Exhibit h(x)
AMENDED AND RESTATED MASTER-FEEDER PARTICIPATION AGREEMENT
AMONG
USAA MUTUAL FUNDS TRUST
BLACKROCK ADVISORS, LLC
USAA INVESTMENT MANAGEMENT COMPANY, AND
BLACKROCK DISTRIBUTORS, INC.
DATED AS OF OCTOBER 2, 2006
This Amended and Restated Master-Feeder Participation Agreement is made and
entered into as of the 2nd day of October 2006 by and among: USAA Mutual Funds
Trust (the "Trust"), on behalf of its series USAA Extended Market Index Fund
(the "Fund"); BlackRock Advisors, LLC (the "Adviser"); USAA Investment
Management Company (the "Manager"); and BlackRock Distributors, Inc. ("BDI").
WHEREAS, the USAA Mutual Fund, Inc. (now doing business as USAA Mutual
Funds Trust) and Fund Asset Management, L.P. entered into a Master-Feeder
Participation Agreement dated as of October 27, 2000 (the "Agreement"); and
WHEREAS, as a result of the combination of Xxxxxxx Xxxxx Investment
Managers, L.P. and certain affiliates, including Fund Asset Management, L.P.,
and BlackRock, Inc. and its subsidiaries, a new advisory agreement dated
September 29, 2006 was approved with the Adviser on behalf of Quantitative
Master Series Trust (the "Master Trust"); and
WHEREAS, the Adviser manages the Quantitative Master Series Trust (the
"Master Trust"), on behalf of its series, the BlackRock Extended Market Series
(the "Portfolio");
WHEREAS, the Fund is a series of an open-end management investment company,
and the Fund and the Portfolio have the same investment objectives and
substantively the same investment policies;
WHEREAS, the Fund desires to invest its investable assets in the Portfolio
in exchange for a beneficial interest in the Portfolio ("Shares") on the terms
and conditions set forth herein, and the Portfolio believes that such
investments are in its best interests; and
WHEREAS, the Manager is the manager for the Fund, Adviser is the manager
for the Portfolio, and BDI is the placement agent for the Portfolio;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein made and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
INVESTMENTS AND REDEMPTIONS
1.1 INVESTMENTS. By placing orders through BDI, the Fund will invest its
investable assets in the Portfolio and, in exchange therefor, the Portfolio will
issue to the Fund Shares equal in value to the assets of the Fund conveyed to
the Portfolio. The Fund may add to or reduce its investment in the Portfolio as
described in the Portfolio's Form N-1A registration
statement (the "Portfolio's N-1A"). Notwithstanding the foregoing, the Portfolio
reserves the right to refuse purchase requests if such action is required by law
or, in the sole discretion of the trustees of the Master Trust, is in the best
interests of other shareholders of the Portfolio, provided that prior to taking
such action the Portfolio has delivered notice to the Manager of the reason(s)
for its belief that such action is required and has allowed the Manager ten days
following receipt of such notice, unless prohibited by applicable law, to
correct the problem(s) or concern(s) identified by the Portfolio. In connection
with each investment, each party hereto shall deliver to each other party such
documents as such other party reasonably may request.
1.2 INVESTMENTS. Investments can occur on Business Days as the Fund
determines. ("Business Day" shall mean any day on which the New York Stock
Exchange is open for trading and on which the Portfolio calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission ("SEC")).
All acts occurring on the date of investment shall be deemed to occur
simultaneously as of the determination of the Portfolio's net asset value on the
date of investment.
1.3 REDEMPTIONS. BDI will redeem any full or fractional Shares of the
Portfolio when requested by the Manager on behalf of the Fund in accordance with
the operational procedures mutually agreed to by BDI and the Manager from time
to time and the provisions of the Portfolio's N-1A. BDI shall ensure that the
Portfolio makes payment via federal funds wire for such Shares no later than
12:00 noon New York time on the day the redemption request is made, but in no
event shall payment be delayed for a greater period than is permitted by the
Investment Company Act of 1940, as amended (the "1940 Act") (including any rule
or order of the SEC thereunder).
1.4 PURCHASE AND REDEMPTION PROCEDURES. BDI shall accept cash movement
reports from the Fund on each Business Day, provided that such orders are
received prior to 9:00 a.m. New York time on such Business Day. BDI shall accept
transfer authorization reports from the Fund by 2:00 p.m. New York time on each
Business Day. Such transfer authorization reports shall reflect purchase and
redemption orders received from the Fund's shareholders in good order prior to
the time the net asset value of the Portfolio is priced (the Portfolio's
"valuation time") on the prior Business Day. Any such purchase or redemption
order received after the Portfolio's valuation time on a Business Day shall be
deemed received prior to 9:00 a.m. New York time on the next succeeding Business
Day. Purchase and redemption orders shall be provided to BDI as agent for the
Portfolio in such written or electronic form (including facsimile) as may be
mutually acceptable to BDI and the Manager. In the event that the Manager elects
to use a form of written or electronic communication which is not capable of
recording the time, date and recipient of any communication and confirming good
transmission, the Manager shall be responsible for confirming that any
communication sent by the Manager to BDI was properly received. BDI may reject
purchase and redemption orders that are not in proper form. BDI shall be
entitled to assume the authenticity of communications received from, and shall
be fully protected from all liability in acting upon the instructions of, the
persons named as authorized individuals of the Manager in the attached Schedule
A. Payment by the Fund for a purchase order that is transmitted to and accepted
by BDI shall be made by 12:00 noon New York time on the same Business Day that
BDI receives notice of the order. Payments shall be made in federal funds
transmitted by wire. In the event that the Fund shall fail to pay in a timely
manner for any purchase order validly received by BDI, the Manager shall hold
the Portfolio harmless
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from any losses reasonably sustained as the result of the Portfolio acting in
reliance on such purchase order received by BDI.
