EXHIBIT 8(h)
USAA MUTUAL FUND, INC.
SUBCUSTODIAN AGREEMENT
WITH
TEXAS COMMERCE BANK
The undersigned custodian (the "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 appoints Texas Commerce Bank as subcustodian (the
"Subcustodian") for each of the respective series of the Fund
(the "Funds") and the Subcustodian hereby accepts such
appointment on the following terms and conditions as of the date
set forth below.
1. Qualification. The Custodian and the Subcustodian each
represents to the other and to the Company that it is qualified
to act as a custodian for a registered investment company under
the 1940 Act, and the Custodian represents to the Subcustodian
that it is the duly appointed, qualified and acting Custodian of
the Funds, with all necessary power and authority to enter into
this Agreement.
2. Subcustody. The Subcustodian agrees to maintain one or
more custodial accounts ("Subscription Accounts") for the Funds
in which checks ("Subscription Checks") issued in payment for
purchases of Fund shares shall be deposited by USAA Shareholder
Account Services ("USAA SAS"), transfer agent of the Funds (the
"Transfer Agent"). The Subcustodian further agrees to debit USAA
IMCO account no. 06407080765 (the "Return Item Account") for the
aggregate amount of all Subscription Checks returned to the
Subcustodian for non-payment ("Return Items"), informing USAA SAS
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, Subcustodian 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 Subcustodian the full amount of any such insufficiency.
Each business day the Subcustodian agrees to, based
upon instructions by USAA SAS, remit to the Custodian by wire
transfer amounts of Subscription Checks deposited in the
Subscription Account on the preceding business day
notwithstanding whether the Subcustodian has collected good funds
in respect of such checks. The Funds will compensate the
Subcustodian 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 Subcustodian, (ii) for service
fees charged by the Subcustodian for processing Subscription
Checks as set forth in Schedule 1 to this Agreement (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 the USAA Investment Management Company (USAA
IMCO) within five (5) business days following a request for
payment by Subcustodian pursuant to Paragraph 2 hereof.
3. Instructions: Other Communications. Any one officer
or other authorized representative of the Transfer Agent
designated as hereinafter provided as an officer or other
authorized representative of the Transfer Agent authorized to
give instructions to the Subcustodian with respect to Fund assets
held in Subscription Accounts (an "Authorized Officer"), shall be
authorized to instruct the Subcustodian 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 Subcustodian shall agree; provided, however,
the Subcustodian is authorized to accept and act upon
instructions from the Transfer Agent, whether orally, by
telephone or otherwise, which the Subcustodian reasonably
believes to be given by an authorized person. The Subcustodian
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 Subcustodian
signed by the President or any Vice President and any Assistant
Vice President, Assistant Secretary or Assistant Treasurer of the
Funds. In addition to a written list of authorized officers, the
Transfer Agent will provide Subcustodian with additional
information and signature cards as reasonably requested by
Subcustodian relating to the authorized officers. The
Subcustodian shall furnish the Transfer Agent, with a copy to the
Funds, 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. The Subcustodian shall also
furnish the Custodian with a copy of item (ii) above.
4. Fees. The service fees charged by the Subcustodian
under the Agreement 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 Funds thirty (30) days in
advance of any increase in fees.
5. Liabilities.
(i) The Subcustodian shall be held harmless by the
Custodian and Transfer Agent and shall not be liable for any
action taken or omitted to be taken in good faith, or for any
mistake of law or fact, or for anything Subcustodian may do or
refrain from doing in connection with or as required by this
Agreement, except for failure to exercise ordinary care or act in
good faith. Except as otherwise set forth herein, the
Subcustodian shall have no responsibility with respect to Fund
assets. The Subcustodian shall, for the benefit of the Custodian
and the Funds, 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 Subcustodian shall have no
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
Subcustodian. IN NO EVENT WILL THE SUBCUSTODIAN BE LIABLE
TO CUSTODIAN, TRANSFER AGENT OR THE FUNDS FOR ANY INDIRECT
DAMAGES, LOST PROFITS, SPECIAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES WHICH ARISE OUT OF OR IN CONNECTION WITH THE
SERVICES CONTEMPLATED HEREIN.
