Exhibit 7(c)
FORM OF CUSTODIAN AGREEMENT
AGREEMENT dated as of_______________, 2003 between THE NORTHERN TRUST
COMPANY (the "Custodian") and USAA MUTUAL FUND, INC. (the "Customer"), on behalf
of USAA S&P 500 INDEX FUND (the "Series").
WHEREAS, the Customer may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio of
Securities and Cash (each as hereinafter defined) (all such existing and
additional series now or hereafter listed on Exhibit A being hereinafter
referred to individually as a "Portfolio" and collectively, as the
"Portfolios"); and
WHEREAS, the Customer desires to appoint the Custodian as custodian on
behalf of the Portfolios under the terms and conditions set forth in this
Agreement, and the Custodian has agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN. The Customer hereby employs the Custodian as
custodian of all assets of each Portfolio which are delivered to and accepted by
the Custodian or any Subcustodian (as that term is defined in Section 4)
pursuant to the terms and conditions set forth herein. Without limitation, such
assets shall include stocks and other equity interests of every type, evidences
of indebtedness, other instruments representing same or rights or obligations to
receive, purchase, deliver or sell same and other non-cash investment property
of a Portfolio which is acceptable for deposit ("Securities") and cash from any
source and in any currency ("Cash") (Securities and Cash, collectively,
"Property"). The Custodian shall not be responsible for any property of a
Portfolio held or received by the Customer or others and not delivered to the
Custodian or any Subcustodian.
2. MAINTENANCE OF SECURITIES AND CASH AT CUSTODIAN AND SUBCUSTODIAN
LOCATIONS. Pursuant to Instructions, the Customer shall direct the Custodian to
(a) settle securities transactions and maintain cash in the country or other
jurisdiction in which the principal trading market for such securities is
located, where such securities are to be presented for payment or where such
securities
are acquired and (b) maintain cash and cash equivalents in such countries in
amounts reasonably necessary to effect the Customer's transactions in such
securities. Instructions to settle securities transactions in any country shall
be deemed to authorize the holding of such Securities and Cash in that country.
3. CUSTODY ACCOUNT. The Custodian agrees to establish and maintain one
or more custody accounts on its books, each in the name of a Portfolio (each, an
"Account") for any and all Property from time to time received and accepted by
the Custodian or any Subcustodian for the account of such Portfolio. Upon
delivery by the Customer to the Custodian of any Property belonging to a
Portfolio, the Customer shall, by Instructions (as hereinafter defined in
Section 14), specifically indicate to which Portfolio such Property belongs, or
if such Property belongs to more than one Portfolio, shall allocate such
Property to the appropriate Portfolios. The Custodian shall allocate such
Property to each Account in accordance with the Instructions; PROVIDED THAT the
Custodian shall have the right, in its sole discretion, to refuse to accept any
Property that is not in proper form for deposit for any reason. The Customer, on
behalf of each Portfolio, acknowledges its responsibility as a principal for all
of its obligations to the Custodian arising under or in connection with this
Agreement, warrants its authority to deposit in the appropriate Account any
Property received therefor by the Custodian or a Subcustodian and to give, and
authorize others to give, instructions relative thereto. The Custodian may
deliver securities of the same class in place of those deposited in an Account.
The Custodian shall hold, keep safe and protect as custodian for each
Account, on behalf of the Customer, all Property in such Account. All
transactions, including, but not limited to, foreign exchange transactions
involving the Property, shall be executed or settled solely in accordance with
Instructions (which shall specifically reference the Account for which such
transaction is being settled), except that until the Custodian receives
Instructions to the contrary, the Custodian will:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property, as the same become
payable and credit the same to the appropriate Account;
(b) present for payment all Securities held in an Account which are
called, redeemed or retired or otherwise become payable and all coupons and
other income items which call for payment upon presentation to the extent that
the Custodian or Subcustodian is
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actually aware of such opportunities and hold the cash received in such Account
pursuant to this Agreement;
(c) (i) exchange Securities where the exchange is purely ministerial
(including, without limitation, the exchange of temporary securities for those
in definitive form and the exchange of warrants, or other documents of
entitlement to securities, for the Securities themselves) and (ii) when
notification of a tender or exchange offer (other than ministerial exchanges
described in (i) above) is received for an Account, endeavor to receive
Instructions, provided that if such Instructions are not received in time for
the Custodian to take timely action, no action shall be taken with respect
thereto;
(d) whenever notification of a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend or stock split is
received for an Account and such rights entitlement or fractional interest bears
an expiration date, if after endeavoring to obtain Instructions such
Instructions are not received in time for the Custodian to take timely action or
if actual notice of such actions was received too late to seek Instructions,
sell in the discretion of the Custodian (which sale the Customer hereby
authorizes the Custodian to make) such rights entitlement or fractional interest
and credit the appropriate Account with the net proceeds of such sale;
(e) execute in the Customer's name for an Account, whenever the
Custodian deems it appropriate, such ownership and other certificates as may be
required to obtain the payment of income from the Property in such Account;
(f) pay for each Account, any and all taxes and levies in the nature of
taxes imposed on interest, dividends or other similar income on the Property in
such Account by any governmental authority. In the event there is insufficient
Cash available in an Account to pay such taxes and levies, the Custodian shall
notify the Customer of the amount of the shortfall and the Customer, at its
option, may deposit additional Cash in such Account or take steps to have
sufficient Cash available. The Customer agrees, when and if requested by the
Custodian and required in connection with the payment of any such taxes to
cooperate with the Custodian in furnishing information, executing documents or
otherwise; and
(g) appoint brokers and agents for any of the ministerial transactions
involving the Securities described in (a) - (f), including, without limitation,
affiliates of the Custodian or any Subcustodian.
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4. SUBCUSTODIANS AND SECURITIES SYSTEMS. The Customer authorizes and
instructs the Custodian to hold the Property in each Account in custody accounts
which have been established by the Custodian with (a) one of its U.S. branches
or another U.S. bank or trust company or branch thereof located in the U.S.
which is itself qualified under the Investment Company Act of 1940, as amended
("1940 Act"), to act as custodian (individually, a "U.S. Subcustodian"), or a
U.S. securities depository or clearing agency or system in which the Custodian
or a U.S. Subcustodian participates (individually, a "U.S. Securities System")
or (b) one of its non-U.S. branches or majority-owned non-U.S. subsidiaries, a
non-U.S. branch or majority-owned subsidiary of a U.S. bank or a non-U.S. bank
or trust company, acting as custodian (individually, a "non-U.S. Subcustodian";
U.S. Subcustodians and non-U.S. Subcustodians, collectively, "Subcustodians"),
or a non-U.S. depository or clearing agency or system in which the Custodian or
any Subcustodian participates (individually, a "non-U.S. Securities System";
"U.S. Securities System" and "non-U.S. Securities System", collectively,
"Securities System"), PROVIDED that in each case in which a U.S. Subcustodian or
U.S. Securities System is employed, each such Subcustodian or Securities System
shall have been approved by Instructions; PROVIDED FURTHER that in each case in
which a non-U.S. Subcustodian or non-U.S. Securities System is employed, (a)
such Subcustodian or Securities System either is (i) a "qualified U.S. bank" as
defined by Rule 17f-5 under the 1940 Act ("Rule 17f-5") or (ii) an "eligible
foreign custodian" within the meaning of Rule 17f-5 or such Subcustodian or
Securities System is the subject of an order granted by the U.S. Securities and
Exchange Commission ("SEC") exempting such agent or the subcustody arrangements
thereto from all or part of the provisions of Rule 17f-5 and (b) the agreement
between the Custodian and such non-U.S. Subcustodian has been approved by
Instructions; it being understood that the Custodian shall have no liability or
responsibility for determining whether the approval of any Subcustodian or
Securities System has been proper under the 1940 Act or any rule or regulation
thereunder.
Upon receipt of Instructions, the Custodian agrees to cease the
employment of any Subcustodian or Securities System with respect to the
Customer, and if desirable and practicable, appoint a replacement subcustodian
or securities system in accordance with the provisions of this Section. In
addition, the Custodian may, at any time in its discretion, upon written
notification to the Customer, terminate the employment of any Subcustodian or
Securities System.
Upon request of the Customer, the Custodian shall deliver to the
Customer annually a certificate stating: (a) the identity of each
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non-U.S. Subcustodian and non-U.S. Securities System then acting on behalf of
the Custodian and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such non-U.S Subcustodian and
non-U.S. Securities System; (b) the countries in which each non-U.S.
Subcustodian or non-U.S. Securities System is located; and (c) so long as Rule
17f-5 requires the Customer's Board of Directors to directly approve its foreign
custody arrangements, such other information relating to such non-U.S.
Subcustodians and non-U.S. Securities Systems as may reasonably be requested by
the Customer to ensure compliance with Rule 17f-5. So long as Rule 17f-5
requires the Customer's Board of Directors to directly approve its foreign
custody arrangements, the Custodian also shall furnish annually to the Customer
information concerning such non-U.S. Subcustodians and non-U.S. Securities
Systems similar in kind and scope as that furnished to the Customer in
connection with the initial approval of this Agreement. The Custodian agrees to
promptly notify the Customer if, in the normal course of its custodial
activities, the Custodian has reason to believe that any non-U.S. Subcustodian
or non-U.S. Securities System has ceased to be a qualified U.S. bank or an
eligible foreign custodian each within the meaning of Rule 17f-5 or has ceased
to be subject to an exemptive order from the SEC.
5. USE OF SUBCUSTODIAN. With respect to Property in an Account which is
maintained by the Custodian in the custody of a Subcustodian employed pursuant
to Section 4:
(a) The Custodian will identify on its books as belonging to the
Customer on behalf of a Portfolio, any Property held by such Subcustodian.
(b) Any Property in an Account held by a Subcustodian will be subject
only to the instructions of the Custodian or its agents unless otherwise agreed
between Customer and Custodian.
(c) Property deposited with a Subcustodian will be maintained in an
account holding only assets for customers of the Custodian.
(d) Any agreement the Custodian shall enter into with a non-U.S.
Subcustodian with respect to the holding of Property shall require that (i) the
Account will be adequately indemnified or its losses adequately insured; (ii)
the Securities are not subject to any right, charge, security interest, lien or
claim of any kind in favor of such Subcustodian or its creditors except a claim
for payment in accordance with such agreement for their safe custody or
administration and expenses related thereto, (iii) beneficial ownership of such
Securities be freely transferable without the
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payment of money or value other than for safe custody or administration and
expenses related thereto, (iv) adequate records will be maintained identifying
the Property held pursuant to such Agreement as belonging to the Custodian, on
behalf of its customers and (v) to the extent permitted by applicable law,
officers of or auditors employed by, or other representatives of or designated
by, the Custodian, including the independent public accountants of or designated
by, the Customer be given access to the books and records of such Subcustodian
relating to its actions under its agreement pertaining to any Property held by
it thereunder or confirmation of or pertinent information contained in such
books and records be furnished to such persons designated by the Custodian.
6. USE OF SECURITIES SYSTEM. With respect to Property in the Account(s)
which are maintained by the Custodian or any Subcustodian in the custody of a
Securities System employed pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian will be required by its
agreement with the Custodian to, identify on its books such Property as being
held for the account of the Custodian or Subcustodian for its customers.
