The Victory Portfolios
EX-99.B8(b)
Amended and Restated Institututional Custody and
Clearance Services Agreement dated October 31, 1995
AMENDED AND RESTATED
INSTITUTIONAL CUSTODY AND CLEARANCE SERVICES AGREEMENT
BY AND BETWEEN
THE BANK OF NEW YORK
AND
KEY SERVICES CORPORATION
EFFECTIVE AS OF THE 30TH DAY OF OCTOBER, 1995
TABLE OF CONTENTS
PAGE NO.
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Section 1 Amendment and Restatement....................................2
Section 2 Services Provided............................................2
Section 3 Entities Covered.............................................2
Section 4 Appointment and Acceptance...................................2
Section 5 Delivery of Securities; Safekeeping..........................2
Section 6 Deposit of Monies............................................3
Section 7 Registration of Securities...................................3
Section 8 Proxies, Notices, etc........................................4
Section 9 Purchases....................................................4
Section 10 Sales........................................................4
Section 11 Settlements..................................................4
Section 12 Corporate Actions/Reorganizations............................6
Section 13 Collections..................................................7
Section 14 Asset Income.................................................7
Section 15 Payment......................................................8
Section 16 Investment of the Customer's Money...........................9
Section 17 Release of Assets............................................9
Section 18 Books, Records and Accounts..................................9
Section 19 Proper Instructions.........................................10
Section 20 Term and Fees...............................................11
Section 21 Confidentiality; Proprietary Information....................12
Section 22 Responsibility..............................................13
Section 23 Indemnification.............................................14
Section 24 Termination.................................................16
Section 25 Force Majeure...............................................17
Section 26 General Provisions..........................................17
Section 27 Future Relationship.........................................20
Section 28 Managing the Relationship...................................21
Section 29 Vendor Risk Analysis........................................22
Schedule I Services to be Performed
Schedule II Fees
Schedule III Performance Standards
Addendum I Foreign Securities
Addendum II Laser
AMENDED AND RESTATED INSTITUTIONAL CUSTODY
AND CLEARANCE SERVICES AGREEMENT
THIS AMENDED AND RESTATED INSTITUTIONAL CUSTODY AND CLEARANCE SERVICES
AGREEMENT (the "Agreement"), effective as of the 30th day of October, 1995, by
and between THE BANK OF NEW YORK, a trust company organized and existing under
the laws of the State of New York (the "Custodian"), and KEY SERVICES
CORPORATION, a corporation organized and existing under the laws of the State of
New York ("Key Services").
WHEREAS, the Bank of New York, Ameritrust Company National Association
("Ameritrust"), and Ameritrust Texas National Association ("Ameritrust Texas"),
have heretofore entered into that certain Institutional Custody and Clearance
Services Agreement dated as of August 1, 1991 (the "Custody Agreement"); and
WHEREAS, Society Management Company ("Society") has succeeded to the
interests of Ameritrust and Ameritrust Texas in the Custody Agreement; and
WHEREAS, Key Services is successor by merger to Society and has
succeeded to the interest of Society in the Custody Agreement; and
WHEREAS, the Custodian and Key Services desire to amend and restate
the Agreement so that the Agreement reflects and refers to the proper parties in
interest and by making certain other amendments thereto; and
WHEREAS, Key Services is referred to hereinafter as the "Customer";
and
NOW, THEREFORE, in consideration of the mutual premises set forth
herein, the parties hereto agree as follows:
1. AMENDMENT AND RESTATEMENT. This Agreement and any attached
Addendums amend and restate and are executed in replacement of and substitution
for the Custody Agreement.
2. SERVICES PROVIDED. The Custodian shall provide the institutional
custody and clearance services (the "Services") for the securities set forth in
the attached Schedule I. The parties acknowledge that the Customer may change
the Services and the securities from time to time during the term of this
Agreement.
3. ENTITIES COVERED. At any time during the term of this Agreement,
any affiliate of the Customer may choose to have the Custodian provide Services
to it under the terms and conditions of this Agreement by so notifying the
Custodian and executing a letter agreement with the Custodian agreeing to be
bound by the terms and conditions of this Agreement. Thereafter, such entity is
deemed to be included with the term "Customer." For the above purposes,
"affiliate" means any entity that now or in the future controls, is controlled
by, or is under the same common control as the Customer.
4. APPOINTMENT AND ACCEPTANCE. The Customer hereby appoints the
Custodian as custodian of the securities and monies (the "Assets") beneficially
held by the Customer, either in its fiduciary or agency capacity, and the
Custodian hereby agrees to act as custodian and, as such, shall perform its
duties upon the terms and conditions set forth in this Agreement.
5. DELIVERY OF SECURITIES; SAFEKEEPING. The Customer will deliver (or
cause to be delivered) to the Custodian the Assets of its choice and may deliver
(or cause to be delivered) Assets which come into its possession. As custodian,
the Custodian will physically safekeep the Assets in separate accounts; or in a
clearing agency registered with
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the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934, as amended, which acts as a securities depository; or the
book-entry system as provided in Subpart O of Treasury Circular No. 300 and the
book-entry regulations promulgated in connection therewith (the "Book-Entry
System"). The Custodian has no power or authority to assign, hypothecate, pledge
or otherwise dispose of any Assets, except as provided herein or pursuant to
Proper Instructions (as defined in Section 19 below).
6. DEPOSIT OF MONIES. On receipt of appropriate Proper Instructions,
the Custodian will open and maintain a separate transaction account(s) (as that
term is defined in Regulation D promulgated by the Board of Governors of the
Federal Reserve System) or subaccount(s), as instructed by the Customer, and
will credit to and hold in such account(s) all Assets received by it, subject to
the provisions hereof, and to Proper Instructions. The Custodian will report the
Customer's money and security transactions on a combined statement for each
account.