(ii) The Subcustodian shall indemnify, defend and save
harmless the Custodian and each Fund from and against all loss,
liability, claims and demands incurred by the Custodian or the
Fund arising out of or in connection with the Subcustodian's
willful malfeasance or bad faith in connection with its
obligations and duties under this Agreement.
(iii) The Custodian agrees to indemnify, defend and save
harmless the Subcustodian from and against any and all loss,
liability, claims and demands incurred by the Subcustodian in
connection with the performance by the Subcustodian in good faith
of any activity under this Agreement pursuant to instructions of
the Custodian.
(iv) It is understood and expressly stipulated that neither
the shareholders of any Fund or the members of the Board of such
Fund shall be personally liable hereunder. The obligations of
each Fund hereunder are not personally binding upon, nor shall
resort to the private property of, any of the members of the
Board of the Fund, nor of its shareholders, officers, employees
or agents, but only the Fund's property shall be bound.
6. Termination. Each party may terminate this Agreement
at any time by not less than thirty (30) days' prior written
notice which shall specify the date of such termination; and
further, provided, however, that the Custodian may immediately
terminate this Agreement in the event of the appointment of a
conservator or receiver for the Subcustodian by the Federal
Deposit Insurance Corporation or upon the happening of a like
event at the direction of an appropriate regulatory agency or
court of competent jurisdiction. Upon termination, the
Subcustodian shall make immediate delivery of all Fund assets
held in the Subscription Accounts to the Custodian or to any
third party specified by the Custodian in writing. If any
Subscription Checks are subsequently returned unpaid the Funds
shall direct the Transfer Agent to pay the Subcustodian the
amount thereof on behalf of the Funds promptly upon demand.
7. Communications. All notices to be delivered pursuant
to the terms of this Agreement 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 Agreement, unless otherwise
agreed by the parties, shall be addressed as follows:
(i) to the Subcustodian:
Texas Commerce Bank
0000 X.X. Loop 000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxx
(ii) to the Custodian:
State Street Bank and Trust Company
One Heritage Drive
Xxxxxx Xxxxxxxx X.0-X
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
(iii) to the Transfer Agent: USAA Shareholder Account Services
USAA Building, D-3-E
(As instructed by the Custodian) San Antonio, Texas 78288
Attn: Xxx Xxxxx
8. Access to Records. The Subcustodian 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 any Fund or the Custodian.
9. Cooperation. The Subcustodian shall cooperate with
each Fund and the Custodian and their respective independent
public accountants in connection with annual and other audits of
the books and records of the Custodian or the Fund.
10. Miscellaneous. This Agreement (i) shall be governed by
and construed in accordance with the laws of the State of Texas
without regard to conflicts of law rules, (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 Subcustodian in connection with or
relating to this Agreement will be subject to the Subcustodian's
Terms and Conditions of Deposit Accounts, and any and all rules
or regulations now or hereafter promulgated by the Subcustodian
which relate to such accounts 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 Agreement shall control.
12. Signature Authority. Each of the undersigned
represents and warrants that he/she has the requisite authority
to execute this Agreement on behalf of the party for whom the
undersigned signs; that all necessary action has been taken to
authorize this Agreement; that this Agreement, upon execution and
delivery, shall be a binding obligation of such party.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth below.
