Lender shall be designated a party thereto) relating to or arising
out of this Agreement or the Loan Documents or any actual or proposed use of
proceeds of Loans to such Borrower hereunder, PROVIDED that Agents and Lenders
shall not have the right to be indemnified hereunder for their own gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.
(c) The undertaking in this Section shall survive termination of the
aggregate Commitments, the payment of all other obligations of Borrowers under
this Agreement and the other Loan Documents, and the resignation of Agents,
SECTION 9.04 SET OFF. During the continuance of any Event of Default as to a
particular Borrower, any deposits or other sums credited by or due from any
Lender solely to such Borrower, and any securities or other property solely of
such Borrower in the possession of such Lender may be applied to or set off by
such Lender against the payment of such Borrower's Obligations and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, of such Borrower to such Lender. Each
Lender agrees with each other Lender that (a) if an amount to be set off is to
be applied to Debt of a Borrower to such Lender, OTHER THAN Debt evidenced by
the Note held by such Lender, such amount shall be applied ratably to such other
Debt and to the Debt evidenced by the Note held by such Lender, and (b) if such
Lender shall receive from a
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Borrower whether by voluntary payment, exercise of the right of set off,
counterclaim, cross action, or enforcement of the claim evidenced by the Note
held by such Lender by proceedings against such Borrower at law or in equity or
by proof thereof in bankruptcy, reorganization, liquidation, receivership, or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Note held by such Lender any amount in excess of its ratable portion of the
payments received by all Lenders with respect to the Notes held by all Lenders,
such Lender will make such disposition and arrangements with the other Lenders
with respect to such excess, EITHER by way of distribution, assignment of claims
(to such extent as is necessary), subrogation, or otherwise as shall result in
each Lender receiving in respect of the Note held by it its proportionate
payment as contemplated by this Agreement; PROVIDED that if all or any part of
such excess payment is thereafter recovered from such Lender, such disposition
and arrangements shall be rescinded and the amount restored to the extent of
such recovery, but without interest.
SECTION 9.05 AMENDMENTS AND WAIVERS. Any provision of this Agreement, the Notes,
or any other Loan Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by each Investment Company, on
behalf of the Funds, and by the Required Lenders (and, if the rights or duties
of an Agent are affected thereby, by such Agent); PROVIDED that no such
amendment or waiver shall, UNLESS signed by all Lenders, (a) increase or
decrease the Commitment Amount of any Lender (EXCEPT as provided in SECTION
9.06(B)) or subject any Lender to any additional obligation, (b) reduce or
forgive the principal of or rate of interest on any Loan or any fees to Lenders
hereunder, (c) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees to Lenders hereunder or for the termination of
the aggregate Commitments, or (d) change the percentage of the Commitment
Amounts or of the aggregate unpaid principal amount of the Notes, or the number
of Lenders, which shall be required for Lenders or any of them to take any
action under this Section or any other provision of this Agreement.
SECTION 9.06 SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns, except that no Borrower may assign
or otherwise transfer any of its rights under this Agreement without the prior
written consent of all Lenders.
(b) Any Lender may at any time assign to one or more Eligible
Assignees (each, an "ASSIGNEE") all, or a proportionate amount of at least
$5,000,000 of all, of its rights and obligations under this Agreement and the
Note, and such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption in substantially the form of EXHIBIT E executed by
such Assignee and such transferor Lender, with, if no Default or Event of
Default has occurred and is continuing, the written consent of Borrowers and of
Administrative Agent, which consents shall not be unreasonably withheld or
delayed PROVIDED that no such consent of Borrowers or Administrative Agent shall
be required if the Assignee is an Affiliate of the transferor Lender. Upon
execution and delivery of such instrument and payment by such Assignee to such
transferor Lender of an amount EQUAL to the purchase price agreed between such
transferor Lender and such Assignee, such Assignee shall be a Lender party to
this Agreement and shall have all the rights and obligations of a Lender with a
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Commitment Amount as set forth in such instrument of assumption, and the
transferor Lender shall be released from any further obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this SUBSECTION
(B), the transferor Lender, Administrative Agent, and the Investment Companies,
on behalf of the Funds, shall make appropriate arrangements so that new Notes
are issued to the Assignor and the Assignee, and Administrative Agent shall be
authorized to revise SCHEDULE 1 to reflect such assignment and to circulate such
revised schedule to Lenders and Borrowers. In connection with any such
assignment, the transferor Lender shall pay to Agents an administrative fee for
processing such assignment in the amount of $3,500. If the Assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to Investment Companies, on behalf of the
Funds, and Operations Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with SECTION
2.15.
(c) Any Lender may at any time grant to one or more Eligible Assignees
(each, a "PARTICIPANT") participating interests in its Commitment or any of its
Loans. In the event of any such grant by a Lender of a participating interest to
a Participant, whether or not upon notice to Borrowers and Operations Agent,
such Lender shall remain responsible for the performance of its obligations
hereunder (including the confidentiality provisions of SECTION 9.10), and
Borrowers and Agents shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
Any agreement pursuant to which any Lender may grant such a participating
interest shall provide that such Lender shall retain the sole right and
responsibility to enforce the obligations of Borrowers hereunder, including,
without limitation, the right to approve any amendment, modification, or waiver
of any provision of this Agreement; PROVIDED that such participation agreement
may provide that such Lender will not agree to any modification, amendment, or
waiver of this Agreement described in SECTION 9.05(A), (B), (C), or (D) of
without the consent of the Participant. Each Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of ARTICLE VIII with respect to its participating
interest. An assignment or other transfer which is not permitted by SUBSECTION
(B) or (D) shall be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance with this SUBSECTION
(C).
(d) Any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement
and its Note in favor of any Federal Reserve Bank, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law. No such assignment shall release the transferor Lender from its
obligations hereunder.
(e) No Assignee, Participant, or other transferee of any Lender's
rights shall be entitled to receive any greater payment under SECTION 8.01 or
otherwise under this Agreement than such Lender would have been entitled to
receive with respect to the rights transferred, UNLESS such transfer is made
with Borrowers' prior written consent.
SECTION 9.07 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT ARE CONTRACTS UNDER THE LAWS OF THE STATE OF TEXAS AND SHALL
FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
SAID STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
CHAPTER 346 OF THE TEXAS FINANCE CODE SHALL NOT APPLY TO THIS AGREEMENT OR THE
LOANS MADE HEREUNDER. EACH BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF TEXAS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON SUCH BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION
9.01. EACH BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT.
SECTION 9.08 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AND UNDERSTANDINGS AMONG THE PARTIES, SUPERSEDE
ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
SECTION 9.09 MISCELLANEOUS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. The provisions of
this Agreement are severable and if any one clause or provision hereof shall be
held invalid or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or provision, or
part thereof, in such jurisdiction, and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other clause or provision
of this Agreement in any jurisdiction.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 9.11 LIMITATION ON LIABILITY. Notice is hereby given that this Agreement
and the Notes have been executed by Authorized Officers of the Investment
Companies in that capacity and not in their individual capacities, severally and
not jointly on behalf of each Fund as provided elsewhere in this Agreement. It
is expressly agreed that the obligations of each
42
Borrower arising under this Agreement and under the other Loan Documents are
obligations of such Borrower, binding solely upon the assets and property of
such Borrower, and are not personal obligations of its trustees, directors,
officers, employees, agent or shareholders.
SECTION 9.12 TRUST DISCLAIMER. Neither the shareholders, trustees, directors,
officers, employees, or other agents of any Investment Company, Borrower, or
Fund shall be personally bound by or liable for any indebtedness, liability, or
obligation hereunder or under the Notes nor shall resort be had to their private
property for the satisfaction of any obligation or claim hereunder.
SECTION 9.13 PUBLICITY. No party to this Agreement or any other Loan Document
will use any name, trademark, or trade name of any other without such other
party's prior written consent.
SECTION 9.14 COMPLIANCE WITH LAWS. Each party will comply with all applicable
laws, ordinances, rules, and regulations governing its duties or
responsibilities under this Agreement.
SECTION 9.15 CONFIDENTIALITY. Each Agent and each Lender agrees to maintain the
confidentiality of the Information (defined below) and to use the Information
solely for purposes related to the transactions contemplated by this Agreement,
EXCEPT that Information may be disclosed, in each case, (a) to its and its
Affiliates' directors, officers, employees, and agents, including accountants,
legal counsel, and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any Assignee of or Participant in, or any prospective Assignee
of or Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to any Borrower and its obligations, (g) with
the consent of the applicable Borrower, or (h) to the extent such Information
(x) becomes publicly available OTHER THAN as a result of a breach of this
Section or (y) becomes available to either Agent or any Lender on a
nonconfidential basis from a source other than any Investment Company or
Borrower. For purposes of this Section, "INFORMATION" means all information
received from a Borrower or its applicable Investment Company relating to such
Borrower or applicable Investment Company or any of their respective businesses,
OTHER THAN any such information that is available to either Agent or any Lender
on a nonconfidential basis prior to disclosure by such Borrower or applicable
Investment Company, PROVIDED that, in the case of information received from a
Borrower or Investment Company after the Effective Date, such information is
clearly identified at the time of delivery as confidential. Any Person required
to
43
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, "INFORMATION" shall not
include, and the parties to this Agreement and their respective Affiliates (and
their respective partners, directors, officers, employees, agents, advisors, and
other representatives) may disclose to any and all Persons, without limitation
of any kind (a) any information with respect to the U.S. federal and state
income tax treatment of the transactions contemplated by this Agreement and any
facts that may be relevant to understanding such tax treatment, which facts
shall not include for this purpose the names of the parties or any other Person
named in this Agreement, or information that would permit identification of the
parties or such other Persons, or any pricing terms or other nonpublic business
or financial information that is unrelated to such tax treatment or facts, and
(b) all materials of any kind (including opinions or other tax analyses)
relating to such tax treatment or facts that are provided to any of the Persons
referred to above.
SECTION 9.16 USA PATRIOT ACT NOTICE. Each Lender and Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies Borrowers that pursuant
to the requirements of the USA Patriot Act (TITLE III OF PUB. L. 107-56 [signed
into law October 26, 2001]) (the "ACT"), it is required to obtain, verify, and
record information that identifies Borrowers, which information includes the
names and addresses of Borrowers and other information that will allow such
Lender or Administrative Agent, as applicable, to identify Borrowers in
accordance with the Act. Upon request, each Borrower shall provide Lenders and
Administrative Agent such information and cooperate with Lenders and
Administrative Agent in obtaining such information.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGES FOLLOW.]
44
CREDIT AGREEMENT SIGNATURE PAGE
Signature to the Credit Agreement dated January 8, 2004, among USAA Mutual Fund,
Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., and USAA State Tax-Free
Trust (not in their individual capacities, but on behalf of and for the benefit
of the series of funds set forth on Schedule 2 hereto) and State Street Bank and
Trust Company, as operations agent for Lenders, and Bank of America, N.A., as
administrative agent for Lenders.
USAA MUTUAL FUND, INC., USAA INVESTMENT TRUST,
on behalf of and for the benefit on behalf of and for the benefit
of its series of Funds: of its series of Funds:
USAA Aggressive Growth USAA Cornerstone Strategy
USAA Growth & Income USAA Precious Metals and Minerals
USAA Income Stock USAA International
USAA Short-Term Bond USAA World Growth
USAA Money Market USAA GNMA Trust
USAA Growth USAA Treasury Money Market Trust
USAA Income USAA Emerging Markets
USAA S&P 500 Index USAA Growth and Tax Strategy
USAA Science & Technology USAA Balanced Strategy
USAA First Start Growth
USAA High Yield Opportunities
USAA Intermediate-Term Bond
USAA Small Cap Stock
USAA Extended Market Index
USAA Nasdaq-100 Index
USAA Capital Growth USAA Value
USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit on behalf of and for the benefit
of its series of Funds: of its series of Funds:
USAA Long-Term USAA Florida Tax-Free Income
USAA Intermediate-Term USAA Florida Tax-Free Money Market
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
By: /S/ XXXXXXXXXXX X. XXXXX
-------------------------------------------------------------
Xxxxxxxxxxx X. Xxxxx, President of each of the above entities
Signature to the Credit Agreement dated January 8, 2004, among USAA Mutual Fund,
Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., and USAA State Tax-Free
Trust (not in their individual capacities, but on behalf of and for the benefit
of the series of funds set forth on Schedule 2 hereto) and State Street Bank and
Trust Company, as operations agent for Lenders, and Bank of America, N.A., as
administrative agent for Lenders.
BANK OF AMERICA, as Administrative Agent
By: /S/ XXXX X'XXXXX
-----------------------------------
Name: Xxxx X'Xxxxx
Title: Managing Director
BANK OF AMERICA, as a Lender
By: /S/ XXXX X'XXXXX
------------------------------------
Name: Xxxx X'Xxxxx
Title: Managing Director
CREDIT AGREEMENT
SIGNATURE PAGE
Signature to the Credit Agreement dated January 8, 2004, among USAA Mutual Fund,
Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., and USAA State Tax-Free
Trust (not in their individual capacities, but on behalf of and for the benefit
of the series of funds set forth on Schedule 2 hereto) and State Street Bank and
Trust Company, as operations agent for Lenders, and Bank of America, N.A., as
administrative agent for Lenders.
