EXHIBIT 4(l)
SUB-ADVISORY AGREEMENT
AGREEMENT made as of the 10th day of August, 2001 (the "Effective Date"),
between USAA INVESTMENT MANAGEMENT COMPANY, a corporation organized under the
laws of the state of Delaware and having its principal place of business in San
Antonio, Texas (the "Adviser") and DEUTSCHE ASSET MANAGEMENT, INC., a
corporation organized under the laws of the state of Delaware and having its
principal place of business in New York City, New York (the "Sub-Adviser").
WHEREAS, the Adviser is engaged principally in the business of rendering
investment management services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Sub-Adviser is engaged principally in the business of
rendering investment management services and is registered as an investment
adviser under the Advisers Act; and
WHEREAS, USAA MUTUAL FUND, INC., a corporation organized under the laws of
the state of Maryland (the "Company"), is an open-end management investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Company is authorized to issue shares of beneficial interest
in separate series, with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Company has established one (1) separate series, the USAA S&P
500 Index Fund, such series together with all other series subsequently
established by the Company with respect to which the Sub-Adviser renders
investment advisory services pursuant to the terms of this Agreement, being
herein referred to as the "Fund"; and
WHEREAS, pursuant to an Advisory Agreement, dated as of August 3, 2001,
between the Company and the Adviser (the "Advisory Agreement"), the Adviser is
required to perform investment advisory services for the Fund.
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF SUB-ADVISER.
(a) USAA S&P 500 INDEX FUND. The Adviser hereby employs the Sub-Adviser to
provide investment advisory services to the USAA S&P 500 Index Fund for the
period and on the terms herein set forth. The Sub-Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
(b) ADDITIONAL FUNDS. In the event that the Company establishes one or
more series of shares other than the USAA S&P 500 Index Fund with respect to
which the Adviser desires to
retain the Sub-Adviser to render investment advisory services hereunder, the
Adviser shall so notify the Sub-Adviser in writing, indicating the advisory fee
to be payable with respect to the additional series of shares. If the
Sub-Adviser is willing to render such services on the terms provided for
herein, it shall so notify the Adviser in writing, whereupon such series shall
become a Fund hereunder.
2. DUTIES OF ADVISER AND SUB-ADVISER.
(i) DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
true copies of each of the following:
(a) The Company's Articles of Incorporation, as filed with the
Department of Assessments and Taxation of the state of Maryland and all
amendments and supplements thereto (such Articles of Incorporation, as
presently in effect and as it shall from time to time be amended or
supplemented, is herein called the "Declaration");
(b) The Company's Bylaws and amendments and supplements thereto (such
Bylaws, as presently in effect and as it shall from time to time be
amended and supplemented, is herein called the "Bylaws");
(c) Resolutions of the Company's Board of Directors authorizing the
appointment of the Adviser and Sub-Adviser and approving the Advisory
Agreement and this Agreement and copies of the written consent in lieu of
initial meeting of sole shareholder of the Fund;
(d) The most recent amendment to the Company's Registration Statement
on Form N-1A under the Securities Act of 1933, as amended (the "1933
Act"), and the 1940 Act (File Nos. 2-49560 and 811-2429) as filed with the
Securities and Exchange Commission (the "Commission") on April 30, 2001,
and
(e) The current prospectus and Statement of Additional Information
(collectively, such prospectus and Statement of Additional Information, as
in effect from time to time and all amendments and supplements thereto,
are herein called the "Prospectus") of each Fund;
The Adviser will furnish the Sub-Adviser from time to time with copies
of all amendments of or supplements to items (a), (b), (c), (d), and (e).
