Ordinance No. 11,776ORDINANCE NO. 11,776
AN ORDINANCE OF THE CITY COUNCIL Ol"THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING A DOMESTIC CUSTODY AGREEMEN"I'WITI-1.11'
MORGAN CHASE BANK, NA, FOR USE IN CONNEC'110N WITH 'THE
OPENING OF ONE OR MORE CASH AND SECURI'l", IES ACCOUNTS AND
TI-IE CONDUCT OF SUCH OTHER TRANSACTIONS REFERRED TO
,rHEREIN; MAKING 01 TIER PROVISIONS RELATED THERETO; AND
PROVIDING FORT1,-IE EFFECTIVE DA'I`E THEREOF.
* * * * * * * * * * * * * * * * * * * * * * * k* * * * * * * * * * * * 4, * * * * * 4, * * * * * * * * * * * * * * * * * * * 44 * * * * * * * * * * * * * * * 4, * *
BE IT ORDAINED BY TI CITY COUNCIL OF THE, CITY OF BAYTOWN, TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes a
Domestic Custody Agreement with JP Morgan Chase Bank, NA, for use in connection with the
opening of one or more cash and securities accounts and the conduct of such other transactions
referred to therein. A copy of said agreement is attached hereto as Exhibit "A" and incorporated
herein for all, intents and purposes.
Section 2: That the City Council of the City of Baytown authorizes payment to JI)
Morgan Chase Bank, NA, in accordance with the agreement authorized in Section I hereof,
Section 3: This ordinance shall take effect immediately from and after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ and PASSED by the affirmative vote of
of Baytown this the I Vr' day of October, 2011.
CIA BRYSCH, Cit�lerk
API-)ROVED AS To F'ORM:
10 ACID RAMIREZ, SR,, Cart torney
7t 5
\\Cobs ry I \1ep 1\Karen\1`j1es\C ityCt)tiiicil\Ordiiiaticcs\2011\(,)ctober
City Council of the City
1-1. DONCARLOS, Mayor
ARM
Form Doniestic Custody Agreement (NY Uw) hj�y 2010
TABLE OF CONTENTS
DomesticCustody Agreement .................................. ............................... 4
1. INTENTION OF THE PARTIES; DEFINITIONS ............. ............................... 4
1.1 Intention of the Parties 4
1.2 Definitions; Interpretation 4
2. What J.P. Morgan is Required to Do ..................... ............................... 6
2.1
Set Up Accounts
6
2.2
Cash Account
7
2.3
Segregation of Assets; Nominee Name
7
2.4
Settlement of Transactions
8
2.5
[Reserved.]
8
2.6
Actual Settlement Date Accounting
8
2.7
Income Collection
8
2.8
Miscellaneous Administrative Duties
9
2.9
Corporate Actions
9
2.10
Class Action Litigation
9
2.11
Proxies
10
2.12
Statements of Account
10
2.13
Access to J.P. Morgan's Records
11
2.14
[Reserved.]
11
2.15
Notification
11
3. Instructions .................................................... .............................11
3.1 Acting on Instructions; Method of Instruction and Unclear Instructions 11
3.2 Verification and Security Procedures 11
3.3 Instructions Contrary to Law /Market Practice 12
3.4 Cut -Off Times 12
3.5 Electronic Access 12
4. Fees, Expenses and Other Amounts Owing to J.P. Morgan ........................ 12
4.1 Fees and Expenses 12
4.2 Overdrafts 12
4.3 J.P. Morgan's Right Over Securities; Set -off 13
5. Securities Depositories ...................................... .............................13
5.1 Use of Securities Depositories 13
6. Additional Provisions ........................................ .............................14
6.1 Representations of the Customer and J.P. Morgan 14
6.2 The Customer is Liable to J.P. Morgan Even if it is Acting for Another Person 14
7. When J.P. Morgan is Liable to the Customer ........... .............................15
Form Domestic Custody Agreement (NY Law) July 2010
7.1 Standard of Care; Liability 15
7.2 Force Majeure 15
7.3 J.P. Morgan May Consult With Counsel 16
7.4 J.P. Morgan Provides Diverse Financial Services and May Generate Profits as a
Result 16
7.5 Assets Held Outside J.P. Morgan's Control 16
7.6 Ancillary Services 16
8. Taxation ........................................................ .............................17
8.1 Tax Obligations 17
9. Termination ................................................... .............................17
9.1 Term and Termination
17
9.2 Exit Procedure
18
10. Miscellaneous ................................................. .............................18
10.1 Notifications
18
10.2 Successors and Assigns
18
10.3 Entire Agreement
19
10.4 Insurance
19
10.5 Security Holding Disclosure
19
10.6 USA PATRIOT Act Disclosure
19
10.7 Governing Law and Jurisdiction
19
10.8 Severability; Waiver; and Survival
20
10.9 Confidentiality
20
10.10 Counterparts
21
10.11 No Third Party Beneficiaries
21
SCHEDULE 1 Form of Board Resolution
22
ANNEX A Electronic Access
23
Form Domestic Custody Agreement (NY Law) July 2010
Domestic Custody Agreement
This Agreement, dated , 20_, is between JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION ( "J.P. Morgan "), with a place of business at 1111 Polaris Parkway,
Suite 3J, Columbus, OH 43240; and [ 1
(the "Customer ") with a place of business at f 1.
1. INTENTION OF THE PARTIES; DEFINITIONS
1.1 Intention of the Parties
(a) This Agreement sets out the terms on which J.P. Morgan will be providing custodial,
settlement and other associated services to the Customer. J.P. Morgan will be
responsible for the performance of only those duties set forth in this Agreement.
(b) The Customer acknowledges that J.P. Morgan is not providing any legal, tax or
investment advice in providing the services under this Agreement.
(c) It is the intention of the parties that the services offered by J.P. Morgan under this
Agreement with respect to the custody of Securities and related settlement
services will be limited to Securities that are issued in the United States ( "U.S. ")
by an issuer that is organized under the laws of the U.S. or any state thereof, or
that are both traded in the U.S. and eligible for deposit in a U.S. Securities
Depository.
(d) The terms and conditions of this Agreement are applicable only to the services
which are specified in this Agreement. Other services are subject to separate terms
and conditions, which J.P. Morgan will make available to the Customer upon
request.
1.2 Definitions; Interpretation
(a) As used herein, the following terms have the meaning hereinafter stated.
"Account" has the meaning set forth in Section 2.1 of this Agreement.
"Affiliate" means an entity controlling, controlled by, or under common control
with, J.P. Morgan or the Customer as the case may be.
"Applicable Law" means any applicable statute, treaty, rule, regulation or
common law and any applicable decree, injunction, judgment, order, formal
interpretation or ruling issued by a court or governmental entity.
