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HomeMy WebLinkAbout1995-12-05; City Council; Resolution 95-331!I 0 e 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i RESOLUTION NO. 95 - 331 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE CONTRACT FOR BANKING AND CUSTODIAL SERVICES WITH THE FIRST INTERSTATE BANK WHEREAS, the City of Carlsbad's contract with First Interstate Bani for banking services and custodial services will expire in January 1996; and WHEREAS, the City Treasurer solicited proposals (Attachment "El from 14 financial institutions with branch operations within the City of Carlsbad tc provide banking services and custodial services to the City of Carlsbad; and WHEREAS, the City Treasurer received competitive proposals frorr five banking institutions to provide banking services and custodial services to the City of Carlsbad; and r WHEREAS, the proposals were analyzed and reviewed by an ad hoc committee and the Investment Review Committee; and WHEREAS, both committees concurred that the Banking Service: Proposal (Attachment "Cl') and the Institutional Custody Services Proposa (Attachment "D") submitted by First Interstate Bank were the best overall fol banking services and custodial services; and WHEREAS, First Interstate Bank has provided the City with excellent service since merging with San Diego Trust & Savings Bank in April 1994. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California as follows: 1. That the above recitations are true and correct. 2. The City Council will offer a three-year contract with an optionai two-year extension to First Interstate Bank to provide banking services and custodial services. The contract will commence of February 1, 1996. 1 2 3 4 5 6 7 8 9 10 11 12 3.3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0 I 0 3. That the City Treasurer is hereby authorized to sign the attached Agreement for Banking Services, Attachment "A," and Custodial Agreement, Attachment "B," as well as any other agreement necessary to secure the contracl with First Interstate Bank. PASSED, APPROVED AND ADOPTED at a regular meeting of the CiQ Council on the 5th day of DECEMBER , 1995, by the following vote, to wit: AYES: Council Members Lewis, Nygaard, Finnila, Hall NOES: None /-, ABSENT: Council Member ATTEST: c XLE'TH'4 2r111 TEN NZ, City Clerk (SEAL) KAREN R. KUNDTZ, sistant City Clerk I '0 0 CITY OF CARLSBAD Agreement for Banking Services Attachment "A" 0 0 CITY OF CARLSBAD AGREEMENT FOR BANKING SERVICES THIS AGREEMENT, made and entered into this 4<e day of &eea,&~995 , by and the City of Carlsbad, a municipal corporation, hereinafter referred to as “City” and FIRST INTEF BANK OF CALIFORNIA, hereinafter referred to as “Bank.” I. RECITALS The City is desirous of hiring the services of Bank as the depository of certain City funds other banking services in accordance with the terms and conditions hereinafter set forth, and Bank is ( of providing such services. 11. SCOPE OF SERVICES Bank shall provide the services set forth inclusive in its pricing proposal to City dated July 3 I a copy of which is attached hereto as Exhibit “A.” This proposal was submitted by Bank to City in rc to the City’s Request for Proposal dated June 1995, which is attached hereto as Exhibit “B.” TI Treasurer may elect to delete any of the services set forth in the above designated portion of Exhit subject to the notice requirements contained in the Product Agreements described below. Bank may j additional services under the terms of this Agreement upon the mutual agreement of Bank and City. 1x1. PRODUCT AGREEMENTS Bank shall provide the services set forth in the above designated portion of Exhibit “A” a specifically described in the “Cash Management Terms and Conditions” to be executed by City concv herewith, a copy of which is attached hereto and incorporated herein by this reference. Any futurc services not currently the subject hereof will be reflected by Product Agreements for such service: executed by the parties and incorporated herein if not already covered in the “Cash Management Ten Conditions.’’ In the event of any inconsistency between the provisions of this Agreement, Exhibit “A the “Cash Management Terms and Conditions,” the terms of this Agreement and Exhibit “A” shall prel 1 0 0 IV. COMPENSATION Compensation to Bank for the services provided pursuant to this Agreement shall be as set fort pricing provisions in the attached Exhibit ”A,” said provisions of which are incorporated herein reference. Any revisions to the compensation hereunder shall be mutually agreed upon by the City Bank. Pricing as quoted by Bank in Section I1 of Exhibit “A” shall remain in effect until June 3( unless otherwise agreed to by City and Bank. Any other services utilized by City shall be priced acco Bank’s prevailing “Fee Schedule - Business Accounts.” The Bank shall reserve the right to pass on i all direct costs associated with any Federal and State Regulations, including but not limited to Federal : Insurance Corporation and Federal Reserve charges. V. METHOD OF PAYMENT Bank shall be paid for its sekices hereunder pursuant to the relevant provisions of its prop’ forth in Exhibit “A,” which provisions are incorporated herein by this reference. The City may com the Bank with fees, compensating balances, or a combination of the two. Any fees not cow compensating balances shall be due and payable by the City on a quarterly basis. Any net quarterly f be paid by auto debit to the City’s primary checking account or paid to the Bank by check. VI. TERM This Agreement shall commence upon execution and shall remain and continue in effect for tl years and may be automatically renewed for an additional two (2) years. Time is of the essence performance of this Agreement. Services provided by any third party vendors, such as armored deposit courier, messenger, or check printers, are not covered by this agreement. 2 a 0 VII. EXTENSION The term of this Agreement may be extended by City and Bank by agreement in writing with to each such extension at least thirty (30) calendar days prior to the date on which this Agreemel extension thereof would otherwise have terminated. The terms and conditions of the agreemen extended shall be as set forth herein except that modifications in the compensation designated in Sec E.xhibit “A” may be made effective for the period of any extension as mutually determined by Bank City in writing as a part of the agreement for the extension of this Agreement, subject to the approvz City. -11. TERMINATION Any other provision herein to the contrary notwithstanding, and in addition to other met termination provided for herein or available under the laws of the State of California, it is agreed 1 Agreement shall terminate sixty (60) days after written notice of termination, which may be given b party to the other party to this Agreement with or without cause. After the expiration of such sixty ( period, Bank shall immediately cease all services hereunder except as may be specifically approvec City. Bank shall be entitled to compensation for all services rendered prior to the termination and services authorized by City thereafter in accordance with the aforementioned section regarding compel 3 a e IX. NOTICES Any notice required to be given hereunder shall be in writing with copies as directed herein a be personally served or given by mail. All notices by mail shall be deemed to have been given when I by the party to be served. Mail notices are to be sent by United States mail, certified and postage addressed to the party to be served as follows: TO CITY: TO BANK: City of Carlsbad Mr. James Stanton City Treasurer 1200 Carlsbad Village Drive Carlsbad, CA 92008 First Interstate Bank of California Ms. Barbara Mathias Manager Carlsbad Office 3 150 El Camino Real, Suite A Carlsbad, CA 92008 and First Interstate Bank of California Ms. Susan Cotton Vice President & Manager Government Services Group 5000 Birch Street, Suite 10,000 Newport Beach, CA 92660 Either party may change its address by notifying the other party of the change of address in Notice shall be deemed communicated when received by the party to be served if served as provided section. X. ATTORNEYS’ FEES In the event that either party hereto fails to comply with any of the terms of this Agreement other party commences legal proceedings to enforce any of the terms of this Agreement or to termin Agreement, the prevailing party in such suit shall receive from the other a reasonable sum in attorneys’ fees and costs as may be established by the Court or Jury. 4 e 0 XI. EXTENT OF AGREEMENT This document, Exhibit “A” incorporated herein by reference, and the “Cash Management Te negotiations, representations or agreements, either written or oral. This Agreement and Exhibit “A” amended only by written instrument signed by both City and Bank. The “Cash Management Tel Conditions” may be amended only as provided therein. Condilions” represent the entire integrated Agreement between City and Bank and supersede 8 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date above. FIRST INTERSTATE BANK OF CALIFORN 1 n :? <. .,/‘L BY . Ti _. 1: / .&h? 7 Tit vq e: T- Title: :fi \ /,. 1 A ‘y j-, /I’ /? tc->9kqA<,,; c .z By: Laq/&fi 1 - I’ Title. Y KC2 p2sKJ2.J- ATTEST:, SXXi” City <-*y Cle of Carlsbad ,-x KAREN R. KUNDTZ, Assistant City Clerk APPROVED AS TO FORM: L Q*k City Attorney of the 12 .1(-$6 City of Carlsbad 5 0. 