(ii) The Sub-Adviser, at its own expense, shall furnish the following
services to the Company:
(a) INVESTMENT PROGRAM. The Sub-Adviser is hereby authorized and
directed and hereby agrees, subject to the overall supervision of the
Adviser and the Board of Directors of the Company, to (i) develop and
furnish continuously an investment program and strategy for the Fund, (ii)
provide index information and analysis relative to the
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investment program and investments of the Fund, (iii) determine what
investments shall be purchased, held, sold or exchanged by the Fund and
what portion, if any, of the assets of the Fund shall be held in cash or
cash equivalents, and (iv) purchase and sell portfolio securities on
behalf of the Company with respect to each Fund. The Sub-Adviser shall
perform these duties in conformity with (1) the stated investment
objectives, policies and restrictions of the Fund as set forth in the
Company's effective Registration Statement, (2) any additional policies or
guidelines established by the Adviser or Board of Directors of the Company
that have been furnished in writing to the Sub-Adviser, (3) the provisions
of the Internal Revenue Code of 1986, as amended (the "Code") applicable
to "regulated investment companies" (as defined in Section 851 of the
Code), as from time to time in effect, and (4) applicable provisions of
law, including without limitation all applicable provisions of the 1940
Act and the rules and regulations thereunder. The Adviser shall provide
the Sub-Adviser with prior written notice of any material change to the
Company's Registration Statement that would affect the Sub-Adviser's
management of the Fund. In accordance with paragraph 2(ii)(b), the
Sub-Adviser shall arrange for the execution of all orders for the purchase
and sale of securities and other investments for the Fund's account and
will exercise full discretion and act for the Company in the same manner
and with the same force and effect as the Company might or could do with
respect to such purchases, sales, or other transactions, as well as with
respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales, or other transactions. The Sub-Adviser
will make its officers and employees available to meet with the Adviser's
officers and directors on due notice at reasonable times to review the
investments and investment program of the Fund in the light of current and
prospective economic and market conditions.
In the performance of its duties hereunder, the Sub-Adviser is and
shall be an independent contractor and except as expressly provided for
herein or otherwise expressly provided or authorized shall have no
authority to act for or represent any Fund or the Company in any way or
otherwise be deemed to be an agent of any Fund, the Company or of the
Adviser. If any occasion should arise in which the Sub-Adviser gives any
advice to its clients concerning the shares of a Fund, the Sub-Adviser
will act solely as investment counsel for such clients and not in any way
on behalf of the Company or any Fund.
(b) PORTFOLIO TRANSACTIONS. In connection with the management of the
investment and reinvestment of the Fund's assets, the Sub-Adviser, acting
by its own officers, directors or employees or by a duly authorized
subcontractor, is authorized to select the broker or dealers that will
execute purchase and sale transactions for the Company of behalf of the
Fund.
In executing portfolio transactions and selecting brokers or dealers,
if any, the Sub-Adviser will use its best efforts to seek on behalf of a
Fund the best overall terms available. In assessing the best overall terms
available for any transaction, the Sub-Adviser shall consider all factors
it deems relevant, including (without limitation) the breadth of the
market in and the price of the security, the financial condition and
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execution capability of the broker or dealer, the quality of research
provided and the reasonableness of the commission, if any, with respect to
the specific transaction and on a continuing basis.
The Sub-Adviser may buy securities for the Fund at the same time it
is selling such securities for another client account and may sell
securities for the Fund at the time it is buying such securities for
another client account. In such cases, subject to applicable legal and
regulatory requirements, and in compliance with such procedures of the
Company as may be in effect from time to time, the Sub-Adviser may
effectuate cross transactions between the Fund and such other account if
it deems this to be advantageous. The Sub-Adviser also may cause the Fund
to enter into other types of investment transactions (e.g., a long
position on a particular securities index) at the same time it is causing
other client accounts to take opposite economic positions (e.g., a short
position on the same index).
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients,
the Sub-Adviser, to the extent permitted by applicable laws and
regulations, and in compliance with such procedures of the Company as may
be in effect from time to time, may aggregate the securities to be sold or
purchased in order to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Sub-Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the subject
Fund and to such clients.
