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Exhibit 2.6
SERVICES AGREEMENT
between
UNITED STATES TRUST COMPANY OF NEW YORK
and
NEW U.S. TRUST COMPANY
OF NEW YORK
Dated
September 1, 1995
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS 1
ARTICLE 2. TERM 4
ARTICLE 3. CHASE RESPONSIBILITIES 5
3.1 Services 5
3.2 Performance Standards 7
3.3 Chase Organization and Personnel 8
3.4 Management and Control 10
3.5 Migration of Data Center 13
3.6 Systems Migration 13
3.7 Third Party Work 14
3.8 Loss of Data 14
3.9 Certain Matters Relating to Securities Held For NEW TRUSTCO and its 14
Customers
ARTICLE 4. NEW TRUSTCO RESPONSIBILITIES 15
4.1 NEW TRUSTCO Project Executive 15
4.2 Cooperation 15
4.3 Savings Clause 15
4.4 Transition Activities 15
4.5 Limited Agent 16
4.6 Accuracy of Data 16
4.7 Certain Chase Products 16
4.8 Security Violations 18
4.9 Settlement for Transactions Processed by Chase 18
ARTICLE 5. CHARGES AND PAYMENT TERMS 18
5.1 Charges 18
5.2 Payment Terms 20
5.3 Taxes 21
ARTICLE 6. INTELLECTUAL PROPERTY RIGHTS 22
6.1 NEW TRUSTCO Software 22
6.2 Third Party Software Licensed by NEW TRUSTCO 22
6.3 Third Party Software Licensed by Chase 23
6.4 Ownership of Work Product 23
6.5 No Other Rights 23
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ARTICLE 7. DATA SECURITY/CONFIDENTIALITY/AUDITS 24
7.1 Safeguarding NEW TRUSTCO Data 24
7.2 Confidentiality 24
7.3 Audit Rights 25
ARTICLE 8 TERMINATION 27
8.1 Termination for Cause 28
8.2 Termination for Convenience 28
8.3 Termination For Insolvency 28
8.4 Termination Upon Change of Control 28
8.5 Termination/Expiration Assistance 28
8.6 Termination/Expiration Fee 31
ARTICLE 9. FORCE MAJEURE 31
ARTICLE 10. REPRESENTATIONS AND WARRANTIES 31
10.1 Non-Infringement 32
10.2 Compliance with Laws And Regulations 32
10.3 Authorization 32
10.4 Disclaimer 33
ARTICLE 11. INDEMNITIES 33
11.1 Indemnity by Chase 33
11.2 Indemnity by NEW TRUSTCO 33
11.3 Cross Indemnities 34
11.4 Indemnification Procedures 34
11.5 Subrogation 36
ARTICLE 12. INSURANCE AND RISK OF LOSS 36
12.1 Insurance 36
12.2 Risk of Loss 37
ARTICLE 13. LIMITATION OF LIABILITY 37
13.1 Limitation on Liability 37
ARTICLE 14. CERTAIN LOSSES 39
14.1 General 39
ARTICLE 15. DISPUTE RESOLUTION 43
15.1 Informal Dispute Resolution 43
15.2 General Resolution Procedures 44
15.3 Litigation 45
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15.4 Continued Performance 45
15.5 Affiliates 46
ARTICLE 16. GENERAL 46
16.1 Binding Nature and Assignment 46
16.2 Entire Agreement; Amendment 46
16.3 Notices 47
16.4 Counterparts 48
16.5 Governing Law 48
16.6 Headings 48
16.7 Relationship of Parties 48
16.8 Severability 49
16.9 Consents and Approvals 49
16.10 No Waiver of Default; Cumulative Remedies 49
16.11 Survival 49
16.12 No Third Party Beneficiaries 50
16.13 Media Releases 50
16.14 Covenant of Good Faith 50
16.15 Non-Hiring 50
Schedule A: Services Schedule
Schedule B: Key Transitioning Personnel
Schedule C: Additional Charges
Schedule D: COLA
Schedule E: Side Letter
Schedule F: Side Letter Supplement
Schedule G: Reports
Schedule H: FACAM Joint Venture
Schedule I: FTE Letter Agreement
Schedule J: Termination/Expiration Fee
Schedule K: Procedures Manual Certificate
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THIS SERVICES AGREEMENT, dated as of September 1, 1995, is made and
entered into by and between NEW U.S. TRUST COMPANY OF NEW YORK, a New York State
chartered bank and trust company ("NEW TRUSTCO"), and UNITED STATES TRUST
COMPANY OF NEW YORK, a New York State chartered bank and trust company ("USTNY")
As used in this Agreement, the term "Chase" shall mean USTNY prior to the
effectiveness of the merger of USTNY into The Chase Manhattan Bank, N.A. and
shall mean The Chase Manhattan Bank, N.A. from and after the effectiveness of
such merger and the term "Party" shall mean either NEW TRUSTCO or Chase, as
appropriate, and "Parties" shall mean NEW TRUSTCO and Chase.
RECITALS
1. Chase desires to provide securities processing, bank operations,
information technology and related back office support services to NEW TRUSTCO,
as set forth in this Agreement.
2. NEW TRUSTCO desires to have Chase provide such services in accordance
with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1.
DEFINITIONS
The following terms, when capitalized, are defined as follows:
(a) "Acquisition" means the acquisition by Chase pursuant to the
Acquisition Documents of certain portions of UST's business.
(b) "Acquisition Documents" shall mean the Agreement and Plan of Merger,
dated as of November 18, 1994, among The Chase Manhattan Corporation and U.S.
Trust Corporation (the "Merger Agreement"), and all agreements, instruments and
other documents executed in connection therewith by such parties and their
Affiliates.
(c) "Additional Volume Charges" shall mean, collectively, the volume
charges set forth in Section 1 of Schedule C.
(d) "Affiliate" shall mean any entity controlled by, controlling, or
under common control with any other entity. The term "control" and its
derivatives shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of an entity,
whether through the ownership of voting securities, by contract or otherwise.
Notwithstanding anything to the contrary herein, it is understood and agreed
that the FACAM joint venture described in Schedule H, and, subject to the
limitations set forth in Schedule H, any joint venture or other entity which is
organized as a replacement for such joint venture, shall be deemed to be an
"Affiliate" of NEW TRUSTCO.e
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(e) "AMS" shall mean any asset management system used by Chase in
providing the Services.
(f) "Applications Software" or "Applications" shall mean those programs
(whether or not in process), including all supporting documentation and media,
that perform or are intended to perform specific user related data processing
and telecommunications tasks.
(g) "Broadway Data Center" shall mean the UST data center acquired by
Chase in the Acquisition which is located at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx.
(h) "Chase Data" shall mean the information of Chase and its Affiliates
respecting their businesses, including, without limitation, information relating
to their customers, technology, operations, facilities, consumer markets,
products, capacities, systems, procedures, security practices, research,
development, business affairs, ideas, concepts, innovations, inventions,
designs, business methodologies, improvements, trade secrets, copyrightable
subject matter and proprietary information, all as provided to or obtained by
NEW TRUSTCO during the Term.
(i) "Chase Prevailing Rates" shall mean, for any particular service or
product, the rates charged by Chase ***** pursuant to this Agreement.
(j) "Commencement Date" shall mean the closing date of the Acquisition.
(k) "Contract Year" shall mean any twelve-month period during the Term
beginning on the Commencement Date or any anniversary of the Commencement Date.
(l) "Contribution Agreement" shall mean that certain Contribution
and Assumption Agreement to be entered into by UST and NEW TRUSTCO pursuant to
the Merger Agreement.
(m) "Data Center" shall mean: (i) during the time and to the extent
Services are being performed from there, the Broadway Data Center; (ii) during
the time and to the extent Services are being performed from there, the
MetroTech Data Center; or (iii) such other facility from which Chase will
perform some or all of the Services as permitted under Section 3.5.
(n) "Direct Cost" shall mean any costs for personnel (salary and
benefits), equipment, supplies, materials or services of any kind provided under
this Agreement, but not including any corporate overhead costs or corporate
administrative expenses.
(o) "End User Equipment" shall mean workstations, branch hardware, data
terminals, LAN servers, communications equipment (from the cluster controller
back to the NEW TRUSTCO end user) and other similar types of field equipment
located on NEW TRUSTCO's premises, and associated peripheral equipment, which
are used by NEW TRUSTCO and NEW TRUSTCO licensees to access systems operated by
Chase under this Agreement.
(p) "Equipment" shall mean the computer and telecommunications equipment
used by Chase to provide the Services, but not including End User Equipment.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
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(q) "Fixed Fee" shall mean the fixed annual fee payable pursuant to
Article 5.
(r) "FTE Letter Agreement" shall mean the letter agreement, dated July
19, 1995, between UST and Chase and annexed hereto as Schedule I, which sets
forth the understanding of the Parties with respect to certain support to be
provided by Chase with respect to the AMS, GTAS and CIS 2 systems.
(s) "GTAS" shall mean any corporate trust and agency system used by
Chase in providing the Services.
(t) "Losses" shall mean any liabilities, claims, actions, suits,
proceedings, judgments, losses, damages, deficiencies and expenses. The term
"Losses" shall not include, however, legal and other expenses incurred in
defending an indemnifiable claim under Article 11 for which the financial
responsibilities of the Parties are specified in Section 11.5.
(u) "MetroTech Data Center" shall mean the data center owned or operated
by Chase which is located at 4 Chase MetroTech Center, Myrtle Avenue, Brooklyn,
New York.
(v) "NEW TRUSTCO Data" shall mean all information of NEW TRUSTCO and its
Affiliates respecting their businesses, including, without limitation,
information relating to their customers, technology, operations, facilities,
consumer markets, products, capacities, Systems, procedures, security practices,
research, development, business affairs, ideas, concepts, innovations,
inventions, designs, business methodologies, improvements, trade secrets,
copyrightable subject matter and proprietary information, all as provided to or
obtained by Chase during the Term.
(w) "Performance Standards" shall mean the service levels specified in
the Services Schedule, as such service levels may be supplemented or adjusted
pursuant to Section 3.2(d).
(x) "Post Closing Covenants Agreement" shall mean that certain Post
Closing Covenants Agreement to be entered into among The Chase Manhattan
Corporation, U.S. Trust Corporation, United States Trust Company of New York,
New USTC Holdings Corporation and NEW TRUSTCO pursuant to the Merger Agreement.
(y) "Procedures Manual" shall have the meaning set forth in
Section 3.4.
(z) "Required Consents" shall mean any consents required to be
obtained from third parties to grant the rights of access and use of Third Party
Software which are required by this Agreement.
(aa) "Services" shall mean those services, functions, and
responsibilities that Chase provides to NEW TRUSTCO or undertakes pursuant to
this Agreement, as further described in Article 3.
(ab) "Services Schedule" shall mean the description of Services to be
provided by Chase under this Agreement, and associated Performance Standards,
which is attached as Schedule A.
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(ac) "Side Letter" shall mean the letter agreement, dated November 18,
1994, between UST and The Chase Manhattan Corporation and annexed hereto as
Schedule E, which sets forth the understanding of the Parties with respect to
(i) the sharing of costs incurred by UST in connection with certain transition
and implementation activities, and (ii) the sharing of costs of obtaining the
necessary license rights to certain Third Party Software.
(ad) "Side Letter Supplement" shall mean the letter agreement, of even
date herewith, between UST and The Chase Manhattan Corporation and annexed
hereto as Schedule F, which supplements the Side Letter.
(ae) "Software" shall mean Application Software and Systems Software
unless a more specific reference is required.
(af) "Supplemental Fee" shall mean the supplemental annual fee payable
pursuant to Article 5.
(ag) "Systems Software" shall mean those programs (whether or not in
process), including all supporting documentation and media, that perform or are
intended to perform tasks basic to the functioning of the Equipment and which
are required to operate the Applications Software or otherwise support the
provision of Services by Chase. Systems Software includes, but is not limited
to, operating systems, systems utilities, data security software,
telecommunications monitors and database managers.
(ah) "Term" shall mean the initial and any renewal term of this
Agreement, as provided in Article 2.
(ai) "Termination Date" shall mean the date on which this Agreement
expires or terminates.
(aj) "Third Party Software" shall mean Software used to perform the
Services that is provided under license or lease to Chase or NEW TRUSTCO.
(ak) "UST" shall mean U.S. Trust Corporation and its Affiliates (as the
same existed prior to the closing of the Acquisition).
(al) "UST Employees" shall mean employees of UST and individuals who
have been retained by UST to perform work on a contract basis.
Other terms used in this Agreement are defined in the context in which
they are used and shall have the meanings there indicated.
ARTICLE 2.
TERM
The Term of this Agreement shall begin on the Commencement Date and
shall expire on the fifth anniversary of the Commencement Date unless terminated
earlier or extended in accordance with this Agreement. NEW TRUSTCO may extend
the Term of this Agreement for
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an additional five (5) years upon the same terms and conditions by giving Chase
at least six (6) months advance written notice of its desire to do so; provided,
however, that (i) Chase may increase the Fixed Fee payable during the renewal
Term by an amount equal to 10% of the total fees payable by NEW TRUSTCO during
the fifth Contract Year pursuant to this Agreement (excluding fees for
applications development and maintenance work which is not included in the Fixed
Fee, any amounts paid to Chase as a pass-through expense for products or
services obtained from third parties, Additional Volume Charges for global
custody services and charges for new services or products first provided to NEW
TRUSTCO during the fifth Contract Year), and (ii) Chase consents to such
extension (which consent may be granted or withheld in Chase's sole
discretion). Alteratively, NEW TRUSTCO, in its sole discretion, may extend the
Term of this Agreement for an additional two (2) years upon the same terms and
conditions by giving Chase at least six (6) months advance written notice of its
desire to do so; provided, however, that Chase may increase the Fixed Fee
payable during the renewal Term by an amount equal to 10% of the total fees
payable by NEW TRUSTCO during the fifth Contract Year pursuant to this Agreement
(excluding fees for applications development and maintenance work which is not
included in the Fixed Fee, any amounts paid to Chase as a pass-through expense
for products or services obtained from third parties, Additional Volume Charges
for global custody services and charges for new services or products first
provided to NEW TRUSTCO during the fifth Contract Year). Notwithstanding the
foregoing, NEW TRUSTCO will not have the right to extend the Term of this
Agreement under this Article 2 if NEW TRUSTCO is in breach of any of its payment
obligations at the time notice of extension is given and it fails to cure such
breach within the applicable cure period following notice of such breach from
Chase.
ARTICLE 3.
CHASE RESPONSIBILITIES
3.1 SERVICES
(a) General. During the Term, Chase shall provide Services, consisting
of the following:
(i) the services, functions and responsibilities described in
this Agreement (including its Schedules); and
(ii) subject to the provisions of Article 5, new or
substantially changed products or services resulting from the
evolution or change of NEW TRUSTCO's business; provided, however,
that at any time during the Term, Chase offers, has offered or plans
to offer such products or services to other clients.
The description of the Services set forth in the Services Schedule is intended
to be comprehensive, but not necessarily all-inclusive (i.e., the Services
Schedule contains a high level description of the types of services to be
performed by Chase, but does not list all of the specific functions to be
performed by personnel of Chase and its subcontractors in providing those
services). Subject to Section 3.1 (b), Chase will perform any function which was
performed by an Affected UST Employee (as defined below) at any time during the
twelve (12) months preceding the Commencement Date (and continues to be
performed as of the Commencement Date) even if such function is not specifically
enumerated in the Services Schedule, provided that such function is reasonably
related to the types of securities processing, bank operations, information
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technology and related back-office services described in the Services Schedule.
At either Party's request, the Parties will modify the Services Schedule to
specifically identify such function therein. NEW TRUSTCO shall have the burden
of demonstrating, by a preponderance of the evidence, that a function was
performed by an Affected UST Employee at any time during the twelve (12) months
preceding the Commencement Date (and continues to be performed as of the
Commencement Date) if a dispute arises between the Parties as to whether Chase
is obligated to perform such function.
Chase will not be obligated to perform a particular function which was performed
by an Affected UST Employee during the twelve (12) months preceding the
Commencement Date (and continues to be performed as of the Commencement Date)
if such function is not reasonably related to the types of services described in
the Services Schedule. If Chase does not perform such function for that reason,
there shall be an equitable adjustment to the Fixed Fee to reflect the costs (if
any) that NEW TRUSTCO will incur as a result of Chase not performing such
function. For purposes hereof, the term "Affected UST Employee" shall mean a UST
Employee who is transferred to Chase or whose position or responsibilities are
eliminated as a result of the Acquisition.
The services, functions and responsibilities described in this Agreement will be
provided to NEW TRUSTCO and such of its present and future Affiliates as require
those services from tie to time. References in this Agreement (including its
schedules) to NEW TRUSTCO in its capacity as a service user are to be read as
references to NEW TRUSTCO and such of its present or future AffIliates as
require such services from time to time. At NEW TRUSTCO'S request and without
additional charge to NEW TRUSTCO, Chase will convert future NEW TRUSTCO
Affiliates to the systems then used by Chase in providing the Services at the
rate of one (1) per Contract Year. The Parties recognize the possibility that
NEW TRUSTCO may request that more than one future NEW TRUSTCO Affiliate be
converted during a given Contract Year to the Systems then used by Chase in
providing the Services. The Parties further recognize that such request may
present operational and feasibility issues for Chase. Therefore, in such event,
the Parties will meet to discuss and address the implications and issues for
Chase, and will work on developing a mutually acceptable conversion time frame
and mutually acceptable fees for the additional conversion. In agreeing upon
such fees, the Parties will consider the number of prior conversions performed
by Chase during the Term.
Except as otherwise expressly provided in this Agreement: (A) NEW TRUSTCO shall
not be responsible for providing, maintaining or supporting any facilities,
Equipment, Software, personnel and other resources which are required by Chase
to provide the Services; (B) Chase shall not be responsible for providing,
maintaining or supporting any End User Equipment or Software utilized on End
User Equipment (except for front end Applications Software necessary for NEW
TRUSTCO users to interface with Software operated by Chase); and (C) Chase shall
not be responsible for installing Software on End User Equipment.
(b) EXCLUDED SERVICES. In no event shall Chase provide:
(i) Services for NEW TRUSTCO's broker dealer services,
provided, however, that Chase will provide NEW TRUSTCO's existing and
future broker dealer subsidiaries access to AMS for execution and
confirmation of trades;
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(ii) credit facilities or collateral monitoring services for
NEW TRUSTCO's Institutional Banking Services; or
(iii) Services for any "back-up servicer" obligations of NEW
TRUSTCO or its Affiliates in structured financing transactions or
similar corporate or institutional trust or agency transactions
(c) EXCLUSIVE PROVIDER. Chase shall be the exclusive provider to NEW
TRUSTCO's clients (including institutional clients) of (i) securities lending
and the investment of related collateral, (ii) securities and commodities
clearing services, and (iii) so long as Chase's pricing is competitive, foreign
exchange transactions, except where a NEW TRUSTCO client requests that NEW
TRUSTCO use another provider for foreign exchange transactions and securities
and commodities clearing services. The services described in items (i), (ii) and
(iii) above are not within the scope of this Agreement and will be provided
pursuant to separate agreements between the Parties if NEW TRUSTCO elects to
receive such services; provided that any services within the scope of this
Agreement which are performed by Chase for NEW TRUSTCO or its Affiliates
(whether for their own account or for the benefit of their respective customers)
in executing a foreign exchange transaction shall be governed by this Agreement.
3.2 PERFORMANCE STANDARDS
(a) GENERAL. Performance Standards for certain of the Services are set
forth in the Services Schedule. Chase shall meet or exceed those Performance
Standards, subject to any adjustments thereto as provided in Paragraph (d) below
and in the Services Schedule. NEW TRUSTCO will have the right to add to the
Services Schedule any additional Performance Standards which were achieved by
UST prior to the Commencement Date which are identified by UST at least fifteen
(15) days before the Commencement Date; provided; however, that if Chase does
not meet any such additional Performance Standard in performing services for
itself and Chase reasonably believes that it will not be able to meet such
additional Performance Standard for NEW TRUSTCO without incurring unreasonable
additional costs, and subject further to the provisions of Sections III.A.6 and
III.B.1(c) of the Services Schedule relating to third xxxxx agreements, then
Chase will so notify NEW TRUSTCO in writing within fifteen (15) days of the date
NEW TRUSTCO identifies such additional Performance Standard and the Parties will
agree upon an alternative Performance Standard which comes as close as possible
to the additional Performance Standard identified by NEW TRUSTCO without
imposing unreasonable additional costs on Chase.
(b) FAILURE TO PERFORM. If Chase fails to meet any Performance
Standard; Chase shall (i) promptly investigate the causes of the problem and
prepare a report identifying the same; (ii) use all reasonable efforts to
correct the problem and to begin meeting the Performance Standard as soon as
practicable; and (iii) advise NEW TRUSTCO, as and to the extent requested by NEW
TRUSTCO, of the status of remedial efforts being undertaken with respect to such
problems.
(c) MEASUREMENT OF PERFORMANCE. Throughout the Term, Chase shall
implement the necessary measurement and monitoring tools and procedures required
to measure and report Chase's performance of the Services against the
Performance Standards set forth in the Services Schedule and agreed upon project
plans. Such measurement and monitoring shall permit
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reporting at a level of detail sufficient to verify compliance with such
Performance Standards and plans. Chase shall provide NEW TRUSTCO with
information and access to such tools and procedures upon request for purposes of
verification.
(d) PERIODIC REVIEW. Commencing in the second quarter of the first
Contract Year, and at least annually thereafter, the Parties shall review the
Performance Standards, and shall make adjustments and additions thereto as
mutually agreed upon by the Parties, as appropriate, to reflect enhancements,
evolution and changes in the Services or in their use.
(e) CONTROL. Subject to the provisions of this paragraph (e) and
Section 3.4(b), Chase shall have control over the manner in which it provides
the Services. During the Term, Chase shall not make any changes in the way the
Services are provided without NEW TRUSTCO's approval if such changes would (i)
in any material respect adversely impact the operations of NEW TRUSTCO or
materially increase NEW TRUSTCO's cost, or (ii) in any material respect
adversely impact the way NEW TRUSTCO's customers are serviced (subject, however,
to changes that Chase is required to make to comply with regulatory requirements
or changes arising from events beyond Chase's reasonable control).
3.3 CHASE ORGANIZATION AND PERSONNEL
(a) CHASE ACCOUNT EXECUTIVE. As of the Commencement Date, Chase shall
designate one individual to whom all NEW TRUSTCO communications concerning this
Agreement and the Services may be addressed and who has authority to act for
Chase in connection with all aspects of this Agreement (the "Chase Account
Executive") and one alternate who will substitute for the Chase Account
Executive when the individual designated as the Chase Account Executive is not
available.
(b) ACCOUNT TEAM. Chase shall organize an "Account Team for NEW
TRUSTCO" which shall consist of senior Chase personnel from each major area of
Services, designated as securities processing, bank operations, and information
technology. The organizational structure and responsibilities of the Account
Team for NEW TRUSTCO shall be subject to change from time to time upon the
mutual agreement of the Parties. The Account Team for NEW TRUSTCO shall have
prima Chase responsibility for (i) overall management of the relationship
between NEW TRUSTCO and Chase with respect to the Services, and (ii)
communications between NEW TRUSTCO and Chase with respect to the Services. The
Account Team for NEW TRUSTCO's responsibilities shall be to: (A) discuss with
the NEW TRUSTCO Project Executive issues and concerns of NEW TRUSTCO regarding
the Services; (B) take appropriate steps so that the Services are performed
subject to the provisions of this Agreement; (C) report NEW TRUSTCO requests for
additional Services to appropriate Chase personnel; and (D) review the status of
previously reported NEW TRUSTCO requests for additional Services.
(c) KEY CHASE PERSONNEL.
(i) During the first twelve (12) months after the
Commencement Date, Chase will notify NEW TRUSTCO before: (A)
terminating any of the individuals listed in Schedule B who accept
offers of employment with Chase ("Key Transitioning Personnel"); or (B)
reassigning any Key Transitioning Personnel. If, after being notified
thereof, NEW
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TRUSTCO in good faith objects to the proposed termination or
reassignment within fifteen (15) working days then Chase agrees to
discuss such objection with NEW TRUSTCO and attempt to resolve such
concerns on a mutually agreeable basis.
(ii) Before assigning the Chase Account Executive or the Chase
employee in charge of AMS (together the "Key Chase Personnel"), whether
as an initial assignment or a subsequent assignment, Chase shall notify
NEW TRUSTCO of the proposed assignment and shall provide NEW TRUSTCO
with a resume and any other information about such individuals
reasonably requested by NEW TRUSTCO. If, after being notified thereof,
NEW TRUSTCO in good faith objects to the proposed assignment within
fifteen (15) working days, then Chase agrees to discuss such objections
with NEW TRUSTCO and attempt to resolve such concerns on a mutually
agreeable basis.
(iii) All Key Chase Personnel shall have sufficient knowledge
and authority within the Chase organization to assure that Chase will be
responsive to NEW TRUSTCO's reasonable requests.
(d) REPLACEMENT OF CHASE PERSONNEL. In the event that NEW TRUSTCO
reasonably and in good faith determines that the continued assignment to the NEW
TRUSTCO account of any Chase employee performing Services hereunder is not in
the best interests of NEW TRUSTCO, then NEW TRUSTCO shall give Chase written
notice to that effect requesting that the employee be replaced. Promptly after
its receipt of such a request by NEW TRUSTCO, Chase shall investigate the
matters stated in the request, discuss its findings with NEW TRUSTCO and attempt
to resolve NEW TRUSTCO's concerns on a mutually agreeable basis. Nothing in this
provision shall be deemed to give NEW TRUSTCO the right to require Chase to
terminate any Chase employee's employment; it is intended to give NEW TRUSTCO
only the right to request that Chase discontinue using an employee in the
performance of the Services for NEW TRUSTCO.
(e) RETENTION OF EXPERIENCED PERSONNEL. NEW TRUSTCO and Chase both
agree that it is in their best interests to keep the turnover rate of the Chase
personnel performing the Services to a reasonably low level. Accordingly, if NEW
TRUSTCO reasonably determines that Chase's turnover rate is excessive and so
notifies Chase, Chase shall provide data concerning its turnover rate at the
next quarterly meeting referred to in Section 3.4(d) and shall discuss the
reasons for the turnover rate at such meeting. In any event, notwithstanding
transfer or turnover of personnel, Xxxxx xxxxx obligated to perform the Services
without degradation and in accordance with this Agreement.
(f) USE OF SUBCONTRACTORS.
(i) Chase shall not subcontract performance of a major portion
of the Services without NEW TRUSTCO's prior written consent unless the
subcontractor will also be providing the same and substantial services
for Chase on the same terms and conditions. NEW TRUSTCO shall also have
the right during the Term to revoke its prior approval of a
subcontractor if there was a material misrepresentation concerning the
subcontractor at the time NEW TRUSTCO's approval was given and the
subcontractor's performance is deficient in any material respect;
provided, however, that NEW TRUSTCO shall not
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exercise this right unless it has given Chase notice of its intention to
do so and the subcontractor fails to correct such performance deficiency
within 30 days after the date of such notice. No subcustodian,
depository, pricing service, correspondent bank, broker or other similar
agents appointed by Chase to perform a custody or banking transaction
(collectively, "Chase Transaction Facilitators") shall be considered to
be a subcontractor of Chase for purposes of this Agreement.
(ii) Chase shall remain responsible for obligations performed by
subcontractors to the same extent as if such obligations were performed
by Chase employees. In addition, Chase shall not disclose any
Confidential Information (as defined in Article 7) of NEW TRUSTCO to any
subcontractor unless and until such subcontractor has agreed in writing
to protect the confidentiality of such Confidential Information in a
manner substantially equivalent to that required of Chase by Article 7.
(g) QUALIFICATIONS OF CERTAIN PERSONNEL. During the Term, the personnel
assigned by Chase to perform applications development and maintenance work with
respect to AMS and GTAS shall have, as a group, a level of general training,
education, experience and skills which is equivalent to that of the AMS and GTAS
applications development and maintenance personnel transferred to Chase pursuant
to the Acquisition. On an annual basis, the Parties will review the
qualifications of Chase's AMS and GTAS applications development and maintenance
personnel at one of the quarterly meetings referred to in Section 3.4(c).
3.4 MANAGEMENT AND CONTROL
(a) PROCEDURES MANUAL. The Parties have jointly developed written
materials describing how the Parties will perform their obligations in
connection with the Services, including how the Parties will interface with each
other (both from a procedural standpoint and from the standpoint of systems
interfaces), except that systems life cycle procedures will be jointly developed
within ninety (90) days after the Commencement Date. In addition, Chase shall
provide NEW TRUSTCO with Chase's and third party providers' user documentation
describing how NEW TRUSTCO end users will use Chase provided systems. Such
written materials and user documentation are referred to in this Agreement as
the "Procedures Manual." On at least an annual basis, the Parties shall meet to
determine whether any changes to the Procedures Manual are necessary and shall
prepare such changes as are appropriate under the circumstances. Any changes to
the Procedures Manual must be in writing and signed by the NEW TRUSTCO Project
Executive and the Chase Account Executive to become effective. Chase and NEW
TRUSTCO will comply with the Procedures Manual (as changed by the Parties in
accordance with the preceding sentence). This Agreement (including all Schedules
hereto) and the Procedures Manual are intended to be read together. The
Procedures Manual, as such Procedures Manual exists as of the Commencement Date,
is reflected in the attachments to the certificate, of even date herewith,
attached hereto as Schedule K. As of the Commencement Date, the Parties believe
that there is no conflict between the provisions of this Agreement (including
the Schedules) and the Procedures Manual. However, the following provisions
shall apply in the event that such a conflict is later, found to exist as of the
Commencement Date or arises thereafter as a result of changes made to this
Agreement or the Procedures Manual:
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(i) with respect to any conflict between the provisions of this
Agreement (but not including the Services Schedule) and the Procedures
Manual (as such Procedures Manual exists as of the Commencement Date),
the provisions of this Agreement (but not including the Services
Schedule) shall control;
(ii) with respect to any conflict between the Performance
Standards set forth in the Services Schedule (including without
limitation all time deadlines set forth in the Services Schedule) and
the provisions of the Procedures Manual (as such Procedures Manual
exists as of the Commencement Date), the Performance Standards set forth
in the Services Schedule shall control;
(iii) with respect to any conflict between the functions and
responsibilities of the Parties specified in the Services Schedule (but
not including the Performance Standards set forth therein) and the
functions and responsibilities of NEW TRUSTCO (but not Chase) specified
in the Procedures Manual (as such Procedures Manual exists as of the
Commencement Date), the functions and responsibilities of NEW TRUSTCO
specified in the Procedures Manual shall control;
(iv) with respect to any conflicts between the provisions of the
Services Schedule and the Procedures Manual (as such Procedures Manual
exists as of the Commencement Date) other than those described in items
(ii) and (iii) above, such conflicts will be resolved on a case-by-case
basis with neither document being deemed in advance to be controlling;
(v) with respect to any conflict between the provisions of this
Agreement (but not including the Services Schedule) and the Procedures
Manual which arises after the Commencement Date as a result of changes
made to this Agreement (but not including the Services Schedule) or the
Procedures Manual, the provisions of this Agreement (but not including
the Services Schedule) shall control; and
(vi) with respect to any conflict between the provisions of the
Services Schedule and the Procedures Manual which arises after the
Commencement Date as a result of changes made to the Services Schedule
or the Procedures Manual, the provision which was adopted last by the
Parties shall control.
(b) Change Control. The Procedures Manual shall contain a change
control procedure, which provides, at a minimum, as follows:
(i) Prior to using any Equipment or Software to provide the
Services, Chase shall have reasonably verified that the item has been
properly installed, is operating in accordance with its specifications,
and is performing its intended functions in a reliable manner.
(ii) Chase shall reasonably ensure that all programs are moved
from the development and test environments to the production environment
in a controlled and documented manner.
(iii) Chase shall prepare and provide to NEW TRUSTCO a quarterly
"look ahead" schedule for ongoing and planned changes to the Services.
Chase agrees to discuss with NEW TRUSTCO any objections NEW TRUSTCO may
have to Chase's proposed schedule
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for such changes and to attempt to resolve such concerns. The status of
such changes shall be monitored and tracked against the applicable
schedule.
(c) REPORTING.
(i) Chase shall provide the production reports for NEW
TRUSTCO and its customers which were provided by UST immediately prior
to the Commencement Date in the same frequency and formats as provided
by UST (as such may be modified from time to time by mutual agreement of
the Parties).
(ii) Chase shall also provide NEW TRUSTCO with reports
measuring Chase's performance against applicable Performance Standards.
Unless otherwise specified in this Agreement, such reports shall be
provided to NEW TRUSTCO on a monthly basis. If NEW TRUSTCO has reason to
question the accuracy of any such performance report, Chase will
promptly provide NEW TRUSTCO with adequate supporting documentation to
enable NEW TRUSTCO to verify the accuracy of such report.
(iii) In addition, Chase shall provide such other reports as are
reasonably requested by NEW TRUSTCO and mutually agreed upon by the
Parties.
(iv) On or before the Commencement Date, the Parties will
prepare a list, annexed hereto as Schedule G, of the performance reports
which Chase will provide to NEW TRUSTCO based on the Performance
Standards as of the Commencement Date and any other reports which the
Parties have agreed under Subparagraph (iii) above that Chase will
provide to NEW TRUSTCO. Schedule G will be amended from time to time, as
mutually agreed by the Parties, to reflect any changes in the reports to
be provided by Chase under Subparagraphs (ii) and (iii) above.
