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HomeMy WebLinkAboutC29640A & B - Banking & Custody SvcsContract No.C29640A & B CITY OF PALM DESERT OFFICE OF THE CITY TREASURER STAFF REPORT REQUEST: THAT THE PALM DESERT CITY COUNCIL AWARD BANKING AND CUSTODY SERVICES CONTRACTS TO UNION BANK FOR A TERM OF FIVE YEARS, WITH AN OPTION TO RENEW FOR AN ADDITIONAL TWO YEARS. DATE: Thursday, March 11, 2010 SUBMITTED BY: Paul Gibson, CCMT, City Treasurer CONTENTS: 1. Comparison of Banking/Custody RFP Bids 2. Union Bank Banking Services Contract Documents 3. Union Bank Custody Services Contract Documents Recommendation By minute motion, that the Palm Desert City Council: (1) award banking and custody services contracts to Union Bank for a term of five years, with an option to renew for an additional two years; and (2) authorize the City Treasurer to execute said banking and custody services contracts on behalf of the City. Committee Recommendation The Audit, Investment, and Finance Committee, at its February 23, 2010, meeting, voted 11-0 to recommend that the City Council award the City's banking and custody services contracts to Union Bank. Background The City of Palm Desert ("City") issued a Request for Proposals ("RFP") for Banking and Custody Services. The RFP specified a contract term of five years, with an option to renew for an additional two years. The City provided local notice by placing an advertisement in the Desert Sun. Union Bank, Wells Fargo Bank, JPMorgan Chase, Staff Report Award of Banking and Custody Services Contracts March 11, 2010 Page 2 of 3 U.S. Bank, PNC Global Investment Services, and Bank of the West requested a copy of the RFP. Union Bank ("Union") and JPMorgan Chase ("Morgan") submitted completed RFPs to the City within the required timeframe. The other four banks declined to bid (US Bank and Wells Fargo confirmed this in writing). Staff also requested a bid from Bank of America (no response). Union Bank submitted the lowest -cost bid. Union offered banking services for a direct fee of $2,127 per month, and custody services for a minimum annual fee of $4,100. Union also offered a $2,000 retention bonus that could be used to offset service costs. JPMorgan Chase, in contrast, offered banking services for a direct fee of $2,261 per month, and custody services for a minimum annual fee of $30,500. No bonus was offered. Morgan's bid was uncompetitive due to its high cost of custody services. Union Bank is the second-largest and second -oldest bank headquartered in California. Union submitted a reference list of 8 California local agencies (cities, counties, special districts) -- all of which were excellent. Union has 751 local agency clients in California, and holds $3.7 billion of California public funds deposits. JPMorgan Chase is a New York -headquartered bank, and one of the oldest banks in the United States. Morgan offered 5 out-of-state references (Arizona, Utah, Colorado) - - all of which were excellent. Morgan has 2 local agency clients in California, and holds $30 million of California public funds deposits. Union provides custody services for 300 municipal clients, and has a municipal custody asset base of $50 billion. Morgan provides custody services for 227 municipal clients, and has a municipal custody asset base of $12 billion. Union offered more favorable hours for wiring funds, and has a wires services unit in California (same time zone). Morgan's wire services unit is in Florida. The Morgan bank officer who was designated to be the daily relationship contact for the City, was not present during Morgan's interview with the Palm Desert Finance Subcommittee on Banking Services. In contrast, the Union bank officer who is currently the daily relationship contact for the City not only was present during Union's interview with the Subcommittee, but directed the bank's presentation. Morgan failed to sign and guarantee the pricing in its Custody Service Bid. According to the City Attorney, this constituted a non -responsive bid. The Morgan RFP response also contained a surprising number of errors for a bank of its stature. There were no equivalent errors or omissions in Union's RFP response. Staff Report Award of Banking and Custody Services Contracts March 11, 2010 Page 3 of 3 California Government Code Sections 53649 and 53682 authorize local agency treasurers to enter into agreements with depositories concerning the terms and conditions for any public funds that are being deposited. Staff therefore requests that the City Council authorize the City Treasurer to execute all contract documentation with Union Bank for banking and custody services. Fiscal Impact There is no fiscal impact as a result of this action. Submitted By: Paul Gibson, CCMT, City Treasurer Approved By: Approved By: ohlmuth, City Manager BY RDA 5-D ON •�� aof VERIFIED BY 2,0d original on file with City Clerk's Office Thomas Jeffr City Treasurer CITY COUNCIL ON APPROVED DENTED RECEIVED OTHER MEET G DATE 3 I AYES NOES: On ABSENT: LC ABSTAIN: VC) VERIFIED BY: ik / G//Y1 Original on File with City �Ierk' U s Office BY HOUSG AUTH 5- CD ON t(•� VERIFIED BY: Original on file with Ci y Clerk's Ofli c ('.)1,1BY FIN AUTH 6- ON. e�_.. . VF±RIFED BY:. CD-CIt i} I on ;io, with City Clerk's Office Leverage = Gross Assets / Shareholders' Equity /a wsiueyoa!N tuawAed 1Igaa olny 0. § ƒ § f / / K K ` o / aok.0ms/�//\ _ D. 0 Cacncn \ sesso1 1!p8a0 J04 uo!s!Aoad le}ol anuana l le�ol \ a e o / / \00 CO ® w w a • / / / 'co 2 ƒ \ w-66 CO 0 0 « e : c e*/== =7 $ W• a ® 0 Co.) / f f 3 •_ & /5 �c5c5q $/ 277E m —, \ CD e 0 k m ) { / / 0 73 \ 0 § \ \ $ Financial Statistics (3Q09) r 0 sougej }IpaJO w.101- sayoueJ8 pasaa wled Jo ON \ �ƒ o iv / N.)