EXHIBIT G (ii)
State Street Bank and Trust Company
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
Pursuant to Section 12 of the Custodian Agreement dated as of June 29, 1993
by and between USAA Mutual Funds Trust (the Trust), formerly known as USAA State
Tax-Free Trust, and State Street Bank and Trust Company (the Custodian), as
amended, modified or supplemented from time to time (the Custodian Agreement),
please be advised that the Trust has established the thirty-five new series of
its shares (each a New Fund and collectively the New Funds) set forth below:
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Aggressive Growth Fund Long-Term Fund
Balanced Strategy Fund Money Market Fund
Capital Growth Fund Nasdaq-100 Index Fund
California Bond Fund New York Bond Fund
California Money Market Fund New York Money Market Fund
Cornerstone Strategy Fund Precious Metals and Minerals Fund
Emerging Markets Fund Science & Technology Fund
First Start Growth Fund Short-Term Bond Fund
GNMA Trust Short-Term Fund
Growth & Income Fund Small Cap Stock Fund
Growth and Tax Strategy Fund Tax Exempt Money Market Fund
Growth Fund Treasury Money Market Trust
High-Yield Opportunities Fund Total Return Strategy Fund
Income Stock Fund Value Fund
Income Fund ▇▇▇▇▇▇▇▇ ▇▇▇▇ Fund
Intermediate-Term Bond Fund Virginia Money Market Fund
Intermediate-Term Fund World Growth Fund
International Fund
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Please be further advised that the Trust desires to retain the Custodian to
render custody services under the Custodian Agreement to the New Funds in
accordance with the fee schedule attached hereto as Exhibit A.
Please state below whether you are willing to render such services in
accordance with the fee schedule attached hereto as Exhibit A.
USAA MUTUAL FUNDS TRUST
Attest: By:
----------------------------- -----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary President
Dated: As of August 1, 2006
We are willing to render custody services to the New Funds in accordance
with the Custodian Agreement and the fee schedule attached hereto as Exhibit A.
STATE STREET BANK AND TRUST COMPANY
Attest: By:
------------------------------ ------------------------------------
Dated: As of August 1, 2006
EXHIBIT G (iii)
USAA MUTUAL FUNDS TRUST
ADDENDUM TO CUSTODY LETTER AGREEMENT
WITH
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank (the "Custodian") acting as Custodian for USAA
Mutual Funds Trust (the "Company"), an open-end investment company registered
under the Investment Company Act of 1940 (the "1940 Act"), hereby agrees to the
following terms and conditions as of the date set forth below.
1. QUALIFICATION. The Custodian represents to the Company that it is
qualified to act as a custodian for a registered investment company under the
1940 Act, with all necessary power and authority to enter into this Addendum.
2. CUSTODY. The Custodian agrees to maintain one or more custodial
accounts ("Subscription Accounts") for one of the series of the Company, the
USAA EXTENDED MARKET INDEX FUND (the "Fund"), in which checks ("Subscription
Checks") issued in payment for purchases of Fund shares shall be deposited by
USAA Transfer Agency Company d/b/a USAA Shareholder Account Services ("Transfer
Agent"), transfer agent of the Fund. The Custodian further agrees to debit IMCO
account no. 06407050388 (the "Return Item Account") for the aggregate amount of
all Subscription Checks returned to the Custodian for non-payment ("Return
Items"), informing Transfer Agent daily of any returned Subscription Checks. In
the event that the available funds in the Return Item Account are insufficient
to cover the amount of the Return Items, Custodian will promptly notify Transfer
Agent by telephone of the amount of such insufficiency. Upon receipt of such
telephone notice, Transfer Agent agrees to remit to Custodian the full amount of
any such insufficiency.
Each business day the Custodian agrees to credit an account maintained
by the Company, with immediately available funds, amounts equal to the
Subscription Checks deposited in the Subscription Account on the preceding
business day notwithstanding whether the Custodian has collected good funds in
respect of such checks. The Fund will compensate the Custodian for (i) estimated
earnings lost on amounts wired to the Custodian in payment of Subscription
Checks during the period from the date wire payment is made through the date
good funds on such checks are received by the Custodian, (ii) for service fees
charged by the Custodian for processing Subscription Checks as set forth in
Schedule 1 to this Addendum (these amounts will be paid monthly and computed
based on an overall account relationship), (iii) other miscellaneous fees as
described in Schedule 1, and (iv) Return Items not paid by the Transfer Agent or
USAA Investment Management Company ("IMCO") within five (5) business days
following a request for payment by Custodian pursuant to this paragraph.
3. INSTRUCTIONS: OTHER COMMUNICATIONS. Any one officer or other
authorized representative of the Transfer Agent designated as hereinafter
provided as an officer or
1
other authorized representative of the Transfer Agent authorized to give
instructions to the Custodian with respect to Fund assets held in Subscription
Accounts (an "Authorized Officer"), shall be authorized to instruct the
Custodian as to the deposit, withdrawal or any other action with respect to Fund
assets from time to time by telephone, or in writing signed by such Authorized
Officer and delivered by telecopy, tested telex, tested computer printout or
such other reasonable method as the Transfer Agent and Custodian shall agree;
provided, however, the Custodian is authorized to accept and act upon
instructions from the Transfer Agent, whether orally, by telephone or otherwise,
which the Custodian reasonably believes to be given by an authorized person. The
Custodian may require that any instructions given orally or by
telecommunications be promptly confirmed in writing.
The Authorized Officers shall be as set forth on Schedule 2 attached
hereto or as otherwise from time to time certified in writing by the Transfer
Agent to the Custodian signed by the President or any Vice President, Assistant
Secretary or Assistant Treasurer of the Company. In addition to a written list
of authorized officers, the Transfer Agent will provide Custodian with
additional information and signature cards as reasonably requested by Custodian
relating to the authorized officers. The Custodian shall furnish the Transfer
Agent, with a copy to the Fund, by first class mail, or other mutually
agreed-upon means of transmission, (i) prompt telephonic and written notice of
Return Items, (ii) a monthly report on activity in each of the Subscription
Accounts within five (5) days after the end of each calendar month, and (iii) a
daily statement of activity in each of the Subscription Accounts.
4. FEES. The service fees charged by the Custodian under the Addendum
are set forth in Schedule 1 attached hereto. Schedule 1 may be amended by the
parties in writing provided written notice is furnished to the Fund thirty (30)
days in advance of any increase in fees.
5. LIABILITIES.
(i) The Custodian shall be held harmless by the Transfer Agent and
shall not be liable for any action taken or omitted to be taken under this
Addendum, except for actions or omissions caused by the Custodian's negligence,
willful malfeasance, or bad faith in connection with its obligations and duties
under this Addendum. Except as otherwise set forth herein, the Custodian shall
not have responsibility with respect to Fund assets. The Custodian shall, for
the benefit of the Custodian and the Fund, use the same care with respect to
handling of Fund assets in depository accounts as it uses in respect of its own
assets similarly held. The Custodian shall not have responsibility with respect
to any monies or any wire transfer, checks or other instruments for the payment
of money unless and until actually received or secured by wire transfer by the
Custodian. IN NO EVENT WILL THE CUSTODIAN BE LIABLE TO THE TRANSFER AGENT, THE
COMPANY OR THE FUND FOR ANY INDIRECT DAMAGES, LOST PROFITS, SPECIAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES WHICH ARISE OUT OF OR IN CONNECTION WITH THE SERVICES
CONTEMPLATED HEREIN.
2
(ii) The Custodian shall indemnify, defend and save harmless the
Company and the Transfer Agent from and against all loss, liability, claims and
demands incurred by the Fund or the Transfer Agent arising out of or in
connection with the Custodian's negligence, willful malfeasance or bad faith in
connection with its obligations and duties under this Addendum.
(iii) The Transfer Agent shall indemnify, defend and save harmless the
Custodian from and against all loss, liability, claims and demands incurred by
the Custodian arising out of or in connection with the Transfer Agent's
negligence, willful malfeasance or bad faith in connection with its obligations
and duties under this Addendum.
(iv) It is understood and expressly stipulated that neither the
shareholders of the Fund nor the members of the Board of Trustees of the Company
shall be personally liable hereunder. The obligations of the Fund hereunder are
not personally binding upon, nor shall resort to the private property of, any of
the members of the Board of Trustees of the Company, nor of its shareholders,
officers, employees or agents, but only the Fund's property shall be bound.
6. TERMINATION. The Company may terminate this Addendum at any time
upon prior written notice to the Custodian. The Custodian may terminate this
Addendum at any time by not less than thirty (30) days' prior written notice
which shall specify the date of such termination. Upon termination, the
Custodian shall make delivery of all Fund assets held in the Subscription
Accounts within two business days from receipt of notice of termination to the
third party specified by the Transfer Agent in writing. If any Subscription
Checks are subsequently returned unpaid the Fund shall pay the Custodian the
amount thereof on behalf of the Fund within two business days from receipt of
demand.
7. COMMUNICATIONS. All notices to be delivered pursuant to the terms of
this Addendum shall be given in writing, and shall be deemed given (a) upon
delivery in person to the persons indicated below, or (b) three days after
deposit in the United States Postal Service, postage prepaid, registered, or
certified mail, return receipt requested, or (c) upon receipt by facsimile
(provided that such receipt of such facsimile is confirmed telephonically by the
addressee), or (d) by overnight delivery service (with receipt of delivery),
sent to the addresses shown below, or to such different address(es) as such
party shall be designated by written notice to the other parties hereto at least
ten (10) days in advance of the date upon which such change of address shall be
effective. All communications required or permitted to be given under this
Addendum, unless otherwise agreed by the parties, shall be addressed as follows:
(i) to the Custodian:
----------------------
----------------------
----------------------
3
(ii) to the Transfer Agent:
----------------------
----------------------
----------------------
With a copy to:
----------------------
----------------------
----------------------
8. ACCESS TO RECORDS. The Custodian will not refuse any reasonable
request for inspection and audit of its books and records concerning
transactions and balances of the Subscription Accounts by an agent of the Fund.
