HomeMy WebLinkAbout1997-09-09; City Council; 14343; AWARD OF CUSTODIAL SERVICES CONTRACTa E EE iL 2
CITY OF CARLSBAD - AGENDA BILL I
AB# /$3/3 TITLE: DEPT. ;:/$
CITY ATTY: & MTG. 9/9/97
CITY MGR: =2& DEPT. TRS
I
AWARD OF CUSTODIAL
SERVICES CONTRACT 4
RECOMMENDED ACTION:
Adopt Resolution No. ’1 3 - 59 9
providing custodial services to the City of Carlsbad.
Adopt Resolution No. 9 ’- hd
California to provide custodial services to the City of Carlsbad.
, terminating a contract with Wells Fargo Bat
, awarding a contract to Union Bank
ITEM EXPLANATION:
Termination of Institutional Custody Services Between the City of Carlsbad and Well:
Fargo Bank
On February 1, 1996, the City of Carlsbad and First Interstate Bank (FIB) entered int
contracts for FIB to provide banking services and custodial services to the City for a
period of three years with an option to renew for an additional two years. On April 1,
1996, Wells Fargo Bank (WFB) merged with FIB and assumed the contracts to provi
banking services and custodial services to the City of Carlsbad.
In May 1997, The Bank of New York, Inc. (BNY), and its subsidiary, BNY Western TI
Company, signed an agreement with WFB to purchase the Institutional Custody bus
of WFB. WFB will cease providing custodial services on November 1, 1997, but will
continue to provide banking services to the City of Carlsbad.
Section 9.01 of the contract for custodial services allows either WFB or the City to
terminate the contract with thirty (30) days written notice. A copy of the contract is
attached hereto.
The City Treasurer recommends that the contract for custodial services between WI
and the City be terminated on November 1, 1997.
Contract with Union Bank of California for Institutional Custody Services
The City Treasurer recommends that a contract be awarded to Union Bank of Califoi
(UBC) to provide custodial services as of November 1, 1997. UBC is the third large5
commercial bank in California and is among the 30 largest banks in the United State
UBC has been providing custody services since 191 8 . Part of its organization for
custody services is exclusively devoted to handling municipal accounts.
based on assets. It is considered by the Federal Reserve System to be “well capital
e
' PAGE TWO OF AGENDA BILL / 4, J'??
FISCAL IMPACT:
A comparison of the fee structures of WFB and UBC indicate that in either case the c
to the City would be the same, approximately $300 to $350 per month.
EXHIBITS:
1. Copy of the contract for Institutional Custody Services between WFB and the City
Carlsbad.
2. Copy of the proposed Custody Agreement between UBC and the City of Carlsbad.
3. Resolution No. Y') - 5 5' 4 , Termination of Agreement for Institutior,
4. Resolution No. ? 3- 600
Custody Service Between the City of Carlsbad and Wells Fargo Bank.
, Custody Agreement between the City
Carlsbad and Union Bank of California.
Exhibit 1 'a
City of Carlsbad
CUSTODW, AGREEMENT
/nstitutiona/ Custody 5ewices
1
FIRST hlTER~ATE BANK OF CALIFORNIA
lnstitutional Trust and lnvestmen fr Division
October 1995
i@ a
I 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: AMENDMENTS AND TERMINATIONS ........................................................
ARTICLE X: CONCERNING THE CUSTODIAN .................................................................
ARTICLE XI: MISCELLANEOUS ...........................................................................................
-..
..
0 'e
City of Car
INSTITUTIONAL CUSTODY
CUSTODIAL AGREEMENT
THIS AGREEMENT is made this __ day of , 1995 between Ck. af Carlsbac
The Principal anc "Principal") and FIRST INTERSTATE BANK OF CALIFORNIA (the "Bank").
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 Princip(
upon the Principal's direction ("Custodial Assets"), and to perform such ministerial function!
provided in this Agreement. The Bank agrees to hold and keep as custodian all property deposite
received by it for the account of the Principal and shall faithfully discharge its duties as set fort
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 custc
of Custodial Assets to the Bank.
Section 1.03. The Principal may direct the Bank to establish one or more sub-accounts
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 RESPONSlBlLlN OF CUSTODIAN
Section 2.01. The Bank is authorized to sign any documents which are now or may hereaf
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, includi
dividends, paid to it by any person or organization with respect to securities and other properti
which it holds as custodian under the terms of this Agreement. In the case of interest or dividen
paid upon any municipal bonds, federal book-entry eligible treasury issues, and debt obligations
equity securities of any domestic corporation, the monies shall be credited to the Custodial Accou
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 incon
on at1 other assets shall be credited to the Custodial Account and/or DDA when received by tl
Bank.
g \ah *si4 lllli at" 1
0 '.