STATE STREET BANK AND TRUST COMPANY,
as Operations Agent
By: /S/ XXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
STATE STREET BANK AND TRUST COMPANY,
as a Lender
By: /S/ XXXXX X. XXXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice President
CREDIT AGREEMENT
SIGNATURE PAGE
SCHEDULE 1
LENDERS, COMMITMENT AMOUNTS,
LENDING OFFICES, AND ADDRESSES
===============================================================================
LENDER COMMITMENT COMMITMENT
AMOUNT PERCENTAGE
===============================================================================
STATE STREET BANK AND TRUST COMPANY
Notice Address:
0 Xx Xxxxxxxxx Xxxxxx, 0xx Xxxxx $50,000,000 50%
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Assistant
Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
Lending Office:
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
===============================================================================
BANK OF AMERICA, N.A.
Notice Address:
000 Xxxx Xxxxxx, 00xx Xxxxx $50,000,000 50%
Xxxxxx, Xxxxx 00000
Attention: Xxxx X'Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
Lending Office:
0000 Xxxxxxx Xxxxxxxxx
Mail Code: CA4-706-05-09
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
===============================================================================
TOTAL $100,000,000 100.00%
===============================================================================
SCHEDULE 1
SCHEDULE 2
INVESTMENT COMPANIES, FUNDS, BORROWING LIMITS, AND ADDRESSES
================================================================================
INVESTMENT COMPANY FUND BORROWING
LIMIT 1
================================================================================
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 Index2 25
USAA Science & Technology 25
USAA First Start Growth 25
USAA High Yield Opportunities 25
USAA Intermediate-Term Bond 25
USAA Small Cap Stock 25
USAA Extended Market Index 10
USAA Nasdaq-100 Index 25
USAA Capital Growth 25
USAA Value 25
USAA Investment Trust USAA Cornerstone Strategy 25
USAA Precious Metals and Minerals 25
USAA International 25
USAA World Growth 25
USAA GNMA Trust 25
USAA Treasury Money Market Trust 25
USAA Emerging Markets 25
USAA Growth and Tax Strategy 25
USAA Balanced Strategy 25
USAA Tax Exempt Fund, Inc. USAA Long-Term 15
USAA Intermediate-Term 15
USAA Short-Term 15
USAA Tax Exempt Money Market 15
USAA California Bond 15
USAA California Money Market 15
USAA New York Bond 15
USAA New York Money Market 15
USAA Xxxxxxxx Xxxx 15
USAA Virginia Money Market 15
USAA State Tax-Free Trust USAA Florida Tax-Free Income 15
USAA Florida Tax-Free Money Market 15
================================================================================
1 Maximum Percent of Total Assets Which Can Be Borrowed Under this Agreement
and Other Credit Facility
2 This Fund has both Members and Rewards Class
SCHEDULE 2
ADDRESS FOR NOTICES AND OTHER COMMUNICATIONS TO INVESTMENT COMPANIES, BORROWERS,
AND FUNDS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
(for Federal Express, 78240)
Attention: Xxxxxxxx X. Xxxxxxx, Senior Vice President, Fixed Income
Investments (USAA)
Telephone: (000) 000-0000
Cellphone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
Xxxxxx X. Xxxxxx, Vice President, Equity Investments (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
Xxxxxxx Xxxxxxx, Xx., Assistant Vice President, Mutual Fund Accounting and
Administration (USAA) (for all Borrowings and Payments)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: [email protected]
INSTRUCTIONS FOR PAYMENTS TO EACH BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
TO: (PLEASE PLACE BANK NAME, CORRESPONDENT NAME (IF APPLICABLE), CHIPS AND/OR
FED FUNDS ACCOUNT NUMBER BELOW)
USAA MUTUAL FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA Aggressive Growth Fund Acct.# 0000-000-0
USAA Growth & Income Fund Acct.# 0000-000-0
USAA Income Stock Fund Acct.# 0000-000-0
USAA Short-Term Bond Fund Acct.# 0000-000-0
USAA Money Market Fund Acct.# 0000-000-0
USAA Growth Fund Acct.# 0000-000-0
USAA Income Fund Acct.# 0000-000-0
2
USAA Science & Technology Fund Acct.# 0000-000-0
USAA First Start Growth Fund Acct.# 0000-000-0
USAA High Yield Opportunities Fund Acct.# 0000-000-0
USAA Intermediate-Term Bond Fund Acct.# 0000-000-0
USAA Small Cap Stock Fund Acct.# 0000-000-0
USAA Nasdaq-100 Index Fund Acct.# 0000-000-0
USAA Capital Growth Fund Acct.# 0000-000-0
USAA Value Fund Acct.# 0000-000-0
NORTHERN TRUST COMPANY, XXXXXXX, XXXXXXXX
XXX #000000000
XXXX S&P 500 Index Fund Acct.# 2616882
JPMORGAN CHASE BANK, NEW YORK, NEW YORK
ABA #000000000
USAA Extended Market Index Fund Acct.# P83544
USAA INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA Cornerstone Strategy Fund Acct.# 0000-000-0
USAA Precious Metals and Minerals Fund Acct.# 0000-000-0
USAA International Fund Acct.# 0000-000-0
USAA World Growth Fund Acct.# 0000-000-0
USAA GNMA Trust Acct.# 0000-000-0
USAA Treasury Money Market Trust Acct.# 0000-000-0
USAA Emerging Markets Fund Acct.# 0000-000-0
USAA Growth and Tax Strategy Fund Acct.# 0000-000-0
USAA Balanced Strategy Fund Acct.# 0000-000-0
3
USAA TAX EXEMPT FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA Long-Term Fund Acct.# 0000-000-0
USAA Intermediate-Term Fund Acct.# 0000-000-0
USAA Short-Term Fund Acct.# 0000-000-0
USAA Tax Exempt Money Market Fund Acct.# 0000-000-0
USAA California Bond Fund Acct.# 0000-000-0
USAA California Money Market Fund Acct.# 0000-000-0
USAA New York Bond Fund Acct.# 0000-000-0
USAA New York Money Market Fund Acct.# 0000-000-0
USAA Xxxxxxxx Xxxx Fund Acct.# 0000-000-0
USAA Virginia Money Market Fund Acct.# 0000-000-0
USAA STATE TAX-FREE TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA Florida Tax-Free Income Fund Acct.# 0000-000-0
USAA Florida Tax-Free Money Market Fund Acct.# 0000-000-0
4
SCHEDULE 3
PERMITTED SUBADVISERS,
PERMITTED AFFILIATE ADVISED BORROWERS
PERMITTED SUBADVISERS:
Batterymarch Financial Management, Inc.
The Boston Company Asset Management, LLC
Dresdner RCM Global Investors LLC
Grantham, Mayo, Van Otterloo & Co. LLC
Xxxxxxx Capital Management, LLC*
Xxxxxxx Xxxxx Quantitative Advisers
MFS Investment Management
Northern Trust Investments, N.A.
Wellington Management Company, LLP
Westwood Management Corporation
*PERMITTED AFFILIATE ADVISED BORROWERS:
The following Borrowers are Affiliate Advised Borrowers with respect to
Bank of America (and are subadvised by Xxxxxxx Capital Management, LLC):
USAA Mutual Fund, Inc. on behalf of USAA First Start Growth Fund
USAA Mutual Fund, Inc. on behalf of USAA Aggressive Growth Fund, and
USAA Mutual Fund, Inc. on behalf of USAA Growth Fund.
SCHEDULE 4.11(C)
AGREEMENTS WITH REGULATORS AND BORROWING LIMITATIONS
Each Fund may not borrow money, EXCEPT for temporary or emergency purposes in an
amount not exceeding 33 1/3% of its total assets (including the amount borrowed)
less liabilities (OTHER THAN borrowings).
EXHIBIT A
FORM OF NOTE
U.S.$ January 8, 2004
----------------
FOR VALUE RECEIVED, each of the undersigned Investment Companies, not in its
individual capacity, but on behalf of and for the benefit of the series of Funds
comprising each such Investment Company as listed on SCHEDULE 2 to the Credit
Agreement (collectively "BORROWERS," and individually, "BORROWER"), severally
and not jointly, promises to pay to the order of ___________ ("PAYEE") at
Operations Agent's Lending Office, in lawful money of the United States of
America, in immediately available funds, the principal amount of all Loans made
by Payee to such Borrower under the Credit Agreement dated January 8, 2004 (as
amended, modified, or extended, the "CREDIT AGREEMENT"), among Borrowers, the
Lenders from time to time party thereto, State Street Bank and Trust Company, as
operations agent for Lenders, and Bank of America, N.A., as administrative agent
for Lenders, 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 Credit Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Credit Agreement. Capitalized terms used and not defined in
this Note shall have the meanings assigned to them in the Credit Agreement.
Payee 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 Payee to do so or to do so accurately shall not
affect the obligations of any Borrower 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.
Payee agrees (a) that any claim, liability, or obligation arising
hereunder or under the Credit 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 Borrower 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 Borrower's benefit,
TOGETHER WITH accrued and unpaid interest due and owing thereon, and such
Borrower's share of any other amount due hereunder and under the Credit
Agreement (as determined in accordance with the provisions of the Credit
Agreement), and (b) that no assets of any Borrower shall be used to satisfy any
claim, liability, or obligation arising hereunder or under the Credit Agreement
with respect to the outstanding principal amount of any Loan borrowed for the
benefit of any other Borrower or any accrued and unpaid interest due and owing
thereon or such other Borrower's share of any other amount due hereunder and
under the Credit Agreement (as determined in accordance with the provisions of
the Credit Agreement).
Neither the shareholders, trustees, officers, employees, and other
agents of any Investment Company, Borrower, or Fund shall be personally bound by
or liable for any indebtedness, liability, or obligation under this Note or
under other Loan Documents nor shall resort be had to their private property for
the satisfaction of any obligation or claim hereunder or thereunder.
This Note shall be governed by the laws of the state of Texas.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGE(S) FOLLOW]
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 8, 2004, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., and USAA STATE TAX-FREE TRUST
(not in their individual capacities, but on behalf of and for the benefit of the
series of Funds comprising each such Investment Company as listed on SCHEDULE 2
to the Credit Agreement) payable to the order of _________________.
[GRID]
DATE OF
LOAN
INVESTMENT
COMPANY AND
FUND
AMOUNT OF
LOAN
INTEREST RATE ON
DATE OF BORROWING
AMOUNT OF
PRINCIPAL
REPAID
DATE OF
REPAYMENT
OTHER
EXPENSES
NOTATION
MADE BY
EXHIBIT B
FORM OF BORROWING NOTICE
TO: State Street Bank and Trust Company, Operations Agent
FROM: [USAA Mutual Fund, Inc.]
[USAA Investment Trust]
[USAA Tax Exempt Fund, Inc.]
[USAA State Tax-Free Trust]
[any new Investment Company] ("INVESTMENT COMPANY")
(not in its individual capacity, but on behalf of and for the benefit
of the Fund(s) listed below)
("BORROWER(S)")
DATE1:
SUBJECT: Credit Agreement dated January 8, 2004, among the Borrowers party
thereto, the Lenders party thereto, State Street Bank and Trust
Company, as operations agent for Lenders, and Bank of America, N.A.,
as administrative agent for Lenders (as amended, modified, or
extended, the "CREDIT AGREEMENT")
This Borrowing Notice is executed and delivered to Operations Agent
pursuant to SECTION 2.02 of the Credit Agreement. Capitalized terms used and not
defined in this Borrowing Notice shall have the meanings assigned to them in the
Credit Agreement.
The Investment Company (not in its individual capacity, but on behalf
of and for the benefit of the Fund(s) set forth below) gives you notice that it
requests a Loan under the Credit Agreement, and in that connection sets forth
below the terms on which such Loan is requested to be made:
================================================================================
Revolving Credit Loan
or
Swing Line Advance
--------------------------------------------------------------------------------
Borrowing Date 2 on which such Loan is to be disbursed
--------------------------------------------------------------------------------
Principal Amount 3 of Loan
--------------------------------------------------------------------------------
Each Fund for whose benefit the Loan is being borrowed and the amount of the
Loan which is for the benefit of each Fund
--------------------------------------------------------------------------------
Total Assets of each Fund for whose benefit the Loan is being borrowed as of the
close of business on the Business Day immediately preceding the date of this
Borrowing Notice
--------------------------------------------------------------------------------
Operations Agent is authorized to deposit the proceeds of the Loan requested in
this Borrowing Notice to:
================================================================================
1 Operations Agent must receive this Borrowing Notice no later than 12:00
p.m. (Boston, Massachusetts, time) on the Borrowing Date, unless the
applicable Borrower makes an ORAL REQUEST no later than 11:00 a.m. (Boston,
Massachusetts, time) on the Borrowing Date and Operations Agent receives
this Borrowing Notice no later than 1:00 p.m. (Boston, Massachusetts, time)
on the Borrowing Date.