The Sub-Adviser will advise the Fund's custodian or such depository
or agents as may be designated by the custodian and the Adviser promptly
of each purchase and sale of a portfolio security, specifying the name of
the issuer, the description and amount or number of shares of the security
purchased, the market price, the commission and gross or net price, the
trade date and settlement date, the identity of the effecting broker or
dealer and any other pertinent data that the Fund's custodian may need to
settle a security's purchase or sale. The Sub-Adviser shall not have
possession or custody of any Fund investments. The Company shall be
responsible for all custodial agreements and the payment of all custodial
charges and fees and, upon the Sub-Adviser giving proper instructions to
the custodian, the Sub-Adviser shall have no responsibility or liability
for the acts, omissions or other conduct of the custodian.
Notwithstanding the foregoing, the Sub-Adviser agrees that the
Adviser shall have the right by written notice to identify securities that
may not be purchased on behalf of any Fund and/or brokers and dealers
through which portfolio transaction on behalf of the Fund may not be
effected, including, without limitation, brokers or dealers affiliated
with the Adviser. The Sub-Adviser shall refrain from purchasing such
securities for the Fund or directing any portfolio transaction to any such
broker or dealer on behalf of the Fund, unless and until the written
approval of the Adviser to do so is obtained. In
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addition, the Sub-Adviser agrees that it shall not direct portfolio
transactions for the Fund through any broker or dealer that is an
"affiliated person" of the Sub-Adviser (as that term is defined in the Act
or interpreted under applicable rules and regulations of the Commission)
without the prior written approval of the Adviser except as permitted
under the 1940 Act. Consistent with applicable law and the Sub-Adviser's
procedures, the Sub-Adviser may direct portfolio transactions on behalf of
the Fund to any broker/dealer in recognition of sales of shares of any
investment company or receipt of research or other service without prior
written approval of the Adviser. The Adviser agrees that it will provide
the Sub-Adviser with a list of brokers and dealers that are "affiliated
persons" of the Fund.
(c) REPORTS. The Sub-Adviser shall render to the Board of Directors
of the Company such periodic and special reports as the Board of Directors
may reasonably request with respect to matters relating to the duties of
the Sub-Adviser set forth herein.
3. SUB-ADVISORY FEE.
For the services to be provided by the Sub-Adviser as provided in
Paragraph 2 hereof, the Adviser shall pay to the Sub-Adviser an annual fee as
set forth on Schedule A to this Agreement.
In the case of commencement or termination of this Agreement with respect
to any Fund during any calendar month, the fee with respect to such Fund for
that month shall be reduced proportionately based upon the number of calendar
days during which it is in effect, and the fee shall be computed based upon the
average daily net assets of such Fund for the days during which it is in
effect.
4. EXPENSES.
During the term of this Agreement, the Sub-Adviser will bear all expenses
incurred by it in the performance of its duties hereunder, other than those
expenses specifically assumed by the Company hereunder. The Company shall
assume and shall pay (i) all expenses, fees, and taxes chargeable to the
Company in connection with securities transactions to which any Fund is a
party; (ii) all interest on borrowed money, if any; (iii) all brokers' and
underwriting commissions chargeable to the Company in connection with the
securities transactions to which any Fund is a party; and (iv) all transaction
costs and fees payable in connection with any securities lending program.
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5. COMPLIANCE WITH APPLICABLE REGULATIONS.
In performing its duties hereunder, the Sub-Adviser
(i) shall establish compliance procedures reasonably calculated to ensure
compliance at all times with: all applicable provisions of the 1940 Act
and the Advisers Act, and any rules and regulations adopted thereunder;
Subchapter M of the Code; the provisions of the Registration Statement;
the provisions of the Declaration and the Bylaws of the Company, as the
same may be amended from time to time; and any other applicable provisions
of state, federal or foreign law.
(ii) acknowledges that it has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and that the
Sub-Adviser and certain of its employees, officers and directors are
subject to reporting requirements thereunder and, accordingly, agrees that
it shall, on a timely basis, furnish, and shall cause its employees,
officers and directors to furnish, to the Adviser and/or to the Company,
all reports and information required to be provided under such code of
ethics with respect to such persons.
(iii) agrees that it will maintain for the Company all and only such
records as required under Rules 31a-1 and 31a-2 under the 1940 Act in
respect to its services hereunder and that such records are also the
property of the Company and further agrees to surrender promptly to the
Company a copy of any such records upon the Company's request, all in
accordance with Rule 31a-3 under the 1940 Act.