City of Carl
In the event the Bank fads to actually receive any monies which have been credited to the Custc
Account and/or DDA as hereinabove described, the Bank shall notify the Principal within twenty
(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 tc
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, mo
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, t
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 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, su
literature and reports as may be received by the Bank pertaining to any securities held hereund
The Bank, absent directions, is under no duty to take any action with respect to any securities held
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 Custodi
Account and/or DDA in accordance with the instructions of the Principal. The Bank shall have r
responsibility to determine whether any such disbursements are in accordance with applicable la\
regulations, or any agreement other than this Agreement.
Section 2-06. Notwithstanding any other provision of this Agreement, all or any of ti-
monies or securities of the Custodial Account may be held in the Bank's own custody or in tb
custody of one or more sub-custodians (ie: Federal Reserve and Depository Trust Cornpan)
appointed by the Bank. In addition, the Bank is authorized to cause securities to be registered in th
name of and to maintain such securities on deposit with, any registered securities depository or th
Federal Reserve Book Entry System.
Section 2.07. (a) The Principal hereby authorizes the Bank on a continuous and on-goin!
basis to deposit in the Federal Reservflreasury Book-Entry System (the "Book-Entry System") and/o
The Oepository Trust Company and/or The Participants Trust Company (the "Depositories1') a1
securities eligible for deposit therein and to utilize the Book-Entry System and the Depositories to thc
extent possible in connection with settlements of purchases and sales of securities, and othei
deliveries and returns of securities.
cLL~I \In17 \cr 2
a 'a
City of Caris
(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 inch
only assets held by the Bank of customers, including but not limited to accounts in which the B
acts in a fiduciary or agency capacity.
Section 2.08. The Bank may hold any of the Custodial Assets in the name of a nominee
the Bank or in book entry form.
Section 2.09. The Bank is authorized to deliver any instrument or document necessary
register the securities in the Custodial Account, or to complete any sales or deliveries of them. 1
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 hz
been executed by the Principal. The Principal shall furnish the Bank with all documer,
authorizations, representations, or powers of attorney as may be reasonably required by the Bank
carry out its obligations hereunder, but no such document, authorization, representation, or power
attorney shall be construed to authorize the Bank to take any action not authorized by tt
Agreement.
Section 2.10. (a) Promptly after each purchase of securities by the Principal, the Princip
shall deliver to the Bank Instructions, specifying with respect to each purchase: (i) the name of ti
issuer and the title of the securities, including CUSlP number, if any, (ii) the principal amoui
purchased, (iii) the date of purchase and date of settlement, (iv) the purchase price per unit 1
necessary or desirable), (v) the total amount payable upon such purchase, and (vi) the name of tt-
person or institution from whom, or the brpker through whom the purchase was made. The Bar
shail upon contractual settlement date debit the Custodial Account andor DDA the total amour
payable for the purchase of the securities.
. .
(b) Promptly after each sale of securities by the Principal, the Principal shall deliver t'
the Bank Instructions, specifying with respect to each sale: (i) the name of the issuer and the title o
the securities, including CUSlP number, if any, (ii) the principal amount sold, (iii) the date of sale am
date of settlement, (iv) the sale price per unit (if necessary or desirable), (VI the total amount payablc
to the Principal upon such sale, and (vi) the name of the person or institution to whom, or the broke
through whom the sale was made. The Bank shall deliver the securities in accordance with generail)
accepted street practices (i.e., subject to count and verification). If the Principal's Instructions arc
received by the Bank in a timely manner and the securities which are sold are in good deliverablt
form, the Bank will credit the Custodial Account with the proceeds of such sale provided, however
that the Bank shall not be obligated to credit the Custodial Account and/or DDA with such proceeds
if a failure to deliver the securities is not caused by the Bank (e.g., late instructions, incorrect
instructions, and/or securities out on transfer). In any event, the Bank will be entitled to reverse any
credits previously made where monies are not finally collected.
1 x \,1,"#,,.~\11It? IL.
'i e
City of Carl
ARTICLE 111: INVESTMENT OF CUSTODIAL ACCOUNT
Section 3.01. The assets of the Custodial Account shall be invested and reinveste, accordance with Instructions of the Principal, unless the Principal delegates investment responsit
and authority for all or a portion of the Custodial Account to one or more authorized representatl
In addition to the powers and duties described in Article 11, the Bank shall have the following PO\
and duties which it shall exercise and perform only upon the Instructions of the Principal 01
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 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 Bank
authorized to rely) to deliver securities against payment, the Bank is authorized, in accordance H
customary securities processing practices, to deliver such securities to the purchaser thereof or dea
therefor (including to an agent for any such purchaser or dealer) against a receipt, with t
expectation of collection payment from the dealer, purchaser or agent to whom the securities were
delivered before the dose of business on the same day. When the Bank delivers securities agains
receipt in accordance with the preceding sentence, the Bank shall not bear the risk associated wi
such securities processing practice, provided that the Bank did not select the party to which sud
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 the1
is insufficient cash or securities in the Custodial Account and/or DDA with which to carry out th
itlStrUCtIOns of the Principal or its authorized representatives, the Bank shaff notify the party giving th
instructions of such insufficiency as soon as practicable after receiving the Instructions and shall hav
no further responsibility for complying therewith until it receives sufficient cash or securities.