(b) Any Property held in a Securities System for the account of the
Custodian or a Subcustodian will be subject only to the instructions of the
Custodian or such Subcustodian, as the case may be.
(c) Property deposited with a Securities System will be maintained in
an account holding only assets for customers of the Custodian or Subcustodian,
as the case may be, unless precluded by applicable law, rule, or regulation.
(d) The Custodian shall provide the Customer with any report obtained
by the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities deposited in the
Securities System.
7. AGENTS. The Custodian may at any time or times in its sole
discretion appoint (or remove) any other U.S. bank or trust company which is
itself qualified under the 1940 Act to act as custodian, as its agent to carry
out such of the provisions of this Agreement as the Custodian may from time to
time direct; PROVIDED, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities hereunder.
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8. RECORDS, OWNERSHIP OF PROPERTY, STATEMENTS, OPINIONS OF INDEPENDENT
CERTIFIED PUBLIC Accountants.
(a) The ownership of the Property whether Securities, Cash and/or other
property, and whether held by the Custodian or a Subcustodian or in a Securities
System as authorized herein, shall be clearly recorded on the Custodian's books
as belonging to the appropriate Account and not for the Custodian's own
interest. The Custodian shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions for each Account.
All accounts, books and records of the Custodian relating thereto shall be open
to inspection and audit at all reasonable times during normal business hours by
any person designated by the Customer. All such accounts shall be maintained and
preserved in the form reasonably requested by the Customer. The Custodian will
supply to the Customer from time to time, as mutually agreed upon, a statement
in respect to any Property in an Account held by the Custodian or by a
Subcustodian. In the absence of the filing in writing with the Custodian by the
Customer of exceptions or objections to any such statement within sixty (60)
days of the mailing thereof, the Customer shall be deemed to have approved such
statement and in such case or upon written approval of the Customer of any such
statement, such statement shall be presumed to be for all purposes correct with
respect to all information set forth therein.
(b) The Custodian shall take all reasonable action as the Customer may
request to obtain from year to year favorable opinions from the Customer's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Customer's Form
N-1A and the Customer's Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements of the SEC.
(c) At the request of the Customer, the Custodian shall deliver to the
Customer a written report prepared by the Custodian's independent certified
public accountants with respect to the services provided by the Custodian under
this Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding Cash and
Securities, including Cash and Securities deposited and/or maintained in a
securities system or with a Subcustodian. Such report shall be of sufficient
scope and in sufficient detail as may reasonably be required by the Customer and
as may reasonably be obtained by the Custodian.
(d) The Customer may elect to participate in any of the electronic
on-line service and communications systems offered by
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the Custodian which can provide the Customer, on a daily basis, with the ability
to view on-line or to print on hard copy various reports of Account activity and
of Securities and/or Cash being held in any Account. To the extent that such
service shall include market values of Securities in an Account, the Customer
hereby acknowledges that the Custodian now obtains and may in the future obtain
information on such values from outside sources that the Custodian considers to
be reliable and the Customer agrees that the Custodian (i) does not verify nor
represent or warrant either the reliability of such service nor the accuracy or
completeness of any such information furnished or obtained by or through such
service and (ii) shall be without liability in selecting and utilizing such
service or furnishing any information derived therefrom.
9. HOLDING OF SECURITIES, NOMINEES, ETC. Securities in an Account which
are held by the Custodian or any Subcustodian may be held by such entity in the
name of the Customer, on behalf of the appropriate Portfolio, in the Custodian's
or Subcustodian's name, in the name of the Custodian's, Subcustodian's or
Securities System's nominee, or in bearer form. Securities that are held by a
Subcustodian or which are eligible for deposit in a Securities System as
provided above may be maintained with the Subcustodian or the Securities System
in an account for the Custodian's or Subcustodian's customers, unless prohibited
by law, rule, or regulation. The Custodian or Subcustodian, as the case may be,
may combine certificates representing Securities held in an Account with
certificates of the same issue held by it as fiduciary or as a custodian. In the
event that any Securities in the name of the Custodian or its nominee or held by
a Subcustodian and registered in the name of such Subcustodian or its nominee
are called for partial redemption by the issuer of such Security, the Custodian
may, subject to the rules or regulations pertaining to allocation of any
Securities System in which such Securities have been deposited, allot, or cause
to be allotted, the called portion of the respective beneficial holders of such
class of security in any manner the Custodian deems to be fair and equitable.
10. PROXIES, ETC. With respect to any proxies, notices, reports or
other communications relative to any of the Securities in any Account, the
Custodian shall perform such services and only such services relative thereto as
are (i) set forth in Section 3 of this Agreement, (ii) described in Exhibit B
attached hereto (as such service therein described may be in effect from time to
time) (the "Proxy Service") and (iii) as may otherwise be agreed upon between
the Custodian and the Customer. The liability and responsibility of the
Custodian in connection with the Proxy Service referred to in (ii) of the
immediately preceding sentence and in connection with any additional services
which the Custodian
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and the Customer may agree upon as provided in (iii) of the immediately
preceding sentence shall be as set forth in the description of the Proxy Service
and as may be agreed upon by the Custodian and the Customer in connection with
the furnishing of any such additional service and shall not be affected by any
other term of this Agreement. Neither the Custodian nor its nominees or agents
shall vote upon or in respect of any of the Securities in an Account, execute
any form of proxy to vote thereon, or give any consent or take any action
(except as provided in Section 3) with respect thereto except upon the receipt
of Instructions relative thereto.
11. SEGREGATED ACCOUNT. To assist the Customer in complying with the
requirements of the 1940 Act and the rules and regulations thereunder, the
Custodian shall, upon receipt of Instructions, establish and maintain a
segregated account or accounts on its books for and on behalf of a Portfolio.
12. SETTLEMENT PROCEDURES.
(a) The proceeds from the sale or exchange of Securities will be
credited and the cost of such Securities purchased or acquired will be debited
to the Account in accordance with the schedule specified in the Custodian's
operating guidelines in effect from time to time. Upon the execution and
delivery of this Agreement, the Customer acknowledges receipt of the Custodian's
operating guidelines in effect on the date hereof. Notwithstanding the preceding
sentence, settlement and payment for Securities received for an Account and
delivery of Securities maintained for an Account may be effected in accordance
with the customary or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivering Securities to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or dealer)
against a receipt with the expectation of receiving later payment for such
Securities from such purchaser or dealer. The Custodian shall not be liable for
any loss which results from effecting transactions in accordance with the
customary or established securities trading or securities processing practices
and procedures in the applicable jurisdiction or market.
(b) The Custodian shall not be required to comply with any Instructions
to settle the purchase of any securities for an Account, unless there are
sufficient immediately available funds in the Account, PROVIDED THAT, if, after
all expenses, debits and withdrawals ("Debits") applicable to the Account have
been made and if after all Conditional Credits, as defined below, applicable to
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the Account have been made final entries as set forth in (d) below, the amount
of immediately available funds in such Account is at least equal to the
aggregate purchase price of all securities for which the Custodian has received
Instructions to settle on that date ("Settlement Date"), the Custodian, upon
settlement, shall credit the Securities to an Account by making a final entry on
its books and records.
(c) Notwithstanding the foregoing, if, after all Debits applicable to
the Account have been made, there remains outstanding any Conditional Credit
applicable to the Account or the amount of immediately available funds in such
Account is less than the aggregate purchase price of all securities for which
the Custodian has received Instructions to settle on the Settlement Date, the
Custodian, upon settlement, may credit the securities to the applicable Account
by making a conditional entry on its books and records ("Conditional Credit"),
pending receipt of sufficient immediately available funds in the Account.
(d) If, within a reasonable time from the posting of a Conditional
Credit and after all Debits applicable to the Account have been made,
immediately available funds at least equal to the aggregate purchase price of
all securities subject to a Conditional Credit on a Settlement Date are
deposited into the Account, the Custodian shall make the Conditional Credit a
final entry on its books and records. In such case, the Customer shall be liable
to the Custodian only for late charges at a rate mutually agreed upon in writing
by the Custodian and the Customer.
(e) If, within a reasonable time from the posting of a Conditional
Credit and after all Debits applicable to the Account have been made,
immediately available funds at least equal to the aggregate purchase price of
all securities subject to a Conditional Credit on a Settlement Date are not
deposited into the Account, the Customer, authorizes the Custodian, as agent, to
sell the securities and credit the applicable Account with the proceeds of such
sale. In such case, the Customer shall be liable to the Custodian for any
deficiencies, out-of-pocket costs and expenses associated with the sale of the
securities, including but not limited to, shortfalls in the sales proceeds.
(f) The Customer agrees that it will not use the Account to facilitate
the purchase of securities without sufficient funds in the Account (which funds
shall not include the proceeds of the sale of the purchased securities).
13. PERMITTED TRANSACTIONS. The Customer agrees that it will cause
transactions to be made pursuant to this Agreement only upon
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Instructions in accordance Section 14 and only for the purposes listed below.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise
become payable.
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses.
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed.
(h) In connection with any loans, but only against receipt of
collateral as specified in Instructions which shall reflect any restrictions
applicable to the Customer.
(i) For the purpose of redeeming shares of the capital stock of the
Customer against delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer against
delivery of the shares to be redeemed to the Custodian, a Subcustodian or the
Customer's transfer agent.
(k) For delivery in accordance with the provisions of any agreement
among the Customer, on behalf of a Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc., relating to compliance with
the rules of The Options Clearing Corporation, the Commodities Futures Trading
Commission and of any registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Customer.
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(l) For release of Securities to designated brokers under covered call
options, PROVIDED, HOWEVER, that such Securities shall be released only upon
payment to the Custodian of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Custodian will receive the Securities previously deposited from
the broker. The Custodian will act strictly in accordance with Instructions in
the delivery of Securities to be held in escrow and will have no responsibility
or liability for any such Securities which are not returned promptly when due
other than to make proper request for such return.
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related transactions.
(n) Upon the termination of this Agreement as set forth in Section 20.
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no obligation to
verify the purpose for which a transaction is being effected and shall have no
liability, subject to the provisions of Section 14, for following an Instruction
in connection with a transaction not provided for above.
14. INSTRUCTIONS. The term "Instructions" means instructions from the
Customer in respect of any of the Custodian's duties hereunder which have been
received by the Custodian at its address set forth in Section 21 below (i) in
writing (including, without limitation, facsimile transmission) or by tested
telex signed or given by such one or more person or persons as the Customer
shall have from time to time authorized in writing to give the particular class
of Instructions in question and whose name and (if applicable) signature and
office address have been filed with the Custodian, or (ii) which have been
transmitted electronically through an electronic on-line service and
communications system offered by the Custodian or other electronic instruction
system acceptable to the Custodian, subject to such additional terms and
conditions the Custodian may reasonably require or (iii) a telephonic or oral
communication by one or more persons as the Customer shall have from time to
time authorized to give the particular class of Instructions in question and
whose name has been filed with the Custodian; or (iv) upon receipt of such other
form of instructions as the Customer may from time to time authorize in writing
and which the Custodian has agreed in writing to accept. Instructions in the
form of oral communications shall
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be confirmed by the Customer by tested telex or writing in the manner set forth
in clause (i) above, but the lack of such confirmation shall in no way affect
any action taken by the Custodian in reliance upon such oral instructions prior
to the Custodian's receipt of such confirmation. Instructions may relate to
specific transactions or to types or classes of transactions, and may be in the
form of standing instructions.
