Loading...
Union Bank of California ~ J CUSTODY AGREEMENT This Agreement is made between City of Tigard, ("Client")and Union Bank of California, N.A. ("Bank"). TERMS AND CONDITIONS 1. APPOINTMENT AS AGENT Client hereby appoints Bank as agent to act as custodian of cash, securities, and other property ("Property")described on Schedule A, attached hereto, and other property which may be deposited by Client with Bank from time to time to be held in the account established by this Agreement ("Account") and Bank agrees to act as Client's agent for 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 a demand deposit income account until invested or otherwise disposed of pursuant to Client's written instructions. 2.2 Principal. Bank shall collect principal of Property when paid on maturity, redemption, sale, or otherwise, and hold it in a demand deposit principal account until invested or otherwise disposed of pursuant to Client's written instructions. 2.3 Collection Obligations. Bank shall diligently collect income and principal of which the 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 effect 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 Client promptly of such default or refusal to pay. 2.4 Additions to and Withdrawals from Account. Bank shall make all additions and withdrawals of Property to and from this Account only upon receipt of and pursuant to written instructions from Client except for those withdrawals provided for in Section 4. Upon receipt of such order for each withdrawal, unless otherwise instructed in writing, Bank shall deliver the Property so withdrawn to Client or to Client's designee, upon an appropriate receipt. 3.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 by Client. 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. 3.2 Handle Corporate Actions. Bank shall notify Client of the receipt of notices of redemptions, conversions, maturities, exchanges, calls, puts, subscription rights, and scrip certificates ("Corporate Actions"). Bank need not monitor financial publications for notices of Corporate Actions and shall not be obligated to take any action without waiting for Client's instruction. If a Corporate.Action has.a fixed expiration date, and Bank has not received written instructions regarding it from Client five business days prior to such date, Bank shall take such action as it deems appropriate in its sole discretion. 3.3 Fractional Interests. Bank shall receive and retain all stock distributed by a corporation as a dividend, stock split, or otherwise. However, in connection therewith, if a fractional share is received, Bank shall sell such fractional share. 3.4 Use of Nominees. Bank shall have the right to hold all registered securities in the name of its nominee. 3.5 Use of Securities Depository. Bank may, in its discretion, deposit in a securities depository any securities which, under applicable law, are eligible to be deposited. 3.6 Use of Institutional Delivery System. Notwithstanding any other language in this Agreement, Bank may settle all securities transactions effected by Client through the use of an institutional delivery system. Bank may deliver or receive securities in accordance with appropriate trade report or statements received through an institutional delivery system without having received written direction directly from Client. 4. PLEDGE OF SECURITIES Client shall inform Bank in writing in the event that Client has pledged any Property held in the Account as collateral ("Pledged Collateral") for any loan or advance ("Secured Obligation") made to Client by The Union Bank of California, N.A., or by any other lender 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 of 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. 5.2 Corporate Literature. Bank shall have no duty to forward or retain any other corporate material received by the Account unless required to do so by law. Page 2 5.3 Disclosure to Issuers of Securities. Unless Client directs Bank in writing to the contrary, Client agrees that Bank may disclose the name and address of the party with the authority to vote the proxies of the securities held in this Account as well as the number of shares held, to any issuer of said securities or its agents upon the written request of such issuer or agent in conformity with the provisions of the rapplicable law. 6. CONFIRMATIONS 6.1 Confirmations. Client may request confirmations for security transactions at any time at no additional cost to Client, and such confirmations shall be sent to Client within the time prescribed by law. 6.2 Statements. Each month, Bank shall send Client a cash statement and an asset statement showing market values. The statements will show all income and principal transactions and cash, securities and other Property holdings. Client may approve or disapprove such statement within sixty (60) days of their receipt and, if no written objections are received within the sixty- day(60) period, such statements of the 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 by Bank, its subsidiaries or affiliates. Such services shall include, but not be limited to (1) the 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, UnionBanCal 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. 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 discretion at any time, accept oral, wired, or electronically transmitted instructions from Client provided Bank believes in good faith that the instructions are genuine. 