1
(b) Principal agrees that all investments executed through a brokerdealer will be ii
compliance with all applicable laws and regulations and that sufficient cash will be available in th4
Custodial Account to pay for any securities purchased without consideration given to the proceed!
from the sale of the same securities. Principal acknowledges that Bank will not pay for the purchasc
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 the
purchase, retention or sale of, securities or other property relating to the Custodial Account.
z hbuam \lUII SLm 4
'0 (0
City of Carl!
(b) for any loss occasioned by delay in the actuai receipt of notice by the Bank 01
payment, redemption or other transaction in respect to which the Bank is authorized to take SI
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 Custod'ial Asset
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 SI
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 safe of such shares.
ARTICLE IV AUTHORIZED REPRESENTATIVES
The Principal may appoint in writing one or more authorized representatives for the Custodi
Account and shall contemporaneously give written notice of said appointment or appointments to tl
Bank and shall instruct the Bank in writing with respect thereto. Selection of an authorizt representative shall be in the sole and absolute discretion of the Principal. The Bank shall follow tf
instructions of the authorized representatives in exercising the powers granted the Bank undl
Articles II and 111.
ARTICLE V: CUSTODIAN INSTRUCTIONS
* Section 5.01. Except as hereafter provided, any directions, instructions or notices which thl
Principal, or any other person designated by the Principal is required or permitted to give to the 6an
under this Agreement (the "Instructions") shall be in writing; provided, however, that the Bank in it
discretion may act upon oral instructions if it believes them to be genuine, but the Bank shall not br
required to do so. All oral instructions are to be confirmed in writing. The Bank is authorized tc
record any telephonic communications between authorized representatives and the Bank.
Section 5.02. The transmission of the Instructions by photostatic teletransmission witb
duplicate or facsimile signatures or by affirmation via the national institutional delivery system shall
be authorized methods of Communication until the Bank is notified by the Principal to the contrary.
Section 5.03. The Bank shall as promptly as possible comply with any direction given by the
Principal or any authorized representative.
x \a11.*wm.\ In77 A. 5
0 (0
, City of Car
ARTICLE VI: COMPENSATION AND EXPENSES OF THE BANK
The Bank shall receive reimbursement for any expenses incurred by it in connection wit
Agreement and compensation for its customary and ordinary services in accordance with a w
schedule of fees agreed upon from time to time between the Bank and the Principal. To the e
such fees and expenses are not paid by the Principal, within thirty (30) days following delivery b
Bank to the Principal of the Bank's statement of such fees and expenses, the Bank may charge intl
on such unpaid balances. To the extent such fees and expenses remain unpaid for 90 days b)
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.
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, D
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 andor <
sub-account is in excess of the available balance on deposit therein, the Bank may, if practicak
elect to advance funds to the Custodial Account, DDA and/or any sub-account in an amol
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
any sub-account to cover such overdraft or for any other reason, the amount so advanced by t
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 su
account when due because of the failure of the Bank to make timely presentment or demand f
payment) shall constitute a Loan hereunder. Each such Loan shall be payable on demand. Any Lol
not repaid by the Bank's close of business on the day of disbursement shall bear interest for each d:
until payment in full at a rate per annum equal to 7 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
such rate but in no event should the rate payable be less than six percent per annum, Interest on tts
Loans shall be computed on the basis of a 360-day year and actual days elapsed and shall accw
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 accrue
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 ti
the Custodial Account or any sub-account, the Principal hereby agrees that the Bank shall have t
continuing lien and security interest in and to any property specifically allocated to and held by thc
Custodial Account or any sub-account to which such Loan is deemed to have been made. In thi
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.
g\~bmm.\UtJ71bm 6
m 0
City of Carl
ARTICLE VIII: RECORDS AND ACCOUNTS
Section 8.01. The Bank shall keep accurate records and accounts with respect to all I
and other assets held by it in the Custodial Account, and all receipts and disbursements and c
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 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 mar
value of the assets held in the Custodial Account. Market value for the purposes of this Agreem
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 t
market value shall be deemed to be cost.
In determining the market value of marketable securities, the Bank may utilize any one or mc
sources of information deemed by the Bank to be reliable, including, but not limited to, a prici
service, standard financial periodicals or publications, newspapers of general circulation, records
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 th
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 thereaft€
for such period as may be necessary for the complete divestiture of all cash, securities, and 0th
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 o
termination, as the case may be, commence and prosecute diligently to completion the transfer of a1
cash and the delivery of all securities and other instruments, duly endorsed, to the successor of the
Bank.
