HomeMy WebLinkAboutR-2004-034 Bank of New York Agreement Amendment (re: Security Custody Services).e
RESOLUTION NO. R-2004- - 34
A RESOLUTION authorizing and directing the City Manager of the City of Yakima to
execute an amendment to the Security Custody Services Agreement with
The Bank of New York in order to extend said Agreement through
March 31, 2006.
WHEREAS, the City of Yakima ("City") maintains an investment portfolio; and
WHEREAS, the City requires security custody services concerning said investments;
and
WHEREAS, the Washington State Treasurer, with the assistance of representatives of
the Washington State Attorney General, negotiated and prepared a security custody services
agreement with The Bank of New York; and
WHEREAS, on May 1, 2001, the City Council of the City of Yakima passed Resolution
No. R-2001-70 which authorized the City to enter into and participate in said agreement; and
WHEREAS, the term of said agreement expires March 31, 2004; and
WHEREAS, the Washington State Treasurer has negotiated an extension of said
agreement through March 31, 2006; and
WHEREAS, extension of said agreement requires execution of the attached amendment;
and
WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to
authorize execution of the attached amendment to the agreement with The Bank of New York,
now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager of the City of Yakima is hereby authorized and directed to execute
the attached and incorporated amendment to the Security Custody Services Agreement with
The Bank of New York in order to extend said agreement through March 31, 2006.
ADOPTED BY THE CITY COUNCIL this 17th day of February, 2004.
ATTEST:
Karen S. Roberts, City Clerk
ar[�
Paul P. George, Mayor
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. -1A4-
For
For Meeting Of 2-17-2004
ITEM TITLE: Resolution authorizing and directing the City Manager to execute an amendment to
the Security Custody Services Agreement with The Bank of New York in order to extend the
agreement through March 31, 2006.
SUBMITTED BY : Finance Department
CONTACT PERSON/TELEPHONE: Tim Jensen, Treasury Services Oft�e / -6070
SUMMARY EXPLANATION: On May 1St 2001 the Council adopted Resolution 2001-70 approving
participation in the agreement for securities safekeeping services entered into by the State of
Washington and The Bank of New York. The substance of this contract is to provide a
mechanism for cities with smaller investment portfolios (those Tess than $100 million) to acquire
quality third party custodial services for their portfolios at reasonable prices. These services
include primarily settling trades and safekeeping securities. It is desirable to have a third party
custodian to settle trades and safe keep securities from an accounting, internal control and
logistical perspective. The City's relationship with The Bank of New York under this contract has
served us well and been very economical; however the contract expires March 31, 2004. The
State Treasurer, Michael J. Murphy, has, opted for two additional years under this contract, which
will now expire in March 2006. Staff recommends the City continue its participation in this
agreement by approving the attached Resolution and extending the contract for two more years to
March 31, 2006.
Resolution X Ordinance _ Other(Specify)
Contract X Mail to (name and address):
Phone
Funding Source
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Adopt Resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2004-34
Institutional Investor Services
January 23, 2004
Ms. Rita Anson
Finance Director
City of Yakima
129 N. 2nd Street
Yakima. WA 98901-2637
Dear Rita:
BNY Western Trust Company
AMENDMENT TO WASHINGTON STATEWIDE AGREEMENT
FOR SECURITY CUSTODY SERVICES
Commencing on April 1, 2000, The Bank of New York was named the Washington statewide
custody provider and agreement has been reached with the Washington Office of the State
Treasurer to extend the appointment until March 31, 2006 This letter will serve to amend the
Term of Agreement of the Washington Statewide Contract for Security Custody Services between
City of Yakima and The Bank of New York to continue until March 31, 2006. All other
conditions of the existing agreement remain in full force and effect.
Please acknowledge this understanding by returning an executed copy of this letter at your
earliest convenience.
Sincerely,
Steven A. Ho an
Vice President & Relationship Manager
(206) 224-3114
ACKNOWLEDGEMENT AND CONSENT:
By:
Its• City Manager
Date: ®1_o - o 51
Jan- 2-2004 01:17pm From-BNY WESTERN TRUST CO
+206 224 3138 T-387 P.002/002 F-163
MICHAEL J. MURPHY
State Treasurer
State of Washington
Office of the Treasurer
April 2, 2003
Ms. Colleen Iwano, Senior Vice President
BNY Western Trust Company
Two Union Square, Suite 520
601 Union Street
Seattle WA 98101-2321
Dear Ms. Iwano:
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APR
In February 2000 The Bank of New York ('The "Bank") was named as the statewide! custody provider. The
term of the February 17, 2000 Letter of Agreement between the Bank and the Office of the State Treasurer
(OST) was for a period of four years, commencing on April 1, 2000. The Letter of ,Agreement also allowed
for the possibility of an extension of up to two years, upon mutual agreement between the Bank and OST.
We have contacted all entities utilizing the statewide custody program, and I am pleased to report that we
received positive feedback from all of them, along with an indication of their desire Fo extend the Bank's
appointment. This information was relayed to the Local Government Advisory Cotrimirtee, which served as
the advisory panel in the original search process, at its March 28, 2003 meeting. The Committee voted
unanimously in favor of an extension of the Letter of Agreement.
I appreciate the quality of service you have provided to participating entities thus faij and your interest in
extending the Bank's appointment as the statewide custody provider with no increases in the fee schedule.
This Ietter will serve as our mutual agreement to extend the term of the Bank's appointment for the period
April 1, 2004 through March 31, 2006.
Enclosed are two copies of this Letter. Please sign both copies, keep one for your file and return the second
copy to Douglas Extine, Deputy Treasurer, Office of the State Treasurer, PO Box 40200, Olympia, WA
98504-0200.
Sincerely,
Agreed to and Accepted by; The Bank of New York
CO .••
SENIOR VICE PR.ES]DE I T
BNY WESTERN TRUST
DATE: 'gt. 7 .73
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tL isizive i3ailding. 40. Bax 40200 • Olympia. Waahin_tna 95504-0200 • (36())902-9000 902-9000 • T013(360)902-8963
FAX t38(1) 902-9014 • liornePagehttg://www.wa.govitru
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WASHINGTON STATEWIDE
CONTRACT
For
Security Custody Services
February, 2000
Contract -blanks filled in.doc
WASHINGTON STATEWIDE CONTRACT
FOR SECURITY CUSTODY SERVICES
Table of Contents
GENERAL PROVISIONS 1
1. CONTRACTING PARTIES 1
2. HEREBY WITNESSETH• 1
3. ADDITIONAL SERVICES 1
4. CONSIDERATION 1
5. APPOINTMENT OF CUSTODIAN 2
6. AGREEMENT 2
7. PERSONAL LIABILITY 3
8. HOLD HARMLESS AND INDEMNIFICATION 3
9. CONFLICT AND SEVERABILITY 4
10. NONDISCRIMINATION AND AFFIRMATIVE ACTION 4
11. GIFTS AND GRATUITIES 5
12. RIGHTS AND REMEDIES 5
13. PERFORMANCE 6
14. GOVERNING LAW 6
15. SUBCONTRACT/ASSIGNMENT 6
DEFINITIONS 6
16. DEFINITIONS 6
SCOPE OF SERVICES 7
17. SCOPE OF SERVICES 7
AGREEMENT TERM AND TERMINATION 8
18. TERM OF AGREEMENT AND SURVIVORSHIP OF TERMS 8
19. TERMINATION AND REMEDIES 8
20. FORCE MAJEURE 11
21. CONFLICT OF INTEREST 11
CONTRACT ADMINISTRATION 12
22. INCORPORATED DOCUMENTS 12
23. ORDER OF PRECEDENCE 12
24. ENTIRE AGREEMENT 13
25. LIMITATION OF AGENCY'S AUTHORITY 13
26. AGENCY CONTRACT ADMINISTRATOR 13
27. BANK'S ACCOUNT MANAGER 13
28. CHANGES 14
29. DISPUTES 14
30. ADVERTISING 14
31. CONSENT 14
AGENCY RESPONSIBILITIES 15
32. PROTECTION OF PROPRIETARY AND CONFIDENTIAL INFORMATION 15
33. FUNDS TRANSFER AUTHORIZATION AGREEMENT 15
BANK RESPONSIBILITIES 15
34. REGISTRATION WITH THE DEPARTMENT OF REVENUE 15
35. LICENSING AND ACCREDITATION STANDARDS 15
36. WORKERS' COMPENSATION INSURANCE COVERAGE 15
37. CONFIDENTIALITY OF AGENCY RECORDS 16
38. AUDITING 16
39. BANK COMMITMENTS, WARRANTIES, AND REPRESENTATIONS 16
40. YEAR 2000 COMPLIANCE 17
41. PRICE INCREASES 18
CUSTODY PROVISIONS 18
42. CUSTODY OF SECURITIES 18
PAYMENT PROVISIONS 26
43. PAYMENTS 26
44. TAXES 26
45. DAMAGES 26
CONTRACT EXECUTION 27
46. COUNTERPARTS 27
47. SIGNATURE BLOCKS 28
Washington Statewide Custody Contract
WASHINGTON STATEWIDE AGREEMENT
FOR CUSTODY SERVICES
GENERAL PROVISIONS
1. CONTRACTING PARTIES
THIS AGREEMENT is entered into by and between The City of Yakima, STATE OF
WASHINGTON, hereinafter referred to as the "Agency" and The Bank of New York,
hereinafter referred to as the "Custodian" or the "Bank."
2. HEREBY WITNESSETH:
The State Of Washington, acting by and through the OFFICE OF THE TREASURER of
the STATE OF WASHINGTON, issued a Request for Proposal (RFP), dated November
23, 1999 for the purpose of obtaining proposals for providing statewide custody services.
As a result of that process, the State Treasurer has designated the Bank as the Statewide
Custodian, and the Bank has agreed to provide Statewide Custody Services, hereinafter
referred to as the "Services," as described in Bank's proposal, attached hereto at the
prices stated therein, in accordance with the terms of this Agreement.
3. ADDITIONAL SERVICES
The Parties agree that additional services, appropriate to the scope of this Agreement,
may be added to this Agreement by an instrument in writing and only with the written
consent of both parties. Such writing shall include a specific description of the additional
Services, pricing and additional terms and conditions as relevant. The additional
Services shall be available under the same terms and conditions established herein except
as specifically amended between the parties.
4. CONSIDERATION
In consideration whereof, the mutual promises made to each other, as hereinafter set
forth, the parties further agree as follows:
The Agency and the Bank agree that this Agreement is the complete and exclusive
statement between the parties which supersedes all proposals or prior agreements, oral or
written, and all other communications between the parties relating to the subject matter
of this Agreement except as included by attachment to this Agreement.
To the extent that any terms and conditions are in conflict with any other terms and
conditions, the order of authority is as follows: (1) these General Provisions are
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Washington Statewide Custody Contract
controlling, followed by; (2) the Office of the State Treasurer RFP for Statewide
Securities Custody Services; and (3) the Bank's Proposal, inclusive of related Exhibits
and Schedules.
Unless otherwise agreed in writing, all amendments, addenda, and orders signed during
the life of this Agreement shall be governed by these General Provisions.
Any notice or demand which under this Agreement or applicable law must or may be
given by the Bank, or Agency shall be in writing, properly addressed and, as an
alternative to personal delivery, made by the most expeditious means available, with due
regard given to the time sensitivity of the notice or demand being made.
if to the Bank, at:
The Bank of New York
One Wall Street
New York, NY 10286
Attention: Government Agencies
Department
with a copy to:
BNY Western Trust Company
601 Union Street
Suite 520 •
Seattle, Washington 98101-2321
5. APPOINTMENT OF CUSTODIAN
if to the Agency, at:
The City of Yakima
Finance Department
129 North Second Street
Yakima, WA 98901
The Agency hereby appoints the Bank as Custodian for certain assets of the Agency and
authorizes Custodian to hold such assets in registered form in its name or the name of its
nominees. All property delivered to the Bank, its agents or subcustodians, shall be held
and dealt with as herein provided. The Bank shall have no responsibility or liability for
the acts or omissions of prior Custodians, and shall not be responsible for any property of
the Agency not delivered to the Bank, its agents or subcustodians, and shall only be
obligated to accept such property that is in street name or other good delivery form. The
Bank hereby accepts this appointment.
6. AGREEMENT
NOW THEREFORE the Agency hereby awards to the Bank this Agreement for Custody
Services, hereinafter referred to as "Services," as listed and described in the RFP for
Statewide Custody Services as Exhibit A and acknowledged in the Bank's proposal as
Exhibit B both of which are on file at the Office of the State Treasurer, and by this
reference made a part hereof, as though completely set forth herein, subject to and in
accordance with the terms of this Agreement.
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Washington Statewide Custody Contract
7. PERSONAL LIABILITY
It is agreed by and between the parties hereto that in no event shall any official, officer,
employee or agent of the Agency be in any way personally liable or responsible for any
covenant or agreement herein contained whether expressed or implied, nor for any
statement or representation made herein or in any connection with this agreement.
8. HOLD HARMLESS AND INDEMNIFICATION
8.1 The Bank shall be financially responsible (liable) for any direct money
damages suffered by the Agency which are caused by the Bank's own
negligence, fraud, or failure to exercise Due Care, as defined in Section
42.9.1, in the Bank's performance of its duties under this Agreement. For
the purposes of this Agreement, direct money damages shall include those
situations where interest charges are incurred by the Agency or any loss of
earnings occurs that would otherwise have been realized by the Agency
through an overnight investment of funds, and where such interest charges
or loss of earnings are caused by the Bank's own negligence, fraud, or
failure to exercise Due Care, as defined in Section 42.9.1.
8.2 The Bank shall not be financially responsible (liable) for any damages or
for any losses to the Agency, unless such losses constitute direct money
damages caused by the Bank's own negligence, fraud, or failure to
exercise Due Care, as defined in Section 42.9.1, in the Bank's
performance of its duties under this Agreement. Notwithstanding any
other document or provision in this Agreement to the contrary, but
subject to Section 8.1 hereof, in no event shall the Bank be liable for
indirect, incidental, consequential or special damages regardless of the
form of action and even if the same are foreseeable, except that the
foregoing provisions of this sentence shall not limit the Bank's liability
for any punitive damages.
8.3 Each party to this Agreement agrees to indemnify and hold harmless the
other party, to the extent authorized by law, from all losses (excluding
attorney's fees and expenses) which relate to or result from lawsuits
brought by non-parties to this Agreement from activities covered by this
Agreement from:
8.3.1 A failure by the indemnifying party or its subsidiaries, affiliates,
agents, subcontractors, representatives or employees to comply
with any applicable federal, state or local law, rule or regulation;
8.3.2 A negligent act or omission or the breach of this Agreement (as
defined in Section 19.3) by the indemnifying party, its subsidiaries,
3
Washington Statewide Custody Contract
affiliates, agents, subcontractors, representatives or employees; or
a failure to exercise due care as defined in Section 42.9.1 herein.
8.3.3 Fraudulent or intentional misconduct by the indemnifying party or
its agents, subcontractors, representatives or employees.
8.3.4 Nothing in this section shall be construed to mean either party is
prevented from commencing a legal action against the other.
8.4 Notwithstanding any other document or provision in this Agreement to the
contrary, the above indemnity by the Bank to the Agency shall be limited
to direct money damages and shall relate only to the Bank's own actions
or omissions which constitute negligence, fraud, or failure to exercise Due
Care.
9. CONFLICT AND SEVERABILITY
9.1 CONFLICT In the event of conflict between contract documents and
applicable laws, codes, ordinances or regulations, the most stringent or
legally binding requirement shall govern and be considered a part of this
contract to afford the Agency maximum benefits.
9.2 SEVERABILITY Any provision of this document found to be
prohibited by law shall be ineffective to the extent of such prohibition
without invalidating the remainder of the document.
