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HomeMy WebLinkAboutFirst Interstate Bank; 1995-12-18;v $IT I*81 'T - -1 Date December 1 To File 0 Reply Wanted From Isabelle Paulsen 0 No R epiy Necessary A copy of the agreement with First Interstate Bank was given t Jane DeGiacomo of the Treasurer's Office. Jane indicated that she would forward a copy on to the bank. Council meeting of December 5, 1995. 0 0 City of Carlsbad CUSTODIAL AGREEMENT Institutional Custody Sewices FIRST f NTERSTATE BANI< OF CALIFORNIA Institutional Trust and Investmen ts Division October 1995 0 0 TABLE OF CONTENTS ARTICLE I: APPOINTMENT OF BANK AS CUSTODIAN ............................................... ARTICLE II: AUTHORITY AND RESPONSIBILITY OF CUSTODIAN .............................. ARTICLE Ill: INVESTMENT OF CUSTODIAL ACCOUNT ................................................ ARTICLE IV: AUTHORIZED REPRESENTATIVES .............................................................. ARTICLE V: CUSTODIAN INSTRUCTIONS ..................................................................... ARTICLE VI: COMPENSATION AND EXPENSES OF THE BANK ..................................... ARTICLE VII: ADVANCES AND OVERDRAFTS ................................................................. ARTICLE VIII: RECORDS AND ACCOUNTS ....................................................................... ARTICLE IX: AMEN DME NTS AN D TERM I N AT10 N S ....................................................... ARTICLE X: CONCERNING THE CUSTODIAN ............................................................... ARTICLE XI: MISCELLANEOUS ......................................................................................... INSTITUTIONAL CUSTODY C U STODl AL AGREEMENT , 0 0 City of Carls' In the event the Bank fails to actually receive any monies which have been credited to the Custo Account and/or DDA as hereinabove described, the Bank shall notify the Principal within twenty 1 (24) hours thereof, shall reverse out such credit and shall be entitled to interest at a fair 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, mol which are due and owing to the Principal upon the maturity, redemption, principal payments, or of securities or other property held in the Custodial Account, or at the dates of their calls for payn 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 I( proceedings to make such collection. Whenever the Bank has been unable to make a collec 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, s literature and reports as may be received by the Bank pertaining to any securities held hereun The Bank, absent directions, is under no duty to take any action with respect to any securities he1 the Custodial Account. The Bank will execute proxies with respect to Custodial Assets held in its name or ir 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 Custo 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 Compi 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"1 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 o deliveries and returns of securities. g \dtann~\in77 d~r 2 0 0 City of Carls (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 depos in either the Book-Entry System or the Depositories will be represented in accounts which incl only assets held by the Bank of customers, including but not limited to accounts in which the E? acts in a fiduciary or agency capacity. Section 2.08. The Bank may hold any of the Custodial Assets in the name of a nomine 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 ownershil other documents required to service the Custodial Account and guarantee that such documents 1 been executed by the Principal. The Principal shall furnish the Bank with all documc authorizations, representations, or powers of attorney as may be reasonably required by the Ban carry out its obligations hereunder, but no such document, authorization, representation, or pow6 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 am( purchased, (iii) the date of purchase and date of settlement, (iv) the purchase price per uni 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 am( payable for the purchase of the securities. (b) Promptly after each sale of securities by the Principal, the Principal shall delivc the Bank Instructions, specifying with respect to each sale: (i) the name of the issuer and the tit1 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 genei 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, how€ that the Bank shall not be obligated to credit the Custodial Account and/or DDA with such proct if a failure to deliver the securities is not caused by the Bank (e.g., late instructions, incoi 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 \ilian1~\11!77 doc 3 e 0 City of Carls ARTICLE 111: INVESTMENT OF CUSTODIAL ACCOUNT Section 3.01. The assets of the Custodial Account shall be invested and reinvestec accordance with instructions of the Principal, unless the Principal delegates investment responsib and authority for all or a portion of the Custodial Account to one or more authorized representati In addition to the powers and duties described in Article II, the Bank shall have the following POL and duties which it shall exercise and perform only upon the Instructions of the Principal o authorized representatives: (a) to pay for all securities which have been purchased upon receipt of s securities by or for the Bank. (b) to deliver securities which have been sold in accordance with generally accei street practices or any special directions of the Principal or its authorized representatives, inch but not limited to, the free delivery of securities. in acting upon instructions (on which the Bar authorized to rely) to deliver securities against payment, the Bank is authorized, in accordance \ 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 wer delivered before the close of business on the same day. When the Bank delivers securities agair receipt in accordance with the preceding sentence, the Bank shall not bear the risk associated 1 such securities processing practice, provided