\ o 0 Morgan submitted AZ, UT, and CO references. m 0) `e aouasaid ssaulsn8 AN0031V3 39)129AV SINJWWOO Sa18 JO NOSI IVdV1OO S301A2I9S AaO1Sl0 ONV ONINNVS -- 060Z d32I Leverage = Gross Assets / Shareholders' Equity suogdO pund damns m 0 (0 v CD ( • C n M. m' m Cn 0) O cD Gams ;yDluienO i(}Illoed slyt Hof se6JegC r D thin seo!AJas aim io uolteoo1 00 O 3 w. fD 7 n cn CD 2 c c 5 � (D • (D — I a) N CD y 0) plaH stlsodaa spund ollgnd VC io }unowV ea Jo uol;ezlleie;shoo 0 N N seeueya }}eap.18n0 :103 60 oaa (33) eie2i tlpa o s6u!Uie3 C C -0 v C —I 7 7 E� 1 7 7 N = = WO p T. o ai w o (On 1-1 v o is = c+ o v v * 0 0 = w o m 7 7 (Q - K K a o C C 7 z z-<-<� n m 0.,O 0 y y N Ds) • o 0 Morgan charges $6 for every LAIF wire. Morgan did not directly answer the question. O 1 cri CD 1 O (D 1 1 C X 1. c. n r-F C O - h v 3 m m §. 3 0 y (D .O 1 O (D 3 W M. • D 0 O 0o coQO� o' - • 0 m' 7 0 Both banks charge for the use of Uncollected Funds. ECR "soft earnings" offset the cost of bank services. A2IOD31Va co C zp • z 3DV2i3AV W z SINJWWOO „a3ZI1d11dvo O c • v m mZ m rcn 3A2:13S32I aid Sale JO NOSI2IVdVIO0 RFP 2010 -- BANKING AND CUSTODY SERVICES Leverage = Gross Assets / Shareholders' Equity 2 CO c) & w 5 % 3 $ 0 m $ / 0 a 0 0 \ � C go 0 //c ■ 0 . 0 . a) 3 0 0§¥ x a/ & 0 2 0. a,=o \(0 0Im- \E 0 c a o � �a) =a a Cl) & & U � � k = -0 CO = 2\ CD 0 ®k CD o CO m ° c > = 2 2 k�($ �� ƒ�� a 0 n CO o W CD 0 '< / & $ � ° / = 7 m 69 2/ \ o } k o �- 0 A 0 e \ o I q / > $ -69 2 2m q"En EA z �� fk �0� C. 7oG�=o ? ƒ / > 0 m o o =\ al8 S30IA2I3S AaO1Sl0 Sll NO ONI3I Id 3H1331NV2IVf19 2IO NOIS ION aia N /02IOIN co // /f Q f \ \ x Cr 0 0 § E7Ecn // cp o 3 ) (I) /0. /o CD 0 \ c / £ 0 0 § k \ \ ] % 0 % 0 § A2IOJ31V0 3 9V2I3AV S1N3W WO3 \ \ S018 JO NOSI 1VdINOD / \ RFP 2010 -- BANKING AND CUSTODY SERVICES BANK FILE NUMBER TREASURER FILE NUMBER AGENT OF BANK FILE NUMBER AUDITOR NUMBER CONTRACT FOR DEPOSIT OF MONEYS THIS CONTRACT, relating to the deposit of moneys, is made as of the day of , year , between Type Contract Signers name here ("Treasurer"), acting in his or her official capacity as Type Title Here of Type Depositor Here ("Depositor"), and Union Bank, N.A. ("Bank"), as depository and having a shareholder's equity of on Select Month , Day, year The Treasurer proposes to deposit in the Bank from time to time moneys in his or her custody in an aggregate amount on deposit at any one time not to exceed the total shareholder's equity of the Bank and said moneys will be deposited subject to Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code of the State of California. The Government Code requires the Treasurer to enter into a contract setting forth the conditions upon which said moneys are deposited with the Bank. In the judgment of the Treasurer, this contract is to the public advantage. The parties agree as follows: 1. This contract cancels and supersedes any previous contracts between the Treasurer and the Bank relating to the method of collateralization of Depositor's deposits. 2. This contract, but not deposits then held hereunder, is subject to termination by the Treasurer or the Bank at any time upon 30 days' written notice. Deposits may be withdrawn in accordance with the agreement of the parties and applicable federal and state statutes, rules and regulations. This contract is subject to modification or termination upon enactment of any statute, rule, or regulation, state or federal, which, in the opinion of the Administrator of Local Agency Security of the State of California (the "Administrator"), is inconsistent herewith, including any change relative to the payment of interest upon moneys so deposited by the Treasurer. Upon notice to the Treasurer from the Administrator that the Bank failed to pay assessments, fines or penalties assessed by the Administrator, the Treasurer may withdraw Depositor's deposits from the Bank. Upon notice to the Treasurer from the Administrator that the Bank failed to pay fines or penalties assessed by the Administrator, the Treasurer may immediately withdraw authorization for the placement of pooled securities with the Agent of the Bank. 3. Interest shall accrue on any moneys so deposited as permitted by any act of the Congress of the United States or by any rule or regulation of any department or agency of the federal government. If interest may legally be paid on the account into which the moneys are deposited, then all moneys deposited shall bear interest at a rate agreed upon by the Treasurer and the Bank. 4. The Bank shall issue to the Treasurer for each inactive deposit a receipt or other evidence of deposit on a form agreed to by the Bank and the Treasurer, stating, when required, the interest to be paid, if any, the duration of the deposit, the frequency of interest payments, if any, and the terms of withdrawal. Each such form is by reference made a part of this contract. 