9. FUND TRANSFER INSTRUCTIONS a) Client authorizes Bank to act upon instructions for the transfer of funds from the Account to any other account(s) of Client or to any third party when such instructions are received from Client or Client's Money Manager and which have been authenticated by Bank in accordance with the securities procedures agreed to by Client as set forth in paragraph(b). b) Client agrees to the security procedure offered by Bank to authenticate, amend, and request cancellation of funds transfer instructions as set forth below. Client and Bank agree to preserve the confidentiality of the security procedure. If a funds transfer instruction received by Bank purports to have been transmitted or authorized by Client, it will be deemed effective as Client's instruction if Bank followed the security procedure agreed to by Client. Page 3 i) Authenticated Electronic Instruction. Funds transfer instructions received by Bank via secured electronic systems, e.g., Telex, Swift, etc. carry the same force as if Client or Money Manager gave such instruction directly. ii) Standing Instruction for Funds Transfers. If Client instructs Bank in writing to initiate funds transfers to any account(s) of Client or to any designated third party beneficiary under standing instructions, Bank will perform no call back for such Bank initiated funds transfers. iii) Repetitive Funds Transfers. Repetitive funds transfers may be initiated via facsimile by Client or by Money Manager after Bank has performed an initial call back to Client to verify the repetitive transfer information. Upon receiving each funds transfer request, Bank will verify that the individual whose signature appears on the funds transfer request is an authorized representative of Money Manager, and that the repetitive payment destination matches the beneficiary data on the initial authorization. Unless otherwise instructed, no subsequent call-back will be performed by Bank when Client initiates repetitive transfers. iv) Non-Repetitive Funds Transfers. Non-repetitive funds transfers may be initiated via facsimile by Client or by Money Manager after Bank has performed a call back to Client or another authorized representative of Money Manager and has verified that the individual whose signature appears on the funds transfer request is an authorized representative of Money Manager. (c) Bank will use its best efforts to execute each properly authorized funds transfer instructions on the day of receipt if Bank receives the instruction and is able to authenticate it before Bank's cut-off time, and the day of receipt is a funds transfer business day for Bank and the transmission facility selected. Bank may change its cut-off time without prior notice to Client. (d) Bank at its sole discretion may reject any funds transfer instructions which (i) exceeds the collected and available funds on deposit in the Account; (ii) is not authenticated to Bank's satisfaction or which Bank believes may not be authorized by Client; (iii) contains incorrect, inconsistent, ambiguous, or missing information; (iv) involves funds which are subject to a lien, security interest, claim, hold, dispute, or legal process prohibiting withdrawal. Bank shall incur no liability to Client for any loss occasioned by Bank's refusal, with or without notice to Client, to honor any funds transfer instructions for cause as listed in this subsection. (e) If there are insufficient available funds in the Account to cover Client's obligations under this Agreement, Bank may at is sole discretion choose to complete funds transfers initiated by Client, and Client agrees to immediately repay Bank the amount of any overdraft created thereby plus any overdraft charges imposed in connection therewith,without notice or demand to Client. (f) If Client's transfer instructions identifies the beneficiary, the beneficiary's bank, or an intermediary bank by name and an account or other identifying number, Bank and subsequent parties to the funds transfer may act solely on the basis of such number, even if the name and number do not agree. (g) Client shall have no right to cancel or amend a funds transfer instruction after its receipt by Bank. However, Bank shall use reasonable efforts to act on a request by Client to cancel or amend an instruction prior to executing it, but shall have no liability if cancellation or amendment is not effected. (h) If Client requests a funds transfer in United States Dollars to a foreign country, Bank may transfer payment in the currency of the beneficiary's bank's country.at the Bank's buying rate of exchange for United States Dollar transfers. If for any reason the transfer is returned, Client agrees to accept the refund in United States Dollars in the amount of the foreign money credit, based on the current Page 4 buying rate of the bank converting the currency to United States Dollars on the date of refund, less any charges and expenses incurred by Bank. (i) In the event Client does not specify a funds transfer payment system, communication system or intermediary bank when initiating a particular funds transfer order, then the Bank may utilize any payment or communication system or intermediary bank which Bank deems reasonable under the circumstances. Client agrees to be bound by the rules of the funds transfer payment system utilized. Q) Client agrees that Bank may record telephonic communications with Client relating to funds transfer instructions or services performed by Bank. Client consents to such recording. (k) Except as otherwise required by the Oregon Revised Statutes, Bank shall not be responsible for any loss or liability arising in connection with this Section from (i) any inaccuracy, act or failure to act on the part of any person not within Bank's reasonable control, including, without limitation, the failure of other financial institutions to provide accurate or timely information to Bank or Client; (ii)the failure of other financial institutions to accept payment orders; (iii) Client's negligence or breach of this Agreement; (iv) any ambiguity or inaccuracy in any instruction or in the information set forth in this Agreement given to Bank by Client; (v) any error, failure or delay in execution of any Funds transfer instruction, or cancellation or amendment, including without limitation, any inoperative of computer or communication facilities, or other circumstances beyond Bank's reasonable control; or (vi) any consequential, indirect, punitive, or special damages including loss or damage from subsequent wrongful dishonor resulting from Bank's acts or omissions, unless the Oregon Revised Statutes otherwise requires. Provided that Bank has complied with this Section, Client agrees to indemnify and hold Bank and its directors, officers, employees, agents and attorneys harmless against any claim of any third party arising from or in connection with this Agreement or Bank's performance of Funds transfer services for Client. Client agrees to take any and all reasonable actions to mitigate any potential or actual Bank loss or liability under this Section. 10. COMPENSATION AND OTHER CHARGES 10.1 Compensation. Bank's annual fee as agent shall be based on the published standard fee schedule of the Bank for Custody Accounts as it exists from time to time. Fees shall be taken quarterly. 