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EXHIBIT 8(a)
CUSTODIAN SERVICES AGREEMENT TERMS AND CONDITIONS
This Agreement is made as of November 4, 1991, by and between SCHWAB
INVESTMENTS, (the "Fund"), a Massachusetts business trust, and PROVIDENT
NATIONAL BANK ("Provident"), a national banking association.
The Fund is registered as an open-end investment company under the
Investment Company Act of 1940 (the "1940" Act), as amended.
The Fund wishes to retain Provident to provide custody services, and
Provident wishes to furnish such services to each of the Fund's investment
portfolios listed on Schedule A, hereto ("Portfolio(s)"), either directly or
through an affiliate or affiliates, as more fully described herein. For the
Schwab 1000 Fund, a portfolio of the Fund, this agreement amends and restates,
in its entirety, the Custodian Services Agreement dated March 31, 1991 by and
between the Schwab 1000 Fund and Provident National Bank.
In consideration of the promises and mutual covenants herein contained,
the parties agree as follows:
1. Definitions.
(a) "Authorized Person". The term "Authorized Person" shall mean any
officer of the Fund and any other person, who is duly authorized by the Fund's
Governing Board, to give Oral and Written Instructions on behalf of the Fund.
Such persons are listed in the Certificate attached hereto as the Authorized
Persons Appendix.
(b) "Book-Entry System". The term "Book-Entry System"
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means Federal Reserve Treasury book-entry system for United States and federal
agency securities, its successor or successors, and its nominee or nominees and
any book-entry system maintained by an exchange registered with the SEC under
the 1934 Act.
(c) "CFTC". The term "CFTC" shall mean the Commodities Futures
Trading Commission.
(d) "Governing Board". The term "Governing Board" shall mean the
Fund's Board of Directors if the Fund is a corporation or the Fund's Board of
Trustees if the Fund is a trust, or, where duly authorized, a competent
committee thereof.
(e) "Oral Instructions". The term "Oral Instructions" shall mean
oral instructions received by Provident from an Authorized Person or from a
person reasonably believed by Provident to be an Authorized Person.
(f) "Provident". The term "Provident" shall mean Provident National
Bank or a subsidiary or affiliate of Provident National Bank.
(g) "SEC". The term "SEC" shall mean the Securities and Exchange
Commission.
(h) "Securities and Commodities Laws". The terms the "1933 Act"
shall mean the Securities Act of 1933, the "1934 Act" shall mean the Securities
Exchange Act of 1934, the "1940 Act" shall mean the Investment Company Act of
1940, as amended, and the "CEA" shall mean the Commodities Exchange Act, as
amended.
(i) "Shares". The term "Shares" shall mean the shares of stock of
any series or class of the Fund, or, where appropriate,
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units of beneficial interest in a trust where the Fund is organized as a Trust.
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(J) "Property". The term "Property" shall mean:
(i) any and all securities and other investment items which
the Fund may from time to time deposit, or cause to be
deposited, with Provident or which Provident may from
time to time hold for the Fund;
(ii) All income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by Provident from time to
time, from or on behalf of the Fund.
(k) "Written Instructions". The term "Written Instructions" shall
mean written instructions signed by two Authorized Persons and received by
Provident. The instructions may be delivered by hand,, mail, tested telegram,
cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints Provident to provide
custodian services to each of the Portfolios listed in Schedule A, hereto, and
Provident accepts such appointment and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable,
will provide Provident with the following:
(a) certified or authenticated copies of the
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resolutions of the Fund's Governing Board, approving the appointment
of Provident or its affiliates to provide services;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of the Fund's advisory agreement or agreements;
(d) a copy of the Fund's distribution agreement or agreements;
(e) a copy of the Fund's administration agreements if Provident is
not providing the Fund with such services;
(f) copies of any shareholder servicing agreements made in respect
of the Fund; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. Compliance with Government Rules and Regulations.
Provident undertakes to comply with all applicable requirements of the
1933 Act, the 1934 Act, the 1940 Act, and the CEA, and any laws, rules and
regulations of governmental authorities having jurisdiction with respect to all
duties to be performed by Provident hereunder. Except as specifically set forth
herein, Provident assumes no responsibility for such compliance by the Fund.
