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LICENSE AGREEMENT
LICENSE AGREEMENT, dated as of November 1, 1998 (the "Commencement
Date") by and between STANDARD & POOR'S, a division of The XxXxxx-Xxxx
Companies, Inc. ("S&P"), a New York corporation, having an office at
00 Xxxxxxxx, Xxx Xxxx, XX 00000, Schwab Capital Trust, on behalf of the
Institutional SelectTM S&P 500 Fund, the Institutional SelectTM Large-Cap
Value Index Fund, and the Institutional SelectTM Small-Cap Value Index Fund
("Licensee"), a Massachusetts business trust having an office at 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, XX 00000.
WHEREAS, S&P compiles, calculates, maintains and owns rights in and
to and the S&P SmallCap 600/BARRA Value Index, and to the proprietary data
contained in each of the foregoing indices (such rights being hereinafter
referred to individually as an "S&P Index" and collectively as the "S&P
Indices" and
WHEREAS, S&P uses in commerce and has trade name and trademark
rights to the designations "Standard & Poor's(R)", "S&P(R)", "S&P 500(R)",
"Standard & Poor's 500", "500", "S&P 500/BARRA Value Index", and "S&P
SmallCap 600/BARRA Value Index", (such rights being hereinafter individually
and collectively referred to as the "S&P Marks"); and
WHEREAS, Licensee wishes to use an S&P Index as a component of the
product or products described in Exhibit A attached hereto and made a part
hereof (individually and collectively referred to as the "Product"); and
WHEREAS, Licensee wishes to use the S&P Marks in connection with the
marketing and/or promotion of the Product and in
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connection with making disclosure about the Product under applicable law, rules
and regulations in order to indicate that S&P is the source of the S&P Indices;
and
WHEREAS, Licensee wishes to obtain S&P's authorization to use the S&P
Indices and the S&P Marks in connection with the Product pursuant to the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of License.
(a) Subject to the terms and conditions of this
Agreement, S&P hereby grants to Licensee a non-transferable, non-exclusive
license (i) to use the S&P Indices as a component of the Product to be
marketed and/or promoted by Licensee and (ii) to use and refer to the S&P
Marks in connection with the distribution, marketing and promotion of the
Product (including in the name of the Product) and in connection with making
such disclosure about the Product as Licensee deems necessary or
desirable under any applicable law, rules, regulations or provisions of
this Agreement, but, in each case, only to the extent necessary to indicate
the source of the S&P Indices. It is expressly agreed and understood by
Licensee that no rights to use the S&P Indices and the S&P Marks are granted
hereunder other than those specifically described and expressly granted
herein.
(b) S&P agrees that no person or entity (other than the Licensee)
shall need to obtain a license from S&P with respect to the Product.
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2. Term.
The term of this Agreement shall commence on the Commencement Date and
shall continue in effect thereafter until it is terminated in accordance with
its terms.
3. License Fees.
(a) Licensee shall pay to S&P the license fees ("License Fees")
specified and provide the data called for in Exhibit B, attached hereto and made
a part hereof.
(b) During the term of this Agreement and for a period of one (1)
year after its termination, S&P shall have the right, during normal business
hours and upon reasonable notice to Licensee, to audit on a confidential basis
the relevant books and records of Licensee to determine that License Fees have
been accurately determined. The costs of such audit shall be borne by S&P unless
it determines that it has been underpaid by five percent (5%) or more; in such
case, costs of the audit shall be paid by Licensee. (c) Licensee agrees and
acknowledges that the license granted pursuant to this Agreement is limited to
the Product(s) identified and described in Exhibit A and that if Licensee wishes
to use an S&P Index and/or S&P Marks in connection with any additional
Product(s), it shall first be required to enter into a written amendment to this
Agreement on terms mutually acceptable to S&P and Licensee.
4. Termination.
(a) At any time during the term of this Agreement, either party may
give the other party sixty (60) days prior written notice of termination if the
terminating party reasonably believes that material damage or harm is occurring
to the reputation or goodwill of that party by reason of its continued
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performance hereunder, and such notice shall be effective on the date specified
therein of such termination, unless the other party shall correct the condition
causing such damage or harm within the notice period.