10. NONDISCRIMINATION AND AFFIRMATIVE ACTION
During the performance of this Agreement, the Bank shall comply with all federal and
state nondiscrimination statutes and regulations. These requirements include, but are not
limited to:
10.1 Nondiscrimination in Employment: The Bank shall not discriminate
against any employee or applicant for employment because of race, color,
sex, religion, national origin, creed, marital status, age, or the presence of
any sensory, mental or physical disability. This requirement does not
apply, however, to a religious corporation, association, educational
institution or society with respect to the employment of an individual of a
particular religion to perform work connected with the carrying on by
such corporation, association, educational institution or society of its
activities.
10.1.1 The Bank shall take affirmative action to ensure that employees
are employed and treated during employment without
discrimination because of their race, color, religion, national
origin, creed, marital status, age, or the presence of any sensory,
4
Washington Statewide Custody Contract
mental or physical disability. Such action shall include, but not be
limited to, the following: employment, upgrading, demotion, or
transfer; recruitment or recruitment selection for training,
including apprenticeships and volunteers.
10.2 Nondiscrimination in Client Services: The Bank shall not, on grounds of
race, color, sex, religion, national origin, creed, marital status, age or the
presence of any sensory, mental or physical disability:
10.2.1 Deny an individual any services or other benefits provided under
this contract;
10.2.2 Provide any service(s) or other benefits to an individual which are
different, or are provided in a different manner, from those
provided to others under this contract;
10.2.3 Subject an individual to segregation or separate treatment in any
manner related to the receipt of any service(s) or other benefits
provided under this contract; or,
10.2.4 Deny any individual an opportunity to participate in any program
provided by this contract through the provision of services or
otherwise, or afford any opportunity which is different from that
afforded others under this contract.
10.3 The Bank, in determining (1) the types of services or other benefits to be
provided or (2) the class of individuals to whom, or the situation in which,
such services or other benefits will be provided or (3) the class of
individuals to be afforded an opportunity to participate in any services or
other benefits, will not utilize criteria or methods of administration which
have the effect of subjecting individuals to discrimination because of their
race, color, sex, religion, national origin, creed, marital status, age or the
presence of any sensory, mental or physical disability.
10.4 Noncompliance With Nondiscrimination Requirements: In the event of
the Bank's noncompliance or refusal to comply with the
nondiscrimination requirements, this contract may be rescinded, canceled
or terminated in whole or in part, and the Bank may be declared ineligible
for further contracts with the Agency. The Bank shall, however, be given
a reasonable time in which to cure the noncompliance. Any dispute may
be resolved in accordance with the Disputes section set forth in this
Agreement.
5
Washington Statewide Custody Contract
11. GIFTS AND GRATUITIES
In accordance with RCW 42.23 Code of Ethics for Municipal Officers -Contract Interests,
it is unlawful for any person to accept, directly or indirectly, any compensation, gratuity,
or reward in connection with this contract from any person beneficially interested therein.
12. RIGHTS AND REMEDIES
In the event of any claim for default or breach of contract, no provision in this document
nor in the Bank's proposal for services shall be construed, expressly or by implication, as
a waiver by the Agency of any right to insist upon the strict performance of any term or
condition of the contract or to exercise or delay the exercise of any right or remedy
provided in the contract or by law, or as the acceptance of (or payment for) materials,
equipment or services, or to release the Bank from any responsibilities or obligations
imposed by this contract or by law.
13. PERFORMANCE
Acceptance by the Agency of unsatisfactory performance with or without objection or
reservation shall neither waive the right to claim damage for breach nor constitute a
waiver of requirements for satisfactory performance of any obligation remaining to be
performed by Bank.
14. GOVERNING LAW
This Agreement shall be governed in all respects by, and construed in accordance with,
the law and statutes of the State of Washington. The venue of any action hereunder shall
be exclusively in the Superior Court for Yakima County, Washington. The Bank, by
execution of this contract, acknowledges the jurisdiction of the courts of the state of
Washington in this matter.
15. SUBCONTRACT/ASSIGNMENT
The Bank shall not subcontract or assign its obligations under this contract without the
prior written consent of the Contract Administrator, provided the Bank may enter into
subcontracts, agreements and understandings with BNY Western Trust Company, a
wholly owned subsidiary of The Bank of New York Company, Inc. whenever and on
such terms and conditions as it deems necessary or appropriate to perform its services
hereunder. The Bank shall be responsible to ensure that all requirements of the contract
shall be communicated to any and all subcontractors.
Substitution of another financial institution to act as the Bank under this Agreement may
occur in the event of a takeover, merger, or acquisition. In this event, the Successor Bank
shall provide an automatic continuation of all terms of this Agreement, provided the
Successor Bank can meet all required terms of the Agreement. However, the Agency
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Washington Statewide Custody Contract
reserves the right to terminate the contract in the event a Successor Bank is substituted,
after providing 60 calendar days written termination notice.
DEFINITIONS
16. DEFINITIONS
Definitions as used throughout this Agreement shall have the meanings set forth below:
"Exhibit A" shall mean the Request For Proposal (RFP) for Statewide Custody Services
issued by the Office of the State Treasurer, dated November 23, 1999.
"Exhibit B" shall mean the Bank's proposal in response to the State RFP for Statewide
Custody Services.
"Exhibit C" shall mean the Bank's schedule of fees for all Services provided under this
Agreement.
"Exhibit D" shall mean the Funds Transfer Authorization Agreement which shall run
concurrently with this Agreement.
"Exhibit E" shall mean the Agency's schedule of required Services provided under this
Agreement.
"Agency Contract Administrator" shall mean the staff person appointed by the Agency to
administer this Agreement on behalf of the Agency.
"Bank" shall mean The Bank of New York. It shall also include any subcontractor
retained by the Bank as permitted under the terms of this Agreement.
"Bank's Account Manager" shall mean an employee of the Bank who is permanently
assigned as the primary contact person whom the Agency Contract Administrator shall
work with for the duration of this Agreement.
"Custody Services" may also be referred to as "Services," and shall be inclusive of all
services, including associated support services and maintenance provided pursuant to this
Agreement.
"Depository" shall include the Federal Reserve/Treasury book -entry system for receiving
and delivering securities, the Depository Trust Company, and any other securities
depository, book -entry system or clearing agency (and their respective successors and
nominees) authorized to act as a securities depository, book -entry system or clearing
agency pursuant to applicable law.
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Washington Statewide Custody Contract
"Subcontractor" shall mean one not in the employment of the Bank, who is performing
all or part of those Services under this Agreement under a separate contract with the
Bank. The term "subcontractor" means subcontractor(s) of any tier.
"RCW" shall mean the Revised Code of Washington (Washington State Law).
SCOPE OF SERVICES
17. SCOPE OF SERVICES
The Bank agrees to provide custody, record keeping and cash management, as further
described in the Office of the State Treasurer RFP (Exhibit A) and the Bank's Proposal
(Exhibit B), under the terms of this Agreement, serving as the Statewide Custodian of
Washington State.
AGREEMENT TERM AND TERMINATION
18. TERM OF AGREEMENT AND SURVIVORSHIP OF TERMS
This Agreement shall commence on June 15th, 2001, and continue until March 31, 2004.
The Bank is not obliged to offer this contract for a time period of less than one year, nor
is the Bank obliged to offer the contract with a termination date exceeding the
termination date of its appointment as the Statewide Custodian.
The term of this Agreement may be extended for additional contract periods or portions
thereof, whereby the total contract period with extensions shall not exceed six (6) years,
PROVIDED: the extension shall be by mutual agreement between the Agency and the
Bank, and by the Agency giving written notice of the extension to the Bank not less than
180 days prior to the termination date of this Agreement.
19. TERMINATION AND REMEDIES
19.1 TERMINATION FOR CONVENIENCE The Agency may terminate
this contract, in whole or in part, at any time and for any reason by giving
90 calendar days written termination notice to the Bank and the State
Treasurer. The Bank may terminate this contract, by giving 180 days
written termination notice to the Agency and the State Treasurer.
19.2 TERMINATION FOR REDUCTION OF FUNDING OR
WITHDRAWAL OF AUTHORITY In the event that either funding from
the Agency or other sources is withdrawn, reduced, or limited, or the
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Washington Statewide Custody Contract
authority of the Agency to perform any of its duties is withdrawn, reduced
or limited in any way after the effective date of this Agreement and prior
to its normal completion, the Agency may terminate this Agreement, in
whole or in part, at any time by giving 60 calendar days written
termination notice to the Bank.
19.3 TERMINATION FOR BREACH Except in the case of delay or failure
resulting from circumstances beyond the control of and without the fault
or negligence of the Bank or of the Bank's suppliers or subcontractors, the
Agency shall be entitled, by written or verbal notice, to cancel this
contract in its entirety or in part, for breach of any of the terms herein, and
to retain all other rights against the Bank by reason of the Bank's breach as
provided by law.
A breach shall mean one or more of the following events: (1) the Bank
fails to perform the services by the time and date required and such failure
is not caused by a force majeure event; (2) the Bank breaches any
warranty, or fails to perform or comply with any term or agreement in the
contract; (3) the Bank fails to exercise Due Care as to any aspect of this
Agreement, with Due Care being defined in Section 42.9.1; (4) the Bank
makes any general assignment for the benefit of creditors; (5) the Bank
becomes insolvent or in an unsound financial condition so as to endanger
performance hereunder; (6) the Bank becomes the subject of any
proceeding under any law relating to bankruptcy, insolvency or
reorganization or relief from debtors; or (7) any receiver, trustee or similar
official is appointed for the Bank or any of the Bank's property. If it is
subsequently found that the Bank was not in breach, the rights and
obligations of the parties shall be the same as if a Notice of Termination
had been issued pursuant to subparagraph 19.1.
The Agency Contracting Officer shall issue a written notice of breach
providing a period not to exceed 30 days in which the Bank shall have an
opportunity to cure. Time allowed for cure shall not diminish or eliminate
the Bank's liability for damages.
If the breach remains, after the Bank has been provided the opportunity to
cure, the Agency may do one or more of the following:
19.3.1 Exercise any remedy provided by law;
19.3.2 Terminate this contract and any related contracts or portions
thereof, by written or verbal notice;
19.3.3 Seek damages.
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Washington Statewide Custody Contract
19.4 TERMINATION BY MUTUAL AGREEMENT The Agency and the
Bank may terminate this contract in whole or in part, at any time, by
mutual agreement.
19.5 TERMINATION PROCEDURE Upon termination of this contract the
Agency, in addition to any other rights provided in this contract, may
require the Bank to deliver to the Agency any property specifically
produced or acquired for the performance of such part of this contract as
has been terminated.
The Agency shall pay to the Bank the agreed upon price, if separately
stated, for completed work and services accepted by the Agency, and the
amount agreed upon by the Bank for (a) completed work and services for
which no separate price is stated, (b) partially complete work and services,
(c) other property or services which are accepted by the Agency, and (d)
the protection and preservation of property, unless the termination is for
default, in which case the Agency shall determine the extent of the
liability of the Agency. Failure to agree with such determination shall be
a dispute within the meaning of the "Disputes" section of this contract.
The Agency may withhold from any amounts due to the Bank such sum as
the Agency determines to be necessary to protect the Agency against
potential loss or liability.
The rights and remedies of the Agency provided in this clause shall not be
exclusive and are in addition to any other rights and remedies provided by
law or under this contract.
19.6 TERMINATION -RELATED OBLIGATIONS ANTECEDENT TO
DATE OF TERMINATION Upon nearing the end of the final term of
this agreement, and without respect to either the cause or time of such
termination, the Bank shall take all reasonable and prudent measures to
facilitate the transition to a successor provider's system.
The Bank shall provide, at any time during the nine (9) months preceding
termination, such information about the Bank's systems as will be
reasonably required by the Agency and/or the successor for purposes of
planning the transition and conversion to the successor's system.
19.7 OBLIGATIONS UPON TERMINATION After receipt of a notice of
termination, and except as otherwise directed by the Agency Contract
Administrator, the Bank shall:
19.7.1 Stop work under the contract on the date, and to the extent,
specified in the notice;
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Washington Statewide Custody Contract
19.7.2 Place no further orders or subcontracts for materials, services, or
facilities except as may be necessary for completion of such
portion of the work under the contract as is not terminated;
19.7.3 Assign to the Agency, in the manner, at the times, and to the extent
directed by the Agency Contract Administrator all of the rights,
titles, and interest of the Bank under the orders and subcontracts so
terminated, in which case the Agency has the right, at its
discretion, to settle or pay any or all claims arising out of the
termination of such orders and subcontracts;
19.7.4 Settle all outstanding liabilities and all claims arising out of such
termination of orders and subcontracts, with the approval or
ratification of the Agency Contract Administrator to the extent he
or she may require, which approval or ratification shall be final for
all the purposes of this clause;
19.7.5 Transfer title to the Agency and deliver in the manner, at the times,
and to the extent, if any, as directed by the Agency Contract
Administrator, any property which, if the contract had been
completed, would have been required to be furnished to the
Agency;
19.7.6 Complete performance of such part of the work as shall not have
been terminated; and
19.7.7 Take such action as may be necessary, or as the Agency Contract
Administrator may direct, for the protection and preservation of
the property related to this contract which is in the possession of
the Bank and in which the Agency has or may acquire an interest
and to transfer that property to the successor Custodian.
By such termination, neither the Agency nor the Bank may nullify
obligations already incurred for performance or failure to perform
prior to the date of termination.
20. FORCE MAJEURE
20.1 DEFINITION Neither party shall be liable to the other or deemed in
default under this contract if and to the extent that such party's
performance of this contract is prevented by reason of force majeure. The
term "force majeure" means an occurrence that is beyond the control of
the party affected and could not have been avoided by exercising
reasonable diligence. Force majeure shall include acts of God, war, riots,
strikes, fire, floods, earthquakes, epidemics, or other similar occurrences.
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Washington Statewide Custody Contract
20.2 ALLOCATION OF SERVICE When force majeure affects only part
of the Bank's capacity to perform, the Bank may allocate services among
its customers, including regular customers not included in this Agreement,
in any manner which is fair and reasonable.
20.3 NOTIFICATION If either party is delayed by force majeure, said
party shall provide reasonable notice that there will be delay or non-
delivery of reports or services. The notification shall provide evidence of
the force majeure to the satisfaction of the other party. Such delay shall
cease as soon as practicable and written notification of same shall be
provided. The time of completion shall be extended by contract
modification for a period of time equal to the time that the results or
effects of such delay prevented the delayed party from performing in
accordance with this contract.
20.4 RIGHTS RESERVED The Agency reserves the right to cancel the
contract and/or purchase services from the best available source during the
time of force majeure, and Bank shall have no recourse against the
Agency.
21. CONFLICT OF INTEREST
21.1 The Bank warrants that it presently has no interest and shall not acquire
any interest, direct or indirect, which would conflict in any manner or
degree with the performance of services required under this contract.
21.2 The Agency may terminate this Agreement, by written notice to the
Bank, if it is found after due notice and examination that there is a
violation by Bank of:
21.2.1 RCW 42.23 Code of Ethics for Municipal Officers -Contract
Interests or any other similar statute involving the Bank in its
performance under this Agreement.
21.3 In the event this Agreement is terminated as provided above, the Agency
shall be entitled to pursue the same remedies against the Bank as it could
pursue in the event of a breach of this Agreement by the Bank. The
rights and remedies of the Agency provided by this clause shall not be
exclusive and are in addition to any other rights and remedies provided
by law.
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Washington Statewide Custody Contract
CONTRACT ADMINISTRATION
22. INCORPORATED DOCUMENTS
This Agreement shall consist of the terms and conditions as set forth herein and the
following documents which are incorporated herein by reference:
22.1 "Exhibit A" - The Request For Proposal (RFP) for Statewide Custody
Services, issued by and on file at the Office of the State Treasurer, dated
November 23, 1999.
22.2 "Exhibit B" - The Bank's proposal in response to the State RFP for
Statewide Custody Services, also on file at the Office of the State
Treasurer.
22.3 "Exhibit C" - The Bank's schedule of fees for all Services provided under
this Agreement.
22.4 "Exhibit D" - The Funds Transfer Authorization Agreement which shall
run concurrently with this Agreement.
22.5 "Exhibit E" - The Agency's schedule of required Services provided under
this Agreement.
