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2020-25 BNY Mellon - Custody Agreement Public FinanceMEMORANDUM DATE: TO: FROM: RE: Please list the Contracting Party / Vendor Name, type of agreement to be executed, including any change orders or amendments, and the type of services to be provided. Make sure to list any related Project No. and Project Name. Authority to execute this agreement is based upon: ___ Approved by City Council on ___________________________________________ ___ City Manager’s signing authority provided under the City’s Purchasing Police [Resolution No. 2019-021] for budget expenditures of $50,000 or less. ___ Department Director’s or Manager’s signing authority provided under the City’s Purchasing Policy [Resolution No. 2019-021] for budget expenditures of $15,000 and $5,000, respectively, or less. Procurement Method (one must apply): ___ Bid ___ RFP ___ RFQ ___ 3 written informal bids ___ Sole Source ___ Select Source ___ Cooperative Procurement Requesting department shall check and attach the items below as appropriate: ___ Agreement payment will be charged to Account No.: _____________________ ___ Agreement term: Start Date ________________ End Date ________________ ___ Amount of Agreement, Amendment, Change Order, etc.: $____________________ REMINDER: Signing authorities listed above are applicable on the aggregate Agreement amount, not individual Amendments or Change Orders! ___ Insurance certificates as required by the Agreement for Risk Manager approval Approved by: ______________________________ Date: _______________ ___ Bonds (originals)as required by the Agreement (Performance, Payment, etc.) ___ Conflict of Interest Form 700 Statement of Economic Interests from Consultant(s) NOTE: Review the “Form 700 Disclosure for Consultants” guidance to determine if a Form 700 is required pursuant FPPC regulation 18701(2) ___ Business License No. __________________; Expires: __________________ ___ Requisition for a Purchase Order has been prepared (Agreements over $5,000) September 8, 2020 Jon McMillen, City Manager Karla Romero, Finance Director The Bank of New York Mellon Trust Company – Custody Agreement ✔August 4, 2020 ✔ ✔101-1006-60102 ✔September 8, 2020 June 30, 2025 ✔40,750 ✔ Monika Radeva 9/8/2020 ✔ CUSTODY AGREEMENT (Public Finance) AGREEMENT, dated as of September 3, 2020, between City of La Quinta ("Customer") and The Bank of New York Mellon Trust Company, N.A., as custodian ("Custodian"). This Agreement covers all investments under the direct authority of the City Council including the Successor Agency to the City of La Quinta Redevelopment Agency, the Housing Authority, and Finance Authority. ARTICLE I DEFINITIONS Whenever used in this Agreement, the following words shall have the meanings set forth below: 1. "Authorized Person" shall be any person, whether or not an officer or employee of Customer, duly authorized by Customer to give Written Instructions on behalf of Customer with respect to one or more accounts, such persons to be designated in a Certificate of Authorized Persons (in the form attached hereto or such other form acceptable to Custodian) which contains a specimen signature of such person. 2. "BNYM Affiliate" shall mean any office, branch or subsidiary of The Bank of New York Mellon Corporation. 3. "Book-Entry System" shall mean the Federal Reserve/Treasury book entry system for receiving and delivering securities, its successors and nominees. 4. "Business Day" shall mean any day on which Custodian and relevant Depositories are open for business. 5. “Depository" shall include the Book-Entry System, the Depository Trust Company, and any other book-entry system, securities depository or clearing agency (and their respective successors and nominees) authorized to act as a book-entry system, securities depository or clearing agency pursuant to applicable law and identified to Customer from time to time. 6. "Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Custodian, or another method or system specified by the Custodian as available for use in connection with its services hereunder. 7. "Securities" shall include, without limitation, common stock and other equity securities, mutual funds, bonds, debentures and other debt securities, notes, mortgages or other obligations, and any instruments representing rights to receive, purchase, or subscribe for the same, or representing any other rights or interests therein (whether represented by a certificate or held in a Depository or on the books of the issuer). 8. "Written Instructions" shall mean written communications actually received by Custodian by letter or Electronic Means. -2- Revised 07-28-2020 ARTICLE II APPOINTMENT OF CUSTODIAN; ACCOUNTS; REPRESENTATIONS AND WARRANTIES 1. Customer hereby appoints Custodian as custodian of all Securities and cash at any time delivered to Custodian during the term of this Agreement and authorizes Custodian to hold Securities in registered form in its name or the name of its nominees. Custodian hereby accepts such appointment and agrees to establish and maintain one or more securities accounts and cash accounts in the name of Customer in which it will hold Securities and cash as provided herein. Such accounts (each, an "Account"; and collectively, the "Accounts") shall be in the name of Customer. The term of this Agreement shall commence on September 3, 2020, and terminate on June 30, 2025 (“Initial Term”). This Agreement may be extended for two (2) additional year(s) upon mutual agreement by both parties (“Extended Term”). 2. Customer hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon Written Instruction given by Customer, that: (a) Customer is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder; (b) This Agreement has been duly authorized, executed and delivered by Customer, constitutes a valid and legally binding obligation of Customer, enforceable in accordance with its terms, and no statute, regulation, rule, order, judgment or contract binding on Customer prohibits Customer's execution or performance of this Agreement; and (c) Either Customer owns the Securities in the Account free and clear of all liens, claims, security interests and encumbrances (except those granted herein) or, if the Securities are owned beneficially by others, Customer has the right to pledge such Securities to the extent necessary to secure Customer's obligations hereunder, free of any right of redemption or prior claim by the beneficial owner. Custodian's security interest pursuant to Article V hereof shall be a first lien and security interest subject to no setoffs, counterclaims or other liens prior to or on a parity with it in favor of any other party (other than specific liens granted preferred status by statute), and Customer shall take any and all additional steps which are required to assure Custodian of such priority and status, including (i) notifying third parties or obtaining their consent to Custodian's security interest, (ii) prohibiting transfer of any interest in a Security from the nominee name in which such investment is registered without the express written consent of Custodian and (iii) insuring it does not take any other action that would cause Custodian’s first lien and security interest hereunder to be adversely affected. ARTICLE III CUSTODY AND RELATED SERVICES 1. Subject to the terms hereof, Customer hereby authorizes Custodian to hold any Securities received by it from time to time for Customer's account. Custodian shall be entitled to utilize Depositories to the extent possible in connection with its performance hereunder. Securities and cash deposited by Custodian in a Depository will be held subject to the rules, terms and conditions of such Depository. 