(d) MEETINGS. Unless otherwise mutually agreed to by the Parties, the
Parties shall hold quarterly meetings, at mutually agreed upon sites, for the
purpose of, among other things, reviewing performance and contract issues,
reviewing Chase personnel turnover and reviewing Chase's quarterly "look ahead"
schedule for on-going and planned changes to the Services. All meetings shall
have a published agenda issued by Chase sufficiently in advance of the meeting
to allow meeting participants a reasonable opportunity to prepare for the
meeting. In addition to any matters included by Chase for review, such agenda
shall include such matters as are reasonably requested by NEW TRUSTCO. Each
Party shall be responsible for its own expenses relating to such meetings.
(e) TECHNOLOGY PLANNING; COMMON ASSET MANAGEMENT SYSTEM. Chase will
apprise NEW TRUSTCO of Chase's technology planning activities as they relate to
the Services on a quarterly basis. As part of this process, Chase will consult
with NEW TRUSTCO on mutually beneficial technology developments and potential
joint development efforts. Chase will endeavor to include NEW TRUSTCO inputs in
its development efforts; however, unless a written joint development agreement
is reached on a particular development, Chase will make development decisions in
its sole discretion. The Parties recognize that, if it can be accomplished
consistent with their respective business needs and objectives, it would be
desirable to develop a common technology direction for asset management Systems
support. Accordingly, by the end of the fourth Contract Year, the Parties will
seek to develop a strategy to achieve this objective, including an evaluation
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of AMS/1 or AMS/Open products licensed from Financial Technologies International
L.P. as a common platform. For purposes of clarification, in the event that
Chase has not developed a detailed migration plan reasonably acceptable to NEW
TRUSTCO for the migration of the Parties to a common asset management system by
the end of the fourth Contract Year, the number of FTEs included in the Fixed
Fee will increase as provided in Section 5.1(b)(i).
3.5 MIGRATION OF DATA CENTER
(a) METROTECH MIGRATION. Chase shall migrate all data processing
operations from the Broadway Data Center to the MetroTech Data Center. Chase
shall complete such migration within twelve (12) months after the Commencement
Date. Chase shall reimburse NEW TRUSTCO for the Direct Costs that NEW TRUSTCO
incurs due to Chase's use of the Broadway Data Center between the Commencement
Date and the date that Chase ceases to perform any data processing operations
from the Broadway Data Center (the "Migration Period"), including, without
limitation, the following: (i) rental payments for Equipment utilized by Chase
at the Broadway Data Center, and (ii) salaries and benefits of NEW TRUSTCO
personnel working at the Broadway Data Center who Chase requests NEW TRUSTCO to
retain for the purpose of assisting Chase in providing the Services. Chase shall
reimburse NEW TRUSTCO for severance payments made by NEW TRUSTCO to the
aforementioned personnel (but not to exceed the amount of severance benefit that
would have been payable to such employees by Chase under Paragraph 1 of Schedule
5.8(c) of the Merger Agreement if the employee had been a Retained Employee, as
defined therein, at the tune of his or her termination of employment) and the
rental payments relating to NEW TRUSTCO's lease of the 8th floor of the premises
located at 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx during the Migration Period. If the
Migration Period exceeds twelve (12) months, Chase shall, on the first
anniversary of the Commencement Date, (A) assume the leases for all leased
Equipment at the Broadway Data Center, and (B) purchase all Equipment owned by
NEW TRUSTCO at the Broadway Data Center at its then fair market value.
(b) NEW TRUSTCO APPROVAL. Chase will not migrate NEW TRUSTCO's data
processing operations to any Data Center other than the MetroTech Data Center
without NEW TRUSTCO's prior written approval unless Chase migrates other Chase
customers to such Data Center or Chase utilizes such Data Center for substantial
data processing operations for Chase.
(c) MIGRATION PROCEDURE. In connection with the migration to the
MetroTech Data Center and any other proposed Data Center migration, Chase will
prepare a reasonably detailed migration plan for NEW TRUSTCO's review and
comment. Chase will make all reasonable efforts to resolve any reasonable,
material NEW TRUSTCO concerns with respect to migration and on-going operations
at the new Data Center. Chase will pay all costs associated with the migration
(subject to the provisions of the Side Letter and the Side Letter Supplement
relating to the sharing of costs of obtaining the necessary license rights to
certain Third Party Software) and will provide full normal services to NEW
TRUSTCO during the migration period without material disruption to NEW TRUSTCO's
operations.
3.6 SYSTEMS MIGRATION
NEW TRUSTCO will have the right, at any time during the Term (but only
once) and at Chase's expense, to migrate to any asset management system then
used to support Chase's private
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banking business. Any such migration shall be performed pursuant to a
reasonably detailed migration plan approved by NEW TRUSTCO and in a manner which
will not cause a material disruption in NEW TRUSTCO's operations.
3.7 THIRD PARTY WORK
Except as otherwise provided in Section 3.1(c), during the Term, NEW
TRUSTCO shall have the right to provide itself, or use third parties to provide,
products or services which overlap with, replace or are in addition to the
Services, including without limitation Software development work. Chase shall
reasonably cooperate with NEW TRUSTCO and any such third party. Any programmer
costs relating to such cooperation shall be subject to Section 5.1(b) and any
additional Equipment costs relating to such cooperation shall be reimbursed by
NEW TRUSTCO. Chase shall notify NEW TRUSTCO and obtain its approval before
incurring such additional costs; provided, however, that Chase will not be
obligated to provide any such cooperation which would require it to incur such
costs until NEW TRUSTCO provides the necessary approvals. Chase's obligations
hereunder shall be subject to the relevant third party's (i) compliance with
Chase's reasonable security and other applicable standards and procedures, (ii)
execution of appropriate confidentiality agreements, and (iii) scheduling access
to and use of resources to be furnished by Chase pursuant to this Agreement.
3.8 LOSS OF DATA.
Chase shall take reasonable steps to avoid the corruption, loss or
mistransmission of data and to ensure the security of data during transmission,
including the use of reasonable and customary data encryption techniques. In the
event that Chase becomes aware of any corruption, loss or mistransmission of
data or any breach of data security during transmission, Chase shall take
reasonable steps to remedy such situation. Provided that Chase complies with the
provisions of this Section, Chase shall not be responsible for any corruption,
loss or mistransmission of data, or for any breach of data security during
transmission. NEW TRUSTCO shall take appropriate steps to ensure that access by
employees and customers of NEW TRUSTCO and its Affiliates to the systems used to
provide or access the Services under this Agreement is properly authorized and
in accordance with security procedures then in place.
3.9 CERTAIN MATTERS RELATING TO SECURITIES HELD FOR NEW TRUSTCO AND ITS
CUSTOMERS
(a) Chase will maintain appropriate records showing (i) the security
accounts that are maintained for NEW TRUSTCO (and its Affiliates) and the
security accounts that are accounts of customers of NEW TRUSTCO (and its
Affiliates), and (ii) the securities that are held for NEW TRUSTCO (and its
Affiliates) and the customers of NEW TRUSTCO (and its Affiliates). For purposes
of Article 8 of the Uniform Commercial Code as in effect from time to time,
these accounts, taken together, shall be deemed to constitute a security account
maintained for NEW TRUSTCO (and its Affiliates) on the books of Chase.
(b) With respect to securities and other assets that NEW TRUSTCO has
identified to Chase as held for customers of NEW TRUSTCO (and its Affiliates):
(i) Chase will follow directions received from NEW TRUSTCO; (ii) Chase
recognizes that this property is the
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property of such customers; and (iii) unless otherwise expressly agreed by a
customer, Chase will have no banker's lien, setoff rights or other rights to or
to use such property.
ARTICLE 4.
NEW TRUSTCO RESPONSIBILITIES
In addition to any of NEW TRUSTCO's responsibilities as set forth
elsewhere in this Agreement, whether general or specific, NEW TRUSTCO shall be
responsible for performing the following on a timely basis:
4.1 NEW TRUSTCO PROJECT EXECUTIVE
As of the Commencement Date, NEW TRUSTCO shall designate one individual
to whom all Chase communications concerning this Agreement and the Services may
be addressed and who has authority to act for NEW TRUSTCO in connection with all
aspects of this Agreement (the "NEW TRUSTCO Project Executive") and one
alternate who will substitute for the NEW TRUSTCO Project Executive when the
individual designated as the NEW TRUSTCO Project Executive is not available. NEW
TRUSTCO shall have the right to change the designation of the individuals who
will act as the NEW TRUSTCO Project Executive and the alternate upon prior
written notice to Chase.
4.2 COOPERATION
NEW TRUSTCO agrees to cooperate with Chase, its employees and agents, in
connection with this Agreement by, among other things, making available, as
reasonably requested by Chase, management decisions, information, approvals and
acceptances so that Chase may accomplish its obligations and responsibilities
hereunder.
4.3 SAVINGS CLAUSE
NEW TRUSTCO's failure to perform any of its responsibilities under this
Agreement (other than its payment obligations) will not constitute a material
breach of this Agreement, but Chase's nonperformance of its obligations will be
excused if and to the extent that it results from NEW TRUSTCO's failure of
performance and Chase uses reasonable efforts to perform.
4.4 TRANSITION ACTIVITIES
The Parties hereby acknowledge that each Party has agreed to perform the
transition activities set forth in the Side Letter and the Side Letter has not
been superseded by any term of this Agreement and remains in full force and
effect. In connection with additional transition and implementation activities
not covered by the Side Letter or Section 3.5, the Parties agree that, in the
event that Chase is unable to provide all of the Services on and from the
Commencement Date in a manner comparable to the manner in which UST performed
such Services as of the Commencement Date (other than as a result of undue delay
or inactivity by UST or NEW TRUSTCO), then NEW TRUSTCO shall provide the
required operational support pending assumption of the Services by Chase, and
Chase shall reimburse NEW TRUSTCO for the Direct Costs of such support. For
purposes of this Section, a Service is provided in a "comparable"
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manner if it does not (i) materially adversely impact the functions or
operations of end users or materially increase NEW TRUSTCO's costs, or (ii)
materially adversely impact the way NEW TRUSTCO's clients are serviced.
4.5 LIMITED AGENT
NEW TRUSTCO hereby appoints Chase as NEW TRUSTCO's limited agent to the
extent required for Chase to perform the Services, and NEW TRUSTCO agrees to
promptly notify all appropriate third parties of such appointment.
4.6 ACCURACY OF DATA
NEW TRUSTCO will take reasonable steps to ensure the accuracy of the NEW
TRUSTCO instructions, information and data that it provides to Chase pursuant to
this Agreement. NEW TRUSTCO will review any reports and systems output which UST
Employees (other than UST Employees who are transferred to Chase or whose
positions or responsibilities are eliminated as a result of the Acquisition)
regularly reviewed prior to the Commencement Date to determine the accuracy of
instructions, information and data provided to UST's back office operations.
Chase will take reasonable steps to detect inaccuracies in the NEW TRUSTCO
instructions, information and data, including the performance of normal review
and editing routines. if Chase detects an inaccuracy, Chase will contact
appropriate NEW TRUSTCO personnel before taking further action on such
instructions, information or data.
4.7 CERTAIN CHASE PRODUCTS
(a) EXECUTION OF SEPARATE AGREEMENTS.
(i) With respect to Chase's "Microstation" and any future
products for which Chase requires its customers to execute separate
agreements, (A) NEW TRUSTCO (or its Affiliates) will enter into a
written agreement with Chase under which NEW TRUSTCO will agree to be
responsible for its customer's compliance with the terms and conditions
contained in Chase's standard agreement for such product, and (B) unless
Chase, at its own initiative, proposes to use such product as a
replacement for another product, NEW TRUSTCO (or its Affiliates) will
require its customers who will use any such product to (I) execute an
agreement with NEW TRUSTCO (or its Affiliates) which contains the terms
and conditions set forth in Chase's standard agreement for such product
with such modifications thereto as are appropriate in light of NEW
TRUSTCO (or its Affiliate) rather than Chase being the party to such
agreement, or (II) execute Chase's standard agreement for such product,
as determined under subparagraph (ii) below. In addition, Chase may
require NEW TRUSTCO to execute Chase's standard agreement for any such
product used by NEW TRUSTCO.
(ii) With respect to any product covered under item (B) of
subparagraph (i) above which includes material that Chase licenses from
a third party, Chase will negotiate in good faith to obtain, at no
additional cost to Chase or as little additional costs to Chase as
possible, the right for NEW TRUSTCO to sublicense the product to
customers of NEW TRUSTCO (and its Affiliates) as provided in item (B)(I)
of such subparagraph (i.e., so that NEW TRUSTCO may be the party to the
agreement with its customers rather than Chase).
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If Chase will be required to make additional payments to such third
party to obtain such right, then Chase shall so notify NEW TRUSTCO,
which notice shall indicate the amount of such additional payments.
if requested by NEW TRUSTCO, Chase will allow NEW TRUSTCO to participate
with Chase in negotiations with the third party concerning the amount of
such additional payments, provided that if NEW TRUSTCO's participation
would in Chase's good faith opinion materially delay Chase closing its
transaction with the third party, Chase may close the transaction and
allow NEW TRUSTCO to negotiate the amount of such payments with the
third party after the closing. If NEW TRUSTCO desires for Chase to
obtain such right and agrees to reimburse Chase for such additional
payments, then the product will be sublicensed to NEW TRUSTCO customers
in accordance with item (B)(I) of subparagraph (i) above. If NEW TRUSTCO
does not agree to reimburse Chase for such additional payments, then the
product will be sublicensed to NEW TRUSTCO customers in accordance with
item (B)(II) of subparagraph (i) above.
(iii) In no event will the terms and conditions in any Chase
standard agreement be construed to diminish any of the Performance
Standards or Chase's obligations under this Agreement.
(iv) Notwithstanding anything to the contrary herein, if it
objects to Chase's standard agreement for a particular product, NEW
TRUSTCO will not be obligated to enter into the agreement referred to in
item (A) of subparagraph (i) above or to require its customers to enter
into the agreements referred to in item (B)(I) or (B)(II) of
subparagraph (i) above. In such event, Chase will not be obligated to
make such product available to NEW TRUSTCO or its customers and, if such
product is a replacement for another product then used by Chase in
providing the Services, Chase will continue using such other product for
NEW TRUSTCO and its customers.
(b) CHARGES. There will be no additional charge for the use by NEW
TRUSTCO or its Affiliates for Microstation (except that NEW TRUSTCO and its
Affiliates will be responsible for providing the End User Equipment and Systems
Software required to operate Microstation). Any charges to NEW TRUSTCO and its
Affiliates for future products covered under Section 4.7(a) will be determined
pursuant to Section 2 of Schedule C. Customers of NEW TRUSTCO (or its
Affiliates) may be charged a reasonable fee for the use of Microstation and
future products referred to above, except that there will be no charge for the
use of any such product if (i) Chase generally provides it to its clients
without additional charge, or (ii) Chase, at is own initiative, proposes to use
the product as a replacement for another product for which there is no separate
charge by Chase to such customers (e.g., if Chase, at its own initiative,
proposes to use MicroStation as a replacement for NEW TRUSTCO's Ready Access
product).
(c) BREACHES. In the event that a customer of NEW TRUSTCO (or its
Affiliates) materially breaches an agreement executed pursuant to Section
4.7(a), NEW TRUSTCO will notify such customer in writing of such breach promptly
after becoming aware of the same. If such customer fails to cure such breach
within fifteen (15) days after receipt of such notice, then NEW TRUSTCO will, at
Chase's written request, require the customer to cease using the product covered
by such agreement.
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4.8 SECURITY VIOLATIONS.
Notwithstanding anything to the contrary in this Agreement, Chase will
have the right to take immediate remedial action, in consultation with NEW
TRUSTCO, with respect to a customer of NEW TRUSTCO (or its Affiliates) which is
reasonable under the circumstances in the event that Chase determines that there
has been a security violation in connection with the use of any Chase product.
4.9 SETTLEMENT FOR TRANSACTIONS PROCESSED BY CHASE.
On each New York banking day, by the time specified in the Procedures
Manual, Chase will have posted entries to U.S. Trust's 920 account with Chase or
other similar account (the "920 Account") for the settlement of all transactions
processed by Chase or its Affiliates on behalf of NEW TRUSTCO, its Affiliates
and their respective customers in accordance with this Agreement NEW TRUSTCO
authorizes Chase to make debit and credit entries to its 920 Account for such
transactions. If the resulting balance in the 920 Account is a debit balance, by
the time specified in the Procedures Manual NEW TRUSTCO shall deposit additional
funds to the 920 Account in the amount of such debit balance, and if NEW TRUSTCO
fails to make such deposit it shall repay the overdraft as soon as practicable
on the next New York banking day together with interest thereon at a rate per
annum equal to one percent (1%) plus the effective Federal Funds Rate, as
published by the Federal Reserve Bank of New York, on each day the 920 Account
remains overdrawn. If the resulting balance in the 920 Account is a credit
balance, Chase shall pay the amount of such credit balance as NEW TRUSTCO
directs.
ARTICLE 5.
CHARGES AND PAYMENT TERMS
5.1 CHARGES
(a) FIXED FEE AND SUPPLEMENTAL FEE. NEW TRUSTCO will pay a fixed annual
fee often million dollars ($10,000,000) (the "Fixed Fee") in equal monthly
installments throughout the Term. In addition, NEW TRUSTCO will pay a
supplemental fee of **** **** per year in equal monthly installments during the
first three (3) years of the Term and **** per year in equal monthly
installments during the remainder of the Term (the "Supplemental Fee") in
consideration of the expansion of the scope of services to be performed by Chase
under this Agreement subsequent to the establishment of the Fixed Fee.
(b) APPLICATIONS DEVELOPMENT AND MAINTENANCE.
(i) AMS AND GTAS. The Fixed Fee includes an applications
development and maintenance staff of **** full time equivalents
("FTEs") dedicated to AMS and GTAS applications development and
maintenance during the Term, as further described in the Services
Schedule; provided, however, that beginning with the fifth Contract
Year, the number of FTEs included in the Fixed Fee will increase by ****
FTEs per Contract Year for
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
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Contract Years five through seven unless and until Chase has developed a
detailed implementation plan reasonably acceptable to NEW TRUSTCO for
the migration of the Parties to a common asset management system (at
which time the number of FTEs will revert to 24). Any applications
development and maintenance work requested by NEW TRUSTCO which requires
Chase to provide more FTEs than are included in the Fixed Fee will be
priced at the rate of **** per FTE per year, subject to annual
cost-of-living adjustments pursuant to the provisions of Schedule D
hereto.
(ii) BANKING SYSTEMS. In the event that NEW TRUSTCO requests
applications development to be performed on Software which is part of
the banking systems operated by Chase pursuant to Article III of the
Services Schedule, then (A) if Chase performs such applications
development work, NEW TRUSTCO will be charged for such work at the FTE
rates set forth in Section 5.1(b)(i); and (B) if a third party selected
by Chase performs such applications development work, NEW TRUSTCO will
be responsible for paying such third party's charges for such work and
any subsequent increase in the license or maintenance fees payable to
such third party which are attributable to such development work,
provided that Chase notifies NEW TRUSTCO in writing and obtains its
written approval before incurring such charges.
(c) TERMINATION ASSISTANCE CHARGES. The Termination Assistance
described in Section 8.5 shall be provided at no charge to NEW TRUSTCO, except
as provided therein and in this Section 5.1(c). So long as Chase continues to
provide any portion of the Services after the Termination Date pursuant to
Section 8.5(b), NEW TRUSTCO will pay Chase, at the Chase Prevailing Rates, for
such portion of the Services that Chase continues to provide. In addition, NEW
TRUSTCO will (i) pay Chase at the rates specified in Section 5.1(b) if and to
the extent that Chase is required to provide FTEs in excess of the number
included in the Fixed Fee in order to provide Termination Assistance, and (ii)
reimburse Chase for any additional Direct Costs incurred by Chase in providing
Termination Assistance to the extent such Direct Costs are not covered by the
Fixed Fee and other charges under this Agreement.
(d) ADDITIONAL CHARGES. NEW TRUSTCO shall pay Chase the additional
charges set forth in Schedule C.
(e) EXPENSES. Except as otherwise expressly provided in this Agreement,
all expenses that Chase incurs in performing the Services are covered by the
Fixed Fee, the Supplemental Fee, the charges set forth in Schedule C and this
Article 5 and will not be separately reimbursable by NEW TRUSTCO, including
without limitation depository fees.
(f) NO OTHER CHARGES. For all the Services provided or to be provided by
Chase under this Agreement, NEW TRUSTCO shall not be obligated to pay Chase any
amounts in addition to the charges specified in this Agreement.
(g) PROOF OF CHASE PREVAILING RATES. Wherever this Agreement provides
that Chase's charges to NEW TRUSTCO will be based on Chase Prevailing Rates,
Chase shall provide to NEW TRUSTCO, to the fullest extent possible without
violating any confidentiality obligations to third parties, information
reasonably requested by NEW TRUSTCO to verify the level of such rates at any
relevant times. At NEW TRUSTCO's request at any time (but not more frequently
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
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than quarterly), Chase shall provide NEW TRUSTCO with a certificate, signed
by an officer designated by Chase having a rank of senior vice-president or
higher, certifying the level of such rates and compliance with the requirements
of this Paragraph(f).
5.2 PAYMENT TERMS
(a) INVOICES.
(i) Chase shall invoice NEW TRUSTCO on or before the first day
of each month (but not before the beginning of the prior month) for the
portion of the Fixed Fee and the Supplemental Fee attributable to such
month. Invoices of the Fixed Fee and the Supplemental Fee shall be due
and payable on or before the fifteenth (15th) day of the month.
Additional Volume Charges will be invoiced after the end of each six
month period following the Commencement Date in the manner set forth in
Section 1(j) of Schedule C. Any charges by Chase for FTEs in excess of
the number included in the Fixed Fee will be invoiced on a monthly
basis, which invoices shall be due and payable within thirty (30) days
after receipt by NEW TRUSTCO. Any charges by Chase for new products or
services will be invoiced in the manner agreed to by the Parties at the
time this Agreement is amended to include such new products or services.
Any amount due under this Agreement for which a time for payment is not
otherwise specified will be due and payable within thirty (30) days
after receipt of the invoice for such amount.
(ii) Notwithstanding the provisions of Section 5.2(a)(i), in the
event that this Agreement is terminated due to a material breach by NEW
TRUSTCO, then Chase may require NEW TRUSTCO to pay for any Termination
Assistance and continued provision of Services pursuant to Section 8.5
monthly in advance based on a reasonable estimate by Chase of the total
monthly charges for such Termination Assistance and continued provision
of Services. Chase shall invoice NEW TRUSTCO for such estimated charges
at least fifteen (15) days before the beginning of the month and each
such invoice shall be payable on or before the first day of the month.
As soon as practicable after the end of each month, Chase shall provide
NEW TRUSTCO with a reconciliation of the actual versus estimated monthly
charges for such Termination Assistance and continued provision of
Services, and an appropriate adjustment shall be made on the next
monthly invoice (or if there will be no subsequent monthly invoices, the
appropriate Party shall pay the difference to the other Party within
fifteen (15) days of Chase notifying NEW TRUSTCO of the reconciliation).
If payment is not timely made under this Subparagraph (ii), Chase shall
have no further obligation to continue to provide Termination Assistance
or other Services.
(b) ACCOUNTABILITY. Chase shall maintain complete and accurate records
of and supporting documentation for all financial transactions arising under
this Agreement and for all amounts billable to and payments made by NEW TRUSTCO
hereunder, and shall retain such records for a period of six (6) years following
the end of the Term or as otherwise required by law. Chase agrees to provide NEW
TRUSTCO with documentation and other information with respect to each invoice as
maintained by Chase, its subcontractors or suppliers and as may be reasonably
requested by NEW TRUSTCO to verify that Chase's charges to NEW TRUSTCO are
accurate, correct and valid in accordance with the provisions of this Agreement
NEW TRUSTCO and its authorized agents and representatives shall have access to
such records for
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purposes of audit during normal business hours during the Term of this
Agreement and during the period for which Chase is required to maintain such
records.
(c) PRORATION. Any periodic charges under this Agreement are to be
computed on a calendar month basis, and shall be prorated for any partial month.
Notwithstanding the preceding sentence, the Supplemental Fee shall not be
prorated for any partial month but shall be fully paid when invoiced.
(d) DISPUTED CHARGES. NEW TRUSTCO shall pay undisputed charges when
such payments are due and payable under this Article 5. NEW TRUSTCO may withhold
payment of particular charges, except for the Fixed Fee and the Supplemental
Fee, that NEW TRUSTCO disputes in good faith and in that case NEW TRUSTCO shall
advise Chase in writing of the nature of the dispute and the Parties shall
promptly commence dispute resolution as specified in Article 15.
(e) METHOD OF PAYMENT. All payments, reimbursements and refunds made by
one Party to the other Party hereunder shall be made by wire transfer. Unless
otherwise agreed by NEW TRUSTCO, Chase shall not have the right to receive
payment of its charges by debiting NEW TRUSTCO's account with Chase.
Notwithstanding the foregoing, in the event that NEW TRUSTCO fails to make
timely payment of any installment of the Fixed Fee or the Supplemental Fee or
any undisputed charge arising under this Agreement, Chase shall have the right
to receive payment of such fee or charge by debiting NEW TRUSTCO's account with
Chase, but only if NEW TRUSTCO fails to make payment of such fee or charge,
including interest as set forth below, within fifteen (15) days after receiving
written notice from Chase that payment is past due. Interest on any such late
payment shall be at a rate equal to the effective Federal Funds rate as
published by the Federal Reserve Bank of New York, on each day from the date
such payment is due until the earlier of (i) date that such payment is made, or
(ii) the date that Chase debits NEW TRUSTCO's account.
(f) ALLOCATION. Chase invoices shall allocate Chase's charges among NEW
TRUSTCO and each of its Affiliates based upon a methodology provided by NEW
TRUSTCO which will be consistent with the volume methodology set forth in
Schedule C.
5.3 TAXES
The Parties' respective responsibilities for taxes arising under or in
connection with this Agreement shall be as follows:
(a) Each Party shall be responsible for any personal property taxes on
property it owns or leases, for franchise and privilege taxes on its business,
and for taxes based on its net income or gross receipts.
(b) Chase shall be responsible for any sales, use, excise,
value-added, services, consumption, and other taxes and duties payable by Chase
on any goods or services used or consumed by Chase in providing the Services
where the tax is imposed on Chase's acquisition or use of such goods or services
or the amount of tax is measured by Chase's costs in acquiring such goods or
services.
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(c) In the case of any sales, use, excise, value-added, services,
consumption, or other tax during the Term that is assessed on the provision of
the Services as a whole, or on any particular Service received by NEW TRUSTCO
from Chase, NEW TRUSTCO shall be responsible for such tax.
(d) The Parties agree to fully cooperate with each other to enable each
to more accurately determine its own tax liability and to minimize such
liability to the extent legally permissible. Chase's invoices shall separately
state the portion of its charges which are subject to any taxes described in
paragraph (c) above and the amounts of any taxes Chase is collecting from NEW
TRUSTCO. Each Party shall provide and make available to the other any resale
certificates, information regarding out-of-state or out-of-country sales or use
of equipment, materials or services, and other exemption certificates or
information reasonably requested by either Party.
ARTICLE 6.
INTELLECTUAL PROPERTY RIGHTS
6.1 NEW TRUSTCO SOFTWARE
NEW TRUSTCO grants to Chase a worldwide, paid-up, royalty-free,
nonexclusive license during the Term to use, copy, modify and enhance, for the
sole purpose of providing the Services to NEW TRUSTCO, all existing and future
Software owned by NEW TRUSTCO which is required for Chase to provide the
Services. Such license shall be in addition to any licenses of such Software
granted to United States Trust Company of New York pursuant to the License
Agreement to be entered into between United States Trust Company of New York
and NEW TRUSTCO in connection with the Acquisition (the "License Agreement").
Except as provided above or in the License Agreement, Chase shall have no
right, title or interest in any Software owned by NEW TRUSTCO.
6.2 THIRD PARTY SOFTWARE LICENSED BY NEW TRUSTCO.
(a) Subject to obtaining any Required Consents, NEW TRUSTCO grants to
Chase, during the Term, for the sole purpose of providing the Services to NEW
TRUSTCO, the same rights of access and use that NEW TRUSTCO has with respect to
Third Party Software licensed by NEW TRUSTCO as of the Commencement Date and
required by Chase to provide the Services. Such right of access and use shall
be in addition to any license of such Third Party Software granted to Chase
under the License Agreement. Chase will have financial and administrative
responsibility for such Third Party Software and related maintenance
obligations during the Term (subject to the provisions of the Side Letter and
the Side Letter Supplement). Chase will comply with all duties, including use
and nondisclosure restrictions, imposed on NEW TRUSTCO by any Third Party
Software license.
(b) The Parties will cooperate with each other in seeking all Required
Consents. If any Required Consent is not obtained, then, unless and until such
Required Consent is obtained, Chase shall determine and adopt, subject to NEW
TRUSTCO's prior approval, such alternative approaches as are necessary and
sufficient to provide the Services without such Required
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Consents, including the use of the substitute products if they do not degrade
service to NEW TRUSTCO or result in any additional cost or expense to NEW
TRUSTCO.
6.3 THIRD PARTY SOFTWARE LICENSED BY XXXXX
Xxxxx will not use any Third Party Software in performing the Services
which is not commercially available at the time Chase chooses to utilize such
Software without first obtaining NEW TRUSTCO's written consent.
6.4 OWNERSHIP OF WORK PRODUCT
(a) Except as otherwise provided in the License Agreement, all Software
developed by Chase or its Affiliates under this Agreement as to which
development is fully paid for by NEW TRUSTCO shall be considered works made for
hire owned by NEW TRUSTCO (subject to the rights of Chase, its Affiliates or
third parties in pre-existing works which are incorporated into such work
product). Chase will notify NEW TRUSTCO in advance if it proposes to perform a
particular development project on a shared funding basis. As to NEW TRUSTCO
owned Software described in this Section 6.4(a) which is not subject to the
terms of the License Agreement, NEW TRUSTCO hereby grants to Chase a worldwide,
perpetual, paid-up, royalty free, nonexclusive, nontransferable license to use,
modify and enhance such NEW TRUSTCO owned Software solely in the course of Chase
providing the Services.
(b) The content of all system output and similar material from Services
performed for NEW TRUSTCO pursuant to this Agreement, and all copies thereof,
shall be considered works made for hire owned by NEW TRUSTCO (subject to the
rights of Chase, its Affiliates or third parties in pre-existing works which are
incorporated into such work product).
(c) If any work product referred to in Paragraph (a) or (b) above may
not be considered a work made for hire under applicable law, Chase hereby
irrevocably assigns, and shall cause its Affiliates to assign, to NEW TRUSTCO
without further consideration, their right, title and interest in and to such
work product, including U.S. and foreign copyrights (subject to the rights of
Chase, its Affiliates or third parties in pre-existing works which are
incorporated into such work product). Chase acknowledges that NEW TRUSTCO and
the successors and assigns of NEW TRUSTCO shall have the right to obtain and
hold in their own name any intellectual property rights in and to such work
product Chase agrees to execute any documents and take any other actions
reasonably requested by NEW TRUSTCO to effectuate the purposes of this Article
and shall cause its Affiliates to do the same. Notwithstanding the provisions of
this Section 6.4, NEW TRUSTCO's ownership of such work product shall not
prohibit Chase or its Affiliates from independently developing similar products
without reference to or use of such work product or NEW TRUSTCO's Confidential
Information (as defined in Section 7.2).
6.5 NO OTHER RIGHTS
This Agreement shall not confer upon either Party intellectual property
rights in materials of the other Party (to the extent not covered by this
Article) unless otherwise so provided in other provisions of this Agreement.
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ARTICLE 7.
DATA SECURITY/CONFIDENTIALITY/AUDITS
7.1 SAFEGUARDING NEW TRUSTCO DATA
Chase shall establish and maintain safeguards against the destruction,
loss or alteration of NEW TRUSTCO Data in the possession of Chase which are no
less rigorous than those maintained by Chase for its own information of a
similar nature. NEW TRUSTCO shall have the right to establish backup security
for data and to keep backup data and data files in its possession if it chooses.
7.2 CONFIDENTIALITY
(a) OBLIGATIONS. As used herein, "Confidential Information" shall mean
NEW TRUSTCO Data and Chase Data and, in addition, any information of a Party
which is marked confidential, restricted, or proprietary. Each Party's
Confidential Information shall remain the property of that Party except as
expressly provided otherwise by the other provisions of this Agreement. NEW
TRUSTCO and Chase shall each use at least the same degree of care to prevent
disclosing to third parties the Confidential Information of the other as it
employs to avoid unauthorized disclosure, publication or dissemination of its
own information of a similar nature (including the use of written
confidentiality agreements with employees); provided, however, that the Parties
may disclose such information to persons or entities performing services
required or permitted hereunder where (i) use of such person or entity is
authorized under this Agreement, (ii) such disclosure is necessary or otherwise
naturally occurs in that person's or entity's scope of responsibility, (iii) the
person or entity agrees in writing to assume the obligations described in this
Section, and (iv) the disclosing Party assumes full responsibility for the acts
or omissions of such person or entity. Any disclosure to such person or entity
shall be under the terms and conditions as provided herein. Furthermore, neither
Chase nor NEW TRUSTCO shall (A) commercially exploit any Confidential
Information of the other, (B) make any use or copies of the Confidential
Information of the other except as contemplated by this Agreement, (C) acquire
any right in or assert any lien against the Confidential Information of the
other, or (D) refuse for any reason (including a default or material breach of
this Agreement by the other Party) to promptly provide the other Party's
Confidential Information (including copies thereof) to it if requested to do
so. Chase and NEW TRUSTCO shall each promptly provide copies of or return
Confidential Information of the other Party at the other Party's request, in a
form reasonably requested by the other Party, or shall, at the other Party's
request, destroy it (excluding, however, copies of such Confidential Information
as may be necessary to be retained by reason of legal, accounting or regulatory
requirements). Access of non-NEW TRUSTCO personnel to information relating to
customers of NEW TRUSTCO and its Affiliates must be approved by NEW TRUSTCO (by
the functional group or department requiring access rather than on a
person-by-person basis); provided, however, that Chase shall be excused from
performance to the extent that (i) NEW TRUSTCO denies access to Chase personnel
who require such access to perform the Services, and (ii) Chase has provided NEW
TRUSTCO with written notice of such requirement. Chase shall limit disclosure of
NEW TRUSTCO Data to employees and subcontractors of Chase on a need-to-know
basis (including employees and subcontractors within approved functional groups
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and departments), and will be responsible for any unauthorized disclosures by
such employees and subcontractors.