The Principal shall select such successor within thirty (30) days after the receipt or transmittai
of such notice of termination, as the case may be, and shall forthwith notify the Bank of the selection
of such successor. In the event the Principal has not timely notified the Bank of the selection of a
successor, the Bank, in its discretion, may deliver to the Principal all securities and other instruments,
duly endorsed, and all cash.
&\.I,.". \1"77,1. 7
‘. 0
I City of Carl
Upon delivery to the Principal or successor of the cash, securities and other instruments
by it hereunder, the Bank shall have no further liability or responsibility under this Agreemer
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 t
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 exerc
reasonable care in operating under this Agreement. The Principal indemnifies and holds harm11
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 arisi
out of or relating to any action, suit or proceeding to which the Bank is a party or otherwise involv
by reason of its serving as Custodian pursuant to this Agreement and complying with its terms, excc
where the Bank has been found to have been negligent or to have breached its duties under tb
Agreement by a final judgment of a Court of competent jurisdiction.
This indemnity shall be a continuing obligation of the Principal, its successors and assign
notwithstanding the termination of this Agreement. The Bank shall have no obligation hereunder fc
costs, expenses, damages, liabilities or claims (including attorney‘s fees) sustained or incurred t
reason of any action or inaction by the Federal Book-Entry System, any registered securitic
depository, or their respective successors or nominees, unless such action or inaction is caused b
the negligence or willful misconduct of the Bank.
Section 10.02. The Bank shall not be liabie for any delay or failure to act as may be requiret
hereunder when such delay or failure is due to fire, earthquake, any act of God, interruption o
suspension of any communication or wire facilities or services, war, emergency conditions or othe
circumstances beyond its control provided it exercises such diligence as the circumstances ma;
reasonably require.
ARTICLE XI: MISCELLANEOUS
Section 11.01. Subject to any laws of the United States which may be applicable, this
Agreement shall be governed, construed, regulated and administered under the laws of the State of
California.
L \dwur \in17 $I. 8
:. (.:@
City of Carl
Section 11.02. It is not the intention of any party to this Agreement to violate any st;
regulation, ruling, judicial decision, or other legal provision applicable to this Agreement 01
performance thereof. If any term of this Agreement, or any act or omission in the perform;
thereof, is or becomes violative of any such provision, such term, act or omission shall be of no f
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 rem
such illegality or invalidity shall be taken immediately by the parties.
Section 11.03. Disclosure of Beneficial Owner Information Securities and Exchai
Commission Rule #14b-1 (c), enables corporations to learn the identity of their security holders whj
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 l'corpor
communication" purposes only.
[ J 1 I do not want any name, address, and securities positions disclosed to all the companies
which I own securities that are registered in "nominee" or "street" name.
or
[ 1 I want my name, address and Securities positions disclosed to ati the companies in whict
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 b
arbitration upon mutual agreement. The arbitration shall be conducted in accordance with th
United States Arbitration Act flitle 9, U.S. Code), notwithstanding any choice of law provision in th
Agreement and under the Commercial Rules of the American Arbitration Association 1"AAA"). Thl
arbitrator(s) shall resolve all claims and defenses or other matters in dispute in accordance wit1
applicable law, including without limitation thereto, all statutes of limitation. Any controvers
concerning whether an issue is arbitrable shall be determined by the arbitratork). Judgment upon thc
arbitration award may be entered in any court having jurisdiction. The institution and maintenancc
of an action for judicial relief or pursuit of provisional or ancillary remedies shall not constitute i
waiver of the right of any party, including the plaintiff, to submit the controversy or claim tc
arbitration if any other party contests such action for judicial relief.
E \,L.U*".\lll?l ,*I 9
<e -__ City of Car
IN WITNESS WHEREOF, this Agreement is executed inEf,y 0 FdhA 4 Sta
California, as of the date first above written.
City of Carlsbad
By: L&n'k- By:
Title: 3 Title:
First Interstate Bank of California
-
By: By :
Title: Title! Assistant Vice President
Tax Identification No. 75- kOOC(393
I
I[I 8 11 w- I llwl b. r,-'
2-
Exhibit 2 0 0
CU ST0 DY AGREEMENT
This agreement is made between City of Carisbad, (“Client‘‘) and Union Bank of Califom N.A. (“Bank“)
TERMS AND CONDITIONS
1. APPOINTMENT AS AGENT
Client hereby appoints Bank as agent to act as custodian of cash, securities, and 0th
property (“Property“) described on Schedule A, attached hereto, and other property whic
may be deposited by Client with Bank from time to time to be held in the accou
established by this Agreement (“Account”) and Bank agrees to act as Client’s agent fl
such property according to the terms and conditions of this Agreement.