1.5 TAX NOTICES. BDI shall furnish prompt notice to the Manager of any
income, dividends or capital gain distribution payable on Shares of the
Portfolio. The Fund hereby elects to receive all such income, dividends and
capital gain distributions as are payable in the form of additional Shares of
the Portfolio. BDI shall notify the Manager of the number of Shares so issued as
payment of such dividends and distributions. The Manager acknowledges that the
Portfolio has the status of a partnership for US federal income tax purposes.
BDI shall furnish to the Manager information regarding the Fund's allocable
share of income, gain, loss, deduction and credit of the Portfolio, as
determined for federal income tax purposes.
1.6 NET ASSET VALUE DATA. BDI shall make the net asset value per Share for
the Portfolio available to the Manager on a daily basis as soon as reasonably
practical after such net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6:00 p.m., New
York time.
1.7 CONDITIONS PRECEDENT AND CONTINUING REPRESENTATIONS AND WARRANTIES. The
obligations of each party hereto to consummate the transactions provided for
herein are subject to all representations and warranties of the other parties
contained herein being true and correct in all material respects as of the date
hereof and as of the date of the transactions contemplated hereby. Accordingly,
each party shall be deemed to have made each representation and warranty herein
anew as of the date of each transaction.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 THE TRUST. The Trust represents and warrants as follows:
(a) Organization. The Trust is duly organized and validly existing under
the laws of the State of Delaware as a statutory trust. The Fund is a
duly and validly designated series of the Trust and has the requisite
power and authority to own property and conduct its business as
proposed to be conducted pursuant to this Agreement.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Trust on behalf of the Fund and the consummation of
the transactions contemplated hereby have been duly authorized by the
Trust's Board of Directors.
(c) No Bankruptcy Proceedings. The Fund is not under the jurisdiction of a
court in a proceeding under Title 11 of the United States Code (the
"Bankruptcy Code") or similar case within the meaning of Section
368(a)(3)(A) of the Bankruptcy Code.
(d) Fiscal Year. The fiscal year end for the Fund is December 31.
(e) SEC Filings. The Fund has duly filed all forms, reports, proxy
statements and other documents (collectively, "SEC Filings") required
to be filed under the Securities Act of 1933, as amended (the "1933
Act"), Securities Exchange Act of 1934 (the
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"1934 Act") and the 1940 Act (collectively, the "Securities Laws") in
connection with the registration of its shares, any meetings of its
shareholders and its registration as an investment company. The SEC
Filings were prepared in accordance with applicable requirements of
the Securities Laws and the rules and regulations thereunder, and do
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(f) 1940 Act Registration. The Trust is duly registered as an open-end
management investment company under the 0000 Xxx. The Manager and the
Company acknowledge that shares of the Master Trust and the Portfolio
are not registered for sale with the SEC under the 1933 Act, and are
offered to the Company in reliance on the exemption set forth in
Section 4(2) of the 1933 Act for transactions not involving a public
offering.
2.2 THE ADVISER AND BDI REGARDING THE PORTFOLIO. The Adviser and BDI
jointly and severally represent and warrant as follows:
(a) Organization. The Master Trust is duly organized and validly existing
under the laws of the State of Delaware as a business trust. The
Portfolio is a duly and validly designated series of the Master Trust
and has the requisite power and authority to own property and conduct
its business as proposed to be conducted pursuant to this Agreement.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Adviser have been duly authorized by all necessary
actions by the Adviser.
(c) Authorization of Issuance of Interest. The issuance by each Portfolio
of Shares in exchange for the investment by each Fund has been duly
authorized by the Master Trust's Board of Trustees. When issued in
accordance with the terms of this Agreement, the Shares will be
validly issued, fully paid and non-assessable by the Portfolio.
(d) No Bankruptcy Proceedings. The Portfolio is not under the jurisdiction
of a court in a proceeding under Title 11 of the Bankruptcy Code or
similar case within the meaning of Section 368(a)(3)(A) of the
Bankruptcy Code.
(e) Fiscal Year. The fiscal year end of the Portfolio is December 31.
(f) Auditors. The Portfolio has appointed Deloitte & Touche LLP as its
independent public accountants to certify the Portfolio's financial
statements in accordance with Section 32 of the 1940 Act, and the
Adviser and BDI shall promptly notify the Manager if any other
independent public accountant is designated to perform this function.