The Custodian shall have the right to assume in the absence of notice
to the contrary from the Customer that any person whose name is on file with the
Custodian pursuant to this Section has been authorized by the Customer to give
the Instructions in question and that such authorization has not been revoked.
The Custodian may act upon and conclusively rely on, without any liability to
the Customer or any other person or entity for any losses resulting therefrom,
any Instructions reasonably believed by it to be furnished by the proper person
or persons as provided above.
15. STANDARD OF CARE. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Custodian which are not the contrary to the provisions
of this Agreement. The Custodian will use reasonable care with respect to the
safekeeping of Property in each Account and, except as otherwise expressly
provided herein, in carrying out its obligations under this Agreement. So long
as and to the extent that it has exercised reasonable care, the Custodian shall
not be responsible for the title, validity or genuineness of any Property or
other property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement and shall be held harmless in acting upon, and may
conclusively rely on, without liability for any loss resulting therefrom, any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed or furnished by the proper party or parties,
including, without limitation, Instructions, and shall be indemnified by the
Customer for any losses, damages, costs and expenses (including, without
limitation, the fees and expenses of counsel) incurred by the Custodian and
arising out of action taken or omitted with reasonable care by the Custodian
hereunder or under any Instructions. The Custodian shall be liable to the
Customer for any act or omission to act of any Subcustodian to the same extent
as if the Custodian committed such act itself, PROVIDED THAT if Customer by
Instructions selects any U.S. Subcustodian or a non-U.S. Subcustodian which, at
the time of selection is no part of the Custodian's existing global custody
network, the Custodian shall be only liable for its own negligence. With respect
to a Securities System, the Custodian shall only be responsible or liable for
losses arising from employment of such Securities System caused by the
Custodian's own failure to exercise
-13-
reasonable care. In the event of any loss to the Customer by reason of the
failure of the Custodian or a Subcustodian to utilize reasonable care, the
Custodian shall be liable to the Customer to the extent of the Customer's actual
damages at the time such loss was discovered without reference to any special
conditions or circumstances. In no event shall the Custodian be liable for any
consequential or special damages. The Custodian shall be entitled to rely, and
may act, on advice of counsel (who may be counsel for the Customer) on all
matters and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
In the event the Customer subscribes to an electronic on-line service
and communications system offered by the Custodian, the Customer shall be fully
responsible for the security of the Customer's connecting terminal, access
thereto and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards with respect thereto and agree to
defend and indemnify the Custodian and hold the Custodian harmless from and
against any and all losses, damages, costs and expenses (including the fees and
expenses of counsel) incurred by the Custodian as a result of any improper or
unauthorized use of such terminal by the Customer or by any others.
All collections of funds or other property paid or distributed in
respect of Securities in an Account, including funds involved in third-party
foreign exchange transactions, shall be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have no
liability for any loss occasioned by delay in the actual receipt of notice by
the Custodian or by a Subcustodian of any payment, redemption or other
transaction regarding Securities in each Account in respect of which the
Custodian has agreed to take action as provided in Section 3 hereof. The
Custodian shall not be liable for any loss resulting from, or caused by, or
resulting from acts of governmental authorities (whether de jure or de facto),
including, without limitation, nationalization, expropriation, and the
imposition of currency restrictions; devaluations of or fluctuations in the
value of currencies; changes in laws and regulations applicable to the banking
or securities industry; market conditions that prevent the orderly execution of
securities transactions or affect the value of Property; acts of war, terrorism,
insurrection or revolution; strikes or work stoppages; the inability of a local
clearing and settlement system to settle transactions for reasons beyond the
control of the Custodian; hurricane, cyclone, earthquake, volcanic eruption,
nuclear fusion, fission or radioactivity, or other acts of God.
-14-
The Custodian shall have no liability in respect of any loss, damage or
expense suffered by the Customer, insofar as such loss, damage or expense arises
from the performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for the Customer by
entities other than the Custodian prior to the Custodian's employment under this
Agreement.
The provisions of this Section shall survive termination of this
Agreement.
16. INVESTMENT LIMITATIONS AND LEGAL OR CONTRACTUAL RESTRICTIONS OR
REGULATIONS. The Custodian shall not be liable to the Customer and the Customer
agrees to indemnify the Custodian and its nominees, for any loss, damage or
expense suffered or incurred by the Custodian or its nominees arising out of any
violation of any investment restriction or other restriction or limitation
applicable to the Customer or any Portfolio pursuant to any contract or any law
or regulation. The provisions of this Section shall survive termination of this
Agreement.
17. FEES AND EXPENSES. The Customer agrees to pay to the Custodian such
compensation for its services pursuant to this Agreement as may be mutually
agreed upon in writing from time to time and the Custodian's reasonable
out-of-pocket or incidental expenses in connection with the performance of this
Agreement, including (but without limitation) legal fees as described herein
and/or deemed necessary in the judgment of the Custodian to keep safe or protect
the Property in an Account. The Customer hereby agrees to hold the Custodian
harmless from any liability or loss resulting from any taxes or other
governmental charges, and any expense related thereto, which may be imposed, or
assessed with respect to any Property in an Account and also agrees to hold the
Custodian, its Subcustodians, and their respective nominees harmless from any
liability as a record holder of Property in such Account. The Custodian is
authorized to charge the applicable Account for such items and the Custodian
shall have a lien on the Property in the applicable Account for any amount
payable to the Custodian under this Agreement, including, but not limited to,
amounts payable pursuant to paragraph (e) of Section 12 and pursuant to
indemnities granted by the Customer under this Agreement. The provisions of this
Section shall survive the termination of this Agreement.
18. TAX RECLAIMS. With respect to withholding taxes deducted and which
may be deducted from any income received from any Property in an Account, the
Custodian shall perform such services with respect thereto as are described in
Exhibit C, attached hereto, and shall in connection therewith be subject to the
-15-
standard of care set forth in such Exhibit C. Such standard of care shall not be
affected by any other term of this Agreement.
19. AMENDMENT, MODIFICATIONS, ETC. No provision of this Agreement may
be amended, modified or waived except in a writing signed by the parties hereto.
No waiver of any provision hereto shall be deemed a continuing waiver unless it
is so designated. No failure or delay on the part of either party in exercising
any power or right under this Agreement operates as a waiver, nor does any
single or partial exercise of any power or right preclude any other or further
exercise thereof or the exercise of any other power or right.
20. TERMINATION.
(a) TERMINATION OF ENTIRE AGREEMENT. This Agreement may be terminated
by the Customer at any time by written notice or by the Custodian by the giving
of one hundred twenty (120) days written notice to the Customer; PROVIDED that
such written notice by the Customer shall specify the names of the persons to
whom the Custodian shall deliver the Securities in each Account and to whom the
Cash in each Account shall be paid. If notice of termination is given by the
Custodian, the Customer shall, within one hundred twenty (120) days following
the giving of such notice, deliver to the Custodian a written notice specifying
the names of the persons to whom the Custodian shall deliver the Securities in
each Account and to whom the Cash in each Account shall be paid. In either case,
the Custodian will deliver such Securities and Cash to the persons so specified,
after deducting therefrom any amounts which the Custodian determines to be owed
to it under Sections 12, 17, and 23. In addition, the Custodian may in its
discretion withhold from such delivery such Cash and Securities as may be
necessary to settle transactions pending at the time of such delivery. The
Customer grants to the Custodian a lien and right of setoff against the Account
and all Property held therein from time to time in the full amount of the
foregoing obligations. If within one hundred twenty (120) days following the
giving of a notice of termination by the Custodian, the Custodian does not
receive from the Customer a written notice specifying the names of the persons
to whom the Custodian shall deliver the Securities in each Account and to whom
the Cash in such Account shall be paid, the Custodian, at its election, may
deliver such Securities and pay such Cash to a bank or trust company doing
business in the State of New York to be held and disposed of pursuant to the
provisions of this Agreement, or may continue to hold such Securities and Cash
until a written notice as aforesaid is delivered to the Custodian, provided that
the Custodian's obligations shall be limited to safekeeping.
-16-
(b) TERMINATION AS TO ONE OR MORE PORTFOLIOS. This Agreement may be
terminated by the Customer as to one or more Portfolio(s) (but less than all of
the Portfolios) at any time by delivery of an amended Exhibit A deleting such
Portfolio(s). This Agreement may be terminated by the Custodian as to one or
more Portfolio(s) (but less than all of the Portfolios) by delivery of an
amended Exhibit A deleting such Portfolio(s), in which case termination as to
such deleted Portfolio(s) shall take effect one hundred twenty (120) days after
the date of such delivery, or such earlier time as mutually agreed. The
execution and delivery of an amended Exhibit A which deletes one or more
Portfolio(s) shall constitute a termination of this Agreement only with respect
to such deleted Portfolio(s), shall be governed by the preceding provisions of
Section 20 as to the identification of a successor custodian and the delivery of
Cash and Securities of the Portfolio(s) so deleted to such successor custodian,
and shall not affect the obligations of the Custodian and the Customer hereunder
with respect to the other Portfolio(s) set forth in Exhibit A, as amended from
time to time.
21. NOTICES. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or notices in
connection herewith (a) shall be in writing, hand delivered or sent by telex,
telegram, cable, facsimile or other means of electronic communication agreed
upon by the parties hereto addressed:
if to the Customer, to:
Xxxxxxx Xxxxxxx
0000 Xxxxxxxxxxxxxx Xxxx, XX0X
Xxx Xxxxxxx, Xxxxx 00000
Phone: (000) 000-0000
Facsimile: (210) ____________
if to the Custodian, to:
Xxxxx Xxxxxxx
The Northern Trust Company
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
or in either case to such other address as shall have been furnished to the
receiving party pursuant to the provisions hereof and (b) shall be deemed
effective when received, or, in the case of
-17-
a telex, when sent to the proper number and acknowledged by a proper answerback.
22. SEVERAL OBLIGATIONS OF THE PORTFOLIOS. With respect to any
obligations of the Customer on behalf of each Portfolio and each of its related
Accounts arising out of this Agreement, the Custodian shall look for payment or
satisfaction of any obligation solely to the assets and Property of the
Portfolio and such Accounts to which such obligation relates as though the
Customer had separately contracted with the Custodian by separate written
instrument with respect to each Portfolio and its related Accounts.
23. SECURITY FOR PAYMENT. To secure payment of all obligations due
hereunder, the Customer hereby grants to the Custodian a continuing security
interest in and right of setoff against each Account and all Property held
therein from time to time in the full amount of such obligations; PROVIDED THAT,
if there is more than one Account and the obligations secured pursuant to this
Section can be allocated to a specific Account or the Portfolio related to such
Account, such security interest and right of setoff will be limited to Property
held for that Account only and its related Portfolio. Should the Customer fail
to pay promptly any amounts owed hereunder, the Custodian shall be entitled to
use available Cash in the Account or applicable Accounts, as the case may be,
and to dispose of Securities in the Account or such applicable Account as is
necessary. In any such case and without limiting the foregoing, the Custodian
shall be entitled to take such other action(s) or exercise such other options,
powers and rights as the Custodian now or hereafter has as a secured creditor
under the New York Uniform Commercial Code or any other applicable law.