6. LIABILITY OF SUB-ADVISER; INDEMNIFICATION
Neither the Sub-Adviser nor the officers, directors, employees, agents, or
legal representatives (collectively, "Related Persons") of the Sub-Adviser
shall be liable for any error of judgment or mistake of law, or for any loss
suffered by any Fund or its shareholders in connection with the matters to
which this Agreement relates; provided that, except as set forth in the
succeeding paragraph, no provision of this Agreement shall be deemed to protect
the Sub-Adviser or its Related Persons against any liability to which it might
otherwise be subject by reason of any willful misfeasance, bad faith or
negligence or the reckless disregard of the Sub- Adviser's obligations and
duties (each of which is hereby referred to as a "Culpable Act") under this
Agreement.
Neither the Sub-Adviser nor its Related Persons shall be liable for any
error of judgment or mistake of law, or for any loss suffered by the Adviser or
its Related Persons in connection with the matters to which this Agreement
relates; provided that this provision shall not be deemed to protect the
Sub-Adviser or its Related Persons against any liability to which it might
otherwise be subject by reason of any Culpable Act by the Sub-Adviser or its
Related Persons.
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Neither the Sub-Adviser and its Related Persons nor the Adviser and its
Related Persons shall be liable for delays or errors by reason of circumstances
beyond their control, including, but not limited to, acts of civil or military
authority, national emergencies, labor difficulties, suspensions of trading,
fire, mechanical breakdown, flood or catastrophe, "Acts of God," insurrection,
war, riots or failure of communication or power supply; PROVIDED, HOWEVER, that
the Sub-Adviser and its Related Persons or the Adviser and its Related Persons,
as the case may be, have acted reasonably in preventing the occurrence of such
events and eliminating the continuation of such events; PROVIDED further that
neither the Adviser and its Related Persons nor the Sub-Adviser and its Related
Persons, as the case may be, shall be liable for any consequential damages
related thereto.
The Adviser shall indemnify the Sub-Adviser and its Related Persons and
hold them harmless from and against any and all actions, suits or claims
whether groundless or meritorious, and from and against any and all losses,
damages, costs, charges, reasonable counsel fees, payments, expenses and
liabilities (collectively, "Damages") arising directly or indirectly out of or
in connection with the performance of services by the Sub-Adviser or its
Related Persons hereunder to the extent such Damages result from any willful
misfeasance, bad faith or negligence or the reckless disregard of the Adviser's
obligation and duties under this agreement.
The Sub-Adviser shall indemnify the Adviser and its Related Persons from
and against any Damages arising directly or indirectly out of or in connection
with the performance of services by the Adviser or its Related Persons under
this Agreement or the Advisory Agreement, in each case, to the extent such
Damages result from any Culpable Act of the Sub-Adviser or any of its Related
Persons.
7. REPRESENTATIONS AND WARRANTIES.
(a) ADVISER. The Adviser represents and warrants to the Sub-Adviser that
(i) the retention of the Sub-Adviser by the Adviser as contemplated by this
Agreement is authorized by the respective governing documents of the Company
and the Adviser; (ii) the execution, delivery and performance of each of this
Agreement and the Advisory Agreement does not violate any obligation by which
the Company or the Adviser or their respective property is bound, whether
arising by contract, operation of law or otherwise; and (iii) each of this
Agreement and the Advisory Agreement has been duly authorized by appropriate
action of the Company and the Adviser and when executed and delivered by the
Adviser will be the legal, valid and binding obligation of the Company and the
Adviser, enforceable against the Company and Adviser in accordance with its
terms hereof subject, as to enforcement, to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or law); and (iv) the Adviser is registered as an investment adviser
under the Advisers Act.