(g) SEC Filings. The Portfolio has duly filed all SEC Filings required to
be filed with the SEC pursuant to the 1934 Act and
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1940 Act in connection with any meetings of its investors and its
registration as an investment company. Shares of the Portfolio are not
required to be registered under the 1933 Act because such Shares are
offered solely in private placement transactions that do not involve
any "public offering" within the meaning of Section 4(2) of the 1933
Act. The SEC Filings were prepared in accordance with the requirements
of the Securities Laws, as applicable, and the rules and regulations
thereunder, and do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) 1940 Act Registration. The Master Trust is duly registered as an
open-end management investment company under the 1940 Act, and its
registration is in full force and effect.
(i) Tax Status. The Portfolio is taxable as a partnership under the
Internal Revenue Code of 1986, as amended (the "Code").
(j) Pricing and In-Kind Redemption Procedures. The Portfolio has adopted
pricing and valuation procedures that comply with the 1940 Act and
in-kind redemption procedures that comply with the 1940 Act and any
related interpretations issued by the SEC staff as in effect as of the
date of the transactions contemplated hereby.
2.3 MANAGER. The Manager represents and warrants as follows:
(a) Organization. The Manager is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the requisite power and authority to conduct its business as
contemplated by this Agreement.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by the Manager have been duly authorized by all necessary
actions by the Manager.
(c) Investment Adviser. The Manager is registered as an investment adviser
with the SEC in good standing under the Investment Advisers Act of
1940, as amended (the "Advisers Act").
2.4 XXX. XXX represents and warrants as follows:
(a) Organization. BDI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has
the requisite power and authority to conduct its business as
contemplated by this Agreement.
(b) Authorization of Agreement. The execution and delivery of this
Agreement by BDI has been duly authorized by all necessary actions by
BDI.
(c) Broker-Dealer. BDI is duly registered as a broker-dealer with the SEC
and all jurisdictions where such registration is
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required to conduct the activities contemplated herein, and is a
member in good standing of the National Association of Securities
Dealers, Inc.
ARTICLE III
COVENANTS
3.1 THE TRUST. The Trust covenants as follows:
(a) Advance Review of Certain Documents. The Trust will furnish to BDI
prior to filing or first use, as the case may be, drafts of amendments
to its registration statement on Form N-lA and prospectus supplements
or amendments relating to the Fund, and any proposed advertising or
sales literature relating to the Fund; provided, however, that such
advance notice shall not be required for advertising or sales
literature that merely references the name of the Fund.
(b) Proxy Voting. The Trust agrees that on any matter in which a vote of
holders of Shares of the Master Trust is sought, with respect to which
the Fund is entitled to vote, the Trust will either seek instructions
from the holders of the Fund's securities and vote on the matter in
accordance with such instructions, or the Trust will vote the Shares
of the Portfolio held by it in the same proportion as the vote of all
other holders of Shares of such Portfolio.
3.2 INDEMNIFICATION BY FUND.
(a) The Manager and the Fund, as applicable, will jointly and severally
indemnify and hold harmless the Portfolio, BDI and their respective
trustees, directors, officers and employees and each other person who
controls the Portfolio or BDI, as the case may be, within the meaning
of Section 15 of the 1933 Act (each a "Covered Person" and
collectively "Covered Persons"), against any and all losses, claims,
demands, damages, liabilities and expenses (each a "Liability" and
collectively "Liabilities") (including the reasonable cost of
investigating and defending against any claims therefor and any
counsel fees incurred in connection therewith), joint or several,
which:
(i) arise out of or are based upon any of the Securities Laws, any
other statute or common law or are incurred in connection with or
as a result of any formal or informal administrative proceeding
or investigation by a regulatory agency, insofar as such
Liabilities arise out of or are based upon the ground or alleged
ground that any direct or indirect omission or commission by the
Fund (either during the course of its daily activities or in
connection with the accuracy of its representations or its
warranties in this Agreement) caused or continues to cause the
Portfolio to violate any federal or state securities laws or
regulations or any other applicable domestic or foreign law or
regulations or common law duties or obligations, but only to the
extent that such Liabilities do not arise
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out of and are not based upon an omission or commission of the
Portfolio or BDI;
(ii) arise out of any misstatement of a material fact or an omission
of a material fact related to the Portfolio in the Fund's
registration statement (including amendments thereto) or included
in Fund advertising or sales literature, other than information
provided by the Portfolio or BDI or included in Fund advertising
or sales literature at the request of the Portfolio or BDI;
(iii) result from the failure of any representation or warranty made
by the Fund to be accurate when made or the failure of the Fund
to perform any covenant contained herein or to otherwise comply
with the terms of this Agreement; or
(iv) arise out of any unlawful or negligent act of the Fund or any
director, officer, employee or agent of the Fund, whether such
act was committed against the Fund, the Portfolio, BDI or any
third party; provided, however, that in no case shall the Manager
or the Fund be liable with respect to any claim made against any
such Covered Person unless such Covered Person shall have
notified the Manager and the Fund in writing of the nature of the
claim within a reasonable time after the summons, other first
legal process or formal or informal initiation of a regulatory
investigation or proceeding shall have been served upon or
provided to a Covered Person, or any federal, state or local tax
deficiency has come to the attention of BDI, the Portfolio or a
Covered Person. Failure to notify the Manager or the Fund of such
claim shall not relieve it from any liability that it may have to
any party otherwise than on account of the indemnification
contained in this Section.