2. HANDLING OF INCOME AND PRINCIPAL
2.1 Income. Bank shall collect the income, when paid on said Property, and hold it in
demand deposit income account until invested or othewise disposed of pursuant tl
2.2 Principal. Bank shall collect principal of Property when paid on maturity, redemptior
sale, or otherwise, and hold it in a demand deposit principal account until invested c
otherwise disposed of pursuant to Client‘s written instructions.
2.3 Collection Oblicmfions. Bank shall diligently collect income and principal of which thc
Bank has received actual notice in accordance with normal industry practices
However, Bank shall be under no obligation or duty to take any action to effecl
collection of any amount if the securities or other Property upon which such amount is
payable is in default, or if payment is refused after due demand unless the Bank has
been adequately indemnified by Client in advance. Bank, however, shall notify Clieni
promptly of such default or refusal to pay.
Client’s written instructions.
2.4 Addifions fo and Wifhdrawals from Accounf. Bank shall make all additions and
withdrawals of Property to and from this Account Only upon receipt Of and pursuant to
whtten instructions from Client except for those withdrawals provided for in Section 4.
Upon receipt of such order for each withdrawal, unless othetwise instructed in writing,
Bank shall deliver the Property so withdrawn to Client or to Client’s designee, upon an
appropriate receipt.
3. INVESTMENT OF PROPERTY
3.1 Directions bv Clienf. Client shall have sole responsibility for the investment, review,
and management of all Property held in this Account. Bank shall make all purchases,
sales, conversions, exchanges, investments and reinvestments of Property held in
this Account only upon receipt of and pursuant to written instructions from Client.
Bank shall have no duty or obligation to review, or make recommendations for, the
investment and management of any Property held in this Account, including
uninvested cash.
Page 1
0 0
3.2 Handle Comorafe Actions. Bank shall notify Client of the receipt of notices
redemptions, conversions, maturities, exchanges, calls, puts, subscription rights, a scrip certificates (“Corporate Actions”). Bank need not monitor financial publicatio
for notices of Corporate Actions and shall not be obligated to take any action withc
waiting for Client’s instruction. If a Corporate Action has a fixed expiration date, a
Bank has not received written instructions regarding it from Client five business da
prior to such date, Bank shall take such action as it deems appropriate in its so
discretion.
3.3 Fractional lnteresfs. Bank shall receive and retain all stock distributed by
corporation as a dividend, stock split, or otherwise. However, in connection therewiti
if a fractional share is received, Bank shall sell such fractional share.
3.4 Use of Nomhes. Bank shall have the right to hold all registered securities in tt-
name of its nominee.
3.5 Use of Securities Depositow. Bank may, in its discretion, deposit in a securitie
depository any securities which, under applicable law, are eligible to be deposited.
4. PLEDGE OF SECURITIES
Client shall inform Bank in writing in the event that Client has pledged any Property held ir
the Account as collateral (“Pledged Collateral“) for any loan or advance (“Securec
Obligation“) made to Client by Union Bank of California, N.A., or by any other lendei
designated by Client (“Secured Party”). Client’s notice to Bank shall precisely identify the
Pledged Collateral and state the name, address, telephone number and telex number 01
the Secured Party and the appropriate officer, if any, to contact in connection with the
Pledged Collateral, and Client shall provide evidence that a copy of such notice has been
provided to the Secured Party. Client shall be responsible to Bank for keeping Bank
informed of any changes to this information, and Bank shall be fully protected in relying on
such notice until receipt of a notice providing additional or substituted information. Bank
shall segregate and identify such Property in its records as pledged. Notwithstanding
anything to the contrary contained in this Agreement, by providing the notice referred to
above, Client acknowledges and agrees that the terms of this Custody Agreement are
superseded by the terms of any pledge or security agreement covering the Pledged
Collateral, and that Bank cannot release the Pledge Collateral without the prior written
consent of the Secured Party. In the event that the Secured Party shall notify the Bank in
writing of a default of such Secured Obligation, Bank shall follow, with no further obligation,
the written instructions of the Secured Party regarding the Pledged Collateral and shall be
fully protected in so doing. Any interest or principal payments due on the Secured
Obligation may be charged to the Account upon written instruction from Client.
5. PROXIES AND CORPORATE LITERATURE
5.1 Proxies. Bank shall forward all proxies and accompanying material issued by any
company whose securities are held in the Account to Client unless directed in writing not to do so.
Page 2
0 0
5.2 Corporate Liferafure. Bank shall have no duty to forward or retain any otl
corporate material received by the Account unless required to do so by law.
Unless Client directs Bank in writing to 1
contrary, Client agrees that Bank may disclose the name and address of the pa
with the authority to vote the proxies of the securities held in this Account as well
the number of shares held, to any issuer of said securities or its agents upon t
written request of such issuer or agent in conformity with the provisions of t
applicable law.
5.3 Disclosure to lssuers of Securities.
6. CONFIRMATIONS
6.1 Confirmafkms- Bank shall have no responsibility to send confirmations of sewn
transactions occurring in this Account to Client; however, Client may reque
confirmations for security transactions at any time at no additional cost to Client, ar
such confirmations shall be sent to Client within the time prescribed by law.