0 CITY OF CARLSBAD Custodial Agreement Attachment 'IBtf 0 0 I City of Carlsbad CUSTODIAL AGREEMENT lnstitutionai Custody Sewices I FIRST INTERSTATE BANK OF CALIFORNIA institutional Trust and investments Division October 1995 0 0 I I ~~~ ~ TABLE OF CONTENTS ~~~~ I ARTICLE I: ARTICLE 11: ARTICLE Ill: ARTICLE IV: ARTICLE V: ARTICLE VI: ARTICLE VII: ARTICLE VIII: APPOINTMENT OF BANK AS CUSTODIAN ................................................ AUTHORITY AND RESPONSIBILITY OF CUSTODIAN ............................... INVESTMENT OF CUSTODIAL ACCOUNT ................................................. AUTHORIZED REPRESENTATIVES ............................................................... CUSTODIAN INSTRUCTIONS ...................................................................... COMPENSATION AND EXPENSES OF THE BANK ...................................... ADVANCES AND OVERDRAFTS .................................................................. RECORDS AND ACCOUNTS ........................................................................ ARTICLE IX: AMENDMENTS AND TERMINATIONS ........................................................ ARTICLE X: CONCERNING THE CUSTODIAN ................................................................ ARTICLE XI: MISCELLANEOUS .......................................................................................... 0 0 \ City of Carlsl: INSTITUTIONAL CUSTODY CUSTODIAL AGREEMENT 1 THIS AGREEMENT is made this - day of , 19% between Gjty of CarlM ( "Principal") and FIRST INTERSTATE BANK OF CALIFORNIA (the "Bank"). The Principal and Bank hereby agree as follows: ARTICLE I: APPOINTMENT OF BANK AS CUSTODIAN Section 1-01. The Principal appoints the Bank as custodian to receive and hold safekeeping in the Custodial Account all securities tendered to it from time to time by the Principa upon the Principal's direction ("Custodial Assets"), and to perform such ministerial functions provided in this Agreement. The Bank agrees to hold and keep as custodian all property depositec received by it for the account of the Principal and shall faithfully discharge its duties as set ford this Agreement. Section 1.02. The Principal represents and warrants that it is authorized under the laws of State of California to appoint the Bank as custodian and to transfer or cause to be transferred cust( of Custodial Assets to the Bank. Section 1.03. The Principal may direct the Bank to establish one or more sub-account: hold such portions of the assets of the Custodial Account as the Principal shall direct, along with earnings and profits thereon. ARTICLE 11: AUTHORITY AND RESPONSIBILITY OF CUSTODIAN Section 2.01. The Bank is authorized to sign any documents which are now or may herea be required in order for the Bank to perform its responsibilities under this Agreement. Section 2.02. The Bank shall collect and receive the interest and other income, incluc dividends, paid to it by any person or organization with respect to securities and other proper which it holds as custodian under the terms of this Agreement. In the case of interest or divide paid upon any municipal bonds, federal book-entry eligible treasury issues, and debt obligation! equity securities of any domestic corporation, the monies shall be credited to the Custodial Accc and/or Demand Deposit Account # (hereafter referred to as the "DDA" accordance with the Funds Payment Policy in effect from time to time. Interest or dividend incc on all other assets shall be credited to the Custodial Account and/or DDA when received by Bank. g:\~b.~~a~~~\1I177.ck~c 1 0 0 City of Carlsb In the event the Bank fails to actually receive any monies which have been credited to the Custoc Account and/or DDA as hereinabove described, the Bank shall notify the Principal within twenty fc (24) hours thereof, shall reverse out such credit and shall be entitled to interest at a fair 2 reasonable rate, as mutually determined by the Bank and Principal, from the date of credit to Custodial Account until the date such credit is reversed. Section 2.03. The Bank shall use its best efforts to collect, on behalf of the Principal, mor which are due and owing to the Principal upon the maturity, redemption, principal payments, or s of securities or other property held in the Custodial Account, or at the dates of their calls for paym of which the Bank has actual notice from the reporting services to which the Bank subscribes, : proceeds of property so received shall be held in the Custodial Account, or forwarded upon direction of the Principal. The Bank shall not be obligated to institute or participate in any le proceedings to make such collection. Whenever the Bank has been unable to make a collect pursuant to this section, it will notify