FIDELITY BOND INSURANCE AGREEMENT
AGREEMENT made as of May 13, 2005 by and among USAA MUTUAL FUND, INC. and
USAA TAX EXEMPT FUND, INC., both Maryland corporations, and USAA INVESTMENT
TRUST, a Massachusetts business trust, USAA STATE TAX-FREE TRUST, and USAA LIFE
INVESTMENT TRUST, both Delaware business trusts (collectively the Funds and
singly a Fund), each of which has as its investment adviser and underwriter USAA
INVESTMENT MANAGEMENT COMPANY (the Company).
WHEREAS, The Funds are named Insureds under a Fidelity Bond (the Bond)
issued by the St. Xxxx Fire and Marine Insurance Company (Insurer), in the
amount required by Rule 17g-1 of the Investment Company Act of 1940; and
WHEREAS, The Funds desire to provide the criteria by which losses in
excess of the face amount of the Bond shall be allocated among the parties.
NOW, THEREFORE, It is agreed as follows:
1. The premiums on the Bond as applicable to USAA MUTUAL FUND, INC., USAA
TAX EXEMPT FUND, INC., USAA INVESTMENT TRUST, and USAA STATE TAX-FREE TRUST,
shall be paid by the Company as provided in the investment administration and
servicing agreements entered into by the Company with each of these Funds. The
premium on the Bond as applicable to USAA LIFE INVESTMENT TRUST shall be paid by
USAA LIFE INVESTMENT TRUST.
2. In the event that the claims of loss of the Funds under the Bond are so
related that the Insurer is entitled to assert that the claims must be
aggregated with the result that the total amount payable on such claims is
limited to the face amount of the Bond, the following rules for determining, as
among the Funds, the priority of satisfaction of the claims under the Bond shall
apply:
a. First, all claims of each Fund which have been duly proven and established
under the Bond shall be satisfied up to the minimum amount of fidelity
bond, as determined pursuant to Rule 17g-1(d) under the Investment Company
Act of 1940, required for such Fund; and
b. Second, the remaining amount of insurance, if any, shall then be applied
to such claims of the Funds in proportion to the total of each Fund's
claims not satisfied by such minimum amount of fidelity bond.
3. This Agreement shall become effective on the date hereof. This
agreement shall continue in effect for all periods during which the Bond is in
effect or for which it is renewed, unless modified by agreement of the parties;
PROVIDED, HOWEVER, that this Agreement may be terminated at any time by any of
the parties hereto, upon at least thirty days' written notice to the other
parties thereto, as to claims based upon events occurring after the date of such
termination.
IN WITNESS WHEREOF, The parties have hereunto caused these presents to be
executed by their officers hereunto duly authorized, all as of the date and year
first above written.
USAA MUTUAL FUND, INC. USAA INVESTMENT TRUST
By: /s/ Xxxxxxxxxxx X. Xxxxx By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------- --------------------------------
Xxxxxxxxxxx X. Xxxxx Xxxxxxxxxxx X. Xxxxx
President President
USAA TAX EXEMPT FUND, INC. USAA STATE TAX-FREE TRUST
By: /s/ Xxxxxxxxxxx X. Xxxxx By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------ --------------------------------
Xxxxxxxxxxx X. Xxxxx Xxxxxxxxxxx X. Xxxxx
President President
USAA LIFE INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxx
------------------------
Xxxxxx X. Xxxxx
President
contract\mf\agreemen.t 2005