(b) In the case of breach of any of the material terms or conditions
of this Agreement by either party, the other party may terminate this Agreement
by giving sixty (60) days prior written notice of its intent to terminate, and
such notice shall be effective on the date specified therein for such
termination unless the breaching party shall correct such breach within the
notice period.
(c) S&P shall have the right, in its sole discretion, to cease
compilation and publication of an S&P Index and, in such event, to terminate
this Agreement if S&P does not offer a replacement or substitute index. In the
event that S&P intends to discontinue an S&P Index, S&P shall give Licensee at
least one (1) year's written notice prior to such discontinuance, which notice
shall specify whether a replacement or substitute index will be made available.
Licensee shall have the option hereunder within sixty (60) days after
receiving such written notice from S&P to notify S&P in writing of its intent to
use the replacement or substitute index, if any, under the terms of this
Agreement. In the event that Licensee does not exercise such option or no
substitute or replacement index is made available, this Agreement shall be
terminated as of the date specified in the S&P notice and the License Fees to
the date of such termination shall be computed as provided in Subsection 4(f).
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(d) Licensee may terminate this Agreement upon ninety (90) days prior
written notice to S&P if (i) Licensee is informed of the final adoption of any
legislation or regulation or the issuance of any interpretation that in
Licensee's reasonable judgment materially impairs Licensee's ability to market
and/or promote the Product; (ii) any material litigation or regulatory
proceeding regarding the Product is threatened or commenced; or (iii) Licensee
elects to terminate the public offering or other distribution of the Product, as
may be applicable. In such event the License Fees to the date of such
termination shall be computed as provided in Subsection 4(f).
(e) S&P may terminate this Agreement upon ninety (90) days (or upon
such lesser period of time if required pursuant to a court order) prior written
notice to Licensee if (i) S&P is informed of the final adoption of any
legislation or regulation or the issuance of any interpretation that in S&P's
reasonable judgment materially impairs S&P's ability to license and provide an
S&P Index and S&P Marks under this Agreement in connection with such Product; or
(ii) any litigation or proceeding is threatened or commenced and S&P reasonably
believes that such litigation or proceeding would have a material and adverse
effect upon the S&P Marks and/or an S&P Index or upon the ability of S&P to
perform under this Agreement. In such event the License Fees to the date of such
termination shall be computed as provided in Subsection 4(f).
(f) In the event of termination of this Agreement as provided in
Subsections 4(a), (b), (c), (d) or (e), the License Fees to the date of such
termination shall be computed by prorating the amount of the applicable License
Fees shown in Exhibit B on the basis of the number of elapsed days in the
current term.
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(g) Upon termination of this Agreement, Licensee shall cease to use
the S&P Index and the S&P Marks in connection with the Product; provided that
Licensee may continue to utilize any previously printed materials which contain
the S&P Marks for a period of ninety (90) days following such termination.
(h) For avoidance of doubt, a termination of the License Agreement
with respect to an individual S&P Index shall not affect the parties' respective
representations, warranties, rights, obligations, covenants and agreements with
respect to the S&P Indexes (if any) that are not affected by such termination.
5. S&P's Obligations.
(a) It is the policy of S&P to prohibit its employees who are
directly responsible for changes in the components of the S&P Indices from
purchasing or beneficially owning any interest in the Product and S&P believes
that its employees comply with such policy. Licensee shall have no
responsibility for ensuring that such S&P employees comply with such S&P policy
and shall have no duty to inquire whether any investors or sellers of the
Product are such S&P employees. S&P shall have no liability to the Licensee with
respect to its employees' adherence or failure to adhere to such policy.
(b) S&P shall not and is in no way obliged to engage in any marketing
or promotional activities in connection with the Product or in making any
representation or statement to investors or prospective investors in connection
with the promotion by Licensee of the Product.
(c) S&P agrees to provide reasonable support for Licensee's
development and educational efforts with respect to the Product as follows:
(i) S&P shall provide Licensee, upon request but subject to any agreements of
confidentiality with respect thereto, copies of the results of any marketing
research conducted by or on behalf of S&P with respect to the
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Product as follows: (i) S&P shall provide Licensee, upon request but subject to
any agreements of confidentiality with respect thereto, copies of the results of
any marketing research conducted by or behalf of S&P with respect to the S&P
Indices; and (ii) S&P shall respond in a timely fashion to any reasonable
requests for information by Licensee regarding the S&P Indices.