5. Instructions. Unless otherwise provided in this Agreement, Provident
shall act only upon Oral and Written
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Instructions. Provident shall be entitled to rely upon any Oral and Written
Instructions it receives from an Authorized Persons (or from a person reasonably
believed by Provident to be an Authorized Person) pursuant to this Agreement.
Provident may assume that any Oral or Written Instructions received hereunder
are not in any way inconsistent with the provisions of organizational documents
or this Agreement or of any vote, resolution or proceeding of the Fund's
Governing Board or of the Fund's shareholders.
The Fund agrees to forward to Provident Written Instructions confirming
Oral Instructions so that Provident receives the Written Instructions by the
close of business on the same day that such Oral Instructions are received. The
fact that such confirming Written Instructions are not received by Provident
shall in no way invalidate the transactions or enforceability of the
transactions authorized by the Oral Instructions.
The Fund further agrees that Provident shall incur no liability to the
Fund in acting upon Oral or Written Instructions provided such instructions
reasonably appear to have been received from an Authorized Person.
6. Right to Receive Advice.
(a) Advice of the Fund. If Provident is in doubt as to any action it
should or should not take, Provident may request directions or advice, including
Oral or Written Instructions, from the Fund.
(b) Advice of Counsel. If Provident shall be in doubt as to any
questions of law pertaining to any action it should or
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should not take, Provident may request advice at its own cost from such counsel
of its own choosing (who may be counsel for the Fund, the Fund's advisor or
Provident, at the option of Provident).
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral or Written Instructions Provident receives from the
Fund, and the advice it receives from counsel, Provident shall be entitled to
rely upon and follow the advice of counsel.
(d) Protection of Provident. Provident shall be protected in any
action it takes or does not take in reliance upon directions, advice or Oral or
Written Instructions it receives from the Fund or from counsel to the Fund and
which Provident believes, in good faith, to be consistent with those directions,
advice or Oral or Written Instructions.
Nothing in this paragraph shall be construed so as to impose an obligation
upon Provident (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions advice or Oral
or Written Instructions unloose under the terms of other provisions of this
Agreement, the same in a condition of Provident's properly taking or not taking
such action.
7. Records. The books and records pertaining to the Fund, which are in the
possession of Provident, shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund, or the Fund's
Authorized Persons,
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shall have access to such books and records at all time during Provident's
normal business hours. Upon the reasonable request or the Fund, copies of any
such books and records shall be provided by Provident to the Fund or to an
Authorized Person of the Fund, at the Fund's expense.
8. Confidentiality. Provident agrees to keep confidential all records or
the Fund and information relative to the Fund and its Shareholders (past,
present and potential), unless the release of such records or information is
otherwise consented to, in writing, by the Fund. The Fund agrees that such
consent shall not be unreasonably withheld. The Fund further agrees that, should
Provident be required to provide such information or records to duly constituted
authorities (who may institute civil or criminal contempt proceedings for
failure to comply), Provident shall not be required to seek the Fund's consent
prior to disclosing such information.
9. Cooperation with Accountants. Provident shall cooperate with the Fund's
independent public accountants and shall take all reasonable action in the
performance of its obligations under this Agreement to ensure that the necessary
information is made available to such accountants for the expression of their
opinion, as required by the Fund.
10. Disaster Recovery. Provident shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is
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available. In the event of equipment failures, Provident shall, at no additional
expense to the Fund, take reasonable steps to minimize service interruptions but
shall have no liability with respect thereto.
11. Compensation. As compensation for services rendered by Provident
during the term of this Agreement, the Fund will pay to Provident a fee or fees
as may be agreed to in writing by the Fund and Provident from time to time.
12. Indemnification. The Fund agrees to indemnify and hold harmless
Provident and its nominees from all taxes, charges, expenses, assessment, claims
and liabilities (including, without limitation, liabilities arising under the
1933 Act, the 1934 Act, the 1940 Act, the CEA, and any state and foreign
securities and blue sky laws, and amendments thereto, and expenses, including
(without limitation) attorneys' fees and disbursements, arising directly or
indirectly from any action which Provident takes or does not take (i) at the
request or on the direction of or in reliance on the advice of the Fund or (ii)
upon Oral or Written Instructions. Neither Provident, nor any of its nominees,
shall be indemnified against any liability to the Fund or to its shareholders
(or any expenses incident to such liability) arising out of Provident's own
willful misfeasance, bad faith, gross negligence or reckless disregard of its
duties and obligations under this Agreement.