that the Bank did not select the party to which s 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 tl 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 I- 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 b 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 procf from the sale of the same securities. Principal acknowledges that Bank will not pay for the purct 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. fi \dianne\lIl77 doc 4 0 0 City of Cads (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 s( 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 solvei 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 Assel shares of one or more registered investment companies ("Funds") made available by Bank tc customers. Bank or its affiliates may receive fees for services provided to the Funds. Bank s provide to Principal copies of the prospectuses of the Funds and disclosures of the fees receive( Bank and its affiliates. Bank shall have no investment authority over those assets of the Custo 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 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 Custc Account and shall contemporaneously give written notice of said appointment or appointments tc Bank and shall instruct the Bank in writing with respect thereto. Selection of an author1 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 ur Articles II 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 E under this Agreement (the "Instructions") shall be in writing; provided, however, that the Bank ii discretion may act upon oral instructions if it believes them to be genuine, but the Bank shall no 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 1 duplicate or facsimile signatures or by affirmation via the national institutional delivery system : 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. fi \rl1annr\11177 <lo( 5 0 0 City of Carls ARTICLE VI: COMPENSATION AND EXPENSES OF THE BANK The Bank shall receive reimbursement for any expenses incurred by it in connection with Agreement and compensation for its customary and ordinary services in accordance with a wri schedule of fees agreed upon from time to time between the Bank and the Principal. To the ex such fees and expenses are not paid by the Principal, within thirty (30) days following delivery by Bank to the Principal of the Bank’s statement of such fees and expenses, the Bank may charge intc on such unpaid balances. To the extent such fees and expenses remain unpaid for 90 days by Principal, the Bank, upon notice to the Principal, may deduct such fees and expenses from Custodial Account. In addition, the Bank shall be entitled to reasonable compensation for extraordinary services which it is requested or deems necessary to perform hereunder. I understood that all pricing provided is firm for the period of one (1) year, subject to negotiation 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, C and/or any sub-account is insufficient to pay the total amount due upon the purchase or deliver securities therefor, or (2) an amount otherwise drawn against the Custodial Account, DDA and/or sub-account is in excess of the available balance on deposit therein, the Bank may, if practica elect to advance funds to the Custodial Account, DDA and/or any sub-account in an am( 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 Accour any sub-account to cover such overdraft or for any other reason, the amount so advanced by Bank (less any amount deposited by the Bank to the Custodial Account or sub-account in lie1 monies which have not been collected by the Bank on behalf of the Custodial Account or ! account when due because of the failure of the Bank to make timely presentment or demand payment) shall constitute a Loan hereunder. Each such Loan shall be payable on demand. Any L not repaid by the Bank‘s close of business on the day of disbursement shall bear interest for each until payment in full at a rate per annum equal to 3 percent over the Bank’s prime commei lending rate in effect from time to time, such rate to be adjusted on the effective date of any chang such rate but in no event should the rate payable be less than six percent per annum. Interest on Loans shall be computed on the basis of a 360-day year and actual days elapsed and shall acc from and including the day of disbursement to but excluding the date of payment. The Bank notify the Principal of any interest owed due to a Loan prior to recovering the principal and accr 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 Loa the Custodial Account or any sub-account, the Principal hereby agrees that the Bank shall ha! continuing lien and security interest in and to any property specifically allocated to and held by Custodial Account or any sub-account to which such Loan is deemed to have been made. In regard, the Bank shall be entitled to all the rights and remedies of a pledgee under common law a secured party under the California Commercial Code as then in effect. g \dtanne\l 1177 &x 6 0 0 City of Carls ARTICLE VIII: RECORDS AND ACCOUNTS Section 8.01. The Bank shall keep accurate records and accounts with respect to all c and other assets held by it in the Custodial Account, and all receipts and disbursements and o transactions involving such cash, securities and other assets. The Principal shall have access tc such accounts, books and records at all reasonable times. All such accounts, books and records s be open for inspection and audit at all reasonable times by the Principal or by any person or per: duly authorized by the Principal. Section 8.02. The Bank shall furnish the Principal and the Principal authori representatives with monthly reports in the usual and customary manner and form, setting fort1 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 ma value of the assets held in the Custodial Account. Market value for the purposes of this Agreen means with respect to marketable securities the market price of each such security at the clos business of the day as of which the valuation is being made, and in the case of all