2 Must be a Business Day occurring prior to the Termination Date.
3 Not less than $100,000 or a larger whole multiple of $10,000 if a Revolving
Credit Loan; not less than $50,000 or a larger whole multiple of $10,000 if
a Swing Line Advance.
The Investment Company (not in its individual capacity, but on behalf of
and for the benefit of the Fund(s) set forth above) represents and warrants to
Agents and Lenders that the following statements are true and correct on the
date of this Borrowing Notice, and will be true and correct on the Borrowing
Date before and after giving effect to the Borrowing requested herein:
1. The conditions set forth in SECTIONS 3.02(B) and (E) of the Credit Agreement
have been satisfied;
2. No Default or Event of Default under any Loan Document has occurred and is
continuing;
3. The representations and warranties contained in the Credit Agreement (except
those set forth in Sections 4.07(B) and 4.08)are true and correct;
4. No other Loan to the Borrower(s) named herein has been outstanding for 60 or
more consecutive days;
5. No Borrower named herein is an Affiliate Advised Borrower, except as set
forth below:
Borrower:
--------------------------------
Subadviser:
-------------------------------
Affected Lender:
--------------------------
This Borrowing Notice is irrevocable and shall obligate the Borrower(s)
named herein to accept the Loan requested on the Borrowing Date.
This Borrowing Notice is executed by the undersigned Authorized
Individual on the date first set forth who certifies the accuracy of all of the
foregoing.
INVESTMENT COMPANY:
-----------------------------------------------
(For the benefit of the Fund(s) described above)
By:
--------------------------------------------
Printed Name:
Title:
EXHIBIT C
FORM OF EXTENSION REQUEST
TO: State Street Bank and Trust Company, Operations Agent
Bank of America, N.A., Administrative Agent
The Lenders party to the Credit Agreement
FROM: USAA Mutual Fund, Inc.
USAA Investment Trust
USAA Tax Exempt Fund, Inc.
USAA State Tax-Free Trust
[any new Investment Company] ("INVESTMENT COMPANIES")
(not in their individual capacities, but on behalf of and for the
benefit of the series of Funds comprising each such Investment Company
as listed on SCHEDULE 2 to the Credit Agreement)
DATE 1:
SUBJECT: Credit Agreement dated January 8, 2004, among the Borrowers party
thereto, the Lenders party thereto, State Street Bank and Trust
Company, as operations agent for Lenders, and Bank of America, N.A.,
as administrative agent for Lenders (as amended, modified, or
extended, the "CREDIT AGREEMENT")
This extension request is executed and delivered to Agents and Lenders
pursuant to SECTION 3.02 of the Credit Agreement. Capitalized terms used and not
defined in this extension request shall have the meanings assigned to them in
the Credit Agreement.
Each Investment Company, on behalf of each Fund, requests that each
Lender's Commitment to Borrowers be extended for an additional 364 days from the
Termination Date now in effect.
In order to induce Lenders to consent to such extension of the
Commitment, each undersigned Investment Company (not in its individual capacity,
but on behalf of and for the benefit of the Funds comprising each such
Investment Company as listed on SCHEDULE 2 to the Credit Agreement represents
and warrants that the following statements are true and correct on the date
hereof, and will be true and correct on the effective date of the requested
extension of each Lender's Commitment:
1. No Default or Event of Default under any Loan Document has occurred and is
continuing; and
2. The representations and warranties contained in the Credit Agreement are true
and correct.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGE(S) FOLLOW]
1 Must be not later than 60 days prior to the Termination Date then in effect.
EXHIBIT D
FORM OF OPINION OF COUNSEL FOR BORROWERS
January 8, 0000
Xxxx xx Xxxxxxx, X.X., as Administrative Agent
State Street Bank and Trust Company, as Operations Agent
Each Lender party to the Credit Agreement referenced below
c/o Bank of America, N.A.
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
I have acted as counsel to USAA Investment Management Company, Manager
and Investment Adviser of USAA Mutual Fund, Inc., USAA Investment Trust, USAA
Tax Exempt Fund, Inc., and USAA State Tax-Free Trust (each, an "INVESTMENT
COMPANY," and collectively, the "INVESTMENT COMPANIES"), in connection with (i)
the Credit Agreement dated as of January 8, 2004 (the "CREDIT AGREEMENT"), among
the Investment Companies (not in their respective individual capacities, but on
behalf of and for the benefit of the series of Funds comprising each such
Investment Company as listed on SCHEDULE 2 to the Credit Agreement) (an
Investment Company acting on behalf of a particular Fund, a "BORROWER"), the
Lenders party thereto, State Street Bank and Trust Company, as operations agent
for such Lenders, and Bank of America, N.A., as administrative agent for such
Lenders, and (ii) the Notes (as defined in the Credit Agreement) dated January
8, 2004, made by each Borrower in favor of each Lender. I am a Senior Vice
President of USAA Investment Management Company, an indirect wholly-owned
subsidiary of United Services Automobile Association ("USAA"). All capitalized
terms used in this opinion and not otherwise defined herein shall have the
meanings ascribed to them in the Credit Agreement.
I have examined such records, certificates and documents, and such
questions of fact and law as I have deemed necessary or appropriate for the
basis of the opinions hereinafter expressed.
Based upon and subject to the foregoing, but subject to the assumptions
and qualifications set forth herein, I am of the opinion that:
1. Each Investment Company is a corporation or trust duly organized, validly
existing, and in good standing under the laws of its state of organization.
Each Investment Company has all requisite corporate or trust power and
authority on behalf of its Funds to carry on its business as now conducted
and proposed to be conducted, to enter into the Credit Agreement and all
other documents to be executed by it in connection with the transactions
contemplated thereby, to issue and borrow under the Notes, and to carry out
the terms thereof.
2. The execution, delivery, and performance of the Credit Agreement and the
Notes, and borrowings thereunder, have been duly authorized by all
necessary corporate or trust action of each Investment Company on behalf of
its Funds and will not result in any violation of or be in conflict with or
constitute a default under any Borrowing Limit, the prospectus or statement
of additional information of any of its Funds, or any agreement,
instrument, judgment, decree, order, statute, rule, or governmental
regulation binding on such Investment Company or any of its Funds, or
result in the creation of any mortgage, lien, charge, or encumbrance upon
any of the properties or
assets of such Investment Company or any of its Funds. No Investment
Company is in violation of any term of its respective charter, by-laws, or
trust agreement, and no Investment Company or any of its Funds is in
violation of any material term of any agreement or instrument to which it
is a party, or to the best of my knowledge, of any judgment, decree, order,
statute, rule, or governmental regulation applicable to it.
3. Each Investment Company and its Funds are in compliance in all material
respects with all federal and state securities or similar laws and
regulations, including all material rules, regulations and administrative
orders of the Securities and Exchange Commission (the "SEC") and applicable
Blue Sky authorities. Each Investment Company and its Funds are in
compliance in all material respects with all of the provisions of the
Investment Company Act of 1940 and has filed all reports with the SEC that
are required of them.
4. There is no action, suit or proceeding pending or, to the best of my
knowledge, threatened against any Investment Company or any of its Funds in
any court or before any arbitrator or governmental body which seeks to
restrain any of the transactions contemplated by the Credit Agreement or
which, if adversely determined, could have a material adverse effect on the
assets or business operations of any Investment Company or any of its Funds
or the ability of any Investment Company or any of its Funds to pay and
perform their respective obligations under the Credit Agreement and under
the Notes.
5. The Credit Agreement and the Notes have been duly executed and delivered by
each Borrower and constitute the valid and binding obligations of each
Borrower, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency, receivership,
moratorium, or other applicable debtor relief laws and by general
principles of equity.
6. The assets of each Fund for whose benefit Loans are borrowed are subject to
and liable for such Loans and are available for the repayment of such
Loans.
In rendering the opinion expressed above, I have further assumed: (i) that the
terms of the Credit Agreement will be strictly complied with by Agents and
Lenders; (ii) that there is not, nor shall there be, any form of compensation or
charge, whether direct or indirect, by Agents or Lenders in connection with any
of the Loans, except as expressly set forth in the Credit Agreement; (iii) that
there are not, nor will there be, any compensating balances, frozen funds,
deposits, or other funds of any Borrower which are pledged or hypothecated as
security or which are given as any other form of compensation, whether direct or
indirect, for the account or benefit of Agents or Lenders in connection with the
Loans other than as provided in the Credit Agreement; (iv) that any fees which
have been paid or may be paid to any Agent or Lender or to any other party in
connection with the Loans are for services actually rendered and that such fees
will not exceed just and reasonable compensation for such services rendered; and
(v) that the utilization fees and any other fees to be paid to any Agent or
Lender in connection with the Loans shall be treated as interest by such Agent
or Lender for purposes of assuring that the interest charged by Agents and
Lenders on the Loans does not exceed the highest lawful rate of interest
permitted by applicable law.
In giving the foregoing opinions, I express no opinion other than as to
the federal laws of the United States of America and the laws of the state of
Texas.
I am furnishing this letter to you in my capacity as counsel to USAA
Investment Management Company, Manager and Investment Adviser of the Investment
Companies, and this letter is solely for the benefit of Administrative Agent,
Operations Agent, and Lenders. This letter is not to be used, circulated,
quoted, or otherwise referred to for any other purpose.
Sincerely,
/S/ XXXX X. XXXXXX
--------------------------------------
Xxxx X. Xxxxxx
Senior Vice President, Secretary & Counsel
USAA Investment Management Company
EXHIBIT E
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "ASSIGNMENT AND ASSUMPTION") is
dated as of the Effective Date set forth below and is entered into by and
between ______________ ("ASSIGNOR") and ______________("ASSIGNEE"). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement dated as of January 8, 2004 (as amended, modified, or extended,
the "CREDIT AGREEMENT"), among USAA Mutual Fund, Inc., USAA Investment Trust,
USAA Tax Exempt Fund, Inc., and USAA State Tax-Free Trust (not in their
respective individual capacities, but on behalf of and for the benefit of the
series of Funds comprising each such Investment Company as listed on SCHEDULE 2
to the Credit Agreement), the Lenders from time to time party thereto, State
Street Bank and Trust Company, as operations agent for such lenders, and Bank of
America, N.A., as administrative agent for such lenders, receipt of a copy of
which is hereby acknowledged by Assignee. The Standard Terms and Conditions set
forth in ANNEX 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.
For an agreed consideration, Assignor hereby irrevocably sells and
assigns to Assignee, and Assignee hereby irrevocably purchases and assumes from
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by Administrative
Agent as contemplated below (i) all of Assignor's rights and obligations as a
Lender under the Credit Agreement and the other Loan Documents to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of Assignor under the Credit Agreement and
the other Loan Documents, and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action, and any other right of
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
Loan Document, any other documents or instruments delivered pursuant thereto, or
the loan transactions governed thereby or in any way based on or related to any
of the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims, and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to CLAUSE (I)
above (the rights and obligations sold and assigned pursuant to CLAUSES (I) and
(II) above, collectively, the "ASSIGNED Interest"). Such sale and assignment is
without recourse to Assignor and, except as expressly provided in this
Assignment and Assumption, without representation or warranty by Assignor.
================================================================================
1 ASSIGNOR:
--------------------------------------------------------------------------------
2 ASSIGNEE 1
--------------------------------------------------------------------------------
3 BORROWERS USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc., and
USAA State Tax-Free Trust
[any new Investment Company]
(not in their individual capacities but on behalf
of and for the benefit of the series of funds
comprising each such Investment Company as listed
on SCHEDULE 2 to the Credit Agreement)
--------------------------------------------------------------------------------
4 ADMINISTRATIVE AGENT Bank of America, N.A., as the Administrative Agent
under the Credit Agreement
--------------------------------------------------------------------------------
5 EFFECTIVE DATE2
--------------------------------------------------------------------------------
1 Must be Eligible Assignee, as defined in the Credit Agreement.
6 ASSIGNEE'S SHARE ASSIGNEE'S PERCENTAGE SHARE: ASSIGNED AMOUNT:
--------------------------------------------------------------------------------
7 ASSIGNEE'S PAYMENT
INSTRUCTIONS
--------------------------------------------------------------------------------
8 ASSIGNEE'S NOTICE
INSTRUCTIONS
================================================================================
ASSIGNOR ASSIGNEE
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:___________________________ By: ________________________
Name: Name:
Title: Title:
CONSENTED TO AND ACCEPTED:
BANK OF AMERICA, N.A., as Administrative Agent
By: __________________________
Name:
Title:
CONSENTED TO:3
USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST,
USAA TAX EXEMPT FUND, INC., and
USAA STATE TAX-FREE TRUST
(not in their individual capacities but on behalf of
and for the benefit of its series of Funds as listed on
SCHEDULE 2 to the Credit Agreement)
By:__________________________
Name:
Title:
----------------------------------------------------
2 To be inserted by Administrative Agent and which shall be the effective date
of recordation of transfer in the register therefor.
3 Borrower's consent required only if no Default or Event of Default has
occurred and is continuing.