7. REGISTRATION OF SECURITIES. All securities held by the Custodian as
part of the Assets which are issued or issuable in bearer form may be held by
the Custodian (or its agents) in that form, but at the Custodian's option and
with the consent of the Customer (not to be unreasonably withheld), for the
mutual convenience of the parties, any such securities may be held in registered
form. All securities held by the Custodian as part of the Assets other than
those held in bearer form may be registered in the name of any duly appointed
nominee(s). The Custodian may place all eligible securities it may hold
hereunder in the Depository Trust Company ("DTC"), the Participant Trust Company
("PTC"), or other eligible securities depository or the Book-Entry System, any
of which may commingle the Customer's securities with other securities.
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8. PROXIES, NOTICES, ETC.. The Custodian shall forward to the Customer
copies of all information or documents that it may receive with respect to
Assets held by it under this Agreement which, in the opinion of the Custodian,
are intended for the beneficial owner of the Assets including, without
limitation, all proxies and other authorizations properly executed and all proxy
statements, notices and reports. Neither the Custodian nor its nominees shall
vote, or authorize the voting of, any Assets or give any consent, approval or
waiver with respect thereto, except as otherwise provided herein or as directed
by Proper Instructions. Annually, the Custodian will provide the Customer the
opportunity to indicate the number of shareholder packets needed for the
following calendar year. Additional sets will be provided upon receipt of
advance notice by the Custodian.
9. PURCHASES. Upon receipt of Proper Instructions, the Custodian shall
pay for and receive securities purchased for the account of the Customer,
payment for which is to be made only upon receipt by the Custodian of the
securities in satisfactory form for transfer.
10. SALES. Upon receipt of Proper Instructions, the Custodian will
deliver the securities held by it as custodian hereunder and sold by or for the
Customer against payment to the Custodian (in form satisfactory to the
Custodian) of the amount specified in such Proper Instructions.
11. SETTLEMENTS.
11.1 The Custodian shall settle all purchases and sales of
securities on actual settlement date in immediately available funds or next day
funds as set forth in the Proposal, unless otherwise agreed to or instructed by
the Customer, provided that (a) Proper Instructions are received by the
Custodian on or before the cut-off times detailed in the
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Proposal (except as noted in the Performance Standards in Schedule III), and (b)
the Custodian has all other information and/or Assets necessary to complete the
transaction.
11.2 Notwithstanding the foregoing, the Customer, in its sole
discretion, may require the Custodian to provide one or any number of the
Customer's account(s) with automatic settlement of all purchases and sales of
securities on contractual settlement date in immediately available funds
provided that (a) Proper Instructions are received by the Custodian on or before
the cut-off times detailed in the Proposal (except as noted in the Performance
Standards in Schedule III), and (b) the Custodian has all other information
and/or Assets necessary to complete the transaction. Any change from "actual
settlement date" to "contractual settlement date" requires at least 15 business
days' advance written notice and is only effective as of the 1st day of a month.
11.3 The Custodian will not be liable or responsible for or on
account of any act or omission of any broker or other agent designated by the
Customer to purchase or sell securities for the account of the Customer. The
Custodian has sole discretion to choose the method, entity and agency through
which it will settle and clear transactions, after giving due consideration to
any reasonable preference therefor expressed by the Customer.
11.4 If any advance of funds is made by the Custodian on behalf of
the Customer to purchase securities, or to make payment on or against delivery
of securities, the Custodian will have a continuing lien and security interest
in, and right of setoff against, such securities, without notice to the
Customer, until such time as the Custodian is repaid the amount of such advance.
The Custodian shall notify the Customer in writing in the event any such advance
of funds is made and only after such written notification, the Custodian
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also has the right to lend, pledge and repledge, enter into an agreement to sell
and repurchase (repo), hypothecate and rehypothecate such securities until such
time as the Custodian is repaid the amount of such advance; provided however,
that in the event that the Custodian advances funds for the purchase of
securities held at the Book-Entry System, such securities may be repledged by
the Custodian to the Federal Reserve Bank of New York without such prior written
notification. Except as otherwise provided herein, the Customer's Assets held by
the Custodian hereunder will be held free and clear of any lien or other
encumbrance.
12. CORPORATE ACTIONS/REORGANIZATIONS.
12.1. The Custodian shall provide the Customer with timely notice
of (a) any conversion of securities pursuant to their terms, reorganization,
recapitalization, redemption in kind, consolidation, tender offer or exchange
offer, (b) any exercise or subscription, purchase or similar rights represented
by securities, which notice must contain available information in reasonable
detail, and (c) any partial or full bond calls, bond prerefundings, and bonds
with expiring put options. The primary sources of such information as of the
date hereof include, but are not limited to, the informational services detailed
in the Proposal and mailings from issuers to holders of record.
12.2. Upon receipt of Proper Instructions, in connection with (a)
or (b) of the above provision, the Custodian will exchange securities held as by
it as custodian for other securities, or for securities and cash. The Custodian
will use verifiable efforts to solicit the Customer's instructions prior to
expiration date if the Custodian has not received instructions from the Customer
regarding a corporate action within the time period specified in the Custodian's
notice. The Custodian will not take action on a corporate action without
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Proper Instructions, provided such corporate action is not mandatory according
to its terms. In the event of a late response by the Customer, the Custodian
will make a reasonable attempt to execute the requested action.
13. COLLECTIONS. Unless it receives Proper Instructions to the
contrary, the Custodian will, with respect to the Assets:
(a) collect, receive and hold on deposit for the account of the Customer
all income and other payments received with respect to Assets held by
it;
(b) execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with the collection of
bond and note coupons;
(c) present for payment all coupons and all other income items requiring
presentation;
(d) present for payment all securities that have become payable at
maturity or upon calls for redemption announced in major publications,
received via subscription to electronic services (including, but not
limited to, X.X. Xxxxx Information Services and DTC), or received via
notification directly from the paying agent or trustee. Partial calls
will be allocated among the Custodian's customers on whose behalf the
Custodian is holding the securities involved on the basis of an
impartial lottery;
(e) endorse for collection checks, drafts or other negotiable instruments;
(f) do all things which are necessary or proper in connection with the
receipt and collection of any such items; and
(g) receive and collect all stock dividends, rights and other similar
capital changes and corporate action items.