(b) EXCLUSIONS. Notwithstanding Paragraph (a) above, this Section 7.2
shall not apply to any particular information which Chase or NEW TRUSTCO can
demonstrate (i) was, at the time of disclosure to it, in the public domain; (ii)
after disclosure to it, is published or otherwise becomes part of the public
domain through no fault of the receiving Party; (iii) was in the possession of
the receiving Party at the tune of disclosure to it; (iv) was received after
disclosure to it from a third party who had a lawful right to disclose such
information to it; or (v) was independently developed by the receiving Party
without reference to Confidential Information of the furnishing Party. In
addition, a Party shall not be considered to have breached its obligations under
this Section for disclosing Confidential Information of the other Party as
required to satisfy any legal requirement of a competent government body,
provided that, immediately upon receiving any such request and to the extent
that it may legally do so, such Party advises the other Party promptly and prior
to making such disclosure in order that the other Party may interpose an
objection to such disclosure, take action to assure confidential handling of the
Confidential Information, or take such other action as it deems appropriate to
protect the Confidential Information. Further, Chase shall not be considered to
be in breach of its obligations under this Section for disclosing to potential
customers of securities processing, bank operations, information technology and
related back office support services offered by Chase the total volume of such
services (e.g., number of custody accounts and transactions) performed by Chase
for NEW TRUSTCO and other external customers of Chase, provided that the
information disclosed would not enable the recipient of such information to
determine the volume (or approximate volume) of any such services performed for
NEW TRUSTCO.
(c) LOSS OF CONFIDENTIAL INFORMATION. In the event of any unauthorized
disclosure or loss of, or inability to account for, any Confidential Information
of the furnishing Party, the receiving Party shall notify the furnishing Party
immediately.
(d) NO IMPLIED RIGHTS. Nothing contained in this Section shall be
construed as obligating a Party to disclose its Confidential Information to the
other Party, or as granting to or conferring on a Party, expressly or impliedly,
any rights or license to the Confidential Information of the other Party;
provided, however, that each Party shall have such rights of use of the other
Party's Confidential Information as may be set forth elsewhere in this
Agreement.
7.3 AUDIT RIGHTS
(a) GENERAL. Chase shall provide to NEW TRUSTCO's (and its Affiliates')
regulators access at all reasonable times to the part of any facility at which
Chase is providing the Services, to Chase personnel providing the Services, and
to data and records relating to the Services, in connection with any regulatory
examinations of NEW TRUSTCO (or any of its Affiliates). In addition, (i) Chase
shall allow NEW TRUSTCO's external and internal auditors (on behalf of NEW
TRUSTCO and its Affiliates) to utilize computer assisted audit techniques
provided by NEW TRUSTCO (or any of its Affiliates) against those NEW TRUSTCO
(and its Affiliates) computer systems and files, and files created by Chase for
shared Systems that represent NEW TRUSTCO (and its Affiliates) data, that are
operated, supported or maintained by Chase pursuant
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to this Agreement, and (ii) with respect to any applications under development
under this Agreement, Chase shall allow NEW TRUSTCO's external and internal
auditors who participate in some or all of the acceptance testing of such
applications under Section III.E of Schedule A access at all reasonable times
to the part of any facility at which Chase is performing such applications
development, to Chase personnel performing such applications development, and
to data and records relating to such applications development, for the purpose
of testing that agreed internal controls for such applications have been
included. Further, Chase shall provide customers and proprietary fluids of NEW
TRUSTCO (and its Affiliates), issuers of securities, and their respective
auditors, with access to (A) the vault in which physical securities for which
NEW TRUSTCO (or any of its Affiliates) acts as trustee or custodian are held
for the purpose of verifying physical holdings, and (13) reconciliations of
depository records for securities for which NEW TRUSTCO (or any of its
Affiliates) acts as trustee or custodian for the purpose of verifying book
entry holdings. Chase shall cooperate with such auditors and regulators and
provide them with any assistance that they reasonably require to install and
operate audit software.
(b) AUDIT REPORTS.
(i) Chase shall provide NEW TRUSTCO with a copy of a report
annually prepared and opined by external auditors contracted for by
Chase (which auditors shall be a nationally recognized firm) in
accordance with Statement on Auditing Standards No. 70 issued by the
American Institute of Certified Public Accountants, as amended or
superseded by subsequent pronouncements (such types of reports, whether
or not contracted for by Chase, being referred to herein as "SAS 70
Reports"), covering the services provided by Chase's Global Securities
Services (referred to herein as "GSS") to its clients and NEW TRUSTCO
(and its Affiliates).
(ii) Chase will require its external auditors to use their
reasonable best efforts to plan and to substantially complete their
work on the GSS SAS 70 Report, except for the follow-up and update
testing, on or before January 15 following the calendar year then ended
in order to provide a verbal report to NEW TRUSTCO's internal and
external auditors (which auditors will act on behalf of NEW TRUSTCO and
its Affiliates) by such date with respect to such report. The mutual
intent of the Parties is for Chase's external auditors to inform NEW
TRUSTCO's internal and external auditors in such verbal report, subject
to completion of update testing, whether the specified internal control
policies and procedures were suitably designed at December 31 of the
calendar year then ended, and whether such policies and procures were
operating with sufficient effectiveness during such year. This
information is required in order for NEW TRUSTCO's external auditors to
report on NEW TRUSTCO's (and its Affiliates') financial statements in
accordance with Securities and Exchange Commission requirements on a
timely basis, which is considered to be no more than three (3) weeks
after the close of the fiscal year. Chase will allow NEW TRUSTCO's
external and internal auditors (on behalf of NEW TRUSTCO and its
Affiliates) to meet with Chase's external auditors prior to December 31
of each calendar year to discuss the status of the GSS SAS 70
procedures and related testing for such year. The final GSS SAS 70
Report will be provided to NEW TRUSTCO on approximately April 30
following the calendar year then ended. The GSS SAS 70 Report will
incorporate policies, procedures and controls over the processing of
NEW TRUSTCO'S (and its
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Affiliates') data and the population sampled for testing will include
NEW TRUSTCO (and its Affiliates') data. NEW TRUSTCO shall have the
right to meet with Chase in following up any exceptions disclosed in
SAS 70 Reports and to discuss the steps taken to correct them.
(iii) In addition to the GSS SAS 70 Reports, Chase will provide
NEW TRUSTCO with SAS 70 Reports from third party servicers and other
audit reports conducted by Chase's internal auditors with respect to
NEW TRUSTCO (and its Affiliates) systems, systems shared with Chase
and/or the Services.
(iv) With respect to the audits of systems and Services
conducted by Chase and not covered in the aforementioned SAS 70
Reports, Chase will agree with NEW TRUSTCO on the audit scope prior to
the commencement of the audits. Chase's internal draft and final audit
reports and workpapers relative to NEW TRUSTCO (and its Affiliates)
shall be available for review by NEW TRUSTCO's internal and external
auditors (on behalf of NEW TRUSTCO and its Affiliates). NEW TRUSTCO
shall have the right to meet with Chase in following up any NEW TRUSTCO
(and its Affiliates) exceptions disclosed in the internal audit reports
and to discuss the steps taken to correct them. Chase's internal
auditors will agree with NEW TRUSTCO on the risk rating for those
Services not covered in the aforementioned SAS 70 Reports using Chase's
risk rating methodology. For those Services with a very high risk
rating, the internal audits will be conducted during the twelve month
period ending September 30 of each year and the draft reports shall be
issued no later than December 15 of each year. Final audit reports
shall be issued no later than December 31 of each year. An other
Services will be audited in accordance with Chase's internal audit
cycle. The draft and final audit reports relating to such Services
shall be provided to NEW TRUSTCO upon issuance thereof by Chase
internally. The workpapers associated with such reports shall also be
available for review by NEW TRUSTCO's internal and external auditors
upon issuance of the draft audit reports by Chase internally. If there
are any Services that NEW TRUSTCO believes should be audited and such
Services are not covered in the GSS SAS 70 Reports or other SAS 70
Reports and audits provided by Chase, Chase will allow NEW TRUSTCO to
engage Chase's external auditors to perform audits of such Services at
NEW TRUSTCO's expense.
(v) Except as provided in the last sentence of subparagraph
(iv) above, the professional fees and expenses related to the
preparation of SAS 70 Reports and other reports and audits referred to
in this Section 7.3 shall be borne by Chase.
ARTICLE 8.
TERMINATION
8.1 TERMINATION FOR CAUSE
In the event that either Party materially breaches any of its duties or
obligations under this Agreement, which breach shall not be cured within thirty
(30) days after written notice specifying the breach is given to the breaching
Xxxxx, then the Party not in breach may, by giving written notice to the
breaching Party, terminate this Agreement for cause as of a date specified in
the notice of termination, provided, however, that the Party not in breach may
only give such notice
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after the expiration of a fifteen (15) day informal dispute resolution process
conducted pursuant to Section 15.2(e). Without limiting the foregoing, repeated
breaches by a Party of its duties or obligations under this Agreement shall be
deemed a material breach of this Agreement.
8.2 TERMINATION FOR CONVENIENCE
At any time after the first Contract Year, NEW TRUSTCO may terminate this
Agreement for convenience and without regard to cause by giving Chase at least
six (6) months prior written notice (which may be given before the end of the
first Contract Year) designating the termination date. A termination fee of two
million five hundred thousand dollars ($2,500,000) shall apply if the effective
date of termination is during the second Contract Year. Such termination fee
shall be reduced pro rata by the amount of $69,444.44 per month for each month
beyond the end of the second Contract Year. No other break-up fees or penalties
will be payable in the event of termination for convenience.
8.3 TERMINATION FOR INSOLVENCY
In the event that either Xxxxx (a) files for bankruptcy; (b) becomes or is
declared insolvent, or is the subject of any proceedings related to its
liquidation, insolvency or the appointment of a receiver or similar officer for
it; (c) makes an assignment for the benefit of all or substantially all of its
creditors; or (d) enters into an agreement for the composition, extension, or
readjustment of substantially all of its obligations, then the other Party may,
by giving written nonce of termination to such Party, terminate this Agreement
as of a date specified in such notice of termination.
8.4 TERMINATION UPON CHANGE OF CONTROL
Chase shall promptly notify NEW TRUSTCO of any Chase Change of Control (as
defined below). In the event of a Chase Change of Control, NEW TRUSTCO shall
have the right to terminate this Agreement by giving Chase written notice of
termination within six (6) months after the consummation of such Chase Change
of Control specifying a termination date. For purposes of this Section, the
term "Chase Change of Control" shall mean (i) the sake of all or substantially
all of the assets of Chase or its parent corporation, in a single transaction
or series of related transactions, to any person or entity, or group of related
persons and entities, (ii) the merger or consolidation of Chase or its parent
corporation into or with another entity where Chase (or its parent corporation)
is not the (ii) entity (but occluding any such merger or consolidation as to
which at least 50% of the outstanding voting securities of the surviving entity
are owned by the owners of Chase or its parent corporation. immediately prior
to the merger or consolidation), or (iii) the acquisition by a person or
entity, or group of related persons or entities, of at least 50% of the
outstanding voting securities of Chase or its parent corporation.
8.5 TERMINATION/EXPIRATION ASSISTANCE
(a) GENERAL. Subject to the provisions of Section 5.1(c) and 5.2(a)(ii),
except as otherwise expressly stated herein, Chase will provide reasonably
requested termination assistance to NEW TRUSTCO or its designee for a period
commencing six (6) months prior to expiration or termination of this Agreement,
and continuing for up to one year after the expiration or termination of this
Agreement (for any reason, including termination for the material breach of
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NEW TRUSTCO) to facilitate a smooth transition. of the Services to NEW TRUSTCO
or its designee ("Termination Assistance"); provided, however, that Chase will
be required to provide Termination Assistance for only up to six (6) months
after any termination of this Agreement by Chase based on a Change of Control
(as defined in the Post Closing Covenants Agreement). Termination Assistance
shall include, without limitation, the following:
(i) Chase will assist in the development of a transition plan,
will make available necessary project personnel and resources to
facilitate the transition, and will provide training, documentation and
other materials necessary to enable NEW TRUSTCO or its designee to
assume responsibility for the Services using any Equipment or Systems
previously used by Chase.
(ii) If and to the extent that a third party is designated
by NEW TRUSTCO to assume responsibility for the Services, Chase shall
provide the Termination Assistance to NEW TRUSTCO's designee. Chase
shall provide the designee with such information regarding the Services
as is reasonably prudent or necessary in order for the designee to
assume responsibility for, and continue the performance of, the
Services in an orderly manner. However, prior to providing any of the
foregoing Termination. Assistance to NEW TRUSTCO's designee, Chase
shall have the right to receive from such designee, in a form
reasonably acceptable to Chase, written assurances that (A) the
designee shall maintain at all times the confidentiality of any Chase
proprietary information, Chase Software, or other confidential
materials disclosed or provided to, or learned by, such designee in the
course of receiving the Termination Assistance, and (B) the designee
shall use such proprietary information, Chase Software, and other
confidential materials only for the purpose of providing services to
NEW TRUSTCO.
(iii) The provisions of Section 7(b) of the Post Closing
Covenants Agreement and Section 16.15 of this Agreement shall not
prevent NEW TRUSTCO and its designee from offering employment to any
Chase employees (including without limitation individuals performing
work for Chase on a contract basis) who are primarily performing
Services for NEW TRUSTCO's account at any time during the six (6) month
period prior to expiration or termination of this Agreement.
(iv) Chase shall grant to NEW TRUSTCO and its Affiliates a
worldwide, perpetual, paid-up (when NEW TRUSTCO has paid Chase the
one-time license fee referred to below), royalty free, nonexclusive
license (A) to use, copy, modify and enhance, in the course of
providing banking, trust, custody or other financial services, any then
existing Software owned by Chase or any of its Affiliates (including
any modifications, enhancements or derivative works of Software
licensed by Chase from third parties, if and to the extent that Chase
is the owner of such modifications, enhancements or derivative works)
which is part of an asset management system or corporate trust and
agency system and is used to provide Services to NEW TRUSTCO
immediately prior to the Termination Date (the "Chase Software"), and
(B) to sublicense to NEW TRUSTCO Clients (as defined below) the right
to use the Chase Software (in object code form only) in the course of
NEW TRUSTCO or its Affiliates providing banking, trust, custody or
other financial services to such NEW TRUSTCO Clients. For purposes of
this Section 8.5(a)(iv), "NEW TRUSTCO Clients" shall mean any persons
or entities to whom NEW TRUSTCO or its
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Affiliates provides any services. NEW TRUSTCO and its Affiliates shall
have the right to permit their contractors to exercise their rights
under such license for their benefit, but solely for their benefit,
in the course of providing banking, trust, custody or other financial
services. Such licenses shall be in addition to any licenses of
such Chase Software granted to NEW TRUSTCO pursuant to the License
Agreement. As part of such license, (I) NEW TRUSTCO shall be required to
execute a license agreement which contains terms and conditions which
conform in form and substance to the relevant provisions of the License
Agreement, (II) Chase will provide copies of source code and technical
documentation for such Chase Software, and (III) NEW TRUSTCO shall pay
Chase the then current fair market value of such license as a one-time
license fee. Such license will not be transferable by NEW TRUSTCO
without Chase's prior written approval, except in connection with a
direct or indirect acquisition of NEW TRUSTCO by another institution
which is not a competitor of Chase. In the event that there is a direct
or indirect acquisition of NEW TRUSTCO by another institution which is
a competitor of Chase, neither NEW TRUSTCO nor the acquirer shall use
the Chase Software for processing any accounts of persons or entities
who were not NEW TRUSTCO Clients as of the closing date of such
acquisition without Chase's prior approval, which approval may be
granted or withheld at Chase's sole discretion and may be subject to
additional fees and terms and conditions; provided, however, that to
enable NEW TRUSTCO to successfully transition to a new asset management
and/or corporate trust and agency system, NEW TRUSTCO (or the acquirer)
may use the Chase Software, without additional fees, to process all
accounts of NEW TRUSTCO Clients (including accounts of persons and
entities who become NEW TRUSTCO Clients after the closing date of such
acquisition) for a period of up to eighteen (18) months following the
closing date of such acquisition. Such new accounts shall not include
any accounts of the acquirer prior to closing date of the acquisition.
As a condition to the transfer of the license granted under this
Subparagraph (iv), the transferee shall execute and deliver to Chase a
writing in which the transferee agrees to be bound by the terms and
conditions of the license agreement referred to in item (I) above.
(v) To the extent NEW TRUSTCO is not the licensee of Third
Party Software then being used by Chase to provide the Services, Chase
shall use reasonable efforts, at NEW TRUSTCO's request and subject to
obtaining any Required Consents, to provide NEW TRUSTCO (or its
designee, if requested by NEW TRUSTCO) with a sublicense or other right
to use such Software after termination or expiration of this Agreement,
for the benefit of NEW TRUSTCO and its Affiliates, and their respective
customers, in supporting the business of NEW TRUSTCO and ks Affiliates.
NEW TRUSTCO shall be responsible for paying any fees required to obtain
Required Consents.
(vi) Chase shall make available to NEW TRUSTCO or its designee,
pursuant to reasonable terms and conditions, any Equipment owned or
leased by Chase or its Affiliates that is substantially dedicated to
the performance of the Services. NEW TRUSTCO or its designee may
purchase such Equipment owned by Chase or its Affiliates at fair market
value and may assume their rights and obligations with respect to any
such Equipment leased by them. Chase shall return to NEW TRUSTCO any
NEW TRUSTCO Equipment then in Chase's possession or control.
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(vii) Chase shall make available to NEW TRUSTCO or its
designee, pursuant to reasonable terms and conditions, any third party
services then being utilized by Chase solely in the performance of the
Services. Chase shall be entitled to retain the right to utilize any
such third party services in connection with the performance of
services for any other Chase customer.
(viii) In providing the Termination Assistance, Chase shall
provide NEW TRUSTCO and its designees, agents, contractors, and
consultants with reasonable access to and use of all systems then being
used by Chase to provide the Services (subject to restrictions
contained in agreements with third parties).
(b) SERVICES AFTER EXPIRATION/TERMINATION. In addition to the
Termination Assistance provided pursuant to Section 8.5(a), at NEW TRUSTCO's
request, for a period of up to one (1) year following the Termination. Date (or
six months following any termination of this Agreement by Chase based upon a
Change of Control), Chase shall provide to NEW TRUSTCO any or all of the
Services being performed by Chase prior to such Termination Date, including
without limitation. any of the Services under this Section. Except as provided
in Section 5.1(c), to the extent Chase is to perform Services under this
Section, the provisions of this Agreement shall be applicable as such
provisions would have been applicable to such Services prior to such
Termination. Date.
8.6 TERMINATION/EXPIRATION FEE
Upon expiration or termination. of this Agreement for any reason
including without limitation for cause, NEW TRUSTCO shall pay the applicable
termination/expiration fee set forth in Schedule J.
ARTICLE 9.
FORCE MAJEURE
Each Party will be excused from performance delays and failures due to
acts of God and other causes beyond the reasonable control of such Party
(except for subcontractor defaults which are not the result of a force majeure
event), provided the delay could not have been avoided by reasonable
precautions (such as backup systems) and cannot reasonably be circumvented
through the use of alternative sources, workaround plans and other means. Any
Xxxxx so delayed in its performance shall immediately notify the Party to whom
performance is due by telephone (to be confirmed in writing within two (2) days
of the inception of such delay) and describe at a reasonable level of detail
the circumstances causing such delay. If a force majeure condition materially
restricts the performance of the Services for more than three (3) days, NEW
TRUSTCO may procure such Services from alternative sources. The Parties will
share equally the charges of such alternative source and NEW TRUSTCO will
continue to pay Chase the Fixed Fee and the Supplemental Fee. If the force
majeure event persists for more than five (5) days, NEW TRUSTCO may terminate
the Services Agreement.
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ARTICLE 10.
REPRESENTATIONS AND WARRANTIES
10.1 NON-INFRINGEMENT
Each Party represents and warrants that it shall perform its
responsibilities under this Agreement in a manner that does not infringe, or
constitute an infringement or misappropriation of, any patent, copyright,
trademark, trade secret, trade name, service xxxx or other proprietary rights
of any third party.
10.2 COMPLIANCE WITH LAWS AND REGULATIONS
(a) NEW TRUSTCO and Chase each represent and warrant to the other
that it shall perform its responsibilities under this Agreement in a manner
that complies with all laws, regulations, ordinances and codes applicable to
this Agreement and the Services, including without limitation identifying and
procuring required permits, certificates, approvals and inspections. If a
charge of non-compliance with any such laws, regulations, ordinances, or codes
occurs, then the Party so charged shall promptly notify the other Party of such
charge in writing, provided that the Party so charged shall be obligated to
give such notice only if it is reasonably likely that (i) such charge of
non-compliance could adversely affect its ability to perform its obligations
hereunder at such time or in the future, or (ii) such charge of non-compliance
could have an adverse impact on the other Party or the other Party's clients
at such time or in the future.
(b) NEW TRUSTCO and Chase each further represent and warrant to the
other that its performance of this Agreement will not constitute: a violation
of any judgment, order or decree, a material default under any material
contract by which it or any of its material assets are bound; or an event that
would, with notice or lapse of time, or both, constitute such a default.
(c) Each Party agrees that it will not perform its responsibilities
under this Agreement with actual knowledge on the part of the business unit(s)
performing such responsibilities that the manner in which such responsibilities
are performed would cause the other Party to be in violation of any laws,
regulations, ordinances and codes which are imposed on such other Party.
10.3 AUTHORIZATION
Each Party represents and warrants to the other that:
(a) it has all requisite corporate power and authority to enter into
this Agreement and to carry out the transactions contemplated by this
Agreement; and
(b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly
authorized by all requisite corporate action on the part of such Party.
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10.4 DISCLAIMER
THIS IS A SERVICE AGREEMENT AND IS NOT SUBJECT TO ARTICLE 2 OR 2A OF THE
UNIFORM COMMERCIAL CODE AS ENACTED BY THE STATE OF NEW YORK OR OTHERWISE. OTHER
THAN THE WARRANTIES SET FORTH IN THIS ARTICLE 10, CHASE MAKES NO WARRANTIES
WITH RESPECT TO THIS AGREEMENT OR THE PERFORMANCE OF ITS OBLIGATIONS
HEREUNDER (INCLUDING WARRANTIES WITH RESPECT TO ITS SERVICES, DELIVERABLES, OR
WORK PRODUCT HEREUNDER), EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO,
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
CHASE DOES NOT WARRANT THAT THE SERVICES SHALL BE UNINTERRUPTED OR ERROR FREE.
OTHER THAN THE WARRANTIES SET FORTH IN THIS ARTICLE 10, NEW TRUSTCO MAKES NO
WARRANTIES WITH RESPECT TO THIS AGREEMENT OR THE PERFORMANCE OF ITS OBLIGATIONS
HEREUNDER, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 11.
INDEMNITIES
11.1 INDEMNITY BY XXXXX
Xxxxx agrees to indemnify and hold harmless NEW TRUSTCO and its
Affiliates and their respective directors, officers, employees, agents and
assigns, as applicable, in accordance with the procedures described in Section
11.4, against any and all Losses, as incurred, for or on account of or arising
from or in connection with or otherwise with respect to:
(a) any claim of infringement of any patent, trade secret, trademark,
trade name, service xxxx, copyright or other proprietary rights alleged to have
occurred because of Systems or other resources provided to NEW TRUSTCO or based
upon performance of the Services by Chase; or
(b) any claim by (i) any subcontractor of Chase of any tier (i.e.,
direct subcontractors of Chase, subcontractors of such subcontractors and so
on), (ii) any Chase Transaction Facilitator (as defined in Section 3.3(f)(i)),
or (iii) any other person or entity furnishing products or services to Chase
in. connection with the provision. of the Services under this Agreement (i.e.,
a supplier), except to the extent that NEW TRUSTCO is at fault, in whole or in
part, in causing the loss or injury alleged by such person or entity.
For purposes of Paragraph (b) above, the extent of NEW TRUSTCO's fault, if any,
shall be determined with reference to its obligations under this Agreement.
11.2 INDEMNITY BY NEW TRUSTCO
NEW TRUSTCO agrees to indemnify and hold harmless Chase and its
Affiliates and their respective directors, officers, employees, agents and
assigns, as applicable, in accordance with the
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procedures described in Section 11.4, against any and all Losses, as incurred,
for or on account of or arising from or in connection with or otherwise with
respect to:
(a) any claim of infringement of any patent, trade secret, trademark,
trade name, service xxxx, copyright or other proprietary rights alleged to have
occurred because of systems or other resources provided to Chase by NEW TRUSTCO
pursuant to this Agreement; or
(b) any claim by a customer of NEW TRUSTCO (or any of its Affiliates)
or a third parry (other than a Chase Transaction Facilitator or a subcontractor
or supplier of Chase) in connection with the provision of the Services under
this Agreement except (i) in the case of claims based on Article 14 Losses, to
the extent that Chase is liable for such Article 14 Loss, and (ii) in the case
of all other claims, to the extent that Chase or a subcontractor or supplier of
Chase is at fault, in whole or in part, in causing the loss or injury alleged
by such customer or third party.
For purposes of Paragraph (b) above, Chase's fault, if any, shall be determined
with reference to its obligations under this Agreement.
11.3 CROSS INDEMNITIES
Chase and NEW TRUSTCO each agree to indemnify and hold harmless the
other, and its Affiliates and their respective directors, officers, employees,
agents and assigns, as applicable, in accordance with the procedures described
in Section 11.4, against any and all Losses, as incurred, for or on. account of
or arising from or in connection with or otherwise with respect to any of the
following in connection with this Agreement: (a) the death or bodily injury of
any agent, employee, customer, contractor, business invitee or business visitor
of such other Party to the extent caused or contributed to by the indemnitor,
its Affiliates, employees, contractors or agents; (b) the damage, loss or
destruction of any real or personal property owned or leased by the indemnitee
to the extent caused or contributed to by the indemnitor, its Affiliates,
employees, contractors or agents; (c) except as otherwise provided in the Post
Closing Covenants Agreement, any claim asserted against the other Party
resulting from an act or omission of the indemnitor, its Affiliates,
contractors or agents in their capacity as an employer of a person, and (d) any
claim asserted against the other Party in connection with this Agreement
resulting from the indemnifying Party's failure to comply with any laws,
regulations, ordinances and codes. Subparagraphs (b) and (d) above shall not
apply to any matter covered under Article 14.
11.4 INDEMNIFICATION PROCEDURES
(a) Any Party seeking any indemnification provided for under this
Agreement (the "Indemnified Party") in respect of, arising out of or involving
the commencement or threatened commencement of any civil, administrative or
investigative action or proceeding against the Indemnified Party (a "Third
Party Claim"), shall notify in writing (and to the extent received, deliver
copies of all related notices and documents (including court papers) to) the
Party from whom indemnification is sought (the "Indemnifying Party") of the
Third Party Claim within fifteen (15) Business Days (as defined in the Post
Closing Covets Agreement) after receipt by such Indemnified Party of written
notice of the Third Party Claim; provided, however, that failure to give such
notification shall not affect the indemnification provided hereunder except to
the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure (except that
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the Indemnifying Party shall not be liable for any expenses incurred during the
period in which the Indemnified Party failed to give such notice if such
Indemnified Party failed to give such notice within the allotted fifteen
Business Days). Thereafter, the Indemnified Party shall deliver to the
Indemnifying Party, within five (5) Business Days' time after the Indemnified
Party's receipt thereof, copies of all other notices and documents (including
court papers) received by the Indemnified Party relating to the Third Party
Claim.
(b) If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses (except as provided in Section 11.4(c)), to assume the defense
thereof with experienced counsel selected by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party. Should the Indemnifying Party
so elect to assume the defense of a Third Party Claim, the Indemnifying Party
sill not be liable to the Indemnified Party for any legal expenses (except as
provided below and in Section 11.4(c)) subsequently incurred by the Indemnified
Party in connection with the defense thereof Notwithstanding the Indemnifying
Party's election to assume the defense of such Third Party Claim, the
Indemnified Party shall have the right to employ separate counsel and to
participate in the defense of such action at its own expense; provided however,
that the Indemnifying Party shall bear the reasonable fees, costs, and expenses
of such separate counsel if (i) the use of counsel chosen by the Indemnifying
Party to represent the Indemnified Party would present such counsel with a
conflict of interest that would preclude such counsel from representing the
Indemnified Party pursuant to legal canons of ethics or other applicable law;
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent it within thirty (30) days
after notice to the Indemnifying Party of the institution of such Third Party
Claim, or (iii) the Indemnifying Party shall authorize the Indemnified Party to
employ separate counsel at the Indemnifying Party's expense. If the
Indemnifying Party chooses to defend or prosecute a Third Party Claim, each
Party hereto shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the Indemnifying Party's
request) the provision to the Indemnifying Party of records and information
which are reasonably relevant to such Third Party Claim, and making employees
available (subject to reimbursement by the Indemnifying Party of actual
expenses incurred therewith) on a mutually convenient basis to provide
addItional information and explanation of any material provided hereunder. If
the Indemnifying Party chooses to defend or prosecute any Third Party Claim,
the Indemnified Party shall agree to any settlement, compromise or discharge of
such Third Party Claim which the Indemnifying Party may recommend and which by
its terms obligates the Indemnifying Party to pay the full amount of the
liability in connection with such Third Party Claim and releases the
Indemnified Party completely in connection with such Third Party Claim.
(c) Notwithstanding anything set forth in Section 11.4(b) to the
contrary, in the event an Indemnified Party reasonably believes and so notifies
the Indemnifying Party in writing that the applicable claim, even if fully
indemnified for, is reasonably likely to have a material adverse effect on the
Indemnified Party's business, financial condition. or results of operations,
then the Indemnifying Party shall not have the right to assume the defense of
such claim but shall have the right to employ separate counsel and to
participate in the defense of such action at its own expense. In such an event,
(i) the Indemnified Party and its counsel shall consult, wherever reasonably
practicable, with the Indemnifying Party and its counsel with respect to the
status of
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the claim and any related litigation, and (ii) the Indemnified Party shall bear
the fees, costs arid expenses of its counsel.
(d) Whether or not the Indemnifying Party shall have assumed the
defense of a Third Party Claim, so long as the Indemnifying Party acknowledges
in writing its obligation to indemnify the Indemnified Party with respect to
the applicable claims, the Indemnified Party shall not admit any liability with
respect to, or settle, compromise or discharge, such Third Party Claim without
the Indemnifying Party's prior written consent, which consent may not be
withheld unless, in the Indemnifying Party's good-faith judgment, such
settlement, compromise or discharge is unreasonable in light of such Third
Party Claim against, and defenses available to, the Indemnified Party.
11.5 SUBROGATION
In the event that an Indemnifying Party shall be obligated to indemnify
an Indemnified Party pursuant to this Article, the Indemnifying Party shall,
upon payment of such indemnity in full, be subrogated to all rights of the
Indemnified Party with respect to the Losses indemnified, and the Indemnified
Party agrees to execute and deliver to the Indemnifying Party such instruments
as may be reasonably required to evidence such subrogation.
ARTICLE 12.
INSURANCE AND RISK OF LOSS
12.1 INSURANCE
(a) GENERAL. Each Party shall procure and maintain throughout the Term
at least the following insurance coverages in a policy or policies of
insurance, primary and excess, including, where appropriate, umbrella or
catastrophic form:
(i) Disability and Workers Compensation. Insurance, including
not less than $1,000,000 Employers Liability Coverage.
(ii) Commercial General Liability Insurance against loss
from injuries or death to any person and from damage to any property
with combined single limits of not less than $15,000,000, including the
following coverages: (i) bodily injury and property damage; (ii) broad
form contractual liability; (iii) broad form property damage; and (iv)
personal injury.
(iii) Financial Institution Bond Insurance. Such insurance
shall include, without limitation, fidelity, premises, transit, check
forgery, securities forgery and computer crime in the amount of
$50,000,000 for NEW TRUSTCO and $100,000,000 for Chase. In addition
Chase shall carry excess securities coverage of not less than
$75,000,000.
The Parties agree that, if NEW TRUSTCO increases the assets under
administration, care, custody and/or control of Chase, then NEW TRUSTCO may
request that Chase obtain such additional Financial Institution Bond Insurance
and excess securities coverage as is reasonable and customary in view of the
total amount of NEW TRUSTCO's assets under administration, care, custody and/or
control of Chase. If Chase obtains such additional coverage, Chase will
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provide to NEW TRUSTCO, by broker's representation letter or otherwise,
evidence of such additional coverage.