"Authorized Person" means any person who has been designated by written notice
from the Customer in the form as provided by J.P. Morgan (or by written notice in the
form as provided by J.P. Morgan from any agent designated by the Customer, including,
without limitation, an investment manager) to act on behalf of the Customer under this
Agreement and any person who has been given an access code by a security
administrator appointed by the Customer which allows the provision of Instructions.
Such persons will continue to be Authorized Persons until such time as J.P. Morgan
receives and has had reasonable time to act upon Instructions from the Customer (or its
agent) that any such person is no longer an Authorized Person.
Form Domestic Custody Agreement (NY Law) July 2010
"Cash Account" has the meaning set forth in Section 2.1(a)(ii).
"Confidential Information" means and includes all non - public information concerning
the Customer or the Accounts which J.P. Morgan receives in the course of providing
services under this Agreement. Nevertheless, the term Confidential Information shall not
include information which is or becomes available to the general public by means other
than J.P. Morgan's breach of the terms of this Agreement or information which J.P.
Morgan obtains on a non - confidential basis from a person who is not known to be subject
to any obligation of confidence to any person with respect to that information.
"Corporate Action" means any subscription right, bonus issue, stock repurchase plan,
redemption, exchange, tender offer, or similar matter with respect to a Financial Asset in
the Securities Account that requires discretionary action by the beneficial owner of the
Security, but does not include rights with respect to class action litigation or proxy voting.
"Entitlement Holder" means the person named on the records of a Securities
Intermediary as the person having a Securities Entitlement against the Securities
Intermediary.
"Financial Asset" means a Security and refers, as the context requires, either to
the asset itself or to the means by which a person's claim to it is evidenced, including a
Security, a security certificate or a Securities Entitlement. "Financial Asset" does not
include cash.
"Instruction" means an instruction that has been verified in accordance with a
Security Procedure or, if no Security Procedure is applicable, which J.P. Morgan
believes in good faith to have been given by an Authorized Person.
"J.P. Morgan Indemnitees" means J.P. Morgan, its Affiliates its nominees,
directors, officers, employees and agents.
"Liabilities" means any liabilities, losses, claims, costs, damages, penalties, fines,
obligations, taxes (other than taxes based solely on J.P. Morgan's income),or expenses
of any kind whatsoever (including, without limitation, reasonable attorneys',
accountants', consultants' or experts' fees and disbursements).
"Securities" means shares, stocks, debentures, bonds, notes or other like
obligations, whether issued in certificated or uncertificated form, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase or
subscribe for the same that are commonly traded or dealt in on securities exchanges or
financial markets or other obligations of an issuer, or shares, participations and
interests in an issuer recognized in the country in which it is issued or dealt in as a
medium for investment and any other property as may be acceptable to J.P. Morgan for
the Securities Account.
"Securities Account" means each Securities custody account on J.P. Morgan's
records to which Financial Assets are or may be credited under this Agreement.
"Securities Depository" means any securities depository, dematerialized book entry
system or similar system for the central handling of Securities.
"Securities Entitlement" means the rights and property interests of an Entitlement
Holder with respect to a Financial Asset as set forth in Part 5 of Article 8 of the Uniform
Commercial Code of the State of New York, as the same may be amended from time to
time.
Form Domestic Custody Agreement (NY Law) July 2010
"Securities Intermediary" means J.P. Morgan, a Securities Depository and any other
financial institution which in the ordinary course of business maintains Securities custody
accounts for others and acts in that capacity.
"Security Procedure" means security procedure to be followed by the Customer upon
the issuance of an Instruction and /or by J.P. Morgan upon the receipt of an Instruction, so
as to enable J.P. Morgan to verify that such Instruction is authorized, as set forth in
service level documentation in effect from time to time between the parties with respect
to the services set forth in this Agreement, or as otherwise agreed in writing by the
parties. A Security Procedure may, without limitation, involve the use of algorithms,
codes, passwords, encryption or telephone call backs, and may be updated by J.P. Morgan
from time to time upon notice to the Customer. The Customer acknowledges that the
Security Procedure is designed to verify the authenticity of, and not detect errors in,
Instructions. For the avoidance of doubt, the parties agree that a SWIFT message issued in
the name of the Customer through any third party utility agreed upon by the parties as
being a method for providing Instructions and authenticated in accordance with that
utility's customary procedures shall be deemed to be an authorized Instruction.
(b) Headings are for reference and convenience only and are not intended to affect
interpretation.
(c) References to Articles and Sections are to Articles and Sections of this Agreement and
references to sub - sections and paragraphs are to sub - sections of the Sections and
paragraphs of the sub - sections in which they appear.
(d) Unless the context requires otherwise, references in this Agreement to "persons" shall
include legal as well as natural entities; references importing the singular shall
include the plural (and vice versa); use of the generic masculine pronoun shall include
the feminine; use of the term "including" shall be deemed to mean "including but not
limited to," and references to appendices and numbered sections shall be to such
addenda and provisions herein; all such addenda are hereby incorporated in this
Agreement by reference.
2. What J.P. Morgan is Required to Do
2.1 Set Up Accounts
(a) J.P. Morgan will establish and maintain the following accounts ( "Accounts "):
(i} one or more Securities Accounts in the name of the Customer (or in another
name requested by the Customer that is acceptable to J.P. Morgan) for
Financial Assets, which may be held by J.P. Morgan or a Securities Depository
for J.P. Morgan on behalf of the Customer, including as an Entitlement Holder;
and
one or more accounts in the name of the Customer (or in another name
requested by the Customer that is acceptable to J.P. Morgan) ( "Cash
Account ") for any and all cash received by or on behalf of J.P. Morgan for the
account of the Customer.
(b) At the request of the Customer, additional Accounts may be opened in the future,
and such additional Accounts shall be subject to the terms of this Agreement.
(c) In the event that the Customer requests the opening of any additional Account for
the purpose of holding collateral pledged by the Customer to a securities exchange,
Form Domestic Custody Agreement (NY Law) July 2010
clearing corporation, or other central counterparty (a "Counterparty ") to secure
trading activity by the Customer, or the pledge to a Counterparty of cash or
individual Securities held in an Account, that Account (or the pledged cash or
Securities) shall be subject to the collateral arrangements in effect between J.P.
Morgan and the Counterparty in addition to the terms of this Agreement.
(d) J.P. Morgan's obligation to open Accounts pursuant to Section 2.1(a) is conditional
upon J.P. Morgan receiving such of the following documents as J.P. Morgan may
require:
(i) a certified copy of the Customer's constitutional documents as
currently in force;
(ii) evidence reasonably satisfactory to J.P. Morgan of the due
authorization and execution of this Agreement by the Customer (for
example by a certified copy of a resolution of the Customer's board
of directors or equivalent governing body, substantially in the form
set out in Schedule 1);
(iii) J.P. Morgan's standard form fund manager mandate completed by
the fund manager designated by the Customer; and
(iv) in the case of any Account opened in a name not that of the
Customer, documentation with respect to that name similar to
that set forth in sub - sections (i) - (iii).