6.2 Sfatemenfs. Each month, Bank shall send Client a cash statement and an assf
statement showing market values. The statements will show all income and principi
transactions and cash, securities and other Property holdings. Client may approve c
disapprove such statement within sixty (60) days of their receipt and, if no writte
objections are received within the sixty-day (60) period, such statements of thc
account shall be deemed approved.
7. USE OF OTHER BANK SERVICES
Client may direct Bank to utilize for this Account other services or facilities provided bl
purchase or sales of securities as principal to or from, or, (2) the placing of orders for the
purchase, sale, exchange, investment or reinvestment of securities through any brokerage
service conducted by, or (3) the placing of orders for the purchase or sale of units of any
investment company managed or advised by Bank, Union BanCal Corp., or their
subsidiaries or affiliates. Client hereby acknowledges that Bank will receive additional fees
for such services in accordance with Bank's standard fee schedules, which shall be
delivered to Client from time to time. City will be notified 30 days in advance of any fee
increases.
Notwithstanding the above, Client hereby directs Bank to utilize for this Account for cash
management purposes the HighMark Group of mutual funds advised by Bank. Client shall
designate the particular HighMark Fund that Client deems appropriate for the Account.
Client hereby acknowledges that Bank will receive management fees for such services in
accordance with Bank's standard fee schedules, which shall be delivered to Client from
time to time. These management fees will be in addition to those fees charged by Bank as
agent for the Client's Custody Account.
Bank, its subsidiaries or affiliates. Such services shall include, but not be limited to (4) th~
8. INSTRUCTIONS
All instructions from Client shall be in writing, and shall continue in force until changed by
subsequent instructions. Pending receipt of written authority, Bank may, in its absolute
Page 3
0 0
diwgtkm $1 any time, accept oral, wired, or electronically transmitted instructions frc
Client provided Bank believes in good faith that the instructions are genuine.
9. COMPENSATION AND OTHER CHARGES
9.1 Compensation. Bank's annual fee as agent shall be based on the published stand2
fee schedule of the Bank for Custody Accounts as it exists from time to time. Fe shall be billed quarterly.
9.2 Chaming the Account. Bank is authorized to charge the Account for incideni
expenses, provided City concurs and is notified 30 days in advance, as well as f
funds necessary for Bank to complete any purchase or expense, to make ai
directed disbursement or take any other action regarding the Account. Bank sh;
have no duty to make any purchases, exchanges, or disbursements or to incur ai
expenses, unless the funds necessary to cover the amount of the expense ai
available in the Account.
IO. COST BASES AND DATES OF ACQUISITION
Client agrees to furnish Bank with the income tax cost bases and dates of acquisition of a
Property held in the Account to be camed on its records. If Client does not furnish SUC
information for any such Property, Bank shall carry the Property at any such nominal valu
it determines, such value to be for bookkeeping purposes only. All statements an
reporting of any matters requiring this information will use this nominal value, Bank sha have no duty to verify the accuracy of the cost bases and dates of acquisition furnished b
Client. Property purchased in the Account shall be camed at cost.
1 I. LIMITED POWER OF AlTORNEY
Bank is hereby granted a limited power of attorney by Client to execute on Client's behal
any declarations, endorsements, assignments, stock or bond powers, affidavits, certificate!
of ownership or other documents required (1) to effect the sale, transfer, or othe
disposition of Property held in the Account, (2) to obtain payment with respect to Property
held in the Account, or (3) to take any other action required with respect to the Property
held in the Account, and in the Bank's own name to guarantee as Client's signature sc
affixed .
1 2. 1 N D EM N I FI CAT1 0 N
As additional consideration for the Bank's acceptance of this Account and Agreement to
act as "Agent," Client agrees to indemnify, and hold Bank, its officers, directors, employees
and agents harmless from and against any and all losses, liabilities, demands, claims, and
expenses, any attorney's fees and taxes (other than those based on Bank's net income)
arising out of or in connection with this Agreement, or out of any actions of Client or Client's
agents which are not caused by Bank's negligence or willful misconduct. Bank agrees to
indemnify and hold City, it officers, directors, employees and agents harmless from and
against any losses, liabilities, demands, claims, and expenses, any attorney fees and taxes
arising out of or in connection with this Agreement, or out of any actions of Bank or Bank's
agents which are not caused bu City's negligence or willful misconduct. This provision shall
Page 4
0 e
survive the termination of this Agreement and shall be binding upon each pal
successors, assigns, heirs and personal representatives.
13. AMENDMENT AND TERMINATION OF AGREEMENT
13.1 Amendment. This Agreement may be amended only by a written agreemc
executed by both Bank and Client.
