EXHIBIT 4(m)
INVESTMENT ACCOUNTING AGREEMENT
THIS AGREEMENT made and effective as of this 10th day of August,
2001, by and between USAA Mutual Fund, Inc. (the "Company"), a Maryland
corporation on behalf of USAA S&P 500 Index Fund (the "Fund"), a series of
the Company, and Investment Company Capital Corp, a Maryland corporation
("ICCC").
WHEREAS, the Company is registered as an "investment company" under
the Investment Company Act of 1940 (the "1940 Act") and the Fund is a duly
authorized series of the Company; and
WHEREAS, ICCC performs certain investment accounting and compliance
services in connection with maintaining certain accounting records of one
or more investment companies; and
WHEREAS, ICCC may perform certain investment accounting and
compliance services on a computerized accounting system (the "Portfolio
Accounting System"); and
WHEREAS, the Company desires to appoint ICCC as investment accounting
agent for the Fund, and ICCC is willing to accept such appointment;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF INVESTMENT ACCOUNTING AGENT. The Company hereby constitutes
and appoints ICCC as investment accounting agent for the Fund to perform
accounting and limited compliance functions related to portfolio
transactions required of the Fund under Rule 31a-1 of the 1940 Act and to
calculate the net asset value of the Fund. Notwithstanding Section 11.I,
ICCC may assign all or a portion of its duties and responsibilities
hereunder to one or more of ICCC's affiliates upon advance written notice
of such assignment to the Company. Nevertheless, any assignment by ICCC to
a person or entity which is not an affiliate of ICCC of all or a portion
of ICCC's duties and responsibilities hereunder shall comply with Section
11.I.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and acknowledges to ICCC:
A. That it is a corporation duly organized and existing and in good
standing under the laws of Maryland, and that it is registered under
the 1940 Act; and
B. That it has the requisite power and authority under applicable law,
its charter or articles of incorporation and its bylaws to enter into
this Agreement; that it has taken all requisite action necessary to
appoint ICCC as investment accounting agent for the Fund; that this
Agreement has been duly executed and delivered by the Company on
behalf of the Fund; and that this Agreement constitutes a legal, valid
and binding obligation of the Company, enforceable in accordance with
its terms.
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3. REPRESENTATIONS AND WARRANTIES OF ICCC. ICCC hereby represents, warrants
and acknowledges to the Company:
A. That it is a corporation duly organized and existing and in good
standing under the laws of the State of Maryland;
B. That it has the requisite power and authority under applicable law,
its charter or articles of incorporation and its bylaws to enter into
and perform this Agreement; that this Agreement has been duly
executed and delivered by ICCC; and that this Agreement constitutes a
legal, valid and binding obligation of ICCC, enforceable in
accordance with its terms; and
C. That the accounts maintained and preserved by ICCC shall be the
property of the Company and/or the Fund and that it will not use any
information made available to it under the terms hereof for any
purpose other than complying with its duties and responsibilities
hereunder or as specifically authorized in writing by the Company for
itself and on behalf of the Fund.
4. DUTIES AND RESPONSIBILITIES OF THE COMPANY.
A. The Company shall turn over to ICCC all of the Fund's accounts
previously maintained, if any.
B. The Company shall provide to ICCC the information necessary to
perform ICCC's duties and responsibilities hereunder in writing or
its electronic or digital equivalent prior to the close of the New
York Stock Exchange on each day on which ICCC prices the Funds'
securities and foreign currency holdings.
C. The Company shall furnish ICCC with the declaration, record and
payment dates and amounts of any dividends or income and any other
special actions required concerning the securities in the portfolio
when such information is not readily available from generally
accepted securities industry services or publications.
D. The Company shall pay to ICCC such compensation at such time as may
from time to time be agreed upon in writing by ICCC and the Company.
The initial compensation schedule is attached as Exhibit A.
E. The Company shall provide to ICCC, as conclusive proof of any fact or
matter required to be ascertained from the Company as reasonably
determined by ICCC, a certificate signed by the Company's president
or other officer of the Company, or other authorized individual, as
reasonably requested by ICCC. The Company shall also provide to ICCC
instructions with respect to any matter concerning this Agreement
requested by ICCC. ICCC may rely upon any instruction or information
furnished by any person reasonably believed by it to be an officer or
agent of the Company, and shall not be held to have notice of any
change of authority of any such person until receipt of written
notice thereof from the Company.