5. The Bank will maintain at all times with the Agent of the Bank as security for Depositor's deposits (a) eligible securities of the classes described in Government Code Section 53651, except subdivisions (m) and (p), having a market value at least 10% in excess of the total amount of deposits secured by those securities, (b) eligible securities of the class described in subdivision (m) of Government Code Section 53651 having a market value at least 50% in excess of the total amount of deposits secured by those securities and (c) eligible securities of the class described in subdivision (p) of Government Code Section 53651 having a market value of at least 5% in excess of the total amount of deposits secured by those securities. If the Administrator determines that a security is not qualified to secure public deposits, the Bank will substitute other securities to comply with the requirements of this paragraph. 6. Eligible securities are those listed in Government Code Section 53651. 7. The Treasurer hereby waives security for that portion of the total amount on deposit which is insured pursuant to federal law. 8. The Agent of the Bank, which the Treasurer and the Bank hereby authorize to hold the eligible securities posted as collateral under this contract, is the Trust Department of the Bank. The Agent of the Bank has filed with the Administrator an agreement to comply in all respects with all provisions of the Local Agency Deposit Security Law as set forth in the Government Code and Local Agency Deposit Security Regulations. 9. Authority for placement of securities for safekeeping in accordance with Government Code Section 53659 is hereby granted to the Agent of the Bank, including placement with any Federal Reserve Banks or branches thereof, and the following banks or trust companies, other than the Bank: Depository Trust Company, New York, New York; FORM 53969 (Rev. 12/09) 10. If the Bank fails to pay all of any moneys on deposit of the Depositor which are subject to this contract when ordered to do so in accordance with the terms of withdrawal set forth on the deposit receipt (which is by reference made a part hereof), the Treasurer will immediately notify, in writing, the Administrator. Action of the Administrator in converting the collateral required by paragraph 5 above for the benefit of the Depositor is governed by Government Code Section 53665. 11. The Bank may add, substitute or withdraw eligible securities being used as security for deposits made hereunder in accordance with Government Code Section 53654, provided the requirements of paragraph 5 above are met. The Bank shall not interchange classes of security (as defined in Government Code Section 53632.5) without the prior written approval of the Treasurer. 12. The Bank shall have and hereby reserves the right to collect the interest on the securities except in cases where the securities are liable to sale or are sold or converted in accordance with the provision of Government Code Section 53665. 13. The Bank will pay all expenses incurred in transporting eligible securities maintained as collateral for moneys on deposit to and from the Agent of the Bank. The Depositor will pay (or promptly reimburse the Bank for or otherwise compensate the Bank for) all expenses incurred in transporting all moneys deposited with the Bank to and from the Treasurer's office. The Depositor will pay the Bank (or otherwise compensate the Bank for) the fees and charges stated in the Bank's then current Schedule of Fees (unless the Bank and the Treasurer otherwise agree) for handling, collecting and paying all checks, drafts and other exchange or securities according to the Bank's normal practices. 14. This contract, the parties hereto, and all deposits governed by this contract shall be subject in all respects to Title 5, Division 2, Part 1, Chapter 4, Article 2 (commencing with Section 53630) of the Government Code of the State of California, and of all other state and federal laws, statutes, rules and regulations applicable to such deposits, whether now in force or hereafter enacted or promulgated, all of which are by this reference made a part hereof. IN WITNESS WHEREOF, the Treasurer in his or her official capacity has signed this contract in quadruplicate and the Bank has caused this contract to be executed in like number by its duly authorized officer. 