13. Responsibility of Provident. Provident shall be under no
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duty to take any action on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed to by Provident, in writing. Provident
shall be obligated to exercise reasonable and diligence in the performance of
its duties hereunder, to act in good faith and to use its best effort, within
reasonable limits, in performing Services provided for under this Agreement.
Provident shall be responsible for damages arising out of its failure to perform
its duties under this Agreement arising out of Provident's negligence.
Without limiting the generality of the foregoing or of any other provision
of this Agreement, Provident, in connection with its duties under this
Agreement, shall not be under any duty or obligation to inquire into and shall
not be liable for (a) the validity or invalidity or authority or lack thereof of
any Oral or Written Instruction, notice or other instrument which conforms to
the applicable requirements of this Agreement, and which Provident reasonably
believes to be genuine; or (b) delays or errors or loss of data occurring by
reason of circumstances beyond Provident's control, including acts of civil or
military authority, national emergencies, labor difficulties, fire, flood or
catastrophe, acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
14. Description of Services.
(a) Delivery of the Property.. The Fund will deliver or arrange for
delivery to Provident, all the property it owns,
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including cash received as a result of the distribution of its shares, during
the period that is set forth in this Agreement. Provident will not be
responsible for such property until actual receipt.
(b) Receipt and Disbursement of Money. Provident, acting upon
Written Instructions, shall open and maintain separate account(s) in the name of
each Portfolio using all cash received from or for the account of such
Portfolio, subject to the terms of this Agreement. In addition, upon Written
Instructions, Provident shall open separate custodial accounts for each separate
series, portfolio or class of the Fund and shall hold in such account(s) all
cash received from or for the accounts of the Fund specifically designated to
each series, portfolio or class.
Provident shall make cash payment from or for the account of the Fund only
for:
(i) purchases of securities in the name of each Portfolio or
Provident or Provident's nominee as provided in
sub-paragraph j and for which Provident has received a
copy of the broker's or dealer's confirmation or payee's
invoice, as appropriate;
(ii) purchase or redemption of shares of each Portfolio
delivered to Provident;
(iii) payment of, subject to Written Instructions, interest,
taxes, administration, accounting, distribution,
advisory, management fees or
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similar expenses which are to be borne by each
Portfolio;
(iv) payment to, subject to receipt of Written Instructions,
the Fund's transfer agent, as agent for the
shareholders, an amount equal to the amount of dividends
and distributions stated in the Written Instructions to
be distributed in cash by the transfer agent to
shareholders, or, in lieu of paying the Fund's transfer
agent, Provident may arrange for the direct payment of
cash dividends and distributions to shareholders in
accordance with procedures mutually agreed upon from
time to time by and among the Fund, Provident and the
Fund's transfer agent.
(v) payments, upon receipt Written Instructions, in
connection with the conversion, exchange or surrender of
securities owned or subscribed to by each Portfolio and
held by or delivered to Provident;
(vi) payments of the amounts of dividends received with
respect to securities sold short;
(vii) payments made to a sub-custodian pursuant to provisions
in sub-paragraph c of this Agreement; and
(viii) payments upon Written Instructions made for
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other proper Fund Purposes.
Provident is hereby authorized to endorse and collect
all check, drafts or other orders for the payment of
money received as custodian for the account of the Fund.
(c) Receipt of Securities.
(i) Provident shall hold all securities received by it for
or for the account of each Portfolio in a separate
account that physically segregates such securities from
those of any other persons, firms or corporations. All
such securities shall be held or disposed of only upon
Written Instructions of the Fund pursuant to the terms
of this Agreement. Provident shall have no power or
authority to assign, hypothecate, pledge or otherwise
dispose of any such securities or investment, except
upon the express terms of this Agreement and upon
Written Instructions, accompanied by a certified
resolution of the Fund's Governing Board, authorizing
the transaction. In no case may any member of the Fund's
Board of Trustees, or any officer, employee or agent of
the Fund withdraw any securities.