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION
1. REPRESENTATIONS AND WARRANTIES.
1.1. ASSIGNOR. Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free
and clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of any Borrower or any
other Person obligated in respect of any Loan Document or (iv) the performance
or observance by any Borrower of any of its respective obligations under any
Loan Document.
1.2. ASSIGNEE. Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement), (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on Administrative Agent or any
other Lender, and (v) if it is not incorporated under the laws of the United
States or a state thereof, attached hereto is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by Assignee; and (b) agrees that (i) it will, independently and
without reliance on Administrative Agent, Operations Agent, Assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
2. PAYMENTS. From and after the Effective Date, Operations Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to Assignee whether such amounts have accrued
prior to or on or after the Effective Date. Assignor and Assignee shall make all
appropriate adjustments in payments by Operations Agent for periods prior to the
Effective Date or with respect to the making of this assignment directly between
themselves.
3. GENERAL PROVISIONS. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Texas.
EXHIBIT F
FORM OF SUBORDINATION AGREEMENT
================================================================================
THIS IS AN AGREEMENT AMONG: DATED: January 8, 2004
--------------------------------------------------------------------------------
NAME AND ADDRESS OF AGENT: NAME AND ADDRESS OF DEBTOR: NAME AND ADDRESS OF
Bank of America, N.A. USAA Mutual Fund, Inc. CREDITOR:
(as Administrative USAA Investment Trust USAA Capital Corporation
Agent on behalf of the USAA Tax Exempt Fund, Inc. 0000 Xxxxxxxxxxxxxx Xxxx
Banks party to the USAA State Tax-Free Trust Xxx Xxxxxxx, Xxxxx 00000
Senior Credit Agreement (Each not in its individual
(defined below) capacity, but on behalf
000 Xxxx Xxxxxx of the Funds listed on
Xxxxxx, Xxxxx 00000 SCHEDULE 2 to the Senior
Credit Agreement)
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
================================================================================
1. BACKGROUND. Debtor is or may be indebted to Lenders pursuant to and as
defined in that certain Credit Agreement dated January 8, 2004, among
Lenders, Agent and State Street Bank and Trust Company, as Operations Agent
(the "Senior Credit Agreement"). Debtor also is or may be indebted to
Creditor pursuant to that certain Facility Agreement Letter dated January
8, 2004, between Debtor and Creditor (the "Subordinated Facility
Agreement"). All debt (as hereinafter defined) of a Debtor under the Senior
Credit Agreement is hereinafter referred to as "senior debt" and all debt
of a Debtor 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 the holder thereof, 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 all 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 Credit
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
Agent's permission, Creditor will not be a party to any action or
proceeding against any Debtor to recover subordinated debt. Upon written
request of Agent, 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 any Debtor's insolvency, or in liquidation or
marshaling of any 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 Lenders and immediately pay to Agent, 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 Agent, Agent may enforce this agreement
or as attorney in fact for Creditor and any Debtor may take any such action
on Creditor's behalf. Creditor hereby irrevocably appoints Agent as
Creditor's attorney in fact to take any such action that Agent 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
Agent's own name or in Creditor's name that Agent 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 Lenders' or Agent's rights against Creditor
or any of Creditor's obligations hereunder, Lenders or Agent 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 Agent not less than 10 days before any assignment of any
subordinated debt.
8. ASSIGNMENT BY LENDER. Each 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
Dallas County, Texas.
10. CUMULATIVE RIGHTS; WAIVERS. This instrument is cumulative of all other
rights and securities of Lenders and Agent. No waiver by Agent or any
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 Credit Agreement and repayment in full of the senior debt.
(AGENT) (DEBTOR) (CREDITOR)
Bank of America, N.A., USAA Mutual Fund, Inc. USAA Capital Corporation
as Administrative Agent USAA Investment Trust
USAA Tax Exempt Fund, Inc.
USAA State Tax-Free Trust
(not in its individual
capacity, but on behalf of
the Funds listed on SCHEDULE 2
to the Senior Credit Agreement)
By By By
--------------------- -------------------------- ----------------------
Xxxx X'Xxxxx, Xxxxxxxxxxx X. Xxxxx, Xxxxx X. XxXxxxxxx,
its Managing Director its President its SVP-Treasurer
Signature to the Note dated January 8, 2004, by USAA Mutual Fund, Inc.,
USAA Investment Trust, USAA State Tax Exempt Fund, Inc., and USAA State Tax-Free
Trust (not in their individual capacities, but on behalf of and for the benefit
of the series of Funds listed on SCHEDULE 2 to the Credit Agreement) payable to
Bank of America, N.A.
USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST,
USAA TAX EXEMPT FUND, INC., and
USAA STATE TAX-FREE TRUST,
By: /S/ XXXXXXXXXXX X. XXXXX
---------------------------------------
Xxxxxxxxxxx X. Xxxxx, President of each
of the above entities
NOTE
U.S.$50,000,000 January 8, 2004
FOR VALUE RECEIVED, each of the undersigned Investment Companies, not in its
individual capacity, but on behalf of and for the benefit of the series of Funds
comprising each such Investment Company as listed on SCHEDULE 2 to the Credit
Agreement (collectively "BORROWERS," and individually, "BORROWER"), severally
and not jointly, promises to pay to the order of BANK OF AMERICA, N.A. ("PAYEE")
at Operations Agent's Lending Office, in lawful money of the United States of
America, in immediately available funds, the principal amount of all Loans made
by Payee to such Borrower under the Credit Agreement dated January 8, 2004 (as
amended, modified, or extended, the "CREDIT AGREEMENT"), among Borrowers, the
Lenders from time to time party thereto, State Street Bank and Trust Company, as
operations agent for Lenders, and Bank of America, N.A., as administrative agent
for Lenders, 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 Credit Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Credit Agreement. Capitalized terms used and not defined in
this Note shall have the meanings assigned to them in the Credit Agreement.
Payee 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 Payee to do so or to do so accurately shall not
affect the obligations of any Borrower 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.
Payee agrees (a) that any claim, liability, or obligation arising
hereunder or under the Credit 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 Borrower 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 Borrower's benefit,
TOGETHER WITH accrued and unpaid interest due and owing thereon, and such
Borrower's share of any other amount due hereunder and under the Credit
Agreement (as determined in accordance with the provisions of the Credit
Agreement), and (b) that no assets of any Borrower shall be used to satisfy any
claim, liability, or obligation arising hereunder or under the Credit Agreement
with respect to the outstanding principal amount of any Loan borrowed for the
benefit of any other Borrower or any accrued and unpaid interest due and owing
thereon or such other Borrower's share of any other amount due hereunder and
under the Credit Agreement (as determined in accordance with the provisions of
the Credit Agreement).
Neither the shareholders, trustees, officers, employees, and other
agents of any Investment Company, Borrower, or Fund shall be personally bound by
or liable for any indebtedness, liability, or obligation under this Note or
under other Loan Documents nor shall resort be had to their private property for
the satisfaction of any obligation or claim hereunder or thereunder.
This Note shall be governed by the laws of the state of Texas.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGE(S) FOLLOW]
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 8, 2004, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., and USAA STATE TAX-FREE TRUST
(not in their individual capacities, but on behalf of and for the benefit of the
series of Funds comprising each such Investment Company as listed on SCHEDULE 2
to the Credit Agreement) payable to the order of BANK OF AMERICA, N.A.
[GRID]
DATE OF
LOAN
INVESTMENT
COMPANY AND
FUND
AMOUNT OF
LOAN
INTEREST RATE ON
DATE OF BORROWING
AMOUNT OF
PRINCIPAL
REPAID
DATE OF
REPAYMENT
OTHER
EXPENSES
NOTATION
MADE BY
NOTE
U.S.$50,000,000 January 8, 2004
FOR VALUE RECEIVED, each of the undersigned Investment Companies, not in its
individual capacity, but on behalf of and for the benefit of the series of Funds
comprising each such Investment Company as listed on SCHEDULE 2 to the Credit
Agreement (collectively "BORROWERS," and individually, "BORROWER"), severally
and not jointly, promises to pay to the order of BANK OF AMERICA, N.A. ("PAYEE")
at Operations Agent's Lending Office, in lawful money of the United States of
America, in immediately available funds, the principal amount of all Loans made
by Payee to such Borrower under the Credit Agreement dated January 8, 2004 (as
amended, modified, or extended, the "CREDIT AGREEMENT"), among Borrowers, the
Lenders from time to time party thereto, State Street Bank and Trust Company, as
operations agent for Lenders, and Bank of America, N.A., as administrative agent
for Lenders, 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 Credit Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Credit Agreement. Capitalized terms used and not defined in
this Note shall have the meanings assigned to them in the Credit Agreement.
Payee 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 Payee to do so or to do so accurately shall not
affect the obligations of any Borrower 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.
Payee agrees (a) that any claim, liability, or obligation arising
hereunder or under the Credit 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 Borrower 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 Borrower's benefit,
TOGETHER WITH accrued and unpaid interest due and owing thereon, and such
Borrower's share of any other amount due hereunder and under the Credit
Agreement (as determined in accordance with the provisions of the Credit
Agreement), and (b) that no assets of any Borrower shall be used to satisfy any
claim, liability, or obligation arising hereunder or under the Credit Agreement
with respect to the outstanding principal amount of any Loan borrowed for the
benefit of any other Borrower or any accrued and unpaid interest due and owing
thereon or such other Borrower's share of any other amount due hereunder and
under the Credit Agreement (as determined in accordance with the provisions of
the Credit Agreement).
Neither the shareholders, trustees, officers, employees, and other
agents of any Investment Company, Borrower, or Fund shall be personally bound by
or liable for any indebtedness, liability, or obligation under this Note or
under other Loan Documents nor shall resort be had to their private property for
the satisfaction of any obligation or claim hereunder or thereunder.
This Note shall be governed by the laws of the state of Texas.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGE(S) FOLLOW]
Signature to the Note dated January 8, 2004, by USAA Mutual Fund,
Inc., USAA Investment Trust, USAA State Tax Exempt Fund, Inc., and USAA State
Tax-Free Trust (not in their individual capacities, but on behalf of and for the
benefit of the series of Funds listed on SCHEDULE 2 to the Credit Agreement)
payable to State Street Bank and Trust Company
USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST,
USAA TAX EXEMPT FUND, INC., and
USAA STATE TAX-FREE TRUST,
By: /S/ XXXXXXXXXXX X. XXXXX
---------------------------------------
Xxxxxxxxxxx X. Xxxxx, President of each
of the above entities
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 8, 2004, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., and USAA STATE TAX-FREE TRUST
(not in their individual capacities, but on behalf of and for the benefit of the
series of Funds comprising each such Investment Company as listed on SCHEDULE 2
to the Credit Agreement) payable to the order of BANK OF AMERICA, N.A.
[GRID]
DATE OF
LOAN
INVESTMENT
COMPANY AND
FUND
AMOUNT OF
LOAN
INTEREST RATE ON
DATE OF BORROWING
AMOUNT OF
PRINCIPAL
REPAID
DATE OF
REPAYMENT
OTHER
EXPENSES
NOTATION
MADE BY
SUBORDINATION AGREEMENT
================================================================================
THIS IS AN AGREEMENT AMONG: DATED: January 8, 2004
================================================================================
NAME AND ADDRESS OF AGENT: NAME AND ADDRESS OF DEBTOR: NAME AND ADDRESS OF
Bank of America, N.A. (as USAA Mutual Fund, Inc. CREDITOR:
Administrative Agent on USAA Investment Trust USAA Capital Corporation
behalf of the Banks party 0000 Xxxxxxxxxxxxxx Xxxx
to the Senior Credit USAA Tax Exempt Fund, Inc. Xxx Xxxxxxx, Xxxxx 00000
Agreement (defined below) USAA State Tax-Free Trust
000 Xxxx Xxxxxx (Each not in its individual
Xxxxxx, Xxxxx 00000 capacity,but on behalf of
the Funds listed on SCHEDULE
2 to the Senior Credit Agreement)
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
================================================================================
1. BACKGROUND. Debtor is or may be indebted to Lenders pursuant to and as
defined in that certain Credit Agreement dated January 8, 2004, among
Lenders, Agent and State Street Bank and Trust Company, as Operations Agent
(the "Senior Credit Agreement"). Debtor also is or may be indebted
toCreditor pursuant to that certain Facility Agreement Letter dated January
8, 2004, between Debtor and Creditor (the "Subordinated Facility
Agreement").All debt (as hereinafter defined) of a Debtor under the Senior
Credit Agreement is hereinafter referred to as "senior debt" and all debt
of a Debtor underthe 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
orhereafter 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 andregardless of the manner in which such debt has been or may
hereafter be acquired by the holder thereof, 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 all 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 Credit
Agreement) has occurred and is continuing in respect of senior debt.