1. (NAME OF LOCAL AGENCY) By: Name: Title: UNION BANK, N.A. By: Name: Title: FORM 53969 (Rev. 12/09) Contract for Banking Services This CONTRACT FOR BANKING SERVICES (hereinafter "Contract"), effective « date>>, by and between Union Bank, N.A. (hereinafter "Bank"), and the « Client Name» (hereinafter "short name"), is in accordance with California Government Code 53682. Whereas, in the judgment of the Treasurer this Contract is to public advantage; and Whereas, the city desires to secure a wide range of banking services to be provided by a single financial institution pursuant to a Contract; and, Whereas, the «short name» solicited proposals to provide such banking services from the fmancial institutions qualified to provide such services; and, Whereas, Bank submitted a proposal which the company deems to be the most complete and responsive to the «short name's» request for proposals, and will provide the city the desired types, availability and quality of services; and, Whereas, Bank represents to the «short name» that it meets the requisite legal and other qualifications and possesses sufficient financial strength and capacity to render the banking services sought by the company. Now, therefore, in consideration of mutual covenants, it is agreed that the Bank will service the «short name's» banking needs as presented in the proposal, dated «date». The «short name» will be the sole selector of services to be utilized as outlined in the proposal. The terms of this Contract are as stated in the Bank's proposal and is an integral part of this Contract. Any mutual amendments to this Contract will be an addendum to this Contract. This Contract may be terminated on thirty (30) days written notice by either party disclosed in the Contract for Deposit of Moneys as required by the California Government Code. Customer Name Union Bank, N.A. Treasurer Dated: Vice President Dated: UnionBank UnionBank TT I BANK --DEPOSITOR AGREEMENT Public Agency Depositor Agreement --To: Union Bank, N.A. ("Bank") This public agency agrees that the deposit account(s) opened by it with the Bank which is/are listed below and is/are govemed by this Agreement and the terms and conditions of Bank's disclosure agreement and Bank's schedule of fees and charges; that the disclosure agreement and schedule have been received; that the terms, conditions, fees and charges may be amended from time to time by the Bank on reasonable notice; and that the accounts opened hereafter and listed below are subject to the terms, conditions, fees and charges of Bank then in effect. ACCOUNT NUMBER TYPE CYCLE DATE OPENED OPENED BY REVIEWED BY DATE CLOSED 1. 2. 3. 4. 5. MAILING ADDRESS FOR ABOVE ACCOUNT(S) AREA CODE & PHONE NUMBER STREET ADDRESS TYPE OF PUBLIC AGENCY TAXPAYER I.D. NUMBER IDENTIFICATION BANK REFERENCE PREVIOUS BANK BRANCH/OFFICE ACCOUNT OFFICER CHANGE OF MAILING ADDRESS AREA CODE & PHONE NUMBER DATE RECEIVED FORM 00334 (Rev. 07/2009) eFORM (Page 1 of 2) UnionBank ENTER ACCOUNT NUMBER ► T 1 T L E BANK --DEPOSITOR AGREEMENT Public Agency SIGNATURE(S) (Sign in black ink) TYPED NAME AND TITLE (LINE OUT UNUSED SPACES) Signing Instructions: It is not the Bank's general policy to offer accounts on which two or more signatures are required for withdrawals. (For exceptions, see Form 00333 Approval of Multiple-Signature/Special Signing instructions.) PREPARE AND MAIL STATEMENT AS FOLLOWS: I I I I I l According to Bank's schedule. At the end of the month. Other: Hold if not called for in 60 days, then mail. The Bank is not responsible for statements lost in transit. I understand that you will handle deposits and accounts according to your arrangements for services of this type and according to a Contract for Deposit of Moneys between us dated The persons whose specimen signatures appear above are authorized, acting in such number as is indicated above, to withdraw or transfer funds from the deposit account(s). I certify that: • I am legally charged with receipt and safekeeping of the funds coming into the Treasury of this public agency and I am authorized to establish deposit accounts with you. • For time deposit accounts, I am authorized to establish one now and other accounts later under this agreement. The authority hereby conferred shall remain in force until you receive written notice of revocation from the governing body of this public agency or from me. Date FORM 00334 (Rev. 07/2009) eFORM (Page 2 of 2) Signature Type or Print Name Title (Signatory on Contract for Deposit of Moneys) UnionBank PUBLIC ENTITY RESOLUTION California Government Code 53679 stipulates that money not under control of the treasurer but belonging to a local agency and under the control of any of its officers or employees other than the treasurer may deposit funds as active deposits or inactive deposits. For deposits in excess of the amount insured under any federal law, a contract in accordance with Section 53649 is required. It is resolved that the officer now or subsequently holding the position of (Title) (Public Entity) is authorized by the Governing Board under California Government Code 53649 to enter into any contract with Union Bank of California, N.A. relating to any deposit, which in his or her judgment is to the public advantage. Contracting requirements could include: • Establish bank accounts and services. • Sign, or change in writing, agreements with the Bank regarding the Public Entity's bank deposit relationship. • Specify in writing to the Bank the individuals who are authorized in the name of and on behalf of the Public Entity to: • Withdraw funds from any of the Public Entity's banking accounts on the Public Entity's checks or orders. • Endorse and deliver to the Bank, for any purposes, and in any