23. ORDER OF PRECEDENCE
23.1 The headings used herein are inserted for convenience only and shall not
control nor affect the meaning or construction of any of the provisions.
23.2 If any provision of this Agreement shall be deemed to be in conflict with
any statute or rule of law, such provisions shall be deemed modified to
conform to said statute or rule of law. In the event of any inconsistency in
this Agreement, the inconsistency shall be resolved in the order of
precedence stated below:
23.2.1 Applicable Federal and State Statutes and Regulations.
23.2.2 The Terms and Conditions of this Agreement.
23.2.3 Exhibit A - The Request For Proposal (RFP) for Statewide
Custody Services issued by the Office of the State Treasurer, dated
November 23, 1999, Exhibit B - The Bank's proposal in response
to the State RFP for Statewide Custody Services, and Exhibit E -
The Agency's schedule of required Services provided under this
Agreement.
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Washington Statewide Custody Contract
24. ENTIRE AGREEMENT
This document, including all addenda and subsequently issued change notices, comprises
the entire agreement between the Agency and the Bank and shall be governed by the laws
of the State of Washington incorporated herein by reference.
25. LIMITATION OF AGENCY'S AUTHORITY
Only the Agency Contracting Officer, or delegate by writing, shall have the express,
implied, or apparent authority to alter, amend, modify, or waive any clause or condition
of this Agreement. Furthermore, any alteration, amendment, modification, or waiver of
any clause or condition of this Agreement is not effective or binding until made in
writing and signed by the Agency and the Bank unless otherwise provided herein.
26. AGENCY CONTRACT ADMINISTRATOR
The Agency shall appoint an individual who will be the Contract Administrator for this
Agreement and will provide oversight of the activities conducted hereunder. The Agency
Contract Administrator will manage this Agreement on behalf of the Agency, and will be
the principal point of contact for the Bank concerning Bank's performance hereunder.
The Agency shall notify Bank, in writing, when there is a change in staffing and a new
Contract Administrator is assigned to this Agreement.
27. BANK'S ACCOUNT MANAGER
The Bank shall appoint an individual who will be the Account Manager for the Agency
account. The Bank's Account Manager will be the principal point of contact for the
Agency concerning the Bank's performance hereunder. The Bank's Account Manager
will also serve as the focal point for business matters, support coordination, and
administrative activities. The Bank shall notify the Agency in writing if a new Account
Manager is assigned.
28. CHANGES
No modifications or amendments to this Agreement shall be effective unless it is in a
written amendment signed by an authorized officer of the Bank and the Agency Contract
Administrator.
29. DISPUTES
29.1 Except as otherwise provided in this Agreement, when a bona fide dispute
concerning a question of fact arises between the Agency and the Bank,
and it cannot be resolved, either party may initiate the dispute resolution
procedure provided herein.
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Washington Statewide Custody Contract
29.2 Time is of the essence in resolving disputes. The initiating party shall
reduce its description of the dispute to writing and deliver it to the
responding party. The responding party must respond in writing within
two (2) Agency working days.
29.2.1 Then, both parties shall have three (3) Agency working days to
negotiate in good faith to resolve the dispute.
29.3 Both parties agree to exercise good faith in dispute resolution and to avoid
arbitration and litigation whenever reasonably possible. Nothing in this
Agreement shall prevent either party, after the expiration of the three (3)
day period in Section 29.2.1, from pursuing other methods of dispute
resolution.
29.4 The Agency and the Bank agree that, the existence of a dispute
notwithstanding, they will continue without delay to carry out all their
respective responsibilities under this Agreement which are not affected by
the dispute.
30. ADVERTISING
The Bank shall not advertise or publish information concerning this contract in any form
or media without prior written consent from the Agency.
31. CONSENT
Both parties agree that whenever a party's consent is required under the terms of this
Agreement, that consent shall not be unreasonably delayed or withheld.
AGENCY RESPONSIBILITIES
32. PROTECTION OF PROPRIETARY AND CONFIDENTIAL INFORMATION
Any specific information that is contained in the Bank's Proposal (Exhibit B) that is
confidential or proprietary, must be clearly identified by the Bank by stamping
"CONFIDENTIAL" on the lower right hand corner of the corresponding page(s). A
blanket designation of the entire proposal as being confidential will be disregarded. If a
request is made to view Bank's proprietary information, the State Treasurer and the
Agency will comply with the Public Records Act, chapter 42.17 RCW.
33. FUNDS TRANSFER AUTHORIZATION AGREEMENT
The Agency shall execute a Funds Transfer Authorization Agreement with the Bank.
This agreement shall remain in effect for the duration of this Agreement. The Transfer
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Washington Statewide Custody Contract
Agreement is attached hereto as Exhibit D. In the case of any conflict between the Funds
Transfer Authorization Agreement and this Agreement, this Agreement shall take
precedence.
BANK RESPONSIBILITIES
34. REGISTRATION WITH THE DEPARTMENT OF REVENUE
The Bank shall complete registration with the Department of Revenue, General
Administration Building, Olympia, Washington 98504, and be responsible for payment
of all taxes due on payments made under this contract.
35. LICENSING AND ACCREDITATION STANDARDS
The Bank shall comply with all applicable local, state, and federal licensing requirements
and standards necessary in the performance of this Agreement.
36. WORKERS' COMPENSATION INSURANCE COVERAGE
The Bank shall provide or purchase applicable workers' compensation insurance
coverage prior to performing work under this contract. The Agency will not be
responsible for payment of industrial insurance premiums for the Bank, or any
subcontractor or employee of the Bank, which might arise under the workers'
compensation insurance laws during perfomiance of duties and services under this
contract. Should the Bank fail to secure workers' compensation insurance coverage or
fail to pay premiums on behalf of its employees, the Agency may deduct the amount of
premiums owing from the amounts payable to the Bank under this contract and transmit
the same to the appropriate workers' compensation insurance fund.
37. CONFIDENTIALITY OF AGENCY RECORDS
37.1 The Bank acknowledges that material and information which has or will
come into its possession or knowledge in connection with this Agreement,
or its performance, may consist of confidential and proprietary data, the
disclosure of which to, or use by, third parties could be damaging.
37.2 Access to information concerning individual recipients of the Agency's
services shall not be granted except as authorized by law or Agency rule.
37.3 The Bank, therefore, agrees to hold all such material and information in
strictest confidence, not to make use thereof other than for the
performance of this Agreement, to release it only to authorized employees
requiring such information, and not to release or disclose it to any other
party.
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Washington Statewide Custody Contract
37.4 Notwithstanding anything apparently to the contrary in the preceding
provisions of this Section 37, the Bank may release the material and
infoimation described in this Section 37 to authorized bank examiners and
to its internal and external auditors for official use and may also release it
pursuant to a subpoena or other order issued by a court of competent
jurisdiction. The Bank shall promptly notify the Agency of any such
subpoena or order upon its receipt.
38. AUDITING
The Bank shall permit representatives of the Agency, the Agency Auditor, an auditor
selected by the Agency, and/or the Auditor of the State of Washington or their authorized
assistant to examine the records of the Bank relating to the services rendered under this
Agreement, including securities transactions. Such audits may include, but are not
limited to, examination of the securities themselves. If the Bank has contracted for
deposit of the securities with another Bank, the Bank shall require its subcontractor to
provide similar access to the designated Agency and State officials or their
representatives. Any audits required by this Section which do not necessitate the
compilation of records in addition to those which are otherwise required by other
Sections of this Agreement may be conducted without notice. Any audits required by
this Section which require the compilation of records in addition to those which are
otherwise required by this Agreement may be conducted upon ten (10) days written
notice from the Agency to the Bank. The provisions of this Section shall remain in effect
for eighteen (18) months after the expiration, or sooner termination, of this Agreement.
Records of Agency transactions must be kept and maintained by the Bank for a period of
no less than seven (7) years from the date of the transaction.
39. BANK COMMITMENTS, WARRANTIES, AND REPRESENTATIONS
39.1 Any written commitment by the Bank within the scope of this Agreement
shall be binding upon the Bank. Failure of the Bank to fulfill such a
commitment may constitute breach and shall render the Bank liable for
damages due the Agency under the terms of this Agreement.
39.2 For purposes of this Agreement, a commitment by the Bank, which must
be in writing, includes: (1) prices and options committed to remain in
force over a specified period(s) of time; (2) any warranty or representation
made by the Bank in a proposal as to Service performance; (3) any
warranty or representation made by the Bank concerning the
characteristics of items in (2) above, contained in any literature,
descriptions, or specifications accompanying or referred to in a proposal;
(4) any modification of or affirmation or representation as to the above
which is made by Bank in writing whether or not incorporated into a
formal amendment to the proposal in question; and (5) any representation
by the Bank in a proposal, supporting documents or amendments thereto
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Washington Statewide Custody Contract
as to, services to be performed, prices and options committed to remain in
force over a fixed period of time, or any other similar matter regardless of
the fact that the duration of such commitment may exceed the duration of
this Agreement.
40. YEAR 2000 COMPLIANCE
40.1 Year 2000 Compliance.
The Custodian hereby warrants that it will use commercially reasonable
efforts to ensure that the computer software and hardware (as used in this
subsection, the "Systems") that are owned by the Custodian and used to
provide the services to be provided by the Custodian under this
Agreement (as used in this subsection "Services") are 2000 Compliant or
will be made 2000 Compliant before December 31, 1999. With respect to
software that the Custodian licenses from third parties and uses in
providing the Services ("Third Party Software"), the Custodian warrants
that it has used or will use commercially reasonable efforts to test the
same by September 30, 1999 to certify, in accordance with the
Custodian's standard practices, that the Third Party Software is 2000
Compliant. If the Custodian cannot certify any Third Party Software as
2000 Compliant, the Custodian will use commercially reasonable efforts
to replace such Third Party Software with software that is warranted or
certified by its vendor as 2000 Compliant, if such replacement is
available, compatible with the Custodian's Systems and deemed by the
Custodian as appropriate under the circumstances. In the event that the
Custodian uses third party service providers to provide the Services or any
portion thereof ("Third Party Services"), the Custodian warrants that it has
in place a program under which it will use commercially reasonable
efforts to contact such service providers and obtain from them assurances
that the Systems use in providing Third Party Services are 2000
Compliant. As used herein, the term "2000 Compliant" means that the
Systems will function without material error caused by the introduction of
dates falling on or after January 1, 2000. Notwithstanding the foregoing,
the parties hereto acknowledge and agree that the Custodian cannot and
does not warrant that the Systems, Third Party Software or Third Party
Services will continue to interface with the hardware, firmware, software
(including operating systems), records or data used by the Fund or third
parties, nor does the Custodian make any warranties hereunder with
respect to any public utility, communications service provider, securities
or commodities exchange, or funds transfer network.
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Washington Statewide Custody Contract
41. PRICE INCREASES
41.1 The Bank agrees to provide the Services at the costs, rates and fees set
forth in Exhibit C, Custody Fee Schedule. No other costs, rates, or fees
shall be payable to the Bank for implementation of Bank's proposal.
41.2 The fee schedule applies for two years from the date the Letter of
Agreement is signed. Annual adjustments may be made by the Bank after
the first two years to any or all items no greater than the national
Consumer Price Index (CPI) as published by DRI/McGraw Hill for the
preceding calendar year. The limitation would continue if the term of the
Letter of Agreement is extended.
CUSTODY PROVISIONS
42. CUSTODY OF SECURITIES
42.1 CUSTODIAL SERVICES The Custodian shall take custody of the
securities owned by the Agency, and tendered for transfer to its custody;
provide safekeeping services for them and accept complete responsibility
as a fiduciary for their safekeeping from the moment of delivery to it
and/or its transfer agent until their safe return and delivery to the Agency
or its designated agent upon expiration or sooner termination of this
Agreement.
When ownership of a security is manifested by a certificate, bond, note or
other physical document, the Custodian will verify proper registration of
the security in the name of the Agency; keep the physical specimen in a
secure vault, safe from destruction, damage, embezzlement and/or other
loss; readily available to the Agency; and in a condition suitable for sale
or transfer. When ownership is reflected in a book entry on official
records only, the Custodian shall be shown on the books of the Federal
Reserve System, the Depository Trust Corporation, or other depository
agencies, as Custodian of the Agency's book -entry security; the Custodian
shall verify the proper registration, evidenced by an entry in the
Custodian's books reflecting that the Custodian holds those particular
securities (or a quantity of securities that are part of a fungible bulk of
government book -entry securities) as Custodian for the Agency; and the
Custodian shall obtain and maintain the confirmatory documents in a
secure area and unless expressly authorized by the Agency, keep the
securities ready for immediate sale or transfer free and clear of all
encumbrances.
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Washington Statewide Custody Contract
42.2 INVENTORY; DELIVERY AND REDELIVERY the Custodian shall
keep an accurate, current inventory of all securities held within its custody
for the Agency. The inventory will contain precise identification of each
security including, when applicable, the date of purchase and maturity
date; CUSIP numbers; and other sources of identification.
42.3 DEPOSIT OF SECURITIES the Custodian shall keep tangible securities
in the facilities of the Custodian located in New York City, unless the
Custodian and the Agency agree in writing to another location. Where
securities are eligible for deposit in a book -entry system or a Depository,
the Custodian may use that depository.
Security arrangements shall restrict access to the Agency securities, record
all entries and withdrawals, and provide physical safety for records at least
equal to customs and standards of banks in large metropolitan financial
centers for maintenance of valuable commercial securities.
In addition, the Custodian shall maintain a "back-up" system of
confirmatory records at another location so that if the vault at the
Custodian's approved facility is inaccessible or its material damaged,
destroyed, or stolen, the Custodian can establish to a reasonable degree of
certainty, the securities belonging to the Agency.
42.4 AGENCY CLEARING ACCOUNT the Custodian shall establish a
clearing account for the Agency as directed by the Agency. This account
shall accurately reflect transactions of all kinds, with respect to securities
of the Agency. This account is not to be construed as a Depository
Account.
The Custodian shall credit the following to the accounts immediately upon
the earlier of the settlement date or the payment date:
42.4.1 All interest and other distributions received on account of the
securities (including mortgages) held for the Agency;
42.4.2 All payments of principal or other return of capital, including,
securities backed by mortgages and financing contracts;
42.4.3 All proceeds from the sale or transfer of securities, or rights
appurtenant to the securities;
42.4.4 All payments made by the Agency to the Custodian and by the
Custodian to the Agency;
42.4.5 The Custodian may debit the account with disbursements
authorized by the Agency.
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Washington Statewide Custody Contract
At the close of business, there shall be no cash in the clearing account. At
the option of the Agency, all funds in the account at the close of business
shall either be remitted by wire to the Agency in care of its primary bank
or invested in an investment authorized by state statutes and approved by
the Agency.
42.5 TRANSACTIONS the Custodian shall assist the purchase of securities
and the sale of securities within its possession owned by the Agency.
When so instructed, the Custodian will:
42.5.1 Take possession of securities purchased by the Agency, and when
authorized, make payment from the clearing accounts as
established under this Agreement therefore;
42.5.2 Deliver securities sold or transferred by the Agency to the
appropriate entity or person versus payment;
42.5.3 Register in its name or in its name as Custodian, securities owned
by the Agency and held in its physical custody or those securities
indicated on the records of the Federal Reserve System, the
depository trust company of New York Agency, or another
depository, provided that adequate records are maintained to
identify the actual ownership of the securities by the Agency and
all rights to interest, and sale proceeds are vested in the Agency;
42.5.4 At the option of the Agency, the Custodian shall:
42.5.4.1
42.5.4.2
Washington Statewide Custody Contract
credit or debit the appropriate money account of the
Agency in connection with the purchase, sale,
maturity, redemption, income, dividends or other
disposition of securities and other assets held for the
time being on behalf of the Agency in said accounts
on an actual settlement basis; or
make available provisional credit of settlement,
maturity redemption proceeds, income and
dividends on a contractual settlement basis. The
Custodian reserves the right to reverse any such
crediting at any time before actual receipt of the
item associated with the credit when the Custodian
determines that actual receipt will not be received in
due course for such an item. In such instances, the
Custodian may charge the appropriate money
account of the Agency for the expense of providing
funds associated with such advance in an amount
21
42.5.4.3
not to exceed the actual short-term earnings of the
Agency during the time the funds were credited to
the Agency.