2. Custodian shall furnish Customer with a monthly summary of all account transfers and activity. Although Customer recognizes that it may obtain a broker confirmation or written statement containing comparable information at no additional cost, Customer hereby agrees that confirmations of investments are -3- Revised 07-28-2020 not required to be issued by Custodian for each month in which a monthly statement is rendered. No statement need be rendered for an Account if no activity occurred in such Account during such month. Customer may elect to receive advices, confirmations, reports or statements electronically through the Internet to an e-mail address specified by it for such purpose. By electing to use the Internet for this purpose, Customer acknowledges that such transmissions are not encrypted and therefore are insecure. Customer further acknowledges that there are other risks inherent in communicating through the Internet such as the possibility of virus contamination and disruptions in service, and agrees that Custodian shall not be responsible for any loss, damage or expense suffered or incurred by Customer or any person claiming by or through Customer as a result of the use of such methods. 3. With respect to all Securities held in an Account, Custodian shall, unless otherwise instructed to the contrary: (a) Receive all income and other payments and advise Customer as promptly as practicable of any such amounts due but not paid; (b) Present for payment and receive the amount paid upon all Securities which may mature and advise Customer as promptly as practicable of any such amounts due but not paid; (c) Forward to Customer all information or documents that it may receive from an issuer of Securities which, in the opinion of Custodian, are intended for the beneficial owners of U.S. Securities; (d) Execute, as custodian, any certificates of ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection with the collection of bond and note coupons; (e) Hold directly, or through a Depository, all rights and similar Securities issued with respect to any Securities credited to an Account hereunder; and (f) Endorse for collection checks, drafts or other negotiable instruments. 4. (a) Custodian shall notify Customer of such rights or discretionary actions or of the date or dates by when such rights must be exercised or such action must be taken provided that Custodian has received, from the issuer or the relevant Depository or a nationally or internationally recognized bond or corporate action service to which Custodian subscribes, timely notice of such rights or discretionary corporate action or of the date or dates such rights must be exercised or such action must be taken. Absent actual receipt of such notice, Custodian shall have no liability for failing to so notify Customer and Custodian shall follow timely directions received in writing through one of the Communication processes so specified by the Custodian. (b) Whenever Securities (including, but not limited to, warrants, options, tenders, options to tender or non-mandatory puts or calls) confer optional rights on Customer or provide for discretionary action or alternative courses of action by Customer, Customer shall be responsible for making any decisions relating thereto and for directing Custodian to act. In order for Custodian to act, it must receive Customer's Written Instructions at Custodian's offices, addressed as Custodian may from time to time request, not later than noon (Pacific time) at least two (2) Business Days prior to the last scheduled date to act with respect to such Securities (or such earlier date or time as Custodian may notify Customer). Absent Custodian's timely receipt of such Written Instructions, Custodian shall not be liable for failure to take any action relating to or to exercise any rights conferred by such U.S. Securities. 5. Custodian will make available to Customer proxy voting services upon the request of, and for the jurisdictions selected by, Customer in accordance with terms and conditions to be mutually agreed upon by Custodian and Customer. -4- Revised 07-28-2020 6. Custodian shall promptly advise Customer upon its notification of the partial redemption, partial payment or other action affecting less than all Securities of the relevant class. If Custodian or Depository holds any such Securities in which Customer has an interest as part of a fungible mass, Custodian or such Depository may select the Securities to participate in such partial redemption, partial payment or other action in any non-discriminatory manner that it customarily uses to make such selection. 7. Custodian shall not under any circumstances accept bearer interest coupons which have been stripped from United States federal, state or local government or agency securities unless explicitly agreed to by Custodian in writing. 8. Customer shall be liable for all taxes, assessments, duties and other governmental charges, including any interest or penalty with respect thereto ("Taxes"), with respect to any cash or Securities held on behalf of Customer or any transaction related thereto. Customer shall indemnify Custodian for the amount of any Tax that Custodian or any other withholding agent is required under applicable laws (whether by assessment or otherwise) to pay on behalf of, or in respect of income earned by or payments or distributions made to or for the account of Customer (including any payment of Tax required by reason of an earlier failure to withhold). Custodian shall, or shall instruct the applicable withholding agent to, withhold the amount of any Tax which is required to be withheld under applicable law upon collection of any dividend, interest or other distribution made with respect to any Security and any proceeds or income from the sale, loan or other transfer of any Security. In the event that Custodian is required under applicable law to pay any Tax on behalf of Customer, Custodian is hereby authorized to withdraw cash