13.2 Tenninafion. This Agreement may be terminated at any time by written 30 c advance notice notice from one party to the other. in addition, this Account sh
terminate upon notification to the Bank of Client's incapacity or Client's death. Up
termination, Bank shall have a reasonable amount of time to transfer the Prope
held in the Account in accordance with the written instructions of Client or the persc
or entity legally entitled to receive such property. Costs related to terminatic
including without limitation, costs for shipping securities and other Property held in tl
Account and costs of re-registering securities, generating reports and accounting f I
disposition of cash shall be charged to the Account.
14. ENTIRE AGREEMENT
This Agreement and Addendum fnof Applicable) constitute the entire Agreement betwee
the parties. All previous agreements, whether written or oral, between the Bank and Clien
are hereby superseded, except any direction to Bank prohibiting it to disclose informatiol
to issuers of securities as provided in Section 5.3.
15. SINGULAR AND PLURAL
If more than one person shall execute this Agreement, then where the context permits
singular pronouns shall be deemed to be plural personal pronouns.
16. GOVERNING LAW
This agreement shall be governed by, and construed under, the laws of the State 01
California.
17. TAXATION OF ACCOUNT
17.1 W-9 Cerfificafion. Client agrees to provide a completed W-9 or W-8 certification, as
appropriate, to Bank.
17.2 Client's Tax identification Number is.-
17.3 Client's responsibilify for Filinq Tax Returns and Pavinq Taxes. Client is responsible
for filing any and all tax returns and for paying all taxes on Property and income held
in this Account.
18. NOTICES
Page 5
e 0
18. I Mai/incr of Notices. All notices, requests, demands and other communications un
this Agreement shall be in writing and shall be deemed as having been duly given
the date of service, if served personally on the party to whom notice is to be given
on the fifth day after mailing, if mailed to the party to whom notice is to be given,
first class mail, registered or certified, postage prepaid, and properly addressed
follows:
Client: City of Carlsbad
1200 Carlsbad Village Drive Carlsbad, CA 92008
Attn: James M. Stanton
Treasurer
Bank: Union Bank of California
475 Sansome Street, 12th Floor
San Francisco, CA 94111
Attn: Moon Shil Lee
Vice President
18.2 Chancre of Address. Either party may change the address at which notice may t
given by giving ten (IO) days prior written notice of such change to the other party.
19. EFFECTIVE DATE
This Agreement shall become effective upon the date of receipt by the Bank of tl-
securities and other property described in the attached Schedule A.
Client:
By:
Title:
Date:
Accepted: UNION BANK OF CALIFORNIA, N.A., Agent
By: L c
Title: /- c/t3 /
Date: fc 37- 97
Page 6
e e
SCHEDULE A
Bank Accounts
Bankers Acceptances
Certificates of Deposit
Collateralized Mortgage Obligations
Commercial Paper
Common Stocks
Convertible Stocks
Corporate Bonds
Foreign Securities
Futures
Government Agency Issues
Government Bonds
Insurance Contracts
Publicly Traded Limited Partnership Units
Municipal Bonds
Mutual Fund
Options
Preferred Stocks
Private Placements
Repurchase Agreements
Reverse Repurchase Agreements
Page 7
0 e
CERTIFICATE OF INCUMBENCY
I, Catherine L. Huston, do hereby certify that I am the duly qualified and appolnted Assi:
Secretary of Union Bank of California, National Association.
I further certify that the following are true and correct specimen signatures of said nar
employees and their signing authorities as designated by the Trust Executive Officer of Union Ban1
California, N.A., and defined in the accompanying resolution.
NAME CLASS SIGNATURE
MOON LEE, Vice President ADE /, ///*/ (&de
/’
/
IN WITNESS WHEREOF, I have set my hand and seal of this Association this 2’Y &
day of L 19q7. -,
(SEAL) t&& x. /&*w
Cathenne L. Huston
Assistant Secretary
475 SANSOME STREET, SAN FRANCISC~ CALIFOPN A ?J 11 I
4 15 705 0400
/r
RIGHT THUMBPRINT tC State of Cal i fornia
County of San Francisco ,i On August 27, 1997before me, Grace E. Ameral 0
e personalty appeared Moon Shil Lee
[DATE1 (NAMEfllTLE OF OFFICER-i.e.'JANE DOE, NOTARY Publ\c'\
INAMEISI OF SlGNER(S11
CAPACITY CLAIMED BY S
OINDIVIDUAL(S)
DCORPORATE
OFFICER(S) dpersonally known to me -OR- 0 c UI :G 3UL - (TITLE
OPARTNER(5) OLlMlTED +34de+e to%xT OGENERA person(* whose name#
IS/' subscribed to the OTRUSTEEW within instrument and OGUARDlANlCONSERVAT acknowledged to me that DOTHER. ks/she,ke+executed the same in .kis/her/W authorized capacity&&, SIGNER IS REPRESENTINO;
signature(+ on the instrumentthe personw, or the entity upon behalf of which the personw
instrument.