(b) The Manager and the Fund will be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but, if the Manager or
the Fund elects to assume the defense, such defense shall be conducted
by counsel chosen by the Manager or the Fund. In the event the Manager
or the Fund elects to assume the defense of any such suit and retain
such counsel, each Covered Person and any other defendant or
defendants may retain additional counsel, but shall bear the fees and
expenses of such counsel unless (A) the Manager or the Fund shall have
specifically authorized the retaining of such counsel or (B) the
parties to such suit include any Covered Person and the Manager or a
Fund, and any such Covered Person has been advised by counsel that one
or more legal defenses may be available to it that may not be
available to the Manager or the Fund, in which case neither the
Manager nor the Fund shall be entitled to assume the defense of such
suit notwithstanding its obligation to bear the fees and expenses of
such counsel. Neither the Manager nor the Fund shall be liable to
indemnify any Covered
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Person for any settlement of any claim affected without the Manager or
Fund's written consent, which consent shall not be unreasonably
withheld or delayed. The indemnities set forth in paragraph (a) above
will be in addition to any liability that the Manager or the Fund
might otherwise have to a Covered Person.
3.3 THE ADVISER AND BDI. Each of the Adviser and BDI jointly and severally
covenant as follows:
(a) Advance Review of Filings. The Adviser and BDI will furnish to the
Manager, prior to filing, draft amendments to the Portfolio's Form
N-1A.
(b) Tax Status. The Portfolio will qualify to be taxable as a partnership
under the Code for all periods during which this Agreement is in
effect, except to the extent that the failure to so qualify results
from any action or omission of a Fund.
(c) Availability of Shares. Subject to compliance with the terms of this
Agreement, the Portfolio shall permit its corresponding Fund to make
additional investments in the Portfolio on each Business Day on which
shares of the Fund are sold to the public; provided, however, that the
Portfolio may refuse to permit a Fund to make additional investments
on any day on which the Trustees of the Master Trust reasonably
determine that permitting additional investments by a Fund would
constitute a breach of their fiduciary duties to the Portfolio or
would breach applicable law.
(d) Investment Objective. The Adviser and BDI will notify the Fund at
least 60 days prior to the Portfolio changing its investment objective
or policies.
3.4 INDEMNIFICATION BY THE ADVISER AND BDI.
(a) The Adviser and BDI will jointly and severally indemnify and hold
harmless the Trust, the Fund, the Manager and their directors,
officers and employees and each other person who controls the Fund
within the meaning of Section 15 of the 1933 Act (each a "Covered
Person" and collectively "Covered Persons"), against any and all
losses, claims, demands, damages, liabilities and expenses (each a
"Liability" and collectively, the "Liabilities")(including the
reasonable costs of investigating and defending against any claims
therefor and any counsel fees incurred in connection therewith), joint
or several, whether incurred directly or indirectly, which
(i) arise out of or are based upon any of the Securities Laws, any
other statute or common law or are incurred in connection with or
as a result of any formal or informal administrative proceeding
or investigation by a regulatory agency, insofar as such
Liabilities arise out of or are based upon the ground or alleged
ground that any direct or indirect omission or commission by the
Adviser (either during the course of its daily activities or in
connection with the accuracy of its
8
representations or its warranties in this Agreement) caused or
continues to cause the Fund to violate any federal or state
securities laws or regulations or any other applicable domestic
or foreign law or regulations or common law duties or
obligations, but only to the extent that such Liabilities do not
arise out of and are not based upon an omission or commission of
the Fund;
(ii) arise out of or are based upon an inaccurate calculation of the
Portfolio's net asset value (even if calculated by another party
retained for that purpose);
(iii) arise out of (A) any misstatement of a material fact or an
omission of a material fact in the Portfolio's N-1A (including
amendments thereto) or included at the request of BDI in
advertising or sales literature used by the Fund, or (B) any
misstatement of a material fact or an omission of a material fact
in the Portfolio's N-1A or advertising or sales literature of any
investor in the Portfolio, other than the Fund;
(iv) arise out of the Portfolio's having caused the Fund to fail to
qualify as a regulated investment company under the Code;
(v) arise out of any claim by the Internal Revenue Service that the
Trust is not entitled to a dividends paid deduction under the
Code as a result of the amount of any fees charged (or not
charged) by the Adviser, BDI or any affiliate thereof to (A) the
Trust or the Portfolio, or (B) any other regulated investment
company under the Code that invests in the Portfolio.