(d) S&P or its agent shall calculate and disseminate the S&P Indices
at least once each fifteen (15) seconds in accordance with its current
procedures, which procedures may be modified by S&P.
(e) S&P shall promptly correct or instruct its agent to correct any
mathematical errors made in S&P's computations of an S&P Index which are brought
to S&P's attention by Licensee, provided that nothing in this Section 5 shall
give Licensee the right to exercise any judgment or require any changes with
respect to S&P's method of composing, calculating or determining the
S&P Indices; and, provided further, that nothing herein shall be deemed to
modify the provisions of Section 9 of this Agreement.
6. Informational Materials Review.
Licensee shall use its best efforts to protect the goodwill and
reputation of S&P and of the S&P Marks in connection with its use of the S&P
Marks under this Agreement. Licensee shall submit to S&P for its review and
approval all informational materials pertaining to and to be used in connection
with the Product, including, where applicable, all prospectuses, plans,
registration statements, application forms, contracts, videos, advertisements,
brochures and promotional and any other similar informational materials
(including documents required to be filed with governmental or regulatory
agencies) that in any way use or refer to S&P, the S&P Indices, or the S&P Marks
(the
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"Informational Materials"). S&P's approval shall be required with respect
to the use of and description of S&P, the S&P Marks and the S&P Indices and
shall not be unreasonably withheld or delayed by S&P. Specifically, S&P shall
notify Licensee, by facsimile transmission in accordance with Subsection 12(d)
hereof, of its approval or disapproval of any Informational Materials within
twenty-four (24) hours (excluding Saturday, Sunday and New York Stock Exchange
Holidays) following receipt thereof from Licensee. Any disapproval shall
indicate S&P's reasons therefor. Any failure by S&P to respond within such
twenty-four (24) hour period shall be deemed to constitute a waiver of S&P's
right to review such Informational Materials. Informational Materials shall
be addressed to S&P, c/o Xxxxxxxxxx Xxxxxxx, Specialist - Index
Licensing/Marketing, Equity Index Services, at the address specified in
Subsection 12(d). Informational Materials may be submitted via facsimile (to
000-000-0000 or 212-412-0429) if they are less than 20 pages and legible after
transmission. Once Informational Materials have been approved by S&P, subsequent
Informational Materials which do not alter the use or description of S&P, the
S&P Marks or the S&P Indices need not be submitted for review and approval by
S&P.
7. Protection of Value of License.
(a) During the term of this Agreement, S&P shall use its best efforts
to maintain in full force and effect federal registrations for "Standard &
Poor's(R)", "S&P(R)", and "S&P 500(R)". S&P shall at S&P's own expense and sole
discretion exercise S&P's common law and statutory rights against infringement
of the S&P Marks, copyrights and other proprietary rights.
(b) Licensee shall cooperate with S&P in the maintenance of such
rights and registrations and shall take such actions and execute such
instruments as S&P may from time to time
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reasonably request, and shall use the
following notice when referring to the S&P Indices or the S&P Marks in any
Informational Material:
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's
500", "500", S&P 500/BARRA Value Index, S&P SmallCap 600/BARRA
Growth Index, S&P SmallCap 600/BARRA Value Index are trademarks of
The XxXxxx-Xxxx Companies, Inc. and have been licensed for use by
Schwab Capital Trust and the following series: Institutional SelectTM
S&P 500 Fund, the Institutional SelectTM Large-Cap Value Index Fund,
and the Institutional SelectTM Small-Cap Value Index Fund. The Product
is not sponsored, endorsed, sold or promoted by Standard & Poor's and
Standard & Poor's makes no representation regarding the advisability of
investing in the Product.
or such similar language as may be approved in advance by S&P, it being
understood that such notice need only refer to the specific S&P Index and
related S&P Marks to which the relevant Informational Materials relate.
8. Proprietary Rights.
(a) Licensee acknowledges that the S&P Indices are selected,
coordinated, arranged and prepared by S&P through the application of methods and
standards of judgment used and developed through the expenditure of considerable
work, time and money by S&P. Licensee also acknowledges that the S&P Indices and
the S&P Marks are the exclusive property of S&P, that S&P has and retains all
proprietary rights therein (including, but not limited to trademarks and
copyrights) and that the S&P Indices and
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their compilation and composition and changes therein are in the control and
discretion of S&P.