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At Provident's own expense and for its own convenience,
Provident may enter into sub-custodian agreements with
other United States banks or trust companies to perform
duties described in this sub-paragraph c. Such bank or
trust company shall have an aggregate capital, surplus
and undivided profits, according to its last published
report, of at least one million dollars $1,000,000), if
it is a subsidiary or affiliate of Provident, or at
least twenty million dollars ($20,000,000) if such bank
or trust company is not a subsidiary or affiliate of
Provident. In addition, such bank or trust company must
agree to comply with the relevant provisions of the 1940
Act and other applicable rules and regulations.
Provident shall remain responsible for the performance
of all of its duties as described in this Agreement and
shall hold the Fund harmless from its own acts or
omissions, under the standards of care provided for
herein, or of any sub-custodian chosen by Provident
under the terms of this sub-paragraph c.
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(d) Transactions Requiring Instructions. Upon receipt of oral or
Written Instructions and not otherwise, Provident, directly or through the use
of the Book-Entry System shall;
(i) deliver any securities held for each Portfolio against
the receipt of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be designated
in such Oral or Written Instructions, proxies, consents,
authorizations, and any other instruments whereby the
authority of the Fund as owner of any securities may be
exercised;
(iii) deliver any securities to the issuer thereof, or its
agent, when such securities are called, redeemed,
retired or otherwise become payable; provided that, in
any such case, the cash or other consideration is to be
delivered to Provident;
(iv) deliver any securities held for each Portfolio against
receipt of other securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or
recapitalization of any corporation, or the exercise of
any conversion privilege;
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(v) deliver any securities held for each Portfolio to any
protective committee, reorganization committee or other
person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, and receive and hold
under the terms of this Agreement such certificates of
deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such
delivery;
(vi) make such transfer or exchanges of the assets of the
Fund and take such other steps as shall be stated in
said Oral or Written Instructions to be for the purpose
of effectuating a duly authorized plan of liquidation,
reorganization, merger, consolidation or
recapitalization of such Portfolio;
(vii) release securities belonging to a Portfolio to any bank
or trust company for the purpose of a pledge or
hypothecation to secure any loan incurred by that
Portfolio; provided, however, that securities shall be
released only upon payment to Provident of the monies
borrowed, except that in cases where additional
collateral is required to secure a borrowing already
made subject to proper prior
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authorization, further securities may be released for
that purpose; and repay such loan upon redelivery to it
of the securities pledged or hypothecated therefor and
upon surrender of the note or notes evidencing the loan;
(viii) release and deliver securities owned by a Portfolio in
connection with any repurchase agreement entered into on
behalf of a Portfolio, but only on receipt of payment
therefor; and pay out moneys of a Portfolio in
connection with such repurchase agreements, but only
upon the delivery of the securities;
(ix) release and deliver or exchange securities owned by a
Portfolio in connection with any conversion of such
securities, pursuant to their terms, into other
securities;
(x) release and deliver securities owned by a Portfolio for
the purpose of redeeming in kind shares of a Portfolio
upon delivery thereof to Provident; and
(xi) release and deliver or exchange securities owned by a
Portfolio for other corporate purposes.
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Provident must also receive a certified resolution
describing the nature of the corporate purpose and the
name and address of the person(s) to whom delivery shall
be made when such action is pursuant to sub-paragraph
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d.(xi) above.
(e) Use of Book-Entry System. The Fund shall deliver to Provident
certified resolutions of the Fund's Governing Board approving, authorizing and
instructing Provident on a continuous and on-going basis,, to deposit in the
Book-Entry System all securities belonging to each Portfolio eligible for
deposit therein and to utilize the Book-Entry System to the extent possible in
connection with settlements of purchases and sales of securities by the Fund,
and deliveries and returns of securities loaned, subject to repurchase
agreements or used as collateral in connection with borrowings. Provident shall
continue to perform such duties until it receives Written or Oral Instructions
authorizing contrary actions(s).
To administer the Book-Entry System properly, the following provisions
shall apply:
(i) With respect to securities of a Portfolio which are
maintained in the Book-Entry system, established
pursuant to this sub-paragraph e hereof, the records of
Provident shall identify by Book-Entry or otherwise
those securities belonging to a Portfolio.
