EXHIBIT 7(o)
[THE CHASE MANHATTAN BANK LETTERHEAD]
October 27, 2000
USAA Mutual Fund, Inc.
10750 XxXxxxxxx Freeway, BKB-04-S
San Antonio, Texas 78288
Dear Sir or Madam:
On behalf of The Chase Manhattan Bank ("Chase"), this letter (the
"Custody Letter Agreement") is to confirm that Chase has been selected by the
Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx Quantitative Advisors, a division of Xxxxxxx Xxxxx
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 Fund, Inc., 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,
The Chase Manhattan Bank
By: /S/XXXXX X. XXXXXXX
-------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Acknowledged and Agreed:
USAA Mutual Fund, Inc., on behalf of its series, USAA Extended Market Index Fund
By: /S/ XXXXXXX X.X. XXXX
---------------------
Name: Xxxxxxx X.X. Xxxx
Title: President
Cc: Xxxx Xxxxx, Xxxxxxx Xxxxx Quantitative Advisors
1012239.1
EXHIBIT A
ADDENDUM TO CUSTODY LETTER AGREEMENT
EXHIBIT 7(p)
USAA MUTUAL FUND, INC.
ADDENDUM TO CUSTODY LETTER AGREEMENT
WITH
THE CHASE MANHATTAN BANK
The Chase Manhattan Bank (the "Custodian") acting as Custodian for
USAA Mutual Fund, Inc. (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
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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.
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(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 Directors 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 Directors 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:
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(i) to the Custodian:
The Chase Manhattan Bank (Texas Region)
0000 X.X. Loop 000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
(ii) to the Transfer Agent:
USAA Shareholder Account Services
Bank Services Building, BKB-03-N
00000 XxXxxxxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
With a copy to:
USAA Investment Management Company
Bank Services Building, BKB-04-S
00000 XxXxxxxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Vice President, Securities Counsel and Compliance
Telephone No.: (000) 000-0000
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
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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 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.
5
IN WITNESS WHEREOF, the undersigned have executed this Addendum as of
the date set forth below.
Dated: October 27, 2000
THE CHASE MANHATTAN BANK
By: /S/ XXXXX X. XXXXXX
-------------------------
Name: Xxxxx X. Xxxxxx
Title:Senior Vice President and Manager
USAA TRANSFER AGENCY COMPANY
By: /S/ XXXXXXX X. XXXX
--------------------------
Name: Xxxxxxx X. Xxxx
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 FUND, INC.
on behalf of itself and its series
USAA EXTENDED MARKET
INDEX FUND
By: /S/ XXXXXXX X.X. XXXX
--------------------------
Name: Xxxxxxx X.X. Xxxx
Title: President
IMCO hereby consents and agrees to the terms of the foregoing Addendum
to Custodian Letter Agreement.
USAA INVESTMENT
MANAGEMENT COMPANY
By: /S/ XXXXX X. XXXXXXX
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
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SCHEDULE 1
FEES
7
Automated Clearing House (ACH) Origination
USAA MUTUAL FUND, INC.
SERVICE PRICE
Origination Services (DEBITS AND CREDITS)
2 Day Settlement Extended Processing1 $ 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 file1
Data Transmission (IN/OUT) 10.00 file1
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 file1
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
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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.
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Account Reconciliation Services
USAA MUTUAL FUND, INC.
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 Research1 35.00 hour
Manually Key Issue Data from Fax1 2.00 issue
1 One-time charge for special services requested by client which require
extensive research and or manual work.
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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.
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Funds Transfer Service
USAA MUTUAL FUND, INC.
SERVICE PRICE
Maintenance $ 0.00 account
Incoming Transfer
AUTOPOST Domestic 3.00 transfer
NON-AUTOPOST Domestic 4.50 transfer
International 10.00 transfer
Electronic Initiation1
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.
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MicroLink
USAA MUTUAL FUND, INC.
SERVICE PRICE
BANK ACCOUNT REPORTING
Implementation1
Bank Account Reporting $ 325.00 one time
Maintenance1
Bank Account Reporting 30.00 client
Chase Texas Accounts 25.00 account
Current-Day Reporting 10.00 account2
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
Implementation1 225.00 one time
Without Bank Account Reporting 325.00 one time
Maintenance1 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 Processing4 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.
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Item Processing--Deposit Services
USAA MUTUAL FUND, INC.
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.
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SCHEDULE 2
AUTHORIZED OFFICERS
Xxxxxxx X.X. Xxxx
Xxxxxxx Xxxx
Xxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxxx
Xxxx Xxxx
Xxxxxxxx Xxxxxxxxx
Date: October 27, 2000
15
EXHIBIT 7(q)
State Street Bank and Trust Company
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Gentlemen:
Pursuant to Section 12 of the Custodian Agreement dated as of November
3, 1982, between USAA Mutual Fund, Inc. (the "Company") 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 Company
has established three new series of its shares, namely, the USAA Nasdaq-100
Index Fund, the USAA Global Titans Index Fund, and the USAA Capital Growth Fund
(collectively the "Funds"). Please be further advised that the Company desires
to retain the Custodian to render custody services under the Custodian
Agreement to the 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 FUND, INC.
Attest: /S/ XXXXXXX X. XXXXXX By: /S/ XXXXXXX X.X. XXXX
--------------------- ---------------------
Xxxxxxx X. Xxxxxx Xxxxxxx X.X. Xxxx
Secretary President
Dated: October 27, 2000
We are willing to render custody services to the USAA Nasdaq-100 Index
Fund, the USAA Global Titans Index Fund, and the USAA Capital Growth Fund in
accordance with the fee schedules attached hereto as Exhibit A.
STATE STREET BANK AND TRUST COMPANY
Attest: /S/ XXXXXXXXX X. POSTER BY: /S/ XXXXXX X. XXXXX
----------------------- -------------------
Xxxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx, Vice Chairman and
Chief Operating Officer
Dated: October 27, 2000