(b) S&P reserves all rights with respect to the S&P Indices and the
S&P Marks except those expressly licensed to Licensee hereunder.
(c) Each party shall treat as confidential and shall not disclose or
transmit to any third party any documentation or other written materials that
are marked as "Confidential and Proprietary" by the providing party
("Confidential Information"). Confidential Information shall not include (i) any
information that is available to the public or to the receiving party hereunder
from sources other than the providing party (provided that such source is not
subject to a confidentiality agreement with regard to such information) or
(ii) any information that is independently developed by the receiving party
without use of or reference to information from the providing party.
Notwithstanding the foregoing, either party may reveal Confidential Information
to any regulatory agency or court of competent jurisdiction if such information
to be disclosed is (a) approved in writing by the other party for disclosure or
(b) required by law, regulatory agency or court order to be disclosed by a
party, provided, if permitted by law, that prior written notice of such required
disclosure is given to the other party and provided further that the providing
party shall cooperate with the other party to limit the extent of such
disclosure. The provisions of this Subsection 8(c) shall survive any termination
of this Agreement for a period of five (5) years from disclosure by either party
to the other of the last item of such Confidential Information.
9. Warranties; Disclaimers.
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(a) S&P represents and warrants that S&P has the right to grant the
rights granted to Licensee herein and that, subject to the terms and conditions
of this Agreement, the license granted herein shall not infringe any trademark,
copyright or other proprietary right of any person not a party to this
Agreement. (b) Licensee agrees expressly to be bound itself by and furthermore
to include all of the following disclaimers and limitations in each prospectus
or each Statement of Additional Information ("SAI") relating to the Product,
provided the SAI is incorporated by reference into the prospectus and the
prospectus contains disclosure regarding the S&P Indices that conforms to the
notice in Subsection 7(b), including a cross reference to the SAI disclosure.
Licensee shall furnish a copy of the prospectus and SAI thereof to S&P:
The Product is not sponsored, endorsed, sold or promoted by Standard &
Poor's, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P"). S&P makes no
representation or warranty, express or implied, to the owners of the Product or
any member of the public regarding the advisability of investing in securities
generally or in the Product particularly or the ability of the the S&P 500
Composite Stock Price Index, the S&P 500/BARRA Value Index, and the S&P SmallCap
600/BARRA Value Index to track general stock market performance. S&P's only
relationship to the Licensee is the licensing of certain trademarks and trade
names of S&P and of the the S&P 500 Composite Stock Price Index, the S&P
500/BARRA Value Index, and the S&P SmallCap 600/BARRA Value Index which is
determined, composed and calculated by S&P without regard to the Licensee or the
Product. S&P has no obligation to take the needs of the Licensee or the owners
of the Product into consideration in determining, composing or calculating the
S&P 500 Composite Stock Price Index, the S&P 500/BARRA Value Index, and the S&P
SmallCap 600/BARRA Value Index. S&P is not responsible for and has not
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participated in the determination of the prices and amount of the Product or the
timing of the issuance or sale of the Product or in the determination or
calculation of the equation by which the Product is to be converted into cash.
S&P has no obligation or liability in connection with the administration,
marketing or trading of the Product.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 COMPOSITE STOCK PRICE INDEX, THE S&P 500/BARRA VALUE INDEX, AND THE S&P
SMALLCAP 600/BARRA VALUE INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE
NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS
OF THE PRODUCT, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500
COMPOSITE STOCK PRICE INDEX, THE S&P 500/BARRA VALUE INDEX, AND THE S&P SMALLCAP
600/BARRA VALUE INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 COMPOSITE
STOCK PRICE INDEX, THE S&P 500/BARRA VALUE INDEX, AND THE S&P SMALLCAP 600/BARRA
VALUE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING,
IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
Any changes in the foregoing disclaimers and limitations must be
approved in advance in writing by an authorized officer of S&P.
(c) Each party represents and warrants to the other that it has the
authority to enter into this Agreement according
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to its terms and that its performance does not violate any laws, regulations or
agreements applicable to it.