(b) INSURANCE CERTIFICATES. A certificate of insurance or a brokers
representation letter corresponding to each such policy shall be delivered by
the Party required to obtain such insurance to the other Party on or before the
Commencement Date. With respect to insurance noted in items (i) and (ii) of
paragraph (a) above, such certificates of insurance shall contain an agreement
by the king insurance company(ies) that such insurance will not be canceled or
terminated without thirty (30) days prior written notice to the insured With
respect to insurance noted in item (iii) of paragraph (a) above, each Party
shall use reasonable efforts to notify the other Party in the event of
cancellation, termination or material modification thirty (30) days in advance
of such change. Each insured will use reasonable efforts to notify the other
Party immediately upon receipt of such notice of cancellation or termination.
Each insured will use reasonable efforts to deliver to the other Party written
notice of renewal and or material modification within a reasonable time after
such event, but not longer than thirty (30) days thereafter.
12.2 RISK OF LOSS
Each Party shall be responsible for risk of loss of, and damage to, any
Equipment, End User Equipment, Software or other materials in its possession or
under its control.
ARTICLE 13.
LIMITATION OF LIABILITY
13.1 LIMITATION ON LIABILITY
(a) THE LIMITATIONS ON LIABILITY SET FORTH IN SECTIONS 13.1(b), (c)
AND) (d) BELOW SHALL NOT APPLY TO CHASE'S LIABILITY UNDER ARTICLE 14 IN
CONNECTION WITH CHASE'S PERFORMANCE OF (OR FAILURE TO PERFORM) (i) ANY OF THE
SERVICES DESCRIBED IN SECTION II.A OF THE SERVICES SCHEDULE, OR (ii) ANY FUNDS
TRANSFER PURSUANT TO SECTION II.B OF THE SERVICES SCHEDULE WHICH IS DIRECTLY
RELATED TO SECURITIES FOR WHICH CHASE IS A CUSTODIAN OR WILL SHORTLY BECOME A
CUSTODIAN.
(b) IN EACH CONTRACT YEAR, CHASE AND NEW TRUSTCO SHALL SHARE EQUALlY
LIABILITY FOR ALL ARTICLE 14 LOSSES (AS DEFINED IN ARTICLE 14), OTHER THAN
THOSE DESCRIBED IN SECTION 13.1(a) ABOVE, FOR WHICH CHASE WOULD OTHERWISE BE
LIABLE UNDER ARTICLE 14 UNTIL NEW TRUSTCO HAS PAID AN AMOUNT EQUAL TO THE NET
FINANCIAL LOSSES (AS DEFINED BELOW) FOR ANY LIABILITY ABOVE THE AMOUNT OF SUCH
SHARED LIABILITY, CHASE will PAY ONE HUNDRED PERCENT (100%) OF ALL ARTICLE 14
LOSSES, OTHER THAN THOSE DESCRIBED IN SECTION 13.1(a) ABOVE, FOR WHICH CHASE
WOULD OTHERWISE BE LIABLE UNDER ARTICLE 14, UP TO A TOTAL AGGREGATE AMOUNT
EQUAL TO **** IN ANY CONTRACT YEAR. AS USED HEREIN, THE TERM "NET FINANCIAL
LOSSES" SHALL MEAN THE NET FINANCIAL LOSSES INCURRED BY UST AND ITS AFFILIATES
DURING
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
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CALENDAR YEAR 1994 AS A RESULT OF ACTS OR OMISSIONS OF UST IN PERFORMING, FOR
ITSELF OR ITS AFFILIATES, ANY SERVICES WHICH CHASE IS OBLIGATED TO PERFORM
UNDER THIS AGREEMENT OTHER THAN THOSE DESCRIBED IN SECTION 13.1(a) ABOVE,
PROVIDED THAT THE FINANCIAL LOSSES TAKEN INTO ACCOUNT SHALL BE LIMITED TO THOSE
FINANCIAL LOSSES FOR WHICH CHASE WOULD HAVE BEEN RESPONSIBLE UNDER ARTICLE
14 IF CHASE HAD PROVIDED SUCH SERVICES UNDER THIS AGREEMENT DURING CALENDAR
YEAR 1994. FOR PURPOSES OF APPLYING THE LIMITATIONS SET FORTH IN THIS SECTION
13.1(b), THE AMOUNT OF CHASE'S LIABILITY HEREUNDER FOR ANY CONTRACT YEAR SHALL
BE MEASURED BASED ON THE DATE THE EVENT RESULTING IN SUCH LIABILITY OCCURRED
(RATHER THAN THE DATE WHEN CHASE SATISFIES THE LIABILITY).
(c) EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPHS (a) AND (b) ABOVE,
EACH PARTY'S AGGREGATE LIABILITY TO THE OTHER PARTY FOR All CAUSES OF ACTION OR
CLAIMS, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY,
NEGLIGENCE (INCLUDING NEGLIGENT MISREPRESENTATION), AND OTHER TORTS ARISING OUT
OF OR RELATING TO THIS AGREEMENT SHALL NOT EXCEED ****.
(d) NEITHER PARTY SHALL HAVE LIABILITY, WHETHER BASED ON CONTRACT, TORT
(INCLUDING, WITHOUT LIMITATION, NEGLIGENCE), WARRANTY OR ANY OTHER LEGAL OR
EQUITABLE GROUNDS, FOR ANY PUNITIVE, EXEMPLARY, CONSEQUENTIAL, SPECIAL,
INDIRECT OR INCIDENTAL LOSS OR DAMAGE SUFFERED BY THE OTHER PARTY, INCLUDING
WITHOUT LIMITATION, LOSS OF DATA, PROFITS (EXCLUDING PROFITS UNDER THIS
AGREEMENT), INTEREST OR REVENUE, OR USE OR INTERRUPTION OF BUSINESS, ARISING
FROM OR RELATED TO THIS AGREEMENT, EVEN IF SUCH PARTY IS ADVISED OF THE
POSSIBILITY OF SUCH LOSSES OR DAMAGES.
(e) THE LIMITATIONS SET FORTH IN SECTIONS 13.1(b), 13.1(c) AND
13.1(d) ABOVE ARE NOT INTENDED TO IMPLY THAT CUSTOMERS OR OTHER THIRD PARTIES
HAVE A RIGHT TO RECOVER PUNITIVE, EXEMPLARY, CONSEQUENTIAL, SPECIAL, INDIRECT,
OR INCIDENTAL LOSSES OR DAMAGES AND SHALL NOT APPLY TO (i) CHASE'S AND NEW
TRUSTCO'S INDEMNifY OBLIGATIONS UNDER ARTICLE 11, (ii) AMOUNTS INADVERTENTLY
OVERPAID TO EITHER PARTY BY THE OTHER, (iii) AMOUNTS FOR CHARGES, FEES,
REFUNDS, CREDITS, ADJUSTMENTS, REIMBURSEMENTS, ETC. DUE UNDER ARTICLE 3, ARTICLE
5, SCHEDULE C OR OTHERWISE DUE AND PAYABLE UNDER THIS AGREEMENT, OR (iv)
DAMAGES OCCASIONED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE (i.e., CONDUCT
EVINCING A RECKLESS INDIFFERENCE TO THE RIGHTS OF OTHERS) OF A PARTY.
(f) A PARTY MAY NOT ASSERT AGAINST THE OTHER PARTY ANY CLAIM OR SEEK
ANY REMEDY IN CONNECTION WITH THIS AGREEMENT OR ACTS DONE OR OMITTED HEREUNDER
UNLESS THE ASSERTING PARTY HAS GIVEN THE
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
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OTHER PARTY WRITTEN NOTICE OF THE CLAIM WITHIN TWO (2) YEARS AFTER THE
ASSERTING PARTY FIRST HAD ACTUAL KNOWLEDGE OF THE FACTS SUPPORTING THE CLAIM.
NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 13.1(f) SHALL NOT
APPLY TO ANY MATTER COVERED UNDER ARTICLE 11 OR ANY ARTICLE 14 LOSSES
COVERED UNDER ITEM (i) OF SECTION 14.1(a), PROVIDED THAT IN THE CASE OF SUCH
ARTICLE 14 LOSSES THE APPROPRIATE NOTICE UNDER ARTICLE 14 HAS BEEN GIVEN EXCEPT
AS PROVIDED IN THIS SECTION 13.1(f), THE STATUTE OF LIMITATIONS FOR ALL CLAIMS
SHALL BE AS PROVIDED UNDER APPLICABLE LAW.
(g) NEW TRUSTCO AND CHASE EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE
LIMITATIONS AND EXCLUSIONS CONTAINED HEREIN REPRESENT THE PARTIES' AGREEMENT AS
TO THE ALLOCATION OF RISK BETWEEN THE PARTIES AND THEIR MUTUAL OBLIGATIONS OF
CONTRACT IN CONNECTION WITH CHASE'S OBLIGATIONS UNDER THIS AGREEMENT. THE
AMOUNTS PAYABLE TO CHASE IN CONNECTiON HEREWITH REFLECT THIS ALLOCATION OF RISK
AND THE EXCLUSION OF CONSEQUENTIAL AND PUNITIVE DAMAGES IN THIS AGREEMENT.
ARTICLE 14.
CERTAIN LOSSES
14.1 GENERAL
(a) The term "Article 14 Loss" shall mean any financial loss described
in item (i), (ii) or (iii) below which arises out of, in whole or in part, any
act or omission of Chase or any of its subcontractors in connection with its
performance (or failure to perform) any Services and for which Chase or any of
its subcontractors is at fault, in whole or in part (as "fault" is determined
in Paragraph (b) below):
(i) financial loss to a customer of NEW TRUSTCO (or any of
its Affiliates) or other third party (notwithstanding that NEW TRUSTCO
(or one of its Affiliates) may be liable to the customer or other third
party);
(ii) financial loss to NEW TRUSTCO (or any of its Affiliates)
when acting as a principal or for its own account; or
(iii) financial loss to NEW TRUSTCO (or any of its Affiliates)
due to an incorrect credit or payment being made to a customer of NEW
TRUSTCO (or any of its Affiliates) or other third party.
(b) Subject to the terms and conditions of this Article 14, Chase
shall be liable for an Article 14 Loss based on the degree of fault of Chase
and its subcontractors in causing such Article 14 Loss in relation to the
degree of fault of all other persons and entities (including without limitation
NEW TRUSTCO and its Affiliates and their respective customers and
counterparties in a settlement or transaction). For purposes hereof, the degree
of fault of Chase
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and its subcontractors shall be determined with reference to Chase's
obligations under this Agreement. Notwithstanding anything to the contrary in
this Agreement, the following provisions shall apply in determining Chase's
liability, if any, for an Article 14 Loss:
(i) Chase will use reasonable care in performing its
obligations under this Agreement, including without limitation the
safekeeping of assets;
(ii) Chase shall be liable for an Article 14 Loss which shall
occur as the result of the failure of a subcustodian to exercise
reasonable care with respect to securities settlement and the
safekeeping of assets; but only to the extent that Chase would be
liable if Chase were performing the settlement or holding the assets in
New York. In the event of any Article 14 Loss incurred by a customer of
NEW TRUSTCO (or any of its Affiliates) by reason of the failure of
Chase or its subcustodians to utilize reasonable care, Chase shall be
liable only to the extent of the direct damages of such customers, to
be determined based on the market value of the property which is the
subject of the Article 14 Loss at the date of discovery thereof, unless
Chase would be liable for other types of damages under Section
14.1(b)(v);
(iii) Chase will not have liability for an Article 14 Loss to
the extent it was caused by:
(A) ****
(B) **** provided that:
(I) if Chase is unable to obtain reimbursement from
any such Agent for such Article 14 Loss after its initial
efforts in seeking reimbursement in accordance with Article V
of the Services Schedule, then Chase shall either assign its
claim against such Agent to NEW TRUSTCO or pursue such claim
itself in which case any amounts ultimately recovered from such
Agent shall be distributed as follows: first, to reimburse the
expenses of collection, second, to reimburse the person or
entity suffering the Article 14 Loss for such loss; third, if
NEW TRUSTCO and/or Chase reimbursed the person or entity
suffering the Article 14 Loss prior to the recovery of such
amounts from such Agent, then to reimburse the Parties in
proportion to the amount each Party paid as reimbursement to
the person or entity suffering such loss; and
(II) Chase and NEW TRUSTCO shall share equally
liability for an Article 14 Loss to the extent it was caused by
an act or omission of any such correspondent bank;
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
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(C) the insolvency of a subcustodian which it
appoints unless such appointment was made negligently or in bad
faith;
(D) the general risk of investing;
(E) the risk of investing or holding assets in a
particular country, such as losses resulting from
nationalization, expropriation or other government actions;
regulation of the banking or securities industry; currency
restrictions; devaluations or fluctuations; market conditions
which prevent the orderly execution of securities transactions
or affect the value of assets; and, other market practices or
conditions disclosed in writing by Chase to NEW TRUSTCO on a
market-by-market basis; provided, however, that this exclusion
from liability shall not apply if and to the extent that such
Article 14 Loss was caused by the negligent failure (under the
standard set forth in Section 14.1(b)(ii) above) of Chase or
its subcustodian to comply with the laws or regulations of such
country;
(F) actions taken or omitted in reliance upon any
instruction, order, indenture, stock certificate, power of
attorney, assignment, affidavit or other instrument reasonably
believed by Chase, in good faith, to be genuine or bearing the
signature of a person or persons believed by Chase, in good
faith, to be authorized to sign, countersign or execute the
same; provided, however, that this provision shall not be
construed to diminish Chase's responsibilities under Section
4.6; and provided further that this provision shall not apply
to any Article 14 Loss arising out of Chase's failure to
perform its obligations in accordance with this Agreement
relating to check or item processing (including without
limitation Chase's obligations under Sections III(C)(3), (4),
(7) and (9) of the Services Schedule);
(G) Chase acting in accordance with applicable laws,
regulations, rules or policies (including, but not limited to,
rules, regulations and policies of the various payment
Systems), or with the terms of its agreements with other banks
or financial institutions regarding the transaction of business
with those banks or institutions, provided such terms are not
manifestly unreasonable;
(H) force majeure events for which Chase would be
excused from delay or failure of performance under Article 9;
(iv) Chase will not be liable to NEW TRUSTCO for any Article 14
Loss arising out of Chase's failure to perform its obligations in
accordance with this Agreement relating to check or item processing
(including without limitation. Chase's obligations under Sections
III(C)(3), (4), (7) and (9) of the Services Schedule) (any such Article
14 Loss being referred to herein as a "Check Processing Loss") if and
to the extent that NEW TRUSTCO (or one of its Affiliates) has valid
defenses under Article 4 of the Uniform Commercial Code of the
applicable jurisdiction which, if asserted by NEW TRUSTCO (or its
Affiliate), would avoid liability to its customer. Chase will be
subrogated, to the extent of any payments made to NEW TRUSTCO for any
Check Processing Loss, to the rights of NEW TRUSTCO (or its Affiliate)
with respect to such Article 14 Loss; and
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(v) in no event shall Chase be liable for indirect or
consequential damages or lost profits or loss of business, even if
previously informed of the possibility of such damages, except that
Chase shall be liable for such damages occasioned by its willful
misconduct or gross negligence (i.e., conduct evincing a reckless
indifference to the rights of others) to the extent provided under New
York law (without assuming knowledge of NEW TRUSTCO's customers being
imputed to Chase).
Chase shall not have liability for an Article 14 Loss to the extent that its
liability would have been avoided or reduced by the provisions set forth in
the preceding sentence. If there are changes in the financial services industry
after the date of this Agreement which result in financial institutions
routinely including in their customer contracts and enforcing against their
customers liability protections which are different than those set forth in
this Section 14.1(b), the Parties will discuss in good faith and agree upon
appropriate changes to the provisions of this Section 14.1(b).
(c) Each Party shall notify the other Party of an Article 14 Loss
promptly after it becomes aware of the same. If NEW TRUSTCO (or any of its
Affiliates) falls to give prompt notice to Chase of an Article 14 Loss, then
Chase shall not be liable in respect of such Article 14 Loss to the extent that
Chase can demonstrate, by a preponderance of the evidence, that its ability to
investigate or mitigate such Article 14 Loss was impaired by such failure to
give prompt notice.
(d) NEW TRUSTCO will have the option of attempting to resolve any
Article 14 Loss described in Section 14.1(a)(i) above itself or jointly with
Chase. If NEW TRUSTCO settles the Article 14 Loss itself, ft may make a claim
against Chase under this Article 14 to the extent that it believes that Chase
is liable to it, in whole or in part, for the amount paid by it to settle such
Article 14 Loss. If there is a dispute between the Parties as to Chase's
financial responsibility for any Article 14 Loss which NEW TRUSTCO resolves by
itself, NEW TRUSTCO will have the burden of demonstrating, by a preponderance
of the evidence, (i) that the Article 14 Loss occurred, (ii) the amount of the
Article 14 Loss, and (iii) the degree of fault of Chase in causing the Article
14 Loss. Chase's liability for the Article 14 Loss will equal the amount
actually paid by NEW TRUSTCO in settlement of the loss multiplied by a
percentage which represents Chase's degree of fault as determined under Section
14.1(b) above.
(e) With respect to Article 14 Losses described in Section
14.1(a)(ii) above, NEW TRUSTCO (or its Affiliates) will take any reasonable
steps requested by Chase in writing to mitigate the amount of the financial
loss to NEW TRUSTCO (or its Affiliates). Chase will not be responsible for
losses incurred by NEW TRUSTCO (or its Affiliates) due to the failure of NEW
TRUSTCO (or its Affiliates) to take such reasonable steps requested by Chase.
(f) With respect to Article 14 Losses described in Section
14.1(a)(iii) above, NEW TRUSTCO (or its Affiliates) will take any reasonable
steps requested by Chase in writing to recover the incorrect credit or payment.
Chase will be liable to NEW TRUSTCO, based on the relative degree of fault of
Chase and its subcontractors as determined under Paragraph (b) above, for the
reasonable costs incurred by NEW TRUSTCO (and its Affiliates) in attempting to
recover the same.
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(g) If a customer of NEW TRUSTCO (or any of its Affiliates) or other
third party commences, or threatens to commence, an action or proceeding
against NEW TRUSTCO (or any of its Affiliates) based on an Article 14 Loss
described in. Section 14.1(a)(i) above, the indemnification procedures set
forth in Section 11.4 shall apply to the defense or settlement of such action
of proceeding (or threatened action or proceeding). In applying the procedures
described in Section 11.4, such action or proceeding (or threatened action or
proceeding) shall be considered to be a "Third Party Claim."
ARTICLE 15.
DISPUTE RESOLUTION
15.1 INFORMAL DISPUTE RESOLUTION
NEW TRUSTCO and Chase acknowledge that, from time to time during the
Term, there may arise between them issues regarding the Parties' rights, duties
and obligations, including without limitation, issues arising as a result of
changes in circumstances which are not reasonably anticipated as of the
Commencement Date, and which require the attention of NEW TRUSTCO and Chase
management. In order to resolve any such issues arising under this Agreement as
quickly and efficiently as feasible and at the lowest management level
possible, NEW TRUSTCO and Chase agree to utilize the following procedures:
(a) LEVEL ONE. If NEW TRUSTCO identifies an issue, or issues, that
requires resolution, NEW TRUSTCO will give the Chase Account Executive written
notice identifying the issue(s), and if Chase identifies an issue, or issues,
that requires resolution, Chase will give the NEW TRUSTCO Project Executive
written notice identifying the issue(s). The NEW TRUSTCO Project Executive and
the Chase Account Executive will then negotiate in good faith on a regular
basis to resolve the issue(s) as expeditiously as feasible under the
circumstances; provided, however, such negotiation will extend no more than ten
(10) business days from the date the receiving Party received the written
notice identifying the issue(s). Notwithstanding the above ten (10) business
day period, the NEW TRUSTCO Project Executive and the Chase Account Executive
may, without waiver of any rights, agree to extend such period to another date,
provided that such agreement is in a signed writing delivered prior to the
expiration of the ten (10) business day period to the Senior NEW TRUSTCO
Project Executive and the Senior Chase Account Executive (collectively, the
"Senior Executives"). The "Senior NEW TRUSTCO Project Executive" shall be the
senior level executive with management responsibility for the Chase
relationship. The "Senior Chase Account Executive" shall be the senior level
executive with management responsibility for the NEW TRUSTCO relationship.
In the event any issue(s) remain unresolved upon the expiration. of the
time period referred to in the preceding paragraph or, prior to such
expiration, either the NEW TRUSTCO Project Executive or the Chase Account
Executive states in writing to the other that he/she will not be able to
resolve the issue(s) through continued negotiation, they will refer the
issue(s) to the Senior NEW TRUSTCO Project Executive and the Senior Chase
Account Executive.
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No later than five (5) business days from the date of such referral,
the NEW TRUSTCO Project Executive and the Chase Account Executive will each
prepare a written statement describing in derail their respective positions
related to the issue(s) (the "Issue Statements"). The Issue Statements will be
submitted to both of the Senior NEW TRUSTCO Project Executive and the Senior
Chase Account Executive no later than the expiration of the time period
referred to in the preceding sentence. The purpose of preparing and submitting
the Issue Statements is to facilitate the resolution process. However, the
Issue Statements will not preclude either Party from identifying any additional
relevant issues during the resolution process, nor in any event will the Issue
Statements constitute a waiver of or prejudice or limit either Party's rights
or remedies.
(b) LEVEL TWO. When the Issue Statements are received by the Senior
NEW TRUSTCO Project Executive and the Senior Chase Account Executive as
described above, they will negotiate in good faith on a regular basis to
resolve the issue(s) as expeditiously as feasible under the circumstances;
provided, however, such negotiation will extend no more than five (5) business
days from the date the Senior NEW TRUSTCO Project Executive and the Senior
Chase Account Executive each received the Issue Statements. Notwithstanding the
above five (5) business day period, the Senior NEW TRUSTCO Project Executive
and the Senior Chase Account Executive may, without waiver of any rights, agree
to extend such period to another date, provided that such agreement is in a
writing signed prior to the expiration of the five (5) business day period.
Within five (5) business days of the conclusion of the Senior NEW
TRUSTCO Project Executive's and the Senior Chase Account Executive's
negotiation, these senior Executives will submit a joint written recommendation
for any issue(s) agreed upon and separate written recommendations for any
issue(s) not agreed upon or remaining unresolved. NEW TRUSTCO and Chase agree
to be bound by the joint written recommendation for any issues agreed upon.
For any issues that remain unresolved, either Party may institute litigation in
accordance with Section 15.3.
15.2 GENERAL RESOLUTION PROCEDURES
(a) At each management level, the designated representatives of the
Parties may utilize such practices and procedures for resolving the issue(s) as
they determine in their discretion are most likely to result in an early and
amicable resolution.
(b) Except pursuant to Section 15.2(d) below, NEW TRUSTCO and Chase
each agree that they will refrain from instituting any litigation, and no court
shall be competent to address any dispute properly addressed in this fashion,
until either the Senior NEW TRUSTCO Project Executive or the Senior Chase
Account Executive provides a written notice to the other that he/she has
concluded in good faith that amicable resolution through continued negotiation
of the issue(s) does not appear likely after the conclusion of the resolution
process set forth in Section 15.1 above.
(c) Notwithstanding anything to the contrary in this Article 15, if
the issue(s) being addressed pursuant to this Article 15 involves a major
payment, service level or post-termination dispute, both Parties agree that the
duly empowered negotiating representative of either Party
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may escalate the issue(s) to the next management level for resolution at any
time and for any reason.
(d) Notwithstanding anything to the contrary in this Article 15, this
provision will not be construed to prevent a Party from instituting, and a
Party is authorized to institute litigation earlier to (i) avoid, based on a
well-founded belief, the expiration of any applicable limitations period
applicable to a particular claim, (ii) to preserve a superior position. with
respect to other creditors, or (iii) seek a temporary restraining order or
other immediate injunctive relief.
(e) Notwithstanding any to the contrary in this Article 15, in the
event that a Party initiates a fifteen (15) day informal dispute resolution
process pursuant to Section 8.1, the dispute resolution process shall be
accelerated and shall be resolved by the Senior NEW TRUSTCO Project Executive
and the Senior Chase Account Executive. The NEW TRUSTCO Project Executive and
the Chase Account Executive shall each prepare their respective Issue
Statements within two (2) days of the commencement of this informal accelerated
resolution procedure and deliver same to the Senior Executives. The Senior
Executives shall either resolve the dispute within the remaining thirteen (13)
days whereby the Parties shall be bound by the decision of the Senior
Executives or either Party may institute litigation proceedings.
(f) Chase shall not debit or freeze NEW TRUSTCO's account with Chase
for the purpose of collecting (i) any money damages that Chase believes it is
entitled to recover from NEW TRUSTCO for breach of this Agreement or (ii) any
amounts that Chase believes it is entitled to recover from NEW TRUSTCO under
the indemnification provisions of Article 11; provided, however, that this
restriction shall not apply in any instance where (A) Chase notifies NEW
TRUSTCO in writing that it believes it is entitled to recover such money
damages or indemnifiable amounts (as applicable) and intends to debit NEW
TRUSTCO's account for the same, and (B) NEW TRUSTCO does not dispute in good
xxxxx Xxxxx'x right to recover such money damages or indemnifiable amounts (as
applicable) as evidenced by NEW TRUSTCO's failure to provide written. notice to
Chase, within thirty (30) days after receipt of Chase's notice under item (A)
above, disputing Chase's right to recover the same. The provision shall not
apply to any charges payable by NEW TRUSTCO to Chase under Article 5.
15.3 LITIGATION
The Parties consent to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any state
court sitting in New York, New York for all litigation which may be brought
with respect to the terms of, and the transactions and relationships
contemplated by, this Agreement.
15.4 CONTINUED PERFORMANCE
Each Party agrees to continue performing its obligations under this
Agreement while any dispute is being resolved unless and until such obligations
are terminated by the termination or expiration of this Agreement.
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15.5 AFFILIATES
Although NEW TRUSTCO's Affiliates shall have no right to bring any
claim or action, or to seek and obtain money damages or other relief, directly
against Chase in connection with any dispute or controversy arising out of or
relating to this Agreement, NEW TRUSTCO shall be entitled to (i) treat any
damages sustained by its Affiliates as damages to NEW TRUSTCO as a party
hereunder (and such damages shall be aggregated into NEW TRUSTCO's damages and
shall be subject to all applicable limitations of liability set forth in
Article 13), and (ii) pursue equitable and other relief relating to the
provision of Services to its Affiliates under this Agreement.
ARTICLE 16.
GENERAL
16.1 BINDING NATURE AND ASSIGNMENT
(a) ****
Except as provided in the preceding two sentences, Chase may not assign its
right or obligations under this Agreement without the prior written consent
of NEW TRUSTCO, which consent may be granted or withheld in NEW TRUSTCO's sole
discretion. In addition, Chase shall not assign its rights or obligations under
this Agreement to another person or entity unless such person or entity has
sufficient operating assets and capital to operate its business and fulfill its
obligations.
(b) NEW TRUSTCO may not assign its rights and obligations under this
Agreement without the prior written consent of Chase (which consent shall not
be unreasonably withheld).
(c) For purposes of this Section, any assignment by operation of law,
order of any court, or pursuant to any plan of merger, consolidation, or
liquidation shall be deemed an assignment subject to the provisions of this
Section. Any assignment made in violation of this Section shall be void and of
no effect as between the Parties. Subject to the foregoing, this Agreement
shall be binding on the Parties hereto and their respective successors and
assigns; provided that the Party assigning this Agreement notifies the other
Party in writing of the assignment and the assignee agrees in writing to be
bound by all the terms and conditions of this Agreement.
16.2 ENTIRE AGREEMENT; AMENDMENT
Except with respect to the obligations of the Parties in connection
with the Acquisition Documents (including the Side Letter), the FTE Letter
Agreement and the Side Letter
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
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Supplement, this Agreement, including any Schedules referred to herein and
attached hereto, each of which is incorporated herein for all purposes,
constitutes the entire agreement with respect to the subject matter hereof and
supersedes all prior agreements, whether written or oral, with respect to the
subject matter contained in this Agreement and there are no representations,
understandings or agreements relative hereto which are not fully expressed
herein. Notwithstanding the foregoing, this Agreement shall supersede (i) the
Services Agreement Term Sheet, between The Chase Manhattan Corporation and
U.S. Trust Corporation, dated November 18, 1994 (except for Sections 4.1 and
4.2 thereof), and (ii) that certain letter agreement, between The Chase
Manhattan Corporation and U.S. Trust Corporation, dated November 18, 1994,
relating to the payment of base salary and severance to certain employees
located at the Broadway Data Center. No change, waiver, or discharge hereof
shall be valid unless in writing and signed by an authorized representative of
the Party against which such change, waiver, or discharge is sought to be
enforced.
16.3 NOTICES
All notices, requests, demands, and determinations under this Agreement
(other than routine operational communications), shall be in writing and shall
be deemed duly given (a) when delivered by hand, (b) one (1) day after being
given to an express courier with a reliable system for tracking delivery, (c)
when sent by confirmed facsimile with a copy sent by another means specified in
this Section, or (d) six (6) days after the day of mailing, when mailed by
United States mail, registered or certified mall, return receipt requested,
postage prepaid, and addressed as follows:
In the case of Chase:
Chase Account Executive
Chase Manhattan Bank, N.A.
0 XxxxxXxxx
00xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxx Xxxx
with a copy to:
Legal Department
Chase Manhattan Bank, N.A.
1 Chase Xxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. XxxXxxxxxxx, Esq.
In the case of NEW TRUSTCO:
New U.S. Trust Company of New York
000 Xxxx 00xx Xxxxxx
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52
New York, New York 10036-1532
Attn: Xx. Xxxx X. Xxxxxxx
with a copy to:
Legal Department
U.S. Trust Corporation.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx Xxxxxxx, Esq.
A Party may from time to time change its address or designee for notification
purposes by giving the other prior written notice of the new address or
designee and the date upon which it will become effective.
16.4 COUNTERPARTS
This Agreement may be executed in several counterparts, each of which
shall be an original, all of which taken together shall constitute one single
agreement between the Parties hereto.
16.5 GOVERNING LAW
This Agreement and performance under it shall be governed by and
construed in accordance with the laws of the state of New York, as such laws
are applied to contracts between New York residents that are entered into and
to be performed entirely within New York.
16.6 HEADINGS
The article, section and paragraph headings and the table of contents
used herein are for reference and convenience only and shall not enter into the
interpretation hereof.
16.7 RELATIONSHIP OF PARTIES
(a) Except as otherwise expressly provided in this Agreement, Chase, in
furnishing the Services to NEW TRUSTCO hereunder, is acting only as an
independent contractor. No legal partnership or joint venture is intended to be
created by or pursuant to this Agreement. Chase shall be solely responsible for
the payment of compensation of Chase personnel assigned to perform services
hereunder and such personnel are not entitled to the provisions of any NEW
TRUSTCO employee benefits. NEW TRUSTCO shall not be responsible for payment of
worker's compensation, disability benefits and unemployment insurance or for
withholding and paying employment taxes for any Chase personnel performing
services hereunder, but such responsibility shall be that of Chase. Chase is
not an agent of NEW TRUSTCO and has no authority to represent NEW TRUSTCO as to
any matters, except as expressly authorized in this Agreement.
(b) Without limiting the generality of the foregoing, with respect to
securities held by NEW TRUSTCO (or any of its Affiliates) for its customers and
security accounts maintained by
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NEW TRUSTCO (or any of its Affiliates) for its customers, the Parties
acknowledge that (i) the customers are and will remain customers of NEW TRUSTCO
(or its Affiliates); (ii) NEW TRUSTCO (and each of as Affiliates) maintains and
will continue to maintain security accounts for its customers in the ordinary
course of its business and is acting and will continue to aa in that capacity;
(iii) neither the customer relationship nor the accounts are being assigned or
transferred to Chase; (iv) Chase is acting as the agent of NEW TRUSTCO (and
each of its Affiliates) in providing recordkeeping and custodial services under
Article II of the Services Schedule with respect to such securities and such
accounts; and (v) the changes in custody arrangements taking place at the time
this Agreement becomes effective are not transfers by the customers.
16.8 SEVERABILITY
Any provision in this Agreement which is found to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions or affecting the validity or
enforceability of such provisions in any other jurisdiction.
16.9 CONSENTS AND APPROVALS
(a) Each Party will cooperate with the other by, among other things,
making available, as reasonably requested by the other, management decisions,
information, approvals, and acceptances in order that each Party may properly
accomplish its obligations and responsibilities hereunder. Except where
expressly provided as being in the sole discretion of a Party, where agreement,
approval, acceptance, consent or similar action by either Party hereto is
required by any provision of this Agreement, such action shall not be
unreasonably delayed or withheld.
(b) An approval or consent given by a Party under this Agreement shall
not relieve the other Party from responsibility for complying with the
requirements of this Agreement, nor shall it be construed as a waiver of any
rights under this Agreement, except as and to the extent otherwise expressly
provided in such approval or consent.
16.10 NO WAIVER OF DEFAULT; CUMULATIVE REMEDIES
A delay or omission by either Party hereto to exercise any right or
power under this Agreement shall not be construed to be a waiver thereof. A
waiver by either of the Parties hereto of any of the covenants to be performed
by the other or any breach thereof shall not be construed to be a waiver of any
succeeding breach thereof or of any other covenant herein contained. All
remedies provided for in this Agreement shall be cumulative and in addition to
and not in lieu of any other remedies available to either Party at law, in
equity or otherwise.