9. COOPERATION. The Custodian shall cooperate with the Fund and its
respective independent public accountants in connection with annual and other
audits of the books and records of the Fund.
10. MISCELLANEOUS. This Addendum (i) shall be governed by and construed
in accordance with the laws of the state of New York, (ii) may be executed in
counterparts each of which shall be deemed an original but all of which shall
constitute the same instrument, and (iii) may only be amended by the parties
hereto in writing.
11. TERMS AND CONDITIONS OF DEPOSIT ACCOUNTS. The handling of the
Subscription Accounts and the Return Item Account and all other accounts
maintained with Custodian in connection with or relating to this Addendum will
be subject to the Custodian's Terms and Conditions of Deposit Accounts, and any
and all rules or regulations now or hereafter promulgated by the Custodian which
relate to such accounts or services provided by the Custodian and the Uniform
Commercial Code, as adopted by the State of Texas (except in the event any of
the same are contrary to the specific provisions hereof). In the event of any
specific conflict between the provisions hereof and the provisions of any of the
agreements, rules and regulations referenced in this paragraph, the provisions
of this Addendum shall control.
12. SIGNATURE AUTHORITY. Each of the undersigned represents and
warrants that he/she has the requisite authority to execute this Addendum on
behalf of the party for
4
whom the undersigned signs; that all necessary action has been taken to
authorize this Addendum; that this Addendum, upon execution and delivery, shall
be a binding obligation of such party.
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of
the date set forth below.
Dated: August 1, 2006
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK
By: _____________________________
Name:
Title:
USAA TRANSFER AGENCY COMPANY
By: _____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT
The Company, on behalf of the Fund, hereby consents and agrees to the
terms of the foregoing Addendum; provided, however, that the same shall not
relieve the Custodian of any of its responsibilities to the Fund as set forth in
the Custodian Letter Agreement between the Company and the Custodian.
USAA MUTUAL FUNDS TRUST,
on behalf of itself and its series
USAA EXTENDED MARKET
INDEX FUND
By: _____________________________
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: PRESIDENT
5
IMCO hereby consents and agrees to the terms of the foregoing Addendum
to Custodian Letter Agreement.
USAA INVESTMENT
MANAGEMENT COMPANY
By: _____________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT
6
SCHEDULE 1
FEES
7
Automated Clearing House (ACH) Origination
USAA MUTUAL FUNDS TRUST
SERVICE PRICE
Origination Services (DEBITS AND CREDITS)
2 Day Settlement Extended Processing(1) $ 0.01 item
1 Day + Settlement 0.15 item
2 Day + Settlement 0.10 item
Electronic Depository Transfer 0.15 item
Pre-Authorized Check 1.00 item
Items Originated-Addenda 0.02 record
Receiving Services
Items Received-Corporate 0.10 item
Items Received-Addenda 0.01 record
Input Services
Vendor 25.00 file(1)
Data Transmission (IN/OUT) 10.00 file(1)
General Services
Debit Blocking (EPA) 25.00 account
Maintenance 25.00 client tax ID
Support-Phone Expenses (CLIENT CHARGE) actual expense
Recall 30.00 item
Correction/Reversal 15.00 item
Location Add (CHASELINK) 1.00 transaction
Correspondent Settlement 100.00 account
Redeposit 1.50 item
Unroutable 1.00 item
Notification of Change Via Mail 4.50 notice of change
Notification of Change Via Transmission 1.25 notice of change
Notification of Change Via Autofax 1.25 notice of change
Transmission Implementation 200.00 one time
ACH/EC Programming 100.00 hour
Reporting Services
Return Via Transmission 1.25 item +
10.00 transmission file(1)
Return Via ChaseLink 1.00 item
Return/Notification Via Phone 5.00 item/report
Return/Notification Via Mail 4.50 return
Return/Notification Via Fax 4.00 page
Return Via Autofax 1.25 return
1 A file is defined by the different tax identification numbers contained in the
NACHA input file.
AUTOMATED CLEARING HOUSE (ACH) (CONT'D)
ACH PAC Return-Electronic $ 2.25 fax/transmission
ACH PAC Return-Paper Advice 5.00 advice
Transaction Journal-ACH Origination Report 6.00 report
Return Journal-ACH Return Transmission Report 6.00 report
ACH Composite Receiver File 25.00 month
Ad-hoc Services
ACH Transaction Recalls 10.00 recall
8
Aged Inquiry Transaction Research 10.00 inquiry
Create Official Checks 25.00 check
Duplicate Report Copies 5.00 report
Additional Test File 50.00 file
Duplicate Fax/Mail Delivery 5.00 fax/delivery
Research Faxed Pages 0.35 page
Return Item Analysis Report 10.00 report
Rules Violation Incident Report 150.00 report
This pricing represents fees for this service. Additional fees for other
services may be applicable. Please contact your Chase Treasury Solutions
Representative with questions.
9
Account Reconciliation Services
USAA MUTUAL FUNDS TRUST
SERVICE PRICE
POSITIVE PAY
Per Item - Full Reconciliation .035 item
Data Transmission No charge
CheckMate Software No charge
Exception Notification Delivery - Fax No charge
Exception Notification Delivery - Internet 5.00 transmission/email address
Exception Items (Paid-No-Issue) 2.00 item
Transmission Set-Up 300.00 one-time only charge
Stale Date Notification .06 item
Maximum Dollar Notification .06 item
PAID LIST (PARTIAL) RECONCILIATION
Non Positive Pay Paid List Per Item .05 item
Non Positive Pay Paid List Maintenance 125.00 month
Daily Paid Reconciliation 2.50 item + transmission charge
FULL RECONCILIATION
Non Positive Pay Full Per Item .06 item
Non Positive Pay Full Maintenance 150.00 month
DEPOSIT RECONCILIATION
Per Item .06 item
Maintenance 75.00 month
RANGE RECONCILIATION
Per Item .06 item
Maintenance 75.00 month
OTHER SERVICES
Stop Pay Expiration Report 20.00 cycle
Non Positive Pay Data Transmission 10.00 transmission
Float Report (Full Reconciliation only) 50.00 cycle
Diskette (Inbound or Outbound) 35.00 diskette
Postage Courier Actual costs
Rebuild Past Reconciliation (>90 days) (1) 25.00 hour
Manual Research(1) 35.00 hour
Manually Key Issue Data from Fax(1) 2.00 issue
(1) One-time charge for special services requested by client which require
extensive research and or manual work.
10
ACCOUNT RECONCILIATION SERVICE (CONT'D)
QUICK SEARCH
Software No charge
First Account $ 35.00 account month
Additional Accounts 15.00 account month
Stop Payment 7.00 stop
Photocopy Request 4.00 photocopy
Extended History (>90 days) 10.00 month account
Additional User 20.00 user/month
This pricing represents fees for this service. Additional fees for other
services may be applicable. Please contact your Chase Treasury Solutions
Representative with questions.
11
Funds Transfer Service
USAA MUTUAL FUNDS TRUST
SERVICE PRICE
Maintenance $ 0.00 account
Incoming Transfer
AUTOPOST Domestic 3.00 transfer
NON-AUTOPOST Domestic 4.50 transfer
International 10.00 transfer
Electronic Initiation(1)
Domestic Straight Through Transfer 4.00 transfer
Domestic Repaired Transfer 7.00 transfer
International Transfer (U.S. DOLLAR PAYMENTS) 35.00 transfer
Operator Assisted Initiation
Domestic 15.00 transfer
International (U.S. DOLLAR PAYMENTS) 40.00 transfer
International Pass Through Transfer 20.00 transfer
Manual Transfer Surcharge 100.00 transfer +
operator assisted transfer fee
Priority Handling Surcharge 20.00 transfer
Notification
Printed Advice 3.50 transfer
Telephone 6.50 call
Fax 4.00 transfer
(1) Includes ChaseLink FT, MicroLink FT, Insight CPS, FT/PC, FT EXPRESS, and
Automatic Standing Transfer. A MicroLink FT transaction fee of $1.00/transfer
also applies.
This pricing represents fees for this service. Additional fees for other
services may be applicable. Please contact your Chase Treasury Solutions
Representative with questions.
12
MicroLink
USAA MUTUAL FUNDS TRUST
SERVICE PRICE
BANK ACCOUNT REPORTING
Implementation(1)
Bank Account Reporting $ 325.00 one time
Maintenance(1)
Bank Account Reporting 30.00 client
Chase Texas Accounts 25.00 account
Current-Day Reporting 10.00 account(2)
Other Bank Accounts 40.00 account
Transaction Reporting
Previous Day 0.13 item
Current Day 0.25 item
SPECIAL REPORTS MODULE
EDI Report 15.00 client
Per Line 0.10 line
EC Translation Charges 0.20 1000 characters
AUTOMATED PAYMENTS & COLLECTIONS (APC)(3)
Implementation(1) 225.00 one time
Without Bank Account Reporting 325.00 one time
Maintenance(1) 40.00 account/client
Without Bank Account Reporting 50.00 account/client
Transactions
1-500 Transactions 0.30 transaction
501-1,000 Transactions 0.15 transaction
1,000+ Transactions 0.10 transaction
CCD+ Addenda Record 0.12 record
Origination Services (DEBITS AND CREDITS)
2 Day Settlement Extended Processing(4) 0.01 item
1 Day + Settlement 0.15 item
2 Day + Settlement 0.10 item
(1)Fees are for single micro-computer setup. Additional micro-computer
implementation and maintenance charges are available at 50% off listed fees.