In order to secure repayment of an advance of funds
made in connection with a purchase of securities the
Custodian shall have a purchase money security
interest in, and a security entitlement with respect
to, all of the Agency's right, title and interest in and
to the securities acquired with such advance
(including proceeds thereof). The Custodian shall
with respect to such purchase money security
interest be entitled to all the rights and remedies of
a pledgee and secured creditor under applicable
laws, rules or regulations as then in effect. If the
Custodian, in its sole discretion, advances funds to
the Agency or there shall arise for whatever reason
an overdraft in the Agency's account the Custodian
may at any time charge any such overdraft or
indebtedness together with interest due thereon
against any balance of account standing to such
Agency's credit on the Custodian's books.
42.5.5 Disburse funds as requested and remit funds to the Agency before
the close of each business day.
The Agency retains the exclusive authority to manage the assets of the Agency within the
Custodian's custody. This includes the determination of which investments shall be
made; what and when securities shall be sold or encumbered; the terms or conditions of
any transaction; and the disposition of cash on hand. The Custodian shall make no
transaction without instructions from the Agency, except the advance crediting of
principal, interest and other proceeds to the Agency's clearing account.
42.6 INCOME ON DEFECTIVE TRANSACTIONS The Custodian shall
pay the Agency the following sums when a transaction is defective
without fault of the Agency:
42.6.1 If a seller fails to deliver the securities in proper form on the
settlement date, and the Custodian is not providing contractual
settlement, the Custodian shall return to the Agency all those funds
designated for purchase before the close of each business day, or
invest those funds in an investment authorized by state statutes and
approved by the Agency.
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Washington Statewide Custody Contract
42.6.2 If a buyer fails to make payment on the settlement date, and the
Custodian is not providing contractual settlement, the Custodian
shall pay the Agency the interest or other income, if any, actually
received by it, from the party in default.
42.6.3 If the transaction fails or is delayed due to the inability of the
Custodian to make such delivery due to actions of, or an inaction
by, the Custodian, its agents, employees or equipment, the
Custodian shall promptly pay the Agency an amount to make it
whole as if the transaction had been properly executed, provided
that the foregoing provisions shall not apply if the inability, action
or inaction is by reason of forces beyond the control of Custodian,
and provided further that Custodian's obligation to make payment
to the Agency shall be limited to amounts constituting direct
money damages.
42.7 ANCILLARY SERVICES
42.7.1 The Custodian shall have a comprehensive contingency plan for
timely disaster recovery in the event systems are rendered
inoperative due to fire, flood or other disaster.
42.7.2 Settlement of Transactions:
Settlement of and payment for securities received for, and
delivered from, the account may be made in accordance with the
customary or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including without limitation, the delivery of
securities to a purchaser, broker, dealer or their respective agents
either against a receipt for future payment or without any payment
(so-called "free delivery").
42.7.3 Taxes:
The Agency is solely responsible and liable for the payment of and
the reclamation, where applicable, of all taxes assessments, duties,
and other governmental charges (including any interest or penalties
with respect thereto) with respect to the cash or securities held
hereunder or the Account. The Custodian, however, will cooperate
with the Agency in connection with the Agency's payment or
reclamation of taxes.
42.7.4 Pricing Services:
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Washington Statewide Custody Contract
To the extent that the Custodian provides values of, and pricing
information with respect to, securities, the Custodian is authorized
to utilize generally recognized pricing services (including brokers,
dealers and market makers). The Custodian shall not be liable or
responsible for or be under any duty to inquire into, nor be deemed
to make any assurances or warranties with respect to, the accuracy
or completeness of such values or information, even if the
Custodian, in performing services for itself and others, including
services similar to those performed for the Agency, receives
different valuations of the same or similar securities of the same
issuer. In the event such services are unable to provide a value of
or pricing information with respect to securities and the Custodian,
nevertheless, provides values and pricing information, the
Custodian shall so advise the Agency, but shall have no other
obligation or liability with respect to such valuation or pricing
information.
42.8 PROPER INSTRUCTIONS AND EVIDENCE OF AUTHORITY The
term "Proper Instructions" shall mean instructions received by the
Custodian from the Agency or any person duly authorized by them. Such
instructions may be in writing signed by the authorized person or may be
in a tested communication or in a communication utilizing access codes
effected between electro -mechanical or electronic devices or may be by
such other means as may be agreed to from time to time by the Custodian
and the party giving such instructions (including, without limitation, oral
instructions). The Agency shall cause its duly authorized officer to certify
to the Custodian in writing the names and specimen signatures of persons
authorized to give proper instructions. The Custodian shall be entitled to
rely upon the identity and authority of such persons until it receives notice
from the Agency to the contrary.
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate, instrument or paper reasonably believed by it
to be genuine and to have been properly executed or otherwise given by or
on behalf of the Agency. The Custodian may receive and accept a
certificate from the Agency as conclusive evidence (i) of the authority of
any person to act in accordance with such certificate or (ii) of any
determination or of any action by the Agency as described in such
certificate, and such certificate may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.
42.9 RESPONSIBILITY OF CUSTODIAN
42.9.1 The Custodian shall perform its duties hereunder with "Due Care."
For the purposes of this agreement, "Due Care" shall mean the
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Washington Statewide Custody Contract
degree of care and skill demonstrated by fiduciaries acting in like
capacity as a safekeeping Custodian. The Custodian shall not be
responsible for the title, validity or genuineness, including good
deliverable form, of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract. The
Custodian may at its discretion appoint and remove agents or
subcustodians to carry out such of the provisions of this contract as
the Custodian may from time to time direct; provided, however,
that such appointment shall not relieve the Custodian of its
responsibilities or liabilities under this Contract, and provided
further that any depository selected with Due Care by the bank
shall not be deemed for purposes of this agreement an agent or
subcustodian of the Bank.
42.9.2 Provided always that the Custodian and its agents and
subcustodians act in good faith and with the exercise of Due Care
in performance of such duties as would ordinarily be expected of a
financial institution in the relevant market and subject to the terms
of the Custody Agreement:
42.9.2.1
It is not liable for any loss or damage caused by the
delay or failure of any central bank, any Depository,
or any commercially prevalent payment or clearing
system to deliver to or for the Bank or its
subcustodians securities purchased or sold, or to
make or receive and remit, any payment in
connection with purchases or sales of securities, for
delays or failures in providing corporate action
notices, or for delays or inability by the Bank to
perform its duties due to acts or omissions of any
Depository or to disorder in market infrastructure
with respect to any particular security, security
exchange, central depository or clearing system;
and
42.9.2.2 It is not liable for any delay or failure of any non-
parties, company, corporation, or other body in
charge of registering or transferring Securities in
the name of the Custodian, any customer of the
Custodian, or the Subcustodian, its nominee or
agent, or for any consequential losses arising out of
such delay or failure to transfer such Securities
including non -receipt of bonus, dividends and rights
and other accretions or benefits.
25
Washington Statewide Custody Contract
42.10 SECURITY CODES If the Custodian has issued security codes or
passwords to the Agency in order that the Custodian may verify that
certain transmissions of information, including Proper Instructions, have
been originated by the Agency, the Custodian shall, to the extent
authorized by law, be kept indemnified by and be without liability to the
Agency for any action taken or omitted by it in reliance upon receipt by
the Custodian of transmissions of information with the proper security
code or password, including instructions purporting to be Proper
Instructions, which the Custodian reasonably believes to be from the
Agency.
42.11 SPECIAL AND CONSEQUENTIAL DAMAGES Except as otherwise
provided in this Agreement, neither the Custodian nor the Agency shall be
liable to the other for special or consequential damages unless such
damages result from the gross negligence or fraud of that party.
42.12 NOTICES Notices and other writings shall be delivered by the most
expeditious means available, with due regard given to the time sensitivity
of the notice or demand being made:
To the Agency:
The City of Yakima
Finance Department
129 North Second Street
Yakima, WA 98901
To the Custodian:
The Bank of New York
One Wall Street
New York, NY 10286
Attention: Government Agencies Department
with a copy to:
BNY Western Trust Company
601 Union Street
Suite 520
Seattle, Washington 98101-2321
Or to such other address as the Agency or Custodian may hereafter specify in writing.
Telephone and facsimile notices shall be sufficient if communicated to the party entitled
to receive such notice at the following numbers:
If to Agency:
26
Washington Statewide Custody Contract
Telephone (509) 576-6639 Facsimile (509) 576-6634
If to Custodian:
Telephone (206) 224 - 3114 Facsimile (206) 224 - 4201
or to such other numbers as either party may furnish the other party by written notice
under this Section.
PAYMENT PROVISIONS
43. PAYMENTS
Fees and reimbursement for costs and expenses incurred by the Bank in connection with
this Agreement, shall be paid quarterly after the last business day of each calendar
quarter, with the first payment for the calendar quarter ending 09/30/2001. The Bank
shall submit to the respective Agency an invoice containing an itemized list of all costs
and expenses.
The respective Agency will forward payment for service charges to the Bank, after the
Agency verifies all activity and charges; within thirty days of receipt of the invoice,
provided there are no significant unreconciled differences.
In the event services are rendered for less than a calendar quarter, as will be the case for
the initial invoice period, or this Agreement is terminated prior to the end of a calendar
quarter, the respective Agency shall pay the Bank's fee prorated for the portion of the
calendar quarter such services are rendered or the Agreement is in effect, plus any costs
and expenses incurred by the Bank for the Account up to or subsequent to the date of
termination.
44. TAXES
It is mutually agreed and understood that all payments accrued on account of payroll
taxes, unemployment contributions, any other taxes, insurance or other expenses for the
Bank's staff shall be the sole liability of the Bank.
45. DAMAGES
If the Bank does not meet its Service obligations as detailed in Section 42 of this
Agreement and such failure is not caused by a force majeure event, the Bank shall be
required to negotiate a settlement with the Agency Contract Administrator for an
appropriate reduction in charges.
27
Washington Statewide Custody Contract
In the event the Agency suffers any loss as a result of the Bank's gross negligence, fraud,
or failure to exercise Due Care, as defined in Section 42.9.1, in the performance of its
duties under this Agreement, either by the Bank or the Bank's agents, employees,
subcontractors, or representatives under this Agreement, the Bank shall be liable to the
Agency for such damages but only to the extent such damages constitute direct money
damages caused by the Bank's negligence, fraud, or failure to exercise Due Care. The
Agency shall be required to fully document such losses in writing by submitting such
documentation to the Bank.
CONTRACT EXECUTION
46. COUNTERPARTS
This Agreement is to be executed in duplicate originals and each duplicate shall be
deemed an original copy of the Agreement signed by each party, for all purposes.
47.
28
Washington Statewide Custody Contract
SIGNATURE BLOCKS
IN WITNESS WHEREOF the parties hereto, having read this Agreement in its entirety,
including all attachments hereto, do agree in each and every particular.
APPROVED
City of Yakima
SIGNATURE
City Manager
TITLE
May 23, 2001
DATE
City Contract No. 2001-46
Resolution # R-2001-70
Washington Statewide Custody Contract
APPROVED
Bank of New York
41-'44)
SI NATURt
e& P're sidenG`_
29
TITLE
DATE
The BANK OF NEW YORK
CERTIFICATE OF AUTHORIZED INDIVIDUALS
GOVERNMENT AGENCIES
Account Name: City of Yakima Account #: 0 6 0 573
I certify that I am the City Manager of the City of Yakima, formed and existing under the laws of
Washington. I further certify that in accordance with the authority granted by City of Yakima and other
applicable law (Attach a copy of appropriate ordinance, council minutes or other source of documented
authority). The Bank of New York has been designated a custodian under the custodial agreement, a copy
of which is attached to this authorization. I further certify that the persons holding the position(s) of
Finance Director, Accounting Manager and Investment Officer may conduct business within the duties
designated by state statute and local code and shall have the authority to instruct The Bank of New York
and to execute such further documents and instruments as may be required or useful.
The Bank of New York may rely on instructions given by any one of the Authorized Persons named below,
who shall have the authority to obligate this public entity to contracts and agreements with The Bank of
New York.
Rita Anson / Finance Director
Name/Position
Cindy Epperson / Accounting Manager
Name/Position
Timothy M. Jensen / Accountant
Name/Position
Signature
Signature
Signa re
a/L.-Qv/A-)
Name/Position Signature
The above list of Authorized Persons may be amended from time to time in writing by certification
executed by the undersigned or his/her successors in office.
Witness my hand and the official seal the day of , J
Signature:
Name: Richard A. Zais Jr.
(OFFICIAL SEAL)
05/23/2001
U:/FORMS/ACCTDOC/PBSIG.DOC
Title: City Manager
The BANK OF NEW YORK
SHAREHOLDER COMMUNICATIONS ACT
The Bank of New York must comply with the Shareholder Communications Act and its related Securities
and Exchange Commission rules. To assist us in our compliance with the Act we ask you consider your
position regarding the disclosure of your name, address, and security position to those companies
requesting such information regarding the owners of their securities.
El Object to disclosure
Do not object to disclosure
Customer Name: City of Yakima
Account Number(s): 06 057 3
Authorized Si nature
Timothy M. Jensen
Name
05/23/2001
..C./2i/1
Date
If we do not receive a response from you within 30 days of this mailing,
your account will be coded as "Non Objection"
Thank you for helping us to comply with the Shareholder Communications Act
U:/FORMS/ACCTD OC/PBSIG. DOC
The BANK OF NEW YORK
EXHIBIT D
FUNDS TRANSFER
STANDING INSTRUCTIONS
Client hereby directs Custodian to process funds received or disbursed, (including those for payment of
maturing obligations, redemption collections, interest and dividends, and security settlements.) as directed
below:
Account Name: City of Yakima
Account Number:
E+ Wire funds to : Kev Bank of Washington
1
IOMNIMIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIO
❑ Send check payable to customer
❑ Special Instructions: Identify Trade and Dealer
If we do not receive a response from you within 30 days of this mailing. BNY Western Trust Company,
Custodian, will act upon these standing instructions until further notice is given to Custodian. Notification
can include written, fax, or telephonic notice in accordance with your Custody Agreement.
Date: May 23, 2001 Authorized by: -�i,�L'stf a�
Rita M. Anson
Print Name
Finance Director
Title
05/23/2001
U:/FORMS/ACCTDOC/PB SIG. DOC
The BANK OF NEW YORK
FACSIMILE INSTRUCTIONS: AUTHORIZATION
RE: Custody Agreement Dated May 23, 2001 Between The City of Yakima, and The Bank of New York.
Customer Authorization, Limitation of Liability and Indemnity:
The City of Yakima ("Customer") hereby authorizes The Bank of New York (the "Bank") to rely upon and
comply with instructions and directions sent by facsimile or other similar electronic methods by persons
believed by the Bank to be authorized to give instructions and directions on behalf of Customer. The Bank
shall have no duty or obligation to verify or confirm that the person who sent such instructions or directions
is, in fact, a person authorized to give instructions or directions on behalf of Customer, and the Bank shall
have no liability for any losses, liabilities, costs or expenses incurred or sustained by Customer as a result of
such reliance upon or compliance with such instructions or directions.
Please be advised that there are more secure methods of sending instructions and directions to the Bank.
By executing this document, you elect to use the foregoing method of transmitting instructions and
directions over such secure methods.
This authorization shall remain in full force and effect until canceled, revoked or amended by written notice
received by the Bank; and replaces and supersedes any previous authorization from Customer to the Bank
relating to the giving of instructions by facsimile or other electronic methods and is in addition to all other
authorizations.
In accordance with Section 42.8 of the Washington Statewide Contract for Security Custody Services, the
Custodian shall be protected in acting upon any instructions, notice, request, consent, certificate, instrument
or paper reasonably believed by it to be genuine and to have been properly executed or otherwise given by
or on behalf of the Customer. The Custodian may receive and accept a certificate from the Customer as
conclusive evidence (i) of the authority of any person to act in accordance with such certificate or (ii) of any
determination or of any action by the Customer as described in such certificate, and such certificate may be
considered as in full force and effect until receipt by the Custodian of written notice to the contrary.