(d) Licensee represents and warrants to S&P that the Product shall at
all times comply with the description in Exhibit A.
(e) Licensee represents and warrants to S&P that the Product shall
not violate any material applicable law, which violation has or can be expected
to have a material adverse effect on S&P, including but not limited to any
material banking, commodities and securities laws.
(f) Neither party shall have any liability for lost profits or
indirect, punitive, special, or consequential damages arising out of this
Agreement, even if notified of the possibility of such damages. Without
diminishing the disclaimers and limitations set forth in Subsection 9(b), or the
indemnification obligations of either party under Subsections 10(a) or 10(b), in
no event shall the cumulative liability of either party exceed the average
annual License Fees actually paid to S&P hereunder.
(g) Use of any marks by Licensee in connection with its Product
(including in the name of such Product) which are not the S&P Marks is at
Licensee's sole risk.
(h) The provisions of this Section 9 shall survive any termination of
this Agreement.
10. Indemnification.
(a) Licensee shall indemnify and hold harmless S&P, its affiliates
judgments, damages, costs or losses of any
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kind (including reasonable attorneys' and experts' fees) as a result of any
claim, action, or proceeding that arises out of or relates to (a) any breach by
Licensee of its representations or warranties under this Agreement, or (b) the
Product; provided, however, that S&P notifies Licensee promptly of any such
claim, action or proceeding. Licensee shall periodically reimburse S&P for its
reasonable expenses incurred under this Subsection 10(a). S&P shall have the
right, at its own expense, to participate in the defense of any claim, action or
proceeding against which it is indemnified hereunder; provided, however, it
shall have no right to control the defense, consent to judgment, or agree to
settle any such claim, action or proceeding without the written consent of
Licensee without waiving the indemnity hereunder. Licensee, in the defense of
any such claim, action or proceeding except with the written consent of S&P,
shall not consent to entry of any judgment or enter into any settlement which
either (a) does not include, as an unconditional term, the grant by the claimant
to S&P of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of S&P. This provision shall survive the
termination or expiration of this Agreement.
(b) S&P shall indemnify and hold harmless Licensee, its affiliates
and their officers, directors, employees and agents against any and all
judgments, damages, costs or losses of any kind (including reasonable attorneys'
and experts' fees) as a result of any claim, action, or proceeding that arises
out of or relates to any breach by S&P of its representations or warranties
under this Agreement; provided, however, that (a) Licensee notifies S&P promptly
of any such claim, action or proceeding; (b) Licensee grants S&P control of its
defense and/or settlement; and (c) Licensee cooperates with S&P in the defense
thereof. S&P shall periodically reimburse Licensee for its reasonable expenses
incurred under this Subsection 10(b). Licensee shall have the
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proceeding against which it is indemnified hereunder; provided, however, it
shall have no right to control the defense, consent to judgment, or agree to
settle any such claim, action or proceeding without the written consent of S&P
without waiving the indemnity hereunder. S&P, in the defense of any such claim,
action or proceeding, except with the written consent of Licensee, shall not
consent to entry of any judgment or enter into any settlement which either
(a) does not include, as an unconditional term, the grant by the claimant to
Licensee of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of Licensee. This provision shall survive
the termination or expiration of this Agreement.
11. Suspension of Performance.
Neither S&P nor Licensee shall bear responsibility or liability for any
losses arising out of any delay in or interruptions of their respective
performance of their obligations under this Agreement due to any act of God, act
of governmental authority, act of the public enemy or due to war, the outbreak
or escalation of hostilities, riot, fire, flood, civil commotion, insurrection,
labor difficulty (including, without limitation, any strike, or other work
stoppage or slow down), severe or adverse weather conditions, communications
line failure, or other similar cause beyond the reasonable control of the party
so affected.
12. Other Matters.
(a) This Agreement is solely and exclusively between the parties
hereto and shall not be assigned or transferred by either party, without prior
written consent of the other party, and any attempt to so assign or transfer
this Agreement without such written consent shall be null and void.
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(b) This Agreement constitutes the entire agreement of the parties
hereto with respect to its subject matter and may be amended or modified only by
a writing signed by duly authorized officers of both parties. This Agreement
supersedes all previous agreements between the parties with respect to the
subject matter of this Agreement. There are no oral or written collateral
representations, agreements, or understandings except as provided herein.