amount, negotiable or non-negotiable items of any kind, and owned by, or held by, or payable to the Public Entity. • Send, review, and/or authorize wire and electronic transfers of funds from the Public Entity accounts. Such authority may be exercised by such authorized individual acting alone, regardless of any multiple signature requirements otherwise applicable to the accounts. • Otherwise access the Public Entity's deposit accounts. This authority has been granted by the Governing Board and shall remain in effect until the Bank receives written notice of revocation at the Office where the Public Entity's banking relationship is maintained. I CFRTIFIC:ATION , Clerk/Secretary to the Governing Board of the above referenced Public Entity, do hereby certify that the foregoing is a full, true, and correct copy of a resolution passed by the Governing Board on revoked or amended. (Month and date) of CLERK/SECRETARY TO THE GOVERNING BOARD (Year), and the resolution has not been SIGNATURE DATE Distribution: ORIGINAL — Office Copy FORM 00219 (11/98) DUPLICATE — CCSU TRIPLICATE — Customer UnionBank INDEMNITY AND HOLD HARMLESS AGREEMENT This Indemnity and Hold Harmless Agreement ("Agreement") is entered into between , ("Customer") and Union Bank, N.A. ("Bank") respecting the duties and liabilities of Customer and Bank in connection with deposit account services performed by Bank. RECITALS A. Customer maintains or will maintain deposit accounts at Bank against which checks, check -warrants, and/or warrants (together or separately, "Items") will be presented to Bank for collection or payment. B. Customer recognizes that it and Bank are exposed to risk of loss resulting from the increasing frequency of Items presented for collection or payment that are counterfeit or bear alterations and/or forged, missing, or unauthorized drawer signatures ("Fraudulent Items"). Due in large part to Bank's use of automated check processing equipment and procedures, and the difficulty of detecting Fraudulent Items, Bank would be unable in most situations to prevent payment of Fraudulent Items if they were presented against Customer's accounts. C. Customer is aware that Bank offers a service in conjunction with Bank's Account Reconcilement services known as "Positive Pay". Utilizing Positive Pay Plan 1, Customer provides Bank with lists of issued Items against which Bank may compare Items presented for payment. Under Positive Pay Plan 2, Customer does not submit issue information. While both Positive Pay plans substantially reduce the risk arising form the payment of Fraudulent Items, Plan 2 does not protect against Fraudulent Items that are cashed at a banking office and for that reason Bank recommends selection of Plan 1. D. Bank is unwilling to provide deposit account services to Customer without receiving the assurances set forth below. Based on the foregoing, and in consideration of the deposit account services to be performed by Bank, Customer and Bank agree as follows: 1. Customer acknowledges that if Customer does not choose to subscribe to either Positive Pay Plan 1 or Plan 2, and except as may be attributable to Bank's lack of good faith or failure to exercise ordinary care, Customer knowingly assumes the risk of loss associated with Fraudulent Items and agrees to indemnify and hold harmless Bank, its officers, employees, agents, successors and assigns, from and against any and all liability, loss or damage to which it may be subjected by reason of Bank's payment of Fraudulent Items. 2. If Customer does not choose to subscribe to Positive Plan 1, and except as may be attributable to Bank's lack of good faith or failure to exercise ordinary care, Customer assumes the risk of loss associated with Bank's payment of Fraudulent Items presented for payment over-the-counter at a banking office and agrees to indemnify and hold harmless Bank, its officers, employees, agents, successors and assigns, from and against any and all liability, loss or damage to which it may be subjected by reason of Bank's payment of such over-the-counter Items. 3. In the event of an inconsistency between this Indemnity and Hold Harmless Agreement and the terms and conditions of any other agreement between Bank and Customer regarding the subject matter hereof, this Agreement shall prevail to the extent necessary to avoid the inconsistency. The above is agreed to. Customer Union Bank, N.A. By: By: Title: Title: Date: Date: IndemnityandHoldHarmles$Agmt. doc 18873/DJR 10 UnionBank bUnionBank AUTHORIZATION AND AGREEMENT FOR TREASURY MANAGEMENT SERVICES Each of the undersigned is an officer, owner, principal or other authorized individual of the business organization named below (Company). Company has received Union Bank's All About Treasury Management Services disclosure and agreement (Agreement) and agrees to be bound by the Agreement, as amended from time to time, any applicable user documentation, set-up forms anc related documents, and other disclosures provided to Company with regard to the provision of one or more Treasury Management Services by Union Bank (Bank). Company may from time to time request any of the Services described in the