(2)The charge for Current Day Reporting is in addition to the account charges.
(3)Refer to ACH Price Sheet for additional APC and DTS charges.
(4)File received after 4:00 p.m. CT.
13
Item Processing--Deposit Services
USAA MUTUAL FUNDS TRUST
SERVICE PRICE
ITEM PROCESSING (PRE-ENCODED DEPOSITS)
On-Us $ 0.000 item
Tier I/Local City 0.015 item
Tier II/Local RCPC 0.021 item
Tier III/Texas Fed Cities 0.035 item
Tier IV/Other Texas 0.038 item
Tier V/Other Transit 0.040 item
HDGS 0.150 item
Premium RCPC 0.045 item
Repaired 0.450 item
Rejects 0.450 item
High Speed U.S. Dollar Canadian Items 1.000 item
DEPOSIT SERVICES
Maintenance 10.00 account
Debits Posted
Paper 0.065 item
Electronic 0.065 item
Credits Posted
Paper 0.45 item
Electronic 0.20 item
Deposit Corrections 10.00 deposit (1 FREE/MONTH)
Items Deposited Basic 0.07 item
Encoding 0.04 item
Stop Payment-Telephone 25.00 each
Stop Payment Quick Search 7.00 each
Return Items
Received 2.00 return
Reclears 1.50 reclear
Special Handling 2.00 each
Insufficient Funds 0.00 item
Overdraft Interest 90 day avg. T-Bill
Special Statements 7.50 statement
Check Copy Retrieval 4.00 item (3 FREE/MONTH)
Telephone Balance-Commercial 3.00 inquiry
Transit Check Cashing-Payee 1.5% of check total ($5 MIN)
Transit Check Cashing-Commercial Client 5.00 check
Additional Analysis Statement 10.00 copy
Invoice Billing 25.00 relationship/month
Foreign Deposits 5.00 each
This pricing represents fees for this service. Additional fees for other
services may be applicable. Please contact your Chase Treasury Solutions
Representative with questions.
14
SCHEDULE A
PERSONS AUTHORIZED TO ACT ON BEHALF OF THE MANAGER
FAM and its agent are authorized to rely on instructions from the
following individuals on behalf of the Manager on its own behalf and on behalf
of the Fund:
NAME SIGNATURE
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Revised: April 2004
[▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK LETTERHEAD]
August 1, 2006
USAA Mutual Funds Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Dear Sir or Madam:
On behalf of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank ("Chase"), this letter (the "Custody
Letter Agreement") is to confirm that Chase has been selected by the ▇▇▇▇▇▇▇
▇▇▇▇▇ Extended Market Index Series (the "Series") of the Quantitative Master
Series Trust (the "Trust") as global custodian for the Series. Chase has entered
into a global custody agreement (the "Custody Agreement") with the Series and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Quantitative Advisors, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investment
Managers, and is responsible for the provisions of custody and related services
under such Custody Agreement, including, but not limited to, asset safekeeping,
servicing and reporting for the Series. Chase has acted as global custodian for
the Trust since July 31, 1999, the Trust's inception.
It is our understanding that the USAA Extended Market Index Fund (the
"Fund"), a series of USAA Mutual Funds Trust, will be a "feeder" fund of the
Series as part of a Master - Feeder relationship. As you know, each feeder of
the Series, including the Fund, will indirectly be the recipient of the custody
services we are providing to the Series as its custodian. In addition, we
propose to serve as the direct custodian for the Fund. In this capacity, we
propose to maintain custody of the Fund's interest in the Series and to provide
the cash custody services set forth in the Addendum to Custody Letter Agreement
attached hereto as Exhibit A (the "Custody Addendum"). There shall be no fees
for the services provided by Chase as direct custodian for the Fund, other than
as set forth in the Custody Addendum.
If you are in agreement with this proposal, please countersign this
letter where indicated and return the letter to my attention. Please don't
hesitate to contact me should you have any questions about the services Chase
will provide to the Series and the Fund.
Sincerely,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Bank
By:
Name:
Title:
Acknowledged and Agreed:
USAA Mutual Funds Trust, on behalf of its series, USAA Extended Market Index
Fund
By:
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
cc: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Quantitative Advisors
EXHIBIT A
ADDENDUM TO CUSTODY LETTER AGREEMENT
EXHIBIT G (iv)
CUSTODIAN AGREEMENT
AGREEMENT dated as of August 1, 2006 between THE NORTHERN TRUST COMPANY
(the "Custodian") and USAA MUTUAL FUNDS TRUST (the "Customer"), on behalf of the
USAA S&P 500 INDEX FUND (the "Series").
WHEREAS, the Customer may be organized with one or more series of
shares, each of which shall represent an interest in a separate portfolio of
Securities and Cash (each as hereinafter defined) (all such existing and
additional series now or hereafter listed on Exhibit A being hereinafter
referred to individually as a "Portfolio" and collectively, as the
"Portfolios"); and
WHEREAS, the Customer desires to appoint the Custodian as custodian on
behalf of the Portfolios under the terms and conditions set forth in this
Agreement, and the Custodian has agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN. The Customer hereby employs the Custodian as
custodian of all assets of each Portfolio which are delivered to and accepted by
the Custodian or any Subcustodian (as that term is defined in Section 4)
pursuant to the terms and conditions set forth herein. Without limitation, such
assets shall include stocks and other equity interests of every type, evidences
of indebtedness, other instruments representing same or rights or obligations to
receive, purchase, deliver or sell same and other non-cash investment property
of a Portfolio which is acceptable for deposit ("Securities") and cash from any
source and in any currency ("Cash") (Securities and Cash, collectively,
"Property"). The Custodian shall not be responsible for any property of a
Portfolio held or received by the Customer or others and not delivered to the
Custodian or any Subcustodian.
2. MAINTENANCE OF SECURITIES AND CASH AT CUSTODIAN AND SUBCUSTODIAN
LOCATIONS. Pursuant to Instructions, the Customer shall direct the Custodian to
(a) settle securities transactions and maintain cash in the country or other
jurisdiction in which the principal trading market for such securities is
located, where such securities are to be presented for payment or where such
securities
1
are acquired and (b) maintain cash and cash equivalents in such countries in
amounts reasonably necessary to effect the Customer's transactions in such
securities. Instructions to settle securities transactions in any country shall
be deemed to authorize the holding of such Securities and Cash in that country.
3. CUSTODY ACCOUNT. The Custodian agrees to establish and maintain one
or more custody accounts on its books, each in the name of a Portfolio (each, an
"Account") for any and all Property from time to time received and accepted by
the Custodian or any Subcustodian for the account of such Portfolio. Upon
delivery by the Customer to the Custodian of any Property belonging to a
Portfolio, the Customer shall, by Instructions (as hereinafter defined in
Section 14), specifically indicate to which Portfolio such Property belongs, or
if such Property belongs to more than one Portfolio, shall allocate such
Property to the appropriate Portfolios. The Custodian shall allocate such
Property to each Account in accordance with the Instructions; PROVIDED THAT the
Custodian shall have the right, in its sole discretion, to refuse to accept any
Property that is not in proper form for deposit for any reason. The Customer, on
behalf of each Portfolio, acknowledges its responsibility as a principal for all
of its obligations to the Custodian arising under or in connection with this
Agreement, warrants its authority to deposit in the appropriate Account any
Property received therefor by the Custodian or a Subcustodian and to give, and
authorize others to give, instructions relative thereto. The Custodian may
deliver securities of the same class in place of those deposited in an Account.
The Custodian shall hold, keep safe and protect as custodian for each
Account, on behalf of the Customer, all Property in such Account. All
transactions, including, but not limited to, foreign exchange transactions
involving the Property, shall be executed or settled solely in accordance with
Instructions (which shall specifically reference the Account for which such
transaction is being settled), except that until the Custodian receives
Instructions to the contrary, the Custodian will:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property, as the same become
payable and credit the same to the appropriate Account;
(b) present for payment all Securities held in an Account which are
called, redeemed or retired or otherwise become payable and all coupons and
other income items which call for payment upon presentation to the extent that
the Custodian or Subcustodian is actually aware of such opportunities and hold
the cash received in such Account pursuant to this Agreement;
2
(c) (i) exchange Securities where the exchange is purely ministerial
(including, without limitation, the exchange of temporary securities for those
in definitive form and the exchange of warrants, or other documents of
entitlement to securities, for the Securities themselves) and (ii) when
notification of a tender or exchange offer (other than ministerial exchanges
described in (i) above) is received for an Account, endeavor to receive
Instructions, provided that if such Instructions are not received in time for
the Custodian to take timely action, no action shall be taken with respect
thereto;
(d) whenever notification of a rights entitlement or a fractional
interest resulting from a rights issue, stock dividend or stock split is
received for an Account and such rights entitlement or fractional interest bears
an expiration date, if after endeavoring to obtain Instructions such
Instructions are not received in time for the Custodian to take timely action or
if actual notice of such actions was received too late to seek Instructions,
sell in the discretion of the Custodian (which sale the Customer hereby
authorizes the Custodian to make) such rights entitlement or fractional interest
and credit the appropriate Account with the net proceeds of such sale;
(e) execute in the Customer's name for an Account, whenever the
Custodian deems it appropriate, such ownership and other certificates as may be
required to obtain the payment of income from the Property in such Account;
(f) pay for each Account, any and all taxes and levies in the nature of
taxes imposed on interest, dividends or other similar income on the Property in
such Account by any governmental authority. In the event there is insufficient
Cash available in an Account to pay such taxes and levies, the Custodian shall
notify the Customer of the amount of the shortfall and the Customer, at its
option, may deposit additional Cash in such Account or take steps to have
sufficient Cash available. The Customer agrees, when and if requested by the
Custodian and required in connection with the payment of any such taxes to
cooperate with the Custodian in furnishing information, executing documents or
otherwise; and
(g) appoint brokers and agents for any of the ministerial transactions
involving the Securities described in (a) - (f),
3
including, without limitation, affiliates of the Custodian or any Subcustodian.