24. REPRESENTATIONS AND WARRANTIES.
(a) The Customer hereby represents and warrants to the Custodian that:
(i) the employment of the Custodian and the allocation of
fees, expenses and other charges to any Account as herein provided, is
not prohibited by law or any governing documents or contracts to which
the Customer is subject;
(ii) the terms of this Agreement do not violate any obligation
by which the Customer is bound, whether arising by contract, operation
of law or otherwise;
(iii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be
-18-
binding upon the Customer and each Portfolio in accordance with its
terms; and
(iv) the Customer will deliver to the Custodian such evidence
of such authorization as the Custodian may reasonably require, whether
by way of a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer that:
(i) the terms of this Agreement do not violate any obligation
by which the Custodian is bound, whether arising by contract, operation
of law or otherwise;
(ii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon the
Custodian in accordance with its terms;
(iii) the Custodian will deliver to the Customer such evidence
of such authorization as the Customer may reasonably require, whether
by way of a certified resolution or otherwise; and
(iv) the Custodian is qualified as a custodian under Section
26(a) of the 1940 Act and warrants that it will remain so qualified or
upon ceasing to be so qualified shall promptly notify the Customer in
writing.
25. GOVERNING LAW AND SUCCESSORS AND ASSIGNS. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Custodian.
26. PUBLICITY. Customer shall furnish to Custodian at its office
referred to in Section 21 above, (a) at least ten (10) days prior to filing or
first use, as the case may be, drafts of its registration statement on Form N-1A
(including amendments) and prospectus supplements or amendments relating to the
Customer, or (b) at least two (2) business day prior to filing or first use, as
the case may be, as proposed advertising or sales literature relating to the
Custodian. The Customer will not make any other written or oral representation
about the Custodian without its prior written consent. The provisions of this
Section shall survive the termination of this Agreement.
27. SUBMISSION TO JURISDICTION. Any suit, action or proceeding arising
out of this Agreement may be instituted in any State or Federal court sitting in
the City of Xxx Xxxx, Xxxxx xx
-00-
Xxx Xxxx, Xxxxxx Xxxxxx of America, and the Customer irrevocably submits to the
non-exclusive jurisdiction of any such court in any such suit, action or
proceeding and waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of venue of any such suit,
action or proceeding brought in such a court and any claim that such suit,
action or proceeding was brought in an inconvenient forum.
28. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties hereto.
29. CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is publicly
available when provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required or requested to be
disclosed by any bank or other regulatory examiner of the Custodian, Customer,
or any Subcustodian, any auditor of the parties hereto, by judicial or
administrative process or otherwise by applicable law or regulation.
30. SEVERABILITY. If any provision of this Agreement is determined to
be invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other provision of this Agreement.
31. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter herein and supersedes all
prior agreements and understandings relating to such subject matter.
Notwithstanding the foregoing, nothing in this Agreement shall affect any other
agreement between the parties related to other subject matters.
-20-
32. HEADINGS. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
USAA MUTUAL FUND, INC.
By:
Title:
THE NORTHERN TRUST COMPANY
By:
Title:
-21-
EXHIBIT A
To Custodian Agreement dated as of________, 2003 between The Northern
Trust Company and USAA Mutual Fund, Inc.
LIST OF PORTFOLIOS
The following is a list of Portfolio(s) referred to in the first
WHEREAS clause of the above-referred to Custodian Agreement. Terms used herein
as defined terms, unless otherwise defined, shall have the meanings ascribed to
them in the above-referred to Custodian Agreement.
USAA S&P 500 Index Fund
Dated as of: ______, 2003 USAA MUTUAL FUND, INC.
By:
Title:
THE NORTHERN TRUST COMPANY
By:
Title:
EXHIBIT B
To Custodian Agreement dated as of __________, 2003 between The
Northern Trust Company and USAA Mutual Fund, Inc.
PROXY SERVICE
The following is a description of the Proxy Service referred to in
Section 10 of the above referred to Custodian Agreement. Terms used herein as
defined terms shall have the meanings ascribed to them therein, unless otherwise
defined below.
The Custodian currently provides proxy voting services, including event
notification, voting for annual general meetings and extraordinary meetings, in
partnership with the following market specialists:
Institutional Shareholder Services (ISS), for all global proxy services
ex-U.S. ADP, for U.S. proxy services
Proxy voting services are currently provided in the markets listed
below:
Argentina Malaysia
Australia Mexico
Austria Netherlands
Belgium New Zealand
Canada Norway
China Philippines
Czech Republic Poland
Denmark Portugal
Euroclear Singapore
Finland Slovak Republic
France South Africa
Germany South Korea
Greece Spain
Hong Kong Sri Lanka
Hungary Sweden
Indonesia Switzerland
Ireland Thailand
Italy United Kingdom
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Japan United States
Kenya Venezuela
For those markets not covered by our standard proxy voting service, the
Fund Manager can contact Custodian directly with voting instructions on specific
events; Custodian will use reasonable efforts to vote these proxies for the
customer.
All proxy voting instructions must be received by Custodian before
specified deadline for execution. Execution costs attributable to settlement and
custody activities in specific markets, such as stamp duty, securities
re-registration fees, and will be passed through where applicable.
Custodian may at its sole discretion change its arrangement for
provision of proxy service from time to time, provided such change is
communicated promptly to the Customer in writing.
Dated as of: _____, 2003 USAA MUTUAL FUND, INC.
By:
Title:
THE NORTHERN TRUST COMPANY
By:
Title:
-24-
EXHIBIT C
To Custodian Agreement dated as of ________, 2003 between The Northern
Trust Company and USAA Mutual Fund, Inc.
TAX RECLAIMS
Pursuant to Section 18 of the above referred to Custodian Agreement,
the Custodian shall perform the following services with respect to withholding
taxes imposed or which may be imposed on income from Property in any Account.
Terms used herein as defined terms shall, unless otherwise defined, have the
meanings ascribed to them in the above referred to Custodian Agreement.
When withholding tax has been deducted with respect to income from any
Property in an Account, the Custodian will actively pursue, on a reasonable
efforts basis, the reclaim process, PROVIDED THAT the Custodian shall not be
required to institute any legal or administrative proceeding against any
Subcustodian or other person. The Custodian will provide fully detailed
advices/vouchers to support reclaims submitted to the local authorities by the
Custodian or its designee. In all cases of withholding, the Custodian will
provide full details to the Customer. If exemption from withholding at the
source can be obtained in the future, the Custodian will notify the Customer and
advise what documentation, if any, is required to obtain the exemption. Upon
receipt of such documentation from the Customer, the Custodian will file for
exemption on the Customer's behalf and notify the Customer when it has been
obtained.
In connection with providing the foregoing service, the Custodian shall
be entitled to apply categorical treatment of the Customer according to the
Customer's nationality, the particulars of its organization and other relevant
details that shall be supplied by the Customer. It shall be the duty of the
Customer to inform the Custodian of any change in the organization, domicile or
other relevant fact concerning tax treatment of the Customer and further to
inform the Custodian if the Customer is or becomes the beneficiary of any
special ruling or treatment not applicable to the general nationality and
category or entity of which the Customer is a part under general laws and treaty
provisions. The Custodian may rely on any such information provided by the
Customer.
In connection with providing the foregoing service, the Custodian may
also rely on professional tax services published by a major international
accounting firm and/or advice received from a Subcustodian in the jurisdictions
in question. In addition, the Custodian may seek the advice of counsel or other
professional tax advisers in such jurisdictions. The Custodian is entitled to
rely, and may act, on information set forth in such services and on advice
received from a Subcustodian, counsel or other professional tax advisers and
shall be without liability to the Customer for any action reasonably taken or
omitted pursuant to information contained in such services or such advice.
Dated as of: ______, 2003 USAA MUTUAL FUND, INC.
By:
Title:
THE NORTHERN TRUST COMPANY
By:
Title:
-2-
EXHIBIT 8(d)
January 09, 2003
USAA Mutual Fund, Inc.,
USAA Investment Trust,
USAA Tax Exempt Fund, Inc.,
USAA State Tax-Free Trust, and
USAA Life Investment Trust, not in their individual capacities but on behalf
of and for the benefit of the series of funds comprising each such
Borrower as set forth on SCHEDULE A hereto
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx, President
Xxxxx X. Xxxxxxxxx, President
Ladies and Gentlemen:
This Facility Agreement Letter (this "AGREEMENT") sets forth the terms
and conditions for loans (each a "LOAN" and collectively the "LOANS") which USAA
Capital Corporation ("CAPCO"), agrees to make during the period commencing
January 09, 2003 and ending January 08, 2004 (the "FACILITY PERIOD") to USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust, and each investment company which
may become a party hereto pursuant to the terms of this Agreement (each a
"BORROWER" and collectively the "BORROWERS"), each of which is executing this
Agreement not in its individual capacity, but on behalf of and for the benefit
of the series of funds comprising each such Borrower as set forth on SCHEDULE A
(as hereafter modified or amended in accordance with the terms hereof) (each a
"FUND" and collectively the "FUNDS"), under a master revolving credit facility
(the "FACILITY"). This Agreement replaces in its entirety that certain Facility
Agreement Letter dated January 10, 2002, as heretofore amended or modified,
between the Borrowers and CAPCO. CAPCO and the Borrowers hereby agree as
follows:
1. AMOUNT. The aggregate principal amount of the Loans to be advanced
under this Facility shall not exceed, at any one time outstanding, U.S.
$400,000,000 (the "COMMITMENT"). The aggregate principal amount of the Loans
which may be borrowed by a Borrower for the benefit of a particular Fund under
the Facility and the Other Facility (defined below) shall not exceed the
percentage (the "BORROWING LIMIT") of the total assets of such Fund as set forth
on SCHEDULE A.
2. PURPOSE AND LIMITATIONS ON BORROWINGS. Each Borrower will use the
proceeds of each Loan made to it solely for temporary or emergency purposes of
the Fund for whose benefit it is borrowing in accordance with such Fund's
Borrowing Limit and prospectus in effect at the time of such Loan. Portfolio
securities may not be purchased by a Fund while there is a Loan outstanding
under the Facility and/or a loan outstanding under the Other Facility (defined
below) for the benefit of such Fund, if the aggregate amount of such Loan and
such other loan under the Other Facility exceeds 5% of the total assets of such
Fund. The Borrowers will not, and will not permit any Fund to, directly or
indirectly, use any proceeds of any Loan for any purpose, which would violate
any provision of any applicable statute, regulation, order, or restriction.