(e) J.P. Morgan reserves the right to reverse any transactions that were credited to the
Accounts due to mis- postings and other similar causes.
2.2 Cash Account
(a) Any amount standing to the credit of the Cash Account is a debt due from J.P.
Morgan to Customer as banker. Except as otherwise provided in Instructions
acceptable to J.P. Morgan, all cash held in the Cash Account will be deposited
during the period it is credited to the Accounts in one or more deposit accounts at
J.P. Morgan.
(b) Any amounts credited by J.P. Morgan to the Cash Account on the basis of a notice
or an interim credit from a third party, may be reversed if J.P. Morgan does not
receive final payment in a timely manner. J.P. Morgan will notify the Customer
promptly of any such reversal.
(c) With J.P. Morgan's consent, the Customer may use as the Cash Account a separate
demand deposit account established by the Customer at J.P. Morgan which is
electronically linked to the Securities Account.
2.3 Segregation of Assets; Nominee Name
(a) J.P. Morgan will identify in its books that Financial Assets credited to the
Customer's Securities Account belong to the Customer (except as otherwise may be
agreed by J.P. Morgan and the Customer).
(b) J.P. Morgan is authorized, in its discretion:
(i) to hold in bearer form, such Financial Assets as are customarily held in bearer
form or are delivered to J.P. Morgan in bearer form;
7
Form Domestic Custody Agreement (NY Law) July 2010
(ii) to hold Securities in or deposit Securities with any Securities Depository;
(iii) to hold Securities in omnibus accounts on a fungible basis and to accept
delivery of Securities of the same class and denomination as those deposited
with J.P. Morgan; and
(iv) to register in the name of the Customer, J.P. Morgan, a Securities Depository,
or their respective nominees, such Financial Assets as are customarily held in
registered form.
2.4 Settlement of Transactions
Subject to Article 3 and Section 4.2 of this Agreement, J.P. Morgan will act in
accordance with Instructions with respect to settlement of transactions. Settlement
will be conducted in accordance with prevailing standards of the market in which the
transaction occurs. Without limiting the generality of the foregoing, the Customer
authorizes J.P. Morgan to deliver Securities or payment in accordance with applicable
market practice in advance of receipt or settlement of consideration expected in
connection with such delivery or payment, and the Customer acknowledges and agrees
that such action alone will not of itself constitute negligence, fraud, or willful
misconduct of J.P. Morgan, and the risk of loss arising from any such action will be
borne by the Customer. In the case of the failure of the Customer's counterparty (or
other appropriate party) to deliver the expected consideration as agreed, J.P. Morgan
will contact the counterparty to seek settlement and will notify the Customer of such
failure. If the Customer's counterparty continues to fail to deliver the expected
consideration, J.P. Morgan will provide information reasonably requested by the
Customer that J.P. Morgan has in its possession to allow the Customer to enforce rights
that the Customer has against the Customer's counterparty, but J.P. Morgan will not be
obliged to institute legal proceedings, file a proof of claim in any insolvency proceeding
or take any similar action.
2.5 [Reserved.]
2.6 Actual Settlement Date Accounting
J.P. Morgan will post the transaction on the date on which the cash or Financial Assets
received as consideration for the transaction is actually received and settled by J.P.
Morgan.
2.7 Income Collection
(a) J.P. Morgan will monitor information publicly available in the applicable market
about forthcoming income payments on the Financial Assets, and will promptly
notify the Customer of such information.
(b) Income on Financial Assets, net of any taxes withheld by J.P. Morgan or any third
party, will be credited only after actual receipt and reconciliation by J.P. Morgan.
(c) J.P. Morgan will use reasonable efforts to contact appropriate parties to collect
unpaid interest, dividends or redemption proceeds and notify the Customer of the
late payment, but J.P. Morgan will not be obliged to file any formal notice of
default, institute legal proceedings, file a proof of claim in any insolvency
proceeding or take any similar action.
Form Domestic Custody Ageement (NY Law) July 2010
2.8 Miscellaneous Administrative Duties
(a) Until J.P. Morgan receives Instructions to the contrary, J.P. Morgan will:
(i) present all Financial Assets for which J.P. Morgan has received notice of a call
for redemption or that have otherwise matured, and all income and interest
coupons and other income items that call for payment upon presentation;
(ii) execute in the name of the Customer such certificates as may be required to
obtain payment in respect of Financial Assets; and
(iii) exchange interim or temporary documents of title held in the Securities
Account for definitive documents of title.
(b) In the event that, as a result of holding of Financial Assets in an omnibus account,
the Customer receives fractional interests in Financial Assets arising out of a
Corporate Action or class action litigation, J.P. Morgan will credit the Customer
with the amount of cash it would have received had the Financial Assets not been
held in an omnibus account, and the Customer shall relinquish to J.P. Morgan its
interest in such fractional interests.
(c) If some, but not all, of an outstanding class of Financial Assets is called for
redemption, J.P. Morgan may allot the amount redeemed among the respective
beneficial holders of such a class of Financial Assets on a pro rata basis or in a
similar manner J.P. Morgan deems fair and equitable.
2.9 Corporate Actions
(a) J.P. Morgan will act in accordance with local market practice to obtain information
concerning Corporate Actions that is publicly available in the local market. J.P.
Morgan also will review information obtained from sources to which it subscribes
for information concerning such Corporate Actions. J.P. Morgan will promptly
provide that information (or summaries that reflect the material points concerning
the applicable Corporate Action) to the Customer or its Authorized Person.
(b) J.P. Morgan will act in accordance with the Customer's Instructions in relation to
such Corporate Actions. If the Customer fails to provide J.P. Morgan with timely
Instructions with respect to any Corporate Action, neither J.P. Morgan nor its
nominees will take any action in relation to that Corporate Action, except as
otherwise agreed in writing by J.P. Morgan and the Customer or as may be set forth
by J.P. Morgan as a default action in the notification it provides under Section
2.9(a) with respect to that Corporate Action.
2.10 Class Action Litigation
Any notices received by J.P. Morgan's corporate actions department about settled
securities class action litigation that requires action by affected owners of the
underlying Financial Assets will be promptly notified to the Customer if J.P. Morgan,
using reasonable care and diligence in the circumstances, identifies that the Customer
was a shareholder and held the relevant Financial Assets in custody with J.P. Morgan at
the relevant time. J.P. Morgan will not make filings in the name of the Customer in
respect to such notifications except as otherwise agreed in writing between the
Customer and J.P. Morgan. The services set forth in this Section 2.10 are available
only in certain markets, details of which are available from J.P. Morgan on request.
Form Domestic Custody Agreement (NY Law) July 2010
2.11 Proxies
(a) J.P. Morgan will monitor information distributed to holders of Financial Assets
about upcoming shareholder meetings, promptly notify the Customer of such
information and, subject to Section 2.11(c), act in accordance with the Customer's
Instructions in relation to such meetings (the "Proxy Voting Service ").