Governing Law:
This document shall be governed by, and shall be construed in accordance with, the substantive laws (and
not the choice of law rules) of the State of Washington.
Representations and Warranties of Customer:
Customer hereby represents and warrants to the Bank that this authorization is properly given and has been
duly approved by a resolution of its Board of Directors.
Nothing contained herein shall, or be deemed to, alter or modify the rights and remedies of the Bank as set
forth in the Agreement.
05/23/2001
U: /FORMS/ACCTDOC/PB S IG.DOC
The BANK OF NEW YORK
The execution of this document by Customer constitutes acceptance of the foregoing.
THE BANK OF NEW YORK
I rf�
By:Account Administrator
Customer hereby accepts and
agrees to the terms and conditions
set forth herein:
Signatures 2,e-rx)
Name: Rita M. Anson
Title: Finance Director
Date: Jr y-0(
05/23/2001
U:/FORM S/ACCTDOC/PB SIG.DOC
THE
BANKOF
NEW
YORK
Fee Description
Statewide Custody Fee Schedule
Fee Charged
Comments
Account Charges: (Basic Service)
Includes 3 accounts per relationshi
Market Value up to $100 mil.
$100 00 per month
Per relationship
Market Value $100 to $200 mil.
$200.00 per month
Per relationship
Market Value over $200 mil.
$200 00 per month
1/200 of 1% on next $1.8 billion
1/400 of 1% on balance
Per relationship
Additional Accounts over initial 3
$50.00 per month
Per portfolio
Transactions: (Basic Service
Manual (Fax, Phone)
$12.00 per transaction
Purchases & Sales
Automated (On line entry by client)
$8.00 per transaction
Purchases & Sales
Maturities
$8.00 per transaction
Wires: Outgoing only
$10.00 per wire
Accounting Statements:
Standard Statements (Basic Service)
Waived
Daily Audited Accounting
$1,000 00 per month
Per portfolio
Performance Measurement:
($5,000.00 annual minimum per relationship)
Fundamental Performance Measurement
$1,000.00 per portfolio annually
ROR reports hardcopy
InformPA analytics (Online)
$2,000 00 per portfolio annually
Online ROR's, characteristics, report
writer, graphics
InformPA attribution analysis (Online)
$3,000 00 per portfolio annually
Performance Snapshot Quarterly
$1,200 00 per Snapshot report
Performance Snapshot Monthly
$3,500.00 per Snapshot report
Out -of Pocket Expenses (Basic Service)
On-line Communications:
Passed along at cost
Courier, Postage, etc.
Installation fee
$1,000.00 one-time
Monthly Access
Waived
Invoices will be produced quarterly.
Page 15
The Bank of New York
Receive/Deliver Instructions
For Our Customers
Type of Security
Delivery Instructions
BNY Account # 901
City of Yakima a/c 060573
- BNY Agent Bank #26500
- Institutional ID #26662
- BNY Interested Party ID #26662
Rec/Del Deadline (Pacific Standard Time)
Rec/Del: 7:30 a.m. or best efforts
Rec/Del: 10:00 a.m. or best efforts
Rec/Del: 8:00 a.m.
Rec/Del: 10:00 a.m. or best efforts
Trade Date Plus 2 for Instructions;
Trade Date +2 9:00 PST for cancellations and corrections
Depository Trust Company (DTC)
- Corrections & Late Trades
- C/Ps
- ADRs
- Same day settlements - (SDFS)
DTC Institutional Delivery System
- Principal Party
- Interested Party
Federal Reserve Book Entry System (FRBE)
- Same day settlements
BK of NYC/CUST
City of Yakima a/c 060573
ABA #021000018
Rec: 10:00 a.m. or best efforts till close
Del: 9:30 a.m. or best efforts till close
Participants Trust Company (PTC)
BYORK / Account # / Account Name
Rec/Del: 2:00 p.m. S-1
Euro Items
- Euro Time Deposits
- Euroclear Items (Attn: Ceclia or Sue)
- Eurodollar CDs (Attn: Nick Mirfin)
Euroclear #97816
Account Name / Account #
All instructions must be received 2 days prior to settlements
or best efforts thereafter
Wire Transfers
BK of NYC/ ABA #021000018
BBK = IOC 363
City of Yakima a/c 060573
12:15 a.m., or best efforts thereafter
Physicals
- Same day settlement (Fed Funds)
- Clearing House Funds
The Bank of New York
One Wall Street, 3rd Floor
Window A
The Bank of New York
One Wall Street, 3rd Floor
Window A
Rec: 12:00 p.m.
Del: 10:00 a.m.
Rec: 8.30 a.m. A/C Name, A/C #
Del: 6:00 a.m. - 7:45 a,m. or best effort
depending on the number of certificates.
Free Receives/Delivers - Government
- Stocks & Muni Bonds
One Wall Street, 3rd Floor
One Wall Street, 5th Floor
No Deadline
Cash Management
7.30 a.m.
Pair -Offs
Bk of NYC ABA #021000018
BBK-GLA 111567 -Pair Off
Note: Do not reference Account Name / Account #
All instructions must be received one day prior to
settlements, best efforts thereafter.
Note
Instructions received after our normal deadline will be handled on a best effort basis. To enable The Bank of New York to give our "best effort", a
telephone call in addition to the transmission or written instruction is always required after our "stated deadline" For any cash flow related item we require
notice the day prior to settlement in order to position funds into or out of BNY short term investment vehicles.
U:\ FORMS\ BNY3RDI. DOC
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
0
Item No.
For Meeting of May 1, 2001
ITEM TITLE: Resolution Authorizing Excecution of an Investment/Security Custody
Services Agreement with The Bank of New York
SUBMITTED BY: Department of Finance & Budget
CONTACT PERSON/TELEPHONE: Timothy Jensen, Finance Department 576-6639
Cindy Epperson, Accounting Manager 575-6070
SUMMARY EXPLANATION:
This Resolution authorizes execution of the attached Investment/Security Custody Agreement
with the Bank of New York (BONY) to be the custodian of the City's investments.
Previously, the City has contracted with Key Bank for these services. Key Bank has notified us
that they wish to terminate this relationship at the end of June 2001, because performing this
service for an investment portfolio of our size is not profitable for them.
Because the banking industry was beginning to increase charges for this service, the Washington
State Treasurer recognized the benefit of negotiating for a statewide Security Custody
agreement. In 1999 the Treasurer appointed a committee to prepare a Request for Proposal and
negotiate a contract that can be used for all state agencies. The City's Finance Department was
represented on this committee as Tim Jensen was asked to serve.
The committee was able to negotiate an acceptable contract for these services, which was
reviewed and approved by the Attorney General's office. Execution of the attached contract will
result in changing the City's Security Custodian to The Bank of New York, and will provide this
needed service at a lower cost to the City.
Resolution_X Ordinance Other (Specify)
Contract X Mail to (name and address): Return to Tim Jensen
Phone:
Funding Source: General Fun ._(budgeted)
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Adopt Resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
Resol.ut4on adopted. RESOLUTION NO. R-2001-70
WASHINGTON STATEWIDE
CONTRACT
For
Security Custody Services
February, 2000
Contract -blanks tilled in
WASHINGTON STATEWIDE CONTRACT
FOR SECURITY CUSTODYCES
SERVICES
Table of Contents
GENERAL PROVISIONS 1
1. CONTRACTING PARTIES 1
2. HEREBY WITNESSETH• ••. 1
3. ADDITIONAL SERVICES 1
4. CONSIDERATION 1
5. APPOINTMENT OF CUSTODIAN 7
6 AGREEMENT 2
7. PERSONAL LIABILITY.. ... ........ ... ... ............ 3
8 HOLD HARMLESS AND INDEMNIFICATION ............. 3
9. CONFLICT AND SEVERABILITY • • 4
10. NONDISCRIMINATION AND AFFIRMATIVE ACTION 4
11. GIFTS AND GRATUITIES 5
12. RIGHTS AND REMEDIES .,,,..... 5
13. PERFORMANCE 6
14. GOVERNING LAW 6
15. SUBCONTRACT/ASSIGNMENT 6
DEFINITIONS 6
16. DEFINITIONS
SCOPE OF SERVICES 7
17. SCOPE OF SERVICES 7
AGREEMENT TERM AND TERMINATION 8
18. TERM OF AGREEMENT AND SURVIVORSHIP OF TERMS 8
19. TERMINATION AND REMEDIES 8
20. FORCE MAJEURE 11
21. CONFLICT OF INTEREST 11
CONTRACT ADMINISTRATION 12
22. INCORPORATED DOCUMENTS 12
23. ORDER OF PRECEDENCE 12
24. ENTIRE AGREEMENT . ..- 13
25. LIMITATION OF AGENCY'S AUTHORITY 13
26. AGENCY CONTRACT ADMINISTRATOR 13
27. BANK'S ACCOUNT MANAGER 13
28. CHANGES 14
29. DISPUTES 14
30. ADVERTISING 14
31. CONSENT 14
AGENCY RESPONSIBILITIES 15
32. PROTECTION OF PROPRIETARY AND CONFIDENTIAL INFORMATION 15
33. FUNDS TRANSFER AUTHORIZATION AGREEMENT 15
BANK RESPONSIBILITIES 15
34. REGISTRATION WITH THE DEPARTMENT OF REVENUE 15
35. LICENSING AND ACCREDITATION STANDARDS 15
36. WORKERS' COMPENSATION INSURANCE COVERAGE 15
37. CONFIDENTIALITY OF AGENCY RECORDS 16
38. AUDITING 16
39. BANK COMMITMENTS, WARRANTIES, AND REPRESENTATIONS 16
40. YEAR 2000 COMPLIANCE 17
41. PRICE INCREASES 18
CUSTODY PROVISIONS 18
42. CUSTODY OF SECURITIES 18
PAYMENT PROVISIONS 26
43. PAYMENTS 26
44. TAXES 26
45. DAMAGES 26
CONTRACT EXECUTION 27
46. COUNTERPARTS 27
47. SIGNATURE BLOCKS 28
Washington Statewide Custody Contract
WASHINGTON STATEWIDE AGREEMENT
FOR CUSTODY SERVICES
GENERAL PROVISIONS
1. CONTRACTING PARTIES
THIS AGREEMENT is entered into by and between The City of Yakima, STATE OF
W n SHf NGTON hereinafter referred to as the "Agency" and The Bank of New York,
hereinafter referred to as the "Custodian" or the `Bank."
2. HEREBY WITNESSETH:
The State Of Washington, acting by and through the OFFICE OF THE TREASURER of
the STATE OF WASHINGTON, issued a Request for Proposal (RFP), dated November
23, 1999 for the purpose of obtaining proposals for providing statewide custody services.
As a result of that process, the State Treasurer has designated the Bank as the Statewide
Custodian, and the Bank has agreed to provide Statewide Custody Services, hereinafter
referred to as the "Services," as described in Bank's proposal, attached hereto at the
prices stated therein, in accordance with the terms of this Agreement.
1
3. ADDITIONAL SERVICES
The Parties agree that additional services, appropriate to the scope of this Agreement,
may be added to this Agreement by an instrument in writing and only with the written
consent of both parties. Such writing shall include a specific description of the additional
Services, pricing and additional terms and conditions as relevant. The additional Services
shall be available under the same terms and conditions established herein except as
specifically amended between the parties.
4. CONSIDERATION
In consideration whereof, the mutual promises made to each other, as hereinafter set
forth, the parties further agree as follows:
The Agency and the Bank agree that this Agreement is the complete and exclusive
statement between the parties which supersedes all proposals or prior agreements, oral or
written, and all other communications between the parties relating to the subject matter of
this Agreement except as included by attachment to this Agreement.
To the extent that any terms and conditions are in conflict with any other terms and
conditions, the order of authority is as follows: (1) these General Provisions are
controlling, followed by; (2)
the Office of the State Treasurer RFP for Statewide
1
Washington Statewide Custody Contract
Securities Custody Services; and (3) the Bank's Proposal, inclusive of related Exhibits
and Schedules.
Unless otherwise agreed in writing, all amendments, addenda, and orders signed during
the life of this Agreement shall be governed by these General Provisions.
Any notice or demand which under this Agreement or applicable law must or may be
given by the Bank, or Agency shall be in writing, properly addressed and, as an
alternative to personal delivery, made by the most expeditious means available, with due
regard given to the time sensitivity of the notice or demand being made.
if to the Bank, at: if to the Agency, at:
The Bank of New York
One Wall Street
New York, NY 10286
Attention: Government Agencies
Department
with a copy to:
BNY Western Trust Company
601 Union Street
Suite 520
Seattle, Washington 98101-2321
5. APPOINTMENT OF CUSTODIAN
The Agency hereby appoints the Bank as Custodian for certain assets of the Agency and
authorizes Custodian to hold such assets in registered foiiii in its name or the name of its
nominees. All property delivered to the Bank, its agents or subcustodians, shall be held
and dealt with as herein provided. The Bank shall have no responsibility or liability for
the acts or omissions of prior Custodians, and shall not be responsible for any property of
the Agency not delivered to the Bank, its agents or subcustodians, and shall only be
obligated to accept such property that is in street name or other good delivery form. The
Bank hereby accepts this appointment.
6. AGREEMENT
NOW THEREFORE the Agency hereby awards to the Bank this Agreement for Custody
Services, hereinafter referred to as "Services," as listed and described in the RFP for
Statewide Custody Services as Exhibit A and acknowledged in the Bank's proposal as
Exhibit B both of which are on file at the Office of the State Treasurer, and by this
reference made a part hereof, as though completely set forth herein, subject to and in
accordance with the terms of this Agreement.
2
Washington Statewide Custody Contract
7. PERSONAL LIABILITY
the parties hereto shall any nffirial officer
It is agreed by and between hereto that in no event �,.w_. --"., � --_, ,
employee or agent of the Agency be in any way personally liable or responsible for any
any
covenant or agreement herein contained whether expressedor implied, nor for
statement or representation made herein or in any connection with this agreement.
8. HOLD HARMLESS AND INDEMNIFICATION
8.1 The Bank shall be financially responsible (liable) for any direct money
damages suffered by the Agency which are caused by the Bank's own
failure e Due Care, Section
negligence, fraud, or to eXerCis:.. as defined in ��--�-��--�
42.9.1, in the Bank's performance of its duties under this Agreement. For
the purposes of this Agreement, direct money damages shall include those
situations where interest charges are incurred by the Agency or any loss of
earnings occurs that would otherwise have been realized by the Agency
through an overnight investment of funds, and where such interest charges
or loss of earnings are caused by the Bank's own negligence, fraud, or
failure to exercise Due Care, as defined in Section 42.9.1.
8.2 The Bank shall not be financially responsible (liable) for any damages or
for any losses to the Agency, unless such losses constitute direct money
damages caused by the Bank's own negligence, fraud, or failure to
defined Section 42.9.1, in the Rank's
exercise Due Care, as in
performance of its duties under this Agreement. Notwithstanding any
other document or provision in this Agreement to the contrary, but
subject to Section 8.1 hereof, in no event shall the Bank be liable for
indirect, incidental, consequential or special damages regardless of the
form of action and even if the same are foreseeable, except that the
foregoing provisions of this sentence shall not limit the Bank's liability
for any punitive damages.
8.3 Each party to this Agreement agrees to indemnify and hold harmless the
other party, to the extent authorized by law, from all losses (excluding
attorney's fees and expenses) which relate to or result from lawsuits
brought by non-parties to this Agreement from activities covered by this
Agreement from:
8.3.1 A failure by the indemnifying party or its subsidiaries, affiliates,
agents, subcontractors, representatives or employees to comply
with any applicable federal, state or local law, rule or regulation;
8.3.2 A negligent act or omission or the breach of this Agreement (as
defined in Section 19.3) by the indemnifying party, its subsidiaries,
affiliates, agents, subcontractors, representatives or employees; or
a failure to exercise due care as defined in Section 42.9.1 herein.