OATTORNEY IN FACT
and that by&gJherj&g& [Name of Peraon(s) or Entit)
acted' executed the RIGHT THUMBPAINT (Opti r itness my hand and official seal.
LF%-. /SEAL1 L
I-
(SIGNATURE OF NOTARY) ~,1 CAPACITY CLAIMED BY SlGh
OINDIVIDUALIS)
DCORPORATE
ATTENTION NOTARY
OFFICERIS)
The Information requested below and in the column to the right IS OPTIONAL. ITITLES) Recording of this document IS not requlred by law and is also optional.
It could, however, prevent fraudulent attachment of thls certificate to any unauthorized document. OG ENERAL
THIS CERTIFICATE TKIs or Type of Document Custody Agreement CITRUSTEE(S1
TO THE DOCUMENT Number of Pages 7 DateofDocurnent Auqust 27, 1997 DOTHER
0 PARTNERIS1 c] LIMITED
OADORNEY IN FACT
MUST BE ATTACHED OGU ARDIANICONSERVATOR
DESCRIBED AT RIGHT W/O notary
Signerls) Other Than Named Above " i en t u ns i gned at present
SIGNER IS REPRESENTING:
[Name of Person(s1 or Entaytiss
WOLCOTTS FORM 83240 Rev 3 94 (price da5a E 2AI ALL PURPOSE ACKNOWLEDGMENT WITH SIGNER CAPAClTYIREPRESENTATlONrrWO FINGERPRINTS '1994 WOLCOT-S FORMS INC 1 *
1
2
3
4
5
6
7
a
9
10
11
12
13
14
15
16
17
18
19
0 0
RESOLUTION NO. 97-599
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, TERMINATING THE CONTRACT WITH WELLS FARGO BANI
PROVIDING CUSTODIAL SERVICES TO THE CITY OF CARLSBAD.
WHEREAS, Wells Fargo Bank has sold its Institutional Servict
business and will cease providing custodial services on November 1, 1997, and
WHEREAS, the current contract for custodial services with We
Fargo Bank allows either Wells Fargo Bank or the City of Carlsbad to terminal
the contract with thirty (30) days written notice, and
WHEREAS, it is beneficial for the City of Carlsbad to secure othc
custodial services.
NOW, THEREFORE, BE IT RESOLVED by the City Council of tt
City of Carlsbad, California, as follows:
1. The City Treasurer is hereby authorized to sign a letter to Well
Fargo Bank serving notice that of the City’s intent to terminate the contract fc
20
21
22
23
24
25
26
27
28
custodial services as of November 1, 1997. The contract for banking service
will remain in effect.
Ill
Ill
Ill
Ill
Ill
111
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
a 0
PAGE TWO OF RESOLUTION YO 97-599
PASSED, APPROVED AND ADOPTED at a regular meeting of th
City Council on the 9th day of September, 1997, by the following vote, to wit
,@,YES. Council Members Lewis, Finnila, Nygaard, Kulchii
NOES: None
ABSENT: None -
CLAUDE A. LEWIS, Mayor
ATTEST:
(SEAL) KAREN R. KUNDTZ, Assistant City Clerk
“I
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
e 0
RESOLUTION NO. 97-600
RESOLUTION OF THE CITY COUNCIL OF THE CIM OF CARLSBAD,
CALIFORNIA, APPROVING THE CUSTODY AGREEMENT BETWEEN THE
CITY OF CARLSAD AND UNION BANK OF CALIFORNIA
WHEREAS, The City of Carlsbad has terminated its custody
contract with Wells Fargo Bank as of November 1, 1997, and
WHEREAS, Union Bank of California has a reputation of providing
responsive custody services to municipalities at competitive rates, and
WHEREAS, Union Bank of California is the third largest commerck
bank in California, and
WHEREAS, Union Bank of California is considered by the Federal
Reserve System to be “well capitalized”, and
WHEREAS, Union Bank of California does business within the City
of Carlsbad, and
WHEREAS, Union Bank of California has the capability of providinc
custody services as of November 1, 1997.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Carlsbad, California, as follows:
1. The City Manager is hereby authorized to sign the Custod
Agreement between the City of Carlsbad and Union Bank of California to providi
custody services as of November 1, 1997.
Ill
Ill
1
2
3
4
5
6
71
a
9
70
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
a e l
PAGE TWO OF RESCLUTION NO. 97-600
PASSED, APPROVED AND ADOPTED at a regular meeting of th
I I City Council on the 9th day of SePtember, 1997, by the following vote, to wit: I
AYES:
NOES: None
ABSENT: None
Council Members Lewis, Finnila, Nygaard, Kulch
c
CLAUDE A LEWIS, Mayor
ATTEST: - ALETHA L. RAU RANZ, City Clerk
KAREN R. KUNDTZ, Assistant City Clerk (SEAL)