Anything of valuereceived 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
Agent's permission, Creditor will not be a party to any action or
proceeding against any Debtor to recover subordinated debt. Upon written
request of Agent, Creditor will file any claim or proof of claim or take
any other action tocollect subordinated debt in any bankruptcy,
receivership, liquidation, reorganization or other proceeding for relief of
debtors or in connection with any Debtor's insolvency, or in liquidation or
marshaling of any Debtor's assets or liabilities, or in any probate
proceeding, and if any distribution shall bemade to Creditor, Creditor will
hold the same in trust for Lenders and immediately pay to Agent, 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 Agent, Agent may enforce this agreement
or as attorney in fact for Creditor and any Debtor may take anysuch action
on Creditor's behalf. Creditor hereby irrevocably appoints Agent as
Creditor's attorney in fact to take any such action that Agent 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
Agent'sown name or in Creditor's name that Agent 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
withoutreleasing or impairing any of Lenders' or Agent's rights against
Creditor or any of Creditor's obligations hereunder, Lenders or Agent may
takeadditional 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 compromisewith, 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 allsecurity interests, liens, or mortgages now or hereafter securing
subordinated debt. Any foreclosure against any property securing senior
debt shallforeclose, extinguish and discharge all security interests, liens
and mortgages securing subordinated debt, and any purchaser at any such
foreclosure saleshall 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 orsecuring
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 Agent not less than 10 days before any assignment of
anysubordinated debt.
8. ASSIGNMENT BY LENDER. Each 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
Dallas County, Texas.
10. CUMULATIVE RIGHTS; WAIVERS. This instrument is cumulative of all other
rights and securities of Lenders and Agent. No waiver by Agent or any
Lenderof 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
ofeach 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 Credit Agreement and repayment in full of the
senior debt.
(AGENT) (DEBTOR) (CREDITOR)
Bank of America, N.A., USAA Mutual Fund, Inc. USAA Capital Corporation
as Administrative Agent USAA Investment Trust
USAA Tax Exempt Fund, Inc.
USAA State Tax-Free Trust
(not in its individual
capacity, but on behalf of
the Funds listed on
SCHEDULE 2 to the Senior
Credit Agreement)
By /S/XXXX X'XXXXX By By
------------------------ -------------------------- ---------------------
Xxxx X'Xxxxx, Xxxxxxxxxxx X. Xxxxx, Xxxxx X. XxXxxxxxx,
its Managing Director its President its SVP-Treasurer
SUBORDINATION AGREEMENT
================================================================================
THIS IS AN AGREEMENT AMONG: DATED: January 8, 2004
================================================================================
NAME AND ADDRESS OF AGENT: NAME AND ADDRESS OF DEBTOR: NAME AND ADDRESS OF
Bank of America, N.A. (as USAA Mutual Fund, Inc. CREDITOR:
Administrative Agent on USAA Investment Trust USAA Capital Corporation
behalf of the Banks party 0000 Xxxxxxxxxxxxxx Xxxx
to the Senior Credit USAA Tax Exempt Fund, Inc. Xxx Xxxxxxx, Xxxxx 00000
Agreement (defined below) USAA State Tax-Free Trust
000 Xxxx Xxxxxx (Each not in its individual
Xxxxxx, Xxxxx 00000 capacity,but on behalf of
the Funds listed on SCHEDULE
2 to the Senior Credit Agreement)
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
================================================================================
1. BACKGROUND. Debtor is or may be indebted to Lenders pursuant to and as
defined in that certain Credit Agreement dated January 8, 2004, among
Lenders, Agent and State Street Bank and Trust Company, as Operations Agent
(the "Senior Credit Agreement"). Debtor also is or may be indebted
toCreditor pursuant to that certain Facility Agreement Letter dated January
8, 2004, between Debtor and Creditor (the "Subordinated Facility
Agreement").All debt (as hereinafter defined) of a Debtor under the Senior
Credit Agreement is hereinafter referred to as "senior debt" and all debt
of a Debtor underthe 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
orhereafter 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 andregardless of the manner in which such debt has been or may
hereafter be acquired by the holder thereof, 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 all 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 Credit
Agreement) has occurred and is continuing in respect of senior debt.
Anything of valuereceived 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
Agent's permission, Creditor will not be a party to any action or
proceeding against any Debtor to recover subordinated debt. Upon written
request of Agent, Creditor will file any claim or proof of claim or take
any other action tocollect subordinated debt in any bankruptcy,
receivership, liquidation, reorganization or other proceeding for relief of
debtors or in connection with any Debtor's insolvency, or in liquidation or
marshaling of any Debtor's assets or liabilities, or in any probate
proceeding, and if any distribution shall bemade to Creditor, Creditor will
hold the same in trust for Lenders and immediately pay to Agent, 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 Agent, Agent may enforce this agreement
or as attorney in fact for Creditor and any Debtor may take anysuch action
on Creditor's behalf. Creditor hereby irrevocably appoints Agent as
Creditor's attorney in fact to take any such action that Agent 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
Agent'sown name or in Creditor's name that Agent 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
withoutreleasing or impairing any of Lenders' or Agent's rights against
Creditor or any of Creditor's obligations hereunder, Lenders or Agent may
takeadditional 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 compromisewith, 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 allsecurity interests, liens, or mortgages now or hereafter securing
subordinated debt. Any foreclosure against any property securing senior
debt shallforeclose, extinguish and discharge all security interests, liens
and mortgages securing subordinated debt, and any purchaser at any such
foreclosure saleshall 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 orsecuring
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 Agent not less than 10 days before any assignment of
anysubordinated debt.
8. ASSIGNMENT BY LENDER. Each 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
Dallas County, Texas.
10. CUMULATIVE RIGHTS; WAIVERS. This instrument is cumulative of all other
rights and securities of Lenders and Agent. No waiver by Agent or any
Lenderof 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
ofeach 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 Credit Agreement and repayment in full of the
senior debt.
(AGENT) (DEBTOR) (CREDITOR)
Bank of America, N.A., USAA Mutual Fund, Inc. USAA Capital Corporation
as Administrative Agent USAA Investment Trust
USAA Tax Exempt Fund, Inc.
USAA State Tax-Free Trust
(not in its individual
capacity, but on behalf of
the Funds listed on
SCHEDULE 2 to the Senior
Credit Agreement)
By By /S/XXXXXXXXXXX X. XXXXX By /S/XXXXX X. XXXXXXXXX
------------------------ -------------------------- ---------------------
Xxxx X'Xxxxx, Xxxxxxxxxxx X. Xxxxx, Xxxxx X. XxXxxxxxx,
its Managing Director its President its SVP-Treasurer
EXHIBIT h (iii)
January 08, 2004
USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc.,
USAA State Tax-Free Trust, and
USAA Life Investment Trust, not in their individual capacities but on behalf
of and for the benefit of the series of funds comprising each such
Borrower as set forth on SCHEDULE A hereto
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx, President
Xxxxx X. Xxxxxxxxx, President
Ladies and Gentlemen:
This Facility Agreement Letter (this "AGREEMENT") sets forth the terms
and conditions for loans (each a "LOAN" and collectively the "LOANS") which USAA
Capital Corporation ("CAPCO"), agrees to make during the period commencing
January 08, 2004 and ending January 06, 2005 (the "FACILITY PERIOD") to USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust, and each investment company which
may become a party hereto pursuant to the terms of this Agreement (each a
"BORROWER" and collectively the "BORROWERS"), each of which is executing this
Agreement not in its individual capacity, but on behalf of and for the benefit
of the series of funds comprising each such Borrower as set forth on SCHEDULE A
(as hereafter modified or amended in accordance with the terms hereof) (each a
"FUND" and collectively the "FUNDS"), under a master revolving credit facility
(the "FACILITY"). This Agreement replaces in its entirety that certain Facility
Agreement Letter dated January 9, 2003, as heretofore amended or modified,
between the Borrowers and CAPCO. CAPCO and the Borrowers hereby agree as
follows:
1. AMOUNT. The aggregate principal amount of the Loans to be advanced
under this Facility shall not exceed, at any one time outstanding, U.S.
$400,000,000 (the "COMMITMENT"). The aggregate principal amount of the Loans
which may be borrowed by a Borrower for the benefit of a particular Fund under
the Facility and the Other Facility (defined below) shall not exceed the
percentage (the "BORROWING LIMIT") of the total assets of such Fund as set forth
on SCHEDULE A.
2. PURPOSE AND LIMITATIONS ON BORROWINGS. Each Borrower will use the
proceeds of each Loan made to it solely for temporary or emergency purposes of
the Fund for whose benefit it is borrowing in accordance with such Fund's
Borrowing Limit and prospectus in effect at the time of such Loan. Portfolio
securities may not be purchased by a Fund while there is a Loan outstanding
under the Facility and/or a loan outstanding under the Other Facility (defined
below) for the benefit of such Fund, if the aggregate amount of such Loan and
such other loan under the Other Facility exceeds 5% of the total assets of such
Fund. The Borrowers will not, and will not permit any Fund to, directly or
indirectly, use any proceeds of any Loan for any purpose, that would violate any
provision of any applicable statute, regulation, order, or restriction.
3. BORROWING RATE AND MATURITY OF LOANS. CAPCO shall make Loans to a
Borrower and the principal amount of each Loan outstanding from time to time
shall bear interest from the date each such Loan is made to, but excluding the
date of payment in full thereof, at a rate per annum equal to the rate at which
CAPCO obtains funding in the capital markets. Interest on the Loans shall be
calculated on the basis of a year of 360 days and the actual days elapsed but
shall not exceed the highest lawful rate. Each loan will be for an established
number of days agreed upon by the applicable Borrower and CAPCO on or before the
date of such Loan. Notwithstanding the above, all Loans to a Borrower shall be
made
available at a rate per annum equal to the rate at which CAPCO would make loans
to affiliates and subsidiaries. Further, as to the investment companies except
USAA Life Investment Trust, if the CAPCO rate exceeds the rate at which a
Borrower could obtain funds pursuant to the $100 million credit agreement with
State Street Bank and Trust Company ("State Street") and Bank of America, N.A.
("Bank of America") , the Borrower will in the absence of predominating
circumstances, borrow from State Street and/or Bank of America. Any past due
principal and/or accrued interest shall bear interest at a rate per annum equal
to the aggregate of the "FEDERAL FUNDS RATE" plus 1.50 percent (150 basis
points), but not to exceed the highest lawful rate, from the date of any such
payment was due, but excluding the date of payment in full thereof, and shall be
payable on demand.
4. ADVANCES, PAYMENTS, PREPAYMENTS AND READVANCES. Upon each Borrower's
request, and SUBJECT TO the terms and conditions contained herein, CAPCO shall
make Loans to each Borrower on behalf of and for the benefit of its respective
Fund(s) during the Facility Period, and each Borrower may borrow, repay and
reborrow Loans hereunder. The Loans shall be evidenced by a duly executed and
delivered Master Grid Promissory Note in the form of EXHIBIT A (the "NOTE").
Each Loan shall be in an aggregate amount not less than U.S. $100,000 and
increments of U.S. $1,000 in excess thereof. Payment of principal and interest
due with respect to each Loan shall be payable at the maturity of such Loan and
shall be made in funds immediately available to CAPCO prior to 2:00 p.m. San
Antonio, Texas time on the day such payment is due, or as CAPCO shall otherwise
direct from time to time and, SUBJECT TO the terms and conditions hereof, may be
repaid with the proceeds of a new borrowing hereunder. Notwithstanding any
provision of this Agreement to the contrary, all Loans, accrued but unpaid
interest and other amounts payable hereunder shall be due and payable upon
termination of the Facility (whether by acceleration or otherwise).
5. FACILITY FEE. Beginning with the date of this Agreement and until
such time as all Loans have been irrevocably repaid to CAPCO in full, and CAPCO
is no longer obligated to make Loans, each Fund (to be allocated among the Funds
as the Borrowers deem appropriate) severally shall pay to CAPCO its allocated
share of a facility fee (the "FACILITY FEE"). The Facility Fee will be the
Borrowers' assessed proportionate share of CAPCO's operating expenses related to
obtaining/maintaining CAPCO's funding programs. The expense will be allocated by
CAPCO to the Borrowers and to the other CAPCO borrowers (CAPCO affiliates and
subsidiaries) based on the Borrowers' Commitment (as it may be reduced pursuant
to SECTION 6) as a percentage of the total amount of borrowing authorized for
all CAPCO borrowers. In no event will the Facility Fee exceed .09 of one percent
(9 basis points) of the amount of the commitment, nor will it exceed the fee
charged any other CAPCO affiliates and subsidiaries under similar loan
arrangements.
6. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. The Borrowers on
behalf of the applicable Funds shall have the right upon at least three business
days prior written notice to CAPCO, to terminate or reduce the unused portion of
the Commitment. Any such reduction of the Commitment shall be in the amount of
U.S. $5,000,000 or any larger integral multiple of U.S. $1,000,000 (EXCEPT that
any reduction may be in the aggregate amount of the unused Commitment). Accrued
fees with respect to the terminated Commitment shall be payable to CAPCO on the
effective date of such termination.
7. MANDATORY TERMINATION COMMITMENT. The Commitment shall automatically
terminate on the last day of the Facility Period and any Loans then outstanding
(TOGETHER WITH accrued interest thereon and any other amounts owing hereunder)
shall be due and payable on such date.
