ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made as of May 1, 2003, by and between USAA LIFE
INSURANCE COMPANY, a stock life insurance company organized under the laws of
the state of Texas and having a place of business in San Antonio, Texas ("USAA
Life"), and USAA INVESTMENT MANAGEMENT COMPANY, a corporation under the laws of
the state of Delaware and having a place of business in San Antonio, Texas
("IMCO").
RECITALS
The USAA Life Investment Trust (the "Trust") is an open-end management
investment company registered under the Investment Company Act of 1940 (the
"1940 Act"), as amended, whose shares are registered under the Securities Act of
1933 (the "1933 Act"), as amended, and with shares offered in various investment
funds as set forth in Exhibit A (the "Existing Funds") (such funds together with
any funds subsequently established by the Trust for which the Trust retains USAA
Life to provide administrative services being collectively referred to as the
"Funds").
The Trust makes its shares available for purchase to the Separate Account
of USAA Life Insurance Company and the Life Insurance Separate Account of USAA
Life Insurance Company (the "Separate Accounts"), and to any other separate
accounts of USAA Life or any of USAA Life's subsidiaries or affiliates, and to
separate accounts of non-affiliated life insurance companies (all such eligible
purchasers being referred to collectively as "Purchasers").
USAA Life issues variable annuity contracts and variable life insurance
policies (collectively "Contracts") funded through the Separate Accounts. In
addition, USAA Life invests certain assets of the Separate Accounts in the Trust
for the benefit of the owners of the Contracts ("Contract Owners").
USAA Life desires to retain IMCO to provide certain administrative
services to the Trust on USAA Life's behalf, and IMCO is willing to provide such
services.
AGREEMENT
In consideration of the agreements contained herein, and for other good
and valuable consideration, receipt of which is hereby acknowledged, USAA Life
and IMCO agree as follows:
1. APPOINTMENT OF IMCO
(a) USAA Life appoints IMCO to provide administrative services for the
period and on the terms set forth in this Agreement. Such services are provided
to the Trust on behalf of USAA Life in connection with the Administrative
Services Agreement between USAA Life and the Trust dated May 1, 2003. IMCO
accepts such appointment and agrees to render the services herein set forth for
the compensation herein provided.
(b) IMCO shall be subject to the direction and control of USAA Life and
the Trust in providing services under this Agreement, and shall provide such
services in compliance with all applicable provisions of the Trust's Master
Trust Agreement, Bylaws, Prospectus, and any applicable federal or state laws
and regulations.
2. DUTIES OF IMCO
IMCO shall provide administrative services to the Trust on behalf of USAA
Life; provided, that IMCO shall not have any obligation under this Agreement to
provide any services related to the distribution of fund shares or any other
services that are the subject of separate agreements or arrangements between
IMCO and USAA Life, or IMCO and the Trust. Subject to the foregoing, IMCO shall
provide the following services and facilities to the Trust on behalf of USAA
Life:
(a) Office Space, Equipment and Facilities. Furnish such office space,
office equipment and office facilities as are adequate for the services provided
with respect to the Funds.
(b) Personnel. Provide the services of individuals competent to perform
all of the executive, administrative and clerical functions that are not
performed by employees or other agents engaged by USAA Life or by IMCO acting in
some other capacity pursuant to a separate agreement or arrangement with USAA
Life or the Trust with respect to the Funds.
(c) Agents. Assist USAA Life in selecting and coordinating the
activities of the other agents engaged by USAA Life and the Trust with respect
to the Funds, including the Trust's transfer agent, custodian, independent
auditors, and legal counsel.
(d) Trustees and Officers. Authorize and permit IMCO's directors,
officers and employees who may be elected or appointed as trustees or officers
of the Trust to serve in such capacities, without remuneration from or other
cost to USAA Life or the Trust.
(e) Books and Records. Assure that all financial, accounting and other
records required to be prepared, maintained, and preserved by the Trust are
prepared, maintained, and preserved by it or on its behalf in accordance with
applicable laws and regulations.
(f) Regulatory Reports and Filings. Prepare and file (as required) or
arrange for others to prepare and file all proxy statements with respect to the
Funds, all periodic reports by the Trust with respect to the Funds, and all
reports and filings required to maintain the registration and qualification of
the Trust and the Shares, or to meet other regulatory or tax requirements
applicable to the Funds under federal and state securities and tax laws.
(g) Board Reports. Prepare and coordinate materials relating to the
Funds and the services provided under this Agreement to be presented to the
Trust's Board of Trustees in preparation for its meetings.
(h) Accounting. Provide all accounting services necessary or appropriate
to conduct the Trust's business and day-to-day operations.