(vi) result from the failure of any representation or warranty made by
the Adviser or BDI to be accurate when made or the failure of the
Adviser or BDI to perform any covenant contained herein or to
otherwise comply with the terms of this Agreement;
(vii) arise out of any unlawful or negligent act by the Adviser, the
Portfolio, BDI or any director, trustee, officer, employee or
agent of the Adviser, the Portfolio or BDI, whether such act was
committed against the Portfolio, the Fund or any third party;
(viii) arise out of any claim that the systems, methodologies, or
technology used in connection with operating the Portfolio,
including the technologies associated with maintaining the
master-feeder structure of the Portfolio, violates any license or
infringes upon any patent or trademark;
(ix) arise out of any claim that the use of the names used by the
Portfolio or any related use of names by the Fund violates any
license or infringes upon any trademark; or
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(x) result from any Liability of the Portfolio, the Adviser or BDI to
any investor in the Portfolio (or shareholder thereof), other
than the Fund (and its shareholders); provided, however, that in
no case shall the Adviser or BDI be liable with respect to any
claim made against any such Covered Person unless such Covered
Person shall have notified the Adviser and BDI in writing of the
nature of the claim within a reasonable time after the summons,
other first legal process or formal or informal initiation of a
regulatory investigation or proceeding shall have been served
upon or provided to a Covered Person or any federal, state or
local tax deficiency has come to the attention of the Fund or a
Covered Person. Failure to notify the Adviser and BDI of such
claim shall not relieve it from any liability that it may have to
any Covered Person otherwise than on account of the
indemnification contained in this paragraph.
(b) The Adviser and BDI will be entitled to participate at its own expense
in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if the Adviser or BDI
elects to assume the defense, such defense shall be conducted by
counsel chosen by the Adviser and BDI. In the event either the Adviser
or BDI elects to assume the defense of any such suit and retain such
counsel, each Covered Person and any other defendant or defendants may
retain additional counsel, but shall bear the fees and expenses of
such counsel unless (A) the Adviser and BDI shall have specifically
authorized the retaining of such counsel or (B) the parties to such
suit include any Covered Person, the Portfolio, the Adviser or BDI,
and any such Covered Person has been advised by counsel that one or
more legal defenses may be available to it that may not be available
to the Portfolio, the Adviser or BDI, in which case neither the
Adviser nor BDI shall be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such
counsel. Neither the Adviser nor BDI shall be liable to indemnify any
Covered Person for any settlement of any claim affected without their
written consent, which consent shall not be unreasonably withheld or
delayed. The indemnities set forth in paragraph (a) will be in
addition to any liability that each Portfolio and BDI might otherwise
have to a Covered Person.
3.5 IN-KIND REDEMPTION. If the Fund desires to redeem all of its Shares in
the Portfolio, unless otherwise agreed to by the parties hereto, the Adviser and
BDI, as applicable, will direct the Portfolio to effect such redemption "in
kind" in accordance with the in-kind redemption procedures adopted by the Master
Trust's Board of Trustees.
3.6 AUDITORS. If the Fund's independent public accountants differ from
those of the Portfolio, BDI and the Adviser will use their best efforts to
require the Master Trust's independent public auditors to provide the Fund's
independent public auditors with any assistance or cooperation reasonably
requested by the Fund or the Fund's independent public auditors. Such assistance
and cooperation will be considered within the scope of the Master
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Trust's independent public auditors' duties to the Master Trust, and shall
provided without charge to the Fund.
3.7 REASONABLE ACTIONS. Each party covenants that it will, subject to the
provisions of this Agreement, from time to time, as and when requested by
another party or in its own discretion, as the case may be, execute and deliver
or cause to be executed and delivered all such assignments and other
instruments, take or cause to be taken such actions, and do or cause to be done
all things reasonably necessary, proper or advisable in order to consummate the
transactions contemplated by this Agreement and to carry out its intent and
purpose.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 NOTIFICATION OF CERTAIN MATTERS. Each party will give prompt notice to
the other parties of (a) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate, and (b) any material failure of a party or any trustee, director,
officer, employee or agent thereof to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by such person
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 4.1 shall not limit or otherwise affect the remedies available,
hereunder or otherwise, to the party receiving such notice.
4.2 ACCESS TO INFORMATION. The Portfolio and the Fund shall afford each
other access at all reasonable times to such party's officers, employees, agents
and offices and to all its relevant books and records and shall furnish each
other party with all relevant financial and other data and information as
requested; provided, however, that nothing contained herein shall obligate the
Portfolio or the Fund to provide each other with access to the books and records
relating to any other series of the Master Trust and the Trust other than the
Portfolio or the Fund, nor shall anything contained herein obligate the
Portfolio or the Fund to furnish each other with a shareholder list, except as
may be required to comply with applicable law or any provision of this
Agreement.
4.3 CONFIDENTIALITY. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party (unless such
information is or becomes readily ascertainable from public information or trade
sources) and shall ensure that its officers, employees and authorized
representatives do not disclose such information to others without the prior
written consent of the party from whom it was obtained, except if disclosure is
required by the SEC, any other regulatory body or the Fund's or Portfolio's
respective auditors, or in the opinion of counsel such disclosure is required by
law, and then only with as much prior written notice to the other party as is
practical under the circumstances.
4.4 PUBLIC ANNOUNCEMENTS. No party shall issue any press release or
otherwise make any public statements with respect to the matters covered by this
Agreement without the prior consent of the other parties hereto, which consent
shall not be unreasonably withheld; provided, however, that consent shall not be
required if, in the opinion of counsel, such disclosure is required by law and
the party making such disclosure shall provide the other parties hereto with as
much prior written notice of such disclosure as is practical under the
circumstances.