8. COMMITTED FACILITY. CAPCO acknowledges that the Facility is a
committed facility and that CAPCO shall be obligated to make any Loan requested
during the Facility Period under this Agreement, subject to the terms and
conditions hereof; PROVIDED, HOWEVER, that CAPCO shall not be obligated to make
any Loan if this Facility has been terminated by the Borrowers, or to a Borrower
on behalf of a proposed borrowing Fund, if at the time of a request for a Loan
by a Borrower (on behalf of such applicable borrowing Fund) there exists any
Event of Default or condition which, with the passage of time or giving of
notice, or both, would constitute or become an Event of Default with respect to
such Fund.
9. LOAN REQUESTS. Each request for a Loan (each a "BORROWING NOTICE")
shall be in writing by the applicable Borrower, EXCEPT that such Borrower may
make an oral request (each an "ORAL REQUEST") PROVIDED THAT each Oral Request
shall be followed by a written Borrowing Notice within one business day. Each
Borrowing Notice shall specify the following terms ("TERMS") of the requested
Loan: (i) the date on which such Loan is to be disbursed, (ii) the principal
amount of such Loan, (iii) the Borrower which is borrowing such Loan, (iv) the
Fund(s) for whose benefit the Loan is being borrowed and the amount of the Loan
which is for the benefit of each such Fund, and (v) the requested maturity date
of the Loan. Each Borrowing Notice shall also set forth the total assets of each
Fund for whose benefit a portion of the Loan is being borrowed as of the close
of business on the day immediately preceding the date of such Borrowing Notice.
Borrowing notices shall be delivered to CAPCO by 9:00 a.m. San Antonio, Texas
time on the day the Loan is requested to be made.
Each Borrowing Notice shall constitute a representation to CAPCO by the
applicable Borrower on behalf of the proposed borrowing Fund(s) of such Borrower
that all of the representations and warranties made by such Borrower on behalf
of the applicable borrowing Fund(s) of such Borrower in SECTION 12 are true and
correct as of such date and that no Event of Default or other condition which
with the passage of time or giving of notice, or both, would result in an Event
of Default, has occurred or is occurring with respect to such borrowing Fund(s).
10. CONFIRMATIONS; CREDITING OF FUNDS; RELIANCE BY CAPCO. Upon receipt
by CAPCO of a Borrowing Notice:
(a) CAPCO shall send the applicable Borrower written
confirmation of the Terms of such Loan via facsimile or telecopy, as soon as
reasonably practicable; PROVIDED, HOWEVER, that the failure to do so shall not
affect the obligation of such Borrower;
(b) CAPCO shall make such Loan in accordance with the Terms by
transfer of the Loan amount in immediately available funds, to the account of
the applicable Borrower as specified in EXHIBIT B or as such Borrower shall
otherwise specify to CAPCO in a writing signed by an Authorized Individual (as
defined in SECTION 11) of such Borrower and sent to CAPCO via facsimile or
telecopy; and
(c) CAPCO shall make appropriate entries on the Note or the
records of CAPCO to reflect the Terms of the Loan; PROVIDED, HOWEVER, that the
failure to do so shall not affect the obligation of any borrowing Fund.
CAPCO shall be entitled to rely upon and act hereunder pursuant to any Oral
Request, which it reasonably believes to have been made by the applicable
Borrower through an Authorized Individual. If any Borrower believes that the
confirmation relating to any Loan contains any error or discrepancy from the
applicable Oral Request, such Borrower will promptly notify CAPCO thereof.
11. BORROWING RESOLUTIONS AND OFFICERS' CERTIFICATES. Prior to the
making of any Loan pursuant to this Agreement, the Borrowers shall have
delivered to CAPCO (a) the duly executed Note, (b) resolutions of each
Borrower's Board of Directors/Trustees authorizing each Borrower to execute,
deliver and perform this Agreement and the Note on behalf of the applicable
Funds, (c) an Officer's Certificate in substantially the form set forth in
EXHIBIT D, authorizing certain individuals ("AUTHORIZED INDIVIDUALS"), to take
on behalf of each Borrower (on behalf of the applicable Funds) actions
contemplated by this Agreement and the Note, and (d) the opinion of counsel to
USAA Investment Management Company, manager and advisor to the Borrowers, with
respect to such matters as CAPCO may reasonably request.
12. REPRESENTATIONS AND WARRANTIES. In order to induce CAPCO to enter
into this Agreement and to make the Loans provided for hereunder, each Borrower
hereby severally, makes on behalf of each
of its respective series of Funds comprising such Borrower the following
representations and warranties, which shall survive the execution and delivery
hereof and of the Note:
(a) ORGANIZATION, STANDING, ETC. Such Borrower is a
corporation or trust duly organized, validly existing, and in good standing
under applicable state laws and has all requisite corporate or trust power and
authority to carry on its respective businesses as now conducted and proposed to
be conducted, to enter into this Agreement and all other documents to be
executed by it in connection with the transactions contemplated hereby, to issue
and borrow under the Note and to carry out the terms hereof and thereof;
(b) FINANCIAL INFORMATION; DISCLOSURE, ETC. Such Borrower has
furnished CAPCO with certain financial statements of such Borrower with respect
to itself and the applicable Fund(s), all of which such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis and fairly present the financial position and
results of operations of such Borrower and the applicable Funds on the dates and
for the periods indicated. Neither this Agreement nor any financial statements,
reports or other documents or certificates furnished to CAPCO by such Borrower
on behalf of the applicable Fund(s) in connection with the transactions
contemplated hereby contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements contained herein or
therein in light of the circumstances when made not misleading;
(c) AUTHORIZATION; COMPLIANCE WITH OTHER INSTRUMENTS. The
execution, delivery and performance of this Agreement and the Note, and
borrowings hereunder, have been duly authorized by all necessary corporate or
trust action of such Borrower and will not result in any violation of or be in
conflict with or constitute a default under any term of the charter, by-laws or
trust agreement, as applicable, of such Borrower or of any borrowing
restrictions or prospectus or statement of additional information of such
Borrower or the applicable Fund(s), or of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Borrower on behalf of the applicable Fund(s), or result in the creation of any
mortgage, lien, charge or encumbrance upon any of the properties or assets of
the applicable Fund(s) pursuant to any such term. Such Borrower is not in
violation of any term of its respective charter, by-laws or trust agreement, as
applicable, and such Borrower and the applicable Fund(s) are not in violation of
any material term of any agreement or instrument to which they are a party, or
to the best of such Borrower's knowledge, of any judgment, decree, order,
statute, rule or governmental regulation applicable to them;
(d) SEC COMPLIANCE. Such Borrower and the applicable Fund(s)
are in compliance in all material respects with all federal and state securities
or similar laws and regulations, including all material rules, regulations and
administrative orders of the Securities and Exchange Commission (the "SEC") and
applicable Blue Sky authorities. Such Borrower and the applicable Fund(s) are in
compliance in all material respects with all of the provisions of the Investment
Company Act of 1940, and such Borrower has filed all reports with the SEC that
are required of it or the applicable Fund(s);
(e) LITIGATION. There is no action, suit or proceeding pending
or, to the best of each Borrower's knowledge, threatened against such Borrower
or the applicable Fund(s) in any court or before any arbitrator or governmental
body which seeks to restrain any of the transactions contemplated by this
Agreement or which could reasonably be expected to have a material adverse
effect on the assets or business operations of such Borrower or the applicable
Fund(s) or the ability of such applicable Fund(s) to pay and perform their
respective obligations hereunder and under the Notes; and
(f) FUNDS' OBLIGATION FOR REPAYMENT. The assets of each Fund
for whose benefit Loans are borrowed by the applicable Borrower are SUBJECT TO
and liable for such Loans. CAPCO may only seek repayment from the assets of the
Fund of a Borrower that obtained a Loan, and may not seek repayment of that Loan
from the assets of any other Fund of that Borrower.
13. AFFIRMATIVE COVENANTS OF THE BORROWERS. Until such time as all
amounts of principal, interest and other sums due to CAPCO by a Borrower
pursuant to any Loan made to such Borrower for the benefit of the applicable
Fund(s) is irrevocably paid in full, and until CAPCO is no longer obligated to
make Loans to such Borrower for the benefit of the applicable Fund(s), such
Borrower (on behalf of its respective Fund(s)) severally agrees:
(a) To deliver to CAPCO as soon as possible and in any event
within seventy-five (75) days after the end of each fiscal year of such Borrower
and the applicable Fund(s), Statements of Assets and Liabilities, Statements of
Operations and Statements of Changes in Net Assets of each applicable Fund for
such fiscal year, as set forth in each applicable Fund's Annual Report to
shareholders TOGETHER WITH a calculation of the maximum amount which each
applicable Fund could borrow under its Borrowing Limit as of the end of such
fiscal year;
(b) To deliver to CAPCO as soon as available and in any event
within seventy-five (75) days after the end of each semiannual period of such
Borrower and the applicable Fund(s), Statements of Assets and Liabilities,
Statement of Operations and Statements of Changes in Net Assets of each
applicable Fund as of the end of such semiannual period, as set forth in each
applicable Fund's Semiannual Report to shareholders, TOGETHER WITH a calculation
of the maximum amount which each applicable Fund could borrow under its
Borrowing Limit at the end of such semiannual period;
(c) To deliver to CAPCO prompt notice of the occurrence of any
event or condition which constitutes, or is likely to result in, a change in
such Borrower or any applicable Fund which could reasonably be expected to
materially adversely affect the ability of any applicable Fund to promptly repay
outstanding Loans made for its benefit or the ability of such Borrower or the
applicable Fund(s) to perform their respective obligations under this Agreement
or the Note;
(d) To do, or cause to be done, all things necessary to
preserve and keep in full force and effect the corporate or trust existence of
such Borrower and all permits, rights and privileges necessary for the conduct
of its businesses and to comply in all material respects with all applicable
laws, regulations and orders, including without limitation, all rules and
regulations promulgated by the SEC;
(e) To promptly notify CAPCO of any litigation, threatened
legal proceeding or investigation by a governmental authority which could
reasonably be expected to materially affect the ability of any applicable Fund
to promptly repay the outstanding Loans made for its benefit hereunder or the
ability of such Borrower or the applicable Fund(s) to otherwise perform their
respective obligations hereunder;
(f) In the event a Loan for the benefit of a particular Fund
is not repaid in full within 10 days after the date it is borrowed, and until
such Loan is repaid in full, to deliver to CAPCO, within two business days after
each Friday occurring after such 10th day, a statement setting forth the total
assets of such Fund as of the close of business on each such Friday; and
(g) Upon the request of CAPCO, which may be made by CAPCO from
time to time in the event CAPCO in good faith believes that there has been a
material adverse change in the capital markets generally, to deliver to CAPCO,
within two business days after any such request, a statement setting forth the
total assets of each Fund for whose benefit a Loan is outstanding on the date of
such request.
14. NEGATIVE COVENANTS OF THE BORROWERS. Until such time as all amounts
of principal, interest and other sums due to CAPCO by a Borrower pursuant to any
Loan made to such Borrower for the benefit of the applicable Fund(s) is
irrevocably paid in full, and until CAPCO is no longer obligated to make Loans
to such Borrower for the benefit of the applicable Fund, such Borrower (on
behalf of its respective Fund(s)) severally agrees:
(a) Unless CAPCO has breached its obligations to lend
hereunder or becomes insolvent or the subject of a receivership proceeding, not
to incur any indebtedness for borrowed money (OTHER THAN (i) pursuant to a U.S.
$100,000,000 Credit Agreement with State Street and Bank of America previously
referenced in Paragraph 3 above (the "OTHER FACILITY") and (ii) overdrafts
incurred at the custodian of the Funds from time to time in the ordinary course
of business) EXCEPT the Loans, without the prior written consent of CAPCO, which
consent will not be unreasonably withheld; and
(b) Not to dissolve or terminate its existence, or merge or
consolidate with any other person or entity, or sell all or substantially all of
its assets in a single transaction or series of related transactions (OTHER THAN
assets consisting of margin stock), each without the prior written consent of
CAPCO, which consent will not be unreasonably withheld; PROVIDED THAT a Borrower
or Fund may without such consent merge, consolidate with, or purchase
substantially all of the assets of, or sell substantially all of its assets to,
an affiliated investment company or series thereof, as provided for in Rule
17a-8 under the Investment Company Act of 1940.