(b) The Proxy Voting Service is available only in certain markets, details of which are
available from J.P. Morgan on request. Provision of the Proxy Voting Service is
conditional upon receipt by J.P. Morgan of a duly completed enrolment form as
well as additional documentation that may be required for certain markets.
(c) The Proxy Voting Service does not include physical attendance at shareholder
meetings. Requests for physical attendance at shareholder meetings can be made
but they will be evaluated and agreed to by J.P. Morgan on a case by case basis.
(d) The Customer acknowledges that the provision of the Proxy Voting Service may be
precluded or restricted under a variety of circumstances. These circumstances
include, but are not limited to:
(i) the Financial Assets being on loan or out for registration;
(ii) the pendency of conversion or another corporate action;
(iii) the Financial Assets being held in a margin or collateral account at J.P.
Morgan or another bank or broker, or otherwise in a manner which affects
voting;
(iv) local market regulations or practices, or restrictions by the issuer; and
(v) J.P. Morgan being required to vote all shares held for a particular issue for all
of J.P. Morgan's customers on a net basis (i.e., a net yes or no vote based on
voting instructions received from all its customers). Where this is the case,
J.P. Morgan will notify the Customer.
2.12 Statements of Account
(a) J.P. Morgan will provide the Customer with a statement of account for each
Account, identifying cash and Financial Assets held in the Account and any
transfers to and from the Account. Statements of account may be delivered
electronically or on -line over the Internet and are deemed delivered when sent
electronically or posted on the Internet. The Customer will review its statement of
account and give J.P. Morgan written notice of (i) any suspected error or omission
or (ii) non - receipt of a statement of account within a reasonable time after the
statement of accounts is sent or made available to the Customer, as the case may
be.
(b) The Customer acknowledges that information available to it electronically with
respect to transactions posted after the close of the prior business day may not be
accurate due to mis- postings, delays in updating Account records, and other causes.
J.P. Morgan will not be liable for any loss or damage arising out of any such
information accessed electronically that is subsequently updated or corrected by
the close of business on the first business day after the original transaction was
posted.
m
Form Domestic Custody Agreement (NY Law) July 2010
2.13 Access to J.P. Morgan's Records
(a) J.P. Morgan will allow the Customer's auditors and independent public accountants
such reasonable access to the records of J.P. Morgan relating to the Accounts as is
required in connection with their examination of books and records pertaining to
the Customer's affairs.
(b) J.P. Morgan will, upon reasonable written notice, allow the Customer reasonable
access during normal working hours to the records of J.P. Morgan relating to the
Accounts. J. P. Morgan may impose reasonable restrictions on the number of
individuals allowed access, the frequency and length of such access, and the scope
of the records made available. The Customer shall reimburse J.P. Morgan for the
reasonable cost of copying, collating and researching archived information.
2.14 [Reserved.]
2.15 Notification
If the Customer has agreed to access information concerning the Accounts through J.P.
Morgan's website, J.P. Morgan may make any notifications required under this
Agreement by posting it on the website.
3. Instructions
3.1 Acting on Instructions; Method of Instruction and Unclear Instructions
(a) The Customer authorizes J.P. Morgan to accept, rely upon and /or act upon any
Instructions received by it without inquiry. To the extent permitted under
Applicable Law, the Customer will reimburse the J.P. Morgan Indemnitees for
expenses incurred in defending against third party claims asserted against the J.P.
Morgan Indemnitees as a result of any action or omission taken in accordance with
any Instruction.
(b) To the extent possible, instructions to J. P. Morgan shall be sent via electronic
instruction or trade information system acceptable to J.P. Morgan or via facsimile
transmission. Where reasonably practicable, the Customer will use automated and
electronic methods of sending Instructions.
(c) J.P. Morgan shall promptly notify an Authorized Person if J.P. Morgan determines
that an Instruction does not contain all information reasonably necessary for J.P.
Morgan to carry out the Instruction. J.P. Morgan may decline to act upon an
Instruction if it does not receive clarification or confirmation satisfactory to it. J.P.
Morgan will not be liable for any loss arising from any reasonable delay in carrying
out any such Instruction while it seeks information, clarification or confirmation or
in declining to act upon any Instruction for which it does not receive clarification
satisfactory to it.
3.2 Verification and Security Procedures
(a) J.P. Morgan and the Customer shall comply with any applicable Security Procedures
with respect to the delivery or authentication of Instructions and shall ensure that
any codes, passwords or similar devices are reasonably safeguarded.
it
Form Domestic Custody Agreement (NY Law) July 2010
(b) Either party may record any of their telephone communications.
3.3 Instructions Contrary to Law /Market Practice
J.P. Morgan need not act upon Instructions which it reasonably believes to be contrary
to law, regulation or market practice, and J.P. Morgan shall be under no duty to
investigate whether any Instructions comply with Applicable Law or market practice.
In the event J.P. Morgan does not act upon such Instructions, J.P. Morgan will notify
the Customer where reasonably practicable.
3.4 Cut -Off Times
J.P. Morgan has established cut -off times for receipt of Instructions, which will be
made available to the Customer. If J.P. Morgan receives an Instruction after its
established cut -off time, J.P. Morgan will attempt to act upon the Instruction on the
day requested if J.P. Morgan deems it practicable to do so or otherwise as soon as
practicable after that day.
3.5 Electronic Access
Access by the Customer to certain applications or products of J.P. Morgan via J.P.
Morgan's web site or otherwise shall be governed by this Agreement and the terms and
conditions set forth in Annex A.
4. Fees, Expenses and Other Amounts Owing to J.P. Morgan
4.1 Fees and Expenses
The Customer will pay J.P. Morgan for its services under this Agreement such fees as
may be agreed upon in writing from time to time, together with J.P. Morgan's
reasonable out -of- pocket or incidental expenses, including, but not limited to, legal
fees and tax or related fees incidental to processing charged directly or indirectly by
governmental authorities, issuers, or their agents, to the extent permitted under
Applicable Law. Invoices will be payable within thirty (30) days of the date of the
invoice. If the Customer disputes an invoice it shall nevertheless pay on or before the
date that payment is due such portion of the invoice that is not subject to a bona fide
dispute. J.P. Morgan may deduct amounts invoiced from the Cash Account except to
the extent that the Customer has objected to the invoice within thirty (30) days of the
date of the invoice (or such other period as the parties may agree in writing). Without
prejudice to J.P. Morgan's other rights, J.P. Morgan reserves the right to charge
interest on overdue amounts from the due date until actual payment at such rate as
J.P. Morgan customarily charges for similar overdue amounts.