from any cash account in the amount required to pay such Tax and to use such cash for the timely payment of such Tax in the manner required by applicable law. If the aggregate amount of cash in all cash accounts is not sufficient to pay such Tax, Custodian shall promptly notify Customer of the additional amount of cash (in U.S. Dollars) required, and Customer shall directly deposit such additional amount in the appropriate cash account promptly after receipt of such notice, for use by Custodian as specified herein. In the event that Custodian reasonably believes that Customer is eligible, pursuant to applicable law or to the provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax which is otherwise required to be withheld or paid on behalf of Customer under any applicable law, Custodian shall, or shall instruct the applicable withholding agent to, either withhold or pay such Tax at such reduced rate or refrain from withholding or paying such Tax, as appropriate; provided that Custodian shall have received from Customer all documentary evidence of residence or other qualification for such reduced rate or exemption required to be received under such applicable law or treaty. In the event that Custodian reasonably believes that a reduced rate of, or exemption from, any Tax is obtainable only by means of an application for refund, Custodian shall have no responsibility for the accuracy or validity of any forms or documentation provided by Customer to Custodian hereunder. Customer hereby agrees to indemnify and hold harmless Custodian in respect of any liability arising from any underwithholding or underpayment of any Tax which results from the inaccuracy or invalidity of any such forms or other documentation, and such obligation to indemnify shall be a continuing obligation of Customer, its successors and assigns, notwithstanding the termination of this Agreement. 9. For the purpose of settling Securities and foreign exchange transactions, Customer shall provide Custodian with sufficient immediately available funds for all transactions by such time and date as conditions in the relevant market dictate. As used herein, "sufficient immediately available funds" shall mean either (i) sufficient cash denominated in the currency of Customer's home jurisdiction to purchase the necessary foreign currency, or (ii) sufficient applicable foreign currency to settle the transaction. Custodian shall provide Customer with immediately available funds each day which result from the actual settlement of all sale transactions, based upon advices received by Custodian from its Depositories. Such funds shall be in the currency of Customer's home jurisdiction or such other currency as Customer may specify to Custodian. 10. Any foreign exchange transaction effected by Custodian in connection with this Agreement may be entered with Custodian or a BNYM Affiliate acting as principal or otherwise through customary banking channels. Customer may issue standing Written Instructions with respect to foreign exchange transactions but Custodian may establish rules or limitations concerning any foreign exchange facility made available to Customer. Customer shall bear all risks of holding cash denominated in a foreign currency. Without limiting the -5- Revised 07-28-2020 foregoing, Customer shall bear the risks that rules or procedures imposed by Depositories, exchange controls, asset freezes or other laws, rules, regulations or orders shall prohibit or impose burdens or costs on the transfer to, by or for the account of Customer of property held outside Customer's jurisdiction or denominated in a currency other than its home jurisdiction or the conversion of cash from one currency into another currency. Custodian shall not be obligated to substitute another currency for a currency whose transferability, convertibility or availability has been affected by such law, regulation, rule or procedure. Custodian shall not be liable to Customer for any loss resulting from any of the foregoing events. 11. To the extent that Custodian has agreed to provide pricing or other information services in connection with this Agreement, Custodian is authorized to utilize any vendor (including brokers and dealers of Securities) reasonably believed by Custodian to be reliable to provide such information. Customer understands that certain pricing information with respect to complex financial instruments (e.g., derivatives) may be based on calculated amounts rather than actual market transactions and may not reflect actual market values, and that the variance between such calculated amounts and actual market values may or may not be material. Where vendors do not provide information for particular Securities or other property, an Authorized Person may advise Custodian regarding the fair market value of, or provide other information with respect to, such Securities or property as determined by it in good faith. Custodian shall not be liable for any loss, damage or expense incurred as a result of errors or omissions with respect to any pricing or other information utilized by Custodian hereunder. 12. As an accommodation to Customer, Custodian may provide consolidated recordkeeping services pursuant to which Custodian reflects on Account statements Securities not held in Custodian’s vault or for which Custodian or its nominee is not the registered owner ("Non-Custody Securities"). Non-Custody Securities shall be designated on Custodian's books as "shares not held" or by other similar characterization. Customer acknowledges and agrees that it shall have no security entitlement against Custodian with respect to Non-Custody Securities, that Custodian shall rely, without independent verification, on information provided by Customer regarding Non-Custody Securities (including but not limited to positions and market valuations) and that Custodian shall have no responsibility whatsoever with respect to Non-Custody Securities or the accuracy of any information maintained on Custodian's books or set forth on account statements concerning Non- Custody Securities. 