16.11 SURVIVAL
Notwithstanding any provisions of this Agreement to the contrary, all
payment obligations relating to periods prior to the expiration or termination
of this Agreement, as well as Sections 6.4, 7.2 and 8.5, Articles 10, 11, 13,
14, 15 and 16, and any other provision of this Agreement that by its terms,
nature or operation of law should survive the expiration or termination of this
Agreement, shall survive the expiration of termination of this Agreement.
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SCHEDULE A
(to Services Agreement)
Services Schedule
-----------------------
55
16.12 NO THIRD PARTY BENEFICIARIES
This Agreement is entered into solely between, and may be enforced only
by, NEW TRUSTCO and Chase, and this Agreement shall not be deemed to create any
rights in third parties, including without limitation employees, vendors,
suppliers and customers of a Party, or to create any obligations of a Party to
any such third parties.
16.13 MEDIA RELEASES
Each Party shall submit to the other all advertising, written sales
promotion, press releases and other publicity matters relating to this
Agreement in which the other Party's name or xxxx is mentioned or language from
which the connection of said name or xxxx xxx be inferred or implied, and shall
not publish or use such advertising, sales promotion, press releases, or
publicity matter without prior written approval of the other Party. Each Party
may disclose the existence and general relationship established by this
Agreement.
16.14 COVENANT OF GOOD FAITH
Each Party agrees that, in its respective dealings with the other Party
under or in connection with this Agreement, it shall act in good faith.
16.15 NON-HIRING
Except as otherwise provided in Section 8.5(a)(iii), Chase and NEW
TRUSTCO each agree that, during the Term and for six (6) months thereafter, it
shall not, except with the prior written consent of the other Party, directly
or indirectly offer employment to any person then-employed by the other Party
or so employed six (6) months prior to such offer (except if such person's
employment was terminated by the other Party) if such person was, (a) in the
case of Chase employees, primarily performing Services for NEW TRUSTCO under
this Agreement, or (b) in the case of NEW TRUSTCO employees, working in NEW
TRUSTCO's securities processing, bank operations or information technology
group.
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IN WITNESS WHEREOF, USTNY and NEW TRUSTCO have each caused this
Agreement to be signed and delivered by its duly authorized officers, all as of
the date first set forth above.
UNITED STATES TRUST COMPANY
OF NEW YORK
By: XXXX X. XXXXXXX
-----------------------------------
Name:
Title:
NEW U.S. TRUST COMPANY OF
NEW YORK
By: XXXXXXX X. XXXXXX
-----------------------------------
Name:
Title:
The Chase Manhattan Bank N.A. agrees to be bound by this Agreement in
place of USTNY upon the effectiveness of the merger of USTNY into The Chase
Manhattan Bank, N.A.
THE CHASE MANHATTAN BANK, N.A.
By: XXXXX XXXX
-----------------------------------
Name:
Title: V.P.
57
Table of Contents Page
I. INTRODUCTION 1
II. SECURITIES PROCESSING 1
A. Custody 1
B. Cash Data Entry Funds Transfer 7
C. Validation of Trade Information on the Trade
Authorization System (TAS) 8
III. BANK OPERATIONS 8
A. General 8
B. Systems 9
C. Operations / Processing 12
IV. INFORMATION TECHNOLOGY SERVICES 14
A. Introduction 14
B. Data Processing Services 14
C. Data Network Management 20
D. Help Desk and Problem Management 20
E. Applications Development and Maintenance 21
F. Back-Up Disaster Recovery 26
G. Viruses and Disabling Code 28
H. Other Services 28
I. Information Technology Performance Standards 30
X. XXXXX CUSTODY TRANSACTION FACILITATORS 30
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Attachments
-----------
Attachment II(A)(2)(b) Credit on Collection
Attachment II(A)(2)(c)(i) Capital Changes/Corporate Actions
Attachment II(A)(2)(c)(v) Credit on Corporate Actions
Attachment II(A)(3)(d) Auto Credit Product Profile
Attachment II(A)(3)(e) Interest Bearing Currency Accounts
Attachment II(A)(3)(f) Contractual Settlement
Attachment II(A)(3)(g) Global Proxy Services
Attachment II(A)(6) Securities Processing Instructional Deadlines
Attachment II(A)(8) Pricing Vendor/Product List
Attachment III(A)(6)(1) Bank Operations Functions
Attachments II(A)(9) Corporate Trust Performance Standards
Attachment III(A)(6)(2) Bank Operations Performance Standards
Attachment IV(I) Information Technology Performance
Standards
59
SERVICES SCHEDULE
I. INTRODUCTION
This Services Schedule describes securities processing, bank operations,
information technology and related back office support services, functions and
responsibilities of Chase included within the Services, together with
associated Performance Standards. Chase shall provide all Services under the
Agreement as a "private label" service or as a correspondent bank, as
appropriate. During the Term the parties may also agree on different or
additional services and amend this Services Schedule in writing accordingly.
Unless otherwise indicated, this Services Schedule is to be read consistently
with the Agreement.
Capitalized terms used herein without definition have the meanings
ascribed to such terms in the Agreement.
II. SECURITIES PROCESSING
A. Custody.
-------
Chase will act as custody agent, but in some cases safekeeping only,
for all types of investment vehicles, cash, precious metals and other
property of NEW TRUSTCO and its customers. Securities for safekeeping
only or non-serviced securities include securities registered in
customer name in care of customer; securities with no known payment
schedules and where information cannot be obtained after reasonable
effort; property not requiring servicing; sealed envelopes
containing documents or "said to contain" documents, jewelry, gold,
coins, agreements, xxxxx, trustee agreements or the like. However,
in the case of such non-serviced securities, Chase will credit moneys
when received and will make reasonable efforts to follow up and
ascertain payment schedules.
1. General.
--------
(a) Chase will provide custodial services for NEW TRUSTCO
which include custody, transaction settlement,
rendering of customer statements, and servicing of
securities, cash, precious metals and other property
held at DTC, FRB, PTC, and other depositories,
subcustodians and custodians, and physical securities
held in Chase's vaults.
(b) Chase will carry NEW TRUSTCO/NEW TRUSTCO client
reference numbers on its Securities Movement and
Control ("SMAC") and communicate it back to AMS for
global transactions.
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(c) Chase will provide recordkeeping services for investment
advisory accounts.
2. Domestic Settlements.
--------------------
(a) Chase will perform all settlement functions for Next Day
Funds Securities ("NDFS") and obtain net settlement
balance for the net buys, sells, calls, maturities, etc. on
settlement/payable date. If money is owed to NEW TRUSTCO,
Chase will credit NEW TRUSTCO's account. If money is owed
to Chase, NEW TRUSTCO will fund it. A separate and similar
settlement and reconciliation will be done for Same Day
Funds Securities ("SDFS").
(b) Chase shall credit all dividend, interest and other income
collections, including, but not limited to, P&I on all
MBS/ABS to NEW TRUSTCO client accounts, in accordance with
the schedule set forth in Attachment II(A)(2)(b).
(c) Capital Changes/Corporate Actions
(i) Upon receipt from one or more of the current
services or publications of information listed in
Attachment II(A)(2)(c)(i) regarding calls for
redemption of bonds or other corporate actions,
Chase will screen such information to determine
whether NEW TRUSTCO has holders of the affected
securities and notify NEW TRUSTCO of relevant
corporate actions on receipt of announcement.
(ii) Put options: **** days prior to the put date, Chase
shall notify NEW TRUSTCO if it is affected by
running a current job in AMS that produces this
information.
(iii) Voluntary Reorganization: within **** hours of Chase
receiving the notifications, Chase shall notify
NEW TRUSTCO if all the necessary materials are not
available from the agent within the **** hour
timeframe, Chase will notify NEW TRUSTCO of the
delay. Notifications received by Chase within 5
business days before proration or expiration date
shall be communicated by Chase to NEW TRUSTCO via
telephone and fax, notifications received by Chase
more than 5 business days before proration or
expiration date shall be communicated by Chase to
NEW TRUSTCO via fax. NEW TRUSTCO will respond to
Chase by the appropriate deadline for each action
indicating the number of "yes" responses, the number
of "no" responses and the number of "no responses"
A-2
**** This section has been omitted and will be filed separately with
the Securities and Exchange Commission to receive confidential
treatment pursuant to Rule 24b-2.
62
received by Chase. By 11 a.m. on the answer due
date, Chase will inform NEW TRUSTCO of the
shares/bond amounts that have not responded to the
offer. Chase will advise NEW TRUSTCO of the
shares/bond amounts for which responses are needed
but have not been received.
(iv) Class actions, Defaults, Bankruptcies, Consents;
Copies of all pertinent documents and prospectuses
available to Chase from agents and depositories
shall be sent by Chase to NEW TRUSTCO in a timely
manner.
(v) Chase shall credit all corporate actions in
accordance with the schedule set forth in Attachment
II(A)(2)(c)(v) and will be compensated (at the
effective Federal Funds Rate, as published by the
Federal Reserve Bank of New York, for each day such
amount is outstanding) for the open uncollected
fluids upon presentation of satisfactory
documentation if Chase advances Rinds to NEW TRUSTCO
earlier than Chase's crediting practice at that
time. Chase will maintain a collection rate
consistent with the baseline standard of UST as of
the Commencement Date. NEW TRUSTCO will not pay
compensation in excess of such baseline. UST's
baseline collection rate (uncollected balance vs.
total monthly anticipated amount) as of the
Commencement Date is **** for dividends and
interest **** for maturities and redemptions, and
**** for calls.
(d) End of Day ("EOD") Settlement
(i) Chase will perform net EOD settlement with NEW TRUSTCO
(ii) There will be a separate net settlement every day for
each of NDF and SDF.
3. Global Settlements.
------------------
(a) Chase global services for NEW TRUSTCO includes all
transaction, safekeeping and out of pocket expenses. It does
not include significant one time charges (e.g.
registration charges to initiate trading in Brazil).
(b) NEW TRUSTCO will input global securities and related
transactions into the trade authorization system of AMS.
Chase will input the
A-3
**** This section has been omitted and will be filed separately with
the Securities and Exchange Commission to receive confidential
treatment pursuant to Rule 24b-2.
63
transaction into Chase's global custody system using the AMS
ticket as its instruction.
(c) Chase will provide foreign tax reclamation services where
available subject to NEW TRUSTCO's provision of required
documentation at the beneficial owner level. Reclamation
forms will be completed and filed by Chase with the proper
authorities. Chase will provide ongoing follow up with the
appropriate agents or tax authorities to review outstanding
reclaims.
(d) Foreign interest and dividends will be paid based upon the
Chase Autocredit schedule on payable date in countries where
offered, or if not offered, then as received. See Attachment
II(A)(3)(d).
(e) Chase will provide interest bearing cash accounts as
outlined in Attachment II(A)(3)(e).
(f) Chase will provide contractual settlement date accounting of
cash as outlined in Attachment II(A)(3)(f).
(g) Chase will provide global proxy services as outlined in
Attachment II(A)(3)(g).
(h) Under Chase's existing policy, items (d)-(g) include the
expansion to countries not listed on the referenced
schedules without additional charge to NEW TRUSTCO Chase
reserves the right to change its policy and such change will
apply to NEW TRUSTCO.
4. MASTER SECURITY FILE
(a) Chase will provide **** turn-around on set up of a new
security issue at least **** of the time. In the event of
undue delay, Chase will notify NEW TRUSTCO of the delay and
estimated turnaround time.
(b) Chase will obtain daily reset rates by **** and weekly reset
rates by **** and download such information to the Master
Security File using UST's existing process and procedure in
effect as of the Commencement Date.
5. INQUIRIES. Resolution of inquiries shall be within a **** period
unless an inquiry involves a third party or is longer than 12
months old.
6. SETTLEMENTS. Chase will provide settlement of securities within
the schedules as set forth in Attachment II(A)(6).
A-4
**** This section has been omitted and will be filed separately with
the Securities and Exchange Commission to receive confidential
treatment pursuant to Rule 24b-2.
64
7. PROXY PROCESSING. Chase will provide proxy processing
for NEW TRUSTCO using UST's procedures in effect as of the
Commencement Date. Notwithstanding anything to the contrary in
the Agreement, Chase shall not migrate proxy services to a third
party provider in the future without NEW TRUSTCO's approval,
which approval will not be withheld if Chase selects a nationally
recognized proxy services provider which agrees to meet NEW
TRUSTCO's customer service standards.
8. PRICING SERVICES. Chase shall provide reports and updates from the
vendors on the securities listed on Attachment II(A)(8). By the
Commencement Date, Chase and NEW TRUSTCO will mutually develop a
process to update prices not currently available on automated
vendor feeds.
9. CORPORATE TRUST.
(a) Chase shall provide the servicing of NEW TRUSTCO's corporate
trust activity meeting the same Performance Standards as
those met by UST's existing process as of the Commencement
Date, including those set forth in Attachment II(A)(9)(a).
Such servicing will include banking services, securities
settlement, custodial and technological services, and
mailing and enclosing activities (to include checks with
enclosures, statements and notices to holders, etc.). NEW
TRUSTCO, in its capacity as a transfer agent, will operate
its own receive and deliver window; maintain its own vault
facility to control and inventory unissued and cancelled
certificates; and operate its own certificate printing
facility. All administrative work which is part of NEW
TRUSTCO's corporate trust activities will remain a function
of NEW TRUSTCO, and NEW TRUSTCO will not rely on Chase to
perform such administrative functions.
(b) Chase will allow NEW TRUSTCO to utilize UST's existing (as
of the Commencement Date) transfer agent numbers and
corporate trust participant accounts for FAST and NON-FAST
issues through DTC. Without limiting the generality of the
foregoing, Chase will:
(i) Provide NEW TRUSTCO's corporate trust department
("Corporate Trust") access to DTC's participant
terminal system ("PTS") terminal with the ability to
input, confirm and inquire any transactions and
security positions for DTC participant accounts 1522
and 2969.
(ii) Act as NEW TRUSTCO's agent with respect to all of its
duties and responsibilities associated with processing
medium term notes and commercial paper through DTC
participant accounts 1522 (commercial paper) and 2969
(medium term
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65
notes). Accordingly, Chase will follow NEW TRUSTCO's
direction in a timely manner with respect to all
processing for these DTC accounts, including the
prompt execution and delivery of DTC's standard
agreements and letters of representation related to
medium term notes and commercial paper. Without
limiting the generality of the foregoing, Chase shall
settle in a timely fashion and in accordance with DTC
procedures, the trade authorization system ("TAS")
transactions initiated by Corporate Trust pertaining
to activities of commercial paper and medium term
notes. Such settlements shall include free deliveries,
free receives, delivery versus payment and receipt
versus payment. If either of the two accounts exceed
their predetermined net debit cap, Corporate Trust
will be notified by Chase and instructed to wire
funds to DTC for the value of the deficiency. At the
end of the day, the related trust account will be
credited by Chase via cash data entry ("CDE") for the
amount wired to DTC for credit to DTC participant
accounts 1522 and/or 2969.
(iii) Provide DTC with a net settlement end of day cash
total. In the event of an out of proof condition,
Corporate Trust will be notified by Chase by **** on
the same day of the condition and Corporate Trust
will then adjust the TAS entry in accordance with
instructions provided by Chase.
(iv) Promptly forward any correspondence received
pertaining to DTC participant accounts 1522 and 2969
to a person designated by Corporate Trust.
(c) With respect to DTC participant accounts 1522 and 2969, NEW
TRUSTCO will:
(i) Safekeep and protect passwords which allow access to the
DTC PTS network. Chase will be restricted to inquiry only
access to DTC participant account numbers 1522 and 2969.
(ii) Keep current on all DTC regulations and deadlines that
govern DTC participant account numbers 1522 and 2969.
(iii) Ensure that access to TAS is restricted by Profile
Allocation Control ("PAC").
(iv) Grant access to TAS and be responsible for the input,
validation and authorization of trades as well as the
accuracy of the
A-6
**** This section has been omitted and will be filed separately with
the Securities and Exchange Commission to receive confidential
treatment pursuant to Rule 24b-2.
66
information released via TAS and PTS including CUSIP,
unit amount, dollar amount, maturity date, interest
rate, issue date and, where applicable, the broker
number.
(v) Release all trade information on maturities (RVP/Free
Deliveries) and issuance (DVP/Free Deliveries) in a
manner consistent with current UST practices as of the
Commencement Date).
(vi) Be responsible for the safekeeping and servicing of
the master notes utilized in commercial paper and
medium term notes processing. This responsibility
includes but is not limited to all activity and
reconciliation with DTC as well as the required
safekeeping and servicing of the master notes by NEW
TRUSTCO. While Chase will own the accounts designated
for the process at DTC, NEW TRUSTCO will accept total
responsibility for the operation of the master note
accounts.
(d) NEW TRUSTCO will reimburse Chase for the mailing of
corporate trust checks to the extent NEW TRUSTCO is
reimbursed by the issuer of the securities in question.
B. CASH DATA ENTRY FUNDS TRANSFER
1. Chase will provide automated interfaces between NEW TRUSTCO's Fed
wire system (as in effect on the Commencement Date) and Chase's
Fed wire payment system for incoming and outgoing cash wires.
Chase will be responsible for interfacing with the Federal
Reserve Bank. For NEW TRUSTCO's outgoing Fed cash wires, Chase
will pass acknowledgments to NEW TRUSTCO's Fed system (as in
effect on the Commencement Date). NEW TRUSTCO will utilize its
systems (as in effect as of the Commencement Date) for
inquiries and Fed wire acknowledgment numbers. Chase will be
responsible for maintaining NEW TRUSTCO's Fed wire system.
2. If NEW TRUSTCO puts up a CDE wire and at such time either (a) is
in a net cash position or (b) is within the intraday overdraft
limit established between Chase and NEW TRUSTCO, then such CDE
wire will be immediately processed through Chase's Fed wire
system (even if Chase is in an overdraft position at such time
and even though processing such CDE wire will increase Chase's
overdraft position).
3. Incoming funds shall be immediately credited to NEW TRUSTCO if
the routing of such funds is automated. Incoming funds which
require manual routing will be processed within **** Incoming
funds which do not have an account number, name or other
identification (e.g., Attn: Xxxx Xxx)
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**** This section has been omitted and will be filed separately with
the Securities and Exchange Commission to receive confidential
treatment pursuant to Rule 24b-2.
67
will be returned by Chase, on the same day of receipt, to the
sender asking for more information.
4. NEW TRUSTCO will be responsible for granting access to CDE via
PAC.
5. NEW TRUSTCO will be responsible for the input, validation and
authorization of cash wires released via CDE.
C. Validation of Trade Information on the Trade Authorization System (TAS).
-----------------------------------------------------------------------
1. The Trade Authorization System (TAS) requires a co-signature
(i.e., a different user ID other than the originator's) for any
transaction that will decrease the holdings of an account(s),
such as free deliveries. However, any transaction that increases
the holdings in an account(s), such as free receives and receive
vs. payments, does not require a co-signature. Furthermore,
both increases and decreases of holdings instructions originated
and released through TAS have built-in system edits, some of
which require an "override" by the releasing party. It is the
responsibility of NEW TRUSTCO or its customer to review all
edits which are brought to NEW TRUSTCO's attention by Chase
before they are overridden. It is agreed that once the trade is
"released" by NEW TRUSTCO or its customer (this status is
placed by the system when the instructions are deemed correct
by NEW TRUSTCO or its customer), all particulars to the trade are
valid and awaiting settlement.
2. Any information related to a trade (placed in fields identified
as "special" or "free" instructions) or for the trade (which
includes without limitation price, CUSIP, contra party's address
(referred to as CHN # or mnemonic), trade date, net dollar amount
and units), once "released" by NEW TRUSTCO or its customer, is
considered valid and in agreement with NEW TRUSTCO and its
customer.
3. NEW TRUSTCO will ensure that access to TAS is restricted by the
Profile Allocation Control (PAC).
III. BANK OPERATIONS
A. General.
--------
1. As of the Commencement Date, Chase will assume responsibility for
a significant portion of NEW TRUSTCO's bank operations. Without
the generality of the preceding sentence, pursuant to a letter
agreement dated July 14, 0000 (xxx "X&X Xxxxxx") xxxxxxx Xxxxxx
Xxxxxx Trust Company of New York and M&I Data Services, Inc.
("M&I"), M&I has agreed that Chase will assume (and Chase hereby
assumes) administrative and financial responsibility for the
service bureau Systems contract with M&I (deposits,
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loans, etc.), related systems and services (check processing,
ARP, ACH, etc.) and the related operations and clerical
support/processing support that utilize these related systems.
Chase as part of the Agreement is responsible for providing
system functionalities and processing services for NEW TRUSTCO's
bank operations. NEW TRUSTCO hereby appoints Chase as NEW
TRUSTCO's limited agent to the extent required by Chase to
perform such services.
2. As part of these bank operations services, Chase shall on a
timely basis upgrade and enhance the systems and services to
incorporate regulatory, industry and business condition
changes, subject to Section 5.1(b)(ii) of the Agreement and to
the limitations (if any) in existing third party systems and
services agreements which limitations are beyond Chase's
reasonable ability to control (to the extent Chase cannot,
without incurring material costs, legally terminate such third
party Systems and services agreements or otherwise remedy the
situation).
3. Chase will perform operational and technology continuity and
disaster recovery planning and services for Chase-managed bank
operations and systems.
4. Chase shall provide a liaison function between Chase and NEW
TRUSTCO which will monitor and support mutually agreed upon
levels of customer service. This function will include, but not
be limited to, all NEW TRUSTCO customer service queries to
and from M&I and interaction with various parts of the Chase
organization. Chase has customer service software (e.g., PEGA)
which will be made available to NEW TRUSTCO as part of this
liaison process as well as for NEW TRUSTCO's use in performing
customer service for its clients.
5. The term "bank operations," includes the functional areas of
NEW TRUSTCO and all Affiliates of check processing, loan
processing, deposit services, records storage and retrieval,
research and adjustment, international paying and receiving,
cash management, return items, electronic funds transfer
(FedWire and ACH), customer service, and other current services
(ATM, voice response, etc.). NEW TRUSTCO shall provide reasonable
notice to Chase in advance of requesting bank operations services
for a new Affiliate of NEW TRUSTCO.
6. Attachment III(A)(6)(1) lists (i) the specific functions that
will be performed by Chase and (ii) the retained bank operations
functions which NEW TRUSTCO will perform. The Parties acknowledge
and agree that Attachment III(A)(6)(1) is an overview and not a
final statement of the specific tasks to be performed by each
Party within each function, and that such tasks will be further
specified by the Parties prior to the Commencement Date and
incorporated into the Procedures Manual, as mutually agreed to by
the
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69
Parties. If there are any inaccuracies in such Attachment, the
Parties will amend such Attachment accordingly. Attachment
III(A)(6)(2) states the Performance Standards applicable to those
functions designated as Chase's responsibility. These
Performance Standards are not necessarily all inclusive and may
be amended by mutual consent as business conditions and process-
ing support requirements change over time. With respect to the
FiServ agreement to be assumed by Chase and similar third party
agreements to be assumed by Chase, Chase will not be responsible
for such third party's failure to achieve Performance Standards
set forth in such third party contract; however, Chase will use
commercially reasonable efforts (which shall not require Chase
to make additional payments to third parties) in managing third
party agreements to cause third parties to achieve the
Performance Standards set forth in this Services Schedule.
7. Chase shall perform its obligations relating to check and item
processing and electronic funds transfer set forth herein
(including without limitation under Sections III(C)(3), (4), (7),
(9), (10) of this Services Schedule) in accordance with
Articles 4 and 4A of the Uniform Commercial Code, applicable
Federal Reserve regulations and operating letters, clearing house
rules, and other laws, rules and regulations applicable to such
obligations.
8. Chase shall only be required to
****
Chase shall only be required to comply with the lower
standard with respect to such customer accounts.
B. Systems.
1. M&I Data Services.
-----------------
(a) As set forth herein and in the M&I Letter, Chase will assume
administrative and financial responsibility of and for the
service bureau contract in place between UST and M&I as of
the Commencement Date Chase will meet all M&I and/or NEW
TRUSTCO related interface and update deadlines in effect as
of the Commencement. Date Chase will perform, or M&I will
continue to perform, those activities which M&I is
performing for UST.
(b) NEW TRUSTCO anticipates that from time to time it will
require modifications and enhancements to "M&I Systems"
and/or to the functionality it is currently receiving.
Subject to Section 5.1(b)(ii) of the Agreement, if NEW
TRUSTCO requests such modifications, and Chase has retained
M&I as the service provider for NEW
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**** This section has been omitted and will be filed separately with
the Securities and Exchange Commission to receive confidential
treatment pursuant to Rule 24b-2.
70
TRUSTCO, Chase will use commercially reasonable efforts to
facilitate such changes with M&I.
(c) ****
set forth in the M&I
Agreement; however, Chase will use commercially reasonable
efforts (which shall not require Chase to make additional
payments to M&I) in managing the M&I Agreement to cause M&I
to achieve the Performance Standards set forth in this
Services Schedule.
2. Other Related Systems.
---------------------
(a) To the extent that Chase does not replace NEW TRUSTCO's
existing Systems, Chase will assume administrative and
financial responsibility under all license and maintenance
agreements for the suite of in-house banking related systems
being operated by NEW TRUSTCO or its contractors as of the
Commencement Date. Subject to Section 5.1(b)(ii) of the
Agreement, Chase will perform enhancements to such Systems
requested by NEW TRUSTCO or arrange for third parties to
perform such enhancements. Chase may, at any time propose
the replacement of these in-house systems with Chase's
Systems software and/or system access suitable for the sup-
port of NEW TRUSTCO's businesses.
(b) If Chase proposes such systems replacement, and to the
extent NEW TRUSTCO agrees to change banking system platforms
as described above, Chase will create, modify and/or
resynchronize system interfaces and associated
interoperability to emulate the environment in existence as
of the Commencement Date (e.g., Customer Information Files
and System Interfaces, AMS, Finance, HR) Chase may implement
such new Systems in whole or in part. As such new systems
are implemented Chase will provide necessary training and
documentation for the NEW TRUSTCO user community.
(c) Chase's and NEW TRUSTCO's costs associated with such system
conversion to another platform/system will be assumed by
Chase and such conversion shall be phased in upon a mutually
agreed upon schedule. Additionally, to the extent Chase
implements a Chase, or other vendor system, to support NEW
TRUSTCO, Chase will integrate NEW TRUSTCO's client base as
a "correspondent banking relationship" or "private label"
operations as applicable and migrate the existing operations
of NEW TRUSTCO into Chase's facilities or data processing
environment in a manner that does not adversely impact NEW
TRUSTCO's client base.
A-11
**** This section has been omitted and will be filed separately with
the Securities and Exchange Commission to receive confidential
treatment pursuant to Rule 24b-2.
71
(d) To the extent Chase does not implement Chase's standard
client or other systems of comparable functionality, and
until such time as Chase does implement such
functionality, Chase will operate NEW TRUSTCO's systems in
place as of the Commencement Date to meet the standards of
performance set forth in Attachment III(A)(6)(2)
notwithstanding anything to the contrary in the Agreement.
3. APPROVALS CONVERSIONS AND CONNECTIVITY. To the extent applicable,
Section 2 above applies to M&I. To the extent Chase desires to
implement other systems to replace M&I services, such changes to
M&I services shall be subject to the same approvals, conversions
and connectivity constraints outlined in (a) - (d) above.
C. Operations/Processing.
---------------------
1. Chase may, within mutually agreed upon timeframes (assumed to be
the Commencement Date unless otherwise agreed by NEW TRUSTCO and
Chase), replace all correspondent and third party service
relationships presently in place between UST and other
organizations (e.g., ATM Settlement, Check Clearing, International
Transfer, and Collections, inbound transportation, Courier,
fiche and film production).
2. In providing LOAN SERVICES, Chase will provide access to, and
output from, the M&I loan systems, or a Chase replacement system,
in the same media as is provided as of the Commencement Date or as
is otherwise mutually agreed upon by NEW TRUSTCO and Chase.
Additionally, Chase will provide loan statement mailing services
in accordance with the schedules established by NEW TRUSTCO.
3. In providing DEPOSIT SERVICES, Chase will print, separate and
distribute (via mail or courier) statements (with checks enclosed
as applicable), advices and notices generated from the M&I service
bureau or from a mutually agreed upon replacement system(s). Chase
shall provide report distribution to NEW TRUSTCO in the same media
as is provided as of the Commencement Date or as is otherwise
mutually agreed upon by NEW TRUSTCO and Chase.
4. In providing CHECK PROCESSING services Chase will assume
responsibility and provide all standard functions related to these
activities including the activities listed in Attachment
III(A)(6)(1).
5. In providing RECORD STORAGE and retrieval services, Chase will
create and maintain appropriate records and store such records for
the same retention periods as are provided on the Commencement
Date or as NEW TRUSTCO
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72
and Chase otherwise mutually agree. Chase will deliver these stored
records to NEW TRUSTCO on a timely basis.
6. In providing RESEARCH AND ADJUSTMENT services, Chase will perform all
interbank research and adjustments. Adjustments to NEW TRUSTCO client
accounts will be directed to NEW TRUSTCO customer service who will
perform such updates or adjustments. Where there are processing fees
associated with adjustments, compensation will be determined by USCIB,
NYCH and FED rules and regulations.
7. In providing INTERNATIONAL PAYING AND RECEIVING services, Chase will act
as a correspondent bank for NEW TRUSTCO providing PC based software
(e.g., Chase Trader and Microstation/Infostation Software) to assist NEW
TRUSTCO accomplishing the functions and activities listed in Attachment
III(A)(6)(1), Section F. NEW TRUSTCO shall use the
Microstation/Infostation when available.
8. In providing CASH MANAGEMENT services, Chase will perform the functions
and activities listed in Attachment III(A)(6)(1) in accordance with the
Performance Standards set forth in Attachment III(A)(6)(2), Section G.
9. Consistent with normal banking practices, Chase will serve as "Bank of
First Deposit". In conjunction with NEW TRUSTCO, Chase will perform the
RETURN ITEMS services listed in Attachment III(A)(6)(1), Section H.
10. In providing ELECTRONIC FUNDS TRANSFER services, Chase will provide the
systems and personnel to complete the transfer of funds within NEW
TRUSTCO client accounts, as well as externally through established EFT
vehicles (e.g., FedWire and ACH). The necessary risk management and
funds control practices and authorization process must be in place to
support this activity. NEW TRUSTCO personnel and clients will have
access to transfer information on a real-time basis as is feasible.
11. In practice, NEW TRUSTCO will be the intermediary between Chase and
NEW TRUSTCO clients in providing CUSTOMER SERVICE and related activi-
ties. However, this will necessitate a close working relationship between
Chase and NEW TRUSTCO, and will require use of Chase's inquiry man-
agement tools (e.g., PEGA). NEW TRUSTCO client account postings will
be performed exclusively by NEW TRUSTCO personnel.
12. In providing BRANCH AUTOMATION support, Chase will provide PC based,
user-friendly, front-end software functions (such as on-line update and
inquiry) in the event that NEW TRUSTCO and Chase choose to migrate
from the M&I processing environment. Such functions shall be at least
comparable to or better than M&I's PC Teller/sales Partner combination
and NEW
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TRUSTCO's current SQN which are in use in UST branches as
of the Commencement Date.
13. In providing VOICE RESPONSE services, (known within NEW
TRUSTCO as "private access line") Chase will provide a
voice response environment which will enable NEW TRUSTCO
clients to access deposit and loan information.
14. [In providing ATM related services, Chase will act, or
will cause M&I to act as the switch to necessary ATM
networks (e.g., NYCE, PULSE, HONOR, CIRRUS, PLUS, etc.)
including the required authorization functions to
deposits and related systems. Chase will act as the
settlement bank and provide required authorizations for
ATM withdrawals on behalf of NEW TRUSTCO. The production,
issuance and control functions related to NEW TRUSTCO
client ATM cards is part of the M&I Data Services contract
for which Chase is assuming administrative and financial
responsibility as set forth in the M&I Letter.
15. Chase shall provide required BATCH AND ON-LINE DATA
TRANSMISSION control and validation for NEW TRUSTCO to
operate the M&I service bureau as it is done for UST as of
the Commencement Date.
IV. INFORMATION TECHNOLOGY SERVICES
A. Introduction.
------------
Chase will perform the data processing, data network, help desk
and problem management, applications development and
maintenance, back-up/disaster recovery, and other services
described below. The Services will meet the Performance Standards
in Section IV(I) below. If NEW TRUSTCO elects to use Customer
Information System/2 and Access Security at any time during the
Term, Chase, in connection with such systems will adhere to the
design methodology and data model usage of Financial Technologies
International L.P. ("FTI") or, any successor in interest or
subsequent owner of Access Security and CIS/2.
B. Data Processing Services.
------------------------
1. PROCESSING, OPERATIONS. Chase will perform all processing
operations functions and services necessary to run the
applications and systems software used to support NEW
TRUSTCO's business requirements and meet the Performance
Standards during the Term. NEW TRUSTCO will provide Chase
with data center operations manuals and other pertinent
documentation in NEW TRUSTCO's possession. Included in its
responsibilities, and subject to reasonableness standards
and the non-disruption of the data processing environment,
Chase will:
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(a) Make available, monitor and process on-line and batch
applications, including scheduled, unscheduled and on-request
applications development and maintenance ("AD/M") functions as
well as end-user initiated processing.
(b) Provide complete computer room operations and technical support
for test and production environments.
(c) Schedule systems maintenance so as not to interfere with the
business needs of NEW TRUSTCO. Reasonable sufficient regular
"windows" must be agreed to in order to accomplish maintenance.
(d) Process special request activities within time frames reasonably
requested by NEW TRUSTCO.
(e) Provide mainframe processing to support all client/server applica-
tions during the term.