Provident shall furnish the Fund a detailed statement of
the Property held for the Fund under this Agreement at
least monthly and from time to time and upon written
request.
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(ii) Securities and any cash of a Portfolio deposited in the
Book-Entry System will at all times be segregated from
any assets and cash controlled by Provident in other
than a fiduciary or custodian capacity but may be
commingled with other assets held in such capacities.
Provident and its sub-custodian, if any, will pay out
money only upon receipt of securities and will deliver
securities only upon the receipt of money.
(iii) All books and records maintained by Provident which
relate to the Fund's participation in the Book-Entry
System will at all times during Provident's regular
business hours be open to the inspection of the Fund's
duly authorized employees or agents, and the Fund will
be furnished with all information in respect of the
services rendered to it as it may require.
(iv) Provident will provide the Fund with copies of any
report obtained by Provident on the system of internal
accounting control of the Book-Entry System promptly
after receipt of such a report by Provident. Provident
will also provide the Fund with such reports on its own
system of internal control as the Fund may reasonably
request from time
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to time.
(f) Registration of Securities. All Securities hold for the Fund
which are issued or issuable only in bearer form, except such securities held in
the Book-Entry System, shall be hold by Provident in bearer form; all other
securities held for the Fund may be registered in the name of the Fund;
Provident; the Book-Entry System; a sub-custodian; or any duly appointed
nominee(s) of the Fund, Provident, Book-Entry system or sub-custodian. The Fund
reserves the right to instruct Provident as to the method of registration and
safekeeping of the securities of each Portfolio. The Fund agrees to furnish to
Provident appropriate instruments to enable Provident to hold or deliver in
proper form for transfer, or to register its registered nominee or in the name
of the Book-Entry Systems any securities which it may hold for the account of
each Portfolio and which may from time to time be registered in the name of the
Portfolio. Provident shall hold all such securities which are not held in the
Book-Entry System in a separate account for each Portfolio in the name of each
Portfolio physically segregated at all times from those of any other person or
persons.
(g) Voting and Other Action. Neither Provident nor its nominee shall
vote any of the securities hold pursuant to this Agreement by or for the account
of the Fund, except in accordance with Written Instructions. Provident, directly
or through the use of the Book-Entry System, shall execute in blank and promptly
deliver all notice, proxies, and proxy soliciting materials to the
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registered holder of such securities. If the registered holder is not the Fund
then Written or oral Instructions must designate the person(s) who owns such
securities.
(h) Transactions Not Requiring Instructions. In the absence of
contrary Written Instructions, Provident is authorized to take the following
actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account of each
Portfolio, all income, dividends, distributions,
coupons, option premiums, other payments and
similar items, included or to be included in the
Property, and, in addition, promptly advise the
Fund of such receipt and credit such income, as
collected, to the Fund's custodian account;
(B) endorse and deposit for collection, in the name of
the applicable Portfolio, checks, drafts, or other
orders for the payment of money;
(C) receive and hold for the account of each Portfolio
all securities received as a distribution on the
portfolio securities as a result of a stock
dividend, share split-up or reorganization,
recapitalization, readjustment or other
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rearrangement or distribution of rights or similar
securities issued with respect to any portfolio
securities belonging to a Portfolio held by
Provident hereunder;
(D) present for payment and collect the amount payable
upon all securities which may mature or be called,
redeemed, or retired, or otherwise become payable
on the date such securities become payable; and
(E) take any action which may be necessary and proper
in connection with the collection and receipt of
such income and other payments and the endorsement
for collection of checks, drafts, and other
negotiable instruments.
(ii) Miscellaneous Transactions.
(A) Provident is authorized to deliver or cause to be
delivered Property against payment or other
consideration or written receipt therefor in the
following cases:
(1) for examination by a broker or dealer
selling for the account of a Portfolio in
accordance with street delivery custom;
(2) for the exchange of interim receipts
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or temporary securities for definitive
securities; and
(3) for transfer of securities into the name of
a Portfolio or Provident or nominee of
either, or exchange of securities for a
different number of bonds, certificates, or
other evidence, representing the same
aggregate face amount or number of units
bearing the same interest rate, maturity
date and call provisions, if any; provided
that, in any such case, the new securities
are to be delivered to Provident.