the Principal of its inability to make such collection, and reasons therefor, insofar as such reasons are known to the Bank. Section 2.04. The Bank will notify the Principal of any voluntary offering with respect to securities held in the Custodial Account and will forward to the Principal, upon request, st literature and reports as may be received by the Bank pertaining to any securities held hereunc The Bank, absent directions, is under no duty to take any action with respect to any securities helc the Custodial Account. The Bank will execute proxies with respect to Custodial Assets held in its name or in nominee name and forward the proxies to the Principal without having voted the proxies. Section 2.05. The Bank shall disburse cash and other property then held in the Custoc Account and/or DDA in accordance with the instructions of the Principal. The Bank shall have responsibility to determine whether any such disbursements are in accordance with applicable I; regulations, or any agreement other than this Agreement. Section 2.06. Notwithstanding any other provision of this Agreement, all or any of monies or securities of the Custodial Account may be held in the Bank's own custody or in custody of one or more sub-custodians (ie: Federal Reserve and Depository Trust Compa appointed by the Bank. In addition, the Bank is authorized to cause securities to be registered in name of and to maintain such securities on deposit with, any registered securities depository or Federal Reserve Book Entry System. Section 2.07. (a) The Principal hereby authorizes the Bank on a continuous and on-gc basis to deposit in the Federal Reserve/Treasury Book-Entry System (the "Book-Entry System") an( The Depository Trust Company and/or The Participants Trust Company (the "Depositories") securities eligible for deposit therein and to utilize the Book-Entry System and the Depositories to extent possible in connection with settlements of purchases and sales of securities, and 01 deliveries and returns of securities. - ~:\'I,~,,,,~\lll77.,~,~ L 0 0 I City of Carlsl: (b) Where securities eligible for deposit in the Book-Entry System and/or Depositories are transferred to the Custodial Account, the Bank shall identify as belonging to Principal a quantity of Securities in a fungible bulk of securities shown on the Bank's account on books of the Book-Entry System or the Depositories. Securities and monies of the Principal deposi in either the Book-Entry System or the Depositories will be represented in accounts which incll only assets held by the Bank of customers, including but not limited to accounts in which the Bi acts in a fiduciary or agency capacity. Section 2.08. The Bank may hold any of the Custodial Assets in the name of a nominec the Bank or in book entry form. Section 2.09. The Bank is authorized to deliver any instrument or document necessar) register the securities in the Custodial Account, or to complete any sales or deliveries of them. - Bank may execute on the Principal's behalf any declarations, affidavits, certificates of ownership other documents required to service the Custodial Account and guarantee that such documents h been executed by the Principal. The Principal shall furnish the Bank with all docume authorizations, representations, or powers of attorney as may be reasonably required by the Ban1 carry out its obligations hereunder, but no such document, authorization, representation, or powe attorney shall be construed to authorize the Bank to take any action not authorized by Agreement. Section 2.10. (a) Promptly after each purchase of securities by the Principal, the Princ shall deliver to the Bank Instructions, specifying with respect to each purchase: (i) the name of issuer and the title of the securities, including CUSlP number, if any, (ii) the principal amc purchased, (iii) the date of purchase and date of settlement, (iv) the purchase price per unil necessary or desirable), (v) the total amount payable upon such purchase, and (vi) the name of person or institution from whom, or the broker through whom the purchase was made. The B shall upon contractual settlement date debit the Custodial Account and/or DDA the total amc payable for the purchase of the securities. (b) Promptly after each sale of securities by the Principal, the Principal shall delive the Bank Instructions, specifying with respect to each sale: (i) the name of the issuer and the titlc the securities, including CUSlP number, if any, (ii) the principal amount sold, (iii) the date of sale date of settlement, (iv) the sale price per unit (if necessary or desirable), (v) the total amount pay to the Principal upon such sale, and (vi) the name of the person or institution to whom, or