(f) Regularly monitor end-user job submissions so that such jobs are
successfully completed in a timely manner.
(g) Continuously enhance processing capabilities and efficiencies
through system tuning and other run time improvements.
2. SYSTEMS SOFTWARE. Chase will evaluate, acquire, install, maintain and
support Systems Software as required to provide the Services. Included
in Chase's responsibilities, Chase will:
(a) Perform modifications, enhancements and changes necessary to pre-
vent and correct errors such that each item of Systems Software
operates according to its documentation and the Services
dependent on such Software are provided in accordance with the
Performance Standards.
(b) Unless otherwise specified and agreed upon by NEW TRUSTCO and
Chase, install and upgrade Systems Software at mutually agreed
upon time frames.
(c) Install new releases of existing Systems Software or new Systems
Software products in a test environment which will be maintained
by Chase prior to its introduction into the production
environment. The tests will determine functional deficiencies of
the new release, compatibility with other production Systems
Software and compatibility with production Applications Software.
Any detected problems will be resolved in accordance with
procedures set forth in the
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75
Procedures Manual before any systems software is moved to the pro-
duction environment.
(d) Subject to restrictions in third-party agreements, promptly
provide NEW TRUSTCO with all information and documentation
requested by NEW TRUSTCO relating to any Systems Software used in
providing the Services.
3. EQUIPMENT. Chase will evaluate, acquire, maintain, repair, replace or up-
grade all Data Center Equipment as necessary to perform the Services and
meet the Performance Standards.
4. PRODUCTION CONTROL. Chase will maintain production schedules in order to
satisfy performance requirements. Chase will cooperate with NEW
TRUSTCO in responding to priority job execution, special processing re-
quests and new processing requirements.
5. FILE SERVICES ACTIVITIES. Chase will manage files in a manner which is
designed to provide for the availability and performance of and
preserve the integrity of, NEW TRUSTCO data under Chase control.
Included in such responsibilities, Chase will:
(a) Manage file services so that all files under its control are
current and available during requested access times.
(b) Review Chase's file retention policies with NEW TRUSTCO and, if
necessary, revise such policies to conform to NEW TRUSTCO's en-
vironment, as such environment exists as of the Commencement
Date.
(c) Initiate and complete required processing management functions de-
signed to preserve the integrity of all data.
(d) Verify (using procedures acceptable to NEW TRUSTCO) the suc-
cessful receipt of all incoming files and the successful
transmission of all outgoing files.
(e) Maintain, update and execute file backup and recovery procedures
so that disaster recovery time, and data recovery point
objectives can be met.
(f) Conduct routine monitoring and corrective action according to pro-
cedures approved by NEW TRUSTCO for intermediate files used for
on-line and batch processing.
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(g) Provide adequate file space for processing.
6. TAPE MANAGEMENT. Chase will perform both on- and off-site tape manage-
ment services. Included in such responsibilities, Chase will:
(a) Provide logging and tracking of all physical tapes in and out of
the Data Center, and provide required rotation of tapes for
off-site vault storage.
(b) Develop procedures with NEW TRUSTCO governing time periods for
retention of tapes, including reasonable periods for retention of
tapes for auditing purposes.
(c) Store tapes and paper documentation at secure off-site vault
storage as required by NEW TRUSTCO.
(d) Provide NEW TRUSTCO with the capability to monitor compliance
with retention and storage procedures.
(e) Provide reliable tape media and keep read/write errors to a
minimum.
(f) Maintain adequate supplies for the tape environment and a scratch
tape pool which is sufficient to fulfill all data center needs.
(g) Store tapes in a physically and environmentally protected area.
Authorized NEW TRUSTCO representatives shall be granted access
to inspect storage areas.
(h) Retrieve archived tapes and restore required files and datasets
within time frames specified in the Performance Standards.
(i) Provide tape media for delivery to third parties.
7. MAINFRAME DATA BASE ADMINISTRATION. Chase will be responsible for man-
agement of data base and file administration, including (data base
design, documentation, application support, tuning, backup and recovery,
standards, and support for applicable NEW TRUSTCO databases (e.g., AMS,
GTAS, Banking). Included in such responsibilities, Chase will:
(a) Provide adequate production and test data base subsystems with the
ability to increase the number over the Term.
(b) Support, control and provide inquiry access to the data
dictionary required for NEW TRUSTCO data management and data
base management.
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(c) Perform all logical and physical data base control functions to sup-
port current systems and planned new systems development.
(d) Perform data base tuning and reorganization functions as required to
maintain system performance standards in accordance with a sched-
ule that is mutually agreed upon by NEW TRUSTCO and Chase.
(e) Plan for changes in the size of data bases due to business growth
and project implementation based on information provided by NEW
TRUSTCO, and review plans with NEW TRUSTCO on a regular
basis.
(f) Provide data base environments for application development, mainte-
xxxxx, testing, quality assurance and ad-hoc reporting separate from
the production data base environment as required.
(g) Develop, maintain and document standard data base access routines
for use by applications support and development personnel.
(h) Implement physical data base design, create indices and make recom-
mendations on methods to optimize application performance, in a
manner that is mutually agreed upon by NEW TRUSTCO and Chase.
(i) Audit, evaluate and approve all data base design changes associated
with applications development and maintenance ("AD/M") support.
(j) Maintain and upgrade as necessary automated monitoring tools to
monitor data base performance and integrity and data base space
utilization, and identify and recommend modifications for improved
performance. Chase will implement recommended modifications as
mutually agreed upon by NEW TRUSTCO and Chase.
(k) Maintain or modify data base archive and purge processes and proce-
dures to meet NEW TRUSTCO business requirements as mutually
agreed upon by NEW TRUSTCO and Chase.
(l) Maintain and provide data base backup procedures to recover from a
data base outage or corrupt data base within time frames established
by mutual agreement of NEW TRUSTCO and Chase.
(m) Maintain data base definitions and make data base definitions avail-
able to NEW TRUSTCO upon request.
(n) Maintain and provide user guides for data base products and partici-
xxxx in standards development.
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(o) Test and implement data base environment changes in a manner as
mutually agreed upon by NEW TRUSTCO and Chase.
(p) Determine data base changes and impact of AD/M work, and imple-
ment necessary changes to relevant data bases in a manner mutually
agreed upon by NEW TRUSTCO and Chase.
(q) Chase will perform all of the functions described above with
respect to data bases for the asset management systems, corporate
trust and agency system and the banking systems operated by Chase
for NEW TRUSTCO's benefit. Chase will perform only the functions
described in paragraphs (a), (b), (f), (j), (l) and (o) with
respect to the data bases for Corporate Systems (as defined in
Section (b) of Schedule C). NEW TRUSTCO will perform the other
functions described above with respect to the data bases for
Corporate Systems. Chase will provide the required facilities to
enable NEW TRUSTCO to perform these functions.
(r) For Corporate Systems data bases covered by Sections (a), (b),
(f), (j), (l) and (o), NEW TRUSTCO and Chase will develop a
mutually agreed upon set of performance and resource usage
standards.
8. OUTPUT. Chase will perform output device processing and distribution
functions. Included in such responsibilities, Chase will:
(a) Produce, separate, package and distribute output on time and
within defined quality standards, as set forth in the Performance
Standards.
(b) Effectively track, manage, communicate and resolve all output
problems.
9. DATA ACCESS. Chase will provide NEW TRUSTCO and its customers with the
capability to access and download NEW TRUSTCO data base and file
information (including but not limited to, AMS, GTAS and banking data)
and create their own reports. The above facility will be provided by,
but not limited to, RAPID USERPROD, NEW TRUSTCO developed programs, TSO
user submitted jobs and ad hoc query tools (e.g., Powerview, Crystal).
Where applicable, in the AMS environment, PAC and MultiBank functions
will be employed to limit and control access to NEW TRUSTCO data resid-
ing within the AMS environment. NEW TRUSTCO shall co-operate with Chase
in preventing abuses of ad hoc query and reporting.
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C. Data Network Management.
-----------------------
1. Chase will assume operational and management responsibility for
the Chase NEW TRUSTCO Network. As used herein, the term "Chase
NEW TRUSTCO Network"' shall mean all Equipment, Software, lines
and cabling (including appropriate recovery links) used to
provide a network link into a single NEW TRUSTCO domestic
location. NEW TRUSTCO is responsible for all network distribution
from that point to its end users.
2. Chase's responsibilities will include providing and maintaining
sufficient bandwidth, and evaluating, acquiring, installing,
upgrading, maintaining, repairing and replacing all necessary
Equipment, Software, lines and cabling, to support NEW TRUSTCO's
business requirements (including Access Security and CIS/2) and
meet the Performance Standards.
D. Help Desk and Problem Management.
--------------------------------
NEW TRUSTCO's help desk will act as the initial point of contact for NEW
TRUSTCO end users reporting problems relating to the Services. NEW
TRUSTCO's help desk at its discretion, may refer any or all such
reported problems to Chase. Chase will provide a help desk function with
a single telephone number for NEW TRUSTCO's help desk to call for
problem resolution twenty-four (24) hours per day, seven (7) days per
week (the "Chase Help Desk"). The Chase Help Desk will provide second
and third level problem resolution. Unless requested by NEW TRUSTCO's
help desk, the Chase Help Desk will interface directly with NEW
TRUSTCO's help desk and not directly with NEW TRUSTCO end users in
resolving reported problems. Included in its help desk and problem
management responsibilities, Chase will:
1. Use an automated problem tracking and management system to which
the NEW TRUSTCO help desk will be provided access.
2. Log reported problems upon receipt and monitor, control and
report on each problem until it is corrected.
3. Monitor time to repair for each reported problem and measure the
mean time to repair ("MITR") for all reported problems with the
Services.
4. Escalate unresolved problems according to mutually agreed upon
procedures.
5. Maintain communications with NEW TRUSTCO's help desk on all
problems through resolution.
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0. Provide a mechanism for expedited handling of problems which are
of high business priority to NEW TRUSTCO.
7. Correct problems within the scope of its responsibility. Chase
and NEW TRUSTCO will consider a problem unresolved until Chase
receives confirmation from NEW TRUSTCO's help desk that it has
been corrected.
8. Provide reports on problems, including statistics on types of
problems, total number of problems, outstanding problems and
resolution time.
9. Conduct with NEW TRUSTCO mutually agreed upon periodic problem re-
view meetings to ensure accurate problem resolution.
10. Analyze trends and recommend actions to reduce the number of
reported problems.
E. Application Development and Maintenance.
---------------------------------------
This Section E applies to applications development and maintenance for
the systems used by Chase to provide the Services. Notwithstanding
anything to the contrary herein, NEW TRUSTCO will remain responsible for
performing applications development and maintenance work with respect
to Corporate Systems (as defined in Section 1(b) of Schedule C), and
Chase's obligations with respect to Corporate Systems applications
development and maintenance shall be limited to the provisions set forth
in Paragraph 2(a) of this Section E. Pricing of applications development
and maintenance work described in this Section is as set forth in
Article 5 of the Agreement. Notwithstanding anything to the contrary
in the Agreement, so long as each of Chase and NEW TRUSTCO are using AMS
and/or GTAS, Chase shall not implement a change to the functionality
of AMS or GTAS until the parties agree that such change will not
adversely impact the other party's use of such systems. The Parties will
reasonably cooperate with each other in assessing the impact of all such
changes. After Chase no longer is using AMS or GTAS for itself and
notwithstanding anything to the contrary in the Agreement, Chase shall
not make any change to the functionality of AMS or GTAS without the
prior approval of NEW TRUSTCO (subject however, to changes that Chase is
required to make to comply with regulatory requirements).
1. APPLICATIONS MAINTENANCE. Chase shall support and maintain all
applications operated by Chase in providing Services to NEW
TRUSTCO. Applications maintenance shall include the following
activities:
(a) Corrective maintenance, including correction of systems
defects in accordance with applicable specifications and,
where it is determined that systems documentation is in
error, correction of systems documentation.
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(b) Preventative maintenance, including prevention of
systems problems by, where appropriate, improving
systems documentation, source code restructuring,
database/index reorganization, system reengineer-
ing and tool construction.
(c) Provision and installation of all future
modifications, enhancements, modules, upgrades and
releases to all Chase proprietary Software used in
providing the Services so as to remain on the
then-current version of such Software (unless
otherwise approved by NEW TRUSTCO).
(d) Provision and installation of new Software
releases issued by third-party vendors pursuant
to such vendor's normal maintenance practices
and in a manner that ensures continued eligibility
for support and maintenance of any third-party
vendor for such Software.
(e) Development and maintenance of current
documentation, including related end user
documentation, on AMS, GTAS and banking systems
Software.
2. GENERAL AD/M RESPONSIBILITIES. Chase's development and
maintenance responsibilities for Applications Software
include the following responsibilities:
(a) NEW TRUSTCO AND THIRD PARTY DEVELOPMENT. Chase
will cooperate with NEW TRUSTCO and third
parties in conjunction with their performance of
development and maintenance functions with respect
to Software other than AMS and GTAS. Chase will
provide NEW TRUSTCO and such third parties with
access (such access not to unreasonably
interfere with Chase's operations) to the
Equipment, Software, facilities and other
resources used by Chase to perform the Services.
In addition, Chase will provide the following:
(i) Production, test and quality assurance
environments for the installation of third
party/NEW TRUSTCO customized Software.
(ii) Systems Software necessary to provide current
platforms for execution of third party/NEW
TRUSTCO customized Software. NEW TRUSTCO
will be financially responsible for any new
Systems Software products so required.
(iii) Technical services support to insure 24 hour
operation as necessary to process the
business of the client.
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(iv) 24 hour access for applications support into production and
test environments.
(b) STANDARD INDUSTRY TOOLS. Chase will use standard industry tools to
develop Software.
(c) INTERFACES. Chase will develop, implement and maintain Software
interfaces necessary for the Data Center to communicate with
NEW TRUSTCO's systems.
(d) QUALITY ASSURANCE. Chase will be responsible for performing and
implementing quality assurance processes and procedures that
are reasonably necessary to assure that Chase software
development and maintenance responsibilities are executed
accurately and in a timely manner. This includes, without
limitation, performing the full regression testing of the AMS
and GTAS environments, as performed by UST as of the Commencement
Date, for the purpose of determining whether there will be
negative impact on existing production Software functionality.
These testing environments must perform all functions in an
environment that fully duplicates the anticipated production
environment. Subject to the foregoing, the Parties will mu-
tually agree upon checkpoint reviews, Software testing and
acceptance and other quality assurance procedures.
(e) TIMELINESS AND EFFICIENCY. Chase will perform all tasks necessary
to complete applications development projects in a timely and
efficient manner.
(f) PROJECT METHODOLOGY. Chase will utilize a disciplined systems
life cycle (SLC) methodology on all applications development
projects performed for NEW TRUSTCO. Within 90 days after
Commencement Date, Chase will provide NEW TRUSTCO with details of
the SLC methodology to be used for review and comment. Chase and
NEW TRUSTCO will jointly agree on any appropriate modifications
to the SLC methodology. The Chase SLC methodology will include
the following elements:
(i) PROJECT INITIATION. Upon receiving a request setting forth
additional business requirements, the methodology will
incorporate a process to assess the feasibility. This will
include assessing the resource requirements, time
requirements, impact on other applications development
projects, and other information as required so that NEW
TRUSTCO may make a reasonable business decision on whether
to continue. The
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methodology will provide for such assessments
to be completed within a reasonable
specified timeframe.
(ii) PROJECT PLAN. The project plan will provide a
reasonable estimate of the resources
required to complete the project, the process
to be undertaken, the deliverables to be
produced, the estimated schedule for
completion, and the effect, if any, of the
project on other ongoing or projected work.
The project plan will also show any impact on
existing production systems, processing
windows, or response times. Preliminary
project plans will be developed during the
project initiation and user requirements
phases of the project. The final project plan
will be developed during the design phase.
(iii) USER REQUIREMENTS. The methodology will
include a process that will assist in
developing and refining detailed user re-
quirements, at a level sufficient to
formuLate acceptance criteria. NEW TRUSTCO
will provide the appropriate resources and
documentation required to assist Chase in
completing the user requirements phase at NEW
TRUSTCO's expense.
(iv) DESIGN. The methodology will include a design
phase that will document and demonstrate how
the applications development project will
satisfy the user requirements. The design
phase will include a process for
accommodating and tracking ongoing scope
changes to the applications development pro-
ject, and a process for auditing the
applications development project. Design
documentation will be presented to NEW
TRUSTCO for approval.
(v) CODING. The methodology will include a
coding phase for application development.
This phase will incorporate the use of coding
standards, reviews, and audit trails,
including release control. The methodology
will allow for user walk-throughs upon
request.
(vi) TESTING. The testing phase will include the
development of a test plan early in the
applications development project, that will
be presented to NEW TRUSTCO, for NEW
TRUSTCO's approval. Included in the testing
phase will be exception testing and volume
tests, where appropriate, that will
thoroughly test all components of the
applications development project. Prior to
completion of the testing phase, NEW TRUSTCO
will be provided with the detailed test
results.
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(xxx) XXXXXXXXXX. A formal acceptance process will be included in
the methodology. This will include Chase developing jointly
with NEW TRUSTCO an objective and thorough acceptance
testing criteria that will allow NEW TRUSTCO users to ver-
ify the applications development project capabilities, effec-
tiveness and completeness. This phase will include a process
and an audit trail for tracking and correcting problems. Ac-
ceptance is not complete until NEW TRUSTCO notifies
Chase that the applications development project meets the
agreed-upon user requirements. NEW TRUSTCO will provide
the appropriate resources required to assist Chase in
completing the acceptance test.
(viii) IMPLEMENTATION. The methodology will include an implemen-
tation phase. An implementation plan will be presented to
NEW TRUSTCO, for NEW TRUSTCO approval, that will document
the process that will be used to incorporate the ap-
plications development project into production, including
identification of all interfaces and any required
conversions. Chase and NEW TRUSTCO will mutually agree on a
mechanism to ensure that NEW TRUSTCO is aware of any
changes to AMS and/or GTAS in a timely manner.
(g) DEVELOPMENT PRIORITIES. NEW TRUSTCO will establish priorities
with respect to applications development projects and communicate
the same to Chase. Chase will perform applications development
projects in accordance with such priorities. In this regard, NEW
TRUSTCO may request that Chase propose such priorities for NEW
TRUSTCO's approval or modification. NEW TRUSTCO may from time to
time adjust priorities previously established. Chase and NEW
TRUSTCO will mutually agree to project schedules, priorities and
overall resource allocation. Chase will promptly inform NEW
TRUSTCO if it determines that NEW TRUSTCO's directions may result
in the extension of other project schedules, or may impact the
provision of Services, particularly for projects that are
critical to NEW TRUSTCO operations or that are required to
maintain regulatory compliance. Subject to the foregoing, Chase
will remain responsible for timely completion of maintenance
and development projects.
(h) MONITORING, REPORTS AND MEETINGS. NEW TRUSTCO will have the
right to monitor the performance of the work done by maintenance
and development without adversely affecting the work. Chase will
provide NEW TRUSTCO with periodic reports, no less frequently
than once per month, in appropriate detail as mutually agreed upon
by Chase and NEW TRUSTCO, specifying how Chase used the
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resources of applications development personnel during
the relevant period, Chase's plan for using such
resources in the next period, and the status of each
pending or approved request for applications de-
velopment. For planning purposes, the report will also
specify the extent to which resources are available to
perform any new work. Chase will provide further
status information upon NEW TRUSTCO's request. In
addition. Chase will make available appropriate
personnel to meet with NEW TRUSTCO on a mutually agreed
upon schedule to review the status of existing
projects, to discuss new projects, and to review the
utilization of applications development resources.
(i) DOCUMENTATION. Chase will prepare and maintain
technical documentation for the Applications
Software, including modifications, updates and
enhancements of the Applications Software. The
documentation will provide sufficient information for a
trained computer programmer to install, operate,
maintain and modify the Applications Software.
Documentation should include detailed descriptions of
various software functions, flow-charts or other
graphic presentations of system logic and the computer
source code. Chase will assist NEW TRUSTCO to the
extent necessary or requested by NEW TRUSTCO in the
preparation and maintenance of user documentation for
the Applications Software, including modifications,
updates and enhancements thereof Chase will provide NEW
TRUSTCO with all such copies of documentation as NEW
TRUSTCO may reasonably request.
(j) TRAINING. Chase will provide train-the-trainers
training to NEW TRUSTCO in the use of the Applications
Software. Chase will provide NEW TRUSTCO with copies
of all instructor manuals and other training materials
used by Chase personnel in conducting such training.
Subject to the proprietary rights of third parties,
Chase grants NEW TRUSTCO a royalty-free, irrevocable,
perpetual right and license to use, reproduce, modify,
incorporate in other works and distribute all such
trailing materials solely for the use of NEW TRUSTCO
internally and for its clients in connection with their
relationship with NEW TRUSTCO.
F. Back-Up Disaster Recovery.
-------------------------
Chase will provide and maintain Data Center backup,
disaster/recovery and storage services. Chase's responsibilities
will include disaster/recovery functions for all Equipment,
systems and Software operating in the Data Center which are used
to provide the Services, and maintaining the agreed-upon recovery
of all production Data Center and Chase NEW TRUSTCO Network
operations and Equipment. The
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recovery site may be with an outside service provider or with internal
Chase reresources, at Chase's option. Chase will inform NEW TRUSTCO
of its recovery provider. Chase's responsibilities also include the
following:
1. Chase will develop a Disaster Recovery Plan that will provide the
manner in which Chase will perform backup and disaster recovery
functions, and NEW TRUSTCO's priorities for backup and disaster
recovery and methods for changing those priorities. Chase will
provide NEW TRUSTCO with a draft of the plan for NEW TRUSTCO's
review and approval, and will incorporate NEW TRUSTCO's comments
or suggestions into the plan as mutually agreed. Chase will
provide the final plan for NEW TRUSTCO's approval within 90 days
following the Commencement Date or prior to migration to the
MetroTech Data Center, whichever comes first. The Disaster
Recovery Plan will provide for, and Chase will achieve, full
recovery of all NEW TRUSTCO production systems operated by Chase
within 24 hours of a declared disaster using data included in
the last backups taken and shipped off-site, or as otherwise
specified in the Plan. Other non-production systems availability
will be consistent with Chase's then current standards.
2. Chase will be responsible for implementation, maintenance and
testing of the Disaster Recovery Plan. NEW TRUSTCO must approve
any change or modification to the Disaster Recovery Plan, which
will affect the level of service specifically provided to NEW
TRUSTCO.
3. Chase will test the Disaster Recovery Plan at least twice per
year in cooperation with NEW TRUSTCO. Testing dates will be
scheduled with NEW TRUSTCO and test objectives will be identified
with success criteria defined as mutually agreed upon by NEW
TRUSTCO and Chase.
4. Chase will provide NEW TRUSTCO with a formal report of the test
results.
5. Chase will provide proposed Disaster Recovery Plan modifications
so that problem resolution and re-testing of all unsuccessful
test components is performed in a timely manner. At NEW
TRUSTCO's request this may include additional tests.
6. Chase will maintain, and NEW TRUSTCO will have access to,
off-site storage of NEW TRUSTCO's data, Software and
documentation to support disaster recovery.
7. In the event of a disaster, Chase will assume responsibility for
operating the Equipment and providing the functions in accordance
with the Disaster Recovery Plan. Either of the Party's
respective account managers can declare a disaster, provided,
however, that before such a unilateral declaration, the
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declaring party must use reasonable efforts to secure the
other Party's concurrence.
8. Chase will provide a single-point-of-contact for disaster
recovery-related communications and activities.
9. Chase will reasonably increase its disaster recovery
capability as necessary during the term to accommodate
growth in NEW TRUSTCO business volumes, application
enhancements or new functions requested.
G. Viruses and Disabling Code.
--------------------------
Each Party will use commercially reasonable efforts to ensure
that no viruses or similar items ("Viruses") are coded or
introduced into the systems used to provide the Services. Each
Party agrees that, in the event a Virus is found to have been in-
troduced into the Systems used to provide the Services, such
Party will take all reasonable actions at its own expense to
assist in reducing the effects of the Virus and, if the Virus
causes a loss of operational efficiency or loss of data, to
cooperate to the same extent to mitigate and restore such losses.
Chase shall not, without the prior written consent of NEW
TRUSTCO, insert into the Software any code which would have the
effect of disabling or otherwise shutting down all or any portion
of the Services. Furthermore, with respect to any disabling code
that may be part of the Software, Chase shall not invoke such
disabling code at any time, including, upon expiration or
termination of the Agreement for any reason, without NEW
TRUSTCO's prior written consent.
H. Other Services.
--------------
1. SECURITY. Chase will provide security services as required
to allow NEW TRUSTCO to administer or otherwise control the
access and use of NEW TRUSTCO data and applications
software. Included in such responsibilities, Chase will:
(a) Review with NEW TRUSTCO all documented information
security procedures, develop security procedures for
NEW TRUSTCO's review and approval (including a breach
of security action plan), and adhere to NEW TRUSTCO
data security policies. This review is subject to
compliance with reasonable Chase security practices and
procedures.
(b) Prior to the Commencement Date, NEW TRUSTCO and Chase
will mutually agree upon and develop a method of
implementing, modifying and deleting user IDs and
their associated access rights.
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(c) Ensure that all users of the processing environment have
authorized access, as granted by the appropriate areas of
responsibility of Chase or NEW TRUSTCO. Chase will not be
responsible for allowing access to an unauthorized person
who presents an authorized ID, except to the extent that
Chase has contributed to the security breach.
(d) Monitor, review and respond in a timely and appropriate
manner, considering the severity of the violation, to all
access violations that are within the control of data
processing operations.
(e) Promptly provide written reports of all information security
breaches discovered or made known to Chase.
(f) Initiate corrective actions to ensure any security breach
will not occur again if it is within Chase's scope of
responsibility.
(g) Chase and NEW TRUSTCO will cooperate to recover from the im-
pact of security violations that result in loss of, or
damage to, information. Financial responsibility for the
recovery will be borne by the Party responsible for the
security violation.
2. CHANGE MANAGEMENT. To the extent not otherwise provided in this
Services Schedule, Chase will perform the following change
management functions:
(a) Control changes to the data processing environment,
implement changes as mutually agreed in accordance with
Chase change control procedures in effect as of the
Commencement Date or procedures to be determined by mutual
agreement, and implement such changes in a manner to provide
continuity when changes are initiated.
(b) Review, schedule and communicate all proposed application,
network and processing environment changes.
(c) Conduct periodic change management meetings with NEW
TRUSTCO's participation.
(d) Collect data on every change attempted, as pertains to NEW
TRUSTCO, including the cause of any problems and whether the
change was successful from the perspective of a user of the
system. This data will be summarized and reported to NEW
TRUSTCO on a periodic basis (but not less than every two
weeks).
(e) Obtain NEW TRUSTCO approval for all changes to production
processing schedules. In the case of an emergency, however,
Chase may change production processing schedules without
first obtaining
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NEW TRUSTCO's approval to the extent required to
correct the emergency, provided that Chase
notifies NEW TRUSTCO of the changes as soon as
possible and in any event within one hour after
making the changes.
(f) Provide at least 72 hours advance notice of
scheduled outages, and schedule outages for system
maintenance, expansions and modifications during
hours that meet NEW TRUSTCO's operational needs
and minimize disruption.
(g) Where applicable, NEW TRUSTCO will promptly inform
Chase's change control group of LAN/WAN structural
changes that could impact Chase's processing
environment.
3. UTILIZATION AND CHARGEBACK. Chase will provide NEW
TRUSTCO with Chase's utilization reports that NEW
TRUSTCO can use to allocate data center usage within
NEW TRUSTCO's organization. Performance and op-
erational data (e:g., real time monitors, system logs,
error files, trace data, DB2 monitors, etc.) will be
made available to the extent required to support NEW
TRUSTCO's applications.
I. Information Technology Performance Standards.
--------------------------------------------
Subject to adjustment as provided in Section 3.2(d) of the
Agreement, Chase will achieve the performance standards set
forth in Attachment IV(I).
X. XXXXX CUSTODY TRANSACTION FACILITATORS
Chase will use a similar level of effort in seeking reimbursement from
Chase Transaction Facilitators (as defined in Section 3.3(f)(i) of the
Agreement) for financial losses incurred by NEW TRUSTCO and its Affiliates, and
their respective customers, attributable to acts, omissions or insolvency of
Chase Transaction Facilitators that Chase uses on behalf of its own customers
for financial losses of similar size and type.
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XXXXXXXXXX XX(X)(0)(x)
CREDIT ON COLLECTIONS
SECURITY TYPE PAYMENT TYPE CREDITING STANDARD SDF/NDF*
------------- ------------ ------------------ --------
Corporate/Muni. Bonds Interest **** ****
Common Stock Dividends **** ****
Preferred Stock Dividends **** ****
Mutual Funds Regular P&I or **** ****
Reinvestment
Unannounced Dividends Dividends **** ****
GNMA - PTC Eligible Regular P&I **** ****
GNMA - Physical Regular P&I **** ****
Asset Backed - DTC Eligible Regular P&I **** ****
Asset Backed - Physical Regular P&I **** ****
Variable and Floating Rate Interest **** ****
Government (Fed) P&I **** ****
Private Placements Interest and/or **** ****
Regular P&I and/or
Dividend
Foreign Securities Held in U.S. P&I **** ****
Global As per Attachment II(A)(3)(d)
* Standard shall be changed from NDF to SDF if necessary to reflect
then current industry or regulatory standards.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
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ATTACHMENT II(A)(2)(c)(i)
CAPITAL CHANGES/CORPORATE ACTIONS
-------------------------------------------------------------------------------------
VENDOR NAME PUBLICATION INFORMATION INFORMATION TYP
-------------------------------------------------------------------------------------
ISSUE REFERENCE FILE
-------------------------------------------------------------------------------------
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
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ATTACHMENT II(A)(2)(c)(v)
CREDIT ON CORPORATE ACTIONS
TRANSACTION TYPE PAYMENT TYPE CREDITING STANDARD SDF/NDF*
---------------- ------------ ------------------ --------
Maturities Principal **** ** ****
Calls P&I **** ****
Reorganization P&I **** ****
Foreign Securities Held in U.S. P&I **** ****
Stock Splits Shares **** ****
Stock Dividends Shares **** ****
Stock Dividends Shares **** ****
Global See Attachment II(A)(3)(d)
* Standard shall be changed from NDF to SDF if necessary to reflect then
current industry or regulatory standards.
** ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
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ATTACHMENT II(A)(3)(d)
Product Profile
Auto Credit from
The Chase Manhattan Bank, N.A.
Description
To assist you in maximizing your returns, Chase provides global custody clients
with an accounting procedure through which we provisionally credit income to
your cash accounts on pay date, whether or not we have actually received the
income from the issuing company or its agent.
AUTOCREDIT benefits you by provisionally crediting income prior to the actual
account reconciliation process. You have access to your funds sooner so that
you can manage your cash more efficiently. Today, Chase makes AUTOCREDIT
available to you in 27 of the world's major investment markets. The majority
of our customers' investment and business is conducted in these 27 key markets.
To help you maximize the additional control that AUTOCREDIT gives you, all
related information is available in the reports generated by the Chase
XxxxXxxxxxx.XX
- Conditional dividend projection
information is updated daily.
- Daily cash reports reflect the
credits based on the value date of
the dividend payment.
- Daily "Income Received" reports
give you the status of your income
credits, showing all provisional
confirmed and credited income
separately.
Because AUTOCREDIT is a provisional accounting device, Chase may reverse income
that was mistakenly credited or was never actually received in the ordinary
course of business. Before this is done, however, Chase will provide you with
written notice five days prior to the reversal. This right to effect a
reversal is a fundamental term of our agreement to provide AUTOCREDIT.
INCOME
Chase's AUTOCREDIT service applies to bond interest, cash dividend payments and
cash stock options relating to the underlying securities under custody which
are known:
- To be part of your portfolio
holdings.
- To have declared a dividend or to
have scheduled an interest payment
as of a certain date.
AUTOCREDIT applies to cash stock options only when you instruct Chase that you
have elected to take the cash dividend on 100 percent of your entitlement, and
your holding is in an AUTOCREDIT nominee account. If you have failed to
instruct Chase on the uptake of a cash dividend two days
A-34
94
prior to the pay date or you elect to take stock on all or part of your
entitlement, AUTOCREDIT does not apply.
If you do not maintain your cash account with Chase in the U.K., you may
receive provisional in come after pay date reflecting the time it takes Chase
to move funds from our London account to your designated bank. This process can
delay income crediting by up to three working days.
RIGHT TO REVERSE AUTOCREDIT INCOME
Chase's aim in making any reversals is to make sure you return to the position
you would have been in had the credit not been made. Therefore, any reversal is
performed at the original exchange rate at which (where applicable) the credit
was made.
As AUTOCREDIT is a provisional accounting procedure, Chase reserves the right
to reverse income that has been inadvertently credited, or is not actually
received in the ordinary course of business. This can happen for example, if
our sources announce an incorrect dividend rate or currency or if there has
been a change in applicable withholding taxes since the last dividend
notification
In these cases, you are given written notice that the appropriate amount must
be repaid to Chase within five business days of Chase's notification. This
allows sufficient time to fund your cash account in order to avoid debit
balances. Chase reverses the credit at the end of the five-day notice period
by debiting your cash account for the amount credited under the AUTOCREDIT
service. The exchange rate used in cases of overpayment, or where there was no
entitlement, is that used in the original credit. Should the entitlement have
been calculated incorrectly, then the correct amount is recredited with the
same value date and at the same exchange rate as the original credit.