(B) Unless and until Provident receives Oral or
Written Instructions to the contrary, Provident
shall:
(1) pay all income items held by it which call
for payment upon presentation and hold the
cash received by it upon such payment for
the account of a Portfolio;
(2) collect interest and cash dividends
received, with notice to the Fund, to the
account of a Portfolio;
(3) hold for the account of a portfolio
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all stock dividends, rights and similar
securities issued with respect to any
securities held by us; and
(4) execute as agent on behalf of the Fund all
necessary ownership certificates required by
the Internal Revenue Code or the Income Tax
Regulations of the United States Treasury
Department or under the laws of any State
now or hereafter in effect, inserting the
Fund's name on such certificate as the owner
of the securities covered thereby, to the
extent it may lawfully do so.
(i) Segregated Accounts.
(i) Provident shall upon receipt of Written or Oral
Instructions establish and maintain a segregated
accounts(s) on its records for and on behalf of each
Portfolio. Such account(s) may be used to transfer cash
and securities, including securities in the Book-Entry
System:
(A) for the purposes of compliance by the Fund with
the procedures required by a securities or option
exchange, providing such procedures comply with
the 1940 Act
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and any releases of the SEC relating to the
maintenance of segregated accounts by
registered investment companies; and
(B) Upon receipt of Written Instructions, for other
proper corporate purposes.
(ii) Provident may enter into separate custodial agreements
with various futures commission merchants ("FCMs") that
the Fund uses ("FCM Agreement"). Pursuant to an FCM
Agreement, the Fund's margin deposits in any
transactions involving futures contracts and options on
futures contracts will be held by Provident in accounts
("FCM Account") subject to the disposition by the FCM
involved in such contracts and in accordance with the
customer contract between FCM and the Fund ("FCM
Contract"), SEC rules and the rules of the applicable
commodities exchange. Such FCM Agreements shall only be
entered into upon receipt of Written Instructions from
the Fund which state that:
(A) a customer agreement between the FCM and the Fund
has been entered into; and
(B) the Fund is in compliance with all the rules and
regulations of the CFTC. Transfers of initial
margin shall be made into a FCM Account only upon
Written Instructions; transfers of premium and
variation margin may be made
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into a FCM Account pursuant to Oral Instructions.
Transfers of funds from a FCM Account to the FCM
for which Provident holds such an account may only
occur upon certification by the FCM to Provident
that pursuant to the FCM Agreement and the FCM
Contract, all conditions precedent to its right to
give Provident such instructions have been
satisfied.
(iii) Provident shall arrange for the establishment of XXX
custodian accounts for such shareholders holding shares
through XXX accounts, in accordance with the Prospectus,
the Internal Revenue Code (including regulations), and
with such other procedures an are mutually agreed upon
from time to time by and among the Fund, Provident and
the Fund's transfer agent.
(j) Purchases of Securities. Provident shall settle purchased
securities upon receipt of Oral or Written Instructions from the Fund or its
investment advisor(s) that specify:
(i) the name of the issuer and the title of the securities,
including CUSIP number if
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applicable;
(ii) the number of shares or the principal amount purchased
and accrued interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the name of the person from whom or-the broker through
when the purchase was made. Provident shall upon receipt
of securities purchased by or for a Portfolio pay out of
the moneys held for the account of a Portfolio the total
amount payable to the person from whom or the broker
through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth
in such oral or Written Instructions.
(k) Sales of Securities. Provident shall sell securities upon
receipt of Oral Instructions from the Fund that specify:
(i) the name of the issuer and the title of the security,
including CUSIP number if applicable;
(ii) the number of shares or principal amount sold, and
accrued interest, if any;
(iii) the date of trade, settlement and sale;
(iv) the sale price per unit;
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(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to
whom the sale was made;
(vii) the location to which the security must be delivered and
delivery deadline, if any. Provident shall deliver the
securities upon receipt of the total amount payable to
the Fund upon such sale, provided that the total amount
payable is the same as was set forth in the Oral or
Written Instructions. Subject to the foregoing,
Provident may accept payment in such form as shall be
satisfactory to it, and may deliver securities and
arrange for payment in accordance with the customs
prevailing among dealers in securities.