15. EVENTS OF DEFAULT. If any of the following events (each an "EVENT
OF DEFAULT") shall occur (it being understood that an Event of Default with
respect to one Fund shall not constitute an Event of Default with respect to any
other Fund):
(a) A Fund shall default in the payment of principal or
interest on any Loan or any other fee due hereunder for a period of five days
after the same becomes due and payable, whether at maturity or, with respect to
any Facility Fee, at a date fixed for the payment thereof;
(b) A Fund shall default in the performance of or compliance
with any term contained in SECTION 13 and such default shall not have been
remedied within 30 days after written notice thereof shall have been given to
the applicable Borrower on behalf of such Fund by CAPCO;
(c) A Fund shall default in the performance of or compliance
with any term contained in SECTION 14;
(d) A Fund shall default in the performance of or compliance
with any other term contained herein and such default shall not have been
remedied within 30 days after written notice thereof shall have been given to
the applicable Borrower on behalf of such Fund by CAPCO;
(e) Any representation or warranty made by or on behalf of a
Fund herein or pursuant hereto shall prove to have been false or incorrect in
any material respect when made;
(f) USAA Investment Management Company or any successor
manager or investment adviser (PROVIDED THAT such successor manager or
investment advisor is a wholly-owned subsidiary of United Services Automobile
Association and/or CAPCO) shall cease to be the manager and investment advisor
of a Fund; PROVIDED THAT USAA Investment Management Company (or its successor)
shall be permitted to hire one or more of the existing subadvisers listed on
SCHEDULE B as subadvisers for any Fund and may add new subadvisers as provided
in SECTION 16(B); or
(g) An event of default shall occur and be continuing under
the Other Facility with respect to a Fund;
then, in any event, and at any time thereafter, if any Event of Default shall be
continuing, CAPCO may by written notice to the applicable Borrower (i) terminate
its commitment to make any Loan hereunder to such Borrower with respect to such
Fund, whereupon said commitment shall forthwith terminate without any other
notice of any kind and (ii) declare the principal and interest in respect of any
outstanding Loans with respect to such Fund, and all other amounts due hereunder
with respect to such Fund, to be immediately due and payable whereupon the
principal and interest in respect thereof and all other amounts due hereunder
shall become forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by the Borrowers on
behalf of the applicable Funds.
16. NEW BORROWERS; NEW FUNDS; NEW SUBADVISERS
(a) So long as no Event of Default or condition which, with
the passage of time or the giving of notice, or both, would constitute
or become an Event of Default has occurred and is continuing, and with
the prior consent of CAPCO, which consent will not be unreasonably
withheld:
(i) Any investment company that becomes part of the
same "GROUP OF INVESTMENT COMPANIES" (as that term is defined in Rule
11a-3 under the Investment Company Act of 1940) as the original
Borrowers to this Agreement, may, by submitting an amended SCHEDULE A
and EXHIBIT B to this Agreement to CAPCO (which amended SCHEDULE A and
EXHIBIT B shall replace SCHEDULE A and EXHIBIT B which are then a part
of this Agreement) and such other documents as CAPCO may reasonably
request, become a party to this Agreement and may become a "BORROWER"
hereunder; and
(ii) A Borrower may, by submitting an amended
SCHEDULE A and EXHIBIT B to this Agreement to CAPCO (which amended
SCHEDULE A and EXHIBIT B shall replace SCHEDULE A and EXHIBIT B which
are then a part of this Agreement), add additional Funds for whose
benefit such Borrower may borrow Loans. No such amendment of SCHEDULE A
to this Agreement shall amend the Borrowing Limit applicable to any
Fund without the prior consent of CAPCO.
(b) A Borrower may, by submitting an amended SCHEDULE B to
this Agreement to CAPCO (which amended SCHEDULE B shall replace the
SCHEDULE B which is then a part of this Agreement), add new
subadvisers, which are not currently subadvising any other Fund.
17. LIMITED RECOURSE. CAPCO agrees (a) that any claim, liability, or
obligation arising hereunder or under the Note whether on account of the
principal of any Loan, interest thereon, or any other amount due hereunder or
thereunder shall be satisfied only from the assets of the specific Fund for
whose benefit a Loan is borrowed and in any event in an amount not to exceed the
outstanding principal amount of any Loan borrowed for such Fund's benefit,
TOGETHER WITH accrued and unpaid interest due and owing thereon, and such Fund's
share of any other amount due hereunder and under the Note (as determined in
accordance with the provisions hereof) and (b) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Note with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Note (as determined in accordance with the provisions
hereof).
18. REMEDIES ON DEFAULT. In case any one or more Events of Default
shall occur and be continuing, CAPCO may proceed to protect and enforce its
rights by an action at law, suit in equity or other appropriate proceedings,
against the applicable Borrower on behalf of the applicable defaulting Fund(s),
as the case may be. In the case of a default in the payment of any principal or
interest on any Loan or in the payment of any fee due hereunder, the relevant
Fund(s) (to be allocated among such Funds as the Borrowers deem appropriate)
severally shall pay to CAPCO such further amount as shall be sufficient to cover
the cost and expense of collection, including, without limitation, reasonable
attorney's fees and expenses from the relevant Fund.
19. NO WAIVER OF REMEDIES. No course of dealing or failure or delay on
the part of CAPCO in exercising any right or remedy hereunder or under the Note
shall constitute a waiver of any right or remedy hereunder or under the Note,
nor shall any partial exercise of any right or remedy hereunder or under the
Note preclude any further exercise thereof or the exercise of any other right or
remedy hereunder or under the Note. Such rights and remedies expressly provided
are cumulative and
not exclusive of any rights or remedies which CAPCO would otherwise have.
20. EXPENSES. Each of the Funds severally shall pay on demand all
reasonable out-of-pocket costs and expenses (including reasonable attorney's
fees and expenses) incurred by CAPCO in connection with the collection and any
other enforcement proceedings of or regarding this Agreement, any Loan or the
Note against such Fund.
21. BENEFIT OF AGREEMENT. This Agreement and the Note shall be binding
upon and inure for the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; PROVIDED THAT no party to this
Agreement or the Note may assign any of its rights hereunder or thereunder
without the prior written consent of the other parties.
22. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES
(A) GENERAL. Unless otherwise expressly provided herein, all notices,
requests and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed, or delivered to the applicable address or facsimile number, or (subject
to SUBSECTION (C) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
(i) if to the Borrowers, to the address, facsimile number,
electronic mail address, or telephone number specified for such Person
on EXHIBIT B or to such other address, facsimile number, electronic
mail address, or telephone number as shall be designated by such party
in a notice to the other parties; and
(ii) if to CAPCO, to the address, facsimile number, electronic
mail address, or telephone number specified on EXHIBIT C or to such
other address, facsimile number, electronic mail address, or telephone
number as shall be designated by such party in a notice to the other
parties.
All such notices and other communications shall be deemed to be given or made
upon the EARLIER to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by certified mail, when signed for
by or on behalf of the relevant party hereto; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
SUBSECTION (C) below), when delivered. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. This Agreement
and all other documents to be executed by it in connection with the transactions
contemplated hereby may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually-signed originals and shall be
binding on all Borrowers and the Bank. The Bank may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
PROVIDED HOWEVER, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
drafts of loan documents and financial statements and other information as
provided in Section 13, and to distribute this Agreement and the other documents
to be executed in connection herewith for execution by the parties thereto, and
may not be used for any other purpose.
23. MODIFICATIONS. No provision of this Agreement or the Note may be
waived, modified or discharged EXCEPT by mutual written agreement of all
parties. THIS WRITTEN LOAN AGREEMENT AND THE NOTE REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES.
24. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the state of Texas without regard
to the choice of law provisions thereof. Chapter 346 of the Texas Finance Code
shall not apply to this Agreement or the Loans made hereunder.
25. TRUST DISCLAIMER. Neither the shareholders, trustees, officers,
employees and other agents of any Borrower or Fund shall be personally bound by
or liable for any indebtedness, liability or obligation hereunder or under the
Note nor shall resort be had to their private property for the satisfaction of
any obligation or claim hereunder.
26. PUBLICITY. Neither CAPCO nor the Borrowers will use any name,
trademark, or trade name of the other without that other party's prior written
consent.
If this letter correctly reflects your agreement with us, please execute both
copies hereof and return one to us, whereupon this Agreement shall be binding
upon the Borrowers (not in their individual capacity, but on behalf of their
respective Funds listed on SCHEDULE A hereto) and CAPCO.
Sincerely,
USAA CAPITAL CORPORATION
By: /S/ XXXXX X. XXXXXXXXX
----------------------------------
Xxxxx X. XxXxxxxxx
Senior Vice President-Treasurer
1108440
Signature to the Facility Agreement Letter dated January 8, 2004, between USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A hereto) and CAPCO.
AGREED AND ACCEPTED
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXX X. XXXXX
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXX X. XXXXXXXXX
-----------------------------
Xxxxx X. Xxxxxxxxx, President
SCHEDULE A TO FACILITY AGREEMENT LETTER
FUNDS FOR WHOSE BENEFIT LOANS CAN BE BORROWED
UNDER FACILITY AGREEMENT LETTER AND BORROWING LIMIT
BORROWER FUNDS MAXIMUM PERCENT OF THE TOTAL ASSETS
WHICH CAN BE BORROWED UNDER
FACILITY AGREEMENT WITH CAPCO
USAA Mutual Fund, Inc. USAA Aggressive Growth 5% of Total Assets
USAA Growth & Income "
USAA Income Stock "
USAA Short-Term Bond "
USAA Money Market "
USAA Growth "
USAA Income "
USAA S&P 500 Index (Member and Reward classes) "
USAA Science & Technology "
USAA First Start Growth "
USAA High Yield Opportunities "
USAA Intermediate-Term Bond "
USAA Small Cap Stock "
USAA Extended Market Index "
USAA Nasdaq-100 Index "
USAA Capital Growth "
USAA Value "
USAA Investment Trust USAA Cornerstone Strategy "
USAA Precious Metals and Minerals "
USAA International "
USAA World Growth "
USAA GNMA Trust "
USAA Treasury Money Market Trust "
USAA Emerging Markets "
USAA Growth and Tax Strategy "
USAA Balanced Strategy "
USAA Tax Exempt Fund, Inc. USAA Long-Term "
USAA Intermediate-Term "
USAA Short-Term "
USAA Tax Exempt Money Market "
USAA California Bond "
USAA California Money Market "
USAA New York Bond "
USAA New York Money Market "
USAA Xxxxxxxx Xxxx "
USAA Virginia Money Market "
USAA State Tax-Free Trust USAA Florida Tax-Free Income "
USAA Florida Tax-Free Money Market "
USAA Life Investment Trust USAA Life Income "
USAA Life Growth and Income "
USAA Life World Growth "
USAA Life Diversified Assets "
USAA Life Aggressive Growth "
Schedule A
SCHEDULE B TO FACILITY AGREEMENT LETTER
PERMITTED SUBADVISERS
Batterymarch Financial Management, Inc.
The Boston Company Asset Management, LLC
Dresdner RCM Global Investors LLC
Grantham, Mayo, Van Otterloo & Co. LLC
Xxxxxxx Capital Management, LLC
Xxxxxxx Xxxxx Quantitative Advisers
MFS Investment Management
Northern Trust Investments, N.A.
Wellington Management Company, LLP
Westwood Management Corporation
Schedule B
EXHIBIT A TO FACILITY AGREEMENT LETTER
MASTER GRID PROMISSORY NOTE
U.S. $400,000,000 Dated: January 08, 2004
FOR VALUE RECEIVED, each of the undersigned (each a "BORROWER" and
collectively the "BORROWERS"), severally and not jointly and not in their
individual capacities, but on behalf of and for the benefit of the series of
funds comprising each such Borrower as listed on SCHEDULE A to the Agreement as
defined below (each a "FUND" and collectively the "FUNDS") promises to pay to
the order of USAA Capital Corporation ("CAPCO") at CAPCO's office located at
0000 Xxxxxxxxxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000, in lawful money of the
United States of America, in immediately available funds, the principal amount
of all Loans made by CAPCO to such Borrower for the benefit of the applicable
Funds under the Facility Agreement Letter dated January 08, 2004 (as amended or
modified, the "AGREEMENT"), among the Borrowers and CAPCO, together with
interest thereon at the rate or rates set forth in the Agreement. All payments
of interest and principal outstanding shall be made in accordance with the terms
of the Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Agreement. Terms not defined in this Note shall be as set forth
in the Agreement.
CAPCO is authorized to endorse the particulars of each Loan evidenced
hereby on the attached Schedule and to attach additional Schedules as necessary,
provided that the failure of CAPCO to do so or to do so accurately shall not
affect the obligations of any Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
Each Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. Each Borrower agrees to pay all reasonable costs of
collection, including reasonable attorney's fees in connection with the
enforcement of this Note.
CAPCO hereby agrees (i) that any claim, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit a
Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, TOGETHER WITH
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other
agents of any Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
Loans under the Agreement and this Note (except to USAA Life Investment
Trust) are subordinated to loans made under the $100,000,000 Credit Agreement
between the Borrowers and State Street Bank and Trust Company (State Street) and
Bank of America, N.A. (Bank of America), dated January 08, 2004, in the manner
and to the extent set forth in the Agreement among the Borrowers, CAPCO, State
Street and Bank of America, dated January 08, 2004.
This Note shall be governed by the laws of the state of Texas.
Exhibit A
Signature to the Master Grid Promissory Note dated January 08, 2004, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A to the Agreement) payable to CAPCO.
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
---------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXX X. XXXXXXXXX
-----------------------------------
Xxxxx X. Xxxxxxxxx, President
Exhibit A
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 08, 2004, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST and
USAA LIFE INVESTMENT TRUST (not in their individual capacity, but on behalf of
and for the benefit of the series of funds comprising each such Borrower)
payable to the order of USAA CAPITAL CORPORATION.