4. SUBCUSTODIANS AND SECURITIES SYSTEMS. The Customer authorizes and
instructs the Custodian to hold the Property in each Account in custody accounts
which have been established by the Custodian with (a) one of its U.S. branches
or another U.S. bank or trust company or branch thereof located in the U.S.
which is itself qualified under the Investment Company Act of 1940, as amended
("1940 Act"), to act as custodian (individually, a "U.S. Subcustodian"), or a
U.S. securities depository or clearing agency or system in which the Custodian
or a U.S. Subcustodian participates (individually, a "U.S. Securities System")
or (b) one of its non-U.S. branches or majority-owned non-U.S. subsidiaries, a
non-U.S. branch or majority-owned subsidiary of a U.S. bank or a non-U.S. bank
or trust company, acting as custodian (individually, a "non-U.S. Subcustodian";
U.S. Subcustodians and non-U.S. Subcustodians, collectively, "Subcustodians"),
or a non-U.S. depository or clearing agency or system in which the Custodian or
any Subcustodian participates (individually, a "non-U.S. Securities System";
"U.S. Securities System" and "non-U.S. Securities System", collectively,
"Securities System"), PROVIDED that in each case in which a U.S. Subcustodian or
U.S. Securities System is employed, each such Subcustodian or Securities System
shall have been approved by Instructions; PROVIDED FURTHER that in each case in
which a non-U.S. Subcustodian or non-U.S. Securities System is employed, (a)
such Subcustodian or Securities System either is (i) a "qualified U.S. bank" as
defined by Rule 17f-5 under the 1940 Act ("Rule 17f-5") or (ii) an "eligible
foreign custodian" within the meaning of Rule 17f-5 or such Subcustodian or
Securities System is the subject of an order granted by the U.S. Securities and
Exchange Commission ("SEC") exempting such agent or the subcustody arrangements
thereto from all or part of the provisions of Rule 17f-5 and (b) the agreement
between the Custodian and such non-U.S. Subcustodian has been approved by
Instructions; it being understood that the Custodian shall have no liability or
responsibility for determining whether the approval of any Subcustodian or
Securities System has been proper under the 1940 Act or any rule or regulation
thereunder.
Upon receipt of Instructions, the Custodian agrees to cease the
employment of any Subcustodian or Securities System with respect to the
Customer, and if desirable and practicable, appoint a replacement subcustodian
or securities system in accordance with the provisions of this Section. In
addition, the Custodian may, at any time in its discretion, upon written
notification to the
4
Customer, terminate the employment of any Subcustodian or Securities System.
Upon request of the Customer, the Custodian shall deliver to the
Customer annually a certificate stating: (a) the identity of each non-U.S.
Subcustodian and non-U.S. Securities System then acting on behalf of the
Custodian and the name and address of the governmental agency or other
regulatory authority that supervises or regulates such non-U.S Subcustodian and
non-U.S. Securities System; (b) the countries in which each non-U.S.
Subcustodian or non-U.S. Securities System is located; and (c) so long as Rule
17f-5 requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, such other information relating to such non-U.S.
Subcustodians and non-U.S. Securities Systems as may reasonably be requested by
the Customer to ensure compliance with Rule 17f-5. So long as Rule 17f-5
requires the Customer's Board of Trustees to directly approve its foreign
custody arrangements, the Custodian also shall furnish annually to the Customer
information concerning such non-U.S. Subcustodians and non-U.S. Securities
Systems similar in kind and scope as that furnished to the Customer in
connection with the initial approval of this Agreement. The Custodian agrees to
promptly notify the Customer if, in the normal course of its custodial
activities, the Custodian has reason to believe that any non-U.S. Subcustodian
or non-U.S. Securities System has ceased to be a qualified U.S. bank or an
eligible foreign custodian each within the meaning of Rule 17f-5 or has ceased
to be subject to an exemptive order from the SEC.
5. USE OF SUBCUSTODIAN. With respect to Property in an Account which is
maintained by the Custodian in the custody of a Subcustodian employed pursuant
to Section 4:
(a) The Custodian will identify on its books as belonging to the
Customer on behalf of a Portfolio, any Property held by such Subcustodian.
(b) Any Property in an Account held by a Subcustodian will be subject
only to the instructions of the Custodian or its agents unless otherwise agreed
between Customer and Custodian.
(c) Property deposited with a Subcustodian will be maintained in an
account holding only assets for customers of the Custodian.
(d) Any agreement the Custodian shall enter into with a non-U.S.
Subcustodian with respect to the holding of Property shall require that (i) the
Account will be adequately indemnified or its losses adequately insured; (ii)
the Securities are not subject to
5
any right, charge, security interest, lien or claim of any kind in favor of such
Subcustodian or its creditors except a claim for payment in accordance with such
agreement for their safe custody or administration and expenses related thereto,
(iii) beneficial ownership of such Securities be freely transferable without the
payment of money or value other than for safe custody or administration and
expenses related thereto, (iv) adequate records will be maintained identifying
the Property held pursuant to such Agreement as belonging to the Custodian, on
behalf of its customers and (v) to the extent permitted by applicable law,
officers of or auditors employed by, or other representatives of or designated
by, the Custodian, including the independent public accountants of or designated
by, the Customer be given access to the books and records of such Subcustodian
relating to its actions under its agreement pertaining to any Property held by
it thereunder or confirmation of or pertinent information contained in such
books and records be furnished to such persons designated by the Custodian.
6. USE OF SECURITIES SYSTEM. With respect to Property in the Account(s)
which are maintained by the Custodian or any Subcustodian in the custody of a
Securities System employed pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian will be required by its
agreement with the Custodian to, identify on its books such Property as being
held for the account of the Custodian or Subcustodian for its customers.
(b) Any Property held in a Securities System for the account of the
Custodian or a Subcustodian will be subject only to the instructions of the
Custodian or such Subcustodian, as the case may be.
(c) Property deposited with a Securities System will be maintained in
an account holding only assets for customers of the Custodian or Subcustodian,
as the case may be, unless precluded by applicable law, rule, or regulation.
(d) The Custodian shall provide the Customer with any report obtained
by the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities deposited in the
Securities System.
7. AGENTS. The Custodian may at any time or times in its sole
discretion appoint (or remove) any other U.S. bank or trust company which is
itself qualified under the 1940 Act to act as
6
custodian, as its agent to carry out such of the provisions of this Agreement as
the Custodian may from time to time direct; PROVIDED, however, that the
appointment of any agent shall not relieve the Custodian of its responsibilities
or liabilities hereunder.
8. RECORDS, OWNERSHIP OF PROPERTY, STATEMENTS, OPINIONS OF INDEPENDENT
CERTIFIED PUBLIC Accountants.
(a) The ownership of the Property whether Securities, Cash and/or other
property, and whether held by the Custodian or a Subcustodian or in a Securities
System as authorized herein, shall be clearly recorded on the Custodian's books
as belonging to the appropriate Account and not for the Custodian's own
interest. The Custodian shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions for each Account.
All accounts, books and records of the Custodian relating thereto shall be open
to inspection and audit at all reasonable times during normal business hours by
any person designated by the Customer. All such accounts shall be maintained and
preserved in the form reasonably requested by the Customer. The Custodian will
supply to the Customer from time to time, as mutually agreed upon, a statement
in respect to any Property in an Account held by the Custodian or by a
Subcustodian. In the absence of the filing in writing with the Custodian by the
Customer of exceptions or objections to any such statement within sixty (60)
days of the mailing thereof, the Customer shall be deemed to have approved such
statement and in such case or upon written approval of the Customer of any such
statement, such statement shall be presumed to be for all purposes correct with
respect to all information set forth therein.
(b) The Custodian shall take all reasonable action as the Customer may
request to obtain from year to year favorable opinions from the Customer's
independent certified public accountants with respect to the Custodian's
activities hereunder in connection with the preparation of the Customer's Form
N-1A and the Customer's Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements of the SEC.
(c) At the request of the Customer, the Custodian shall deliver to the
Customer a written report prepared by the Custodian's independent certified
public accountants with respect to the services provided by the Custodian under
this Agreement, including, without limitation, the Custodian's accounting
system, internal accounting control and procedures for safeguarding Cash and
Securities, including Cash and Securities deposited and/or maintained in a
securities system or with a Subcustodian. Such
7
report shall be of sufficient scope and in sufficient detail as may reasonably
be required by the Customer and as may reasonably be obtained by the Custodian.
(d) The Customer may elect to participate in any of the electronic
on-line service and communications systems offered by the Custodian which can
provide the Customer, on a daily basis, with the ability to view on-line or to
print on hard copy various reports of Account activity and of Securities and/or
Cash being held in any Account. To the extent that such service shall include
market values of Securities in an Account, the Customer hereby acknowledges that
the Custodian now obtains and may in the future obtain information on such
values from outside sources that the Custodian considers to be reliable and the
Customer agrees that the Custodian (i) does not verify nor represent or warrant
either the reliability of such service nor the accuracy or completeness of any
such information furnished or obtained by or through such service and (ii) shall
be without liability in selecting and utilizing such service or furnishing any
information derived therefrom.