When there has been an underpayment, Chase reverses the full amount
immediately, back-valuing the credit to the date of the original credit and
using the same exchange rate as the original. Chase recredits the correct
amount with the value date and exchange rate as the original credit.
If you do not maintain your cash account with Chase in the U.K., Chase notifies
you of any overpayment or erroneous credits and requires the repayment of the
funds. When this is done, we will make the necessary adjustment. If the case of
a lesser entitlement being due, Chase recredits the income using the exchange
rate of the original credit.
FOREIGN EXCHANGE TRANSACTIONS
You can instruct Chase to credit income to your cash account in the currency of
the payment, or in the base or concentration currency you specify. Unless you
give us alternate instructions, Chase will book the necessary foreign exchange
within the account's general operating procedures, using the exchange rates
applicable up to one day prior to pay date to ensure that we have enough time
to credit cash funds in the local market.
AUTOCREDIT EXCEPTIONS
1. AUTOCREDIT does not operate for American Depository Receipts
(ADRs).
A-35
95
2. AUTOCREDIT only applies for cash stock options where you elect
to take all of the entitlement as cash and instructions are
received 2 days prior to pay date.
3. Where dividends are received by Chase in a currency different to
the currency of the asset's incorporation AUTOCREDIT does not
apply.
4. AUTOCREDIT is paid on permanent holdings less any unsettled
trades as of record/ex date, therefore AUTOCREDIT is not paid in
respect of unsettled purchases.
5. Market claims are not subject to AUTOCREDIT.
6. Where client payment instructions are missing, income is not
paid through AUTOCREDIT.
7. Where pay date occurs on a non-U.K. business day, AUTOCREDIT
payments are made on the next business day.
These operating procedures may be amended from time to time by Chase in its
sole discretion upon reasonable advance notice to the customer.
The provision of AUTOCREDIT does not in any way change the extent of Chase's
obligations to its customers under the applicable custody or trust agreement.
The crediting of income items under this provisional accounting device does not
guarantee in any way that such items will, in due course, be paid and Chase
shall not be deemed a guarantor of any income so credited to a customer's
account.
X-00
00
XXXXXXXXXX XXXXXXX
****
****
****
****
****
****
****
****
****
****
****
****
****
****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-37
97
ATTACHMENT II (A)(3)(e)
INTEREST BEARING CURRENCY ACCOUNTS
****
****
****
****
NOTE: ****
****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-38
98
ATTACHMENT II(A)(3)(f)
CONTRACTUAL SETTLEMENT
Contractual Settlement --- Buys and Sells
Argentina Germany Norway
Australia Hong Kong Philippines (Local Only)
Austria Ireland Portugal
Belgium Italy Singapore
Brazil (Local Only) Japan Spain (Rapport Only)
Canada Luxembourg Sweden
Cedel Malaysia Switzerland
Denmark Mexico Thailand (Local Only)
Finland Netherlands United Kingdom
France New Zealand United States of America
Contractual Settlements Buys --- Actual Settlement Sales
Bangladesh India South Korea
Botswana Indonesia Spain (Non-Rapport)
Xxxxx Xxxxxx Xxx Xxxxx
Xxxxx (Xxxxxxxx) Jordan Tunisia
China (Shenzen) Mauritius Taiwan
Columbia Morocco Turkey
Czech Republic Pakistan Uruguay
Egypt Poland Venezuela
Greece Peru Zimbabwe
Hungary South Africa
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[GLOBAL SECURITIES SERVICES LOGO]
--------------------------------------------------------------------------------
NOTIFICATION TIMEFRAMES
FOR
SETTLEMENT INSTRUCTIONS
*CHASE WILL ENDEAVOR TO MAKE ANY TRANSACTION ON A BEST EFFORTS BASIS
AFTER THE LASTEST DEADLINE SHOWN.
DAGGER FILING DEADLINES ARE SUBJECT TO CHANGE TO THE EXTENT NECESSARY TO
COMPLY WITH THE REQUIREMENTS AT EUROPE CENTRAL BANKS AND FOREIGN
BANK EXCHANGES.
--------------------------------------------------------------------------------
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreements governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable, however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
A-40
100
================================================================================
ARROW NOTIFICATION TIMEFRAMES DO NOT INCLUDE DAY OF RECEIPT.
Country Timeframe Notes
------- --------- -----
DAYS
----
ARGENTINA** 2 The market operates on a cash basis, i.e., no
contractual settlement date. Therefore, for purchases,
settlement will take place 3 days after notification.
For sales, settlement will take place 4 days after
notification.
AUSTRALIA Settlement takes place on T + 5. Pre-matching is
effected manually. For physical transactions
Purchases 2 securities settle as follows:
Sales 3 Purchases: the broker contracts tour sub-custodian 24
hours prior to actual settlement to confirm trade
details. On settlement date the broker delivers the
scrip in exchange for a bank check.
Sales: Our subcustodian withdraws stock, prepares a
transfer deed and then contacts the broker to arrange
settlement.
AUSTRIA 3 Settlement is against payment and is not
simultaneous. Settlement takes place on the second
Monday following the trading week.
BANGLADESH Physical share and funds delivery for DSE
transactions take place of T + 2.
Sales 2
Purchases 4
BELGIUM 2 The forward market settles on a fixed two week
calendar. The cash market settles on T + 3. Brokers
are obliged to hold cash accounts with the National
Bank and cash is debted/credited to their accounts.
--------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreements governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable, however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
A-41
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================================================================================
Country Timeframe Notes
------- --------- -----
DAYS
----
BOTSWANA 2 The standard market time frames for settlement is
anywhere up to T + 14. Chase has established a T + 4
rolling settlement cycle with our sub-custodian
Standard Charter Bank.
BRAZIL** We must have trade instructions on trade date, due to
strict settlement regulations. We strongly advise that
Security 2 FX's be executed through Banco Chase. Repatriation
of sales proceeds must be specified on trade
Foreign Exchange 1 instruction, if desired, and can take up to 2-3 days
after settlement.
CANADA Cash and securities are exchanged simultaneously via
the CDS (central depository). The net cash position is
- Equities, Bonds, 3 remitted to/received from the CDS via a check with
Money Markets same day value.
- Treasuries 1 The settlement of non-CDS eligible securities is
effected over-the-counter, with securities being
exchanged for a same day value check.
There are currently no procedures in place for partial
settlement.
CHILE** 2 Actual settlement.
CHINA
Shanghai**
Shenzen** 3 Actual settlement.
--------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreements governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable, however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
A-42
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------------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
Columbia** 2 Market settlement for equities can vary between T + 0
and T + 5. Chase recommends a T + 3 settlement for
which instructions should be received on trade date.
Market settlement for fixed income is normally traded
on a same day or next day basis, but can settle in the
same way as equities. Instructions are required by
trade date.
Sales: Actual settlement.
Czech Republic 1 Settlement off market or via the Stock Exchange
Registry takes place on T + 3, according to market
practice.
Denmark 2 Brokers are obliged to settle transactions on T+3.
Therefore, instructions are to be received no later than
T+1, or a costly by-in and/or interest claim may
ensue.
Egypt 2 The official settlement timeframe is T + 2; however,
delayed settlement may be negotiated.
Euro Certificates of 2 CEDEL and Euroclear clear transactions by book-
Deposits entry transfer on participants' securities and cash
accounts on a settlement date agreed by the
Eurobonds 2 contracting parties. This is usually five business days
from trade date. Securities and cash are
debited/credited simultaneously.
Finland 3 As of 1/2/95, the Helsinki Stock Exchange has
introduced penalty fees (2) for late settlement of trades
clearing on the automated trading market (known as
"Heti").
France 2 Domestic trades settle in two ways; either on T + 3
rolling settlement, or at month end.
2. Please contact your Relationship Manager for a quote of fees.
------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreement governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable; however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
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------------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
Germany 2 There is no standard settlement time, but T + 2 is usual
for trades executed between domestic counterparties
and T + 5 for trades between international
counterparties.
Ghana 4 The official settlement time frame for trades executed
on the Ghana Stock Exchange will be T + 10.
However Chase request its clients to instruct their
brokers to settle on T + 7 or a buy-in may ensue.
Therefore, clients settlement and funding instructions
for T + 7 settlement should be with Chase no later than
T + 3.
Greece** 2 Greece's settlement period is T + 2.
Bonds 3 Sales: Actual settlement
Hong Kong 2 Settlement of SEHK transactions takes place on T + 2.
Hungary** 2 Stock Exchange trades: The listed share market
operates on a T + 5 rolling settlement basis; settlement
of transactions is modified delivery versus payment.
Sales: The Stock Exchange requires that sold
securities be lodged with it by noon on T + 3; failure
to do so will result in an automatic buyback.
------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreements governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable; however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
A-44
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------------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
India**
Bombay Exchange 1 Instructions should be with Chase no later than trade
date plus 1.
- Purchase and 1
sales
Calcutta & Delhi Instructions should be with Chase no later than trade
Exchanges date plus 1.
- Purchases Notification should be provided to Chase no later than
trade date plus 1.
- Sales(3) Instructions should be with Chase no later than trade
date plus 1.
Madras
- Purchases Instructions should be with Chase no later than trade
date plus 1.
- Sales(3)
Indonesia** 3 Sales: Actual settlement.
The custodian bank must deliver the physical shares
to the selling broker on settlement date. Delivery is
made against a broker check. Investors should note
that check clearance takes between 24 and 48 hours,
depending upon the time of receipt of the check and,
therefore, proceeds on sales are credited on actual
settlement date basis.
Ireland 3 Market settlement occurs on the second Monday
following the 2 week account.
Bonds
-------------------------
3. Securities purchased in Calcutta, Madras and Delhi are sent to Bombay for safe keeping. If securities are sold in Calcutta,
Madras and Delhi, the certificates have to be delivered to the HSBC branches in those cities: therefore, an additional three (3)
days are required (i.e., trade, instructions must be received by Chase the day prior to the end of the trading period).
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreement governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable; however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
A-45
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------------------------------------------------------------------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
ISRAEL** See notes T+0 market settlement. Therefore, it is necessary to confirm trade
instructions directly with the agent on Trade Date and then send
instructions to Chase.
ITALY 4 NOTE: All instructions received after the 12th day of the month
Bonds 2 will be settled at the end of the following month.
JAPAN 2 Settlement takes place on T+3.
JORDAN** 1 The official settlement at the AFM is T+2; however, different
settlement timeframes may be agreed with the brokers.
LUXEMBOURG 3
MALAYSIA** Client may trade odd lot share; however, agent requires at least
3 weeks prior notification to arrange splitting of shares.
Held in MYR, traded 3 Failure to notify agent may result in automatic buy-in on T+6.
in Malaysia.
Held in MYR, traded
in Singapore.
- Purchases 3
- Sales 4
MAURITIUS There is no rolling settlement system. The date appearing on the
contract note represents the clearing date.
Cash settlement of purchases takes place on clearing date minus 2.
Sales settle on clearing date.
------------------------------------------------------------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management before trading.
This document is for information only and is designed to keep you abreast of market conditions and procedures. The information
contained in this document is believed to be accurate. This document is intended neither to influence investment decisions nor to
amend or supplement any agreement governing your relationship with The Chase Manhattan Bank, N.A., Global Securities Division. The
Chase Manhattan Bank, N.A. has gathered the information from a source it considers reliable; however we cannot be held responsible
for inaccuracies and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to update the information contained in
this document, we do not undertake to do so.
A-46
106
------------------------------------------------------------------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
MEXICO Instructions must be received on Trade Date. For same day
settlements, instructions must be received by 11:00 am
Equities 2 (NY Time) on Trade Date.
Gov't. Securities 1
MOROCCO** see notes
NETHERLANDS 2 This is essentially a cash market, and therefore there is no
standard period between trade date and settlement date. Settlements
normally take place between two days and one week after trade date.
Chase will settle on the date quoted by the customer, or three business
days after notification, whichever is later.
NEW ZEALAND 3
NORWAY 2 Following the dematerialization of stock in Norway through the VP System,
brokers are obligated to settle transactions on trade date plus 3.
Therefore, your instructions must be with Chase no later than trade date plus
one business day, or a costly buy-in or interest claim may ensue.
PAKISTAN** 4 The market operates on a 13-day account cycle. Monday to Sunday trading cycle (no
trading on Thursday and Friday) with settlement the following Sunday (i.e., 7-13
days later).
SALES: Actual settlement.
PERU** 2 Instructions should be with Chase no later than trade date.
SALES: Actual settlement.
PHILIPPINES** 3 Contractual settlement if local currency is held and actual settlement of FX is
required.
------------------------------------------------------------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management before trading.
This document is for information only and is designed to keep you abreast of market conditions and procedures. The information
contained in this document is believed to be accurate. This document is intended neither to influence investment decisions nor to
amend or supplement any agreement governing your relationship with The Chase Manhattan Bank, N.A., Global Securities Division. The
Chase Manhattan Bank, N.A. has gathered the information from a source it considers reliable; however we cannot be held responsible
for inaccuracies and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to update the information contained in
this document, we do not undertake to do so.
A-47
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---------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
POLAND** 3 Trade instructions and funding details
must be received by Chase no later than
Trade Date.
Sales: Actual settlement
-----
PORTUGAL** 2 Portugal settlement is T+3.
SINGAPORE 3
Held in SGD, traded
in Singapore.
Held in SGD, traded
in Malaysia.
Purchases 3
Sales 4
SOUTH AFRICA
Cash Deals 3 T+6 for trades executed on a Monday to T+2
for trades that take place on a Friday.
Chase requires settlement instructions no
later than 3pm London time 2 days prior to
the Tuesday settlement date (T+1).
Immediate Deals 3 Usually traded for settlement on T+1 or
T+2. Clients should trade for a minimum of
T+2; Chase will require settlement on
trade date.
SOUTH KOREA** 2 Institutions who have been granted an
exception by the Korea Stock Exchange will
no longer have to place the entrustment
deposit. However, if no exception was
granted a cash collateral deposit of 40%
of the trade amount must be on deposit in
the broker's account on trade date, 9:00
am. The cash details must be delivered to
Chase no loater than T minus 3 to effect
settlement.
------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreements governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable, however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
A-48
108
-----------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
SPAIN Only sales contracted with Rapport member
--------------
brokers who clear through Chase Madrid
--------------------------------------
- Puchases 3 are eligible for contract settlement. That
is, funds will be credited to the Spanish
- Sales See note account on settlement date. Trade
instructions must specify "Rapport With
------------
Chase Madrid." All other sales are subject
------------
to actual settlement date accounting. That
is we will credit the Spanish peseta account
two business days after notification of
receipt of funds in Madrid. Chase will
advise you of the cash settlement by telex
within one business day of notification by
our Spanish agent, after which we will
accept instructions to pay away or convert
pesetas.
SRI-LANKA** The settlement period for purchase is T+5
and for sales is T+7. Physical settlement
- Purchases 2 no longer exists as all trades are now
settled at the CDS.
- Sales
SWEDEN The re-registration of Swedish securities
requires on average six days to complete.
Purchases Transactions will be instructed for
settlement on the date stipulated by the
- Sales settling 2 customer; however, cash will be posted six
with business days after notification of the
Skandanaviska trade.
Enskilda Banken
If the counter-party is ENSKILDA
- All other sales 2 FONDKOMMISSION (i.e., the broker subsidiary
or our agent, SEB), this six day rule will
- Bonds 3 not apply and our normal contractural
settlement date accounting will occur,
provided that Chase receives instructions
two days prior to settlement. The same
settlement rule will apply if the
counter-party uses SKANDINAVISKA as
clearance/settlement agent, provided your
instructions clearly state this and provided
that the broker has given matching
instructions to SKANDINAVISKA.
------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreements governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable, however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
A-49
109
------------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
Xxxxxxxxxxx 0 Xxxxx custodians require two business days to
process a securities transaction, one of which is
the notification period required by the
centralized depository. Consequently, Chase will
process transactions for settlement three business
days following receipt of instruction.
Taiwan** Actual settlement. Need instructions on Trade
Date.
- Purchases 1
- Sales 1
Thailand** 2 SALES: Actual settlement. Settlement takes place
on T+3.
Tunisia 3 Settlement of all transaction on the BVM takes
place on T+7. Settlement is accomplished via the
exchange of certificates or MAD (if
certificates are not available) against same day
value bank checks.
Turkey 2 Actual settlement. Due to the physical nature of
the market, transactions are actual settlement.
United Kingdom Currently, there is a 10 day rolling settlement.
However, effective June 26, 1995 the settlement
timeframe will change to a 5 day rolling
settlement.
Account settlements
- Purchases 4
- Sales 4
Gilt settlements 1 Need instructions on Trade Date.
1
- Purchases
- Sales
United States 1 For DTC eligible securities, direct affirmation is
preferred.
------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreements governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable, however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
A-50
110
------------------------------------------------------------------------------
Country Timeframe Notes
------- --------- -----
Days
----
Uruguay** 1 All securities, with the exception of Treasury
bills, settle on T+1. Treasury bills settle on the
same day basis for secondary market transactions.
The primary market for Treasury bills is a weekly
auction, with accepted bids referred back to the
investor's intermediary for settlement the
next business day.
Venezuela** 3 Must verify purchase settlement prior to sell
execution. Chase requests customers to contract
for a minimum settlement of T+5 on equities and
bonds, to allow sufficient time for all
documentation to be gathered and foreign
exchange arrangements to be completed.
SALES: Actual settlement.
Zimbabwe** 2 Settlement date varies, but the Stock Exchange
Committee rules state that settlement cannot
exceed T+14. The usual settlement period is T+7.
Clients are advised to confirm the settlement date
with the broker at the time the trade is
executed.
------------------------------------------------------------------------------
** Please note that approval must be obtained from Relationship Management
before trading.
This document is for information only and is designed to keep you abreast of
market conditions and procedures. The information contained in this document is
believed to be accurate. This document is intended neither to influence
investment decisions nor to amend or supplement any agreements governing your
relationship with The Chase Manhattan Bank, N.A., Global Securities Division.
The Chase Manhattan Bank, N.A. has gathered the information from a source it
considers reliable, however we cannot be held responsible for inaccuracies
and/or incomplete information. While the Chase Manhattan Bank, N.A. intends to
update the information contained in this document, we do not undertake to do
so.
X-00
000
XXXXXXXXXX II(A)(3)(g)
GLOBAL PROXY SERVICES
Summary Notification of Meeting Agenda and Voting
Argentina (Early 1995) Australia Austria
Canada France Germany
Greece Hong Kong Indonesia
Ireland Italy Japan
Jordan Malaysia Mexico
Netherlands New Zealand Singapore
Spain Switzerland United Kingdom
United States
X-00
000
XXXXXXXXXX II (A)(6)
SECURITIES PROCESSING INSTRUCTIONAL DEADLINES
PHYSICAL DELIVERIES
(FREE & DVP)
*
NEXT DAY FUNDS ****
**** **** ****
*
SAME DAY FUNDS **** ****
**** **** ****
SPECIAL NOTES ALL DELIVERIES PENDED AFTER ESTABLISHED
GUIDELINES WILL BE MADE ON A BEST EFFORTS
BASIS.
* STREET DELIVERY CUTOFFS
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-53
113
SECURITIES PROCESSING INSTRUCTIONAL DEADLINES
ALL RECEIVES
(FREE & RVP)
BOOK ENTRY SALES
*
DTC (MDH) **** ****
**** ****
**** ****
PTC **** ****
FRB **** ****
SPECIAL NOTES ALL DELIVERIES PENDED AFTER ESTABLISHED
GUIDELINES WILL BE MADE ON A BEST EFFORT
BASIS. ANY RECYCLE RECEIVED WITH A PENDING
SALE WILL BE DONE ON A BEST EFFORTS BASIS.
* STREET DELIVERY CUTOFFS
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-54
114
FRB OUTGOING WIRES
NEW TRUSTCO'S normal internal cutoff time for transmitting FRB
outgoing wires will be
****
All outgoing wires released after the established guidelines will be
made on a best effort basis.
FRB INCOMING WIRES
Wires that end up in the repair queue, which are identified with an
account number or name, will be corrected *****.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-55
115
TRANSFERS
For Issues with New York City Trans- Negotiable securities will be
fer Agents shipped within **** Telephone follow
up will commence **** days from date
of shipment.
For Issues with Transfer Agents out- Negotiable securities will be shipped
side of New York City within **** business days of receipt.
Telephone follow up will
commence **** days from date of
shipment.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
X-00
000
XXXXXXXXX FOR SENDING
SPECIAL PROCESSING ITEMS TO CHASE
Red-Tick Adjustments ****
Pair-offs vs. Fed Wires/Vouchers* ****
* The First/Last Day of Month ****
* End of Quarter ****
Account-to-Account Transfers/Gifts ****
Bookkeeping Entries ****
Rec and Del
Special Note:
*USTPNW
The deadline for **** N.Y. time
and USTPNW will call Chase's book entry section directly.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-57
117
SECURITIES PROCESSING DEADLINES FOR NOTIFICATION
FROM CHASE ON BOOK ENTRY PROBLEM FILE AND PHYSICAL PROBLEMS
BOOK ENTRY - RECEIVE & DELIVERY
Chase will attempt to identify exceptions in all problem files within
**** NEW TRUSTCO will be notified of the NEW TRUSTCO problems no later
than **** after the problem has been identified as NEW TRUSTCO's. Such
notification will be given to NEW TRUSTCO as soon as possible but not
later than **** prior to the reclaim cut-off time. Trades
hitting the problem file during the last **** will be
communicated to NEW TRUSTCO as soon as possible. Certain conditions
such as account transitions or bulk securities transfers may impact
Chase's ability to adhere to these time frames.
Chase will reclaim all unresolved trades, unless otherwise instructed,
starting at **** before the reclaim deadline.
In the event that Chase receives an item for NEW TRUSTCO without
sufficient time to research or reclaim, Chase will contact NEW TRUSTCO
and post the item into NEW TRUSTCO's holdover account. If NEW
TRUSTCO verifies on the following day that the item posted to the
holdover account was invalid posting, Chase will compensate NEW
TRUSTCO within **** **** on each day in question, minus reserves.
NEW TRUSTCO will accept a reversal of compensation credit if the item
or items in question are in fact a NEW TRUSTCO transaction.
For corporate trust accounts at any depository which are under the
control of NEW TRUSTCO, all items going into holdover will not be
compensated by Chase.
NOTWITHSTANDING THE ABOVE, CHASE WILL NOTIFY NEW TRUSTCO OF ANY
CONDITION THAT MAY PREVENT IT FROM FULFILLING THE ABOVE
REQUIREMENTS.
PHYSICAL RECEIVES
NSCC **** Cutoff
OVER WINDOW **** Cutoff
FREE RECEIVED **** Cutoff
Physical deliveries shall be re-delivered on a best efforts basis.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-58
118
VOLUNTARY CORPORATE ACTIONS
DEADLINE FOR NEW TRUSTCO RESPONSES
Offers which expire in New York and involve **** prior to expiration/
**** NEW TRUSTCO accounts. pro-ration date.
Offers which expire in New York with approxi- **** prior to expiration/
mately **** accounts or more (based on the pro-ration date.
number of accounts per page), as well as, out-
of-town expirations.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-59
119
VOLUNTARY CORPORATION ACTIONS
PERFORMANCE STANDARDS
****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-60
120
RUSH ITEMS
DEADLINES FOR SENDING
INSTRUCTIONS BY NEW TRUSTCO
AND PROCESSING BY CHASE
ISSUES WITH NEW YORK CITY
TRANSFER AGENTS: NEW TRUSTCO will send information to Chase by ****
Chase will send securities to the transfer agent **** and will
pick-up securities from special window at transfer agents in ac-
cordance with agent time line.
ISSUES WITH TRANSFER
AGENTS OUTSIDE OF NEW NEW TRUSTCO will send instructions to Chase by **** .
YORK CITY:
Chase will send securities to the transfer agent ****
and will make arrangements to receive in similar
manner.
DTC DEPOSITS: NEW TRUSTCO will send instructions to Chase by ****
Chase will use full legal deposit and deposit the ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-61
121
PERFORMANCE STANDARDS FOR
MISCELLANEOUS ITEMS
Vault check for trading (sales) ****
Vault check for other transactions ****
Inform NEW TRUSTCO of potential sale fails
(for T+3 trades) ****
Assistance with private placement ****
Assistance with legal transfers ****
Update FINS database with broker number ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
X-00
000
XXXXXXXXXX II(A)(8)
PRICING VENDOR/PRODUCT LIST
PRIMARY SECONDARY
TYPE OF SECURITY FREQUENCY VENDOR VENDOR
---------------- --------- ------- ---------
US Treasury Notes ****
US Treasury Bonds ****
US Treasury Bills ****
Govt Nat'l Mort. Assoc./Federal Nat'l ****
Mort. Assoc.
Federal Home Loan Corp./Federal ****
Home Loan Bank
Mutual Funds (listed) ****
Municipal Bonds
-- Tax Exempt (Model priced) ****
-- Taxable ****
Domestic Corporate Bonds ****
-- Medium Term Notes ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-63
123
PRIMARY SECONDARY
TYPE OF SECURITY FREQUENCY VENDOR VENDOR
---------------- --------- ------- ---------
-- Floating Rate Notes/Adjusted Rate ****
Mortgage
-- Convertible Bonds ****
-- Private Placements ****
-- Yankee/Euro ****
-- Collateralized Mortgage ****
Obligation/Remic
Foreign Denominated Bonds ****
Foreign Convertible ****
Currency (Exchange Rates) ****
Domestic Common Stock
-- Listed ****
-- Unlisted ****
-- Preferred ****
-- Convertible Preferred ****
Foreign Denominated Stock
-- Listed ****
-- Unlisted ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-64
124
PRIMARY SECONDARY
TYPE OF SECURITY FREQUENCY VENDOR VENDOR
---------------- --------- ------- ---------
-- Preferred Stock ****
-- Convertible ****
Options/Futures ****
Foreign Exchange Contracts ****
Common Trust Funds ****
American Depository Receipts
-- Listed ****
-- Unlisted ****
Automatically Coded Within System
Permanently At:
Cost
-- Bankers Acceptances
-- Discount Notes
-- Repurchase Agreements (Open
End)
Par
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-65
125
PRIMARY SECONDARY
TYPE OF SECURITY FREQUENCY VENDOR VENDOR
---------------- --------- ------- ---------
- Certificates of Deposits
- Commercial Paper
- Demand Notes
- Repurchase Agreements (Close
End)
- Savings Deposits
X-00
000
0 Notification of mis-delivered mail ****
ATTACHMENT II(A)(9)(a)
CORPORATE TRUST
PERFORMANCE STANDARDS FOR CHASE
MAILING OPERATIONS
CATEGORY STANDARD
1 Delivery of Schedule of Mailings. ****
Schedule to include 24 hour to 2 week notice
2 Mailings - enclosed, metered and delivered to P.O. ****
****
****
****
3 Confirmation of completed mailing ****
****
4 Reimbursement of postage charges ****
****
5 Notification of discrepancy in # of pieces ****
****
6 Defect Rate (Destroyed Checks)* ****
****
7 Year-end Statements ****
****
* This rate is dependent on the quality of the forms/envelopes.
** But in any case by January 31st, provided **** of total is
delivered at least **** prior to January 31st.
DWAC PROCESSING
CATEGORY STANDARD
1 Fax daily DWAC sheet ****
****
2 DWAC input to PTS ****
****
3 Notification of delivery with no instructions or in- ****
correct instructions ****
****
4 Free Delivery during reclaim period ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
X-00
000
0 Occasional necessity to Broadcast ****
****
MEDIUM TERM NOTE & COMMERCIAL PAPER PROCESSING
CATEGORY STANDARD
1 Notification of excess of Net Debit Cap ****
2 Notification of Net Settlement Out-of-Proof ****
MAIL RECEIPT
CATEGORY STANDARD
1 Notification of mis-delivered mail ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
X-00
000
XXXXXXXXXX III (A)(6)(1)
BANK OPERATIONS FUNCTIONS
NEW
FUNCTION CHASE TRUSTCO
-------- ----- -------
A. LOAN SERVICES
LOAN PAYMENT PROCESSING X
LOAN ORIGINATION X
LOAN DOCUMENTATION (OPTICAL) X
LOAN STATEMENT RENDERING X
LOAN SERVICING X
LOAN COLLATERAL PROCESSING X
B. DEPOSIT SERVICES
TT&L X
LOCAL DISTRIBUTION OF OUTPUT (PAPER AND ELEC- X
TRONIC) FOR NY OFFICES
REMOTE DISTRIBUTION OF OUTPUT (PAPER AND X
ELECTRONIC) FOR REGIONAL OFFICES
ON-US COLLECTIONS X
DEPOSIT STATEMENT RENDERING X
FEDWIRE ADVICE MAILING X
DEPOSIT ACCOUNT PROCESSING X
STOP PAYMENT ORIGINATION X
C. CHECK PROCESSING
INCLEARING PROCESSING X
INBOUND TRANSPORTATION (BRANCH) X
A-69
129
NEW
FUNCTION CHASE TRUSTCO
-------- ----- -------
CHECK CLEARING X
CHECK SETTLEMENT X
ECP (CURRENTLY SEND ONLY) X
NOTE PROCESSING & PRESENTMENT X
BLIND VERIFICATION (AMS CHECKS) X
FLOAT MANAGEMENT X
IMAGE CAPTURE (NOT CURRENTLY AVAILABLE) X
EXCEPTION ITEM OUTSORT X
ENCODING X
BULK FILING X
MAIL DEPOSIT PROCESSING X
POD PROCESSING X
SIGNATURE VERIFICATION X
D. RECORDS STORAGE AND RETRIEVAL
DOCUMENT STORAGE (OPTICAL) X
MICROFILM & FICHE PRODUCTION X
RECORDS ARCHIVING X
CHECK SAFEKEEPING X
E. RESEARCH AND ADJUSTMENT
INTERBANK RESEARCH & ADJUSTMENT X
DUE FROM/DUE TO RECONCILIATION X
PHOTO RETRIEVAL X
F. INTERNATIONAL PAYING AND RECEIVING
CHIPS TRANSFERS X
FOREIGN CHECK COLLECTION X
FOREIGN TRANSFERS X
A-70
130
NEW
FUNCTION CHASE TRUSTCO
-------- ----- -------
TELEX X
FOREIGN DRAFTS X
G. CASH MANAGEMENT
INTERNAL ACCOUNT RECONCILIATION X
PC BOOK TRANSFER X
PC FEDWIRE INITIATION X
CONTROLLED DISBURSEMENT X
CHECK ISSUE DATA RECEIPT (ARP) X
PAYOR BANK SERVICES X
CASH MANAGEMENT ACCOUNT RECONCILIATION X
OFFICIAL CHECK RECONCILIATION X
PC CASH MGMNT BALANCE REPORTING (INTRA DAY X
PRIOR DAY)
ARP BASED STOP PAYMENT X
ACCOUNT ANALYSIS X
STOP PAYMENT ORIGINATION X
H. RETURN ITEMS
RETURN ITEMS-ON-US X
RETURN ITEMS DEPOSITED X
RETURN ITEM NOTIFICATION (>$2500) X
I. ELECTRONIC FUNDS TRANSFER
ACH PROCESSING AND SETTLEMENT X
PC BASED ACH ORIGINATION (RA) X
FEDWIRE TRANSFER PROCESSING X
UST BOOK TRANSFER PROCESSING X
A-71
131
NEW
FUNCTION CHASE TRUSTCO
-------- ----- -------
J. CUSTOMER SERVICE X
K. OTHER
ATM SWITCHING X
BRANCH AUTOMATION SUPPORT X
VOICE RESPONSE (PAL) X
BATCH AND ON-LINE TRANSMISSIONS X
ATM SETTLEMENT X
END-OF-DAY PROOF & RELEASE X
VOLUME/UTILIZATION REPORTS X
GENERAL LEDGER RECONCILIATION X
X-00
000
XXXXXXXXXX III(A)(6)(2)
BANKING SERVICES PERFORMANCE STANDARDS
Processing
Standard
----------
A. LOAN SERVICES
1. Loan Statements Mailed ****
2. Loan Advices Mailed ****
3. Collateral Updated ****
4. Loan Payment Processed ****
5. Loan Origination Exceptions Resolved ****
6. Loan Documentation Updated & Scanned ****
7. Loan Account/Note Inquiry ****
8. Loan Maintenance ****
9. Loan Output Distribution ****
10. End of Day Proof & Release (M&I) ****
B. DEPOSIT SERVICES
1. Non-enclosure Statements Rendered ****
2. All Statements Rendered ****
3. Statement Rendering Quality (Error Rate) ****
4. Stop Payment Confirmation Distribution ****
5. FedWire Advices Mailed ****
6. M&I Advices Mailed ****
7. Maturity Notices Distributed ****
8. **** ****
- Fax discrepancies to NEW TRUSTCO ****
- Fax all checks > **** NEW TRUSTCO ****
- NEW TRUSTCO Verification to Chase ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-73
133
Processing
Standard
----------
9. Stop/Special Referral Processing
- NEW TRUSTCO Notification to Chase ****
- Fax checks to NEW TRUSTCO ****
- NEW TRUSTCO Verification to Chase ****
10. Non Posted Checks
- Fax checks to NEW TRUSTCO ****
- NEW TRUSTCO Notification to Chase ****
11. M&I Access ****
12. SQN Signature File Update (NY only) ****
13. SQN Signature File Distribution (NY only) ****
14. Distribution of Reports - Exporter ****
15. Distribution of Reports - Paper ****
16. Distribution of Reports - Fiche ****
17. End of Day Proof & Release (M&I) ****
18. General Ledger Deposits (Copy) ****
General Ledger Deposits (Original) ****
19. Non Posted Transaction Copies ****
20. Deposited Return Item Notification ****
- Notification to NEW TRUSTCO ****
- Instructions to Chase ****
- Fundamental -- Fax Copies to NEW TRUSTCO ****
- Referrals (i.e. > **** G/L) ****
- Large Dollar Notification (>**** ****
21. Investigations
- Inquiries ****
- Adjustments ****
- Inquiries/Adjustments - Third Party ****
22. Account Analysis Distribution
- Daily Reports ****
- Statistical Feeds to Budget Systems ****
- Preliminary Statements ****
- Final Statements ****
23. On-US Return Item Notification (>**** ****
24. On-US Return Items Cleared (Qualified) ****
25. Forgery Claim Processing ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-74
134
Processing
Standard
----------
26. Forgery Reimbursement ****
C. CHECK PROCESSING
1. All incoming Checks Processed ****
2. All Deposits Posted ****
3. All Checks Cleared ****
4. MICR Testing ****
5. Mail Deposits Processed ****
6. Availability - NYC Items**** ****
7. Availability - Out of NYC **** ****
8. Availability - Out of NYC **** ****
9. Ready Access Intraday Feeds
- 1st Check Presentment ****
- 2nd Check Presentment ****
- 3rd Check Presentment ****
- Final Totals ****
10. Investigations
- Inquiries ****
- Adjustments ****
- Inquiries/Adjustments - Third Party ****
Source of Receipt-Internal ****
Source of Receipt-External ****
11. Money Desk Reporting
- Preliminary Totals ****
- Final Totals ****
12. M&I Posting File ****
13. AMS Posting File ****
14. Pay Thru Draft Transmission to Clients ****
D. RESEARCH & ADJUSTMENT
1. Archive Retrieval (Urgent) ****
2. Archive Retrieval (Regular) ****
3. Due from Bank Exceptions Resolved ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-75
135
Processing
Standard
----------
4. Original Check (On-Site) ****
5. Original Check (Archive) ****
6. Photocopy Requests (Urgent) (Current Only) ****
7. Photocopy Requests (Current) ****
8. Photocopy Requests (Aged) ****
E. INTERNATIONAL PAYING AND RECEIVING
1. CHIPS Payment ($USD)-4PM Receipt ****
2. Foreign Payment (FX)-4PM Receipt ****
3. Telex Processing-5PM Receipt ****
4. Foreign Collection-3PM Receipt ****
5. CHIPS Receive ****
6. Foreign Transfer Receive ****
7. Foreign Drafts (FX)-3PM ****
8. Investigations
- Inquiries ****
- Adjustments ****
- Inquiries/Adjustments - Third Party ****
F. CASH MANAGEMENT - SYRACUSE
1. Partial Account Reconciliation ****
2. Full Account Reconciliation ****
3. Official Account Reconciliation ****
4. Performance Report External ARP ****
5. Performance Report Internal ARP ****
6. Controlled Disbursement Notification - Early ****
7. Controlled Disbursement Notification - Final ****
8. Issue Input Processing ****
9. ARP On-line Inquiry and Transactions
Availability ****
10. Original Check Retrieval (On-Site) ****
11. Original Check Retrieval (Archived) ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-76
136
Processing
Standard
----------
12. Signature Verification ****
13. Exception Notification/Referral ****
- Fax Checks to NEW TRUSTCO ****
- Fax all checks > **** to NEW TRUSTCO ****
- NEW TRUSTCO Notification to Chase ****
14. Original Hole Punched Checks ****
15. Mailing Pay Thru Drafts & Statements ****
16. Investigations ****
- Inquiries ****
- Adjustments ****
- Inquiries/Adjustments - Third Party ****
17. Photocopy Requests (Urgent) (Current Only) ****
18. Photocopy Requests (Current) ****
19. Photocopy Requests (Aged) ****
G. EFT
1. All ACH File Processing Deadlines Met ****
2. ACH Returns (Originated) ****
3. ACH Ready Access Intraday File ****
- First File ****
- Last File ****
4. ACH M&I Memo Post File Transmission ****
5. ACH M&I Posting File Transmission ****
6. ACH AMS Posting File Transmission ****
7. ACH Credit Reject Item Notification ****
8. ACH Money Desk Reporting ****
9. ACH Notification of Stop Payment Not
Processed ****
10. ACH Stop Payment set up - Originating Client ****
11. ACH Maximum Dollar Limit Reject Notification ****
12. ACH Non Posted/Return Requests ****
13. ACH Service Bureau Clients
- Existing Relationship ****
- New Relationship ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-77
137
Processing
Standard
----------
14. ACH Investigations
- Inquiries ****
- Adjustments ****
- Inquiries/Adjustments - Third Party ****
H. MONEY TRANSFER
1. Wire Transfer Execution ****
2. Ready Access Fed Wire Availability ****
3. NEW TRUSTCO Book Transfer Execution ****
4. Ready Access Wire and Book Transfers ****
5. Investigations
- Inquiry Response ****
- Adjustments ****
- Inquiries/Adjustment - Third Party ****
6. Chase Book Transfer Execution ****
I. OTHER
1. ATM Network Access (Host Availability) ****
2. ATM Settlement ****
3. Private Access Line Access **** ****
4. G/L Update ****
5. Ready Access Availability **** ****
J. NEW TRUSTCO'S RESPONSIBILITY
NEW TRUSTCO, in its dealings with Chase for Electronic Funds Transfer
(EFT) will follow the operating rules and procedures established by the
National Automated Clearing House (NACHA) and the New York Automated
Clearing House (NYACH).