4.2 Overdrafts
If a debit to the Cash Account results in a debit balance, then J.P. Morgan may, in its
discretion, (i) advance an amount equal to the overdraft, (ii) refuse to settle in whole
or in part the transaction causing such debit balance, or (iii) if any such transaction is
posted to the Securities Account, reverse any such posting. If J.P. Morgan elects to
make such an advance, the advance will be deemed a loan to the Customer, payable on
demand, bearing interest at the applicable rate charged by J.P. Morgan from time to
time, for such overdrafts, from the date of such advance to the date of payment
`irk
Form Domestic Custody Agreement (NY Law) July 2010
(including after the date any judgment may be entered against the Customer with
respect to any overdraft) and otherwise on the terms on which J.P. Morgan makes
similar overdrafts available from time to time. No prior action or course of dealing on
J.P. Morgan's part with respect to the settlement of transactions on the Customer's
behalf will be asserted by the Customer against J.P. Morgan for J.P. Morgan's refusal to
make advances to the Cash Account or to settle any transaction for which the Customer
does not have sufficient available funds in the Account. The Customer shall be deemed
to be in default with respect to any such advance upon the occurrence of any event of
the type specified in section 365(e)(1) of the U.S. Bankruptcy Code, as amended from
time to time.
4.3 J.P. Morgan's Right Over Securities; Set -off
(a) Without prejudice to J.P. Morgan's rights under Applicable Law, to the extent J.P.
Morgan or an Affiliate has advanced funds on the Customer's behalf in connection
with the settlement of purchases or sales of Financial Assets for the Securities
Account (such advance, "Credit Liability"), J.P. Morgan and its Affiliates shall have,
and the Customer grants to J.P. Morgan a security interest in and a lien on the
Financial Assets which are the subject of such purchase or sale, until J.P. Morgan
or the Affiliate has been repaid the amount of such Credit Liability by the Customer
and J.P. Morgan's security interest in such Financial Assets shall be released upon
the Customer's repayment of such Credit Liability to J.P. Morgan or the Affiliate.
J.P. Morgan shall be entitled without notice to the Customer, to withhold delivery
of such Financial Assets, sell or otherwise realize any of such Financial Assets and
to apply the proceeds and any other monies credited to the Cash Account in
satisfaction of such Credit Liability.
(b) Without prejudice to J.P. Morgan's rights under Applicable Law, J.P. Morgan may
set off against any Credit Liability of the Customer to J.P. Morgan or any of its
Affiliates any amount in any currency standing to the credit of any of the
Customer's accounts (whether deposit or otherwise) with any J.P. Morgan branch
or office or with any Affiliate of J.P. Morgan. For this purpose, J.P. Morgan shall
be entitled to accelerate the maturity of any fixed term deposits.
5. Securities Depositories
5.1 Use of Securities Depositories
(a) J.P. Morgan may deposit Securities with, and hold Securities in any Securities
Depository on such terms as such Securities Depository customarily operates and
the Customer will provide J.P. Morgan with such documentation or
acknowledgements that J.P. Morgan may require to hold the Financial Assets in
such Securities Depository.
(b) J.P. Morgan is not responsible for the selection or monitoring of any Securities
Depository and will not be liable for any act or omission by (or the insolvency of)
any Securities Depository. In the event the Customer incurs a loss due to the
negligence, willful misconduct, or insolvency of a Securities Depository, J.P.
Morgan will make reasonable efforts, in its discretion, to seek recovery from the
Securities Depository, but J.P. Morgan will not be obligated to institute legal
13
Form Domestic Custody Agreement (NY Law) July 2010
proceedings, file proof of claim in any insolvency proceeding, or take any similar
action.
6. Additional Provisions
6.1 Representations of the Customer and J.P. Morgan
(a) The Customer represents, warrants and covenants that (i) it has full authority and
power, and has obtained all necessary authorizations and consents, to deposit and
control the Financial Assets and cash in the Accounts, to use J.P. Morgan as its
custodian in accordance with the terms of this Agreement, to borrow money (either
short term or intraday borrowings in order to settle transactions prior to receipt of
covering funds), and grant a lien over Financial Assets as contemplated by Section
4.3; (ii) assuming execution and delivery of this Agreement by J.P. Morgan, this
Agreement is the Customer's legal, valid and binding obligation, enforceable
against the Customer in accordance with its terms and it has full power and
authority to enter into and has taken all necessary corporate action to authorize
the execution of this Agreement; (iii) it has not relied on any oral or written
representation made by J.P. Morgan or any person on its behalf, and acknowledges
that this Agreement sets out to the fullest extent the duties of J.P. Morgan; (iv) it
is a resident of the United States and shall notify J.P. Morgan of any changes in
residency; and (v) the Financial Assets and cash deposited in the Accounts are not
subject to any encumbrance or security interest whatsoever and the Customer
undertakes that, so long as Liabilities are outstanding, it will not create or permit
to subsist any encumbrance or security interest over such Financial Assets or cash.
J.P. Morgan may rely upon the certification of such other facts as may be required
to administer J.P. Morgan's obligations under this Agreement and, to the extent
permitted under Applicable Law, the Customer shall reimburse J.P. Morgan for
expenses incurred in defending against any third party claims against J.P. Morgan
arising directly or indirectly from any such certifications.
(b) J.P. Morgan represents and warrants that (i) assuming execution and delivery of
this Agreement by the Customer, this Agreement is J.P. Morgan's legal, valid and
binding obligation, enforceable against J.P. Morgan in accordance with its terms
and (ii) it has full power and authority to enter into and has taken all necessary
corporate action to authorize the execution of this Agreement.
6.2 The Customer is Liable to J.P. Morgan Even if it is Acting for Another
Person
If the Customer is acting as an agent or for another person as envisaged in Section
2.1(a) in respect of any transaction, cash or Financial Asset, J.P. Morgan nevertheless
will treat the Customer as its principal for all purposes under this Agreement. In this
regard, the Customer will be liable to J.P. Morgan as a principal in respect of any
transactions relating to the Account. The foregoing will not affect any rights J.P.
Morgan might have against the Customer's principal or the other person envisaged by
Section 2.1(a).
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Form Domestic Custody Agreement (NY Law) July 2010
7. When J.P. Morgan is Liable to the Customer
7.1 Standard of Care; Liability
(a) J.P. Morgan will use reasonable care in performing its obligations under this
Agreement. J.P. Morgan will not be in violation of this Agreement with respect to
any matter as to which it has satisfied its obligation of reasonable care.
(b) J.P. Morgan will be liable for the Customer's direct damages to the extent they
result from J.P. Morgan's fraud, negligence or willful misconduct in performing its
duties as set out in this Agreement. Nevertheless, under no circumstances will J.P.
Morgan be liable for any indirect, incidental, consequential or special damages
(including, without limitation, lost profits) of any form incurred by any person or
entity, whether or not foreseeable and regardless of the type of action in which
such a claim may be brought, with respect to the Accounts, J.P. Morgan's
performance under this Agreement, or J.P. Morgan's role as custodian.