the brc through whom the sale was made. The Bank shall deliver the securities in accordance with gener accepted street practices (i.e., subject to count and verification). If the Principal's Instructions received by the Bank in a timely manner and the securities which are sold are in good deliver; form, the Bank will credit the Custodial Account with the proceeds of such sale provided, howe that the Bank shall not be obligated to credit the Custodial Account and/or DDA with such procc if a failure to deliver the securities is not caused by the Bank (e.g., late instructions, incor instructions, and/or securities out on transfer). In any event, the Bank will be entitled to reverse credits previously made where monies are not finally collected. g:\dinwc\11177 clcx 3 0 0 City of Carlsk ARTICLE 111: INVESTMENT OF CUSTODIAL ACCOUNT Section 3.01. The assets of the Custodial Account shall be invested and reinvested accordance with Instructions of the Principal, unless the Principal delegates investment responsibi and authority for all or a portion of the Custodial Account to one or more authorized representatib In addition to the powers and duties described in Article II, the Bank shall have the following pow and duties which it shall exercise and perform only upon the Instructions of the Principal or authorized representatives: (a) to pay for all securities which have been purchased upon receipt of SI securities by or for the Bank. (b) to deliver securities which have been sold in accordance with generally accep street practices or any special directions of the Principal or its authorized representatives, includ but not limited to, the free delivery of securities. In acting upon instructions (on which the Ban1 authorized to rely) to deliver securities against payment, the Bank is authorized, in accordance ~r\ customary securities processing practices, to deliver such securities to the purchaser thereof or de: therefor (including to an agent for any such purchaser or dealer) against a receipt, with expectation of collection payment from the dealer, purchaser or agent to whom the securities were delivered before the close of business on the same day. When the Bank delivers securities again! receipt in accordance with the preceding sentence, the Bank shall not bear the risk associated ~r\ such securities processing practice, provided that the Bank did not select the party to which SI securities were delivered. (c) to convert, surrender, tender or exchange securities. Section 3.02. (a) Notwithstanding any other provision of this Agreement, if at any time th is insufficient cash or securities in the Custodial Account and/or DDA with which to carry out instructions of the Principal or its authorized representatives, the Bank shall notify the party giving instructions of such insufficiency as soon as practicable after receiving the Instructions and shall h( no further responsibility for complying therewith until it receives sufficient cash or securities. (b) Principal agrees that all investments executed through a broker-dealer will bc compliance with all applicable laws and regulations and that sufficient cash will be available in Custodial Account to pay for any securities purchased without consideration given to the proce from the sale of the same securities. Principal acknowledges that Bank will not pay for the purch of securities with the proceeds from the sale of the same securities. Section 3.03. The Bank shall have no duty or responsibility: (a) to supervise the investment of, or make recommendations with respect to purchase, retention or sale of, securities or other property relating to the Custodial Account. ~\~lial~~u~\l1177.cl~~~ 4 e 0 City of Carlsk (b) for any loss occasioned by delay in the actual receipt of notice by the Bank of ; payment, redemption or other transaction in respect to which the Bank is authorized to take so action pursuant to this Agreement, unless due to negligence or an intentional act of the Bank. (c) for any act or omission, or for the solvency or notice to Principal of the solven of any broker or dealer which is selected by Principal or any other person other than the B: officers, employees or agents, to effect any transaction for the Custodial Account. Section 3.04. Principal may direct Bank to invest a portion or all of the Custodial Assets shares of one or more registered investment companies ("Funds") made available by Bank to customers. Bank or its affiliates may receive fees for services provided to the Funds. Bank st provide to Principal copies of the.prospectuses of the Funds and disclosures of the fees received Bank and its affiliates. Bank shall have no investment authority over those assets of the Custoc Account