3. BORROWING RATE AND MATURITY OF LOANS. CAPCO shall make Loans to a
Borrower and the principal amount of each Loan outstanding from time to time
shall bear interest from the date each such Loan is made to, but excluding the
date of payment in full thereof, at a rate per annum equal to the rate at which
CAPCO obtains funding in the capital markets. Interest on the Loans shall be
calculated on the basis of a year of 360 days and the actual days elapsed but
shall not exceed the highest lawful rate. Each loan will be for an established
number of days agreed upon by the applicable Borrower and CAPCO on or before the
date of such Loan. Notwithstanding the above, all Loans to a Borrower shall be
made
available at a rate per annum equal to the rate at which CAPCO would make loans
to affiliates and subsidiaries. Further, as to the investment companies except
USAA Life Investment Trust, if the CAPCO rate exceeds the rate at which a
Borrower could obtain funds pursuant to the Bank of America, N.A. ("Bank of
America") 364-day committed $100,000,000 Master Revolving Credit Facility, the
Borrower will in the absence of predominating circumstances, borrow from Bank of
America. Any past due principal and/or accrued interest shall bear interest at a
rate per annum equal to the aggregate of the "FEDERAL FUNDS RATE" plus 1.50
percent (150 basis points), but not to exceed the highest lawful rate, from the
date of any such payment was due, but excluding the date of payment in full
thereof, and shall be payable on demand.
4. ADVANCES, PAYMENTS, PREPAYMENTS AND READVANCES. Upon each
Borrower's request, and SUBJECT TO the terms and conditions contained herein,
CAPCO shall make Loans to each Borrower on behalf of and for the benefit of its
respective Fund(s) during the Facility Period, and each Borrower may borrow,
repay and reborrow Loans hereunder. The Loans shall be evidenced by a duly
executed and delivered Master Grid Promissory Note in the form of EXHIBIT A (the
"NOTE"). Each Loan shall be in an aggregate amount not less than U.S. $100,000
and increments of U.S. $1,000 in excess thereof. Payment of principal and
interest due with respect to each Loan shall be payable at the maturity of such
Loan and shall be made in funds immediately available to CAPCO prior to 2:00
p.m. San Antonio, Texas time on the day such payment is due, or as CAPCO shall
otherwise direct from time to time and, SUBJECT TO the terms and conditions
hereof, may be repaid with the proceeds of a new borrowing hereunder.
Notwithstanding any provision of this Agreement to the contrary, all Loans,
accrued but unpaid interest and other amounts payable hereunder shall be due and
payable upon termination of the Facility (whether by acceleration or otherwise).
5. FACILITY FEE. Beginning with the date of this Agreement and until
such time as all Loans have been irrevocably repaid to CAPCO in full, and CAPCO
is no longer obligated to make Loans, each Fund (to be allocated among the Funds
as the Borrowers deem appropriate) severally shall pay to CAPCO its allocated
share of a facility fee (the "FACILITY FEE"). The Facility Fee will be the
Borrowers' assessed proportionate share of CAPCO's operating expenses related to
obtaining/maintaining CAPCO's funding programs. The expense will be allocated by
CAPCO to the Borrower's and to the other CAPCO borrowers (CAPCO affiliates and
subsidiaries) based on the Borrowers' Commitment (as it may be reduced pursuant
to SECTION 6) as a percentage of the total amount of borrowing authorized for
all CAPCO borrowers. In no event will the Facility Fee exceed .09 of one percent
(9 basis points) of the amount of the commitment, nor will it exceed the fee
charged any other CAPCO affiliates and subsidiaries under similar loan
arrangements.
6. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENT. The Borrowers on
behalf of the applicable Funds shall have the right upon at least three business
days prior written notice to CAPCO, to terminate or reduce the unused portion of
the Commitment. Any such reduction of the Commitment shall be in the amount of
U.S. $5,000,000 or any larger integral multiple of U.S. $1,000,000 (EXCEPT that
any reduction may be in the aggregate amount of the unused Commitment). Accrued
fees with respect to the terminated Commitment shall be payable to CAPCO on the
effective date of such termination.
7. MANDATORY TERMINATION COMMITMENT. The Commitment shall automatically
terminate on the last day of the Facility Period and any Loans then outstanding
(TOGETHER WITH accrued interest thereon and any other amounts owing hereunder)
shall be due and payable on such date.
8. COMMITTED FACILITY. CAPCO acknowledges that the Facility is a
committed facility and that CAPCO shall be obligated to make any Loan requested
during the Facility Period under this Agreement, subject to the terms and
conditions hereof; PROVIDED, HOWEVER, that CAPCO shall not be obligated to make
any Loan if this Facility has been terminated by the Borrowers, or to a Borrower
on behalf of a proposed borrowing Fund, if at the time of a request for a Loan
by a Borrower (on behalf of such applicable borrowing Fund) there exists any
Event of Default or condition which, with the passage of time or giving of
notice, or both, would constitute or become an Event of Default with respect to
such
Fund.
9. LOAN REQUESTS. Each request for a Loan (each a "BORROWING NOTICE")
shall be in writing by the applicable Borrower, EXCEPT that such Borrower may
make an oral request (each an "ORAL REQUEST") PROVIDED THAT each Oral Request
shall be followed by a written Borrowing Notice within one business day. Each
Borrowing Notice shall specify the following terms ("TERMS") of the requested
Loan: (i) the date on which such Loan is to be disbursed, (ii) the principal
amount of such Loan, (iii) the Borrower which is borrowing such Loan, (iv) the
Fund(s) for whose benefit the Loan is being borrowed and the amount of the Loan
which is for the benefit of each such Fund, and (v) the requested maturity date
of the Loan. Each Borrowing Notice shall also set forth the total assets of each
Fund for whose benefit a portion of the Loan is being borrowed as of the close
of business on the day immediately preceding the date of such Borrowing Notice.
Borrowing notices shall be delivered to CAPCO by 9:00 a.m. San Antonio, Texas
time on the day the Loan is requested to be made.
Each Borrowing Notice shall constitute a representation to CAPCO by the
applicable Borrower on behalf of the proposed borrowing Fund(s) of such Borrower
that all of the representations and warranties made by such Borrower on behalf
of the applicable borrowing Fund(s) of such Borrower in SECTION 12 are true and
correct as of such date and that no Event of Default or other condition which
with the passage of time or giving of notice, or both, would result in an Event
of Default, has occurred or is occurring with respect to such borrowing Fund(s).
10. CONFIRMATIONS; CREDITING OF FUNDS; RELIANCE BY CAPCO. Upon receipt
by CAPCO of a Borrowing Notice:
(a) CAPCO shall send the applicable Borrower written
confirmation of the Terms of such Loan via facsimile or telecopy, as soon as
reasonably practicable; PROVIDED, HOWEVER, that the failure to do so shall not
affect the obligation of such Borrower;
(b) CAPCO shall make such Loan in accordance with the Terms by
transfer of the Loan amount in immediately available funds, to the account of
the applicable Borrower as specified in EXHIBIT B or as such Borrower shall
otherwise specify to CAPCO in a writing signed by an Authorized Individual (as
defined in SECTION 11) of such Borrower and sent to CAPCO via facsimile or
telecopy; and
(c) CAPCO shall make appropriate entries on the Note or the
records of CAPCO to reflect the Terms of the Loan; PROVIDED, HOWEVER, that the
failure to do so shall not affect the obligation of any borrowing Fund.
CAPCO shall be entitled to rely upon and act hereunder pursuant to any Oral
Request, which it reasonably believes to have been made by the applicable
Borrower through an Authorized Individual. If any Borrower believes that the
confirmation relating to any Loan contains any error or discrepancy from the
applicable Oral Request, such Borrower will promptly notify CAPCO thereof.
11. BORROWING RESOLUTIONS AND OFFICERS' CERTIFICATES. Prior to the
making of any Loan pursuant to this Agreement, the Borrowers shall have
delivered to CAPCO (a) the duly executed Note, (b) resolutions of each
Borrower's Trustees or Board of Directors authorizing each Borrower to execute,
deliver and perform this Agreement and the Note on behalf of the applicable
Funds, (c) an Officer's Certificate in substantially the form set forth in
EXHIBIT D, authorizing certain individuals ("AUTHORIZED INDIVIDUALS"), to take
on behalf of each Borrower (on behalf of the applicable Funds) actions
contemplated by this Agreement and the Note, and (d) the opinion of counsel to
USAA Investment Management Company, manager and advisor to the Borrowers, with
respect to such matters as CAPCO may reasonably request.
12. REPRESENTATIONS AND WARRANTIES. In order to induce CAPCO to enter
into this Agreement and to make the Loans provided for hereunder, each Borrower
hereby severally, makes on behalf of each
of its respective series of Funds comprising such Borrower the following
representations and warranties, which shall survive the execution and delivery
hereof and of the Note:
(a) ORGANIZATION, STANDING, ETC. Such Borrower is a
corporation or trust duly organized, validly existing, and in good standing
under applicable state laws and has all requisite corporate or trust power and
authority to carry on its respective businesses as now conducted and proposed to
be conducted, to enter into this Agreement and all other documents to be
executed by it in connection with the transactions contemplated hereby, to issue
and borrow under the Note and to carry out the terms hereof and thereof;
(b) FINANCIAL INFORMATION; DISCLOSURE, ETC. Such Borrower has
furnished CAPCO with certain financial statements of such Borrower with respect
to itself and the applicable Fund(s), all of which such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis and fairly present the financial position and
results of operations of such Borrower and the applicable Funds on the dates and
for the periods indicated. Neither this Agreement nor any financial statements,
reports or other documents or certificates furnished to CAPCO by such Borrower
on behalf of the applicable Fund(s) in connection with the transactions
contemplated hereby contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements contained herein or
therein in light of the circumstances when made not misleading;
(c) AUTHORIZATION; COMPLIANCE WITH OTHER INSTRUMENTS. The
execution, delivery and performance of this Agreement and the Note, and
borrowings hereunder, have been duly authorized by all necessary corporate or
trust action of such Borrower and will not result in any violation of or be in
conflict with or constitute a default under any term of the charter, by-laws or
trust agreement, as applicable, of such Borrower or of any borrowing
restrictions or prospectus or statement of additional information of such
Borrower or the applicable Fund(s), or of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Borrower on behalf of the applicable Fund(s), or result in the creation of any
mortgage, lien, charge or encumbrance upon any of the properties or assets of
the applicable Fund(s) pursuant to any such term. Such Borrower is not in
violation of any term of its respective charter, by-laws or trust agreement, as
applicable, and such Borrower and the applicable Fund(s) are not in violation of
any material term of any agreement or instrument to which they are a party, or
to the best of such Borrower's knowledge, of any judgment, decree, order,
statute, rule or governmental regulation applicable to them;
(d) SEC COMPLIANCE. Such Borrower and the applicable Fund(s)
are in compliance in all material respects with all federal and state securities
or similar laws and regulations, including all material rules, regulations and
administrative orders of the Securities and Exchange Commission (the "SEC") and
applicable Blue Sky authorities. Such Borrower and the applicable Fund(s) are in
compliance in all material respects with all of the provisions of the Investment
Company Act of 1940, and such Borrower has filed all reports with the SEC that
are required of it or the applicable Fund(s);
(e) LITIGATION. There is no action, suit or proceeding pending
or, to the best of each Borrower's knowledge, threatened against such Borrower
or the applicable Fund(s) in any court or before any arbitrator or governmental
body which seeks to restrain any of the transactions contemplated by this
Agreement or which could reasonably be expected to have a material adverse
effect on the assets or business operations of such Borrower or the applicable
Fund(s) or the ability of such applicable Fund(s) to pay and perform their
respective obligations hereunder and under the Notes; and
(f) FUNDS' OBLIGATION FOR REPAYMENT. The assets of each Fund
for whose benefit Loans are borrowed by the applicable Borrower are SUBJECT TO
and liable for such Loans. CAPCO may only seek repayment from the assets of the
Fund of a Borrower that obtained a Loan, and may not seek repayment of that Loan
from the assets of any other Fund of that Borrower.