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4.5 SHAREHOLDER MEETING EXPENSES. In the event that the Manager, the Trust
or the Fund shall be required to call a meeting of shareholders solely because
of actions relating to the Adviser, the Master Trust and/or the Portfolio, the
Adviser shall bear all expenses associated with such shareholder meeting.
4.6 WAIVER OF FEES/PAYMENT OF EXPENSES. The Adviser and BDI understand that
each of the Trust and the Manager have entered into this Agreement in reliance
upon the Adviser's and BDI's representation and warranty that the aggregate fees
and expenses of the Portfolio, including but not limited to investment
management, custody, administration, accounting, legal, audit and trustee fees
(the "Portfolio Fees") in addition to other charges by BDI to the Fund or the
Manager shall not exceed (a) .11 of 1% per annum, with respect to the
Portfolio's first $500 million in average annual net assets, and (b) .08 of 1%
per annum, with respect to average annual net assets of the Portfolio in excess
of $500 million. Accordingly, the Adviser and BDI each agrees to waive fees to
the Portfolio or the Fund or pay expenses of the Portfolio or the Fund such that
the aggregate Portfolio Fees and all fees charged to the Fund and the Manager by
BDI do not exceed the foregoing amounts.
ARTICLE V
TERMINATION AND AMENDMENT
5.1 TERMINATION. This Agreement may be terminated (a) by the mutual written
agreement of all parties, (b) at any time by the Fund by redeeming all of the
Fund's Shares in the Portfolio, (c) on not less than 120 days' prior written
notice by the Portfolio to the Fund, and (d) at any time immediately upon
written notice to the other parties in the event that formal proceedings are
instituted against another party to this Agreement by the SEC or any other
regulatory body, provided that the terminating party has a reasonable belief
that the institution of the proceeding is not without foundation and will have a
material adverse impact on the terminating party. The indemnification
obligations in Article III and the confidentiality provisions in Section 4.3
shall survive the termination of this Agreement.
5.2 AMENDMENT. This Agreement may be amended, modified or supplemented at
any time in such manner as may be mutually agreed upon in writing by the
parties.
ARTICLE VI
GENERAL PROVISIONS
6.1 NOTICES. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
when actually received in person or by facsimile, or three days after being sent
by certified or registered United States mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Trust, the Fund or the Manager:
0000 Xxxxxxxxxxxxxx Xxxx,
X-0-X
Xxx Xxxxxxx, Xxxxx 00000
Attn: Senior Vice President, Securities Counsel
Fax: (000) 000-0000
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If to the Adviser:
BlackRock Advisors, LLC.
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn:General Counsel
Fax: (000) 000-0000
If to BDI:
BlackRock Distributors, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn:Xxxxx XxXxxxxxx
Fax: (000) 000-0000
Any party to this Agreement may change the identity of the person to receive
notice by providing written notice thereof to all other parties to the
Agreement.
6.2 EXPENSES. Unless stated otherwise herein, all costs and expense
associated with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
6.3 HEADINGS. The headings and captions in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
6.4 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
6.5 ENTIRE AGREEMENT. This Agreement and the agreements and other documents
delivered pursuant hereto set forth the entire understanding among the parties
concerning the subject matter of this Agreement and incorporate or supersede all
prior understandings.
6.6 SUCCESSORS AND ASSIGNMENTS. Each and all of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and, except as otherwise specifically provided in this Agreement, their
respective successors and assigns. Notwithstanding the foregoing, no party shall
make any assignment of this Agreement or any rights or obligations hereunder
without the written consent of all other parties. As used herein, the term
"assignment" shall have the meaning ascribed thereto in the 1940 Act.
6.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
choice of law or conflicts of law provisions thereof.
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6.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing one or more counterparts.
6.9 THIRD PARTIES. Nothing herein expressed or implied is intended or shall
be construed to confer upon or give any person, other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
6.10 INTERPRETATION. Any uncertainty or ambiguity existing herein shall not
presumptively be interpreted against any party, but shall be interpreted
according to the application of the rules of interpretation for arm's length
agreements.
6.11 LIMITATION OF LIABILITY. Each party expressly acknowledges the
provisions in the Declaration of Trust of the Master Trust limiting the
liability of shareholders, officers and trustees of the Master Trust and the
provisions in the Articles of Incorporation of the Company limiting the
liability of shareholders, officers and directors of the Company.
6.12 ADDITIONAL LIMITATIONS OF LIABILITY. The parties hereto agree and
acknowledge that (a) the Company has entered into this Agreement solely on
behalf of the Fund and no other series of the Company shall have any obligation
hereunder with respect to any liability of the Company arising hereunder; (b)
the Adviser has entered into this Agreement solely on behalf of the Portfolio
and no other series of the Master Trust shall have any obligation hereunder with
respect to any liability of the Portfolio arising hereunder; and (c) no series
or feeder participant of the Master Trust shall be liable to any other series or
feeder participant of the Master Trust.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers, thereunto duly authorized, as of the date first
written above.
USAA MUTUAL FUNDS TRUST,
on behalf of its series,
USAA EXTENDED MARKET INDEX FUND
By:/s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
USAA INVESTMENT MANAGEMENT COMPANY
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President,
Secretary and Counsel
BLACKROCK DISTRIBUTORS, INC.