so invested or the Funds' which have been purchased with such assets, nor shall the B; have any responsibility with respect to investment performance of the Funds or to make i recommendations with respect to the purchase or sale of such shares. ARTICLE IV AUTHORIZED REPRESENTATIVES The Principal may appoint in writing one or more authorized representatives for the Custoc Account and shall contemporaneously give written notice of said appointment or appointments to Bank and shall instruct the Bank in writing with respect thereto. Selection of an authori; representative shall be in the sole and absolute discretion of the Principal. The Bank shall follow instructions of the authorized representatives in exercising the powers granted the Bank un Articles I1 and ill. ARTICLE V: CUSTODIAN INSTRUCTIONS Section 5.01. Except as hereafter provided, any directions, instructions or notices which Principal, or any other person designated by the Principal is required or permitted to give to the B8 under this Agreement (the "Instructions") shall be in writing; provided, however, that the Bank ir discretion may act upon oral instructions if it believes them to be genuine, but the Bank shall no1 required to do so. All oral instructions are to be confirmed in writing. The Bank is authorize( record any telephonic communications between authorized representatives and the Bank. Section 5.02. The transmission of the instructions by photostatic teletransmission L duplicate or facsimile signatures or by affirmation via the national institutional delivery system s be authorized methods of communication until the Bank is notified by the Principal to the contrar) Section 5.03. The Bank shall as promptly as possible comply with any direction given by Principal or any authorized representative. ~:\~1,.~,,,~,,\11~77.~k,~ 5 e 0 \ City of Carlsb ARTICLE VI: COMPENSATION AND EXPENSES OF THE BANK The Bank shall receive reimbursement for any expenses incurred by it in connection with t Agreement and compensation for its customary and ordinary services in accordance with a writt schedule of fees agreed upon from time to time between the Bank and the Principal. To the extt such fees and expenses are not paid by the Principal, within thirty (30) days following delivery by t Bank to the Principal of the Bank's statement of such fees and expenses, the Bank may charge inter1 on such unpaid balances. To the extent such fees and expenses remain unpaid for 90 days by t Principal, the Bank, upon notice to the Principal, may deduct such fees and expenses from tl Custodial Account. In addition, the Bank shall be entitled to reasonable compensation for a1 extraordinary services which it 'is requested or deems necessary to perform hereunder. It understood that all pricing provided is firm for the period of one (1) year, subject to negotiation t any increase or decrease will not exceed 5% each year. ARTICLE VII: ADVANCES AND OVERDRAFTS Section 7.01. In the event that (1) the amount on deposit in the Custodial Account, DO and/or any sub-account is insufficient to pay the total amount due upon the purchase or delivery 1 securities therefor, or (2) an amount otherwise drawn against the Custodial Account, DDA and/or ar sub-account is in excess of the available balance on deposit therein, the Bank may, if practicabl elect to advance funds to the Custodial Account, DDA and/or any sub-account in an amou necessary to cover any resulting overdraft on such account. Section 7.02. If the Bank should advance funds to or on behalf of the Custodial Account I any sub-account to cover such overdraft or for any other reason, the amount so advanced by th Bank (less any amount deposited by the Bank to the Custodial Account or sub-account in lieu ( monies which have not been collected by the Bank on behalf of the Custodial Account or sut account when due because of the failure of the Bank to make timely presentment or demand fc payment) shall constitute a Loan hereunder. Each such Loan shall be payable on demand. Any Loa not repaid by the Bank's close of business on the day of disbursement shall bear interest for each da until payment in full at a rate per annum equal to 3 percent over the Bank's prime commerci< lending rate in effect from time to time, such rate to be adjusted on the effective date of any change i such rate but in no event should the rate payable be less than six percent per annum. Interest on tt- Loans shall be computed on the basis of a 360-day year and actual days elapsed and shall accru from and including the day of disbursement to but excluding the date of payment. The Bank wi notify the Principal of any interest owed due to a Loan prior to recovering the principal and accrue1 interest of any Loan made to the Custodial Account by the Bank hereunder. Section 7.03. In order to secure the repayment of the principal and interest of any Loan t the Custodial Account or any sub-account, the Principal hereby agrees that the Bank shall have continuing lienand security interest in and to any property specifically allocated to and held by th Custodial Account or any sub-account to which such Loan is deemed to have been made. In thl regard, the Bank shall be entitled to all the rights and remedies of a pledgee under common law an( a secured party under the California Commercial Code as then in effect. fi:\'ll.,,ar.