(c) No breach, default, or threatened breach of this Agreement by
either party shall relieve the other party of its obligations or liabilities
under this Agreement with respect to the protection of the property or
proprietary nature of any property which is the subject of this Agreement.
(d) Except as set forth in Section 6 hereof with respect to
Informational Materials, all notices and other communications under this
Agreement shall be (i) in writing, (ii) delivered by hand, by registered or
certified mail, return receipt requested, or by facsimile transmission to the
address or facsimile number set forth below or such address or facsimile number
as either party shall specify by a written notice to the other and (iii) deemed
given upon receipt.
Notice to S&P: Standard & Poor's
00 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx Xxxxxxxx
Senior Vice President
Index Services
Fax #: (000) 000-0000
Notice to Licensee: Schwab Capital Trust
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
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Attn: Xxxxxxx Xxxx, Secretary
Fax #: 000-000-0000
(e) This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of New York.
(f) Each party agrees that in connection with any legal action or
proceeding arising with respect to this Agreement, they will bring such action
or proceeding only in the United States District Court for the Southern District
of New York or in the Supreme Court of the State of New York in and for the
First Judicial Department or the United States District Court for the Northern
District of California or state court in the City and County of San Francisco,
and each party agrees to submit to the jurisdiction of such court and venue in
such court and to waive any claim that such court is an inconvenient forum.
(g) The name "Schwab Capital Trust" refers to the Xxxxxx Capital Trust
and its Trustees, as Trustees but not individually or personally, acting under a
Declaration of Trust dated May 7, 1993. The obligations of the Xxxxxx Capital
Trust entered into in the name of or on behalf of the Xxxxxx Capital Trust by
any of the Trustees, representatives or agents are made not individually, but in
such Schwab Fund Family capacities. Such obligations are not binding upon any of
the Trustees, shareholders or representatives of the Xxxxxx Capital Trust
personally, but bind only the assets of the Xxxxxx Capital Trust belonging to
such series for the enforcement of any claims against the Schwab Fund family.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first set forth above.
SCHWAB CAPITAL TRUST STANDARD & POOR'S
on behalf of The Funds a division of
listed on Exhibit A hereto The XxXxxx-Xxxx Companies, Inc.
BY: ___________________________ BY: ___________________________
_______________________________ _______________________________
(Print Name) (Print Name)
_______________________________ _______________________________
(Print Title) (Print Title)
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EXHIBIT A
PRODUCT DESCRIPTION
Product: The Institutional SelectTM S&P 500 Fund, the Institutional SelectTM
Large-Cap Value Index Fund, and the Institutional SelectTM Small-Cap Value
Index Fund of Schwab Capital Trust (each, a "Product") are publicly offered
mutual funds each of whose investment objective is to seek high total return by
tracking the price and yield performance of publicly-traded common stocks of
companies as represented by an S&P Index.
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EXHIBIT B
LICENSE FEES
Licensee shall pay S&P License Fees computed as follows:
With respect to each individual Product issued pursuant to this Agreement, the
annual License Fee shall be the greater of the applicable Minimum Annual Fee
(as defined below) or one-tenth basis point (.00001) of the average daily net
assets of the Product computed quarterly.
Product Minimum Annual Fee
S&P 500 Fund $5,000 in year one of the Agreement
$7,500 in year two of the Agreement
$10,000 in year three and each subsequent year of the Agreement
Large-Cap Value Index Fund $2,500 in year one of the Agreement
$5,000 in year two of the Agreement
$7,500 in year three of the Agreement
$10,000 in year four and each subsequent year of the Agreement
Small-Cap Value Index Fund $2,500 in year one of the Agreement
$5,000 in year two of the Agreement
$7,500 in year three of the Agreement
$10,000 in year four and each subsequent year of the Agreement
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The Minimum Annual Fee shall be payable on the Commencement Date and each
one-year anniversary thereof. Amounts in excess of the Minimum Annual Fee shall
be paid to S&P within thirty (30) days after the close of each calendar quarter
in which they are incurred; each such payment shall be accompanied by a
statement setting forth the basis for its calculation.
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