9. HOLDING OF SECURITIES, NOMINEES, ETC. Securities in an Account which
are held by the Custodian or any Subcustodian may be held by such entity in the
name of the Customer, on behalf of the appropriate Portfolio, in the Custodian's
or Subcustodian's name, in the name of the Custodian's, Subcustodian's or
Securities System's nominee, or in bearer form. Securities that are held by a
Subcustodian or which are eligible for deposit in a Securities System as
provided above may be maintained with the Subcustodian or the Securities System
in an account for the Custodian's or Subcustodian's customers, unless prohibited
by law, rule, or regulation. The Custodian or Subcustodian, as the case may be,
may combine certificates representing Securities held in an Account with
certificates of the same issue held by it as fiduciary or as a custodian. In the
event that any Securities in the name of the Custodian or its nominee or held by
a Subcustodian and registered in the name of such Subcustodian or its nominee
are called for partial redemption by the issuer of such Security, the Custodian
may, subject to the rules or regulations pertaining to allocation of any
Securities System in which such Securities have been deposited, allot, or cause
to be allotted, the called portion of the respective beneficial holders of such
class of security in any manner the Custodian deems to be fair and equitable.
10. PROXIES, ETC. With respect to any proxies, notices, reports or
other communications relative to any of the Securities in any Account, the
Custodian shall perform such services and only such services relative thereto as
are (i) set forth in Section 3 of
8
this Agreement, (ii) described in Exhibit B attached hereto (as such service
therein described may be in effect from time to time) (the "Proxy Service") and
(iii) as may otherwise be agreed upon between the Custodian and the Customer.
The liability and responsibility of the Custodian in connection with the Proxy
Service referred to in (ii) of the immediately preceding sentence and in
connection with any additional services which the Custodian and the Customer may
agree upon as provided in (iii) of the immediately preceding sentence shall be
as set forth in the description of the Proxy Service and as may be agreed upon
by the Custodian and the Customer in connection with the furnishing of any such
additional service and shall not be affected by any other term of this
Agreement. Neither the Custodian nor its nominees or agents shall vote upon or
in respect of any of the Securities in an Account, execute any form of proxy to
vote thereon, or give any consent or take any action (except as provided in
Section 3) with respect thereto except upon the receipt of Instructions relative
thereto.
11. SEGREGATED ACCOUNT. To assist the Customer in complying with the
requirements of the 1940 Act and the rules and regulations thereunder, the
Custodian shall, upon receipt of Instructions, establish and maintain a
segregated account or accounts on its books for and on behalf of a Portfolio.
12. SETTLEMENT PROCEDURES.
(a) The proceeds from the sale or exchange of Securities will be
credited and the cost of such Securities purchased or acquired will be debited
to the Account in accordance with the schedule specified in the Custodian's
operating guidelines in effect from time to time. Upon the execution and
delivery of this Agreement, the Customer acknowledges receipt of the Custodian's
operating guidelines in effect on the date hereof. Notwithstanding the preceding
sentence, settlement and payment for Securities received for an Account and
delivery of Securities maintained for an Account may be effected in accordance
with the customary or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivering Securities to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or dealer)
against a receipt with the expectation of receiving later payment for such
Securities from such purchaser or dealer. The Custodian shall not be liable for
any loss which results from effecting transactions in accordance with the
customary or established securities trading or securities
9
processing practices and procedures in the applicable jurisdiction or market.
(b) The Custodian shall not be required to comply with any Instructions
to settle the purchase of any securities for an Account, unless there are
sufficient immediately available funds in the Account, PROVIDED THAT, if, after
all expenses, debits and withdrawals ("Debits") applicable to the Account have
been made and if after all Conditional Credits, as defined below, applicable to
the Account have been made final entries as set forth in (d) below, the amount
of immediately available funds in such Account is at least equal to the
aggregate purchase price of all securities for which the Custodian has received
Instructions to settle on that date ("Settlement Date"), the Custodian, upon
settlement, shall credit the Securities to an Account by making a final entry on
its books and records.
(c) Notwithstanding the foregoing, if, after all Debits applicable to
the Account have been made, there remains outstanding any Conditional Credit
applicable to the Account or the amount of immediately available funds in such
Account is less than the aggregate purchase price of all securities for which
the Custodian has received Instructions to settle on the Settlement Date, the
Custodian, upon settlement, may credit the securities to the applicable Account
by making a conditional entry on its books and records ("Conditional Credit"),
pending receipt of sufficient immediately available funds in the Account.
(d) If, within a reasonable time from the posting of a Conditional
Credit and after all Debits applicable to the Account have been made,
immediately available funds at least equal to the aggregate purchase price of
all securities subject to a Conditional Credit on a Settlement Date are
deposited into the Account, the Custodian shall make the Conditional Credit a
final entry on its books and records. In such case, the Customer shall be liable
to the Custodian only for late charges at a rate mutually agreed upon in writing
by the Custodian and the Customer.
(e) If, within a reasonable time from the posting of a Conditional
Credit and after all Debits applicable to the Account have been made,
immediately available funds at least equal to the aggregate purchase price of
all securities subject to a Conditional Credit on a Settlement Date are not
deposited into the Account, the Customer, authorizes the Custodian, as agent, to
sell the securities and credit the applicable Account with the proceeds of such
sale. In such case, the Customer shall be liable to the Custodian for any
deficiencies, out-of-pocket costs and expenses
10
associated with the sale of the securities, including but not limited to,
shortfalls in the sales proceeds.
(f) The Customer agrees that it will not use the Account to facilitate
the purchase of securities without sufficient funds in the Account (which funds
shall not include the proceeds of the sale of the purchased securities).
13. PERMITTED TRANSACTIONS. The Customer agrees that it will cause
transactions to be made pursuant to this Agreement only upon Instructions in
accordance Section 14 and only for the purposes listed below.
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or otherwise
become payable.
(c) In exchange for or upon conversion into other securities alone or
other securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into other
securities.
(e) Upon exercise of subscription, purchase or other similar rights
represented by Securities.
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses.
(g) In connection with any borrowings by the Customer requiring a
pledge of Securities, but only against receipt of amounts borrowed.
(h) In connection with any loans, but only against receipt of
collateral as specified in Instructions which shall reflect any restrictions
applicable to the Customer.
(i) For the purpose of redeeming shares of the capital stock of the
Customer against delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer against
delivery of the shares to be redeemed to the Custodian, a Subcustodian or the
Customer's transfer agent.
11
(k) For delivery in accordance with the provisions of any agreement
among the Customer, on behalf of a Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc., relating to compliance with
the rules of The Options Clearing Corporation, the Commodities Futures Trading
Commission and of any registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Customer.
(l) For release of Securities to designated brokers under covered call
options, PROVIDED, HOWEVER, that such Securities shall be released only upon
payment to the Custodian of monies for the premium due and a receipt for the
Securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Custodian will receive the Securities previously deposited from
the broker. The Custodian will act strictly in accordance with Instructions in
the delivery of Securities to be held in escrow and will have no responsibility
or liability for any such Securities which are not returned promptly when due
other than to make proper request for such return.
(m) For spot or forward foreign exchange transactions to facilitate
security trading or receipt of income from Securities related transactions.
(n) Upon the termination of this Agreement as set forth in Section 20.
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no obligation to
verify the purpose for which a transaction is being effected and shall have no
liability, subject to the provisions of Section 14, for following an Instruction
in connection with a transaction not provided for above.
14. INSTRUCTIONS. The term "Instructions" means instructions from the
Customer in respect of any of the Custodian's duties hereunder which have been
received by the Custodian at its address set forth in Section 21 below (i) in
writing (including, without limitation, facsimile transmission) or by tested
telex signed or given by such one or more person or persons as the Customer
shall have from time to time authorized in writing to give the particular class
of Instructions in question and whose name and (if applicable) signature and
office address have been filed with the
12
Custodian, or (ii) which have been transmitted electronically through an
electronic on-line service and communications system offered by the Custodian or
other electronic instruction system acceptable to the Custodian, subject to such
additional terms and conditions the Custodian may reasonably require or (iii) a
telephonic or oral communication by one or more persons as the Customer shall
have from time to time authorized to give the particular class of Instructions
in question and whose name has been filed with the Custodian; or (iv) upon
receipt of such other form of instructions as the Customer may from time to time
authorize in writing and which the Custodian has agreed in writing to accept.
Instructions in the form of oral communications shall be confirmed by the
Customer by tested telex or writing in the manner set forth in clause (i) above,
but the lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions prior to the Custodian's
receipt of such confirmation. Instructions may relate to specific transactions
or to types or classes of transactions, and may be in the form of standing
instructions.
The Custodian shall have the right to assume in the absence of notice
to the contrary from the Customer that any person whose name is on file with the
Custodian pursuant to this Section has been authorized by the Customer to give
the Instructions in question and that such authorization has not been revoked.
The Custodian may act upon and conclusively rely on, without any liability to
the Customer or any other person or entity for any losses resulting therefrom,
any Instructions reasonably believed by it to be furnished by the proper person
or persons as provided above.