\l1(77.lk,l 6 0 e 1 City of Carlsb ARTICLE VIII: RECORD§ AND ACCOUNTS Section 8.01. The Bank shall keep accurate records and accounts with respect to all ca and other assets held by it in the Custodial Account, and all receipts and disbursements and 0th transactions involving such cash, securities and other assets. The Principal shall have access to such accounts, books and records at all reasonable times. All such accounts, books and records sh, be open for inspection and audit at all reasonable times by the Principal or by any person or perso duly authorized by the Principal. Section 8.02. The Bank shall furnish the Principal and the Principal authorizl representatives with monthly reports in the usual and customary manner and form, setting forth : receipts, disbursements and transactions effected with respect to the Custodial Account. Section 8.03. Upon agreement of the parties, the Bank shall monthly determine the mark value of the assets held in the Custodial Account. Market value for the purposes of this Agreeme means with respect to marketable securities the market price of each such security at the close business of the day as of which the valuation is being made, and in the case of all other assets tt market value shall be deemed to be cost. In determining the market value of marketable securities, the Bank may utilize any one or mo sources of information deemed by the Bank to be reliable, including, but not limited to, a pricir service, standard financial periodicals or publications, newspapers of general circulation, records t and information from securities exchanges and brokerage firms. ARTICLE IX: AMENDMENTS AND TERMINATIONS Section 9.01. This Agreement may be modified at any time by a writing signed by tk Principal and the Bank, and may be terminated at any time upon thirty (30) days' written notic delivered by any party to the other, provided, however, that this Agreement shall continue thereaftt for such period as may be necessary for the complete divestiture of all cash, securities, and othc instruments held hereunder by the Bank, but solely to the extent necessary to effect such complet divestiture. Section 9.02. The Bank shall, immediately upon the receipt or transmittal notice ( termination, as the case may be, commence and prosecute diligently to completion the transfer of a cash and the delivery of all securities and other instruments, duly endorsed, to the successor of th Bank. The Principal shall select such successor within thirty (30) days after the receipt or transmitt; of such notice of termination, as the case may be, and shall forthwith notify the Bank of the selectiol of such successor. In the event the Principal has not timely notified the Bank of the selection of successor, the Bank, in its discretion, may deliver to the Principal all securities and other instrument: duly endorsed, and all cash. - ~:Lb.~~~~~~~\11177~Lx / e 0 1 City of Carlst Upon delivery to the Principal or successor of the cash, securities and other instruments h by it hereunder, the Bank shall. have no further liability or responsibility under this Agreement otherwise, or for any act or omission of the Principal or the successor. Section 9.03. Upon termination of this Agreement and< either after payment to the Bank of fees owed pursuant to this Agreement or the holding of sufficient funds or assets equal to any fee: question, all monies, securities and other assets of every kind and nature held in the Custoc Account shall be paid over, delivered or surrendered upon a written order or receipt signed by Principal or its appointed successor. ARTICLE X: CONCERNING THE CUSTODIAN Section 10.01. The parties agree that the Bank is a bailee for hire, and as such must exerc reasonable care in operating under this Agreement. The Principal indemnifies and holds harm1 the Bank, its directors, officers, employees and agents from and against all liabilities, losses, expen and claims (including reasonable attorney’s fees and costs of defense) arising out of the Principal’s its authorized representatives’ actions or omissions with respect to the