F. The Company shall preserve the confidentiality of the Portfolio
Accounting System and the tapes, books, reference manuals,
instructions, records, programs, documentation and information of,
and other materials relevant to, the Portfolio Accounting System and
the business of ICCC ("Confidential Information"). The Company shall
not voluntarily disclose such Confidential Information to any other
person other than its own employees or agents who reasonably have a
need to know such information pursuant to this Agreement. The Company
shall return all such Confidential Information to ICCC upon
termination or expiration of this Agreement. The Company acknowledges
that ICCC may contract with third parties for its Portfolio
Accounting System and may change Portfolio Accounting Systems at any
time if such change will not materially affect the services provided
under this Agreement. The Company further acknowledges that the
confidentiality provisions of this Agreement as they relate to the
Portfolio Accounting System are intended to provide protection to
ICCC, third party system providers and any of their respective
agents.
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G. If ICCC shall provide the Company direct access to the computerized
accounting and reporting system used hereunder or if ICCC and the
Company shall agree to utilize any electronic system of
communication, the Company shall be fully responsible for any and all
consequences of the use or misuse of the terminal device, passwords,
access instructions and other means of access to such system(s) which
are utilized by, assigned to or otherwise made available to the
Company. The Company agrees to implement and enforce appropriate
security policies and procedures to prevent unauthorized or improper
access to or use of such system(s). ICCC shall be fully protected in
acting hereunder upon any instructions, communications, data or other
information received by ICCC by such means as fully and to the same
extent as if delivered to ICCC by written instrument signed by the
requisite authorized representative(s) of the Company.
5. DUTIES AND RESPONSIBILITIES OF ICCC.
A. ICCC shall calculate the Fund's net asset value, in accordance with
the Fund's prospectus. ICCC will price the securities of the Fund for
which market quotations are available by the use of outside services
designated by the Company which are normally used and contracted with
for this purpose; all other securities will be priced in accordance
with the Company's instructions.
B. ICCC shall prepare and maintain, with the direction and as
interpreted by the Company or the Fund's accountants and/or other
advisors, in complete, accurate, and current form, all accounts and
records needed to be maintained as a basis for calculation of the
Fund's net asset value, and as further agreed upon by the parties in
writing, and shall preserve such records in the manner and for the
periods required by law or for such longer period as the parties may
agree upon in writing.
C. ICCC shall make available to the Company for inspection or
reproduction within a reasonable time, upon demand, all accounts and
records of the Fund maintained and preserved by ICCC. In addition,
ICCC shall periodically provide certain records to various parties,
all as specifically set forth in Exhibit B.
D. ICCC shall be entitled to rely conclusively on the completeness and
correctness of any and all accounts and records turned over to it by
the Company.
E. ICCC shall assist the Fund's independent accountants, or upon
approval of the Company or upon demand, any regulatory body, in any
requested review of the Fund's accounts and records maintained by
ICCC but shall be reimbursed by the Company for all expenses and
employee time invested in any such review outside of routine and
normal periodic reviews. Inspections conducted by the Securities and
Exchange Commission shall be considered routine.
F. Upon receipt from the Company of any necessary information or
instructions, ICCC shall provide information from the books and
records it maintains for the Company with respect to the Fund that
the Company needs for Fund tax returns, questionnaires, or periodic
reports to shareholders and such other reports and information
requests as the Company and ICCC shall agree upon from time to time.
G. ICCC shall not have any responsibility hereunder to the Company, the
Fund, the Fund's shareowners or any other person or entity for moneys
or securities of the Fund, whether held by the Fund or custodians of
the Fund.
H. ICCC agrees that it shall hold in strict confidence all data and
information obtained from the Fund or any related party (unless such
information is or becomes readily ascertainable from public or
published 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
Fund, except if disclosure is required by the Securities and Exchange
Commission or other regulator body or the Fund's auditors or in the
opinion of counsel such disclosure is required by law, and then only
with as much prior written notice to the Fund as is practical under
the circumstances.
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6. INDEMNIFICATION.
A. The Company shall indemnify and hold ICCC harmless from and against
any and all costs, expenses, losses, damages, charges, reasonable
counsel fees, payments and liabilities which may be asserted against
or incurred by ICCC, or for which it may be liable, arising out of or
attributable to:
1. ICCC's action or omission to act pursuant hereto except for
any loss or damage arising form any negligent act or willful
misconduct of ICCC.