14. ASSET INCOME. The Custodian shall collect all Asset income due and
payable on securities held either at the Custodian, a depository or the
Book-Entry System. The Custodian is under no obligation or duty to take action
to effect collection of any amount if the securities upon which such payment is
due are in default, or if payment is refused after due demand and presentation;
other than cooperating with the Customer in providing information or providing
reasonable assistance, including presenting the claim. The
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Custodian shall notify the Customer promptly in the event of such default or
refusal to pay, and only after such notice shall have the right to debit the
Customer's account to the extent of such a pre-credit.
15. PAYMENT.
15.1. The Custodian shall credit the Customer's account on the
payable/maturity date in immediately available or next day funds, as set forth
in the Proposal, with all dividends, interest and maturities attributable to
securities held by the Custodian for the Customer on the payable date, without
regard to actual receipt by the Custodian, with the exception of certain items
which, in the Custodian's reasonable determination, cannot be credited to the
Customer's account until actually received by the Custodian (including, but not
limited to, private placements and certain other securities paying periodic
principal and interest). In the event of default in the payment by the issuer of
any amount so credited to the Customer's account or determination that the
Customer has no legal right to an amount credited to its account, notification
shall be made in writing to the Customer. Five days after such notification has
been made, the Custodian has the right to debit the Customer's account to the
extent of such credit.
15.2. Notwithstanding the foregoing, the Customer, in its sole
discretion, may require the Custodian to provide credit based on conversion to a
contractual settlement environment. Upon such an event, the Custodian shall
credit the Customer's account on the payable date or the first business day
thereafter with all dividends, interest and maturities attributable to
securities held by the Custodian for the Customer on the payable date, and shall
make such credits available in same day funds on the date succeeding the payable
date without regard to actual receipt by the Custodian, with the exception of
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certain items which, in the Custodian's reasonable determination, cannot be
credited to the Customer's account until actually received by the Custodian
(including, but not limited to, private placements and certain other securities
paying periodic principal and interest). In the event of default in a payment by
the issuer of any amount so credited to the Customer's account or determination
that the Customer has no legal right to an amount credited to its account,
notification shall be made in writing to the Customer. Five days after such
notification has been made, the Custodian shall have the right to debit the
Customer's account to the extent of such credit.
15.3. In either of the above-described environments, the Custodian
shall credit the Customer's account(s) in like funds for (a) all mandatory
capital distributions on payable date or ex-dividend date, whichever is later,
and (b) voluntary corporate actions upon receipt of funds from DTC or the paying
agent.
16. INVESTMENT OF THE CUSTOMER'S MONEY. Should the Customer have any
money in its account at the close of a business day, the Custodian shall sweep
such money into Deposit Reserve, an overnight investment vehicle, unless
otherwise instructed by the Customer.
17. RELEASE OF ASSETS. Upon receipt of Proper Instructions, the
Custodian shall release and pay over any Assets to the Customer or as directed
by the Customer.
18. BOOKS, RECORDS AND ACCOUNTS.
18.1. The Custodian will make and maintain proper books of account
and complete records of all transactions in the accounts maintained by the
Custodian hereunder on behalf of the Customer. The Custodian will preserve for
the periods prescribed by applicable federal and state statute or regulation all
records required to be maintained.
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18.2. On at least two (2) business days' notice, the Custodian
will make available to and permit inspection during the Custodian's regular
business hours by the Customer and its auditors of all books, records and
accounts maintained by the Custodian (and, to the extent practicable, its
agents) in connection with its duties hereunder on behalf of the Customer.
18.3. The Custodian shall make available to the Customer projected
settlement reports, fail control reports, trades processed daily reports and
monthly Asset listings.
19. PROPER INSTRUCTIONS.
19.1. The Custodian is deemed to have received "Proper
Instructions" upon receipt of written or oral instructions (a) signed or given
by any person(s) whose name(s) and signature(s) are listed on the most recent
certificate delivered by the Customer to the Custodian which lists those persons
authorized to give orders, corrections and instructions in the name of and on
behalf of the Customer or (b) signed or given by any other person(s) duly
authorized by the Customer to give Proper Instructions to the Custodian
hereunder or whom the Custodian reasonably believes to be so authorized. All
written instructions must be signed by two persons meeting the criteria set
forth in (a) or (b) of this paragraph.
The Customer agrees to forward to the Custodian written
instructions confirming oral instructions by the close of business on the next
business day after such oral instructions were given to the Custodian. The
Customer agrees that the fact that such confirming written instructions are not
received or that contrary written instructions are received by the Custodian in
no way affects the validity or enforceability of transactions
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authorized by oral instructions and effected by the Custodian. In the event that
contrary written instructions are received the Custodian shall take appropriate
reasonable action.
19.2. Proper Instructions specify the action requested to be taken
or omitted. Proper Instructions include instructions sent to the Custodian by
letter, memorandum, telegram, cable, telex, telecopy facsimile, video (CRT)
terminal or other "on-line" system, or similar means of communication, or given
orally over the telephone or in person.
19.3. In connection with the depository eligible transactions, the
Customer authorizes the Custodian to accept and rely upon Proper Instructions
given by an investment manager through a securities depository pursuant to New
York Stock Exchange Rule 387 and similar rules adopted by other stock exchanges
or rule-making bodies and the National Association of Securities Dealers. Such
authorization to accept and rely upon Proper Instructions given through a
securities depository is in addition to and does not otherwise affect the
Customer's authorization to the Custodian to accept or rely upon Proper
Instructions given by any other authorized party pursuant to this Agreement. It
is understood that depository eligible transactions means transactions in those
securities for which confirmation, acknowledgment and, where appropriate, book
entry settlement can be performed through the facilities of a securities
depository.