Custodial Account, or aris out of or relating to any action, suit or proceeding to which the Bank is a party or otherwise invoh by reason of its serving as Custodian pursuant to this Agreement and complying with its terms, exc where the Bank has been found to have been negligent or to have breached its duties under 1 Agreement by a final judgment of a Court of competent jurisdiction. This indemnity shall be a continuing obligation of the Principal, its successors and assig notwithstanding the termination of this Agreement. The Bank shall have no obligation hereunder costs, expenses, damages, liabilities or claims (including attorney’s fees) sustained or incurred reason of any action or inaction by the Federal Book-Entry System, any registered securil depository, or their respective successors or nominees, unless such action or inaction is caused the negligence or willful misconduct of the Bank. Section 10.02. The Bank shall not be liable for any delay or failure to act as may be requi hereunder when such delay or failure is due to fire, earthquake, any act of God, interruption suspension of any communication or wire facilities or services, war, emergency conditions or ot circumstances beyond its control provided it exercises such diligence as the circumstances n reasonably require. ARTICLE XI: MISCELLANEOUS Section 11-01. Subject to any laws of the United States which may be applicable, i Agreement shall be governed, construed, regulated and administered under the laws of the State California. ~:\~li.4#~#w\lli77 &x 8 3 . a 0 City of Carlslc Section 11.02. It is not the intention of any party to this Agreement to vio\ate any stat1 regulation, ruling, judicial decision, or other legal provision applicable to this Agreement or performance thereof. If any term of this Agreement, or any act or omission in the performar thereof, is or becomes violative of any such provision, such term, act or omission shall be of no fo or effect and any such term shall be severed from this Agreement. Any such invalid term, act omission shall not affect the validity of any other term of this Agreement that is otherwise valid, I the validity of any otherwise valid act or omission in the performance thereof, unless such invalic prevents accomplishment of the objectives and purposes of this Agreement. In the event any SI term, act or omission is determined to be illegal or otherwise invalid, the necessary steps to remt such illegality or invalidity shall be taken immediately by the parties. Section 11.03. Disclosure of Beneficial Owner Information Securities and Exchat Commission Rule #14b-1 (c), enables corporations to learn the identity of their security holders whl securities are held by Banks and registered in "nominee" or "street" name. According to the rule, issuing company would be permitted to use your name and related information for "torpor communication" purposes only. [ J 1 I do not want any name, address, and securities positions disclosed to all the companie! which I own securities that are registered in "nominee" or "street" name. or [ ] I want my name, address and securities positions disclosed to all the companies in whic: own securities that are registered in "nominee" or ''street'' name. Section 11.04. Any controversy or claim between the parties and any claim based on arising from an alleged tort may be resolved by a court of competent jurisdiction or be determined arbitration upon mutual agreement. The arbitration shall be conducted in accordance with United States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law provision in Agreement and under the Commercial Rules of the American Arbitration Association PAAA"). - arbitrator(s1 shall resolve all claims and defenses or other matters in dispute in accordance v applicable law, including without limitation thereto, all statutes of limitation. Any controvc concerning whether an issue is arbitrable shall be determined by the arbitrator(s). Judgment upon arbitration award may be entered in any court having jurisdiction. The institution and maintenal of an action for judicial relief or pursuit of provisional or ancillary remedies shall not constitut waiver of the right of any party, including the plaintiff, to submit the controversy or claim arbitration if any other party contests such action for judicial relief. a.\d~.~~~~~~.\11177,tk~ 9 4 0 0 City of Carlst IN WITNESS WHEREOF, this Agreement is executed inef, 0 FGdh 4, State California, as of the date first above written. City of Carlsbad First Interstate Bank of California 2- By: q2LG/p?!!!! Title: & 7- Title: - By: By: < 5thy"Adams - Title: Title: Assistant Vice President Tax Identification No. 9s- mY-3 j; \.,l,~,,,,~,\ll~//~i~,, IO 2 -i . F?". 5. X." I'