3
Washington Statewide Custody Contract
8.3.3 Fraudulent or intentional misconduct by the indemnifying party or
its agents, subcontractors, representatives or employees.
8.3.4 Nothing in this section shall be construed to mean either party is
prevented from commencing a legal action against the other.
8.4 Notwithstanding any other document or provision in this Agreement to the
contrary, the above indemnity by the Bank to the Agency shall be limited
to direct money damages and shall relate only to the Bank's own actions
or omissions which constitute negligence, fraud, or failure to exercise Due
Care.
9. CONFLICT AND SEVERABILITY
9.1 CONFLICT In the event of conflict between contract documents and
applicable laws, codes, ordinances or regulations, the most stringent or
legally binding requirement shall govern and be considered a part of this
contract to afford the Agency maximum benefits.
9.2 SEVERABILITY Any provision of this document found to be
prohibited by law shall be ineffective to the extent of such prohibition
without invalidating the remainder of the document.
10. NONDISCRIMINATION AND AFFIRMATIVE ACTION
During the performance of this Agreement, the Bank shall comply with all federal and
state nondiscrimination statutes and regulations. These requirements include, but are not
limited to:
10.1 Nondiscrimination in Employment: The Bank shall not discriminate
against any employee or applicant for employment because of race, color,
sex, religion, national origin, creed, marital status, age, or the presence of
any sensory, mental or physical disability. This requirement does not
apply, however, to a religious corporation, association, educational
institution or society with respect to the employment of an individual of a
particular religion to perform work connected with the carrying on by such
corporation, association, educational institution or society of its activities.
10.1.1 The Bank shall take affirmative action to ensure that employees are
employed and treated during employment without discrimination
because of their race, color, religion, national origin, creed, marital
status, age, or the presence of any sensory, mental or physical
disability. Such action shall include, but not be limited to, the
following: employment, upgrading, demotion, or transfer;
recruitment or recruitment selection for training, including
apprenticeships and volunteers.
4
Washington Statewide Custody Contract
10.2 Nondiscrimination in Client Services: The Bank shall not, on grounds of
race, color, sex, religion, national origin, creed, marital status, age or the
presence Ul any sensory, mental or physical disability:
1 n i
Deny an individual ual aany services or other benefits provided under
l u
this contract;
10.2.2 Provide any service(s) or other benefits to an individual which are
different, or are provided in a different manner, from those
provided to others under this contract;
Subject an individual to segregation or separate treatment in any
manner related to the receipt of any service(s) or other benefits
provided under this contract; or,
10.2.4 Deny any individual an opportunity to participate in any program
provided by this contract through the provision of services or
otherwise, or afford any opportunity which is different from that
afforded others under this contract.
10.3 The Bank, in determining (1) the types of services or other benefits to be
provided or (2) the class of individuals to whom, or the situation in which,
such services or other benefits will be provided or (3) the class of
individuals to be afforded an opportunity to participate in any services or
other benefits, will not utilize criteria or methods of administration which
have the effect of subjecting individuals to discrimination because of their
race, color, sex, religion, national ongin, creed, marital status, age or the
presence of any sensory, mental or physical disability.
10.4 Noncompliance With Nondiscrimination Requirements: In the event of
the Bank's noncompliance or refusal to comply with the
nondiscrimination requirements, this contract may be rescinded, canceled
or terminated in whole or in part, and the Bank may be declared ineligible
for further contracts with the Agency. The Bank shall, however, be given
a reasonable time in which to cure the noncompliance. Any dispute may
be resolved in accordance with the Disputes section set forth in this
Agreement.
11. GIFTS AND GRATUITIES
In accordance with RCW 42.23 Code of Ethics for Municipal Officers -Contract Interests,
it is unlawful for any person to accept, directly or indirectly, any compensation, gratuity,
or reward in connection with this contract from any person beneficially interested therein.
12. RIGHTS AND REMEDIES
In the event of any claim for default or breach of contract, no provision in this document
nor in the Bank's proposal for services shall be construed, expressly or by implication, as
5
Washington Statewide Custody Contract
a waiver by the Agency of any right to insist upon the strict performance of any term or
condition of the contract or to exercise or delay the exercise of any right or remedy
provided in the contract or by law, or as the acceptance of (or payment for) materials,
equipment or services, or to release the Bank from any responsibilities or obligations
imposed by this contract or by law.
13. PERFORMANCE
Acceptance by the Agency of unsatisfactory performance with or without objection or
reservation shall neither waive the right to claim damage for breach nor constitute a
waiver of requirements for satisfactory performance of any obligation remaining to be
performed by Bank.
14. GOVERNING LAW
This Agreement shall be governed in all respects by, and construed in accordance with,
the law and statutes of the State of Washington. The venue of any action hereunder shall
be exclusively in the Superior Court for Yakima County, Washington. The Bank, by
execution of this contract, acknowledges the jurisdiction of the courts of the state of
Washington in this matter.
15. SUBCONTRACT/ASSIGNMENT
The Bank shall not subcontract or assign its obligations under this contract without the
prior written consent of the Contract Administrator, provided the Bank may enter into
subcontracts, agreements and understandings with BNY Western Trust Company, a
wholly owned subsidiary of The Bank of New York Company, Inc. whenever and on
such terms and conditions as it deems necessary or appropriate to perform its services
hereunder. The Bank shall be responsible to ensure that all requirements of the contract
shall be communicated to any and all subcontractors.
Substitution of another financial institution to act as the Bank under this Agreement may
occur in the event of a takeover, merger, or acquisition. In this event, the Successor Bank
shall provide an automatic continuation of all terms of this Agreement, provided the
Successor Bank can meet all required teinis of the Agreement. However, the Agency
reserves the right to terminate the contract in the event a Successor Bank is substituted,
after providing 60 calendar days written termination notice.
DEFINITIONS
16. DEFINITIONS
Definitions as used throughout this Agreement shall have the meanings set forth below:
"Exhibit A" shall mean the Request For Proposal (RFP) for Statewide Custody Services
issued by the Office of the State Treasurer, dated November 23, 1999.
6
Washington Statewide Custody Contract
"Exhibit B" shall mean the Bank's proposal in response to the State RFP for Statewide
Custody Services.
"Exhibit C" shall mean the Bank's schedule of fees for all Services provided under this
Agreement.
"Exhibit D" shall mean the Funds Transfer Authorization Agreement which shall run
concurrently with this Agreement.
"Exhibit E" shall mean the Agency's schedule of required Services provided under this
Agreement.
"Agency Contract Administrator" shall mean the staff person appointed by the Agency to
administer this Agreement on behalf of the Agency.
"Bank" shall mean The Bank of New York. It shall also include any subcontractor
retained by the Bank as permitted under the terms of this Agreement.
"Bank's Account Manager" shall mean an employee of the Bank who is permanently
assigned as the primary contact person whom the Agency Contract Administrator shall
work with for the duration of this Agreement.
"Custody Services" may also be referred to as "Services," and shall be inclusive of all
services, including associated support services and maintenance provided pursuant to this
Agreement.
"Depository" shall include the Federal Reserve/Treasury book -entry system for receiving
and delivering securities, the Depository Trust Company, and any other securities
UG11 V �.1 Ills o�. aJ ui L�1VJ, Depository
depository, book -entry system or clearing agency (and their respective successors and
nominees) authorized to act as a securities depository, book -entry system or clearing
agency pursuant to applicable law.
"Subcontractor" shall mean one not in the employment of the Bank, who is performing
all or part of those Services under this Agreement under a separate contract with the
Bank. The term "subcontractor" means subcontractor(s) of any tier.
"RCW" shall mean the Revised Code of Washington (Washington State Law).
SCOPE OF SERVICES
17. SCOPE OF SERVICES
The Bank agrees to provide custody, record keeping and cash management, as further
described in the Office of the State Treasurer RFP (Exhibit A) and the Bank's Proposal
(Exhibit B), under the terms of this Agreement, serving as the Statewide Custodian of
Washington State.
7
Washington Statewide Custody Contract
AGREEMENT TERM AND TERMINATION
18. TERM OF AGREEMENT AND SURVIVORSHIP OF TERMS
This Agreement shall commence on July 1st 2001, and continue until March 31, 2004.
The Bank is not obliged to offer this contract for a time period of less than one year, nor
is the Bank obliged to offer the contract with a termination date exceeding the
teiuiination date of its appointment as the Statewide Custodian.
The teini of this Agreement may be extended for additional contract periods or portions
thereof, whereby the total contract period with extensions shall not exceed six (6) years,
PROVIDED: the extension shall be by mutual agreement between the Agency and the
Bank, and by the Agency giving written notice of the extension to the Bank not less than
180 days prior to the termination date of this Agreement.
19. TERMINATION AND REMEDIES
19.1 TERMINATION FOR CONVENIENCE The Agency may terminate
this contract, in whole or in part, at any time and for any reason by giving
90 calendar days written termination notice to the Bank and the State
Treasurer. The Bank may terminate this contract, by giving 180 days
written termination notice to the Agency and the State Treasurer.
19.2 TERMINATION FOR REDUCTION OF FUNDING OR
WITHDRAWAL OF AUTHORITY In the event that either funding from
the Agency or other sources is withdrawn, reduced, or limited, or the
authority of the Agency to perform any of its duties is withdrawn, reduced
or limited in any way after the effective date of this Agreement and prior
to its normal completion, the Agency may tenninate this Agreement, in
whole or in part, at any time by giving 60 calendar days written
teiniination notice to the Bank.
19.3 TERMINATION FOR BREACH Except in the case of delay or failure
resulting from circumstances beyond the control of and without the fault
or negligence of the Bank or of the Bank's suppliers or subcontractors, the
Agency shall be entitled, by written or verbal notice, to cancel this
contract in its entirety or in part, for breach of any of the terms herein, and
to retain all other rights against the Bank by reason of the Bank's breach as
provided by law.
A breach shall mean one or more of the following events: (1) the Bank
fails to perfoim the services by the time and date required and such failure
is not caused by a force majeure event; (2) the Bank breaches any
warranty, or fails to perfoliu or comply with any term or agreement in the
contract; (3) the Bank fails to exercise Due Care as to any aspect of this
Agreement, with Due Care being defined in Section 42.9.1; (4) the Bank
8
Washington Statewide Custody Contract
makes any general assignment for the benefit of creditors; (5) the Bank
becomes insolvent or in an unsound financial condition so as to endanger
performance hereunder; (6) the Bank becomes the subject of any
proceeding under any law relating to bankruptcy, insolvency or
(7) trustee similar
reorganization or relief from debtors, or any receiver, tr ustee or s�m��a�
official is appointed for the Bank or any of the Bank's property. If it is
subsequently found that the Bank was not in breach, the rights and
obligations of the parties shall be the same as if a Notice of Termination
had been issued pursuant to subparagraph 19.1.
The Agency Contracting Officer shall issue a written notice of breach
providing a period not to exceed 30 days in which the Bank shall have an
opportunity to cure. Time allowed for cure shall not diminish or eliminate
the Bank's liability for damages.
If the breach remains, after the Bank has been provided the opportunity to
cure, the Agency may do one or more of the following:
19.3.1 Exercise any remedy provided by law;
19.3.2 Terminate this contract and any related contracts or portions
thereof, by written or verbal notice;
19.3.3 Seek damages.
TEDMIN n TION BY MITT TAT , AGREEMENT The Agency and the
19.4 1L%1�1V111VC1i1�11�
Bank may terminate this contract in whole or in part, at any time, by
mutual agreement.
9TERMINATION PROCEDURE Upontermination of this contract the
TERM_N_ �C1iTiirla�1�11 �,�+d
Agency, in addition to any other rights provided in this contract, may
require the Bank to deliver to the Agency any property specifically
produced or acquired for the performance of such part of this contract as
has been teitninated.
The Agency shall pay to the Bank the agreed upon price, if separately
stated, for completed work and services accepted by the Agency, and the
amount agreed upon by the Bank for (a) completed work and services for
which no separate price is stated, (b) partially complete work and services,
(c) other property or services which are accepted by the Agency, and (d)
the protection and preservation of property, unless the termination is for
default, in which case the Agency shall determine the extent of the
liability of the Agency. Failure to agree with such determination shall be a
dispute within the meaning of the "Disputes" section of this contract. The
Agency may withhold from any amounts due to the Bank such sum as the
Agency determines to be necessary to protect the Agency against potential
loss or liability.
9
Washington Statewide Custody Contract
The rights and remedies of the Agency provided in this clause shall not be
exclusive and are in addition to any other rights and remedies provided by
law or under this contract.
19.6 TERMINATION -RELATED OBLIGATIONS • ANTECEDENT TO
DATE OF TERMINATION Upon nearing the end of the final term of
this agreement, and without respect to either the cause or time of such
termination, the Bank shall take all reasonable and prudent measures to
facilitate the transition to a successor provider's system.
The Bank shall provide, at any time during the nine (9) months preceding
termination, such information about the Bank's systems as will be
reasonably required by the Agency and/or the successor for purposes of
planning the transition and conversion to the successor's system.
19.7 OBLIGATIONS UPON TERMINATION After receipt of a notice of
termination, and except as otherwise directed by the Agency Contract
Administrator, the Bank shall:
19.7.1 Stop work under the contract on the date, and to the extent,
specified in the notice;
19.7.2 Place no further orders or subcontracts for materials, services, or
facilities except as may be necessary for completion of such
portion of the work under the contract as is not teiuiinated;
19.7.3 Assign to the Agency, in the manner, at the times, and to the extent
directed by the Agency Contract Administrator all of the rights,
titles, and interest of the Bank under the orders and subcontracts so
terminated, in which case the Agency has the right, at its
discretion, to settle or pay any or all claims arising out of the
termination of such orders and subcontracts;
19.7.4 Settle all outstanding liabilities and all claims arising out of such
termination of orders and subcontracts, with the approval or
ratification of the Agency Contract Administrator to the extent he
or she may require, which approval or ratification shall be final for
all the purposes of this clause;
19.7.5 Transfer title to the Agency and deliver in the manner, at the times,
and to the extent, if any, as directed by the Agency Contract
Administrator, any property which, if the contract had been
completed, would have been required to be furnished to the
Agency;
19.7.6 Complete performance of such part of the work as shall not have
been terminated; and
I0
Washington Statewide Custody Contract
19.7.7 Take such action as may be necessary, or as the Agency Contract
Administrator may direct, for the protection and preservation of the
property related to this contract which is in the possession of the
Bank and in which the Agency has or may acquire an interest and
to transfer that property to the successor Custodian.
By such termination, neither the Agency nor the Bank may nullify
obligations already incurred for performance or failure to perform
prior to the date of termination.
20. FORCE MAJEURE
20.1 DEFINITION Neither party shall be liable to the other or deemed in
default under this contract if and to the extent that such party
performance of this contract is prevented by reason of force majeure. The
term "force majeure" means an occurrence that is beyond the control of
the party affected and could not have been avoided by exercising
reasonable diligence. Force majeure shall include acts of God, war, riots,
strikes, fire, floods, earthquakes, epidemics, or other similar occurrences.
+-�---
20.2 ALLOCATION OF SERVICE When force majeure affects only part
of the Bank's capacity to perform, the Bank may allocate services among
its customers, including regular customers not included in this Agreement,
in any manner which is fair and reasonable.
delayed by force majeure, e.l7rP_,; said
20.3 NOTIFICATION If either party is
party shall provide reasonable notice that there will be delay or non-
delivery
on-
dclively of reports or services. The notification shall provide evidence of
the majeure the satisfaction of the other party. Such delay shall
Lily force majeure tocease as soon as practicable and written notification of same shall be
provided. The time of completion shall be extended by contract
modification for a period of time equal to the time that the results or
effects of such delay prevented the delayed party from perfoiniing in
accordance with this contract.
20.4 RIGHTS RESERVED The Agency reserves the right to cancel the
contract and/or purchase services from the best available source during the
time of force majeure, and Bank shall have no recourse against the
Agency.
21. CONFLICT OF INTEREST
21.1 The Bank warrants that it presently has no interest and shall not acquire
any interest, direct or indirect, which would conflict in any manner or
degree with the perfouniance of services required under this contract.