20. TERM AND FEES.
20.1. This Agreement commences on October 30, 1995, and will
continue in full force and effect until terminated (i) by the Customer, in its
sole discretion and for any reason, by providing at least one (1) months'
advance written notice or (ii) by the Custodian by providing at least six (6)
months' advance written notice.
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20.2. The Custodian's fees are set forth on the attached Schedule
II. On August 1, 1996 and on every succeeding August 1st, the Custodian may
increase its fees to an amount agreed upon by the parties. However, in no event
shall the Customer be charged more than similarly situated customers of the
Custodian.
20.3. The Custodian shall provide separate monthly invoices for
each account maintained, as requested by the Customer. Invoices will show the
Custodian's fees for the prior month and are due and payable within thirty (30)
days after receipt thereof.
20.4. The parties understand and acknowledge that if Customer is
using "Actual Settlement," Customer may switch from "Actual Settlement" to
"Contractual Settlement" and will be charged the fees for same. The Customer
will not incur any charges for switching from "Actual Settlement" to
"Contractual Settlement."
The Customer may switch from "Actual Settlement" to "Contractual
Settlement" only by providing the notice set forth in Section 11.2 of this
Agreement and only on the 1st day of a month.
20.5. The rate used to calculate interest compensation on any
amount owed by one party to the other hereunder will be based on the then
prevailing New York Clearing House Association Rules on Inter Bank Compensation.
The calculation will be based on a 360-day year for the number of days involved.
21. CONFIDENTIALITY; PROPRIETARY INFORMATION. The Custodian agrees to
treat as confidential all records and other information with respect to the
Customer and the Customer agrees to treat as confidential all information with
respect to the Custodian's system. Each party shall keep such records and other
information of the other party confidential by using the same care and
discretion that it uses with respect to its own
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confidential information. However, if either party is required to produce any
such information by order of any government agency or other regulatory body, it
may, upon not less than 10 days written notice to the other party, release the
required information unless compelled by statute, regulatory requirement or
court order to release the information sooner.
22. RESPONSIBILITY. The Custodian has no duty to take any action on
behalf of the Customer except as set forth herein, other than ministerial acts
required for the proper performance of its duties as custodian under this
Agreement. Upon the Customer's request or with the Customer's consent, the
Custodian is entitled to obtain the advice or opinion of counsel (who may be
in-house or outside counsel for the Custodian or the Customer) at the Customer's
expense with respect to questions of law and will be fully protected with
respect to anything done or omitted by the Custodian in conformity with such
advice or opinion. The Custodian is not liable to the Customer for losses
arising out of any action taken or omitted hereunder, except for misfeasance,
bad faith or negligence in the performance of its duties, or disregard of its
duties under this Agreement. Without limiting the generality of the foregoing,
the Custodian has no duty to inquiry into, and is not liable for, the validity
of the issue of any securities purchased or sold by the Customer, the legality
of their purchase or sale, the propriety of the amount paid for them upon
purchase or sale, the propriety of the amount paid for them upon purchase or
sale, or any actions of third parties affecting the negotiability of the
certificates representing such securities not apparent on such certificates. THE
CUSTODIAN IS NOT LIABLE TO THE CUSTOMER OR ANY THIRD PARTY FOR SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES, OR LOST PROFITS OR LOSS OF BUSINESS, ARISING UNDER OR
IN CONNECTION
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WITH THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE CUSTODIAN'S USE OF
PERMITTED THIRD PARTIES' SERVICES) UNLESS THE CUSTODIAN RECEIVES WRITTEN NOTICE
OF THE POTENTIAL LOSS NOT LESS THAN FIVE (5) BUSINESS DAYS' PRIOR TO THE
OCCURRENCE OF THE SPECIFIC EVENT CAUSING SUCH DAMAGES, LOST PROFITS OR LOSS OF
BUSINESS. THE FOREGOING WILL NOT BE CONSTRUED AS A REQUIREMENT THAT THE
CUSTODIAN PROVIDE SERVICES OR HANDLE SPECIFIC SECURITIES OR TRANSACTIONS WHICH
ARE AGAINST THE CUSTODIAN'S POLICY TO PROVIDE OR HANDLE.
23. INDEMNIFICATION.
23.l. The Customer hereby agrees to indemnify the Custodian and
its controlling persons, officers, directors, employees and agents
(individually, an "Indemnified Party") and hold each Indemnified Party harmless
from and against any losses, claims, liabilities, fines, penalties, damages and
reasonable costs and expenses (including reasonable attorneys' and accountants'
fees) (collectively, the "Claim") arising out of or resulting from any act done
or omitted hereunder, or arising out of the Custodian's performance of services
hereunder, or arising out of transactions of the Customer which occurred prior
to the commencement of the performance of services for the Customer by the
Custodian under this Agreement or a prior agreement, or as a result of errors or
out-of-proof conditions in the Customer's records; provided, that the Customer
will not indemnify an Indemnified Party for any Claim arising from that
Indemnified Party's misfeasance, bad faith or negligence in the performance of
its duties, or disregard of its duties under this Agreement. Actions taken or
omitted in reliance on Proper Instructions, or upon an order, indenture, stock
certificate,
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power of attorney, assignment, affidavit or other instrument reasonably believed
by the Custodian to be genuine or bearing the signature of a person or persons
reasonably believed to be authorized to sign, countersign or execute the same,
are conclusively presumed to have been taken or omitted in good faith.