(b) SUB-ADVISER. The Sub-Adviser represents and warrants to the Adviser
that (i) the retention of the Sub-Adviser by the Adviser as contemplated by
this Agreement is authorized by the Sub-Adviser's governing documents; (ii) the
execution, delivery and performance of this
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Agreement does not violate any obligation by which the Sub-Adviser or its
property is bound, whether arising by contract, operation of law or otherwise;
and (iii) this Agreement has been duly authorized by appropriate action of the
Sub-Adviser and when executed and delivered by the Sub-Adviser will be the
legal, valid and binding obligation of the Sub-Adviser, enforceable against the
Sub-Adviser in accordance with its terms hereof, subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or law); and (iv) the
Sub-Adviser is either registered as an investment adviser under the Advisers
Act, or is not required to so register under applicable law.
8. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) DURATION. This Agreement shall become effective with respect to the
USAA S&P 500 Index Fund on the Effective Date and, with respect to any
additional Fund, on the date of receipt by the Adviser of notice from the
Sub-Adviser in accordance with Paragraph 1(b) hereof that the Sub-Adviser is
willing to serve as Sub-Adviser with respect to such Fund. Unless terminated as
herein provided, this Agreement shall remain in full force and effect for two
years from the date hereof with respect to the USAA S&P 500 Index Fund and,
with respect to each additional Fund, for two years from the date on which such
Fund becomes a Fund hereunder. Subsequent to such initial periods of
effectiveness, this Agreement shall continue in full force and effect for
periods of one year thereafter with respect to the Fund so long as such
continuance with respect to any such Fund is approved at least annually (a) by
either the Directors of the Company or by vote of a majority of the outstanding
voting securities (as defined in the 0000 Xxx) of such Fund, and (b) in either
event, by the vote of a majority of the Directors of the Company who are not
parties to this Agreement or "interested persons" (as defined in the 0000 Xxx)
of any such party, cast in person at a meeting called for the purpose of voting
on such approval.
(b) AMENDMENT. This Agreement may be amended by agreement of the parties,
provided that the amendment shall be approved by the vote of a majority of each
of the Directors of the Company and the Directors of the Company who are not
parties to this Agreement or interested persons of any such party to this
Agreement, in each case at a meeting called for that purpose.
(c) TERMINATION. This Agreement may be terminated with respect to any Fund
at any time, without payment of any penalty, (i) by vote of the Directors of
the Company or by vote of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of that Fund, (ii) by the Adviser, or (iii) by the
Sub-Adviser, in each case on sixty (60) days' prior written notice to the other
party. Upon the effective date of termination of this Agreement, the
Sub-Adviser shall deliver all books and records of the Company or any Fund held
by it (i) to such entity as the Company may designate as a successor
sub-adviser, or (ii) to the Adviser.
(d) AUTOMATIC TERMINATION. This Agreement shall automatically and
immediately terminate in the event of its assignment (as defined in the 1940
Act).
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(e) APPROVAL, AMENDMENT, OR TERMINATION BY INDIVIDUAL FUND. Any approval,
amendment, or termination of this Agreement by the holders of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of any Fund shall be
effective to continue, amend or terminate this Agreement with respect to any
such Fund notwithstanding (i) that such action has not been approved by the
holders of a majority of the outstanding voting securities of any other Fund
affected thereby, and/or (ii) that such action has not been approved by the
vote of a majority of the outstanding voting securities of the Company, unless
such action shall be required by any applicable law or otherwise.
9. SERVICES NOT EXCLUSIVE.
The services of the Sub-Adviser to the Adviser in connection with the Fund
hereunder are not to be deemed exclusive, and the Sub-Adviser shall be free to
render similar services to others so long as its services hereunder are not
impaired thereby. It is understood that the persons employed by the Sub-Adviser
to assist in the performance of its duties hereunder will not devote their full
time to such services and nothing hereunder contained shall be deemed to limit
or restrict in any manner whatsoever the right of the Sub-Adviser to engage in
or devote time and attention to other businesses or to render services of
whatever kind or nature.