13. With respect to Securities issued in the United States, the Shareholders Communications Act of 1985 (the "Act") requires Custodian to disclose to the issuers, upon their request, the name, address and securities position of its customers who are (a) the "beneficial owners" (as defined in the Act) of the issuer’s Securities, if the beneficial owner does not object to such disclosure, or (b) acting as a "respondent bank" (as defined in the Act) with respect to the Securities. (Under the Act, "respondent banks" do not have the option of objecting to such disclosure upon the issuers' request.) The Act defines a "beneficial owner" as any person who has, or shares, the power to vote a security (pursuant to an agreement or otherwise), or who directs the voting of a security. The Act defines a "respondent bank" as any bank, association or other entity that exercises fiduciary powers which holds securities on behalf of beneficial owners and deposits such securities for safekeeping with a bank, such as Custodian. Under the Act, Customer is either the "beneficial owner" or a "respondent bank." [X] Customer is the "beneficial owner," as defined in the Act, of the Securities to be held by Custodian hereunder. [ ] Customer is not the beneficial owner of the Securities to be held by Custodian, but is acting as a “respondent bank,” as defined in the Act, with respect to the Securities to be held by Custodian hereunder. IF NO BOX IS CHECKED, CUSTODIAN SHALL ASSUME THAT CUSTOMER IS THE BENEFICIAL OWNER OF THE SECURITIES. For beneficial owners of the Securities only: -6- Revised 07-28-2020 [ X ] Customer objects [ ] Customer does not object to the disclosure of its name, address and securities position to any issuer which requests such information pursuant to the Act for the specific purpose of direct communications between such issuer and Customer. IF NO BOX IS CHECKED, CUSTODIAN SHALL RELEASE SUCH INFORMATION UNTIL IT RECEIVES A CONTRARY WRITTEN INSTRUCTION FROM CUSTOMER. 14. The Bank of New York Mellon Corporation is a global financial organization that operates in and provides services and products to clients through its affiliates and subsidiaries located in multiple jurisdictions (the “BNY Mellon Group”). The BNY Mellon Group may (i) centralize in one or more affiliates and subsidiaries certain activities (the “Centralized Functions”), including audit, accounting, administration, risk management, legal, compliance, sales, product communication, relationship management, and the compilation and analysis of information and data regarding Customer (which, for purposes of this provision, includes the name and business contact information for the Customer’s employees and representatives) and the accounts established pursuant to this Agreement (“Customer Information”) and (ii) use third party service providers to store, maintain and process Customer’s Information (“Outsourced Functions”). Notwithstanding anything to the contrary contained elsewhere in this Agreement and solely in connection with the Centralized Functions and/or Outsourced Functions, Customer consents to the disclosure of, and authorize BNY Mellon to disclose, Customer’s Information to (i) other members of the BNY Mellon Group (and their respective officers, directors and employees) and to (ii) third-party service providers (but solely in connection with Outsourced Functions) who are required to maintain the confidentiality of Customer’s Information. In addition, the BNY Mellon Group may aggregate Customer Information with other data collected and/or calculated by the BNY Mellon Group, and the BNY Mellon Group will own all such aggregated data, provided that the BNY Mellon Group shall not distribute the aggregated data in a format that identifies Customer Information with Customer specifically. Customer represents that Customer is authorized to consent to the foregoing and that the disclosure of Customer’s Information in connection with the Centralized Functions and/or Outsourced Functions does not violate any relevant data protection legislation. Customer also consents to the disclosure of Customer’s Information to governmental and regulatory authorities in jurisdictions where the BNY Mellon Group operates and otherwise as required by law. ARTICLE IV PURCHASE AND SALE OF U.S. SECURITIES; CREDITS TO ACCOUNT 1. Promptly after each purchase or sale of Securities by Customer, an Authorized Person shall deliver to Custodian Written Instructions specifying all information necessary for Custodian to settle such purchase or sale. Custodian shall account for all purchases and sales of Securities on the actual settlement date unless otherwise agreed by Custodian. 2. Customer understands that when Custodian is instructed to deliver Securities against payment, delivery of such Securities and receipt of payment therefore may not be completed simultaneously. Customer assumes full responsibility for all credit risks involved in connection with Custodian's delivery of Securities pursuant to instructions of Customer. 3. Custodian may, as a matter of bookkeeping convenience or by separate agreement with Customer, credit the Account with the proceeds from the sale, redemption or other disposition of Securities or interest, dividends or other distributions payable on Securities prior to its actual receipt of final payment therefor. All such credits shall be conditional until Custodian's actual receipt of final payment and may be reversed by Custodian to the extent that final payment is not received. Payment with respect to a transaction will not be "final" until Custodian shall have received immediately available funds which under applicable law or -7- Revised 07-28-2020 rule are irreversible and not subject to any security interest, levy or other encumbrance, and which are specifically applicable to such transaction. ARTICLE V OVERDRAFTS OR INDEBTEDNESS 1. If Custodian in its sole discretion advances funds to Customer or there shall arise for whatever reason an overdraft in the Account (including, without limitation, overdrafts incurred in connection with the settlement of securities transactions or funds transfers) or if Customer is for any other reason indebted to Custodian, Customer agrees to repay Custodian on demand the amount of the advance, overdraft or indebtedness plus accrued interest at a rate ordinarily charged by Custodian to its institutional custody customers. 2. In order to secure repayment of Customer's obligations to Custodian hereunder, Customer hereby pledges and grants to Custodian a continuing lien and security interest in, and right of set-off against, all of Customer’s right, title and interest in and to the Accounts and the Securities, money and other property now or hereafter held in the Accounts (including proceeds thereof), and any other property at any time held by it for the account of Customer. In this regard, Custodian shall be entitled to all the rights and remedies of a pledgee and secured creditor under applicable laws, rules or regulations as then in effect. ARTICLE VI CONCERNING CUSTODIAN 1. (a) Except as otherwise expressly provided herein, Custodian shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys' and accountants' fees (collectively, "Losses"), incurred by or asserted against Customer, except those Losses arising out of the negligence or willful misconduct of Custodian. Custodian shall have no liability whatsoever for the action or inaction of any Depository or issuer of Securities. In no event shall Custodian be liable to Customer or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Agreement. (b) Custodian may enter into subcontracts, agreements and understandings with any BNYM Affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Custodian from its obligations hereunder. (c) Customer agrees to indemnify, save and hold Custodian harmless from and against any and all Losses sustained or incurred by or asserted against Custodian by reason of or as a result of any action or inaction, or arising out of Custodian's performance hereunder, including reasonable fees and expenses of counsel incurred by Custodian in a successful defense of claims by Customer; provided, that Customer shall not indemnify Custodian for those Losses arising out of Custodian's negligence or willful misconduct. This indemnity shall be a continuing obligation of Customer, its successors and assigns, notwithstanding the termination of this Agreement. 