(1) Reports.
(i) Provident shall furnish the Fund the following reports:
(A) such periodic and special reports as the Fund may
reasonably request;
(B) a monthly statement summarizing all transactions
and entries for the account of each Portfolio,
listing the portfolio securities belonging to each
Portfolio with the adjusted average cost of each
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issue and the market value at the end of such
month, and stating the cash account of the
Portfolio including disbursement;
(C) the reports to be furnished to the Fund pursuant
to Rule 17f-4; and
(D) such other information as may be agreed upon from
time to time between the Fund and Provident.
(ii) Provident shall transmit promptly to the Fund any proxy
statement, proxy material, notice of a call or
conversion or similar communication received by it as
custodian of the Property. Provident shall be under no
other obligation to inform the Fund as to such actions
or events.
(m) Collections. All collections of monies or other property, in
respect, or which are to become part of the Property (but not the safekeeping
thereof upon receipt by Provident) shall be at the sole risk of the Fund. If
payment is not received by Provident within a reasonable time after proper
demands have been made, Provident shall notify the Fund in writing, including
copies of all demand letters, any written responses, memoranda of all oral
responses and to telephonic demands thereto, and await instructions from the
Fund. Provident shall not be obliged to take legal action for collection unless
and until reasonably indemnified to its satisfaction.
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Provident shall also notify the Fund as soon as reasonably practicable
whenever income due on securities is not collected in due course.
15. Duration and Termination. This Agreement shall continue unless sooner
terminated by the Fund or by Provident for "cause" (as defined below) on sixty
(60) days prior written notice to the other party, for a period of five years.
For purposes of this Agreement, "cause" shall mean any circumstances which
materially impair the ability of either party to this Agreement to perform all
of its duties and obligations hereunder. In the event this Agreement is
terminated (pending appointment of a successor to Provident or vote of the
shareholders any Portfolio of the Fund to dissolve or to function without a
custodian of its cash, securities or other property), Provident shall not
deliver cash, securities or other property of applicable Portfolio to the
Portfolio or the Fund. It may deliver them to a bank or trust company of
Provident's, having an aggregate capital, surplus and undivided profits, as
shown by its last published report, of not less than twenty million dollars
($20,000,000), as a custodian for such Portfolio to be held under terms similar
to those of this Agreement. Provident shall not be required to make any such
delivery or payment until full payment shall have been made to Provident of all
of its fees, compensation, costs and expenses. Provident shall have a security
interest in and shall have a right of setoff against Property in such
Portfolio's possession as security for the payment of such fees, compensation,
costs and
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expenses.
16. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed (a) if to Provident at
Provident's address, Airport Business Center, International Court 2, 000 Xxxxxxx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, marked for the attention of the
Custodian Services Department (or its successor) (b) if to the Fund, at the
address of the Fund; or (c) if to neither of the foregoing, at such other
address as shall have been notified to the sender of any such Notice or other
communication. If notice is sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately. If
notice is sent by first-class mail, it shall be deemed to have been given five
days after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered.
17. Amendments. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom enforcement
of such change or waiver in sought.
18. Delegation. Provident may, with the prior written consent of the Fund,
which consent may not be unreasonably withheld, assign its rights and delegate
its duties hereunder to any wholly-owned direct or indirect subsidiary of
Provident National Bank or PNC Financial Corp, provided that (i) Provident gives
the Fund a minimum of thirty (30) days in which to decide and
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to consent by written notice; (ii) the delegate agrees with Provident to
comply with all relevant provisions of the 1940 Act; and (iii) Provident and
such delegate promptly provide such information as the Fund may request, and
respond to such questions as the Fund may ask, relative to the delegation,
including (without limitation) the capabilities of the delegate.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one more separate documents their agreement, if any, with respect
to delegated and/or Oral Instructions.
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
This Agreement shall be deemed to be a contract made in California and
governed by California law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
and shall
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inure to the benefit of the parties hereto and their respective successors.
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IN WITNESS WHEREOF,, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
PROVIDENT NATIONAL BANK
By: /s/ Xxxxxx Gramlech
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SCHWAB INVESTMENTS
By: /s/ Xxx X. Xxxx
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