15. STANDARD OF CARE. The Custodian shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Custodian which are not the contrary to the provisions
of this Agreement. The Custodian will use reasonable care with respect to the
safekeeping of Property in each Account and, except as otherwise expressly
provided herein, in carrying out its obligations under this Agreement. So long
as and to the extent that it has exercised reasonable care, the Custodian shall
not be responsible for the title, validity or genuineness of any Property or
other property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement and shall be held harmless in acting upon, and may
conclusively rely on, without liability for any loss resulting therefrom, any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed or furnished by the proper party or parties,
including, without limitation, Instructions, and shall be indemnified by the
Customer for any
13
losses, damages, costs and expenses (including, without limitation, the fees and
expenses of counsel) incurred by the Custodian and arising out of action taken
or omitted with reasonable care by the Custodian hereunder or under any
Instructions. The Custodian shall be liable to the Customer for any act or
omission to act of any Subcustodian to the same extent as if the Custodian
committed such act itself, PROVIDED THAT if Customer by Instructions selects any
U.S. Subcustodian or a non-U.S. Subcustodian which, at the time of selection is
no part of the Custodian's existing global custody network, the Custodian shall
be only liable for its own negligence. With respect to a Securities System, the
Custodian shall only be responsible or liable for losses arising from employment
of such Securities System caused by the Custodian's own failure to exercise
reasonable care. In the event of any loss to the Customer by reason of the
failure of the Custodian or a Subcustodian to utilize reasonable care, the
Custodian shall be liable to the Customer to the extent of the Customer's actual
damages at the time such loss was discovered without reference to any special
conditions or circumstances. In no event shall the Custodian be liable for any
consequential or special damages. The Custodian shall be entitled to rely, and
may act, on advice of counsel (who may be counsel for the Customer) on all
matters and shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
In the event the Customer subscribes to an electronic on-line service
and communications system offered by the Custodian, the Customer shall be fully
responsible for the security of the Customer's connecting terminal, access
thereto and the proper and authorized use thereof and the initiation and
application of continuing effective safeguards with respect thereto and agree to
defend and indemnify the Custodian and hold the Custodian harmless from and
against any and all losses, damages, costs and expenses (including the fees and
expenses of counsel) incurred by the Custodian as a result of any improper or
unauthorized use of such terminal by the Customer or by any others.
All collections of funds or other property paid or distributed in
respect of Securities in an Account, including funds involved in third-party
foreign exchange transactions, shall be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian shall have no
liability for any loss occasioned by delay in the actual receipt of notice by
the Custodian or by a Subcustodian of any payment, redemption or other
transaction regarding Securities in each Account in respect of which the
Custodian has agreed to take action as provided in Section 3 hereof. The
Custodian shall
14
not be liable for any loss resulting from, or caused by, or resulting from acts
of governmental authorities (whether de jure or de facto), including, without
limitation, nationalization, expropriation, and the imposition of currency
restrictions; devaluations of or fluctuations in the value of currencies;
changes in laws and regulations applicable to the banking or securities
industry; market conditions that prevent the orderly execution of securities
transactions or affect the value of Property; acts of war, terrorism,
insurrection or revolution; strikes or work stoppages; the inability of a local
clearing and settlement system to settle transactions for reasons beyond the
control of the Custodian; hurricane, cyclone, earthquake, volcanic eruption,
nuclear fusion, fission or radioactivity, or other acts of God.
The Custodian shall have no liability in respect of any loss, damage or
expense suffered by the Customer, insofar as such loss, damage or expense arises
from the performance of the Custodian's duties hereunder by reason of the
Custodian's reliance upon records that were maintained for the Customer by
entities other than the Custodian prior to the Custodian's employment under this
Agreement.
The provisions of this Section shall survive termination of this
Agreement.
16. INVESTMENT LIMITATIONS AND LEGAL OR CONTRACTUAL RESTRICTIONS OR
REGULATIONS. The Custodian shall not be liable to the Customer and the Customer
agrees to indemnify the Custodian and its nominees, for any loss, damage or
expense suffered or incurred by the Custodian or its nominees arising out of any
violation of any investment restriction or other restriction or limitation
applicable to the Customer or any Portfolio pursuant to any contract or any law
or regulation. The provisions of this Section shall survive termination of this
Agreement.
17. FEES AND EXPENSES. The Customer agrees to pay to the Custodian such
compensation for its services pursuant to this Agreement as may be mutually
agreed upon in writing from time to time and the Custodian's reasonable
out-of-pocket or incidental expenses in connection with the performance of this
Agreement, including (but without limitation) legal fees as described herein
and/or deemed necessary in the judgment of the Custodian to keep safe or protect
the Property in an Account. The Customer hereby agrees to hold the Custodian
harmless from any liability or loss resulting from any taxes or other
governmental charges, and any expense related thereto, which may be imposed, or
assessed with respect to any Property in an Account and also agrees to hold the
Custodian, its Subcustodians, and their respective nominees
15
harmless from any liability as a record holder of Property in such Account. The
Custodian is authorized to charge the applicable Account for such items and the
Custodian shall have a lien on the Property in the applicable Account for any
amount payable to the Custodian under this Agreement, including, but not limited
to, amounts payable pursuant to paragraph (e) of Section 12 and pursuant to
indemnities granted by the Customer under this Agreement. The provisions of this
Section shall survive the termination of this Agreement.
18. TAX RECLAIMS. With respect to withholding taxes deducted and which
may be deducted from any income received from any Property in an Account, the
Custodian shall perform such services with respect thereto as are described in
Exhibit C, attached hereto, and shall in connection therewith be subject to the
standard of care set forth in such Exhibit C. Such standard of care shall not be
affected by any other term of this Agreement.
19. AMENDMENT, MODIFICATIONS, ETC. No provision of this Agreement may
be amended, modified or waived except in a writing signed by the parties hereto.
No waiver of any provision hereto shall be deemed a continuing waiver unless it
is so designated. No failure or delay on the part of either party in exercising
any power or right under this Agreement operates as a waiver, nor does any
single or partial exercise of any power or right preclude any other or further
exercise thereof or the exercise of any other power or right.
20. TERMINATION.
(a) TERMINATION OF ENTIRE AGREEMENT. This Agreement may be terminated
by the Customer at any time by written notice or by the Custodian by the giving
of one hundred twenty (120) days written notice to the Customer; PROVIDED that
such written notice by the Customer shall specify the names of the persons to
whom the Custodian shall deliver the Securities in each Account and to whom the
Cash in each Account shall be paid. If notice of termination is given by the
Custodian, the Customer shall, within one hundred twenty (120) days following
the giving of such notice, deliver to the Custodian a written notice specifying
the names of the persons to whom the Custodian shall deliver the Securities in
each Account and to whom the Cash in each Account shall be paid. In either case,
the Custodian will deliver such Securities and Cash to the persons so specified,
after deducting therefrom any amounts which the Custodian determines to be owed
to it under Sections 12, 17, and 23. In addition, the Custodian may in its
discretion withhold from such delivery such Cash and Securities as may be
necessary to
16
settle transactions pending at the time of such delivery. The Customer grants to
the Custodian a lien and right of setoff against the Account and all Property
held therein from time to time in the full amount of the foregoing obligations.
If within one hundred twenty (120) days following the giving of a notice of
termination by the Custodian, the Custodian does not receive from the Customer a
written notice specifying the names of the persons to whom the Custodian shall
deliver the Securities in each Account and to whom the Cash in such Account
shall be paid, the Custodian, at its election, may deliver such Securities and
pay such Cash to a bank or trust company doing business in the State of New York
to be held and disposed of pursuant to the provisions of this Agreement, or may
continue to hold such Securities and Cash until a written notice as aforesaid is
delivered to the Custodian, provided that the Custodian's obligations shall be
limited to safekeeping.
(b) TERMINATION AS TO ONE OR MORE PORTFOLIOS. This Agreement may be
terminated by the Customer as to one or more Portfolio(s) (but less than all of
the Portfolios) at any time by delivery of an amended Exhibit A deleting such
Portfolio(s). This Agreement may be terminated by the Custodian as to one or
more Portfolio(s) (but less than all of the Portfolios) by delivery of an
amended Exhibit A deleting such Portfolio(s), in which case termination as to
such deleted Portfolio(s) shall take effect one hundred twenty (120) days after
the date of such delivery, or such earlier time as mutually agreed. The
execution and delivery of an amended Exhibit A which deletes one or more
Portfolio(s) shall constitute a termination of this Agreement only with respect
to such deleted Portfolio(s), shall be governed by the preceding provisions of
Section 20 as to the identification of a successor custodian and the delivery of
Cash and Securities of the Portfolio(s) so deleted to such successor custodian,
and shall not affect the obligations of the Custodian and the Customer hereunder
with respect to the other Portfolio(s) set forth in Exhibit A, as amended from
time to time.
21. NOTICES. Except as otherwise provided in this Agreement, all
requests, demands or other communications between the parties or notices in
connection herewith (a) shall be in writing, hand delivered or sent by telex,
telegram, cable, facsimile or other means of electronic communication agreed
upon by the parties hereto addressed:
17
if to the Customer, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (210) ____________
if to the Custodian, to:
▇▇▇▇▇ ▇▇▇▇▇▇▇
The Northern Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or in either case to such other address as shall have been furnished to the
receiving party pursuant to the provisions hereof and (b) shall be deemed
effective when received, or, in the case of a telex, when sent to the proper
number and acknowledged by a proper answerback.
22. SEVERAL OBLIGATIONS OF THE PORTFOLIOS. With respect to any
obligations of the Customer on behalf of each Portfolio and each of its related
Accounts arising out of this Agreement, the Custodian shall look for payment or
satisfaction of any obligation solely to the assets and Property of the
Portfolio and such Accounts to which such obligation relates as though the
Customer had separately contracted with the Custodian by separate written
instrument with respect to each Portfolio and its related Accounts.
23. SECURITY FOR PAYMENT. To secure payment of all obligations due
hereunder, the Customer hereby grants to the Custodian a continuing security
interest in and right of setoff against each Account and all Property held
therein from time to time in the full amount of such obligations; PROVIDED THAT,
if there is more than one Account and the obligations secured pursuant to this
Section can be allocated to a specific Account or the Portfolio related to such
Account, such security interest and right of setoff will be limited to Property
held for that Account only and its related Portfolio. Should the Customer fail
to pay promptly any amounts owed hereunder, the Custodian shall be entitled to
use available Cash in the Account or applicable Accounts, as the case may be,
and to dispose of Securities in the Account or such applicable Account as is
necessary. In any such case and without limiting the foregoing, the Custodian
shall be
18
entitled to take such other action(s) or exercise such other options, powers and
rights as the Custodian now or hereafter has as a secured creditor under the New
York Uniform Commercial Code or any other applicable law.