11
Washington Statewide Custody Contract
YTaj11711E:, ��/i+ �•`^'
21.2 The Agency may terminate this Agreement, by written notice to the
Bank, if it is found after due notice and examination that there is a
violation by Bank of:
21.2.1 RCW 42.23 Code of Ethics for Municipal Officers -Contract
Interests or any other similar statute involving the Bank in its
performance under this Agreement.
21.3 In the event this Agreement is terminated as provided above, the Agency
shall be entitled to pursue the same remedies against the Bank as it could
pursue in the event of a breach of this Agreement by the Bank. The
rights and remedies of the Agency provided by this clause shall not be
exclusive and are in addition to any other rights and remedies provided
by law.
CONTRACT ADMINISTRATION
22. INCORPORATED DOCUMENTS
This Agreement shall consist of the terms and conditions as set forth herein and the
following documents which are incorporated herein by reference:
22.1
"Exhibit A" - The
Services, issued by
November 23, 1999
22.2 "Exhibit B" - The
Statewide Custody
Treasurer.
Request For Proposal (RFP) for Statewide Custody
and on file at the Office of the State Treasurer, dated
Bank's proposal in response to the State RFP for
Services, also on file at the Office of the State
22.3 "Exhibit C" - The Bank's schedule of fees for all Services provided under
this Agreement.
22.4 "Exhibit D" - The Funds Transfer Authorization Agreement which shall
run concurrently with this Agreement.
22.5 "Exhibit E" - The Agency's schedule of required Services provided under
this Agreement.
23. ORDER OF PRECEDENCE
23.1 The headings used herein are inserted for convenience only and shall not
control nor affect the meaning or construction of any of the provisions.
23.2 If any provision of this Agreement shall be deemed to be in conflict with
any statute or rule of law, such provisions shall be deemed modified to
12
Washington Statewide Custody Contract
of
. In
e
ent of
conform to said statute or rule
tencw shall bevresolvedyin inconsistency
order of
this Agreement, the inconsistency
precedence stated below:
23.2.1 Applicable Federal and State Statutes and Regulations.
23.2.2 The Terms and Conditions of this Agreement.
23.2.3 Exhibit A - The Request For Proposal (RFP) for Statewide
Custody Services issued by the Office of the State Treasurer, dated
November 23, 1999, Exhibit B - The Bank's proposal in response
to the State RFP for Statewide Custody Services, and Exhibit E -
The Agency's schedule of required Services provided under this
Agreement.
24. ENTIRE AGREEMENT
This document, including all addenda and subsequently issued change notices, comprises
the entire agreement between the Agency and the Bank and shall be governed by the laws
of the State of Washington incorporated herein by reference.
25. LIMITATION OF AGENCY'S AUTHORITY
Only the Agency Contracting Officer, or delegate by writing, shall have the express,
implied, or apparent authority to alter, amend, modify, or n ai e anydifa clause
or or wconditioner of
of this Agreement. Furthermore, any alteration, amend..
any clause or condition of this Agreement is unlessnot fothelve rwisa provided hereing ll remade in
writing and signed by the Agency and the
26. AGENCY CONTRACT ADMINISTRATOR
The Agency shall appoint an individual who will be the Contract
Administrator
ThAgency
Agreement and will provide oversight of the activities conducted
hContract Administrator will manage this Agreement on behalf of the Agency, and will be
the principal point of contact for the Bank concerning Bank's performance hereunder.
The Agency shall notify Bank, in writing, when there is a change in staffing and a new
Contract Administrator is assigned to this Agreement.
27. BANK'S ACCOUNT MANAGER
The Bank shall appoint an individual who will be the Account Manager for the Agency
account. The Bank's Account Manager will be the principal point of contact for the
Agency concerning the Bank's performance hereunder. The Bark's Account Manager
will also serve as the focal point for business matters, support if a new Anatccoun
administrative activities. The Bank shall notify the Agency in writing
Manager is assigned.
13
Washington Statewide Custody Contract
28. CHANGES
No modifications or amendments to this Agreement shall be effective unless it is in a
written amendment signed by an authorized officer of the Bank and the Agency Contract
Administrator.
29. DISPUTES
29.1 Except as otherwise provided in this Agreement, when a bona fide dispute
concerning a question of fact arises between the Agency and the Bank,
and it cannot be resolved, either party may initiate the dispute resolution
procedure provided herein.
29.2 Time is of the essence in resolving disputes. The initiating party shall
reduce its description of the dispute to writing and deliver it to the
responding party. The responding party must respond in writing within
two (2) Agency working days.
29.2.1 Then, both parties shall have three (3) Agency working days to
negotiate in good faith to resolve the dispute.
29.3 Both parties agree to exercise good faith in dispute resolution and to avoid
arbitration and litigation whenever reasonably possible. Nothing in this
Agreement shall prevent either party, after the expiration of the three (3)
day period in Section 29.2.1, from pursuing other methods of dispute
resolution.
29.4 The Agency and the Bank agree that, the existence of a dispute
notwithstanding, they will continue without delay to carry out all their
respective responsibilities under this Agreement which are not affected by
the dispute.
30. ADVERTISING
The Bank shall not advertise or publish information concerning this contract in any form
or media without prior written consent from the Agency.
31. CONSENT
Both parties agree that whenever a party's consent is required under the terms of this
Agreement, that consent shall not be unreasonably delayed or withheld.
14
Washington Statewide Custody Contract
AGENCY RESPONSIBILITIES
32. PROTECTION OF PROPRIETARY AND CONFIDENTIAL INFORMATION
Any specific information that is contained in the Bank's Proposal (Exhibit B) that is
confidential or proprietary, must be clearly identified by the Bank by stamping
"CONFIDENTIAL" on the lower right hand corner of the corresponding page(s). A
blanket designation of the entire proposal as being confidential will be disregarded. If a
request is made to view Banks proprietary information,
42the17 State Treasurer and the
Agency will comply with the Public Records Act, chapter
RCW.
33. FUNDS TRANSFER AUTHORIZATION AGREEMENT
The Agency shall execute a Funds Transfer Authorization Agreement with the Bank.
This agreement shall remain in effect for the duration of this Agreement. The Transfer
Agreement is attached hereto as Exhibit D. In the case of any conflict between the Funds
Transfer Authorization Agreement and this Agreement, this Agreement shall take
nrerec lei ice
BANK RESPONSIBILITIES
34. REGISTRATION WITH THE DEPARTMENT OF REVENUE
The Bank shall complete registration with the Department of Revenue, General
Administration Building, Olympia, Washington 98504, and be responsible for payment
of all taxes due on payments made under this contract.
35. LICENSING AND ACCREDITATION STANDARDS
The Bank shall comply with all applicable local, state, and federal licensing requirements
and standards necessary in the performance of this Agreement.
36, WORKERS' COMPENSATION INSURANCE COVERAGE
The Bank shall provide or purchase applicable workers' compensation insurance coverage
prior to perfoinung work under this contract. The Agency will not be responsible for
payment of industrial insurance premiums for the Bank, or any subcontractor or
employee of the Bank, which might arise under the workers' compensation insurance
laws during performance of duties and services under this contract. Should the Bank fail
to secure workers' compensation insurance coverage or fail to pay premiums on behalf of
its employees, the Agency may deduct the amount of premiums owing from the amounts
payable to the Bank under this contract and transmit the same to the appropriate workers'
compensation insurance fund.
15
Washington Statewide Custody Contract
37. CONFIDENTIALITY OF AGENCY RECORDS
37.1 The Bank acknowledges that material and information which has or will
come into its possession or knowledge in connection with this Agreement,
or its perfolluance, may consist of confidential and proprietary data, the
disclosure of which to, or use by, third parties could be damaging.
37.2 Access to information concerning individual recipients of the Agency's
services shall not be granted except as authorized by law or Agency rule.
37.3 The Bank, therefore, agrees to hold all such material and information in
strictest confidence, not to make use thereof other than for the
performance of this Agreement, to release it only to authorized employees
requiring such information, and not to release or disclose it to any other
party.
37.4 Notwithstanding anything apparently to the contrary in the preceding
provisions of this Section 37, the Bank may release the material and
information described in this Section 37 to authorized bank examiners and
to its internal and external auditors for official use and may also release it
pursuant to a subpoena or other order issued by a court of competent
jurisdiction. The Bank shall promptly notify the Agency of any such
subpoena or order upon its receipt.
38. AUDITING
The Bank shall permit representatives of the Agency, the Agency Auditor, an auditor
selected by the Agency, and/or the Auditor of the State of Washington or their authorized
assistant to examine the records of the Bank relating to the services rendered under this
Agreement, including securities transactions. Such audits may include, but are not
limited to, examination of the securities themselves. If the Bank has contracted for
deposit of the securities with another Bank, the Bank shall require its subcontractor to
provide similar access to the designated Agency and State officials or their
representatives. Any audits required by this Section which do not necessitate the
compilation of records in addition to those which are otherwise required by other
Sections of this Agreement may be conducted without notice. Any audits required by
this Section which require the compilation of records in addition to those which are
otherwise required by this Agreement may be conducted upon ten (10) days written
notice from the Agency to the Bank. The provisions of this Section shall remain in effect
for eighteen (18) months after the expiration, or sooner termination, of this Agreement.
Records of Agency transactions must be kept and maintained by the Bank for a period of
no less than seven (7) years from the date of the transaction.
39. BANK COMMITMENTS, WARRANTIES, AND REPRESENTATIONS
39.1 Any written commitment by the Bank within the scope of this Agreement
shall be binding upon the Bank. Failure of the Bank to fulfill such a
16
Washington Statewide Custody Contract
commitment may constitute breach and shall render the Bank liable for
damages due the Agency under the teinis of this Agreement.
19 2 For purposes of this Agreement, a commitment by the Bank, which must
be in writing, includes: (1) prices and options committed to remain in
force over a specified period(s) of time; (2) any warranty or representation
made by the Bank in a proposal as to Service performance; (3) any
warranty or representation made by the Bank concerning the
characteristics of items in (2) above, contained in any literature,
descriptions, or specifications accompanying or referred to in a proposal;
(4) any modification of or affirmation or representation as to the above
which is made by Bank in writing whether or not incorporated into a
formal amendment proposal in question; and (5) any representation
formal to the proposal
by the Bank in a proposal, supporting documents or amendments thereto
as to, services to be performed, prices and options committed to remain in
force over a fixed period of time, or any other similar matter regardless of
the fact that the duration of such commitment may exceed the duration of
this Agreement.
40. YEAR 2000 COMPLIANCE
40.1 Year 2000 Compliance.
The Custodian hereby warrants that it will use commercially reasonable
efforts to ensure that the computer software and hardware (as used in this
subsection, the "Systems") that are owned by the Custodian and used to
provide the services to be provided by the Custodian under this Agreement
(as used in this subsection "Services") are 2000 Compliant or will be made
31, 1999. With respect to software that
2000 Compliant before December r
the Custodian licenses from third parties and uses in providing the
Services ("Third Party Software"), the Custodian warrants that it has used
or will use commercially reasonable efforts to test the same by September
30, 1999 to certify, in accordance with the Custodian's standard practices,
that the Third Party Software is 2000 Compliant. If the Custodian cannot
certify any Third Party Software as 2000 Compliant, the Custodian will
use commercially reasonable efforts to replace such Third Party Software
with software that is warranted or certified by its vendor as 2000
Compliant, if such replacement is available, compatible with the
Custodian's Systems and deemed by the Custodian as appropriate under
the circumstances. In the event that the Custodian uses third partyservice
providers to provide the Services or any portion thereof ("Third Party
that place a program under
Services"), the Custodian warrants it has in
which it will use commercially reasonable efforts to contact such service
providers and obtain from them assurances that the Systems use in
providing Third Party Services are 2000 Compliant. As used herein, the
teas' "2000 Compliant" means that the Systems will function without
material error caused by the introduction of dates falling on or after
17
Washington Statewide Custody Contract
January 1, 2000. Notwithstanding the foregoing, the parties hereto
acknowledge and agree that the Custodian cannot and does not warrant
that the Systems, Third Party Software or Third Party Services will
continue to interface with the hardware, firmware, software (including
operating systems), records or data used by the Fund or third parties, nor
does the Custodian make any warranties hereunder with respect to any
public utility, communications service provider, securities or commodities
exchange, or funds transfer network.
41. PRICE INCREASES
41.1 The Bank agrees to provide the Services at the costs, rates and fees set
forth in Exhibit C, Custody Fee Schedule. No other costs, rates, or fees
shall be payable to the Bank for implementation of Bank's proposal.
41.2 The fee schedule applies for two years from the date the Letter of
Agreement is signed. Annual adjustments may be made by the Bank after
the first two years to any or all items no greater than the national
Consumer Price Index (CPI) as published by DRI/McGraw Hill for the
preceding calendar year. The limitation would continue if the term of the
Letter of Agreement is extended.
CUSTODY PROVISIONS
42. CUSTODY OF SECURITIES
42.1 CUSTODIAL SERVICES The Custodian shall take custody of the
securities owned by the Agency, and tendered for transfer to its custody;
provide safekeeping services for them and accept complete responsibility
as a fiduciary for their safekeeping from the moment of delivery to it
and/or its transfer agent until their safe return and delivery to the Agency
or its designated agent upon expiration or sooner termination of this
Agreement.
When ownership of a security is manifested by a certificate, bond, note or
other physical document, the Custodian will verify proper registration of
the security in the name of the Agency; keep the physical specimen in a
secure vault, safe from destruction, damage, embezzlement and/or other
loss; readily available to the Agency; and in a condition suitable for sale or
transfer. When ownership is reflected in a book entry on official records
only, the Custodian shall be shown on the books of the Federal Reserve
System, the Depository Trust Corporation, or other depository agencies, as
Custodian of the Agency's book -entry security; the Custodian shall verify
the proper registration, evidenced by an entry in the Custodian's books
reflecting that the Custodian holds those particular securities (or a quantity
of securities that are part of a fungible bulk of government book -entry
18
Washington Statewide Custody Contract
securities) as Custodian for the Agency; and the Custodian shall obtain
and maintain the confirmatory documents in a secure area and unless
expressly authorized by the Agency, keep the securities ready for
immediate sale or transfer free and clear of all encumbrances.
42.2 INVENTORY: DELIVERY AND REDELIVERY the Custodian shall
keep an accurate, current inventory of all securities held within its custody
for the Agency. The inventory will contain precise identification of each
, 1. and maturity
security including, when applicable, the date of purchase
date; CUSIP numbers; and other sources of identification.
42.3 DEPOSIT OF SECURITIES the Custodian shall keep tangible securities
in the facilities of the Custodian located in New York City, unless the
Custodian and the Agency agree in writing to another location. Where
securities are eligible for deposit in a book-entry system or a Depository,
the Custodian may use that depository.
Security arrangements shall restrict access to the Agency securities, record
all entries and withdrawals, and provide physical safety for records at least
equal to customs and standards of banks in large metropolitan financial
centers for maintenance of valuable commercial securities.
In addition, the Custodian shall maintain a "back-up" system of
confiiiiratory records at another location so that if the vault at the
Custodian's approved facility is inaccessible or its material damaged,
• ,,_ r.�o degree of
destroyed, or stolen, the Custodian can establish to a reasonable
certainty, the securities belonging to the Agency.
42.4 AGENCY CLEARING ACCOUNT the Custodian shall establish a
clearing account for the Agency as directed by the Agency. This account
shall accurately reflect transactions of all kinds, with respect to securities
of the Agency. This account is not to be construed as a Depository
Account.
The Custodian shall credit the following to the accounts immediately upon
the earlier of the settlement date or the payment date:
42.4.1 All interest and other distributions received on account of the
securities (including mortgages) held for the Agency;
42.4.2 All payments of principal or other return of capital, including,
securities backed by mortgages and financing contracts;
42.4.3 All proceeds from the sale or transfer of securities, or rights
appurtenant to the securities;
42.4.4 All payments made by the Agency to the Custodian and by the
Custodian to the Agency;
19
Washington Statewide Custody Contract
42.4.5 The Custodian may debit the account with disbursements
authorized by the Agency.