(c) To the extent permitted under Applicable Law, the Customer shall reimburse the
J.P. Morgan Indemnitees for expenses incurred by any of the J.P. Morgan
Indemnitees in defending against third party claims against J.P. Morgan with
respect to J.P. Morgan's performance under this Agreement where the J.P. Morgan
Indemnitees were not negligent and did not engage in fraud or willful misconduct.
(d) Without limiting Subsections 7.1(a), (b) or (c), the Customer agrees that J.P.
Morgan provides no service in relation to, and therefore has no duty or
responsibility to:
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or the
retention of Financial Assets;
(iii) advise the Customer or an Authorized Person regarding any default in the
payment of principal or income of any Security other than as provided in
Section 2.7(b) of this Agreement; and
(iv) evaluate or report to the Customer or an Authorized Person regarding the
financial condition of any broker, agent or other party to which J.P. Morgan is
instructed to deliver Financial Assets or cash.
7.2 Force Majeure
J.P. Morgan will maintain and update from time to time business continuation and
disaster recovery procedures with respect to its custody business that it determines
from time to time meet reasonable commercial standards. J.P. Morgan will have no
liability, however, for any damage, loss, expense or liability of any nature that the
Customer may suffer or incur, caused by an act of God, fire, flood, civil or labor
disturbance, war, terrorism, act of any governmental authority or other act or threat
of any authority (de jure or de facto), legal constraint, fraud or forgery (other than on
the part of J.P. Morgan or its employees), malfunction of equipment or software
(except where such malfunction is primarily and directly attributable to J.P. Morgan's
negligence in maintaining the equipment or software), failure of or the effect of rules
or operations of any external funds transfer system, inability to obtain or interruption
15
Form Domestic Custody Agreement (NY Law) July 2010
of external communications facilities, or any other cause beyond the reasonable
control of J.P. Morgan (including, without limitation, the non - availability of
appropriate foreign exchange).
7.3 J.P. Morgan May Consult With Counsel
J.P. Morgan will be entitled to rely on, and may act upon the advice of professional
advisors in relation to matters of law, regulation or market practice (which may be the
professional advisors of the Customer), and will not be liable to the Customer under
this Agreement for any action taken or omitted pursuant to such advice.
7.4 J.P. Morgan Provides Diverse Financial Services and May Generate Profits
as a Result
The Customer hereby authorizes J.P. Morgan to act under this Agreement
notwithstanding that: (a) J.P. Morgan or any of its divisions, branches or Affiliates may
have a material interest in transactions entered into by the Customer with respect to
the Account or that circumstances are such that J.P. Morgan may have a potential
conflict of duty or interest, including the fact that J.P. Morgan or its Affiliates may act
as a market maker in the Financial Assets to which Instructions relate, provide
brokerage services to other customers, act as financial adviser to the issuer of such
Financial Assets, act in the same transaction as agent for more than one customer,
have a material interest in the issue of the Financial Assets; or earn profits from any of
the activities listed herein and (b) J.P. Morgan or any of its divisions, branches or
Affiliates may be in possession of information tending to show that the Instructions
received may not be in the best interests of the Customer. J.P. Morgan is not under any
duty to disclose any such information.
7.5 Assets Held Outside J.P. Morgan's Control
J.P. Morgan will not be obliged to (a) hold Financial Assets or cash with any person not
agreed to by J. P. Morgan or (b) register or record Financial Assets in the name of any
person not agreed to by J.P. Morgan. Furthermore, J.P. Morgan will not be obliged to
register or record on J.P. Morgan's records Financial Assets held outside J.P. Morgan's
control.
7.6 Ancillary Services
J.P. Morgan may use third party delivery services and providers of information
regarding matters such as pricing, proxy voting, corporate actions and class action
litigation and use local agents to provide extraordinary services such as attendance at
annual meetings of issuers of Securities. Although J.P. Morgan will use reasonable care
in the selection and retention of such third parry providers and local agents, it will not
be responsible for any errors or omissions made by them in providing the relevant
information or services.
16
Form Domestic Custody Agreement (NY Law) July 2010
8. Taxation
8.1 Tax Obligations
(a) The Customer will pay or reimburse J.P. Morgan, and confirms that J.P. Morgan is
authorized to deduct from any cash received or credited to the Cash Account any
taxes or levies required by any revenue or governmental authority for whatever
reason in respect of the Customers Accounts.
(b) The Customer will provide to J.P. Morgan such certifications, declarations,
documentation, and information as it may require in connection with taxation, and
warrants that, when given, this information is true and correct in every respect,
not misleading in any way, and contains all material information. The Customer
undertakes to notify J.P. Morgan immediately if any information requires updating
or correcting. J.P. Morgan provides no service of controlling or monitoring, and
therefore has no duty in respect of, or liability for any taxes, penalties, interest or
additions to tax, payable or paid that result from:
(i) the inaccurate completion of documents by the Customer or any third party;
(ii) the provision to J.P. Morgan or a third party of inaccurate or misleading
information by the Customer or any third party;
(iii) the withholding of material information by the Customer or any third party; or
(iv) any delay by any revenue authority or any other cause beyond J. P. Morgan's
control.
(c) If J.P. Morgan does not receive appropriate certifications, documentation and
information then, as and when appropriate and required, additional tax shall be
deducted from all income received in respect of the Financial Assets issued
(including, but not limited to, United States non - resident alien tax and /or backup
withholding tax).
(d) The Customer will be responsible in all events for the timely payment of all taxes
relating to the Financial Assets in the Securities Account; provided, however, that
J.P. Morgan will be responsible for any penalty or additions to tax due solely as a
result of J.P. Morgan's negligent acts or omissions with respect to paying or
withholding tax or reporting interest, dividend or other income paid or credited to
the Cash Account.
9. Termination
9.1 Term and Termination
(a) The initial term of this Agreement shall be for a period ending December 31, 2012.
Following the initial term, the Customer may terminate this Agreement on sixty (60)
days' written notice to J.P. Morgan and J.P. Morgan may terminate this Agreement
on one hundred and eighty (180) days' written notice to the Customer.
(b) Notwithstanding Section 9.1(a):
(i) Either party may terminate this Agreement immediately on written notice to
the other party in the event that a material breach of this Agreement by the
17
Form Domestic Custody Agreement (NY Law) July 2010
other party has not been cured within thirty (30) days of that party being
given written notice of the material breach;
(ii) Either party may terminate this Agreement immediately on written notice to
the other party upon the other party being declared bankrupt, entering into a
composition with creditors, obtaining a suspension of payment, being put
under court controlled management or being the subject of a similar measure;
(iii) J.P. Morgan may terminate this Agreement on sixty (60) days' written notice
to the Customer in the event that J.P. Morgan reasonably determines that the
Customer has ceased to satisfy J.P. Morgan's customary credit requirements;
and
(iv) [Reserved.]