2. ICCC's payment of money as requested by the Company, or the
taking of any action which might make ICCC liable for payment of
money; provided, however, that ICCC shall not be obligated to
expend its own moneys or to take any such action except in ICCC's
sole discretion.
3. ICCC's action or omission to act hereunder upon any
instructions, advice, notice, request, consent, certificate or
other instrument or paper reasonably believed by it to be genuine
and to have been properly executed and/or authorized.
4. ICCC's action or omission to act in good faith reliance on the
opinion of outside counsel acceptable to both the Company and
ICCC.
5. ICCC's action or omission to act in good faith reliance on
statements of counsel to the Company, the Company's or the Fund's
independent accountants, and the Company's officers or other
authorized individuals provided by Company resolution.
6. The legality of the issue, sale or purchase of any shares of
the Fund, the sufficiency of the purchase or sale price, or the
declaration of any dividend by the Fund, whether paid in cash or
stock.
7. Any error, omission, inaccuracy or other deficiency in the
Fund's accounts and records or other information provided by the
Company or on behalf of the Company to ICCC, of the failure of the
Company to provide, or provide in a timely manner, the information
needed by ICCC to perform its functions as specified in Section
4.C. hereunder.
8. The Company's refusal or failure to comply with the terms of
this Agreement, the Company's negligence or willful misconduct in
connection with the performance of its duties hereunder, or the
failure of any representation of the Company hereunder to be and
remain true and correct in all respects at all times.
9. The use or misuse, whether authorized or unauthorized, of the
Portfolio Accounting System or other computerized recordkeeping
and reporting system to which ICCC provides the Company direct
access hereunder or of any other electronic system of
communication used hereunder by the Company or by any person who
acquires access to such system(s) through a terminal device,
passwords, access instruction or other means of access to such
system(s) which are utilized by, assigned to or otherwise made
available to the Company, except to the extent attributable to any
negligence or willful misconduct by ICCC.
B. ICCC shall indemnify and hold the Company harmless from and against
any and all costs, expenses, losses, damages, charges, reasonable
counsel fees, payments and liabilities which may be asserted against
or incurred by the Company, or for which it may be liable, arising
out of or attributable to:
1. ICCC's refusal or failure to comply with the terms of this
Agreement or the failure of any representation or warranty of ICCC
hereunder to be and remain true and correct in all respects at all
times.
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2. Any negligent or willful misconduct of ICCC, including direct
losses occasioned by the negligent error of ICCC in calculating
the Fund's net asset value; provided, however, that ICCC may take
reasonable steps at its own expense to mitigate any monetary
damages occurring as a result of ICCC's actions.
3. The failure of ICCC to materially comply with applicable law
in connection with the performance of its duties hereunder.
In no event shall ICCC or the Company be liable for consequential, special
or punitive damages.
7. FORCE MAJEURE. ICCC shall not be responsible or liable for its failure or
delay in performance of its obligations under this Agreement arising out
of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation: any interruption, loss
or malfunction of any utility, transportation, computer (hardware or
software) or communication service; inability to obtain labor, material,
equipment or transportation, or a delay in mails; government or exchange
action, statute, ordinance, rulings, regulations or direction; war,
strike, riot, emergency, civil disturbance, terrorism, vandalism,
explosions, labor disputes, freezes, floods, fires, tornadoes, acts of God
or public enemy, revolutions, or insurrection.
8. PROCEDURES. ICCC and the Company may from time to time adopt procedures as
they agree upon, and ICCC may conclusively assume that any procedure
approved in writing or directed by the Company or its accountants or other
advisors does not conflict with or violate any requirements of the Fund's
prospectus or the Company's, charter or articles of incorporation, bylaws,
any applicable law, rule or regulation, or any order, decree or agreement
by which the Company may be bound.
9. TERM AND TERMINATION. The initial term of this Agreement shall be a period
of one year commencing on the effective date hereof. This Agreement shall
continue thereafter until terminated by either party by notice in writing
received by the other party not less than sixty (60) days prior to the
date upon which such termination shall take effect. Upon termination of
this Agreement:
A. The Company shall pay to ICCC its fees and compensation due hereunder.
B. The Company shall designate a successor (which may be the Company)
by notice in writing to ICCC on or before the termination date.