At the close of business, there shall be no cash in the clearing account. At
the option of the Agency, all funds in the account at the close of business
shall either be remitted by wire to the Agency in care of its primary bank
or invested in an investment authorized by state statutes and approved by
the Agency.
42.5 TRANSACTIONS the Custodian shall assist the purchase of securities
and the sale of securities within its possession owned by the Agency.
When so instructed, the Custodian will:
42.5.1 Take possession of securities purchased by -the Agency, and when
authorized, make payment from the clearing accounts as
established under this Agreement therefore;
42.5.2 Deliver securities sold or transferred by the Agency to the
appropriate entity or person versus payment;
42.5.3 Register in its name or in its name as Custodian, securities owned
by the Agency and held in its physical custody or those securities
indicated on the records of the Federal Reserve System, the
depository trust company of New York Agency, or another
depository, provided that adequate records are maintained to
identify the actual ownership of the securities by the Agency and
all rights to interest, and sale proceeds are vested in the Agency;
42.5.4 At the option of the Agency, the Custodian shall:
42.5.4.1
42.5.4.2
Washington Statewide Custody Contract
credit or debit the appropriate money account of the
Agency in connection with the purchase, sale,
maturity, redemption, income, dividends or other
disposition of securities and other assets held for the
time being on behalf of the Agency in said accounts
on an actual settlement basis; or
make available provisional credit of settlement,
maturity redemption proceeds, income and
dividends on a contractual settlement basis. The
Custodian reserves the right to reverse any such
crediting at any time before actual receipt of the
item associated with the credit when the Custodian
determines that actual receipt will not be received in
due course for such an item. In such instances, the
Custodian may charge the appropriate money
account of the Agency for the expense of providing
funds associated with such advance in an amount
20
not to exceed the actual short-term teem earnings of the
Agency during the time the funds were credited to
the Agency.
o, -,t of an advance. of funds
42.5.4.3 In order to secure repayment
made in connection with a purchase of securities the
Custodian shah have a purchase money security
interest in, and a security entitlement with respect
to, all of the Agency's right, title and interest in and
to the securities acquired with such advance
(including proceeds thereof). The Custodian shall
with respect to such purchase money security
interest be entitled to all the rights and remedies of a
pledgee and secured creditor under applicable laws,
rules or regulations as then in effect. If the
Custodian, in its sole discretion, advances funds to
the Agency or there shall arise for whatever reason
an overdraft in the Agency's account the Custodian
may at any time charge any such overdraft or
indebtedness together with interest due thereon
against any balance of account standing to such
Agency's credit on the Custodian's books.
42.5.5 Disburse funds as requested and remit funds to the Agency before
the close of each business day.
The Agency retains the exclusive authority to manage the assets of the Agency within the
Custodian's custody. This includes the determination of which investments shall be
securities encumbered; the terms or conditions of
made; what and when shall be sold or any transaction; and the disposition of cash on hand. The Custodian shall make no
transaction without instructions from the Agency, except the advance crediting of
principal, interest and other proceeds to the Agency's clearing account.
42.6 INCOME ON DEFECTIVE TRANSACTIONS The Custodian shall
pay the Agency the following sums when a transaction is defective
without fault of the Agency:
42.6.1 If a seller fails to deliver the securities in proper form on the
settlement date, and the Custodian is not providing contractual
settlement, the Custodian shall return to the Agency all those funds
designated for purchase before the close of each business day, or
invest those funds in an investment authorized by state statutes and
approved by the Agency.
42.6.2 If a buyer fails to make payment on the settlement date, and the
Custodian is not providing contractual settlement, the Custodian
21
Washington Statewide Custody Contract
shall pay the Agency the interest or other income, if any, actually
received by it, from the party in default.
42.6.3 If the transaction fails or is delayed due to the inability of the
Custodian to make such delivery due to actions of, or an inaction
by, the Custodian, its agents, employees or equipment, the
Custodian shall promptly pay the Agency an amount to make it
whole as if the transaction had been properly executed, provided
that the foregoing provisions shall not apply if the inability, action
or inaction is by reason of forces beyond the control of Custodian,
and provided further that Custodian's obligation to make payment
to the Agency shall be limited to amounts constituting direct
money damages.
42.7 ANCILLARY SERVICES
42.7.1 The Custodian shall have a comprehensive contingency plan for
timely disaster recovery in the event systems are rendered
inoperative due to fire, flood or other disaster.
42.7.2 Settlement of Transactions:
Settlement of and payment for securities received for, and
delivered from, the account may be made in accordance with the
customary or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including without limitation, the delivery of
securities to a purchaser, broker, dealer or their respective agents
either against a receipt for future payment or without any payment
(so-called "free delivery").
42.7.3 Taxes:
The Agency is solely responsible and liable for the payment of and
the reclamation, where applicable, of all taxes assessments, duties,
and other governmental charges (including any interest or penalties
with respect thereto) with respect to the cash or securities held
hereunder or the Account. The Custodian, however, will cooperate
with the Agency in connection with the Agency's payment or
reclamation of taxes.
42.7.4 Pricing Services:
To the extent that the Custodian provides values of, and pricing
infouiiation with respect to, securities, the Custodian is authorized
to utilize generally recognized pricing services (including brokers,
dealers and market makers). The Custodian shall not be liable or
responsible for or be under any duty to inquire into, nor be deemed
22
Washington Statewide Custody Contract
n�8
to make any assurances or warranties with respect to, the accuracy
or completeness of such values or information, even if the
Custodian, in performing services for itself and others, including
services similar to those performed for the Agency, receives
different valuations of the same or similar securities of the same
issuer. In the event such services are unable to provide a value of
or pricing information with respect to securities and the Custodian,
nevertheless, provides values and pricing infoiiiiation, the
Custodian shall so advise the Agency, but shall have no other
obligation or liability with respect to such valuation or pricing
information.
PROPER NSTRUCTIONS AND EVIDENCE OF AUTHORITY The
term "Proper Instructions"
shall
mean instructions received ythe
Such
Custodian from the Agency or any person duly authorized by them.
instructions may be in writing signed by the authorized person or may be
in a tested communication or in a communication utilizing access codes
effected between electro -mechanical or electronic devices or may be by
such other means as may be
e agreed to from time to time by the Custodian
agree.,�
and the party giving such instructions (including, without limitation, oral
instnictions). The Agency shall cause its duly authorized officer to certify
to the Custodian in writing the names and specimen signatures of persons
authorized to give proper instructions. The Custodian shall be entitled to
rely upon the identity and authority of such persons until it receives notice
Agency to the contrary.
from the
The Custodian shall be protected in acting upon ally instructions, notice,
request, consent, certificate, instrument or paper reasonably believed by it
to be genuine and to have been properly executed or otherwise given by or
on behalf of the Agency. The Custodian may receive and accept a
certificate from the Agency as conclusive evidence (i) of the authority of
any person to act in accordance with such certificate or (ii) of any
determination or of any action by the Agency as described in such
certificate, and such certificate wf r tene sidered as in full notice to the contrary.e and
effect until receipt by the Custodian o
42.9 RESPONSIBILITY OF CUSTODIAN
42.9.1 The Custodian shall perform its duties hereunder with "Due Care."
For the purposes of this agreement, "Due Care" shall mean the
degree of care and skill demonstrated by fiduciaries acting in like
capacity as a safekeeping Custodian. The Custodian shall not be
responsible for the title, validity or genuineness, including good
deliverable form, of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract. The
Custodian may at its discretion appoint and remove agents or
subcustodians to carry out such of the provisions of this contract as
23
Washington Statewide Custody Contract
the Custodian may from time to time direct; provided, however,
that such appointment shall not relieve the Custodian of its
responsibilities or liabilities under this Contract, and provided
further that any depository selected with Due Care by the bank
shall not be deemed for purposes of this agreement an agent or
subcustodian of the Bank.
42.9.2 Provided always that the Custodian and its agents and
subcustodians act in good faith and with the exercise of Due Care
in performance of such duties as would ordinarily be expected of a
financial institution in the relevant market and subject to the terrns
of the Custody Agreement:
42.9.2.1 It is not liable for any loss or damage caused by the
delay or failure of any central bank, any Depository,
or any commercially prevalent payment or clearing
system to deliver to or for the Bank or its
subcustodians securities purchased or sold, or to
make or receive and remit, any payment in
connection with purchases or sales of securities, for
delays or failures in providing corporate action
notices, or for delays or inability by the Bank to
perform its duties due to acts or omissions of any
Depository or to disorder in market infrastructure
with respect to any particular security, security
exchange, central depository or clearing system;
and
42.9.2.2 It is not liable for any delay or failure of any non-
parties, company, corporation, or other body in
charge of registering or transferring Securities in the
name of the Custodian, any customer of the
Custodian, or the Subcustodian, its nominee or
agent, or for any consequential losses arising out of
such delay or failure to transfer such Securities
including non -receipt of bonus, dividends and rights
and other accretions or benefits.
42.10 SECURITY CODES If the Custodian has issued security codes or
passwords to the Agency in order that the Custodian may verify that
certain transmissions of information, including Proper Instructions, have
been originated by the Agency, the Custodian shall, to the extent
authorized by law, be kept indemnified by and be without liability to the
Agency for any action taken or omitted by it in reliance upon receipt by
the Custodian of transmissions of information with the proper security
code or password, including instructions purporting to be Proper
24
Washington Statewide Custody Contract
L from the
Instructions, which the Custodian reasonably believes to be from she
Agency.
a7 11 SPECIAL AND CONSE•UENTIAL DAMAGES Ex,ept� as
slrotherw se
y Rhallbe
provided in this Agreement, neither the Custodiannor the
liable to the other for special or consequential damages unless such
damages result from the gross negligence or fraud of that party.
shall
NOTICES Notices and other writings shall i,P delivered delivered by the most
expeditious means available, with due regard given to the time sensitivity
of the notice or demand being made:
T.., v the-, Agency:
The City of Yakima
129 North Second Street
Yakima, WA 98901
To the Custodian.
The Bank of New York
One Wall Street
New York, NY 10286
Attention: Government Agencies Department
with a copy to:
BNY Western Trust Company
sr._.o.,, Street
601 Union Street
Suite 520
Seattle, Washington 98101-2321
s
Or to such other address as the Agency or Custodian if ay mun catedrt phe party entitled
in writing.
Telephone and facsimile notices shall be sufficientcom
to receive such notice at the following numbers:
If to Agency:
Telephone (509) 576-6639 Facsimile (509) 576-6634
If to Custodian:
Telephone (206) 224 - 3114 Facsimile (206) 224 - 4201
or to such other numbers as either party may furnish the other party by written notice
under this Section.
25
Washington Statewide Custody Contract
PAYMENT PROVISIONS
43. PAYMENTS
Fees and reimbursement for costs and expenses incurred by the Bank in connection with
this Agreement, shall be paid quarterly after the last business day of each calendarThe
quarter, with the first payment for the calendar quarter ending
Bank shall submit to the respective Agency an invoice containing an itemized list of all
costs and expenses.
The respective Agency will forward payment for service charges to the Bank, after the
Agency verifies all activity and charges; within thirty days of receipt of the invoice,
provided there are no significant unreconciled differences.
In the event services are rendered for less than a calendar quarter, as will be the case for
the initial invoice period, or this Agreement is terminated prior to the end of a calendar
quarter, the respective Agency shall pay the Bank's fee prorated for the portion of the
calendar quarter such services are rendered or the Agreement is in effect, plus any costs
and expenses incurred by the Bank for the Account up to or subsequent to the date of
termination.
44. TAXES
It is mutually agreed and understood that all payments accrued on account of payroll
taxes, unemployment contributions, any other taxes, insurance or other expenses for the
Bank's staff shall be the sole liability of the Bank.
45. DAMAGES
If the Bank does not meet its Service obligations as detailed in Section 42 of this
Agreement and such failure is not caused by a force majeure event, the Bank shall be
required to negotiate a settlement with the Agency Contract Administrator for an
appropriate reduction in charges.
In the event the Agency suffers any loss as a result of the Bank's gross negligence, fraud,
or failure to exercise Due Care, as defined in Section 42.9.1, in the performance of its
duties under this Agreement, either by the Bank or the Bank's agents, employees,
subcontractors, or representatives under this Agreement, the Bank shall be liable to the
Agency for such damages but only to the extent such damages constitute direct money
damages caused by the Bank's negligence, fraud, or failure to exercise Due Care. The
Agency shall be required to fully document such losses in writing by submitting such
documentation to the Bank.
26
Washington Statewide Custody Contract
CONTRACT EXECUTION
46. COUNTERPARTS
This Agreement is to be executed in duplicate originals and each duplicate shall be
deemed an original copy of the Agreement signed by each party, for all purposes.
27
vVashington Statewide Custody Contract
SIGNATURE BLOCKS
IN WITNESS WHEREOF the parties hereto, having read this Agreement in its entirety,
including all attachments hereto, do agree in each and every particular.
APPROVED
City of Yakima
SIGNATURE
City Manager
TITLE
May 23, 2001
DATE
City Contract No. 2001-46
Resolution # R-2001-70
Washington Statewide Custody Contract
APPROVED
Bank of New York
SIOATU E
TITLE
`riiit 2q 1 vool
DATE
29
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 9
For Meeting of May 1, 2001
ITEM TITLE: Resolution Authorizing Excecution of an Investment/Security Custody
Services Agreement with The Bank of New York
SUBMITTED BY: Department of Finance & Budget
CONTACT PERSON/TELEPHONE: Timothy Jensen, Finance Department 576-6639
Cindy Epperson, Accounting Manager 575-6070
SUMMARY EXPLANATION:
This Resolution authorizes execution of the attached Investment/Security Custody Agreement
with the Bank of New York (BONY) to be the custodian of the City's investments.
Previously, the City has contracted with Key Bank for these services. Key Bank has notified us
that they wish to terminate this relationship at the end of June 2001, because performing this
service for an investment portfolio of our size is not profitable for them.
Because the banking industry was beginning to increase charges for this service, the Washington
State Treasurer recognized the benefit of negotiating for a statewide Security Custody
agreement. In 1999 the Treasurer appointed a committee to prepare a Request for Proposal and
negotiate a contract that can be used for all state agencies. The City's Finance Department was
represented on this committee as Tim Jensen was asked to serve.
The committee was able to negotiate an acceptable contract for these services, which was
reviewed and approved by the Attorney General's office. Execution of the attached contract will
result in changing the City's Security Custodian to The Bank of New York, and will provide this
needed service at a lower cost to the City.
Resolution X Ordinance Other (Specify)
Contract X Mail to (name and address). Return to Tim Jensen
Phone:
Funding Source: General Funbudgeted)
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Adopt Resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2001-70
RESOLUTION NO. R-2001-70
A RESOLUTION authorizing and directing the City Manager of the City of Yakima
to execute a Security Custody Services Agreement with The Bank of
New York for provision of investment security custody services.
WHEREAS, the City of Yakima ("City") maintains an investment portfolio; and
WHEREAS, the City requires security custody services concerning said
investments; and
WHEREAS, The Washington State Treasurer, with the assistance of
representatives of the Washington State Attorney General, negotiated and prepared the
attached security custody services agreement; and
WHEREAS, a representative of the City of Yakima Finance Department also
participated in the negotiation and preparation process concerning said contract; and
WHEREAS, the City Council deems it to be in the best interest of the City of
'Yakima to contract with The Bank of New York whereby said entity will provide
security custody services in accordance with the terms of the attached agreement; now,
therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager of the City of Yakima is hereby authorized and directed to
execute the attached and incorporated Security Custody Services Agreement with The
Bank of New York for provision of investment security custody services.
ADOPTED BY THE CITY COUNCIL this 1st day of May, 2001.
SI MARY PLACE
Mary Place, Mayor
A I I EST:
.;;t,41.7ii•qT,5.S. Chi
' -
City Clerk
Ceritfied t, be a true ond correct cop' fqie
origad Ele.d in my office,
CITY C_,ERK
By • Jty
(1k)res/finance underwriter contr apr 01/.pm