Agreement. Company may begin to use any such Service, subject to the Bank's approval, once the Bank has received from Company all required and properly executed forms and Company has successfully completed any testing or training requirements. Each of the undersigned warrants that Company has taken all action required by its organizational or constituent documents to authorize each of the undersigned to execute and deliver on behalf of Company this Authorization and Agreement and any other documents the Bank may require with respect to a Service. Company agrees that each Contracting Officer signing below is authorized to enter into agreements for Treasury Management Services with Bank and to designate from time to time who is authorized to use the Services and give instructions on behalf of Company with respect to the Services. NAME OF BUSINESS ORGANIZATION Contracting Officers: Dated Type or Print Name Type or Print Name Signature Title Signature Title Note: If the company specified above is a corporation, then an authorized officer other than the person(s) signing the certificatior below must sign this form; if the company is a partnership, limited liability company, limited liability partnership or sole proprietorship, then all general partners, all members or the proprietor must sign this form unless the organizational or constituent documents specify otherwise. Attach additional signature sheets if necessary. AUTHORIZATION AND AGREEMENT CERTIFICATION The undersigned certifies that each of the signature(s) appearing above is the true signature of a person authorized to execute th form, and further certifies that the undersigned has full authority to execute this certification. The Bank is entitled to rely upon thi: certification until written notice of its revocation is delivered to the Bank. Dated Signature Type or Print Name Title Note: If the Company specified above is a corporation, the secretary or an assistant secretary must sign this certification; if it is partnership, limited liability company or limited liability partnership, one of the general partners or members must sign this certification. Sole proprietors do not need to complete this certification. CUSTOMER ADDRESS STREET ADDRESS TELEPHONE NUMBER (Include area code) CITY IFAX NUMBER (Include area code) !STATE I ZIP CODE FORM 02397 (Rev. 07/2009) eForm Distribution: ORIGINAL --Cash Management Servicing DUPLICATE --Customer FORM 02341 (Rev. 07/2009) eFORM bUnionBank DATE 1. REQUEST TYPE New Setup (New Wire Transfer Service only. Complete all sections.) REF NO. 20091006120057 FUNDS TRANSFER AUTHORIZATION -- Direct Access to Wire Services & Wires on the Web Refer to the appropriate Account and Services Disclosure and Agreement, or Fee Schedule for pricing. Replace Existing (delete ALL current Authorized Caller information and replace with information in Section 5 below) Addendum (for additional accounts or callers) ❑ Update Existing information Delete existing information on the database. 2. CUSTOMER INFORMATION The undersigned "Customer" and Union Bank, N.A. (Bank) agree that the Bank will provide wire transfer services according to the terms of the Master Funds Transfer Agreement and Security Procedures, applicable fee schedule and as specified below. NAME AS IT APPEARS ON YOUR ACCOUNT ADDRESS AS IT APPEARS ON YOUR ACCOUNT CITY STATE/COUNTRY ZIP CODE 3. SELECT OUTGOING WIRE TRANSFER INITIATION TYPE Indicate how you wish to initiate wire transfers. Further descriptions appear in the Master Funds Transfer Agreement and Security Procedures. For your protection, when you set up repetitive transfers, we perform a callback only when you initially set up the parameters for the transfer but not subsequently unless you request otherwise in writing. Additional fees apply for SecurlD Token; refer to the appropriate Account and Services Disclosure and Agreement, or Fee Schedule for pricing. Initiation Type (select one or more) ❑ Direct Access (may be used as a sole initiation type or as a backup to Wires on the Web): ❑ Telephone with SecurlD Token Q ❑ Telephone with SecurlD Token and Callback (No Callback) with SecurlD ❑ Facsimile and Callback with SecurlD Token ❑ Facsimile and Test Key (for Customers not residing in the U.S.) Sfv1ALL l_IS[O(v1FH5 ❑ Wires on the Web (with unique user ID, password, encryption and SecurlD Token authentication) Note: For Wires on the Web, additional documents are required. Skip Sections 4 and 5 and proceed to Section 6. 