By: /s/ Xxxxx XxXxxxxxx
-------------------------------
Name: Xxxxx XxXxxxxxx
Title: Director
BLACKROCK ADVISORS, LLC
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
15
Exhibit h(xi)
AMENDED AND RESTATED SUBADMINISTRATION AGREEMENT
THIS AMENDED AND RESTATED SUBADMINISTRATION AGREEMENT is made as of the
2nd day of October 2006 between BLACKROCK ADVISORS LLC., a Delaware corporation
(the "Adviser"), and USAA INVESTMENT MANAGEMENT COMPANY (the "Administrator"), a
Delaware corporation.
W I T N E S S E T H:
WHEREAS, the Administrator is the administrator of USAA Mutual Funds
Trust (the "Trust"), which has registered with the Securities and Exchange
Commission ("SEC") as an open-end series management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the USAA Mutual Fund, Inc. (now doing business as USAA Mutual
Funds Trust) and Fund Asset Management, L.P. entered into a Subadministration
Agreement dated as of October 27, 2000; and
WHEREAS, as a result of the combination of Xxxxxxx Xxxxx Investment
Managers, L.P. and certain affiliates, including Fund Asset Management, L.P.,
and BlackRock, Inc. and its subsidiaries, a new advisory agreement dated
September 29, 2006 was approved between the Adviser and Quantitative Master
Series Trust (the "Master Trust"); and
WHEREAS, the Administrator and the Adviser desires to replace the
Agreement with this Amended and Restated Subadministration Agreement; and
WHEREAS, the USAA Extended Market Index Fund (the "Index Fund"), has
registered with the SEC offers and sales of shares issued by the Index Fund
under the Securities Act of 1933, as amended; and
WHEREAS, the Master Trust is registered with the SEC as an open-end
series management investment company under the 1940 Act; and
WHEREAS, the capital stock of the Master Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets, which series includes the BlackRock
Extended Market Series (the "Master Index Fund"); and
WHEREAS, pursuant to a Master-Feeder Participation Agreement dated as
of the 27th day of October, 2000, and amended and restated as of October 2,
2006, by and among the Administrator, the Adviser, the Trust and BlackRock
Distributors, Inc. (the "Feeder Agreement"), the Trust shall invest all of the
Index Fund's investable assets in the Master Index Fund in exchange for a
beneficial interest in the Master Index Fund; and
WHEREAS, as a consequence of and pursuant to the terms of the Feeder
Agreement, the Administrator desires to retain the Adviser for the purpose of
performing certain services for the Index Fund; and
WHEREAS, the Adviser is willing to provide services on the terms and
conditions hereafter set forth;
NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE 1
DUTIES OF THE ADVISER
1.1 The Administrator hereby employs the Adviser to act as subadministrator
and to furnish (or to arrange for affiliates to furnish) the services described
below for the period and on the terms and conditions set forth in this
Agreement. The Adviser hereby accepts such employment and agrees during such
period, at its own expense, to render (or to arrange for affiliates to render)
such services for the consideration provided for herein. The parties intend that
the Adviser shall for all purposes be deemed a
subcontractor of the Administrator and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Trust or
the Index Fund.
1.2 The Adviser shall provide the Administrator with the services set
forth in Schedule A and such other incidental administrative services relating
to the Index Fund and the Master Index Fund as the Administrator may from time
to time reasonably request.
1.3 The Adviser shall prepare and be responsible for filing with the SEC
and any state securities regulators requiring such filing, all shareholder
reports, notices, proxy materials (or similar materials such as voting
instruction solicitation materials), prospectuses and statements of additional
information of the Master Index Fund. The Adviser shall bear any costs or
registration and qualification of shares, preparation and filing of the
documents listed in this Section 1.3 and all taxes to which an issuer is subject
on the issuance and transfer of its shares, to the extent that such costs are
not borne directly by the Master Index Fund.
ARTICLE 2
OTHER OBLIGATIONS OF THE PARTIES
2.1 The Adviser shall provide the Administrator, free of charge, with as
many copies of the current registration statement for the Master Trust as the
Administrator may reasonably request.
2.2 The Administrator shall furnish, or cause to be furnished, to the
Adviser or its designee, a copy of the prospectus for the Index Fund or
statement of additional information for the Index Fund in which the Master
Trust, the Master Index Fund or the Adviser is named prior to the filing of such
document with the SEC. The Administrator shall furnish, or shall cause to be
furnished, to the Adviser or its designee, each piece of sales literature or
other promotional material in which the Master Index Fund or the Adviser is
named, at least five Business Days prior to its use. No such prospectus,
statement of additional information or material shall be used if the Adviser or
its designee reasonably objects to such use within five Business Days after
receipt of such material.
ARTICLE 3
COMPENSATION OF ADVISER
3.1 For the services rendered by the Adviser, the Administrator shall pay
to the Adviser an annual fee computed as a percentage of the Index Fund's
average annual net assets ("XXX") equal to:
(a) on the first $500 million of XXX, the lesser of (1) ten hundredths
of one percent (.10%) of the Index Fund's XXX, or (2) the amount
that brings the Expense Ratio (as defined below) of the Index Fund
up to eleven hundredths of one percent (.11%), and
(b) on amounts in excess of $500 million of XXX the lesser of (1)
seven hundredths of one percent (.07%) of the Index Fund's XXX, or
(2) the amount that brings the Expense Ratio of the Index Fund up
to eight hundredths of one percent (.08%).