23.2. Except as otherwise provided in paragraph 3 below, whenever
any Claim arises for indemnification hereunder, one of the Indemnified Parties
shall give prompt notice of the Claim (the "Notice of Claim") to the Customer
and, when known, the facts forming the basis for such Claim. If the facts giving
rise to a Claim for indemnification hereunder involve a claim or demand by any
third party against an Indemnified Party, the Customer is entitled (without
prejudice to the right of any Indemnified Party to participate at its expense
through counsel of its own choosing) to defend or prosecute such Claim at its
expense and through counsel of its own choosing, if it gives written notice of
its intention to do so to the Indemnified Party within twenty (20) days after
the Notice of Claim is given. The Indemnified Party shall cooperate in the
defense of the Claim, and an Indemnified Party must not settle or compromise any
Claim without the prior written consent of the Customer, which consent will not
be unreasonably withheld, unless suit has been instituted against such
Indemnified Party and the Customer has not, within twenty (20) days after having
been given Notice of Claim, assumed control of such suit as provided in this
paragraph; provided, that an Indemnified Party may settle or compromise any
Claim without such consent, if such Indemnified Party does not seek
indemnification for such Claim.
23.3. The Custodian may, in its discretion, tender to the Customer
the defense or may itself resist and defend against any claims of third parties
which are at an
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informal stage of resolution and are made with respect to any Assets held by the
Custodian hereunder, which, in the opinion of the Custodian (or its counsel) are
not proper, just or lawful claims against such securities, monies or other
assets; provided, however, that the Customer shall indemnify the Custodian for
and hold it free and harmless from any Claims (as defined above) arising out of
the defense of any such Claim, as long as the other conditions of this Section
22 have been fulfilled.
23.4. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE CUSTODIAN MAKES NO
REPRESENTATIONS, WARRANTIES, AGREEMENTS OR GUARANTEES, EXPRESS OR IMPLIED,
INCLUDING, AND WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
24. TERMINATION.
24.1. Upon termination of this Agreement, the Customer shall pay
to the Custodian such unpaid processing fees as may have been previously
incurred as of the date of such termination but Customer will not pay any Exit
Charges or any other type of termination fee. "Exit Charges" mean (i) the
Custodian's fees for delivering the Assets governed by this Agreement to another
custodian, depository or Book-Entry System upon termination of this Agreement,
(ii) all related charges paid by the Custodian to the other custodian,
depository or Book-Entry System, and (iii) all related out-of-pocket expenses
incurred by the Custodian for such delivery.
The Custodian shall follow such reasonable Proper Instructions
concerning the transfer of custody of the Assets as the Customer may give. If
any securities or monies remain in the account, the Custodian shall solicit the
Customer for Proper
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Instructions, and if not forthcoming within 30 days, may designate the Customer
as successor custodian and deliver directly to the Customer such securities and
monies.
24.2. Upon termination of this Agreement, all obligations of the
parties to each other hereunder will cease, except that the provisions of
Section 21 will survive and all indemnification provisions herein will survive
with respect to any Claims arising from events prior to such termination.
25. FORCE MAJEURE. Each party shall be responsible for having
appropriate disaster recovery procedures in place. Neither party is responsible
or liable to the other for any failure or delay in performance of their
respective obligations under this Agreement arising out of or caused, directly
or indirectly, by circumstances beyond their reasonable control, including
without limitation, acts of God; earthquakes; fires; floods; wars; civil or
military disturbances; sabotages; epidemics; riots; interruptions, loss or
malfunctions of utility, transportation or communication service; accidents;
acts of civil or military authority; or governmental actions; provided that such
party diligently implements its disaster recovery procedures.
26. GENERAL PROVISIONS.
26.l. Any notices permitted or required by this Agreement must be
in writing. Notices will be sent as follows:
If to the Custodian:
The Bank of New York
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Custody Division, 25th Floor
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If to the Customer:
Key Services Corporation
OH-01-49-0301
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Sr. Vice President, Securities Accounting Services
All notices (whether sent by certified mail return receipt requested,
facsimile, private messenger, courier service or otherwise) are effective upon
receipt, except any notice sent by certified mail and not claimed by the
addressee shall be effective five (5) business days after the date of its
mailing. The parties may change the above addresses by providing proper written
notice thereof.
26.2. Subcontracts. The Custodian may enter into subcontracts,
agreements and understandings, whenever and on such terms and conditions as it
deems necessary or appropriate, to perform its services hereunder without the
consent of the Customer; such subcontracts, agreements and understandings may be
with third parties and may be present or future affiliates of the Custodian.
Where the Custodian has entered into any such subcontracts, agreements and
understandings at the Customer's request, the Customer will reimburse the
Custodian for all appropriate amounts paid to such entities for such services,
whether or not affiliates of the Custodian. No such subcontract, agreement or
understanding shall discharge the Custodian from its obligations hereunder.
26.3. Subcustodial Agreements. To the extent permitted by
applicable federal law, the Custodian may enter into subcustodial agreements
with clearing agencies registered with the Securities and Exchange Commission
under Section 17A of the Securities Exchange Act of 1934, as amended, which acts
as a securities depository or the Book-Entry System, and the Custodian is hereby
appointed the Customer's agent and
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attorney-in-fact for the purpose of entering into such agreements and executing
any necessary documents for or on behalf of the Customer to cause the securities
subject thereto to be registered, as appropriate in the name of the nominee of
the subcustodian.
26.4. Waiver. The failure of a party to insist upon strict
adherence to any term of the Agreement on any occasion is not considered a
waiver nor will such failure deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing and signed by the waiving party.
26.5. Governing Law and Venue. This Agreement will be construed in
accordance with the laws of the State of New York. The parties agree that this
Agreement is enforceable in any Ohio, Texas or New York court of competent
jurisdiction.