4. CUSTOMER ACCOUNTS (Account OwnershiD must be the sam DESIGNATED ACCOUNT NO. ACCOUNT TITLE Add or Delete Account A = Add D = Delete ❑ A ❑ D ❑ A ❑ D ❑ A ❑ D ❑ A ❑ D ❑ A ❑ D 5. AUTHORIZED CALLERS Complete this section to designate Authorized Callers who may initiate transactions, receive callbacks and receive advices. I. ist in order of Callback priority. Line out unused spaces/lines. Authorized Callers Individual Dollar Limit (Printed Name/Signature) If blank, then it's unlimited 1 . PRINTED NAME :GNATURE x 2. PRINTED NAME SIGNATURE x 3. PRINTED NAME ❑ Initiate Repetitive $ ❑ Initiate Non -Repetitive $ ❑ Receive Call back $ ❑ Initiate Repetitive $ ❑ Initiate Non -Repetitive $ ❑ Receive Call back $ ❑ Initiate Repetitive SIGNATURE ❑ Initiate Non -Repetitive x ❑ Receive CaII back A Ca)Ibm:k rF?IFphone ;1r,mher's ,ag(,ired for „3c)1 rhsfgnated Authorized Caller. CONTINUE TO PAGE 2 -- SIGNATURE(S) ARE REQUIRED) $ CALL BACK TELEPHONE NUMBER• ADD OR DELETE CALLER A = Add D = Delete ❑ A ❑ D TELEPHONE ADVICE (Incoming Advices only) ❑Y ❑N CALL BACK TELEPHONE NUMBER• ADD OR DELETE CALLER A = Add D = Delete ❑ A ❑ D CALL BACK TELEPHONE TELEPHONE ADVICE (Incoming Advices only) ❑Y ❑N NUMBER" ADD OR DELETE CALLER A = Add D = Delete ❑ A ❑ D TELEPHONE ADVICE (Incoming Advices only) ❑Y ❑N Page 1 of 2 UnionBank CUSTOMER NAME (FROM SECTION 2 OF PAGE 1) REF. NO. 20091006120057 6. AGREE TO TERMS 1il Aun,,r)v?r Clistoiner', Acciotint(51 Shouid Complete This Section By signing here, each person agrees to the terms and conditions contained in the Master Funds Transfer Agreement and Security Procedures and declares under penalty of perjury that the following is true and correct: (1) I hold the position listed next to my name. (2) Each person listed as an Authorized Signer in this "Agree To Terms" section, has authority to enter into or change any agreement with the Bank concerning funds transfers on behalf of Customer including, but not limited to, authority to add or delete Authorized Callers and designate accounts used for funds transfers. No other person's authorization is necessary to bind the Customer for purposes of fund transfers. (3) This authorization supercedes any conflicting authorizations already in effect. (4) For partnerships I, along with any others who sign below, constitute all of the general partners necessary to bind the partnership. (5) For limited liability companies I, along with any others who sign below, constitute all Customer's members or managers necessary to bind the limited liability company. PRINTED NAME Of AUTHORIZED SIGNER SIGNATURE TITLE 7. RESOLUTION AND CERTIFICATION For Secretary of Corporations or Unincorporated Associations Only RESOLVED, that the individual(s) listed in the "Agree to Terms" section of this Funds Transfer Authorization are hereby authorized to enter into any agreement with Union Bank, N.A. ("Bank") relating to the transfer of funds from the account(s) of the client above ("Company"), whether in person, in writing, or by means of telephone, electronic transmission, or facsimile, and are further authorized to designate others who may initiate transactions and receive callbacks and advices. FURTHER RESOLVED, that this authorization is in addition to any other authorizations in effect and will remain in force until the Bank receives written notice of revocation at the address(es) and manner designated by the Bank. CERTIFICATION: I certify that: (1) I am the Secretary or Assistant Secretary of the Company; (2) the resolution printed above is a complete and accurate copy of a resolution duly adopted by the Company's Board of Directors or by the Company's members (if unincorporated); (3) the resolution is in full force and has not been revoked or changed. SIGNATURE --Corporate Secretary x NAME --Corporate Secretary DATE 8. DESIGNATION OF INCOMING/OUTGOING ADVICE (OPTIONAL) --Refer to the appropriate Account and Services Disclosure and Agreement, or Fee Schedule for pricing. Select one option: ► ❑ Mail ❑ Telephone TELEPHONE NUMBER (Incoming only)() FACSIMILE NUMBER Facsimile ( ) DESIGNATED ACCOUNT NO. ACCOUNT TITLE Incoming (I)/ Outgoing (01 (Bank Use onlvl ❑I I to Initials ❑I to ❑I ❑o ❑ I ❑ o ❑I ❑o Or ❑ By checking this box, this designation applies to all accounts listed in section 4. PREPARED BY - Print Name APPROVED BY (OFFICER LEVEL REQUIRED) - Print Name TITLE FOR BANK USE ONLY SIGNATURE X ❑ O DATE TITLE SIGNATURE X DATE INPUT SIGNATURE X WIRE SERVICES DATABASE, V02-490 VERIFY SIGNATURENERIFICATION OF BANK OFFICER DATE DATE FORM 02341 (Rev. 07/2009) eFORM Page 2 of 2 • Union Bank I) UnionBank DATE: 10/06/2009 I (.1...IE,A1 q•IF RMATION ACCOUNT NUMBER CLIENT NAME ❑UPDATE ❑DELETE CONTACT PERSON ADDRESS CITY I STATE I ZIP CODE FUNDS TRANSFER SETUP • Repetitive Outgoing Wire Set -Up • Reverse Drawdown • Drawdown • Standing Instructions TELEPHONE NO. FACSIMILE NUMBER SPECIAL INSTRUCTIONS 2 REPETITIVE OUTGOING WIRE SET-UP,uB ru ,r,I,Ir�t�„,,,t c,,,l,rvsrllul:r_r TRANSFER FROM ACCOUNT NUMBER CURRENCY OPTIONAL ❑NEW ❑UPDATE ❑DELETE BENEFICIARY iNFORMAT;I2f-J BENEFICIARY NAME ADDRESS (Optional) CITY ❑U.S. Dollar ❑Other Currency REPETITIVE NUMBER (Maximum of 8 NUMERIC Characters) UB Will Provide If Blank MAXIMUM (8)DOLLAR LIMIT (Per Wm) BENEFICIARY BANK iNFORMAI ON BENEFICIARY BANK NAME BENEFICIARY ACCOUNT NUMBER BANK ADDRESS 'STATE I ZIP CODE CITY 'STATE 'ZIP CODE ABA NUMBER OTHER BENEFICIARY INFORMATION (Maximum of 140 characters) INTERMEDIARY BANK NAME (If My) INTERMEDIARY ABA NUMBER 3.DRAWDOWN CREDIT UBOC ACCOUNT NUMBER ❑NEW ❑UPDATE ❑DELETE DRA WOOWN INFORMA TION UBOC BENEFICIARY ACCOUNT NAME DRAWDOWN ACCOUNT NAME ADDRESS (Optional) CITY OPTIONAL REPETITNE NUMBER (Maximum of 8 MAXIMUM (S) DOLLAR LIMIT NUMERIC Characters) UB WA Provide If (Per Wre) Blank DRAWDOWN BANK INFCRMA rHON DRAWDOWN BANK NAME DRAWDOWN ACCOUNT NUMBER BANK ADDRESS ISTATE IZIP