C. ICCC shall deliver to the successor, or if none has been designated,
to the Company, in a format designated by the Company or the
successor, all records, funds and other properties of the Company or
the Fund deposited with or held by ICCC's hereunder. In the event
that neither a successor nor the Company takes delivery of all
records, funds and other properties of the Company or the Fund by the
termination date, ICCC's sole obligation with respect thereto from
the termination date until delivery to a successor or the Company
shall be to exercise reasonable care to hold the same in custody in
its form and condition as of the termination date, and ICCC shall be
entitled to reasonable compensation therefor, including but not
limited to all of its out-of-pocket costs and expenses incurred in
connection therewith.
10. NOTICES. Notices, requests, instructions and other writings addressed to
the Company at USAA Mutual Fund, Inc., 0000 Xxxxxxxxxxxxxx Xxxx,
XXX-X-00-X, Xxx Xxxxxxx, Xxxxx 00000, Attention: Vice President,
Securities Counsel & Compliance, or at such address as that the Company
may have designated to ICCC in writing, shall be deemed to have been
properly given to the Company hereunder; and notices, requests,
instructions and other writings addressed to ICCC at its offices at Xxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000; Attention: Xxxxxxx X. Xxxx, or to
such other address as it may have designated to the Fund in writing, shall
be deemed to have been properly given to ICCC hereunder.
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11. MISCELLANEOUS.
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of
the State of Maryland, without reference to the choice of laws
principles thereof.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. The representations, warranties, and indemnifications extended
hereunder, and the provisions of Section 4.G. are intended to and
shall continue after and survive the expiration, termination or
cancellation of this Agreement.
D. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by each party hereto.
E. The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights
resulting from any breach of any of the terms or conditions of this
Agreement, including the payment of damages, shall not be construed
as a continuing or permanent waiver of any such terms, conditions,
rights or privileges, but the same shall continue and remain in full
force and effect as if no such forbearance or waiver had occurred.
F. The captions in this Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect.
G. This Agreement may be executed in two or more separate counterparts,
each of which shall be deemed an original but all of which together
shall constitute one and the same instrument.
H. If any provision of this Agreement shall be determined to be invalid
or unenforceable, the remaining provisions of this Agreement shall
not be affected thereby, and every provision of this Agreement shall
remain in full force and effect and shall remain enforceable to the
fullest extent permitted by applicable law.
I. This Agreement may not be assigned by either party hereto without the
prior written consent of the other.
J. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between the
Company and ICCC.
K. Except as specifically provided herein, this Agreement does not in
any way affect any other agreements entered into among the parties
hereto and any actions taken or omitted by any party.
L. Notice is hereby given that a copy of the Company's articles of
incorporation and all amendments thereto is on file with the
Secretary of State of the state of its organization; that this
Agreement has been executed on behalf of the Company by the
undersigned duly authorized representative of the Company in his/her
capacity as such and not individually. The Company is authorized to
issue shares of capital stock in separate series, with each such
series representing interests in a separate portfolio of securities
and other assets. Under no circumstances shall the rights,
obligations or liabilities under this Agreement with respect to the
Fund constitute a right, obligation or liability with respect to any
other series of the Company, and ICCC shall look solely to the assets
of the Fund with respect to any such liability.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective and duly authorized officers, to be effective as of the day
and year first above written.
Investment Company Capital Corp
By: /S/ XXXXXXX X. XXXX
-------------------
Name: XXXXXXX X. XXXX
Title: PRESIDENT
USAA Mutual Fund, Inc., on behalf of its series
USAA S&P 500 Index Fund
By: /S/ XXXXX X. XXXXXX
-------------------
Name: Xxxxx X. Xxxxxx
Title: Treasurer
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EXHIBIT A
There will not be any separate payment of any Investment Accounting fee under
this Agreement. All fees in connection with the management of the Fund and the
Accounting and compliance services provided to the Fund will be paid under and
in conjunction with the investment sub-advisory agreement between the Company
and Deutsche Asset Management, Inc. ("XxXX, Inc."), an affiliate of ICCC. ICCC
shall look solely to XxXX, Inc. for payment for services provided under this
Agreement.