For purposes of this paragraph, the term "Expense Ratio" means (i) the total
annual operating expenses of the Master Fund multiplied by the average annual
percentage interest of the Index Fund in the Master Fund, divided by (ii) the
Index Fund's XXX.
ARTICLE 4
DURATION AND TERMINATION OF THIS AGREEMENT
4.1. This Agreement may be terminated at any time by written agreement of
the parties hereto. This Agreement may also be terminated (a) at any time by the
Administrator by written notice to the Adviser, and (b) by the Adviser by 120
days prior written notice to the Administrator. Notwithstanding the above, this
Agreement will automatically terminate upon termination of the Feeder Agreement.
Upon termination:
A. The Administrator shall designate a successor (which may be an
affiliate of the Administrator) by notice in writing to the
Adviser on or before the termination date.
B. The Adviser shall deliver to the successor, or if none has
been designated, to the Administrator, all records, funds and
other properties of the Administrator or the Index Fund
deposited with or held by the Adviser hereunder.
4.2. AMENDMENT. This Agreement may be amended, modified or supplemented at
any time in such manner as may be mutually agreed upon in writing by the panics.
ARTICLE 5
STANDARD OF CARE: INDEMNIFICATION
5.1. The Adviser shall use reasonable care in performing its obligations
under this Agreement. The Adviser shall not be in violation of this Agreement
with respect to any matter as to which it has satisfied its obligation of
reasonable care.
5.2. The Adviser shall indemnify the Administrator against, and hold the
Administrator harmless from, any liabilities, losses, claims, costs, damages,
penalties, fines, obligations, or expenses of any kind whatsoever (including,
without limitation, reasonable attorneys', accountants', consultants' or
experts' fees and disbursements) ("Liabilities"), that may be imposed on,
incurred by or asserted against the Administrator, that result from the
Adviser's negligence, fraudulent acts or willful misconduct in performing its
duties as set out in this Agreement.
5.3. The Administrator shall indemnify the Adviser against, and hold the
Adviser harmless from, any Liabilities that may be imposed on, incurred by or
asserted against the Adviser in connection with or arising out of the
Administrator's negligence, fraudulent acts or willful misconduct in performance
of its duties under this Agreement.
ARTICLE 6
NOTICES
6.1. Notices, requests, instructions and other writings addressed to the
Administrator at 0000 Xxxxxxxxxxxxxx Xxxx, X-0-X, Xxx Xxxxxxx, Xxxxx 00000,
Attn: Senior Vice President, Securities Counsel & Compliance, or such address as
the Administrator may have designated to the Adviser in writing, shall be deemed
to have been properly given to the Administrator hereunder; notices, requests,
instructions and other writings addressed to the Adviser at 000 Xxxxxxxx Xxxx
Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attn: General Counsel or to such other
address as the Adviser may have designated to the Company in writing, shall be
deemed to have been properly given to the Adviser hereunder.
ARTICLE 7
GOVERNING LAW
7.1. This Agreement shall be construed in accordance with the laws of the
State of New York
ARTICLE 8
MISCELLANEOUS
8.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
8.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers, thereunto duly authorized, as of the date first
written above.
BLACKROCK ADVISORS, LLC
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
USAA INVESTMENT MANAGEMENT COMPANY
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President,
Secretary and Counsel
SCHEDULE A
ADMINISTRATIVE SERVICES
MAINTENANCE OF BOOKS AND RECORDS
* Maintaining an inventory of share purchases of the Master Index Fund by the
Index Fund, and providing any information or assistance reasonably required
by the Administrator or the transfer agent of the Trust to reconcile such
inventory with the books and records of the Index.
* Maintaining tax records relating to the Master Index Fund and providing the
Administrator with any information reasonably required by the Administrator
to calculate tax distributions for the Index Fund; and providing the
Administrator with periodic reports related to the Master Index Fund's tax
compliance status.
* Maintaining, preparing and providing reports and schedules relating to the
operation of the Master Index Fund that the Administrator may reasonably
request in connection with reports to be made to the Board of Directors of
the Trust, and maintaining, preparing or providing such other records
relating to the Master Index Fund which the Administrator may reasonably
require in connection with reports relating to the Trust or the Index
Portfolio to regulatory authorities.
REPORTS
* Providing periodic information reporting regarding the Master Index Fund to
the Administrator as reasonably required by the Administrator in order to
provide information relating to the performance or holdings of the Index
Fund to shareholders of the Index Fund.
OTHER ADMINISTRATIVE SUPPORT
* Preparation of reports relating to the Master Index Fund that the
Administrator may reasonably request be made to third-party reporting
services.
* Upon request of the Administrator, using its best efforts to require the
Master Trust's independent public auditors to provide the Trust's
independent public auditors with any assistance or cooperation reasonably
requested by the Administrator or the Trust's independent public auditors,
including the Index Fund annual and semiannual shareholder reports and
annual audit, including the financial statements of the Master Index Fund