other assets market value shall be deemed to be cost. In determining the market value of marketable securities, the Bank may utilize any one or 17 sources of information deemed by the Bank to be reliable, including, but not limited to, a pric service, standard financial periodicals or publications, newspapers of general circulation, record 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 Principal and the Bank, and may be terminated at any time upon thirty (30) days’ written nc delivered by any party to the other, provided, however, that this Agreement shall continue there; for such period as may be necessary for the complete divestiture of all cash, securities, and o instruments held hereunder by the Bank, but solely to the extent necessary to effect such comp divestiture. Section 9.02. The Bank shall, immediately upon the receipt or transmittal noticc termination, as the case may be, commence and prosecute diligently to completion the transfer c cash and the delivery of all securities and other instruments, duly endorsed, to the successor of Bank. The Principal shall select such successor within thirty (30) days after the receipt or transrr of such notice of termination, as the case may be, and shall forthwith notify the Bank of the selec of such successor. In the event the Principal has not timely notified the Bank of the selection successor, the Bank, in its discretion, may deliver to the Principal all securities and other instrumt duly endorsed, and all cash. g \rlid~in~~\11177 doc 7 0 City of Carls Upon delivery to the Principal or successor of the cash, securities and other instruments t by it hereunder, the Bank shall have no further liability or responsibility under this Agreemen 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 o 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 Custo 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 exer reasonable care in operating under this Agreement. The Principal indemnifies and holds harm- the Bank, its directors, officers, employees and agents from and against all liabilities, losses, expel and claims (including reasonable attorney’s fees and costs of defense) arising out of the Principal’ its authorized representatives’ actions or omissions with respect to the Custodial Account, or ari out of or relating to any action, suit or proceeding to which the Bank is a party or otherwise invol 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 Agreement by a final judgment of a Court of competent jurisdiction. This indemnity shall be a continuing obligation of the Principal, its successors and assi notwithstanding the termination of this Agreement. The Bank shall have no obligation hereundei costs, expenses, damages, liabilities or claims (including attorney’s fees) sustained or incurrec reason of any action or inaction by the Federal Book-Entry System, any registered secur depository, or their respective successors or nominees, unless such action or inaction is causec 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 requ hereunder when such delay or failure is due to fire, earthquake, any act of God, interruptiot suspension of any communication or wire facilities or services, war, emergency conditions or o circumstances beyond its control provided it exercises such diligence as the circumstances I reasonably require. ARTICLE XI: MISCELLANEOUS Section 11.01. Subject to any laws of the United States which may be applicable, Agreement shall be governed, construed, regulated and administered under the laws of the Stat California. g.\<I~atrnr\ 11177 dir 8 e 0 City of Carls Section 11.02. It is not the intention of any party to this Agreement to violate any stat 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 performa thereof, is or becomes violative of any such provision, such term, act or omission shall be of no fc or effect and any such term shall be severed from this Agreement. Any such invalid term, ac omission shall not affect the validity of any other term of this Agreement that is otherwise valid, the validity of any otherwise valid act or omission in the performance thereof, unless such invali prevents accomplishment of the objectives and purposes of this Agreement. In the event any s term, act or omission is determined to be illegal or otherwise invalid, the necessary steps to rerr such illegality or invalidity shall be taken immediately by the parties. Section 11 -03. Disclosure of Beneficial Owner Information Securities and Excha Commission Rule #14b-1 (c), enables corporations to learn the identity of their security holders wk 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 "corpa communication" purposes only. [ J ] 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 whi own securities that are registered in "nominee" or "street" name. Section 11.04. Any controversy or claim between the parties and any claim based 01 arising from an alleged tort may be resolved by a court of competent jurisdiction or be determine( 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 (IIAAAIO. arbitrator(s) shall resolve all claims and defenses or other matters in dispute in accordance 1 applicable law, including without limitation thereto, all statutes of limitation. Any controv concerning whether an issue is arbitrable shall be determined by the arbitrator(s1. Judgment upor arbitration award may be entered in any court having jurisdiction. The institution and maintenz of an action for judicial relief or pursuit of provisional or ancillary remedies shall not constitu waiver of the right of any party, including the plaintiff, to submit the controversy or clain arbitration if any other party contests such action for judicial relief. fi \<llannr\lU77 <I"< 9 e 0 City of Carls IN WITNESS WHEREOF, this Agreement is executed in c/r 0 /4'n~~ 4, Stat California, as of the date first above written. City of Carlsbad First Interstate Bank of California 27- By: WY? David Colv'lle , Title: & 7- Title: /e /L - 7 /&W&-g/- By: By: Title: Assistant Vice President Title: Tax Identification No. 95- mq??3 fi \<lal,nr\lR77 (1°C 10 f2-Y k.2