(i) Fidelity Bond. Provide and maintain a bond issued by a reputable
insurance company authorized to do business in the place where the bond is
issued, against larceny and embezzlement covering each officer and employee of
IMCO who may singly or jointly with others have access to funds or securities of
the Trust, with direct or indirect authority to draw upon such funds or to
direct generally the disposition of such funds. The bond shall be in such
reasonable amount as a majority of the Board of Trustees of the Trust who are
not officers or employees of IMCO or USAA Life shall determine, with due
consideration to the aggregate assets of the Trust to which any such officer or
employee may have access.
(j) Delegation. Delegate, at its expense, some or all of its duties
hereunder to other persons or entities approved by IMCO upon prior notice to and
concurrence of USAA Life.
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(k) Other Services. Provide such other services as the parties may from
time to time agree upon in writing.
3. ADMINISTRATION FEE
(a) For the services and facilities to be provided by IMCO as set forth
in paragraph 2 above, and to the extent that the cost of services and
facilities provided by IMCO to the Trust under the Investment Advisory Agreement
between IMCO and the Trust exceed the advisory fee paid to IMCO under that
agreement, USAA Life shall reimburse IMCO for the cost incurred in providing
such services and facilities to the Trust, subject to paragraph (b) below.
(b) To the extent that advisory or other fees paid to IMCO in connection
with any services provided to the Trust under other agreements, including but
not limited to IMCO's Investment Advisory Agreement with the Trust, exceed the
cost of IMCO's providing services under such agreements, such excess shall be
applied under this Agreement to reduce the amount of USAA Life's reimbursement
under subparagraph (a).
(c) IMCO may, from time to time, and for such periods as it deems
appropriate, voluntarily waive fees or otherwise reduce its compensation
hereunder.
4. LIABILITY AND INDEMNIFICATION.
IMCO shall exercise reasonable care in performing its services under this
Agreement. IMCO shall indemnify and hold USAA Life and the Trust, and their
trustees, officers, and employees harmless from and against any and all loss,
cost, damage and expense (a "Loss"), including reasonable expenses for counsel,
incurred by it resulting from any claim, demand, action or suit relating to the
performance of its duties under this Agreement, or any action or omission by it
in the performance of its duties hereunder; provided, however, that this
indemnification shall not apply to any Loss resulting from any action or
inaction of USAA Life or the Trust constituting willful misconduct, bad faith or
negligence in the performance of its duties or the reckless disregard of its
duties under this Agreement. Prior to confessing any claim against it, which
may be the subject of this indemnification, USAA Life or the Trust shall give
IMCO reasonable opportunity to defend against said claim in its own name or in
the name of USAA Life or the Trust.
5. CONFIDENTIALITY.
(a) Trust records maintained by IMCO in connection with the services
provided under this Agreement shall be and remain the property of the Trust.
IMCO shall promptly surrender or make such records available to the Trust or its
designee, without charge, except for reimbursement of expenses for the surrender
of such documents, upon request by the Trust or upon termination of this
Agreement.
(b) IMCO shall not disclose or use any records or information obtained
hereunder in any manner whatsoever except as expressly authorized hereunder, and
further, shall keep confidential any information obtained pursuant to this
Agreement with USAA Life as set forth herein, and disclose such information only
if USAA Life or the Trust has authorized such disclosure, or if such disclosure
is expressly required by applicable federal or state regulatory authorities.
6. DURATION AND TERMINATION OF AGREEMENT
(a) Duration. This Agreement shall become effective as of the date first
set forth above and, unless terminated, shall continue in force from year to
year thereafter.
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(b) Termination. This Agreement may be terminated at any time, without
payment of any penalty, by either party on 120 days' written notice to the other
party. This Agreement shall automatically terminate upon its assignment by IMCO.
(c) Amendment. This agreement may be amended at any time by mutual
agreement in writing of the parties hereto.
7. PRIOR AGREEMENT SUPERSEDED
This Agreement supersedes any prior agreements relating to the subject
matter hereof between the parties.
8. SERVICES NOT EXCLUSIVE
The services of IMCO to USAA Life hereunder are not to be deemed
exclusive, and IMCO shall be free to render similar services to others so long
as its services hereunder are not impaired thereby.
9. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the
State of Texas and the applicable provisions of the 1940 Act. To the extent the
applicable law of the State of Texas, or any of the provisions herein, conflict
with the applicable provisions of the 1940 Act, the latter shall control.
10. ENTIRE AGREEMENT
This is the complete and entire agreement as represented herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
USAA LIFE INSURANCE COMPANY USAA INVESTMENT MANAGEMENT COMPANY
By: _______________________ By: _______________________________
Xxxxx X. Xxxxxxxxx Xxxxxxxxxxx X. Xxxxx
President & CEO President
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EXHIBIT "A"
LISTING OF FUNDS
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Name of Fund
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USAA Life Growth & Income
USAA Life Aggressive Growth
USAA Life World Growth
USAA Life Diversified Assets
USAA Life Income
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