2. Without limiting the generality of the foregoing, Custodian shall be under no obligation to inquire into, and shall not be liable for, any losses incurred by Customer or any other person as a result of the receipt or acceptance of fraudulent, forged or invalid U.S. Securities, or Securities which are otherwise not freely transferable or deliverable without encumbrance. 3. Custodian may, with respect to questions of law specifically regarding the Account, obtain the advice of counsel and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with such advice. -8- Revised 07-28-2020 4. Custodian shall be under no obligation to take action to collect any amount payable on Securities in default, or if payment is refused after due demand and presentment. 5. Custodian shall have no duty or responsibility to inquire into, make recommendations, supervise, or determine the suitability of any transactions affecting any Account. 6. Customer shall pay to Custodian the fees and charges quarterly as may be specifically agreed upon from time to time and such other fees and charges at Custodian's standard rates for such services as may be applicable. Customer shall reimburse Custodian for all costs associated with the conversion of Customer's Securities hereunder and the transfer of Securities and records kept in connection with this Agreement in accordance with “Exhibit A” (the Schedule of Compensation”). Customer shall also reimburse Custodian for out of pocket expenses which are a normal incident of the services provided hereunder. Custodian may debit any Account for amounts payable hereunder which remain in arrears for over 60 days. 7. In addition to the rights of Custodian under applicable law and other agreements, at any time when Customer shall not have honored any and all of its obligations to Custodian, whether or not relating to or arising under this Agreement, Custodian shall have the right without notice to Customer to retain or set-off, against such obligations of Customer, any Securities or cash Custodian or a BNYM Affiliate may directly or indirectly hold for the account of Customer, and any obligations (whether matured or unmatured) that Custodian or a BNYM Affiliate may have to Customer. Any such asset of, or obligation to, Customer may be transferred to Custodian and any BNYM Affiliate in order to effect the above rights. 8. (a) Subject to the terms below, Custodian shall be entitled to rely upon any Written Instructions actually received by Custodian and reasonably believed by Custodian to be duly authorized and delivered. (b) [If Custodian receives Written Instructions which appear on their face to have been transmitted by an Authorized Person via (Electronic Means, Customer understands and agrees that Custodian cannot determine the identity of the actual sender of such Written Instructions and that Custodian shall conclusively presume that such Written Instructions have been sent by an Authorized Person. Customer shall be responsible for ensuring that only Authorized Persons transmit such Written Instructions to Custodian and that all Authorized Persons treat applicable user and authorization codes, passwords and/or authentication keys with extreme care.] The Custodian shall have the right to accept and act upon instructions, including funds transfer instructions ("Instructions") given pursuant to this Agreement and delivered using Electronic Means; provided, however, that the Customer shall provide to the Custodian a Certificate of Authorized Persons, which Certificate of Authorized Persons shall be amended by the Customer whenever a person is to be added or deleted from the listing. If the Customer elects to give the Custodian Instructions using Electronic Means and the Custodian in its discretion elects to act upon such Instructions, the Custodian’s understanding of such Instructions shall be deemed controlling. The Customer understands and agrees that the Custodian cannot determine the identity of the actual sender of such Instructions and that the Custodian shall conclusively presume that Instructions that purport to have been sent by an Authorized Person listed on the Certificate of Authorized Persons provided to the Custodian have been sent by such Authorized Person. The Customer shall be responsible for ensuring that only Authorized Persons transmit such Instructions to the Custodian and that the Customer and all Authorized Persons are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Customer. The Custodian shall not be liable for any losses, costs or expenses arising directly or indirectly from the Custodian’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Customer agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Custodian, including without limitation the risk of the Custodian acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Custodian and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Customer; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular -9- Revised 07-28-2020 needs and circumstances; and (iv) to notify the Custodian immediately upon learning of any compromise or unauthorized use of the security procedures. (c) If Customer elects to transmit Written Instructions through an on-line communication system offered by Custodian, Customer's use thereof shall be subject to any terms and conditions contained in a separate written agreement. If Customer elects (with Custodian’s prior consent) to transmit Written Instructions through an on-line communications service owned or operated by a third party, Customer agrees that Custodian shall not be responsible or liable for the reliability or availability of any such service. 9. Upon reasonable request and provided Custodian shall suffer no significant disruption of its normal activities, Customer shall have access to Custodian's books and records relating to the Account during Custodian's normal business hours. Upon reasonable request, copies of any such books and records shall be provided to Customer at Customer's expense. 