NOTE: SOME LOAN SERVICES AND DEPOSIT SERVICES STANDARDS ARE IN-
CLUDED DUE TO THE DEPENDENCY ON THE M&I SYSTEMS AND THE
LEVELS WHICH MUST BE ACHIEVED BY A REPLACEMENT SYSTEM.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
X-00
000
XXXXXXXXXX IV(I)
INFORMATION TECHNOLOGY
PERFORMANCE STANDARDS
CATEGORY STANDARD
On-Line Availability ****
On-Line Response Time (Average) ****
Print Quality ****
Request of a Tape from Offsite ****
Schedule of New Tape Retention ****
Problem Assignment ****
Change the Batch Schedule ****
Back-Up Disaster Recovery ****
Network Availability ****
Corporate Systems Development ****
Environment
Corporate Systems Production ****
Environment
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-79
139
CATEGORY STANDARD
Tape Delivery to 000 Xxxxxxxx ****
Problem Notification ****
Any forms or stationary used by Chase on behalf of NEW TRUSTCO shall be of the
same quality and standard (envelope, paper and print) as that used by UST as
of the Commencement Date.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-80
140
DATA CENTER
CATEGORY STANDARD
Daily Computer Requested Jobs ****
Including Print JCOMD500
JRCSD810 & 815
JGTCUVUS
JGTCD410
JGTCTAXR
Overnight Computer Jobs Including Print ****
Internal Computer Requested Jobs Includ- ****
ing Print
Rapid/User Prod, Computer Requested ****
Jobs Including Print
On-Line System Availability on Saturday, request notice must be submitted ****
days in advance.
On-Line System Availability on Sunday by mutual consent, with a minimum
guarantee of once **** request notice must be submitted **** days in advance.
In the event of any failure, production systems must be back up and running
within a reasonable timeframe but in any event, not less than Chase's standard
recovery time. Specific timeframes will be jointly determined with Chase as a
result of NEW TRUSTCO's review of Chase's current recovery procedure.
Disaster recovery procedures will within **** of declared disaster provide for
system availability with current data as of the last backup or incremental
backup sent offsite.
Chase and NEW TRUSTCO will mutually agree upon the format and frequency of
system performance reports to be provided by Chase.
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-81
141
ADMINISTRATION
CATEGORY STANDARD
Emergency Terminal Definitions in VTAM ****
All Other Terminal Definitions ****
Password Resets ****
Application Restarted ****
Abends Restarted ****
On-Line Response Problems ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-82
142
VALUATION/PROXY/OUTPUT/COLLECTION AREA
CATEGORY STANDARD
Promissory Note Rates Held by US Trust ****
Accounts
Annual Federal Reserve Report ****
Annual Federal Reserve Unpriced Holding ****
Report
Historical Prices not on AMS ****
Challenged Prices ****
NEW TRUSTCO issues no vender/broker ****
price available
Proxy Processing ****
Proxy Mailing Report ****
Mailing of Client Statements (RAIDS) ****
Client Statement (RAIDS) Mis-match ****
Report
Client Statement (RAIDS) Monthly Vol- ****
ume Report
Detail Verbal Response (written if re- ****
quested) Regarding Problems on Pricing,
Mailings on Client Statements or Proxies
Detail Verbal Acknowledge (written if re- ****
quested) Regarding Problems on Pricing,
Mailing on Client Statements or Proxies
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-83
143
SYSTEMS DEVELOPMENT
CATEGORY STANDARD
Emergency IMS Terminal Changes ****
Detail Notification of AMS Enhancements ****
Detail Response to Reported On- ****
Line/Client Statement Problems
Detail Response to Reported On-Line/ ****
Statement problems
Project Development ****
Rapid Problems ****
Report of Selected Client Statements ****
(RAIDS) by accounts
Report Level Maintenance Journal ****
SIC Table Report ****
Array Table Report ****
Report Code Report ****
Tracs/Sweep/Cost Lot Compare Report ****
Standardware Table Report ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
A-84
144
SCHEDULE B
(to the Services Agreement)
Key Transitioning Personnel
---------------------------
Xxxxxxx Xxxxxxxxx (CSD)
Xxxxxx X. O'Day (CSD)
Xxxxxx X. Xxxxxx (CSD)
Xxxxx Xxxxxxx (CSD)
Xxxxxx X. Xxxxxxx (CSD)
Xxxxxx X. Xxxxxxxx (SS&TO)
Xxxxx X. Xxxxxxxx (SS&TO)
B-1
145
SCHEDULE C
(to the Services Agreement)
Additional Charges
------------------
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-1
146
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-2
147
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-3
148
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-4
149
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-5
150
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-6
151
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-7
152
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-8
153
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-9
154
****
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
C-10
155
Attachment 1 to Schedule C
BOOK ENTRY TRANSACTIONS
-----------------------
DTC Purchase (Receive vs. Payment)
DTC Sale (Deliver vs. Payment)
DTC Free Receive
DTC Free Deliver
PTC Purchase (Receive vs. Payment)
PTC Sale (Deliver vs. Payment)
PTC Free Receive
PTC Free Deliver
FRB Purchase (Receive vs. Payment)
FRB Sale (Receive vs. Payment)
FRB Free Receive
FRB Free Deliver
Calls: Book Entry
Reorganization: Book Entry
Redemptions: Book Entry
Book Entry Transfer (DTC Withdrawal)
Fed Wire (Cash Wire & CDE)
Options (Purchases)
Options (Sales)
Money Funds Purchases (Manual Only)
Money Funds Sales (Manual Only)
C-1-1
156
Attachment 2 to Schedule C
TRANSACTIONS
------------
DTC Purchase (Receive vs. Payment)
DTC Sale (Deliver vs. Payment)
DTC Free Receive
DTC Free Deliver
PTC Purchase (Receive vs. Payment)
PTC Sale (Deliver vs. Payment)
PTC Free Receive
PTC Free Deliver
FRB Purchase (Receive vs. Payment)
FRB Sale (Receive vs. Payment)
FRB Free Receive
FRB Free Deliver
Time Deposit/Record Keeping Purchase (Receive vs. Payment)
Time Deposit/Record Keeping Sale (Deliver vs. Payment)
Time Deposit/Record Keeping Free Receive
Time Deposit/Record Keeping Free Deliver
Physical Purchase (Receive vs. Payment)
Physical Sale (Deliver vs. Payment)
Physical Free Receive
Physical Free Deliver
Calls: Book Entry & Physical
Reorganization: Book Entry & Physical
Redemptions: Book Entry & Physical
Book Entry Transfer (DTC Withdrawal)
Physical Transfer
Fed Wire (Cash Wire & CDE)
Options (Purchases)
Options (Sales)
Money Funds Purchases (Manual Only)
Money Funds Sales (Manual Only)
C-2-1
157
Attachment 3 to Schedule C
CHASE PREVAILING RATES FOR GLOBAL CUSTODY AS OF COMMENCEMENT DATE
-----------------------------------------------------------------
C-3-1
158
The Chase Manhattan Bank, X.X.
Xxxxx XxxxxXxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
[CHASE MANHATTAN LOGO]
September 1, 1995
Xx. Xxxx Xxxxxxx
Executive Vice President
New Trustco
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
Dear Xxxx:
This letter serves to confirm that the attached global custody fees, as
currently quoted to U.S. Trust Company of N.Y., are consistent with fees quoted
to our most valued customers over the last six months.
Sincerely,
159
Safekeeping Transaction
Market (BPs) (USD)
------------------------------------------------------------------
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** **** ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
160
Attachment 4 to Schedule C
VOLUME STATISTICS AND OTHER INFORMATION
---------------------------------------
SEE ATTACHED
C-4-1
161
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** **** **** ****
**** This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment
pursuant to Rule 24b-2.
162
SCHEDULE D
(to the Services Agreement)
Cost of Living Adjustment
-------------------------
1. DEFINITIONS. For purposes of this Schedule D.
(a) "CPI" shall mean the Consumer Price Index for All Urban Consumers,
New York, Northern New Jersey - Long Island - for the New York, New
Jersey, Connecticut Consolidated Metropolitan Statistical Area, for
All Items (1982-1984 = 100), as published by the Bureau of Labor
Statistics of the U.S. Department of Labor.
(b) "Adjustment Date" shall mean September 1 of each year during the Term
beginning on September 1, 1996.
(c) "Current CPI" shall mean with respect to each Adjustment Date, the
CPI published as final by the Bureau of Labor Statistics for March of
the then current calendar year.
(d) "Base CPI" shall mean the CPI published as final by the Bureau of
Labor Statistics for March of the year immediately preceding the then
current calendar year.
(e) "Net CPI" shall mean, with respect to each Adjustment Date, the
Current CPI for that Adjustment Date minus the Base CPI for that
Adjustment Date.
(f) "CPI Percentage Change" shall mean, with respect to each Adjustment
Date, the Net CPI for that Adjustment Date divided by the Base CPI
for that Adjustment Date.
2. PERSONNEL CHARGE ADJUSTMENT. The FTE rate for additional FTEs not
included in the Fixed Fee, as set forth in Section 5.1(b) of the
Agreement, will be adjusted prospectively, effective as of each
Adjustment Date, by increasing the then current rate by an amount equal
to the CPI Percentage Change for that Adjustment Date multiplied by the
then current FTE rate.
3. INDEX REPLACEMENT. In the event that the Bureau of Labor Statistics stops
publishing or substantially changes the content or format of the CPI, the
Parties will substitute another comparable index published by a mutually
agreeable source; provided, however, that if the change is merely to
redefine the base period to some other period, the Parties will continue
to use the affected index but will, if necessary, convert either the
current or prior level of such index to the same basis as the other by
using an appropriate conversion factor.
D-1
163
SCHEDULE E
(to the Services Agreement)
Side Letter
-----------
E-1
164
U.S. TRUST CORPORATION 000 XXXX 00XX XXXXXX
XXX XXXX, XX 00000-0000
TELEPHONE 000 000-0000
U.S. TRUST
November 18, 1994
The Chase Manhattan Corporation
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
The Chase Manhattan Corporation ("Chase") is entering into an Agreement
and Plan of Merger with U.S. Trust Corporation ("UST") under which Chase will,
among other things, acquire certain portions of UST's processing business
through a merger of UST with Chase or one of its subsidiaries (the "Merger").
Certain other assets of UST's business not acquired by Chase will, prior to the
Merger, be transferred by UST to "NEW TRUSTCO."
Chase proposes to provide certain processing and support services to
NEW TRUSTCO and its affiliates under a Services Agreement to be finalized
during the period between the execution and closing of the Merger (the
"Transition Period"). During the Transition Period, Chase will perform certain
transition and implementation activities with the cooperation and assistance of
UST. In addition, the parties will work together to make arrangements for
Chase to obtain the right to use, beginning on the closing date of the Merger,
the third party software currently licensed by UST which is required to support
the part of the UST business to be purchased by Chase and to provide services
to NEW TRUSTCO under the Services Agreement.
This letter sets forth the understanding of the parties with respect to
(i) the sharing of costs incurred by UST in connection with such transition and
implementation activities, and (ii) the sharing of costs of obtaining the
necessary license rights to such third party software.
165
1. Transition and Implementation Activities.
----------------------------------------
Except as otherwise specified below, each party will bear its own costs
incurred in performing transition and implementation activities.
UST and Chase have prioritized how to make the best use of UST's total
budgeted resources for systems development during the Transition Period as
follows:
(a) first, changes required to meet regulatory
requirements (e.g., T+3) and normal systems
support;
(b) second, work on CIS-2;
(c) third, client-related deliverables (both for
persons/entities who will be Chase customers
after the Merger and persons/entities who will
be NEW TRUSTCO customers after the Merger) and
general maintenance and other non-transition
activities, with the parties to mutually
identify such work (including consideration of
internal and external customer requests) and
decide how to prioritize such work;
(d) fourth, modifications to UST's asset management
system ("AMS") which are required to provide
multibank capabilities; and
(e) fifth, non-multibank transition activities, with
the parties to mutually decide how to prioritize
such work.
The parties will work together and agree how the above work will be scheduled
and managed.
UST will pay for all costs it incurs in performing the work described
in items (a) and (b) above regardless of whether it exceeds UST's total
budgeted resources for system development work.
Except as provided below in this paragraph, UST will pay all costs
incurred in performing the systems development work described in item (c) above
regardless of whether they exceed UST's total budgeted resources for systems
development work. Without limiting the generality of the foregoing, UST will
pay all costs it incurs in
2
166
performing systems development work (regardless of whether such costs exceed
UST's total budgeted resources for systems development work), if UST
represented to Chase on or before the execution date of the Merger Agreement
(the "Merger Execution Date") that such systems development work would result
in increased revenue for the part of the UST business that is being purchased
by Chase. However, Chase will pay for all direct costs incurred by UST in
performing systems development work that is expected to result in increased
revenue for the part of the UST business that is being purchased by Chase, if
UST did not represent to Chase on or before the Merger Execution Date that such
increased revenue would be realized, provided that Chase will only be
responsible for such costs to the extent that they exceed UST's total budgeted
resources for systems development (after taking into account the budgeted
resources utilized in performing the work in items (a) and (b) above).
Chase will pay 65% of the direct costs incurred by UST in performing
multibank work (i.e., item (d) above) which are in excess of UST's total
budgeted resources for systems development work (after taking into account the
budgeted resources utilized in performing the work described in items (a) - (c)
above).
Chase will pay 100% of the direct costs incurred by UST in performing
non-multibank transition activities (i.e., item (e) above) which are in excess
of UST's total budgeted resources for systems development work (after taking
into account the budgeted resources utilized in performing the work described
in items (a) - (d) above).
As used in this letter agreement, the term "direct costs" shall mean
the salaries and benefits of the UST employees performing systems development
work and the compensation paid to subcontractors hired by UST to perform such
work.
2. Third Party Software Licenses.
-----------------------------
The parties will share equally the first $2 million in Additional Fees
(as defined below), if any, which are required to be paid for third party
software licensed by UST or its subsidiaries as of the closing date of the
Merger in order to:
3
167
(a) obtain the right for Chase to access, use and obtain support for, at
the UST data center at 000 Xxxxxxxx and the Chase MetroTech data
center, third party software covered under the NEW TRUSTCO Acquired
Licenses (as defined below) solely for the purpose of (i) providing
services to NEW TRUSTCO under the Services Agreement, and (ii) to the
extent applicable, supporting the UIT Business, the MFS Business and
the IAS Business, as those terms are defined in the Contribution and
Assumption Agreement to be entered into as of the closing date of the
Merger between United States Trust Company of New York ("USTNY") and
NEW TRUSTCO (the "Contribution Agreement"); and
(b) obtain the right for Chase to access, use and obtain support for, at
the UST data center at 000 Xxxxxxxx and the Chase MetroTech data
center, third party software covered under licenses retained by USTNY
pursuant to the Contribution Agreement solely for the purpose of (i)
supporting the UIT Business, the MFS Business and the IAS Business
(as those terms are defined in the Contribution Agreement), and (ii)
to the extent applicable, providing services to NEW TRUSTCO under the
Services Agreement.
NEW TRUSTCO will be responsible for Additional Fees to the extent that
they exceed $2 million in the aggregate. UST's portion of any Additional Fees
shall be paid as an adjustment to the fees payable under the Service Agreement.
The term "NEW TRUSTCO Acquired Licenses" shall mean those licenses for third
party software which are part of the assets acquired by NEW TRUSTCO pursuant to
the Contribution Agreement.
For purposes of this letter agreement, the term "Additional Fees" shall
include: (i) one-time transfer, upgrade and incremental fees imposed by
licensors of the third party software described above in order for Chase to
obtain the license rights described in items (a) and (b) above; (ii) any such
fees that are imposed on a periodic (e.g., annual, monthly) basis, but only for
the first four years during which such periodic fees are imposed or until the
termination of the Services Agreement, whichever comes first; (iii) License
Termination Fees (as defined below)
4
168
and (iv) License Termination Credits (as defined below). The parties will
cooperate and use their best reasonable efforts to minimize any Additional
Fees.
The term "Additional Fees" shall not include any incremental amounts
charged by licensors for new versions of a third party software product unless
required by the vendor as a prerequisite for support and transfer of third
party software described above. The term "Additional Fees" shall include
one-time software charges for CPU upgrades associated with the move from 000
Xxxxxxxx to the Chase MetroTech data center, but shall not include any
subsequent CPU-upgrade charges thereafter; provided, however, that the parties
will during the Transition Period review the apportionment of substantial
one-time CPU upgrade charges associated with moving any of the third party
software described above to the Chase MetroTech data center, if Chase will
obtain benefits from the upgraded CPU license for purposes other than those
described in items (a) and (b) above.
This Section 2 will be reviewed by the parties during the Transition
Period to take account of Chase's use of Chase or UST software other than
Duplicative or non-Duplicative Software which provides equivalent
functionality and which can enable Chase to fulfill its obligations under the
Services Agreement and reduce the level of Additional Fees.
The term "Duplicative Software" shall mean all third party software
described in items (a) and (b) above for which Chase currently holds a license
for its Chase MetroTech data center. Unless otherwise agreed by the parties,
Duplicative Software used by Chase in providing services to NEW TRUSTCO under
the Services Agreement will be licensed under the existing licenses held by
Chase (as licenses may be amended to permit Chase to use such Duplicative
Software to provide such services to NEW TRUSTCO), and the licenses held by UST
for the Duplicative Software will be cancelled, with any termination fees
imposed by the vendor in connection with the cancellation of such licenses
("License Termination Fees") to be included in Additional Fees. The total
amount of any reductions in UST licensing costs resulting from any such
cancellation of Duplicative Licenses shall be multiplied
5
169
by four and the resulting amount ("License Termination Credits") shall be
credited against, and deducted from, any Additional Fees.
* * * * *
Please acknowledge your agreement with the terms of this letter
agreement by signing and dating this letter in the spaces provided below.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx,
President
ACCEPTED AND AGREED:
The Chase Manhattan Corporation
By: Xxxxxx X. Xxxxx
-----------------------------------
Title: SECRETARY
--------------------------------
Date: NOVEMBER 18, 1994
---------------------------------
6
170
SCHEDULE F
(to the Services Agreement)
Side Letter Supplement
----------------------
E-2
171
September 1, 1995
The Chase Manhattan Bank, N.A.
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Gentlemen:
This letter agreement supplements the letter agreement between The
Chase Manhattan Corporation ("CMC") and U.S. Trust Corporation ("UST"), dated
November 18, 1994 (the "Side Letter"), regarding the implementation of the
Services Agreement, between United States Trust Company of New York and New
U.S. Trust Company of New York ("New Trustco"), of even date herewith (the
"Services Agreement"). New Trustco and The Chase Manhattan Bank, N.A.
("Chase") hereby assume all obligations of UST and CMC, respectively, under
part 2 (pages 3-6) of the Side Letter, and release CMC and UST from all
obligations thereunder.
This letter sets forth the understanding of the parties hereto with
respect to (i) the payment of certain amounts pursuant to agreements with
**** , (ii) reimbursements to Chase,
(iii) adjustments, and (iv) licenses in respect of New Trustco Affiliates (as
defined in the Services Agreement).
1. Reimbursement of Payments to **** **** ; Credit Balance.
Notwithstanding any provision to the contrary in the Side Letter, New Trustco
shall reimburse Chase for the remaining balance due on the ****
amount payable to **** on June 30, 1999, pursuant to Section 4 of the
Payment and Processing Terms Addendum, between Chase and **** dated as of
June 30, 1995 (the "Credit Balance"); provided, however, that in the event that
any such amount paid by New Trustco is later applied for the benefit of Chase
or its affiliates as a credit toward the procurement of licenses, UMF or
processing grants, Chase shall reimburse New Trustco for the amount of such
credit within thirty (30) days after the application of such credit.
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
172
2. REIMBURSEMENTS TO CHASE. Schedule A hereto represents the results
of the parties' calculation of total Additional Fees to be paid under the Side
Letter to third party software licensors listed on such Schedule ("Total
Fees"). Chase shall pay $1,000,000 of such Total Fees ("Chase's Share") and
New Trustco shall pay $1,998,061 of such Total Fees ("New Trustco's Share").
Payments to licensors shall be made by Chase, and New Trustco shall reimburse
Chase until the entire New Trustco Share has been paid to Chase. The initial
payment to Chase of $1,532,997 shall be paid, upon prior invoice, on September
15, 1995. The remaining payments to Chase under this Paragraph of $116,266 each
shall be paid, upon prior invoice, on March 31, 1996, 1997, 1998 and 1999.
3. ADJUSTMENTS. Chase and New Trustco acknowledge that the
payments to be made by New Trustco pursuant to Paragraph 2 do not include
payments of Additional Fees for certain third party software licensors or
licensed products included on Schedule A. Upon negotiation with such third
party software licensors, all Additional Fees relating to those licensors or
licensed products shall be added to New Trustco's Share.
The parties agree that (i) in the event third party software licensors
or licensed products were inadvertently omitted from or included in those to be
included in the calculation of amounts due under the Side Letter, or (ii) in
the event of mistakes in calculation in the amounts due under the Side Letter,
the parties will equitably adjust the New Trustco Share as appropriate. All
adjustments will be identified and agreed to by the parties no later than
thirty (30) days after the completion of the migration of the Data Center to
MetroTech. There will be no further adjustments with respect to items not
identified by the parties by the end of such period.
4. LICENSES IN RESPECT OF NEW TRUSTCO AFFILIATES. If Chase becomes
obligated to pay additional fees (including taxes) to third party software
licensors due to New Trustco adding one or more Affiliates, the business of
which is to be processed under the Services Agreement, then New Trustco will
reimburse Chase for all such amounts paid by Chase to such third party software
licensors during the period that Chase performs such Services. With respect to
any relevant negotiations with third party software licensors pursuant to
Paragraph 3 and this Xxxxxxxxx 0, Xxx Xxxxxxx shall be entitled to participate
in such negotiations.
* * * * *
2
173
Please acknowledge your agreement with the terms of this letter
agreement by signing and dating this letter in the spaces provided below.
Sincerely,
New U.S. Trust Company of New York
by /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx,
President
ACCEPTED AND AGREED:
The Chase Manhattan Bank, N.A.
by /s/ Xxxxxx Xxxxx
-------------------------------
Title: Secretary
------------------------
Date: November 18, 1994
-------------------------
3
174
EXHIBIT A
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
Page 1
175
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
Page 2
176
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
Page 3
177
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
Page 4
178
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
Page 5
179
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
Page 6
180
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
Page 7
181
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
Page 8
182
SCHEDULE G
(to the Services Agreement)
Reports
-------
Name of the report Job # Frequency
------------------ ----- ---------
Standardware Table Report Upon Request
Unpriced Federal Reserve Report JTRPU281 Daily 1/1 thru 1/10 or prior
business day
Anticipated Proxy Report Weekly (Monday)
Proxy Mailing Volume Report Weekly (Monday)
Client Statement Volume Report Monthly (15th of month)
SIC Table Report Quarterly at month end
Array Table Report Quarterly at month end
Report Code Report Quarterly at month end
Tracs/Sweep/Cost Lot Compare Quarterly at month end
Report
BUDGET CAPTURE VOLUME MONTHLY
STATISTICAL DATA
Foreign Holdings RAPID download Monthly, as of the close of
Lotus Format business after the last business day
(HLDS695.PRN)
Foreign Transactions RAPID download Monthly, as of the close of
LOTUS Format business after the last business day
(TRAN695.PRN)
G-1
183
Name of the report Job# Frequency
------------------ ---- ---------
Foreign Asset Value (USD) by country Monthly
& by account
Foreign PSRD Transactions by country Monthly
& by account
Outstanding Tax Reclaim Due UST Monthly
(New Trustco)
Order Room Sale Falls Monthly
G-2
184
SCHEDULE H
(to the Services Agreement)
FACAM Joint Venture
-------------------
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
H-1
185
SCHEDULE I
(to the Services Agreement)
FTE Letter Agreement
--------------------
I-1
186
The Chase Manhattan Bank, N.A.
0 XxxxxXxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
July 19, 1995
[Chase logo]
Xx. Xxxx Xxxxxxx
Executive Vice President
U.S. Trust Company
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xx. Xxxxxxx:
The following details the agreements reached between U.S. Trust and Chase in
relation to Chase's obligations, as defined in the "Service Agreement", to
provide U.S. Trust with support of the AMS, CTAS and CIS 2 systems.
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
187
****This section has been omitted and will be filed separately with the
Securities and Exchange Commission to receive confidential treatment pursuant
to Rule 24b-2.
188
Please acknowledge your agreement with the terms of this letter by signing and
dating this letter in the spaces provided below.
/s/ Xxxxx Xxxx
Xxxxx Xxxx
Vice President
Chase Manhattan Bank, N.A.
/s/ Xxxx X. Xxxxxxx
Accepted and Agreed:
By: Xxxx X. Xxxxxxx
Title: Executive Vice President
Date: July 27, 1995
cc: Xx. Xxxx Xxxxxxxxxx, UST
Xx. Xxx Berbertch, UST
Xx. Xxxxx Xxxxxxxx, Xxxxx
Xx. Xxxxxx Xxxxxx, Chase
Xx. Xxxxx Xxxxxxxxx, Xxxxx
189
SCHEDULE J
(to the Services Agreement)
Termination/Expiration Fee
--------------------------
-iv-
190
SCHEDULE: J
MONTHS INTO TERMINATION
CONTRACT* EXPIRATION FEES
1 $8,916,667
2 $8,833,333
3 $8,750,000
4 $8,666,667
5 $8,583,333
6 $8,500,000
7 $8,416,667
8 $8,333,333
9 $8,250,000
10 $8,166,667
11 $8,083,333
12 $8,000,000
13 $7,916,667
14 $7,833,333
15 $7,750,000
16 $7,666,667
17 $7,583,333
18 $7,500,000
19 $7,416,667
20 $7,333,333
21 $7,250,000
22 $7,166,667
23 $7,083,333
24 $7,000,000
25 $6,916,667
26 $6,833,333
27 $6,750,000
28 $6,666,667
29 $6,583,333
* Months into contract = 1 means termination during calendar
month September, 1995.
191
MONTHS INTO TERMINATION
CONTRACT* EXPIRATION FEES
30 $6,500,000
31 $6,416,667
32 $6,333,333
33 $6,250,000
34 $6,166,667
35 $6,083,333
36 $6,000,000
37 $5,875,000
38 $5,750,000
39 $5,625,000
40 $5,500,000
41 $5,375,000
42 $5,250,000
43 $5,125,000
44 $5,000,000
45 $4,785,000
46 $4,750,000
47 $4,625,000
48 $4,500,000
49 $4,375,000
50 $4,250,000
51 $4,125,000
52 $4,000,000
53 $3,875,000
54 $3,750,000
55 $3,625,000
56 $3,500,000
57 $3,375,000
58 $3,250,000
59 $3,125,000
60 $3,000,000
* Months into contract = 1 means termination during calendar
month September, 1995.
192
MONTHS INTO TERMINATION
CONTRACT* EXPIRATION FEES
61 $2,875,000
62 $2,750,000
63 $2,625,000
64 $2,500,000
65 $2,375,000
66 $2,250,000
67 $2,125,000
68 $2,000,000
69 $1,875,000
70 $1,750,000
71 $1,625,000
72 $1,500,000
73 $1,375,000
74 $1,250,000
75 $1,125,000
76 $1,000,000
77 $875,000
78 $750,000
69 $625,000
80 $500,000
81 $375,000
82 $250,000
83 $125,000
84 $0
* Months into contract = 1 means termination during calendar
month September, 1995.
193
SCHEDULE K
CERTIFICATE
The undersigned parties to that certain Services Agreement dated
September 1, 1995 between The Chase Manhattan Bank, N.A. and New U.S. Trust
Company of New York (the "Agreement") do hereby certify to one another that
the Procedures Manual attached hereto as Attachment A represents the Procedures
Manual referred to in Section 3.4(a) of the Agreement in existence as of the
Commencement Date (as defined in the Agreement). This Certificate is made by
each party with the intention that the other party shall rely upon it.
IN WITNESS WHEREOF, the undersigned have executed this Certificate this
1st day of September, 1995.
THE CHASE MANHATTAN BANK, N.A.
By:
-------------------------------
NEW U.S. TRUST COMPANY
OF NEW YORK
By:
-------------------------------
K-1