10.2 Charaina the Account. Bank is authorized to charge the Account for incidental expenses as well as for funds necessary for Bank to complete any purchase or expense, to make any directed disbursement or take any other action regarding the Account. Bank shall have no duty to make any purchases, exchanges, or disbursements or to incur any expenses, unless the funds necessary to cover the amount of the expense are available in the Account. 11. COST BASES AND DATES OF ACQUISITION Client agrees to furnish Bank with the income tax cost bases and dates of acquisition of all Property held in the Account to be carried on its records. If Client does not furnish such information for any such Property, Bank shall carry the Property at any such nominal value it determines, such value to be for bookkeeping purposes only.. All statements and reporting of any matters requiring this information will use this nominal value. Bank shall have no duty to verify the accuracy of the cost bases and dates of acquisition furnished by Client. Property purchased in the Account shall be carried at cost. Page 5 12. LIMITED POWER OF ATTORNEY Bank is hereby granted a limited power of attorney by Client to execute on Client's behalf any declarations, endorsements, assignments, stock or bond powers, affidavits, certificates of ownership or other documents required (1)to effect the sale, transfer, or other 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 so affixed. 13. INDEMNIFICATION Not withstanding other provisions within this Agreement, 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 Bank's performance in compliance with this Agreement, or out of any lawful actions of Client or Client's agents except for 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 Bank's negligence or willful misconduct, or failure to comply with the terms of this Agreement or applicable state or federal law. Not withstanding other provisions within this Agreement, Bank agrees to indemnify and hold Client, its officers, agents, and employees harmless from and against any and all losses, liabilities, demands, claims, and expenses, any attorney's fees, and taxes arising out of or in connection with Bank's failure to perform in compliance with this Agreement, negligence willful misconduct, or failure to comply with applicable state or federal law. 14. ATTORNEY'S FEES In case of suit or action is instituted to enforce the provisions of this contract, the parties agree that the losing party shall pay such sum as the court may adjudge reasonable attorney fees and court costs, including attorney's fees and court costs on appeal. 15. ACCESS TO RECORDS Bank agrees to allow, upon reasonable notice, Client to have access to such books, documents, papers and records of Bank as are directly pertinent to this Agreement for the purpose of making audit, examination, excerpts and transcripts. 16. AUDIT Bank shall maintain records to assure conformance with the terms and conditions of this Agreement, and to assure adequate performance and accurate expenditures within the contract period. Bank agrees; upon reasonable notice, to permit Client, the State of Oregon, the federal government, or their duly authorized representatives to audit all records pertaining to this Agreement to assure the accurate expenditure, reporting and transfer of funds and investments 17. AMENDMENT AND TERMINATION OF AGREEMENT Page 6 17.1 Amendment. This Agreement may be amended only by a written agreement executed by both Bank and Client. 17..2 Termination. This Agreement may, be terminated at any time by written notice from one party to the other. Such termination shall be effective immediately. Upon termination, Bank shall have a reasonable amount of time to:transfer the Property held in the Account in accordance with the written instructions of Client or the person or entity legally entitled to receive such property. Costs related to termination,'including without limitation, costs for shipping securities and other Property held in the Account and costs of re-registering securities, generating reports and accounting for disposition of cash shall be charged to the Account. 18. ENTIRE AGREEMENT This Agreement constitutes the entire Agreement between the parties. All previous agreements, whether written or oral, between the Bank and Client, are hereby superseded, except any direction to Bank prohibiting it to disclose information to issuers of securities as provided in Section 5.3. 19. SEVERABILITY In the event any provision or portion of this Agreement is held to be unenforceable or invalid by any court of competent jurisdiction the remainder of this Agreement shall remain in full force and effect and shall in no way be affected or invalidated thereby. 20. 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. 21. GOVERNING LAW This Agreement shall be governed by, and construed under, the laws of the State of Oregon. Any action or suits involving any question arising under this Agreement must be brought in the appropriate court of the State of Oregon. 22. TAXATION OF ACCOUNT 22.1 W--9 Certification. Client agrees to provide a completed W-9 or W-8 certification, as appropriate, to Bank. 22.2 Client's Tax Identification Number is: 22.3 Client's responsibility for Filing Tax Returns and Paying Taxes. Client is responsible for filing any and all tax returns and for paying all taxes on Property and income held in this Account. 23. NOTICES 23.1 Mailing of Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed as having been duly given on the date of Page 7 service, if served personally on the party to whom notice is to be given, or on the fifth day after mailing, if.mailed to theparty to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed as follows: Client: City of Tigard 13125 SW Hall Blvd. Tigard, OR 97223 Attn: Craig Prosser Finance Director Bank: Union Bank of California 475 Sansome Street, 15th Floor San Francisco, CA 94111 Attn: Moon.Shil Lee Vice President 23.2 Change of Address. Either party may change the address at which notice may be given by giving ten (10)days prior written notice of such change to the other party. 24. EFFECTIVE DATE This Agreement shall become effective upon the date of receipt by the Bank of the securities and other property described in the attached Schedule A. CITY OF TIGARD By: I Title: Date: S/y/Db T Accepted: UNION BANK OF CALIFORNIA, N.A., Agent By: Title: Vice President Page 8