9.2 Exit Procedure
The Customer will provide J.P. Morgan full details of the persons to whom J.P. Morgan
must deliver Financial Assets and cash within a reasonable period before the effective
time of termination of this Agreement. If the Customer fails to provide such details in
a timely manner, J.P. Morgan shall be entitled to continue to be paid fees under this
Agreement until such time as it is able to deliver the Financial Assets and cash to a
successor custodian, but J. P. Morgan may take such steps as it reasonably determines
to be necessary to protect itself following the effective time of termination, including
ceasing to provide transaction settlement services in the event that J.P. Morgan is
unwilling to assume any related credit risk. J.P. Morgan will in any event be entitled
to deduct any amounts owing to it prior to delivery of the Financial Assets and cash
(and, accordingly, J.P. Morgan will be entitled to sell Financial Assets and apply the
sale proceeds in satisfaction of amounts owing to it). The Customer will reimburse J.P.
Morgan promptly for all out -of- pocket expenses it incurs in delivering Financial Assets
upon termination. Termination will not affect any of the liabilities either party owes
to the other arising under this Agreement prior to such termination.
1o. Miscellaneous
10.1 Notifications
Notices pursuant to Section 9 of this Agreement shall be sent or served by registered
mail, overnight delivery services, such as Federal Express (FedEx) or United Parcel
Service (UPS), etc., courier services or hand delivery to the address of the respective
parties as set out on the first page of this Agreement, unless notice of a new address is
given to the other party in writing.
10.2 Successors and Assigns
This Agreement will be binding on each of the parties' successors and assigns, but the
parties agree that neither party can assign any of its rights or obligations under this
Agreement without the prior written consent of the other party, which consent will not
be unreasonably withheld or delayed; except J.P. Morgan may assign this Agreement
without the Customer's consent to (a) any Affiliate or subsidiary of J.P. Morgan or (b)
in connection with a merger, reorganization, stock sale or sale of all or substantially all
of J.P. Morgan's custody business.
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Form Domestic Cwtody Agreement (NY Law) July 2010
10.3 Entire Agreement
This Agreement, including the Schedules, Exhibits and Riders (and any separate
agreement which J.P. Morgan and the Customer may enter into with respect to any
Cash Account), sets out the entire Agreement between the parties in connection with
the subject matter hereof, and this Agreement supersedes any other agreement,
statement or representation relating to custody, whether oral or written. Amendments
must be in writing and, except where this Agreement provides for amendments by
notice from J.P. Morgan, signed by both parties.
10.4 Insurance
The Customer acknowledges that J.P. Morgan will not be required to maintain any
insurance coverage specifically for the benefit of the Customer. J.P. Morgan will,
however, provide summary information regarding its own general insurance coverage to
the Customer upon written request.
10.5 Security Holding Disclosure
With respect to Securities and Exchange Commission Rule 14b -2 under The U.S.
Shareholder Communications Act regarding disclosure of beneficial owners to issuers of
Securities, J.P. Morgan is instructed not to disclose the name, address or Security
positions of the Customer in response to shareholder communications requests
regarding the Account.
10.6 USA PATRIOT Act Disclosure
Section 326 of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 ( "USA PATRIOT Act ") requires
J.P. Morgan to implement reasonable procedures to verify the identity of any person
that opens a new Account with it. Accordingly, the Customer acknowledges that
Section 326 of the USA PATRIOT Act and J. P. Morgan's identity verification procedures
require J.P. Morgan to obtain information which may be used to confirm the
Customer's identity, including without limitation the Customer's name, address and
organizational documents ( "identifying information "). The Customer may also be
asked to provide information about its financial status, such as its current audited and
unaudited financial statements. The Customer agrees to provide J.P. Morgan with and
consents to J.P. Morgan obtaining from third parties any such identifying and financial
information required as a condition of opening an account with or using any service
provided by J.P. Morgan.
10.7 Governing Law and Jurisdiction
This Agreement will be construed, regulated and administered under the laws of the
United States or State of New York, as applicable, without regard to New York's
principles regarding conflict of laws, except that the foregoing shall not reduce any
statutory right to choose New York law or forum. The United States District Court for
the Southern District of Texas will have the sole and exclusive jurisdiction over any
lawsuit or other judicial proceeding relating to or arising from this Agreement. If that
court lacks federal subject matter jurisdiction, the District Court of the State of Texas,
located in the county in which the Customer maintains its principal place of business,
will have sole and exclusive jurisdiction. Either of these courts will have the proper
19
Form Domestic Cmicdy Agreement (NY Law) July 2010
venue for any such lawsuit or judicial proceeding, and the parties waive any objection
to venue or their convenience as a forum. The parties agree to submit to the
jurisdiction of any of the courts specified and to accept service of process to vest
personal jurisdiction over them in any of these courts. The parties further hereby
knowingly, voluntarily and intentionally waive, to the fullest extent permitted by
Applicable Law, any right to a trial by jury with respect to any such lawsuit or judicial
proceeding arising or relating to this Agreement or the transactions contemplated
hereby. To the extent that in any jurisdiction the 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, the Customer acknowledges that
such immunity will not apply with respect to claims arising out of the breach of this
Agreement.
10.8 Severability; Waiver; and Survival
(a) If one or more provisions of this Agreement are held invalid, illegal or
unenforceable in any respect on the basis of any particular circumstances or in any
jurisdiction, the validity, legality and enforceability of such provision or provisions
under other circumstances or in other jurisdictions and of the remaining provisions
will not in any way be affected or impaired.
(b) Except as otherwise provided herein, no failure or delay on the part of either party
in exercising any power or right under this Agreement operates as a waiver, nor
does any single or partial exercise of any power or right preclude any other or
further exercise, or the exercise of any other power or right. No waiver by a party
of any provision of this Agreement, or waiver of any breach or default, is effective
unless it is in writing and signed by the party against whom the waiver is to be
enforced.
(c) The parties' rights, protections, and remedies under this Agreement shall survive
its termination.
10.9 Confidentiality
(a) Subject to Section 10.9(b), J.P. Morgan will hold all Confidential Information in
confidence and will not disclose any Confidential Information except as may be
required by Applicable Law, a regulator with jurisdiction over J.P. Morgan's
business, or with the consent of the Customer.
(b) The Customer authorizes J.P. Morgan to disclose Confidential Information to:
(i) any subcontractor, agent, Securities Depository, securities exchange, broker,
third party agent, proxy solicitor, issuer, or any other person that J.P. Morgan
believes it is reasonably required in connection with J.P. Morgan's provision
of relevant services under this Agreement;
(ii) its professional advisors, auditors or public accountants;
(iii) its Affiliates and branches; and
(iv) any revenue authority or any governmental entity in relation to the processing
of any tax relief claim.
zo
Form Domestic Custody Agreement (NY Law) July 2010
(c) Except as otherwise required by Applicable Law or as needed to enforce the terms
of this Agreement, the parties shall hold the terms and conditions, including,
without limitation, any commercial terms, of this Agreement in confidence.