Dated: March 24, 1994
STATE STREET BANK & TRUST COMPANY
As Custodian
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Title: Executive Vice President
TEXAS COMMERCE BANK
As Subcustodian
By:/s/ Xxxxxxx Xxxxx
------------------------
Title: Vice President
USAA SHAREHOLDER ACCOUNT SERVICES
As Transfer Agent
By:/s/ X. Xxx Xxxx
---------------------
X. Xxx Xxxx
Title: Sr. Vice President-
Chief Financial Officer/Controller
By:/s/ Xxxxxxx X. Xxxx
--------------------------
Xxxxxxx X. Xxxx
Title: Vice President-Controller
The Funds each hereby consent and agree to the terms of the
foregoing Subcustodian Agreement; provided, however, that the
same shall not relieve the Custodian of any of its
responsibilities to the Funds as set forth in the Custodian
Agreements between the Funds and the Custodian.
USAA MUTUAL FUND, INC.
By:/s/ Xxxx X. Xxxxxxxx, Xx.
------------------------------
Xxxx X. Xxxxxxxx, Xx.
Title: Vice President
SCHEDULE 1
FEES
Item Processing Pricing
High Volume Corporate Accounts
Effective January 1994
SERVICE PRICE
------- -----
Pre-encoded Deposit
On-Us $ .019/item
Tier I/Local City $ .019/item
Tier II/Local RCPC $ .029/item
Tier III/Texas Fed Cities $ .040/item
Tier IV/Other Texas $ .050/item
Tier V/Other Transit $ .059/item
Rejects $ .03/item
Account Maintenance $ 10.00/account
Debits Posted $ .12/item
Credits Posted $ .45/deposit
FDIC Assessment $ .16/$1,000 ledger bal./mo.
MicroLink Pricing
Effective January 1994
SERVICE PRICE
------- -----
Cash Manager
------------
Software Pricing *
Cash Manager Setup Fee $ 325.00
Maintenance *
Cash Manager $ 35.00/customer/month
Bank Account Reporting
TCB
(First 5 Accounts) $ 25.00/account/month
Current Day Reporting **
Transaction Reporting
Previous Day Items $ .15/item
Current Day Items $ .20/item
Automated Payments & Collections (APC)***
------------------------------------------
Software Pricing *
APC Setup Fee $ 225.00
Maintenance *
Automated Payments & Collections $ 25.00/customer/month
APC Transactions
First 1-500 Transactions $ .30/transaction
* Fees are for single micro-computer software. Additional
micro-computer software and maintenance charges are
available at 50% off listed fees.
** The charge for Current Day Reporting is in addition to the
account charges.
*** Refer to ACH Price Sheet for additional APC and DTS charges.
TexStar Funds Transfer Pricing
Effective January 1994
SERVICE PRICE
------- -----
TexStar Account Maintenance $ 0.00/account/month
Incoming Transfer
Autopost Domestic $ 4.50/transfer
Notifications
TexStar Direct Access $ No charge
TexStar Direct Access, TexStar EXPRESS,
Automatic Standing Transfer, BatchWire*
Internal $ 1.00/transfer
Outgoing
Repetitive $ 6.00/transfer
* BatchWire supports domestic internal and outgoing repetitive
funds transfers.
Automated Clearing House (ACH)
Origination
(Statewide)
Effective January 1994
SERVICE PRICE
------- -----
MicroLink (APC Module)
Software Setup Fee $ 225.00
Maintenance $ 25.00/customer/month
Initiation
First 1-500 transactions $ .30/transaction
Monthly Maintenance * $ 50.00/customer Tax ID/
month
* One charge for all accounts
International Collection Services Pricing
Effective January 1994
SERVICE PRICE
------- -----
International Collections*
$ 25.00-$ 4,000.00 $ 16.00
$ 4,000.01-$10,000.00 $ 26.00
$10,000.01+ $ 51.00 maximum (1/4 of 1%)
* Charge deducted from the face amount of the check. $8.50
processing fee charged to analysis.
SCHEDULE 2
AUTHORIZED OFFICERS
Xxxxxxx X.X. Xxxx
Xxxxxx X.X. Xxxxxxx
Xxxxxxx Xxxx
Xxx Xxxxx
Xxx Xxxxxxx
Xxxx Xxxxxxxx
Xxxxx Xxxxxx