26.6. Assignment. Neither party may assign any of its rights or
delegate any of its duties under this Agreement without the written consent of
the other, which consent will not be unreasonably withheld; except that if
either party merges or consolidates with or sells substantially all of its
assets to another corporation, such other corporation is automatically (and
without the consent of the other party to this Agreement) substituted for that
party if such other corporation assumes all obligations of that party hereunder.
26.7. Separability. If any provision of this Agreement is invalid
or unenforceable, the balance of this Agreement remains in effect, and if any
provision is inapplicable to any person or circumstances, it nevertheless
remains applicable to all other persons and circumstances.
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26.8. No Third Party Rights. In performing the Services hereunder,
the Custodian is acting solely on behalf of the Customer. No contractual or
service relationship is deemed to be established hereby between the Custodian
and any other persons.
26.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which is considered an original, but all of which
together constitute the same instrument.
26.10 The Proposal. The Proposal is incorporated by reference
herein, constitutes part of this Agreement and is binding on the Custodian. In
the event of any inconsistency between this Agreement and the Proposal, the
terms and conditions of this Agreement prevail.
26.11 Complete Agreement; Modification. This Agreement (together
with the attached Schedules) and the Proposal contain the complete statement of
all the arrangements between the parties with respect to their subject matter,
supersede all existing agreements between the parties concerning their subject
matter, and cannot be amended or modified except in a writing signed by the
party against whom such amendment or modification is sought to be enforced.
26.12 No Joint and Several Liability. The obligations and
liabilities of the Customer hereunder are not joint and several, but are the
obligations and liabilities of the party in whose name the applicable account is
maintained.
27. FUTURE RELATIONSHIP. The Custodian understands and acknowledges
that the Customer may become a participant of the Participant's Trust Company.
At such time, the Custodian will cease providing Services to the Customer for
its Participant's Trust
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Company eligible securities. The Custodian will not charge the Customer any Exit
charges or related out-of-pocket expenses for such securities.
28. MANAGING THE RELATIONSHIP. In order to successfully manage the
relationship between the parties and resolve any issues on a timely basis, the
Custodian and the Customer agree as follows:
28.1. At all times during the term of this Agreement, the
Custodian shall have at least one full-time Account Administrator dedicated
solely to the relationship with the Customer; provided however, that this
provision may have to be altered in the event of a substantial change in the
amount of assets held by the Custodian pursuant to this Agreement after the
initial conversion of assets to the Custodian is effected. The Account
Administrator shall make at least two visits each year to the Customer's
location in Ohio.
28.2. The Department Head and Section Manager of the Custodian
shall make at least one visit each year to the Customer's location in Ohio to
address performance under this Agreement, technology updates and other matters.
28.3. In the Actual Settlement environment, there will be two net
settlements per day: one between 10:00 a.m. and 12:30 p.m. Eastern Time; and one
between 4:00 p.m. and 4:30 p.m. Eastern Time. The components of these
settlements are:
Morning Settlement -
The net of:
Today's Fed Fund Purchases and sales that were input
yesterday Yesterday's settled Clearing House
purchases Yesterday's Fed Fund purchase fails
Yesterday's late Fed Fund reclaims
Less:
Today's Fed Fund interest/maturities
Yesterday's Clearing House interest/maturities
Any cash adjustments
- 21 -
Afternoon settlement -
The net of:
Today's Fed Fund purchase fails Today's settled Fed Fund
sales that were input today Any late day cash adjustments
Today's Fed Fund purchases that were input today
28.4. In a Contractual Settlement environment, net settlement will
occur as stated in the Proposal.
28.5. Prior to making any procedural changes, the Custodian shall
provide the Customer with at least fifteen (15) business days advance written
notice. Notwithstanding the foregoing, the Custodian shall provide the Customer
with at least ninety (90) days advance written notice of any procedural changes
which will have a material adverse effect on the Customer.
28.6. The Custodian shall meet the performance standards set forth
in the attached Schedule III. If the Custodian fails to meet these performance
standards, then the Custodian shall provide a written report specifying in
detail the changes that it will make in order to ensure that the performance
standards are met in the future.
29. VENDOR RISK ANALYSIS. The Custodian understands and acknowledges
that the Customer's regulators require the Customer to undertake a risk analysis
of the Custodian. The Custodian agrees to reasonably cooperate with the Customer
in this regard and, among other things, will:
29.1. Provide its audited financial statements for its prior three
fiscal years and thereafter provide all future audited financial statements. If
the Custodian does not have audited financial statements but is a subsidiary of
a corporation that does have audited
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financial statements, then the Custodian shall comply with this requirement by
providing the audited financial statements of its parent.
29.2. Have an independent review of its operations and control
environment (including its disaster recovery plans) once each calendar year and
have its auditor provide a summary of such review to the Customer.
29.3. During the term of this Agreement, have in full force and
effect the following insurance coverages in reasonable amounts:
(i) a Financial Institutions Bond (including Computer
Crime Coverage); and
(ii) mail insurance.
Upon request of the Customer, the Custodian shall provide written
documentation evidencing such insurance coverage.
29.4. At reasonable times, allow the Customer, its regulators and
agents, to enter its premises for audit purposes.