13. AFFIRMATIVE COVENANTS OF THE BORROWERS. Until such time as all
amounts of principal, interest and other sums due to CAPCO by a Borrower
pursuant to any Loan made to such Borrower for the benefit of the applicable
Fund(s) is irrevocably paid in full, and until CAPCO is no longer obligated to
make Loans to such Borrower for the benefit of the applicable Fund(s), such
Borrower (on behalf of its respective Fund(s)) severally agrees:
(a) To deliver to CAPCO as soon as possible and in any event
within ninety (90) days after the end of each fiscal year of such Borrower and
the applicable Fund(s), Statements of Assets and Liabilities, Statements of
Operations and Statements of Changes in Net Assets of each applicable Fund for
such fiscal year, as set forth in each applicable Fund's Annual Report to
shareholders TOGETHER WITH a calculation of the maximum amount which each
applicable Fund could borrow under its Borrowing Limit as of the end of such
fiscal year;
(b) To deliver to CAPCO as soon as available and in any event
within seventy-five (75) days after the end of each semiannual period of such
Borrower and the applicable Fund(s), Statements of Assets and Liabilities,
Statement of Operations and Statements of Changes in Net Assets of each
applicable Fund as of the end of such semiannual period, as set forth in each
applicable Fund's Semiannual Report to shareholders, TOGETHER WITH a calculation
of the maximum amount which each applicable Fund could borrow under its
Borrowing Limit at the end of such semiannual period;
(c) To deliver to CAPCO prompt notice of the occurrence of any
event or condition which constitutes, or is likely to result in, a change in
such Borrower or any applicable Fund which could reasonably be expected to
materially adversely affect the ability of any applicable Fund to promptly repay
outstanding Loans made for its benefit or the ability of such Borrower or the
applicable Fund(s) to perform their respective obligations under this Agreement
or the Note;
(d) To do, or cause to be done, all things necessary to
preserve and keep in full force and effect the corporate or trust existence of
such Borrower and all permits, rights and privileges necessary for the conduct
of its businesses and to comply in all material respects with all applicable
laws, regulations and orders, including without limitation, all rules and
regulations promulgated by the SEC;
(e) To promptly notify CAPCO of any litigation, threatened
legal proceeding or investigation by a governmental authority which could
reasonably be expected to materially affect the ability of any applicable Fund
to promptly repay the outstanding Loans made for its benefit hereunder or the
ability of such Borrower or the applicable Fund(s) to otherwise perform their
respective obligations hereunder;
(f) In the event a Loan for the benefit of a particular Fund
is not repaid in full within 10 days after the date it is borrowed, and until
such Loan is repaid in full, to deliver to CAPCO, within two business days after
each Friday occurring after such 10th day, a statement setting forth the total
assets of such Fund as of the close of business on each such Friday; and
(g) Upon the request of CAPCO, which may be made by CAPCO from
time to time in the event CAPCO in good faith believes that there has been a
material adverse change in the capital markets generally, to deliver to CAPCO,
within two business days after any such request, a statement setting forth the
total assets of each Fund for whose benefit a Loan is outstanding on the date of
such request.
14. NEGATIVE COVENANTS OF THE BORROWERS. Until such time as all amounts
of principal, interest and other sums due to CAPCO by a Borrower pursuant to any
Loan made to such Borrower for the benefit of the applicable Fund(s) is
irrevocably paid in full, and until CAPCO is no longer obligated to make Loans
to such Borrower for the benefit of the applicable Fund, such Borrower (on
behalf of its respective Fund(s)) severally agrees:
(a) Unless CAPCO has breached its obligations to lend
hereunder or becomes insolvent or the subject of a receivership proceeding, not
to incur any indebtedness for borrowed money (OTHER THAN (i) pursuant to a U.S.
$100,000,000 committed master revolving credit facility with Bank of America
N.A. (the "OTHER FACILITY") and (ii) overdrafts incurred at the custodian of the
Funds from time to time in the ordinary course of business) EXCEPT the Loans,
without the prior written consent of CAPCO, which consent will not be
unreasonably withheld; and
(b) Not to dissolve or terminate its existence, or merge or
consolidate with any other person or entity, or sell all or substantially all of
its assets in a single transaction or series of related transactions (OTHER THAN
assets consisting of margin stock), each without the prior written consent of
CAPCO, which consent will not be unreasonably withheld; PROVIDED THAT a Borrower
or Fund may without such consent merge, consolidate with, or purchase
substantially all of the assets of, or sell substantially all of its assets to,
an affiliated investment company or series thereof, as provided for in Rule
17a-8 under the Investment Company Act of 1940.
15. EVENTS OF DEFAULT. If any of the following events (each an "EVENT
OF DEFAULT") shall occur (it being understood that an Event of Default with
respect to one Fund shall not constitute an Event of Default with respect to any
other Fund):
(a) A Fund shall default in the payment of principal or
interest on any Loan or any other fee due hereunder for a period of five days
after the same becomes due and payable, whether at maturity or, with respect to
any Facility Fee, at a date fixed for the payment thereof;
(b) A Fund shall default in the performance of or compliance
with any term contained in SECTION 13 and such default shall not have been
remedied within 30 days after written notice thereof shall have been given to
the applicable Borrower on behalf of such Fund by CAPCO;
(c) A Fund shall default in the performance of or compliance
with any term contained in SECTION 14;
(d) A Fund shall default in the performance of or compliance
with any other term contained herein and such default shall not have been
remedied within 30 days after written notice thereof shall have been given to
the applicable Borrower on behalf of such Fund by CAPCO;
(e) Any representation or warranty made by or on behalf of a
Fund herein or pursuant hereto shall prove to have been false or incorrect in
any material respect when made;
(f) USAA Investment Management Company or any successor
manager or investment adviser (PROVIDED THAT such successor manager or
investment advisor is a wholly-owned subsidiary of United Services Automobile
Association and/or CAPCO) shall cease to be the manager and investment advisor
of a Fund; PROVIDED THAT USAA Investment Management Company (or its successor)
shall be permitted to hire one or more of the existing subadvisors listed on
SCHEDULE B as subadvisors for any Fund and may add new subadvisors as provided
in SECTION 16(B); or
(g) An event of default shall occur and be continuing under
the Other Facility with respect to a Fund;
then, in any event, and at any time thereafter, if any Event of Default shall be
continuing, CAPCO may by written notice to the applicable Borrower (i) terminate
its commitment to make any Loan hereunder to such Borrower with respect to such
Fund, whereupon said commitment shall forthwith terminate without any other
notice of any kind and (ii) declare the principal and interest in respect of any
outstanding Loans with respect to such Fund, and all other amounts due hereunder
with respect to such Fund, to be immediately due and payable whereupon the
principal and interest in respect thereof and all other amounts due hereunder
shall become forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by the Borrowers on
behalf of the applicable Funds.
16. NEW BORROWERS; NEW FUNDS; NEW SUBADVISORS
(a) So long as no Event of Default or condition which, with
the passage of time or the giving of notice, or both, would constitute
or become an Event of Default has occurred and is continuing, and with
the prior consent of CAPCO, which consent will not be unreasonably
withheld:
(i) Any investment company that becomes part of the
same "GROUP OF INVESTMENT COMPANIES" (as that term is defined in Rule
11a-3 under the Investment Company Act of 1940) as the original
Borrowers to this Agreement, may, by submitting an amended SCHEDULE A
and EXHIBIT B to this Agreement to CAPCO (which amended SCHEDULE A and
EXHIBIT B shall replace SCHEDULE A and EXHIBIT B which are then a part
of this Agreement) and such other documents as CAPCO may reasonably
request, become a party to this Agreement and may become a "BORROWER"
hereunder; and
(ii) A Borrower may, by submitting an amended
SCHEDULE A and EXHIBIT B to this Agreement to CAPCO (which amended
SCHEDULE A and EXHIBIT B shall replace SCHEDULE A and EXHIBIT B which
are then a part of this Agreement), add additional Funds for whose
benefit such Borrower may borrow Loans. No such amendment of SCHEDULE A
to this Agreement shall amend the Borrowing Limit applicable to any
Fund without the prior consent of CAPCO.
(b) A Borrower may, by submitting an amended SCHEDULE B to
this Agreement to CAPCO (which amended SCHEDULE B shall replace the
SCHEDULE B which is then a part of this Agreement), add new
subadvisors, which are not currently subadvising any other Fund.
17. LIMITED RECOURSE. CAPCO agrees (a) that any claim, liability, or
obligation arising hereunder or under the Note whether on account of the
principal of any Loan, interest thereon, or any other amount due hereunder or
thereunder shall be satisfied only from the assets of the specific Fund for
whose benefit a Loan is borrowed and in any event in an amount not to exceed the
outstanding principal amount of any Loan borrowed for such Fund's benefit,
TOGETHER WITH accrued and unpaid interest due and owing thereon, and such Fund's
share of any other amount due hereunder and under the Note (as determined in
accordance with the provisions hereof) and (b) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Note with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Note (as determined in accordance with the provisions
hereof).
18. REMEDIES ON DEFAULT. In case any one or more Events of Default
shall occur and be continuing, CAPCO may proceed to protect and enforce its
rights by an action at law, suit in equity or other appropriate proceedings,
against the applicable Borrower on behalf of the applicable defaulting Fund(s),
as the case may be. In the case of a default in the payment of any principal or
interest on any Loan or in the payment of any fee due hereunder, the relevant
Fund(s) (to be allocated among such Funds as the Borrowers deem appropriate)
severally shall pay to CAPCO such further amount as shall be sufficient to cover
the cost and expense of collection, including, without limitation, reasonable
attorney's fees and expenses from the relevant Fund.
19. NO WAIVER OF REMEDIES. No course of dealing or failure or delay on
the part of CAPCO in exercising any right or remedy hereunder or under the Note
shall constitute a waiver of any right or remedy hereunder or under the Note,
nor shall any partial exercise of any right or remedy hereunder or under the
Note preclude any further exercise thereof or the exercise of any other right or
remedy hereunder or under the Note. Such rights and remedies expressly provided
are cumulative and
not exclusive of any rights or remedies which CAPCO would otherwise have.
20. EXPENSES. Each of the Funds severally shall pay on demand all
reasonable out-of-pocket costs and expenses (including reasonable attorney's
fees and expenses) incurred by CAPCO in connection with the collection and any
other enforcement proceedings of or regarding this Agreement, any Loan or the
Note against such Fund.
21. BENEFIT OF AGREEMENT. This Agreement and the Note shall be binding
upon and inure for the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; PROVIDED THAT no party to this
Agreement or the Note may assign any of its rights hereunder or thereunder
without the prior written consent of the other parties.
22. NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES
(A) GENERAL. Unless otherwise expressly provided herein, all notices,
requests and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed, or delivered to the applicable address or facsimile number, or (subject
to SUBSECTION (C) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
(i) if to the Borrowers to the address, facsimile number,
electronic mail address, or telephone number specified for such Person
on EXHIBIT B or to such other address, facsimile number, electronic
mail address, or telephone number as shall be designated by such party
in a notice to the other parties; and
(ii) if to CAPCO, to the address, facsimile number, electronic
mail address, or telephone number specified on EXHIBIT C or to such
other address, facsimile number, electronic mail address, or telephone
number as shall be designated by such party in a notice to the other
parties.
All such notices and other communications shall be deemed to b given or made
upon the EARLIER to occur of (i) actual receipt by the relevant party hereto ad
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by certified mail, when signed for
by or on behalf of the relevant party hereto; (C) if delivered by facsimile,
when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of
SUBSECTION (C) below), when delivered. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. This Agreement
and all other documents to be executed by it in connection with the transactions
contemplated hereby may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually-signed originals and shall be
binding on all Borrowers and the Bank. The Bank may also require that any such
documents and signatures be confirmed by a manually-signed original thereof;
PROVIDED HOWEVER, that the failure to request or deliver the same shall not
limit the effectiveness of any facsimile document or signature.
(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
drafts of loan documents and financial statements and other information as
provided in Section 13, and to distribute this Agreement and the other documents
to be executed in connection herewith for execution by the parties thereto, and
may not be used for any other purpose.
23. MODIFICATIONS. No provision of this Agreement or the Note may be
waived, modified or discharged EXCEPT by mutual written agreement of all
parties. THIS WRITTEN LOAN AGREEMENT AND THE NOTE REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES.
24. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the state of Texas without regard
to the choice of law provisions thereof. Chapter 346 of the Texas Finance Code
shall not apply to this Agreement or the Loans made hereunder.
25. TRUST DISCLAIMER. Neither the shareholders, trustees, officers,
employees and other agents of any Borrower or Fund shall be personally bound by
or liable for any indebtedness, liability or obligation hereunder or under the
Note nor shall resort be had to their private property for the satisfaction of
any obligation or claim hereunder.
26. PUBLICITY. Neither CAPCO nor the Borrowers will use any name,
trademark, or trade name of the other without that other party's prior written
consent.
If this letter correctly reflects your agreement with us, please execute both
copies hereof and return one to us, whereupon this Agreement shall be binding
upon the Borrowers (not in their individual capacity, but on behalf of their
respective Funds listed on SCHEDULE A hereto) and CAPCO.
Sincerely,
USAA CAPITAL CORPORATION
By: /S/ XXXXX X. XXXXXXXXX
------------------------
Xxxxx X. XxXxxxxxx
Senior Vice President-Treasurer
Signature to the Facility Agreement Letter dated January 9, 2003, between USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust, and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A hereto) and CAPCO.
AGREED AND ACCEPTED
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXXXXXXXXX X. XXXXX
------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to this Agreement
By: /S/ XXXXX X. XXXXXXXXX
-----------------------------
Xxxxx X. Xxxxxxxxx, President
SCHEDULE A TO FACILITY AGREEMENT LETTER
FUNDS FOR WHOSE BENEFIT LOANS CAN BE BORROWED
UNDER FACILITY AGREEMENT LETTER AND BORROWING LIMIT
BORROWER FUNDS MAXIMUM PERCENT OF THE TOTAL
ASSETS WHICH CAN BE BORROWED
UNDER FACILITY AGREEMENT WITH
CAPCO
USAA Mutual Fund, Inc. USAA Aggressive Growth 5% of Total Assets
USAA Growth & Income "
USAA Income Stock "
USAA Short-Term Bond "
USAA Money Market "
USAA Growth "
USAA Income "
USAA S&P 500 Index (Member and Reward classes) "
USAA Science & Technology "
USAA First Start Growth "
USAA High Yield Opportunities "
USAA Intermediate-Term Bond "
USAA Small Cap Stock "
USAA Extended Market Index "
USAA Nasdaq-100 Index "
USAA Global Titans Index "
USAA Capital Growth "
USAA Value "
USAA Investment Trust USAA Cornerstone Strategy "
USAA Precious Metals and Minerals "
USAA International "
USAA World Growth "
USAA GNMA Trust "
USAA Treasury Money Market Trust "
USAA Emerging Markets "
USAA Growth and Tax Strategy Fund "
USAA Balanced Strategy "
USAA Tax Exempt Fund, Inc. USAA Long-Term "
USAA Intermediate-Term "
USAA Short-Term "
USAA Tax Exempt Money Market "
USAA California Bond "
USAA California Money Market "
USAA New York Bond "
USAA New York Money Market "
USAA Xxxxxxxx Xxxx "
USAA Virginia Money Market "
USAA State Tax-Free Trust USAA Florida Tax-Free Income "
USAA Florida Tax-Free Money Market "
USAA Life Investment Trust USAA Life Income Fund "
USAA Life Growth and Income Fund "
USAA Life World Growth Fund "
USAA Life Diversified Assets Fund "
USAA Life Aggressive Growth Fund "
Schedule A
SCHEDULE B TO FACILITY AGREEMENT LETTER
PERMITTED SUBADVISORS
Barclays Global Fund Advisors
Batterymarch Financial Management, Inc.
The Boston Company Asset Management, LLC
Deutsche Asset Management, Inc.
Dresdner RCM Global Investors LLC
Eagle Asset Management, Inc.
Xxxxxxx Capital Management, LLC
Xxxxxxx Xxxxx Quantitative Advisers
MFS Investment Management
Wellington Management Company, LLP
Westwood Management Corporation
Schedule B
EXHIBIT A TO FACILITY AGREEMENT LETTER
MASTER GRID PROMISSORY NOTE
U.S. $400,000,000 Dated: January 09, 2003
FOR VALUE RECEIVED, each of the undersigned (each a "BORROWER" and
collectively the "BORROWERS"), severally and not jointly and not in their
individual capacities, but on behalf of and for the benefit of the series of
funds comprising each such Borrower as listed on SCHEDULE A to the Agreement as
defined below (each a "FUND" and collectively the "FUNDS") promises to pay to
the order of USAA Capital Corporation ("CAPCO") at CAPCO's office located at
0000 Xxxxxxxxxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000, in lawful money of the
United States of America, in immediately available funds, the principal amount
of all Loans made by CAPCO to such Borrower for the benefit of the applicable
Funds under the Facility Agreement Letter dated January 09, 2003 (as amended or
modified, the "AGREEMENT"), among the Borrowers and CAPCO, together with
interest thereon at the rate or rates set forth in the Agreement. All payments
of interest and principal outstanding shall be made in accordance with the terms
of the Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Agreement. Terms not defined in this Note shall be as set forth
in the Agreement.
CAPCO is authorized to endorse the particulars of each Loan evidenced
hereby on the attached Schedule and to attach additional Schedules as necessary,
provided that the failure of CAPCO to do so or to do so accurately shall not
affect the obligations of any Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
Each Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. Each Borrower agrees to pay all reasonable costs of
collection, including reasonable attorney's fees in connection with the
enforcement of this Note.
CAPCO hereby agrees (i) that any claim, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit a
Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, TOGETHER WITH
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other
agents of any Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
Loans under the Agreement and this Note (except to USAA Life Investment
Trust) are subordinated to loans made under the $100,000,000 364-day committed
Master Revolving Credit Facility Agreement between the Borrowers and Bank of
America, N.A. (Bank of America), dated January 09, 2003, in the manner and to
the extent set forth in the Agreement among the Borrowers, CAPCO and Bank of
America, dated January 09, 2003.
This Note shall be governed by the laws of the state of Texas.
Exhibit A
Signature to the Master Grid Promissory Note dated January 09, 2003, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A to the Agreement) payable to CAPCO.
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXX X. XXXXXXXXX
-----------------------------------
Xxxxx X. Xxxxxxxxx, President
Exhibit A
SCHEDULE TO NOTE
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 09, 2003, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST and
USAA LIFE INVESTMENT TRUST (not in their individual capacity, but on behalf of
and for the benefit of the series of funds comprising each such Borrower)
payable to the order of USAA CAPITAL CORPORATION.
[GRID]
Date of
Loan
Borrower
and Fund
Amount
of Loan
Type of Rate
and Interest
Rate on Date
of Borrowing
Amount of
Principal
Repaid
Date of
Repayment
Other
Expenses
Notation made
by
Exhibit A
EXHIBIT B
EXHIBIT B TO FACILITY AGREEMENT LETTER
BORROWER INFORMATION SHEET
BORROWERS: USAA MUTUAL FUND, INC., USAA INVESTMENT TRUST, USAA
TAX EXEMPT FUND, INC. and USAA STATE TAX-FREE TRUST
ADDRESS FOR NOTICES AND OTHER COMMUNICATIONS TO THE BORROWERS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 (for Federal Express, 78240)
Attention: Xxxxxxxx X. Xxxxxxx
Senior Vice President, Fixed Income Investments (USAA)
Telephone: (000) 000-0000
Cellphone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: XXXXX.XXXXXXX@XXXX.XXX
Attention: Xxxxxx X. Xxxxxx
Vice President,Equity Investments (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: XXXXXX.XXXXXXX@XXXX.XXX
Attention: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President,
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: xxx.xxxxxxx@xxxx.xxx
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 ( for Federal Express, 78240)
Attention: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President,
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: xxx.xxxxxxx@xxxx.xxx
Exhibit B
BORROWERS: USAA LIFE INVESTMENT TRUST
ADDRESS FOR NOTICES AND OTHER COMMUICATIONS TO THE BORROWERS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 ( for Federal Express, 78240)
Attention: Xxxxx X. Xxxxxx
Senior Vice President
USAA Investment Management Company
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: xxxxx.xxxxxx@xxxx.xxx
ADDRESS FOR BORROWING AND PAYMENTS:
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000 ( for Federal Express, 78240)
Attention: Primary - Xxxxx X. Xxxxxx
Senior Vice President
USAA Investment Management Company
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
e-mail: xxxxx.xxxxxx@xxxx.xxx
Copies to: Xxxxxxx Xxxxxxx, Xx.