24. REPRESENTATIONS AND WARRANTIES.
(a) The Customer hereby represents and warrants to the Custodian that:
(i) the employment of the Custodian and the allocation of
fees, expenses and other charges to any Account as herein provided, is
not prohibited by law or any governing documents or contracts to which
the Customer is subject;
(ii) the terms of this Agreement do not violate any obligation
by which the Customer is bound, whether arising by contract, operation
of law or otherwise;
(iii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon the
Customer and each Portfolio in accordance with its terms; and
(iv) the Customer will deliver to the Custodian such evidence
of such authorization as the Custodian may reasonably require, whether
by way of a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the Customer that:
(i) the terms of this Agreement do not violate any obligation
by which the Custodian is bound, whether arising by contract, operation
of law or otherwise;
(ii) this Agreement has been duly authorized by appropriate
action and when executed and delivered will be binding upon the
Custodian in accordance with its terms;
(iii) the Custodian will deliver to the Customer such evidence
of such authorization as the Customer may reasonably require, whether
by way of a certified resolution or otherwise; and
(iv) the Custodian is qualified as a custodian under Section
26(a) of the 1940 Act and warrants that it will remain
19
so qualified or upon ceasing to be so qualified shall promptly notify
the Customer in writing.
25. GOVERNING LAW AND SUCCESSORS AND ASSIGNS. This Agreement shall be
governed by the law of the State of New York and shall not be assignable by
either party, but shall bind the successors in interest of the Customer and the
Custodian.
26. PUBLICITY. Customer shall furnish to Custodian at its office
referred to in Section 21 above, (a) at least ten (10) days prior to filing or
first use, as the case may be, drafts of its registration statement on Form N-1A
(including amendments) and prospectus supplements or amendments relating to the
Customer, or (b) at least two (2) business day prior to filing or first use, as
the case may be, as proposed advertising or sales literature relating to the
Custodian. The Customer will not make any other written or oral representation
about the Custodian without its prior written consent. The provisions of this
Section shall survive the termination of this Agreement.
27. SUBMISSION TO JURISDICTION. Any suit, action or proceeding arising
out of this Agreement may be instituted in any State or Federal court sitting in
the City of New York, State of New York, United States of America, and the
Customer irrevocably submits to the non-exclusive jurisdiction of any such court
in any such suit, action or proceeding and waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in such a court and any
claim that such suit, action or proceeding was brought in an inconvenient forum.
28. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties hereto.
29. CONFIDENTIALITY. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such providing
party. The foregoing shall not be applicable to any information that is publicly
available when
20
provided or thereafter becomes publicly available other than through a breach of
this Agreement, or that is required or requested to be disclosed by any bank or
other regulatory examiner of the Custodian, Customer, or any Subcustodian, any
auditor of the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation.
30. SEVERABILITY. If any provision of this Agreement is determined to
be invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other provision of this Agreement.
31. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter herein and supersedes all
prior agreements and understandings relating to such subject matter.
Notwithstanding the foregoing, nothing in this Agreement shall affect any other
agreement between the parties related to other subject matters.
32. HEADINGS. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.
USAA MUTUAL FUND, INC.
------------------------
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
THE NORTHERN TRUST COMPANY
------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
21
EXHIBIT A
To Custodian Agreement dated as of August 1, 2006 between The Northern
Trust Company and USAA
Mutual Funds Trust
LIST OF PORTFOLIOS
The following is a list of Portfolio(s) referred to in the first
WHEREAS clause of the above-referred to Custodian Agreement. Terms used herein
as defined terms, unless otherwise defined, shall have the meanings ascribed to
them in the above-referred to Custodian Agreement.
USAA S&P 500 Index Fund
Dated as of: August 1, 2006 USAA MUTUAL FUNDS TRUST
------------------------
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
THE NORTHERN TRUST COMPANY
------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT B
To Custodian Agreement dated as of August 1, 2006 between The Northern
Trust Company and USAA Mutual Funds Trust
PROXY SERVICE
The following is a description of the Proxy Service referred to in
Section 10 of the above referred to Custodian Agreement. Terms used herein as
defined terms shall have the meanings ascribed to them therein, unless otherwise
defined below.
The Custodian currently provides proxy voting services, including event
notification, voting for annual general meetings and extraordinary meetings, in
partnership with the following market specialists:
Institutional Shareholder Services (ISS), for all global proxy services
ex-U.S.
ADP, for U.S. proxy services
Proxy voting services are currently provided in the markets listed
below:
Argentina Malaysia
Australia Mexico
Austria Netherlands
Belgium New Zealand
Canada Norway
China Philippines
Czech Republic Poland
Denmark Portugal
Euroclear Singapore
Finland Slovak Republic
France South Africa
Germany South Korea
Greece Spain
Hong Kong Sri Lanka
Hungary Sweden
Indonesia Switzerland
Ireland Thailand
Italy United Kingdom
Japan United States
Kenya Venezuela
For those markets not covered by our standard proxy voting service, the
Fund Manager can contact Custodian directly with voting instructions on specific
events; Custodian will use reasonable efforts to vote these proxies for the
customer.
All proxy voting instructions must be received by Custodian before
specified deadline for execution. Execution costs attributable to settlement and
custody activities in specific markets, such as stamp duty, securities
re-registration fees, and will be passed through where applicable.
Custodian may at its sole discretion change its arrangement for
provision of proxy service from time to time, provided such change is
communicated promptly to the Customer in writing.
Dated as of: August 1, 2006 USAA MUTUAL FUNDS TRUST
------------------------
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
THE NORTHERN TRUST COMPANY
------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT C
To Custodian Agreement dated as of August 1, 2006 between The Northern
Trust Company and USAA Mutual Funds Trust
TAX RECLAIMS
Pursuant to Section 18 of the above referred to Custodian Agreement,
the Custodian shall perform the following services with respect to withholding
taxes imposed or which may be imposed on income from Property in any Account.
Terms used herein as defined terms shall, unless otherwise defined, have the
meanings ascribed to them in the above referred to Custodian Agreement.
When withholding tax has been deducted with respect to income from any
Property in an Account, the Custodian will actively pursue, on a reasonable
efforts basis, the reclaim process, PROVIDED THAT the Custodian shall not be
required to institute any legal or administrative proceeding against any
Subcustodian or other person. The Custodian will provide fully detailed
advices/vouchers to support reclaims submitted to the local authorities by the
Custodian or its designee. In all cases of withholding, the Custodian will
provide full details to the Customer. If exemption from withholding at the
source can be obtained in the future, the Custodian will notify the Customer and
advise what documentation, if any, is required to obtain the exemption. Upon
receipt of such documentation from the Customer, the Custodian will file for
exemption on the Customer's behalf and notify the Customer when it has been
obtained.
In connection with providing the foregoing service, the Custodian shall
be entitled to apply categorical treatment of the Customer according to the
Customer's nationality, the particulars of its organization and other relevant
details that shall be supplied by the Customer. It shall be the duty of the
Customer to inform the Custodian of any change in the organization, domicile or
other relevant fact concerning tax treatment of the Customer and further to
inform the Custodian if the Customer is or becomes the beneficiary of any
special ruling or treatment not applicable to the general nationality and
category or entity of which the Customer is a part under general laws and treaty
provisions. The Custodian may rely on any such information provided by the
Customer.
3
In connection with providing the foregoing service, the Custodian may
also rely on professional tax services published by a major international
accounting firm and/or advice received from a Subcustodian in the jurisdictions
in question. In addition, the Custodian may seek the advice of counsel or other
professional tax advisers in such jurisdictions. The Custodian is entitled to
rely, and may act, on information set forth in such services and on advice
received from a Subcustodian, counsel or other professional tax advisers and
shall be without liability to the Customer for any action reasonably taken or
omitted pursuant to information contained in such services or such advice.
Dated as of: August 1, 2006 USAA MUTUAL FUNDS TRUST
------------------------
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
THE NORTHERN TRUST COMPANY
------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
4
EXHIBIT G (viii)
STATE STREET BANK & TRUST COMPANY
CUSTODY AND ACCOUNTING FEE SCHEDULE
USAA MUTUAL FUNDS TRUST
--------------------------------------------------------------------------------
I. DOMESTIC CUSTODY
--------------------------------------------------------------------------------
Maintain custody of fund assets. Settle portfolio purchases and sales. Report
trade fails. Determine and collect portfolio income. Make cash disbursements and
report cash transactions. Monitor corporate actions. Report
portfolio positions.
The fee shown below is annualized, billed and payable monthly and based on the
aggregate assets of all USAA accounts serviced by State Street
First $20 billion 0.25 basis points
Next $20 billion 0.20 basis points
Excess 0.15 basis points
TRANSACTIONS
DTC (non-ETD) $12.00
DTC (ETD) $7.00
Fed Book Entry (non-ETD) $12.00
Fed Book Entry (ETD) $7.00
PTC (non-ETD) $20.00
PTC (ETD) $15.00
Physical Settlements $25.00
Maturity collections $8.00
In Kind Transfers (DTC) $7.00
Paydowns $2.00
Third party foreign exchange trades $50.00
Call Monitoring $5.00
Fund of Fund Trades $5.00
All other trades $16.00
Written options $25.00
Closed options $15.00
Futures transactions - no security movement $8.00
Margin payments $6.00
Fund trades $30.00
Affirmations $1.00
CWP (per check) .▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Repo No charge
State Street FX No charge
--------------------------------------------------------------------------------
II. GLOBAL CUSTODY
--------------------------------------------------------------------------------
SUB-CUSTODIAN ASSET BASED FEES**
A fee payable monthly on a pro rata basis, based on the following percentages of
month end net assets.