10. ADDITIONAL AGREEMENTS
(a) ACCESS TO INFORMATION. The Sub-Adviser shall, upon reasonable notice,
afford the Adviser at all reasonable times access to Sub-Adviser's officers,
employees, agents and offices and to all its relevant books and records and
shall furnish the Adviser with all relevant financial and other data and
information as requested; provided, however, that nothing contained herein
shall obligate the Sub-Adviser to provide the Adviser with access to the books
and records of the Sub-Adviser relating to any other funds other than the Fund.
(b) CONFIDENTIALITY. Each party agrees that it shall hold in strict
confidence all data and information obtained from another party hereto (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 party from whom it was obtained, unless such
disclosure is required by the Commission, other regulatory body with applicable
jurisdiction, or the Fund's auditors, or in the opinion of its counsel, law,
and then only with as much prior written notice to the other party as is
practical under the circumstances.
(c) 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 written consent of the other parties hereto,
which consent shall not be reasonably withheld; provided, however, that consent
shall not be required if, in the opinion of counsel, such disclosure is
required by law; provided further, however, that the party making such
disclosure
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shall provide the other parties hereto with as much prior written notice of
such disclosure as is practical under the circumstances.
(d) NOTIFICATIONS. The Sub-Adviser agrees that it will promptly notify the
Adviser and the Company in the event that the Sub-Adviser or any of its
affiliates: (i) becomes subject to a statutory or regulatory disqualification
that prevents the Sub-Adviser from serving as investment adviser pursuant to
this Agreement; or (ii) is or expects to become the subject of an
administrative proceeding or enforcement action by the Commission or other
regulatory body with applicable jurisdiction.
(e) INSURANCE. The Sub-Adviser agrees to maintain errors and omissions or
professional liability insurance coverage in an amount that is reasonable in
light of the nature and scope of the Sub-Adviser's business activities.
(f) SHAREHOLDER MEETING EXPENSES. In the event that the Company shall be
required to call a meeting of shareholders solely due to actions involving the
Sub-Adviser, including, without limitation, a change of control of the
Sub-Adviser, the Sub-Adviser shall bear all reasonable expenses associated with
such shareholder meeting.
11. MISCELLANEOUS.
(a) NOTICES. All notices or other communications given under this
Agreement shall be made by guaranteed overnight delivery, telecopy or certified
mail; notice is effective when received. Notice shall be given to the parties
at the following addresses:
The Adviser: USAA Investment Management Company
10750 Xxxxxx X. XxXxxxxxx Freeway, BK-B-04-S
Xxx Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Securities Counsel & Compliance Dept.
Sub-Adviser: Deutsche Asset Management, Inc.
000 Xxxxxxx Xxxxxx, XXXX0-0000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Legal Department - Xxxxxxx X. Xxxxxxxx
(b) 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
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acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
(c) 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.
(d) APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with and governed by the laws of the state of Delaware without
giving effect to the choice of law or conflicts of law provisions thereof.
(e) COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) EXPENSES. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
(g) HEADINGS. The headings and captions contained in this Agreement are
for reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) ENTIRE AGREEMENT. This Agreement states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act.
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IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of the date first set forth above.
USAA INVESTMENT MANAGEMENT COMPANY
By: /S/ XXXXXXXXXXX X. XXXXX
------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: President
DEUTSCHE ASSET MANAGEMENT, INC.
By: /S/ XXXXX XXXXXXX
------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
Acknowledged and agreed:
USAA MUTUAL FUND, INC.
By: /S/ XXXXX X. XXXXXXX
---------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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SCHEDULE A
SUB-ADVISORY FEES
USAA S&P 500 INDEX FUND:
The Adviser shall pay to the Sub-Adviser a fee calculated daily and
payable monthly in arrears at the annual rate of .02 of 1% per annum for
average net assets up to $2.5 billion; .01 of 1% per annum for the next
$1.5 billion average net assets; and .005 of 1% per annum of the amount by
which the average net assets of the USAA S&P 500 Index Fund exceed $4
billion.
The "average net assets" of the Fund for any month shall be equal to the
quotient produced by dividing (i) the sum of the net assets of such Fund,
determined in accordance with procedures established from time to time by
or under the direction of the Board of Directors of the Company, for each
calendar day of such month, by (ii) the number of such days.
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