10.10 Counterparts
This Agreement may be executed in several counterparts each of which will be deemed
to be an original and together will constitute one and the same agreement.
10.11 No Third Party Beneficiaries
A person who is not a party to this Agreement shall have no right to enforce any term
of this Agreement.
JPMORGAN CHASE BANK, N.A.
By: By:
Name:
Title:
Date:
21
Form Domestic Custody Agreement (NY Law) July 2010
Name:
Title:
Date:
SCHEDULE 1
Form of Board Resolution
To: JPMorgan Chase Bank, N.A.
........................... 20...
We hereby certify that the following is a true copy of the minutes of the Board of
Directorsof ........................................................... ..............................�
(the "Company ") which was duly called and held on ........ ...............................
20....... and at which a duly qualified quorum was present throughout and entitled to
vote.
1. There was produced to the meeting a form of Custody Agreement provided by
JPMorgan Chase Bank, N.A. ( "J.P. Morgan ") for use in connection with the
opening of one or more cash and securities accounts and the conduct of such
other transactions between the Company and J.P. Morgan as referred to
therein. The form of Custody Agreement produced had been completed by an
officer of the Company, and in particular it was noted that details of the
Authorized Persons (as defined therein) and details of persons authorized to
give instructions on behalf of the Company had been provided to J.P. Morgan.
Details of any Fund Managers and Advisers had also been provided to J.P.
Morgan. The indemnities given to J.P. Morgan in the Custody Agreement were
also noted. The meeting considered the form of the Custody Agreement.
2. IT WAS RESOLVED that the form of Custody Agreement (together with the
Schedule and Appendices), completed in the manner and form produced at the
meeting, be and is hereby approved and
that............................................................. ...............................
........................'" be and he /she is hereby authorized, for and on behalf of
the Company, to sign and deliver the same together with such changes and
amendments thereto as he /she may in his /her sole discretion think fit.
......................................... ............................... Director
....................................... ............................... Secretary
Name of Company in full.
VIN
Form Domestic Custody Agreement (NY Law) July 2010
ANNEX A
Electronic Access
1. J.P. Morgan may permit the Customer and its Authorized Persons to access certain
electronic systems, applications and Data (as defined below) in connection with the Agreement
(collectively, the "Products "). J.P. Morgan may, from time to time, introduce new features to
the Products or otherwise modify or delete existing features of the Products in its sole
discretion. J.P. Morgan shall endeavor to give the Customer reasonable notice of its
termination or suspension of access to the Products, but may do so immediately if J.P. Morgan
determines, in its sole discretion, that providing access to the Products would violate
Applicable Law or that the security or integrity of the Products is at risk. Access to the
Products shall be subject to the Security Procedures.
2. In consideration of the fees paid by the Customer to J.P. Morgan and subject to any
applicable software license addendum in relation to J.P. Morgan -owned or sublicensed
software provided for a particular application and Applicable Law, J.P. Morgan grants to the
Customer a non - exclusive, non - transferable, limited and revocable license to use the Products
and the information and data made available through the Products (the "Data ") for the
Customer's internal business use only. The Customer may download the Data and print out hard
copies for its reference, provided that it does not remove any copyright or other notices
contained therein. The license granted herein will permit use by Customer's Authorized Person,
provided that such use shall be in compliance with the Agreement, including this Annex.
3. The Customer acknowledges that there are security, corruption, transaction
error and access availability risks associated with using open networks such as the internet, and
the Customer hereby expressly assumes such risks. The Customer is solely responsible for
obtaining, maintaining and operating all software (including antivirus software, anti - spyware
software, and other internet security software) and personnel necessary for the Customer to
access and use the Products. All such software must be interoperable with J.P. Morgan's
software. Each of the Customer and J.P. Morgan shall be responsible for the proper
functioning, maintenance and security of its own systems, services, software and other
equipment.
4. In cases where J. P. Morgan's web site is unexpectedly down or otherwise
unavailable, J.P. Morgan shall, absent a force majeure event, provide other appropriate means
for the Customer or its Authorized Persons to instruct J.P. Morgan or obtain reports from J.P.
Morgan. J.P. Morgan shall not be liable for any Liabilities arising out of Customer's use of,
access to or inability to use the Products via J.P. Morgan's web site in the absence of J.P.
Morgan's gross negligence or willful misconduct.
5. Use of the Products may be monitored, tracked, and recorded. In using the
Products, the Customer hereby expressly consents to such monitoring, tracking, and recording.
Individuals and organizations should have no expectation of privacy unless local law,
regulation, or contract provides otherwise. J.P. Morgan shall own all right, title and interest in
the data reflecting Customer usage of the Products or J.P. Morgan's web site (including, but
not limited to, general usage data and aggregated transaction data). J.P. Morgan may use and
sublicense data obtained by it regarding the Customer's use of the Products or J.P. Morgan's
website, as long as J.P. Morgan does not disclose to others that the Customer was the source of
such data or the details of individual transactions effected using the Products or web site.
23
Form Domestic Custody Agreement (NY Law) July 2010
6. The Customer shall not knowingly use the Products to transmit (i) any virus,
worm, or destructive element or any programs or data that may be reasonably expected to
interfere with or disrupt the Products or servers connected to the Products; (ii) material that
violates the rights of another, including but not limited to the intellectual property rights of
another; and (iii) "junk mail ", "spam ", "chain letters" or unsolicited mass distribution of e-
mail.
7. The Customer shall promptly and accurately designate in writing to J.P. Morgan
the geographic location of its users upon written request. The Customer further represents and
warrants to J.P. Morgan that the Customer shall not access the service from any jurisdiction
which J.P. Morgan informs the Customer or where the Customer has actual knowledge that the
service is not authorized for use due to local regulations or laws, including applicable software
export rules and regulations. Prior to submitting any document which designates the persons
authorized to act on the Customer's behalf, the Customer shall obtain from each individual
referred to in such document all necessary consents to enable J.P. Morgan to process the data
set out therein for the purposes of providing the Products.
8. The Customer will be subject to and shall comply with all applicable laws, rules
and regulations concerning restricting collection, use, disclosure, processing and free
movement of the Data (collectively, the "Privacy Regulations "). The Privacy Regulations may
include, as applicable, the Federal "Privacy of Consumer Financial Information" Regulation (12
CFR Part 30), as amended from time to time, issued pursuant to Section 504 of the Gramm -
Leach- Bliley Act of 1999 (15 U.S.C. §6801, et seq.), the Health and Insurance Portability and
Accountability Act of 1996 (42 U.S.C. §1320d), The Data Protection Act 1998 and Directive
95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection
of individuals with regard to processing of personal data and the free movement of such data.
9. The Customer shall be responsible for the compliance of its Authorized Persons
with the terms of the Agreement, including this Annex.
24
Form Domestic Custody Ageement (NY Law) July 2010