BASIS POINT
COUNTRY CHARGES TRANSACTION FEES
Argentina 12.0 $ 50
Australia 1.0 $ 20
Austria 8.0 $ 50
Bahrain 40.0 $100
Bangladesh 40.0 $100
Belgium 1.0 $ 20
Bermuda 12.0 $ 75
Bolivia 40.0 $100
Botswana 40.0 $ 75
Brazil 12.0 $ 50
Bulgaria 20.0 $ 75
Canada 3.0 $ 20
Chile 20.0 $ 75
China 20.0 $100
Colombia 40.0 $100
Croatia 40.0 $ 75
Cyprus 40.0 $100
Czech Rep 12.0 $ 75
Denmark 1.0 $ 20
Ecuador 40.0 $ 75
Egypt 12.0 $ 50
Estonia 40.0 $ 40
Euroclear 3.0 $ 20
Finland 1.0 $ 20
France 3.0 $ 20
Germany 3.0 $ 20
Ghana 40.0 $ 75
Greece 12.0 $ 40
Hong Kong 8.0 $ 40
Hungary 12.0 $ 75
Iceland 12.0 $ 25
India 20.0 $100
Indonesia 12.0 $ 75
Ireland 8.0 $ 50
Israel 12.0 $ 50
Italy 3.0 $ 20
Ivory Coast 40.0 $ 75
Jamaica 40.0 $ 75
Japan 3.0 $ 20
Jordan 12.0 $100
Kenya 20.0 $ 75
Latvia 40.0 $ 50
Lebanon 40.0 $100
Lithuania 12.0 $ 50
Malaysia 8.0 $ 50
Mauritius 20.0 $ 75
Mexico 8.0 $ 25
Morocco 20.0 $ 75
Namibia 20.0 $ 50
Netherlands 1.0 $ 20
New Zealand 1.0 $ 20
Norway 1.0 $ 20
Oman 40.0 $100
Pakistan 20.0 $100
Peru 40.0 $100
Philippines 8.0 $ 75
Poland 20.0 $ 50
Portugal 8.0 $ 75
Puerto Rico 8.0 $ 50
Romania 12.0 $ 75
Russia 20.0 $ 75
S Africa 8.0 $ 25
Singapore 8.0 $ 40
Slovak Rep 20.0 $ 75
Slovenia 40.0 $ 75
South Korea 1.0 $ 20
Spain 8.0 $ 40
Sri Lanka 12.0 $ 75
Swaziland 40.0 $ 75
Sweden 3.0 $ 20
Switzerland 1.0 $ 20
Taiwan 12.0 $ 40
Thailand 8.0 $ 50
Trin & Tobago 40.0 $ 75
Tunisia 40.0 $ 40
Turkey 40.0 $ 40
UK 3.0 $ 20
Ukraine 40.0 $100
Uruguay 40.0 $ 75
Venezuela 40.0 $100
Viet Nam 40.0 $100
Zambia 40.0 $100
Zimbabwe 40.0 $100
**Excludes: Agent, depository and local auditing fees, stamp duties and
registration fees
--------------------------------------------------------------------------------
III. SECURITIES LENDING (PROGRAM RUN BY THIRD PARTY)
Securities Lending Fees have been moved to Attachment A, as third party
lending agent is paying fees directly to State Street
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
IV. FUND ACCOUNTING
--------------------------------------------------------------------------------
RECORDKEEPING
Maintain investment ledgers, provide selected portfolio transactions, position
and income reports. Maintain general ledger and capital stock accounts. Prepare
daily trial balance. Calculate Net Asset Value daily. Provide selected general
ledger reports. The fee shown below is annualized, billed and payable monthly
and based on the aggregate assets of the Mutual Funds.
NON-MONEY MARKET FUNDS
First $18 billion 0.90 basis points
Excess 0.60 basis points
Minimum monthly charge Waived
MONEY MARKET FUNDS
First $8 billion 0.70 basis points
Excess 0.50 basis points
Minimum monthly charge Waived
ADVERTISED YIELD
For each portfolio maintain, monthly charge is based on the number of holdings
as followed:
HOLDINGS PER PORTFOLIO MONTHLY FEE
0 to 50 $250.00
50 to 100 $300.00
Over 100 $350.00
▇▇▇▇▇▇
New fund installation charge $1,000.00
Annual per fund charge $3,500.00
▇▇▇▇▇▇ User Fee $ 92.00
AUTOMATED PRICING VIA NAVIGATOR (EXCLUDES FUND OF FUNDS)
Quote Charge (based on month end positions)
Base fee--domestic, including Money Market Funds $300.00
Base fee--more than 20% global $375.00
Municipal Bonds via ▇▇▇▇▇▇ Data $10.00
Municipal Bonds via ▇▇▇▇▇ Information Systems $16.00
Government, corporate, and conv. bonds via Bridge $11.00
Corporate and government bonds via Bridge $11.00
Government, corporate, and conv. bonds via FT Interactive $16.00
Corporate and government bonds via FT Interactive $16.00
Options, futures and private placements $6.00
Foreign equities and bonds $6.00
Listed equities, OTC equities and bonds $6.00
Corporate, municipal, convertible, and government
Bonds, adjustable rate preferred stocks via IDSI $12.00
MULTI-MANAGED FUNDS
For each additional portfolio, the fund will be charged $15,000
--------------------------------------------------------------------------------
V. ENHANCED ACCOUNTING SERVICES - FUND ADMINISTRATION
--------------------------------------------------------------------------------
The following fees are for limited fund administration services or remote access
to technology platforms. All fees quoted are expressed in annual terms unless
expressly noted.
o Performance calculations on multi-managed portfolios $2,000
(fee applies to each multi-manager portfolio)
o Specialized fund administration reporting $250
(fee is per report per fund)
- NSAR Broker
- Top ten holdings
- Series Broker allocation
- Dividend received deduction
- 45 day dividend reporting
- Government income breakdown/income by state
(fee waived for this report)
- Massachusetts State reporting
o Specialized fund administration system applications
- Fund Administration Workstation
(remote access for all funds) $75,000
Before/After tax return module (waived)
(the waiver relates to returns module only.
Use of other FA workstation functions will
require additional fees)
- Wash Sale System
(On demand reporting)
- Equity Fund (per fund) $5,000
- Fixed Income Fund (per fund) $3,000
- iTELS - tax efficient lot selection application $2,500
(service performed by State Street) per fund
--------------------------------------------------------------------------------
VI. SPECIAL SERVICES
--------------------------------------------------------------------------------
Fees for activities of a non-recurring nature such as fund consolidations or
reorganizations, extraordinary security shipments and the preparation of special
reports will be subject to negotiation.
--------------------------------------------------------------------------------
VII. BALANCE CREDITS AND OVERDRAFT CHARGES
--------------------------------------------------------------------------------
For the Mutual Funds only, a balance credit will be applied against the custody
fees or other fees as directed by USAA (excluding out-of-pocket expenses). The
credit is based on 75% of the average 90 day Treasury Bill rate for the month,
times the average collected balance (collected balance is positive balance).
Overdrafts due to overspending/client errors or third party agent errors will be
charged at a rate of Fed Funds plus 50 basis points. Total overdraft charges
will be applied to the monthly custody bills.
--------------------------------------------------------------------------------
VIII. OUT-OF-POCKET EXPENSES
--------------------------------------------------------------------------------
A billing for the recovery of applicable out-of-pocket expenses will be made as
of the end of each month. These expenses have been separated into 2 categories;
recurring and variable.
RECURRING OUT-OF-POCKET EXPENSES
Out-of-pocket expenses related to duplicating, courier service,
postage/insurance, supplies related to fund records, communication/equipment
costs (telephone, lease lines, etc.), and third-party internal control review
will be charged back to the funds at a fixed monthly fee.
$420.00/month per fund
VARIABLE OUT-OF-POCKET EXPENSES
Variable out-of-pocket expenses will be billed as they occur. These
out-of-pocket expenses include, but are not limited to the following:
- Proxy Fees
- Transfer fees
- Sub-Custodian out-of-pocket charges, market fees, registration fees,
stamp duties, etc.
- Customized programming/transmissions @ $175 per hour) (100 hours for
free)
- Annual fee for each customized program/transmission ($3,000)--1st
three are free
- Non recurring legal fees
- Wires ($5.00)
All fees above will be charged against the Fund's custodian account five (5)
business days after the invoice is sent to the Fund's offices. Payment does not
preclude any required billing adjustments that will be made to the following
months bill.
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STATE STREET USAA MUTUAL FUNDS TRUST
By By
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Date: August 1, 2006 Date: August 1, 2006
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STATE STREET BANK AND TRUST COMPANY
ATTACHMENT A
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THIRD PARTIES SECURITIES LENDING-FEE SCHEDULE
(PROGRAM RUN BY METROPOLITAN WEST SECURITIES)
ADMINISTRATION FEE
For reporting of fails, cash collateral, shares on loan, past due income.
Services related to income collection and corporate action support. The fee
shown below is annualized, billed and payable monthly.
Prime Meridian access* $1,080.00
*for accounts NOT already billed by SSC's Cash Management group
DOMESTIC (DTC, FED)
Deliver/Receive loaned securities versus cash/securities collateral
(ETD) 7.00
Loan Administration--DTC SPO $5.00
Wire transfer $5.00
Non-US (sleeves used in Section V)
Deliver/Receive loaned securities versus cash/securities collateral
Group I $25.00
Group II $40.00
Group III $50.00
Group IV $75.00
Group V $100.00
OTHER CUSTODY CHARGES
Domestic Collateral Account Holdings* .4 basis point
Collateral transactions:
DTC, Fed Buy/Sell/Maturity $7.00
Wire in/out 5.00
*based on month end market values of collateral accounts
TRANSMISSION OF CUSTODY POSITIONS AND ACTIVITY
Programming for standard transmission. Transmission set up, integration testing
and maintenance. $175.00 per hour
1A