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IN WITNESS WHEREOF, the parties hereto have caused this Institutional
Custody and Clearance Services Agreement to be executed by their respective
corporate officers effective as of the 30th day of October, 1995. THE BANK OF
NEW YORK
By: Xxxxxx Xxxxxx
---------------------
Title: Vice President
Date: November 17, 1996
KEY SERVICES CORPORATION
By: Xxxxxx X. McGaby
----------------------
Title: Senior Vice President
Date: November 9, 1995
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SCHEDULE I
SERVICES TO BE PERFORMED
SERVICES KEY SERVICES
Depository Trust Company Eligible Securities NO
Same Day Funds NO
Participant's Trust Company Eligible Securities YES
Federal Reserve Bank Eligible Securities NO
Non-Depository Eligible Securities YES
- 25 -
SCHEDULE II
FEES
A. SECURITIES SETTLED AND SAFEKEPT WITHIN THE UNITED STATES
1. MAINTENANCE CHARGES
Actual Contractual
Annual Fee Annual Fee
Category Per Issue Per Issue
-------- ---------- -----------
Depository Trust Company Issues $ 12.00 $ 12.00
Federal Reserve Bank Book Entry Issues 12.00 12.00
Depository Trust Company Municipal 12.00 12.00
Bond Issues
Physical Issues 17.00 15.00
Government National Mortgage Assoc. 24.00 17.00
(GNMA) Issues (Book Entry)
Private Placements 24.00 24.00
2. TRANSACTION CHARGES
Fee Per
Category Transaction
-------- -----------
Depository Trust Company RVP/DVP $ 2.00 $ 2.00
Federal Reserve Bank Book Entry RVP/DVP 5.00 5.00
GNMA RVP/DVP 20.00 17.50
Physical RVP/DVP 17.00 16.50
Depository Trust Company Free Rec/Del 2.00 2.00
Federal Reserve Bank Book Entry Free Rec/Del 5.00 5.00
GNMA Free Rec/Del 20.00 17.50
Physical Free Rec/Del 17.00 16.50
GNMA Mortgage-Backed Securities 4.00 4.00
P & I Reductions
Options RVP/DVP, Rec/Del 17.00 16.50
P & I Reductions 4.00 4.00
A transaction is defined as a receipt or delivery versus payment, or a free
receive or deliver.
- 26 -
SCHEDULE II (CONTINUED)
-----------------------
B. CORPORATE ACTIONS
Type of Action Transaction(s)
-------------- --------------
Purchase DVP
Redemption/Conversion Privilege DVP/Del Free & Rec Free
Consent (if payment is made) Cash Transaction
Put Option DVP & Del Free & Rec Free
Mandatory Put with Retention Privilege DVP if put & Rec Free & Del Free
Warrants or Rights Sell = DVP
Exercise = Del Free & Rec Free
Name Change Del Free & Rec Free
Merger Del Free & Rec Free
If Cash Merger - DVP
Exchange Del Free & Rec Free
Stock Dividend Rec Free
Stock Split Rec Free
Distribution Rec Free
Optional Dividend Rec Free or Rec Free & Cash
Trans or Dividend Credit
Dividend Reinvest Rec Free
Mutual Fund Redemption DVP
Plan or Reorg. or Distribution Any one or combination of DVP,
RVP, Rec Free, Del Free
NOTE: DTC eligible and non-DTC eligible securities with corporate actions
---- shall be charged the applicable physical transaction fee(s).
- 27 -
SCHEDULE II (CONTINUED)
-----------------------
C. REIMBURSEMENT EXPENSES
*Reconciliation Tapes $ 150.00
*Microfiche 5.00/card
*Wire Charges 9.00-Outgoing
*LASER System Access 200.00/Monthly
Postage Market Price
PTC Deposits and Withdrawals Market Price
Transfer Agent Fees Market Price
Federal Express Market Price
DTC Confirms Market Price
Third Party Confirms Market Price
Communications Systems Usage Market Price
(Telenet/Compuserve)
Telephone Market Price
---------------------
* May be changed from time to time upon the mutual consent of the parties.
- 28 -
SCHEDULE III
PERFORMANCE STANDARDS
1) Inquiries (including Compensation Claims):
Respond to non-critical inquiries less than 6 months old in 3 business
days, and older than 6 months in 10 business days. Respond to
compensation claims within 15 business days.
2) Corporate Actions:
Accept instructions from Customer per the following schedule:
- Agent outside New York, but in U.S.: 48 hours prior
to the agent's deadline provided the Custodian has a
protect capability; 72 hours prior to the agent's
deadline if the Custodian does not have a protect
capability.
- Agent in New York: 24 hours prior to the agent's
deadline provided the Custodian has a protect
capability; 48 hours prior to the agent's deadline if
the Custodian does not have a protect capability.
- DTC reorgs.: 9:30 a.m. Eastern time on day of the
agent's deadline (where applicable), but not less
than 1 1/2hours before DTC closing.
3) Deliveries:
Guaranteed settlement on all cash/same day deliveries, settling in
immediately available funds, if instructions are received prior to
12:30 p.m. Eastern time on settlement date; by 1:00 p.m. Eastern time
on an exception basis; after 1:00 p.m. Eastern time on a "best effort"
basis.
- 29 -
ADDENDUM I
The Bank of New York (the "Custodian") and the Customer agree to amend
their Amended and Restated Institutional Custody and Clearance Service Agreement
(the "Agreement") as follows:
1. (a) The Custodian shall provide Services for the Customer's foreign
securities by physically safekeeping same or delivering them for safekeeping to
Euroclear or Cedel (clearance systems for internationally traded securities) or
to other foreign clearance systems, sub-custodians or agents.
The Custodian shall provide the Customer with settlement of all
purchases and sales of foreign securities on a contractual settlement date
arrangement, as set forth in the Proposal, unless instructed otherwise by the
Customer or unless standing instructions of a particular account requires actual
settlement or if the country the securities are to settle does not provide for
the settlement of trades contractually. Attached Exhibit D illustrates those
countries that can settle trades contractually and actually. For the purpose of
settling purchases of foreign securities, the Customer shall provide the
Custodian with foreign exchange instructions for all transactions two business
days prior to settlement. The Customer will ensure that sufficient immediately
available funds are provided to the Custodian by the settlement/value date of
the foreign exchange instruction. As used herein, "sufficient immediately
available funds" means either (i) sufficient United States currency to cover
scheduled purchases. The custodian shall provide the Customer with immediately
available funds in the currency of the transaction from the settlement of all
sale transactions, based upon advices received by the Custodian from its agents
and depositories. Such funds will be
converted to United States currency or retained in such other currency as the
Customer may specify to the Custodian.