USAA Mutual Fund, Inc. , on behalf of Investment Company Capital Corp
its series USAA S&P 500 Index Fund
By: /S/ XXXXX X. XXXXXX By: /S/ XXXXXXX X. XXXX
-------------------- --------------------
Name: Xxxxx X. Xxxxxx Name: XXXXXXX X. XXXX
Title: Treasurer Title: PRESIDENT
Exhibit A is hereby Agreed to By
Deutsche Asset Management, Inc.
By: /S/ XXXXX XXXXXXXXX
--------------------
Name: XXXXX XXXXXXXXX
Title:VP COUNSEL
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EXHIBIT B
On a daily basis, ICCC shall provide the following accounting functions with
respect to the Fund:
A. Journalize the Fund's investment, capital share and income and expense
activities;
B. Verify investment buy/sell trade tickets when received from the Fund's
investment adviser and transmit trades to the Fund's custodian for proper
settlement;
C. Maintain ledgers for investment securities;
D. Maintain historical tax lots in accordance with the specific identification
method for each security;
E. Reconcile cash and investment balances with the custodian, and provide the
Fund's investment adviser with the beginning cash balance available for
investment purposes;
F. Update the cash availability throughout the day as required by the Fund's
investment adviser;
G. Calculate various contractual expenses (e.g., adviser and custody fees);
H. Control all authorized disbursements from the Fund upon written
instructions;
I. Determine the Fund's net investment income;
J. Obtain security market prices from independent pricing services approved
by the Fund's Board or if such prices are unavailable, then follow fair value
procedures approved by the Fund's Board in order to calculate the market value
of the Fund's investments;
K. Transmit or mail a copy of the portfolio valuations to the Fund's
investment adviser/sub-adviser when requested;
L. Compute the net assets and net asset value of the Fund and transmit via
email (fax for backup purposes) to the Fund's transfer agent and the Fund's
investment adviser no later than 6:30 p.m. EST same day unless circumstances
prevent such. If the Fund's net assets and net asset value cannot be computed
or transmitted to the Fund's transfer agent and the Fund's investment adviser
by 6:30 p.m. EST same day, ICCC will telephone the Fund's transfer agent
pricing pager and the Fund's investment adviser (or other person designated by
the Fund from time to time); and ICCC will electronically deliver to the Fund's
transfer agent a daily pricing file (via FTP) by 6:30 p.m. EST. If the pricing
file cannot be transmitted to the Fund's transfer agent by 6:30 p.m. EST same
day, ICCC will call the Fund's transfer agent pricing pager ; and
M. Post to and prepare the Fund's general ledger and transmit electronically
or via fax to the Fund's transfer agent and the Fund's investment adviser no
later than 9:00 a.m. EST next day unless circumstances so prevent. If the
Fund's general ledger cannot be transmitted to the Fund's transfer agent and
the Fund's investment adviser by 9:00 a.m. EST next day, ICCC will contact the
Fund's transfer agent pricing pager and the Fund's investment adviser (or other
person designated by the Fund from time to time).
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In addition ICCC will:
A. Supply readily available Fund statistical data to the Company as requested
on an ongoing basis;
B. Provide information necessary for the Fund to prepare federal and state tax
returns, annual and semi-annual reports, Form N-SARs and proxy statements;
C. Monitor the Fund's status as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") from
time to time;
D. Provide information necessary for the Fund to determine the amount of
dividends and other distributions payable to shareholders as necessary to, among
other things, maintain the qualification as a regulated investment company of
the Fund under the Code;
E. Prepare monthly compliance report to the Company and quarterly compliance
memorandum to the Fund's Board of Directors;
F. Prepare annual and semi-annual trial balances for financial statement
preparation that includes all adjustments for last day trades, last day cap
stock, and any other adjusting journal entries set forth by the Fund or the
Fund's auditors;
G. Prepare annual and semi-annual portfolio of investments schedules for
financial statement preparation with all relevant footnotes (non-income
producing, restricted securities, etc.) as well as a schedule of the futures;
H. Provide the following information for the periods as required by the
Fund's investment adviser: wash sale reports; dividends eligible for the
corporate received deduction; income earned from U.S. government and agency
securities; reports identifying the gain or loss on individual security
transactions; and reports to calculate the shareholder state tax information
for our South Carolina and Massachusetts shareholders; and
I. Provide all Fund records supporting and necessary for the Fund to prepare
the Fund's Statement of Net Assets and Liabilities, the Statement of Operations
and the Statement of Changes in Net Assets.
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