Common use of Deposit of Company Assets in Securities System Clause in Contracts

Deposit of Company Assets in Securities System. The Custodian may deposit and/or maintain securities owned by the Company in a clearing agency registered with the U.S. Securities and Exchange Commission (“SEC”) under Section 17A of the Exchange Act, which acts as a securities depository, or in the book-entry system authorized by the U.S. Department of the Treasury and certain federal agencies, collectively referred to herein as “Securities System” in accordance with SEC rules and regulations, if any, and subject to the following provisions: (1) The Custodian may keep securities of the Company in a Securities System provided that such securities are represented in an account (“Account”) of the Custodian in the Securities System which shall not include any assets of the Custodian other than assets held as a fiduciary, custodian or otherwise for customers; (2) The records of the Custodian with respect to securities of the Company which are maintained in a Securities System shall identify by book-entry those securities belonging to the Company; (3) The Custodian shall pay for securities purchased for the account of the Company upon: (a) Receipt of advice from the Securities System that such securities have been transferred to the Account; and (b) The making of an entry on the records of the Custodian to reflect such payment and transfer for the account of the Company. The Custodian shall transfer securities sold for the account of the Company upon: (a) Receipt of advice from the Securities System that payment for such securities has been transferred to the Account; and (b) The making of an entry on the records of the Custodian to reflect such transfer and payment for the account of the Company. Copies of all advices from the Securities System of transfers of securities for the account of the Company shall identify the Company, be maintained for the Company by the Custodian and be provided to the Company at its request. Upon request, the Custodian shall furnish the Company confirmation of each transfer to or from the account of the Company in the form of a written advice or notice and shall furnish to the Company copies of daily transaction sheets reflecting each day’s transactions in the Securities System for the account of the Company. (4) The Custodian shall provide the Company with any report obtained by the Custodian on the Securities System’s accounting system, internal accounting control and procedures for safeguarding securities deposited in the Securities System. (5) The Custodian shall have received from the Company the initial or annual certificate, as the case may be, required by Article 15 hereof. (6) Anything to the contrary in this Contract notwithstanding, the Custodian shall be liable to the Company for any loss or damage to the Company resulting from use of the Securities System by reason of any negligent action, negligent failure to act or willful misconduct of the Custodian or any of its agents or of any of its or their employees or from failure of the Custodian or any such agent to enforce effectively such rights as it may have against the Securities System; at the election of the Company, it shall be entitled to be subrogated to the rights of the Custodian with respect to any claim against the Securities System or any other person which the Custodian may have as a consequence of any such loss or damage if and to the extent that the Company has not been made whole for any such loss or damage.