The Customer will earn interest on the foreign currencies listed on
Exhibit E attached, from the time the foreign currency is credited to their
account, to the time it is withdrawn.
(b) The foregoing will occur, as stated, provided that (i) Proper
Instructions are received by the Custodian on or before such time as specified
in the Proposal or as the Custodian specifies from time to time and (ii) the
Custodian has all other information and/or securities or monies necessary to
complete the transaction.
(c) Custodian is authorized and hereby agrees to effect currency
exchange transactions in connection with transactions in Foreign Securities,
through their own system, through customary banking channels or as otherwise may
be requested by Customer and agreed to by Custodian. All expenses incident to
the collection and conversion of such currency exchange transactions will be
assumed by Customer. Provided the Custodian is not negligent in the processing
of the transactions, Custodian has no responsibility for the fluctuation in
exchange rates affecting such conversion or risks incident to the collection and
conversion of such currency exchange transactions.
(d) Custodian has established and is bound by certain Performance
Standards, attached as Exhibit B, and Income Credit Policy, attached as Exhibit
C, and both Exhibit B and C are incorporated herein by this reference.
Improvements to existing Performance Standards, sent to Customer in writing,
will not require an amendment to the contract.
- 2 -
2. The fees for the Services set forth above are set forth on Exhibit
A having an effective date of July 1, 1992, and attached hereto.
3. The parties understand and acknowledge that the Custodian is
continually seeking more efficient ways to process foreign securities. When
procedures, including Performance Standards and Income Crediting Policy are to
be changed, the parties will meet and negotiate in good faith in order to
determine the procedures and fees that the Custodian will apply in providing
Services for the Customer's foreign securities.
4. To the greatest extent possible, Custodian shall communicate
information regarding securities and securities settlement by means of the LASER
system.
5. Except when inconsistent with this Addendum I, the terms and
conditions of the Agreement and the Proposal apply to the Services rendered by
the Custodian for the Customer's foreign securities. The term "Proposal" as used
in this Addendum I refers to Custodian's document entitled "Proposal to Provide
Institutional Custody and Clearance Services to Ameritrust Company N.A." dated
January 24, 1991, as amended and updated by that document entitled "Global
Custody Services to Ameritrust" dated March 5, 1992.
- 3 -
IN WITNESS WHEREOF, the parties have executed this Addendum I
effective as of the 30th day of October, 1995. THE CUSTOMER: KEY SERVICES
CORPORATION
By: Xxxxxx X. McGaby
-------------------------
Title: Senior Vice President
Date: November 9, 1995
THE CUSTODIAN:
THE BANK OF NEW YORK
By: Xxxxxx Xxxxxx
-------------------------
Title: Vice President
Date: January 17, 1996
- 4 -
ADDENDUM II
THE BANK OF NEW YORK (the "Custodian") and the Customer agree to amend
their Amended and Restated Institutional Custody and Clearance Services
Agreement (the "Agreement") as follows:
1. Subject to the provisions of this Addendum II, the Custodian shall,
upon the Customer's request, permit the Customer to obtain direct access to its
account through the Custodian's on-line communications system (referred to as
"Laser") and deliver to the Custodian Proper Instructions thereby. Laser shall
permit the Customer at the time mutually agreed upon to (i) instruct the
Custodian to receive into and deliver from the account Assets in accordance with
such instructions, (ii) determine the status of pending trades of securities,
(iii) determine the money balances in the account and whether nor not such
balances are immediately available, and (iv) perform such other functions as may
be offered through Laser from time to time.
2. (a) At no cost, the Custodian agrees to provide the Customer with
certain computer software, user manuals, proprietary data, processes,
information, data bases and documentation (the "Material") as is necessary for
the Customer's use of Laser. Delivery of the Material constitutes the granting
by the Custodian to the Customer of a non-exclusive, non-assignable license to
use the Material in connection with Laser.
(b) The Customer shall use Laser, the Material and the services
available thereby only for its own internal and proper business purposes and
must not sell, lease or otherwise provide, directly or indirectly, Laser, the
Material or any part thereof to
any other person or entity (except for its affiliates and subsidiaries), without
the express prior written consent of the Custodian.
(c) The Custodian reserves the right to modify Laser from time to
time upon prior reasonable notice to the Customer. The Customer agrees not to
modify or attempt to modify Laser without the Custodian's prior written consent.
The Customer acknowledges that Laser is the property of the Custodian and,
accordingly, the Customer agrees that any modifications to Laser, whether by the
Customer or the Custodian and whether with or without the Custodian's consent,
become the property of the Custodian.
3. The Customer will, and will cause its officers and employees to,
treat the user and authorization codes, passwords and authentication keys
applicable to Laser with extreme care. The Customer acknowledges that it is its
sole responsibility to assure that only authorized persons use Laser and that
the Custodian is not responsible nor liable therefor.
4. The Customer shall notify the Custodian of any errors, omissions or
interruptions in, or delay or unavailability of, Laser as promptly as
practicable, and in any event within five (5) business days after the earliest
of (i) discovery thereof, or (ii) in the case of any error, the date of the
earliest notice to the Customer which reflects such error.
5. Except when inconsistent with this Addendum II, the terms and
conditions of the Agreement shall apply to the parties' use of Laser.
- 2 -
IN WITNESS WHEREOF, the parties have executed this Addendum II
effective as of the 30th day of October, 1995.
THE CUSTOMER:
KEY SERVICES CORPORATION
By: Xxxxxx X. McGaby
-------------------------
Title: Senior Vice President
Date: November 9, 1995
THE CUSTODIAN:
THE BANK OF NEW YORK
By: Xxxxxx Xxxxxx
-------------------------
Title: Vice President
Date: January 1, 1996
- 3 -