Assistant Vice President
Mutual Fund Accounting and Administration (USAA)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 or 000-0000
Telex: 767424
e-mail: xxx.xxxxxxx@xxxx.xxx
INSTRUCTIONS FOR PAYMENTS TO BORROWER:
WE PAY VIA: X FED FUNDS CHIPS
-------- ----------
Exhibit B
TO: (PLEASE PLACE BANK NAME, CORRESPONDENT NAME (IF APPLICABLE), CHIPS AND/OR
FED FUNDS ACCOUNT NUMBER BELOW)
USAA MUTUAL FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA AGGRESSIVE GROWTH FUND ACCT.# 0000-000-0
USAA GROWTH & INCOME FUND ACCT.# 0000-000-0
USAA INCOME STOCK FUND ACCT.# 0000-000-0
USAA SHORT-TERM BOND FUND ACCT.# 0000-000-0
USAA MONEY MARKET FUND ACCT.# 0000-000-0
USAA GROWTH FUND ACCT.# 0000-000-0
USAA INCOME FUND ACCT.# 0000-000-0
USAA SCIENCE & TECHNOLOGY FUND ACCT.#0000-000-0
USAA FIRST START GROWTH FUND ACCT.#0000-000-0
USAA HIGH YIELD OPPORTUNITIES FUND ACCT.#0000-000-0
USAA INTERMEDIATE-TERM BOND FUND ACCT.#0000-000-0
USAA SMALL CAP STOCK FUND ACCT.#0000-000-0
USAA NASDAQ-100 INDEX FUND ACCT.#0000-000-0
USAA GLOBAL TITANS INDEX FUND ACCT.#0000-000-0
USAA CAPITAL GROWTH FUND ACCT.#0000-000-0
USAA VALUE FUND ACCT.#0000-000-0
BANKERS TRUST COMPANY, NEW YORK, NEW YORK
ABA #000000000
USAA S&P 500 INDEX FUND ACCT.#096699
Exhibit B
THE CHASE MANHATTAN BANK, NEW YORK, NEW YORK
ABA #000000000
USAA EXTENDED MARKET INDEX FUND ACCT.#P83544
USAA INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA CORNERSTONE STRATEGY FUND ACCT.# 0000-000-0
USAA PRECIOUS METALS AND MINERALS FUND ACCT.# 0000-000-0
USAA INTERNATIONAL FUND ACCT.# 0000-000-0
USAA WORLD GROWTH FUND ACCT.# 0000-000-0
USAA GNMA TRUST ACCT.# 0000-000-0
USAA TREASURY MONEY MARKET TRUST ACCT.# 0000-000-0
USAA EMERGING MARKETS FUND ACCT.# 0000-000-0
USAA GROWTH AND TAX STRATEGY FUND ACCT.# 0000-000-0
USAA BALANCED STRATEGY FUND ACCT.# 0000-000-0
USAA TAX EXEMPT FUND, INC.
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA LONG-TERM FUND ACCT.# 0000-000-0
USAA INTERMEDIATE-TERM FUND ACCT.# 0000-000-0
USAA SHORT-TERM FUND ACCT.# 0000-000-0
USAA TAX EXEMPT MONEY MARKET FUND ACCT.# 0000-000-0
USAA CALIFORNIA BOND FUND ACCT.# 0000-000-0
USAA CALIFORNIA MONEY MARKET FUND ACCT.# 0000-000-0
USAA NEW YORK BOND FUND ACCT.# 0000-000-0
USAA NEW YORK MONEY MARKET FUND ACCT.# 0000-000-0
USAA XXXXXXXX XXXX FUND ACCT.# 0000-000-0
USAA VIRGINIA MONEY MARKET FUND ACCT.# 0000-000-0
Exhibit B
USAA STATE TAX-FREE TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA FLORIDA TAX-FREE INCOME FUND ACCT.# 0000-000-0
USAA FLORIDA TAX-FREE MONEY MARKET FUND ACCT.# 0000-000-0
USAA LIFE INVESTMENT TRUST
STATE STREET BANK AND TRUST COMPANY, BOSTON, MASSACHUSETTS
ABA #000000000
USAA LIFE INCOME FUND ACCT.# 0000-000-0
USAA LIFE GROWTH AND INCOME FUND ACCT.# 0000-000-0
USAA WORLD GROWTH FUND ACCT.# 0000-000-0
USAA LIFE DIVERSIFIED ASSETS FUND ACCT.# 0000-000-0
USAA LIFE AGGRESSIVE GROWTH FUND ACCT.# 0000-000-0
Exhibit B
EXHIBIT C
ADDRESS FOR USAA CAPITAL CORPORATION
USAA Capital Corporation
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. XxXxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Exhibit C
EXHIBIT D TO FACILITY AGREEMENT LETTER
OFFICER'S CERTIFICATE
Xxxx X. Xxxxxx hereby certifies that he is the duly elected Secretary of USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc. and USAA
State Tax-Free Trust; and Xxxxxxx X. Xxxxx hereby certifies she is the duly
elected Secretary of USAA Life Investment Trust (each a "BORROWER" and
collectively the "BORROWERS"), and that they are authorized to execute this
Certificate on behalf of the Borrowers. The undersigned hereby further certifies
to the following:
Any one of the Chairman and Chief Executive Officer of United States Automobile
Association ("USAA"), the Senior Vice President-Chief Financial
Officer/Corporate Treasurer of USAA, or the Senior Vice President-Corporate
Finance and Assistant Treasurer of USAA, together with either the Treasurer or
Assistant Treasurer of the Borrowers, are duly authorized to act on behalf of
the Funds, by transmitting telephonic, electronic mail, telex, or telecopy
instructions and other communications with regard to borrowings and payments
pursuant to the Facility Agreement dated January 9, 2003, with USAA Capital
Corporation. The signature set opposite the name of each individual below is
that individual's genuine signature.
NAME OFFICE SIGNATURE
---- ------ ---------
Xxxxxx X. Xxxxx Chairman and Chief Executive
Officer of USAA /S/ XXXXXX X. XXXXX
----------------------
Xxxxx Xxxxxx, Xx. Senior Vice President-Chief
Financial Officer/Corporate
Treasurer of USAA /S/ XXXXX XXXXXX, XX.
----------------------
Xxxxx X. XxXxxxxxx Senior Vice President-Corporate
Finance and Assistant Treasurer
Of USAA /S/ XXXXX X. XXXXXXXXX
-----------------------
Xxxxx X. Xxxxxx Treasurer of the Borrowers /S/ XXXXX X. XXXXXX
-----------------------
Xxxxxxx Xxxxxxx, Xx. Assistant Treasurer of the
Borrowers /S/ XXXXXX XXXXXXX, XX.
-----------------------
IN WITNESS WHEREOF, we have executed the Certificate as of this 9th day of
January, 2003.
/S/ XXXX X. XXXXXX /S/ XXXXXX X. XXXXX
--------------------- -----------------------------
Xxxx X. Xxxxxx Xxxxxxx X. Xxxxx
Secretary Secretary
I, Xxxxxxxxxxx X. Xxxxx, officer of the Borrowers hereby certify that Xxxx X.
Xxxxxx and Xxxxxxx X. Xxxxx are, and have been at all times since a date prior
to the date of this Certificate, the duly elected, qualified, and acting
Secretaries of the Borrowers and that their signatures set forth above are their
true and correct signature.
Date: January 9, 2003
/S/ XXXXXXXXXXX X. XXXXX
-----------------------------
Xxxxxxxxxxx X. Xxxxx, Officer
Exhibit D
MASTER GRID PROMISSORY NOTE
U.S. $400,000,000 Dated: January 09, 2003
FOR VALUE RECEIVED, each of the undersigned (each a "BORROWER" and
collectively the "BORROWERS"), severally and not jointly and not in their
individual capacities, but on behalf of and for the benefit of the series of
funds comprising each such Borrower as listed on SCHEDULE A to the Agreement as
defined below (each a "FUND" and collectively the "FUNDS") promises to pay to
the order of USAA Capital Corporation ("CAPCO") at CAPCO's office located at
0000 Xxxxxxxxxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxx 00000, in lawful money of the
United States of America, in immediately available funds, the principal amount
of all Loans made by CAPCO to such Borrower for the benefit of the applicable
Funds under the Facility Agreement Letter dated January 09, 2003 (as amended or
modified, the "AGREEMENT"), among the Borrowers and CAPCO, together with
interest thereon at the rate or rates set forth in the Agreement. All payments
of interest and principal outstanding shall be made in accordance with the terms
of the Agreement.
This Note evidences Loans made pursuant to, and is entitled to the
benefits of, the Agreement. Terms not defined in this Note shall be as set forth
in the Agreement.
CAPCO is authorized to endorse the particulars of each Loan evidenced
hereby on the attached Schedule and to attach additional Schedules as necessary,
provided that the failure of CAPCO to do so or to do so accurately shall not
affect the obligations of any Borrower (or the Fund for whose benefit it is
borrowing) hereunder.
Each Borrower waives all claims to presentment, demand, protest, and
notice of dishonor. Each Borrower agrees to pay all reasonable costs of
collection, including reasonable attorney's fees in connection with the
enforcement of this Note.
CAPCO hereby agrees (i) that any claim, liability, or obligation
arising hereunder or under the Agreement whether on account of the principal of
any Loan, interest thereon, or any other amount due hereunder or thereunder
shall be satisfied only from the assets of the specific Fund for whose benefit a
Loan is borrowed and in any event in an amount not to exceed the outstanding
principal amount of any Loan borrowed for such Fund's benefit, together with
accrued and unpaid interest due and owing thereon, and such Fund's share of any
other amount due hereunder and under the Agreement (as determined in accordance
with the provisions of the Agreement) and (ii) that no assets of any Fund shall
be used to satisfy any claim, liability, or obligation arising hereunder or
under the Agreement with respect to the outstanding principal amount of any Loan
borrowed for the benefit of any other Fund or any accrued and unpaid interest
due and owing thereon or such other Fund's share of any other amount due
hereunder and under the Agreement (as determined in accordance with the
provisions of the Agreement).
Neither the shareholders, trustees, officers, employees and other
agents of any Borrower or Fund shall be personally bound by or liable for any
indebtedness, liability or obligation hereunder or under the Note nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
Loans under the Agreement and this Note (except to USAA Life Investment
Trust) are subordinated to loans made under the $100,000,000 364-day committed
Mater Revolving Credit Facility Agreement between the Borrowers and Bank of
America, N.A. (Bank of America), dated January 09, 2003, in the manner and to
the extent set forth in the Agreement among the Borrowers, CAPCO and Bank of
America, dated January 09, 2003.
This Note shall be governed by the laws of the state of Texas.
Signature to the Master Grid Promissory Note dated January 09, 2003, by USAA
Mutual Fund, Inc., USAA Investment Trust, USAA Tax Exempt Fund, Inc., USAA State
Tax-Free Trust and USAA Life Investment Trust (not in their individual
capacities, but on behalf of and for the benefit of the series of funds set
forth on SCHEDULE A TO THE AGREEMENT) payable to CAPCO.
USAA MUTUAL FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA TAX EXEMPT FUND, INC.,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA STATE TAX-FREE TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXXXXXXXX X. XXXXX
-----------------------------------
Xxxxxxxxxxx X. Xxxxx, President
USAA LIFE INVESTMENT TRUST,
on behalf of and for the benefit
of its series of Funds as set forth
on SCHEDULE A to the Agreement
By: /S/ XXXXX X. XXXXXXXXX
-----------------------------------
Xxxxx X. Xxxxxxxxx, President
LOANS AND PAYMENT OF PRINCIPAL
This schedule (grid) is attached to and made a part of the Promissory Note dated
January 09, 2003, executed severally and not jointly by USAA MUTUAL FUND, INC.,
USAA INVESTMENT TRUST, USAA TAX EXEMPT FUND, INC., USAA STATE TAX-FREE TRUST and
USAA LIFE INVESTMENT TRUST (not in their individual capacity, but on behalf of
and for the benefit of the series of funds comprising each such Borrower)
payable to the order of USAA CAPITAL CORPORATION.
[GRID}
Date of Loan
Borrower
and Fund
Amount of
Loan
Type of Rate and
Interest
Rate on Date of
Borrowing
Amount of
Principal
Repaid
Date of
Repayment
Other
Expenses
Notation made
by