[GRID]
Date of
Loan
Borrower
and Fund
Amount of
Loan
Type of Rate and
Interest
Rate on Date of
Borrowing
Amount of
Principal
Repaid
Date of
Repayment
Other
Expenses
Notation
made by
Exhibit A
EXHIBIT B
EXHIBIT B TO FACILITY AGREEMENT LETTER
BORROWER INFORMATION SHEET
BORROWERS: USAA MUTUAL FUND, INC., USAA INVESTMENT TRUST, USAA
TAX EXEMPT FUND, INC. and USAA STATE TAX-FREE TRUST
ADDRESS FOR NOTICES AND OTHER COMMUNICATIONS TO THESE BORROWERS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxxxxx X. Xxxxxxx
Senior Vice President, Fixed Income Investments (USAA)
Telephone: (000) 000-0000
Cellphone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
Attention: Xxxxxx X. Xxxxxx
Vice President, Equity Investments (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
Attention: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President,
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: [email protected]
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President,
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: [email protected]
Exhibit B
BORROWERS: USAA LIFE INVESTMENT TRUST
ADDRESS FOR NOTICES AND OTHER COMMUICATIONS TO THIS BORROWER:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxx X. Xxxxxx
Senior Vice President
USAA Investment Management Company
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxx X. Xxxxxx
Senior Vice President
USAA Investment Management Company
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: [email protected]
Copies to: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 498-7819
Telex: 767424
e-mail: [email protected]
INSTRUCTIONS FOR PAYMENTS TO BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
---------- ----------
Exhibit B
TO: (PLEASE PLACE BANK NAME, CORRESPONDENT NAME (IF APPLICABLE), CHIPS AND/OR
FED FUNDS ACCOUNT NUMBER BELOW)
USAA MUTUAL FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA AGGRESSIVE GROWTH FUND ACCT.# 0000-000-0
USAA GROWTH & INCOME FUND ACCT.# 0000-000-0
USAA INCOME STOCK FUND ACCT.# 0000-000-0
USAA SHORT-TERM BOND FUND ACCT.# 0000-000-0
USAA MONEY MARKET FUND ACCT.# 0000-000-0
USAA GROWTH FUND ACCT.# 0000-000-0
USAA INCOME FUND ACCT.# 0000-000-0
USAA SCIENCE & TECHNOLOGY FUND ACCT.#0000-000-0
USAA FIRST START GROWTH FUND ACCT.#0000-000-0
USAA HIGHYIELD OPPORTUNITIES FUND ACCT.#0000-000-0
USAA INTERMEDIATE-TERM BOND FUND ACCT.#0000-000-0
USAA SMALL CAP STOCK FUND ACCT.#0000-000-0
USAA NASDAQ-100 INDEX FUND ACCT.#0000-000-0
USAA CAPITAL GROWTH FUND ACCT.#0000-000-0
USAA VALUE FUND ACCT.#0000-000-0
NORTHERN TRUST COMPANY, XXXXXXX, XXXXXXXX
XXX #000000000
XXXX S&P 500 INDEX FUND ACCT.#2616882
Exhibit B
X X XXXXXX CHASE BANK, NEW YORK, NY
ABA #000000000
USAA EXTENDED MARKET INDEX FUND ACCT.#P83544
USAA INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA CORNERSTONE STRATEGY FUND ACCT.# 0000-000-0
USAA PRECIOUS METALS AND MINERALS FUND ACCT.# 0000-000-0
USAA INTERNATIONAL FUND ACCT.# 0000-000-0
USAA WORLD GROWTH FUND ACCT.# 0000-000-0
USAA GNMA TRUST ACCT.# 0000-000-0
USAA TREASURY MONEY MARKET TRUST ACCT.# 0000-000-0
USAA EMERGING MARKETS FUND ACCT.# 0000-000-0
USAA GROWTH AND TAX STRATEGY FUND ACCT.# 0000-000-0
USAA BALANCED STRATEGY FUND ACCT.# 0000-000-0
USAA TAX EXEMPT FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA LONG-TERM FUND ACCT.# 0000-000-0
USAA INTERMEDIATE-TERM FUND ACCT.# 0000-000-0
USAA SHORT-TERM FUND ACCT.# 0000-000-0
USAA TAX EXEMPT MONEY MARKET FUND ACCT.# 0000-000-0
USAA CALIFORNIA BOND FUND ACCT.# 0000-000-0
USAA CALIFORNIA MONEY MARKET FUND ACCT.# 0000-000-0
USAA NEW YORK BOND FUND ACCT.# 0000-000-0
USAA NEW YORK MONEY MARKET FUND ACCT.# 0000-000-0
USAA XXXXXXXX XXXX FUND ACCT.# 0000-000-0
USAA VIRGINIA MONEY MARKET FUND ACCT.# 0000-000-0
Exhibit B
USAA STATE TAX-FREE TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA FLORIDA TAX-FREE INCOME FUND ACCT.# 0000-000-0
USAA FLORIDA TAX-FREE MONEY MARKET FUND ACCT.# 0000-000-0
USAA LIFE INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA LIFE INCOME FUND ACCT.# 0000-000-0
USAA LIFE GROWTH & INCOME FUND ACCT.# 0000-000-0
USAA LIFE WORLD GROWTH FUND ACCT.# 0000-000-0
USAA LIFE DIVERSIFIED ASSETS FUND ACCT.# 0000-000-0
USAA LIFE AGGRESSIVE GROWTH FUND ACCT.# 0000-000-0
Exhibit B
EXHIBIT C
ADDRESS FOR USAA CAPITAL CORPORATION
USAA Capital Corporation
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. XxXxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Exhibit C
EXHIBIT D TO FACILITY AGREEMENT LETTER
OFFICER'S CERTIFICATE
Xxxx X. Xxxxxx hereby certifies that he is the duly elected Secretary of USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (each a "BORROWER" and
collectively the "BORROWERS"), and that he is authorized to execute this
Certificate on behalf of the Borrowers. The undersigned hereby further certifies
to the following:
Any one of the Chairman and Chief Executive Officer of United States Automobile
Association ("USAA"), the Executive Vice President-Chief Financial
Officer/Corporate Treasurer of USAA, or the Senior Vice President-Corporate
Finance and Assistant Treasurer of USAA, together with either the Treasurer or
Assistant Treasurer of the Borrowers, are duly authorized to act on behalf of
the Funds, by transmitting telephonic, electronic mail, telex, or telecopy
instructions and other communications with regard to borrowings and payments
pursuant to the Facility Agreement dated January 8, 2004, with USAA Capital
Corporation. The signature set opposite the name of each individual below is
that individual's genuine signature.
NAME OFFICE SIGNATURE
---- ------ ---------
Xxxxxx X. Xxxxx Chairman and Chief Executive
Officer of USAA __________________________
Xxxxx Xxxxxx, Xx. Executive Vice President-Chief
Financial Officer/Corporate
Treasurer of USAA __________________________
Xxxxx X. XxXxxxxxx Senior Vice President-Corporate
Finance and Assistant Treasurer
of USAA __________________________
Xxxxx X. Xxxxxx Treasurer of the Borrowers __________________________
Xxxxxxx Xxxxxxx, Xx. Assistant Treasurer of the
Borrowers __________________________
IN WITNESS WHEREOF, I have executed the Certificate as of this 8th day of
January, 2004.
-----------------------------------
Xxxx X. Xxxxxx
Secretary
I, Xxxxxxxxxxx X. Xxxxx, officer of the Borrowers, hereby certify that Xxxx X.
Xxxxxx is, and has been at all times since a date prior to the date of this
Certificate, the duly elected, qualified, and acting Secretary of the Borrowers
and that his signature set forth above is his true and correct signature.
Date: January 8, 2004
--------------------------------
Xxxxxxxxxxx X. Xxxxx, Officer
Exhibit D
MASTER GRID PROMISSORY NOTE
U.S. $400,000,000 Dated: January 08, 2004
FOR VALUE RECEIVED, each of the undersigned (each a "BORROWER" and
collectively the "BORROWERS"), severally and not jointly and not in their
individual capacities, but on behalf of and for the benefit of the series of
funds comprising each such Borrower as listed on SCHEDULE A to the Agreement as
defined below (each a "FUND" and collectively the "FUNDS") promises to pay to
the order of USAA Capital Corporation ("CAPCO") at CAPCO's office located at
0000 Xxxxxxxxxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000, in lawful money of the
United States of America, in immediately available funds, the principal amount
of all Loans made by CAPCO to such Borrower for the benefit of the applicable
Funds under the Facility Agreement Letter dated January 08, 2004 (as amended or
modified, the "AGREEMENT"), among the Borrowers and CAPCO, together with
interest thereon at the rate or rates set forth in the Agreement. All payments
of interest and principal outstanding shall be made in accordance with the terms
of the Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Agreement. Terms not defined in this Note shall be as set forth
in the Agreement.
CAPCO is authorized to endorse the particulars of each Loan evidenced
hereby on the attached Schedule and to attach additional Schedules as necessary,
provided that the failure of CAPCO to do so or to do so accurately shall not
affect the obligations of any Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
Each Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. Each Borrower agrees to pay all reasonable costs of
collection, including reasonable attorney's fees in connection with the
enforcement of this Note.
CAPCO hereby agrees (i) that any claim, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit a
Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, together with
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other
agents of any Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
Loans under the Agreement and this Note (except to USAA Life Investment
Trust) are subordinated to loans made under the $100,000,000 Credit Agreement
between the Borrowers and State Street Bank and Trust Company (State Street) and
Bank of America, N.A. (Bank of America), dated January 08, 2004, in the manner
and to the extent set forth in the Agreement among the Borrowers, CAPCO, State
Street, and Bank of America, dated January 08, 2004.
This Note shall be governed by the laws of the state of Texas.
Signature to the Master Grid Promissory Note dated January 08, 2004, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A TO THE AGREEMENT) payable to CAPCO.
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
Xxxxxxxxxxx X. Xxxxx, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
Xxxxxxxxxxx X. Xxxxx, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
Xxxxxxxxxxx X. Xxxxx, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
Xxxxxxxxxxx X. Xxxxx, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxxxxx, President
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 08, 2004, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST and
USAA LIFE INVESTMENT TRUST (not in their individual capacity, but on behalf of
and for the benefit of the series of funds comprising each such Borrower)
payable to the order of USAA CAPITAL CORPORATION.
[GRID]
Date of Loan
Borrower
and Fund
Amount
of Fund
Type of Rate
and Interest
Rate of Date of
Borrowing
Amount of
Principle Repaid
Date of Repayment
Other Expenses
Notation
made by
EXHIBIT D TO FACILITY AGREEMENT LETTER
OFFICER'S CERTIFICATE
Xxxx X. Xxxxxx hereby certifies that he is the duly elected Secretary of USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (each a "BORROWER" and
collectively the "BORROWERS"), and that he is authorized to execute this
Certificate on behalf of the Borrowers. The undersigned hereby further certifies
to the following:
Any one of the Chairman and Chief Executive Officer of United States Automobile
Association ("USAA"), the Executive Vice President-Chief Financial
Officer/Corporate Treasurer of USAA, or the Senior Vice President-Corporate
Finance and Assistant Treasurer of USAA, together with either the Treasurer or
Assistant Treasurer of the Borrowers, are duly authorized to act on behalf of
the Funds, by transmitting telephonic, electronic mail, telex, or telecopy
instructions and other communications with regard to borrowings and payments
pursuant to the Facility Agreement dated January 8, 2004, with USAA Capital
Corporation. The signature set opposite the name of each individual below is
that individual's genuine signature.
NAME OFFICE SIGNATURE
---- ------ ---------
Xxxxxx X. Xxxxx Chairman and Chief Executive
Officer of USAA /S/ XXXXXX X. XXXXX
Xxxxx Xxxxxx, Xx. Executive Vice President-Chief
Financial Officer/Corporate
Treasurer of USAA /S/ XXXXX XXXXXX, XX.
Xxxxx X. XxXxxxxxx Senior Vice President-Corporate
Finance and Assistant Treasurer
of USAA /S/ XXXXX X. XXXXXXXXX
Xxxxx X. Xxxxxx Treasurer of the Borrowers /S/ XXXXX X. XXXXXX
Xxxxxxx Xxxxxxx, Xx. Assistant Treasurer of the
Borrowers /S/ XXXXXXX XXXXXXX, XX.
IN WITNESS WHEREOF, I have executed the Certificate as of this 8th day of
January, 2004.
/S/ XXXX X. XXXXXX
-----------------------------------
Xxxx X. Xxxxxx
Secretary
I, Xxxxxxxxxxx X. Xxxxx, officer of the Borrowers, hereby certify that Xxxx X.
Xxxxxx is, and has been at all times since a date prior to the date of this
Certificate, the duly elected, qualified, and acting Secretary of the Borrowers
and that his signature set forth above is his true and correct signature.
Date: January 8, 2004
/S/ XXXXXXXXXXX X. XXXXX
--------------------------------
Xxxxxxxxxxx X. Xxxxx, Officer
Exhibit D