10. It is understood that Custodian is authorized to supply any information regarding the Account which is required by any law, regulation or rule now or hereafter in effect. 11. Custodian shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; it being understood that Custodian shall use commercially reasonable efforts to resume performance as soon as practicable under the circumstances. 12. Custodian shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, and no covenant or obligation shall be implied against Custodian in connection with this Agreement. ARTICLE VII TERMINATION Either party may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall be not less than ninety (90) days after the date of such notice. Upon termination hereof, Customer shall pay to Custodian such compensation as may be due to Custodian, and shall likewise reimburse Custodian for other amounts payable or reimbursable to Custodian hereunder. Custodian shall follow such reasonable Written Instructions concerning the transfer of custody of records, Securities and other items as Customer shall give; provided, that (a) Custodian shall have no liability for shipping and insurance costs associated therewith, and (b) full payment shall have been made to Custodian of its compensation, costs, expenses and other amounts to which it is entitled hereunder. If any Securities or cash remain in the Account, Custodian may deliver to Customer such Securities and cash. Upon termination of this Agreement, except as otherwise provided herein, all obligations of the parties to each other hereunder shall cease. ARTICLE VIII MISCELLANEOUS 1. Customer agrees to furnish to Custodian a new Certificate of Authorized Persons in the event of any change in the then present Authorized Persons. Until such new Certificate is received, Custodian shall be fully protected in acting upon Written Instructions of such present Authorized Persons. -10- Revised 07-28-2020 2. Any notice or other instrument in writing, authorized or required by this Agreement to be given to Custodian, shall be sufficiently given if addressed to Custodian and received by it at its offices at _4655 Salisbury Road, Suite 300, Jacksonville FL, 32226_ or at such other place as Custodian may from time to time designate in writing. 3. Any notice or other instrument in writing, authorized or required by this Agreement to be given to Customer shall be sufficiently given if addressed to Customer and received by it at its offices at _78495 Calle Tampico, La Quinta, CA 92253 or at such other place as Customer may from time to time designate in writing. 4. Each and every right granted to either party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of either party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by either party of any right preclude any other or future exercise thereof or the exercise of any other right. 5. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations shall not in any way be affected thereby. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided however, that this Agreement shall not be assignable by either party without the written consent of the other. 6. (a) This Agreement shall be interpreted, construed, and governed both as to validity and to performance of the parties in accordance with the laws of the State of California, without regard to conflict of law principles. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Custodian covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. (b) The parties hereto agree that the establishment and maintenance of the Account, and all interests, duties and obligations with respect thereto, shall be governed by the laws of the State of California. (c) For Governmental Entities: To the extent that in any jurisdiction Customer may now or hereafter be entitled to claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, Customer irrevocably agrees not to claim, and it hereby waives, such immunity, to the extent permitted by applicable law. 7. The parties hereto agree that in performing hereunder, Custodian is acting solely on behalf of Customer and no contractual or service relationship shall be deemed to be established hereby between Custodian and any other person. 8. Customer hereby acknowledges that Custodian is subject to federal laws, including the Customer Identification Program (CIP) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which Custodian must obtain, verify and record information that allows Custodian to identify Customer. Accordingly, prior to opening an Account hereunder Custodian will ask Customer to provide certain information including, but not limited to, Customer's name, physical address, tax identification number and other information that will help Custodian to identify and verify Customer’s identity such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information. Customer agrees that Custodian cannot open an Account hereunder unless and until the Custodian verifies the Customer's identity in accordance with its CIP. If Customer is a hedge fund or other type of collective investment vehicle (i) Customer has established and presently maintains an anti-money laundering program (the "Program") reasonably designed to prevent Customer from being used as a conduit for money laundering or other illicit purposes or the financing of terrorist activities, (ii) it is in compliance with the Program and all anti-money laundering laws, regulations and rules now or hereafter in effect that are applicable to it, (iii) it has -11- Revised 07-28-2020 verified the identity of each of its investors and documented the origin of the assets funding each investor’s account with Customer, (iv) it can represent and warrant that, to the best of its knowledge, no investor has invested in Customer for money laundering or other illicit purposes; and (v) it shall promptly notify Custodian in writing if any of the foregoing representations and warranties are no longer true. 9. In the event The Bank of New York Mellon Trust Company, N.A. becomes subject to a proceeding under a U.S. special resolution regime, the transfer of this Agreement (and any interest and obligation in or under, and any property securing, this Agreement) from The Bank of New York Mellon Trust Company, N.A. will be effective to the same extent as the transfer would be effective under the U.S. special resolution regime if this Agreement (and any interest and obligation in or under, and any property securing, this Agreement) were governed by the laws of the United States or a state of the United States. In the event The Bank of New York Mellon Trust Company, N.A. or any of its affiliates becomes subject to a proceeding under a U.S. special resolution regime, default rights with respect to this Agreement that may be exercised against The Bank of New York Mellon Trust Company, N.A. are permitted to be exercised to no greater extent than the default rights could be exercised under the U.S. special resolution regime if this Agreement were governed by the laws of the United States or a state of the United States. 10. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. 11. Prior to the beginning of any services under this Agreement and throughout the duration of the term of this Agreement, Custodian shall procure and maintain, at its sole cost and expense, and submit concurrently with its execution of this Agreement, certificates of insurance as set forth in “Exhibit B” (the “Insurance Requirements”) which is incorporated herein by this reference and expressly made a part hereof. -13- CERTIFICATE OF AUTHORIZED PERSONS (Customer - Written Instructions) The undersigned hereby certifies that he/she is the duly elected and acting agent of City of La Quinta, CA (the "Customer"), and further certifies that the following officers or employees of the Customer have been duly authorized in conformity with the Customer's [Articles of Incorporation and By-Laws/Creation/Authorization Information] to deliver Written Instructions to The Bank of New York Mellon Trust Company, N.A. ("BNYM") pursuant to the Custody Agreement between the Customer and BNYM dated September 3, 2020, and that the signatures appearing opposite their names are true and correct: Jon McMillen City Manager 760-777-7100 Name Title nature Phone Number Karla Romero Finance Direct 760-777-7073 Name Title Si �ture Phone Number Rosemary Hallick Financial Services Analyst 760-777-7058 Name Title Signature Phone Number Name Title Signature Phone Number Name Title Signature Phone Number Name Title Signature Phone Number Name Title Signature Phone Number Name Title Signature Phone Number Name Title Signature Phone Number This certificate supersedes any certificate of authorized individuals you may currently have on file. [corporate seal] 1�- Name_:,n McMillen T� . {City Manger Date.- September 3, 2020 Revised 07-28-2020 -14- Revised 07-28-2020 Exhibit A Schedule of Compensation With the exception of out of pocket expenses provided for in Article VI Section 6 of this Agreement, fees and charges shall be paid to Custodian in installment payments made on a quarterly basis and in an amount identified in Custodian’s schedule of compensation attached hereto for the work tasks performed and properly invoiced by Custodian in conformance with Article III of this Agreement. -15- Revised 07-28-2020 Exhibit B Insurance Requirements E.1 Insurance. Prior to the beginning of and throughout the duration of this Agreement, the following policies shall be maintained and kept in full force and effect providing insurance with minimum limits as indicated below and issued by insurers with A.M. Best ratings of no less than A-VI: Commercial General Liability (at least as broad as ISO CG 0001) $1,000,000 (per occurrence) $2,000,000 (general aggregate) Commercial Auto Liability (at least as broad as ISO CA 0001) $1,000,000 (per accident) Personal Auto Declaration Page if applicable Errors and Omissions Liability $1,000,000 (per claim and aggregate) Workers’ Compensation (per statutory requirements) Must include the following endorsements: Workers Compensation with Waiver of Subrogation Cyber Liability $1,000,000 (per occurrence) $2,000,000 (general aggregate) Custodian shall procure and maintain, at its cost, and submit concurrently with its execution of this Agreement, Commercial General Liability insurance against all claims for injuries against persons or damages to property resulting from Custodian’s acts or omissions rising out of or related to Custodian’s performance under this Agreement. The insurance policy shall contain a severability of interest clause providing that the coverage shall be primary for losses arising out of Custodian’s performance hereunder and neither Customer nor its insurers shall be required to contribute to any such loss. Custodian shall carry automobile liability insurance of $1,000,000 per accident against all claims for injuries against persons or damages to property arising out of the use of any automobile by Custodian, its officers, any person directly or indirectly employed by Custodian, any subcontractor or agent, or anyone for whose acts any of them may be liable, arising directly or indirectly out of or related to Custodian’s performance under this Agreement. The term “automobile” includes, but is not limited to, a land motor vehicle, trailer or semi-trailer designed for travel on public roads. The automobile insurance policy shall contain a severability of interest clause providing that coverage shall be primary for losses arising out of Custodian’s performance hereunder and neither Customer nor its insurers shall be required to contribute to such loss. Professional Liability or Errors and Omissions Insurance as appropriate shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Custodian and “Covered Professional Services” as designated in the policy must specifically include work performed under this agreement. The policy limit shall be no less than $1,000,000 per claim and in the aggregate. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer’s duty to defend. The policy retroactive date shall be on or before the effective date of this agreement. -16- Revised 07-28-2020 Custodian shall carry Workers’ Compensation Insurance in accordance with State Worker’s Compensation laws with employer’s liability limits no less than $1,000,000 per accident or disease. Custodian shall procure and maintain Cyber Liability insurance with limits of $1,000,000 per occurrence/loss which shall include the following coverage: a. Liability arising from the theft, dissemination and/or use of confidential or personally identifiable information; including credit monitoring and regulatory fines arising from such theft, dissemination or use of the confidential information. b. Network security liability arising from the unauthorized use of, access to, or tampering with computer systems. c. Liability arising from the failure of technology products (software) required under the contract for Consultant to properly perform the services intended. d. Electronic Media Liability arising from personal injury, plagiarism or misappropriation of ideas, domain name infringement or improper deep-linking or framing, and infringement or violation of intellectual property rights. e. Liability arising from the failure to render professional services. If coverage is maintained on a claims-made basis, Custodian shall maintain such coverage for an additional period of three (3) years following termination of the contract. Custodian shall provide written notice to Customer within twenty (20) working days if: (1) any of the required insurance policies is terminated; (2) the limits of any of the required polices are reduced; or (3) the deductible or self-insured retention is increased. In the event any of said policies of insurance are cancelled, Custodian shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Exhibit to the Contract Officer. The procuring of such insurance certificates evidencing the same shall not be construed as a limitation of Custodian’s obligation to indemnify Customer, its officers, employees, contractors, subcontractors, or agents. E.2 Remedies. In addition to any other remedies Customer may have if Custodian fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, Customer may, at its sole option: a. Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under this Agreement. b. Order Custodian to stop work under this Agreement and/or withhold any payment(s) which become due to Custodian hereunder until Custodian demonstrates compliance with the requirements hereof. c. Terminate this Agreement. Exercise of any of the above remedies, however, is an alternative to any other remedies Customer may have. The above remedies are not the exclusive remedies for Custodian’s failure to maintain or secure appropriate policies or endorsements. Nothing herein contained shall be construed as limiting in any way the extent to which Custodian may be held responsible for payments of damages to persons or property resulting from Custodian’s or its subcontractors’ performance of work under this Agreement. E.3 General Conditions Pertaining to Provisions of Insurance Coverage by Custodian. Custodian and Customer agree to the following with respect to insurance provided by Custodian: -17- Revised 07-28-2020 1. No liability insurance coverage provided to comply with this Agreement shall prohibit Custodian, or Custodian’s employees, or agents, from waiving the right of subrogation prior to a loss. Custodian agrees to waive subrogation rights against Customer regardless of the applicability of any insurance proceeds, and to require all contractors and subcontractors to do likewise. 2. All insurance coverage and limits provided by Custodian and available or applicable to this Agreement are intended to apply to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to Customer or its operations limits the application of such insurance coverage. 3. None of the coverages required herein will be in compliance with these requirements if they include any limiting endorsement of any kind that has not been first submitted to Customer and approved of in writing. 4. No liability policy shall contain any provision or definition that would serve to eliminate so-called “third party action over” claims, including any exclusion for bodily injury to an employee of the insured or of any contractor or subcontractor. 5. All coverage types and limits required are subject to approval, modification and additional requirements by the Customer, as the need arises. Custodian shall not make any reductions in scope of coverage (e.g. elimination of contractual liability or reduction of discovery period) that may affect Customer’s protection without Customer’s prior written consent. 6. Proof of compliance with these insurance requirements, consisting of certificates of insurance evidencing all the coverages required. In the event such proof of any insurance is not delivered as required, or in the event such insurance is canceled at any time and no replacement coverage is provided, Customer has the right, but not the duty, to obtain any insurance it deems necessary to protect its interests under this or any other agreement and to pay the premium. Any premium so paid by Customer shall be charged to and promptly paid by Custodian or deducted from sums due Custodian, at Customer option. 7. It is acknowledged by the parties of this agreement that all insurance coverage required to be provided by Custodian or any subcontractor, is intended to apply first and on a primary, non-contributing basis in relation to any other insurance or self-insurance available to Customer. 8. Custodian agrees to ensure that subcontractors, and any other party involved with the project that is brought onto or involved in the project by Custodian, provide the same minimum insurance coverage required of Custodian. Custodian agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Custodian agrees that upon request, all agreements with subcontractors and others engaged in the project will be submitted to Customer for review. 9. For purposes of applying insurance coverage only, this Agreement will be deemed to have been executed immediately upon any party hereto taking any steps that can be deemed to be in furtherance of or towards performance of this Agreement. 10. Custodian acknowledges and agrees that any actual or alleged failure on the part of Customer to inform Custodian of non-compliance with any insurance requirement in no way imposes any additional obligations on Customer nor does it waive any rights hereunder in this or any other regard. 11. Custodian will renew the required coverage annually as long as Customer, or its employees or agents face an exposure from operations of any type pursuant to this agreement. This obligation applies whether the agreement is canceled or terminated for any reason. Termination of this obligation is not effective until Customer executes a written statement to that effect. -18- Revised 07-28-2020 12. Custodian shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. 13. The provisions of any workers’ compensation or similar act will not limit the obligations of Custodian under this agreement. Custodian expressly agrees not to use any statutory immunity defenses under such laws with respect to Customer, its employees, officials, and agents. 14. Requirements of specific coverage features, or limits contained in this section are not intended as limitations on coverage, limits or other requirements nor as a waiver of any coverage normally provided by any given policy. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be limiting or all-inclusive. 15. These insurance requirements are intended to be separate and distinct from any other provision in this Agreement and are intended by the parties here to be interpreted as such. 16. The requirements in this Exhibit supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impairs the provisions of this Exhibit. 17. Custodian agrees to be responsible for ensuring that no contract used by any party involved in any way with the project reserves the right to charge Customer or Custodian for the cost of additional insurance coverage required by this agreement. Any such provisions are to be deleted with reference to Customer. It is not the intent of Customer to reimburse any third party for the cost of complying with these requirements. There shall be no recourse against Customer for payment of premiums or other amounts with respect thereto. 18. The Customer shall receive from Custodian an annual listing of all BNY Mellon Insurance Coverages.