CODE CITY (STATE 'ZIP CODE OTHER BENEFICIARY INFORMATION (Maximum of 140 characters) ABA NUMBER 4. REVERSE DRAWLOWN:CI H ILIAIEt uo /2)IIIf 12 ` itv.NL1AL IN1I(u iuN I O UE81L A ue ACCOUNT) DEBIT UBOC ACCOUNT NUMBER UBOC O.... DEBIT UACCOUNT NAME MAXIMUM (S) DOLLAR LIMIT (Per Wire) ❑NEW ❑UPDATE ❑DELETE :RE1-1 (NI-QRMA (R)N CREDIT BENEFICIARY NAME (ORIGINATOR) ADDRESS CITY ORIG(NA HMG BANK INFORMATION REVERSE DRAWDOWN BANK NAME BENEFICIARY ACCOUNT NUMBER BANK ADDRESS ' STATE I ZIP CODE CITY ' STATE ' ZIP CODE ABA NUMBER 5. STANDING INSTRUCTIONS ;r ❑NEW ❑UPDATE ❑DELETE FREQUENCY: Begin Date w I«p I ve IIiStR 1 C tICI _„I I II, I .lw n 2 1 I piomae :,'sting Rep. (Itive (lansfel (!u AMOUNT (SELECT ONE ONLY) REPETITIVE TRANSFER ❑ In excess of (PEG) $ NUMBER: ❑ Fixed $ STO NUMBER (IF APPLICABLE): DATE OF MONTHLY ORDERS: End Date: I ENT AllfitORIZAr1ON I PRINTED NAME of AUTHORIZED SIGNER ❑DAILY ❑WEEKLY OBI -WEEKLY ❑ MONTHLY ❑ END -OF -MONTH SIGNATURE I1 I,c�,k DATE 7. UNION BANK, N.A. (Two Sicanatures Required) 1. PREPARED BY - Print Name TITLE 2 APPROVED BY (OFFICER LEVEL REQUIRED)- Print NertjeTITLE SIGNATURE X DATE SIGNATURE X DATE WIRE SERVICES INPUT DATABASE, VO2-498 FORM 02342 (Rev. 07/2009) eFORM !VERIFY ISIGNATURE I DATE DISTRIBUTION Send COPY to Wire Services Unit, V02-490 COPY: Originating Office/Dept. Retain UnionBank HIGHMARK MONEY MARKET FUNDS SWEEP AGREEMENT UN ION BANK OF CALIFORNIA 1. INVESTMENT AUTHORIZATION. The Customer named on the Sweep Application ("Application") authorizes Bank to debit and credit the Checking Account listed on the Application in accordance with the sweep arrangement described in this Agreement. Customer understands that UnionBanc Investment Services LLC ("Investment Services"), Union Bank's brokerage subsidiary, has entered into an agreement with National Financial Services LLC ("NFS"), a NYSE member firm and clearing broker, to execute and clear all HighMark Money Market Mutual Fund transactions and that a Brokerage Sweep Account will be opened at NFS on Customer's behalf and for the purposes set forth in this Agreement. DEFINITIONS. For the purposes of this Sweep Agreement, the following are defined terms: Anticipatory Purchases mean the shares of the designated HighMark Money Market Mutual Fund purchased by Bank on Customer's behalf using monies advanced by Bank due to timing differences in the processing of checking accounts and the closing time for Money Market Mutual Fund purchases. Business Day means any day on which Bank, NFS and the New York Stock Exchange (NYSE) are open for general business other than a Saturday, Sunday, or a legal holiday. Money Market Mutual Fund investment transactions can take place on any Business Day that the Bank, NFS and the NYSE are open for business. Checking Account means the checking account designated by the Customer on the Sweep Application. Collected Balance means the Checking Account ending ledger balance, less float. Fund Balance means the balance in the Brokerage Sweep Account which consists of the dollar value of the net total of Money Market Mutual Fund purchases and redemptions made on Customer's behalf plus dividends. Customer's daily Fund Balance will be recorded by Bank and identified as available funds for Customer's current day transactions on all days that the Bank, NFS and the NYSE are open for business. Investment Vehicle means the Money Market Mutual Fund. Money Market Mutual Fund means the money market mutual fund made available by Bank and Investment Services and selected by the Customer. Minimum Investment Amount means $1,000 for Money Market Mutual Funds. Sweep Account means a brokerage sweep account maintained at NFS in the Customer's name to settle all Money Market Mutual Fund purchases and redemptions made on the Customer's behalf, to hold Customer's positions in the designated Money FORM 02371-HM (06/2009) Market Mutual Fund and to conduct related activities. Brokerage Sweep Accounts are carried by NFS, Member NYSE/SIPC. Target Balance means the Customer's minimum balance needed in Customer's Checking Account as designated on the Application. 2. SWEEP SERVICE. On each Business Day, Bank will determine the Collected Balance in the Checking Account for the previous Business Day and deduct the amount specified in the Application as the Target Balance. When the sweep feature selected on the Application indicates "Investment Only," Collected Balances in the Checking Account in excess of the Target Balance will be invested on the Customer's behalf by the Bank in increments of $1,000 in the designated Money Market Mutual Fund on the Application, provided such Collected Balance meets or exceeds the Minimum Investment Amount. When the Collected Balance in the Checking Account is less than the Target Balance, the Bank will redeem shares in the Money Market Mutual Fund in increments of $1,000, up to the amount invested in the Money Market Mutual Fund. Proceeds from the redemption will be swept back and credited to the Checking Account. All Money Market Mutual Fund investments and redemptions and the respective debits and credits to the Checking Account will be posted the following Business Day with an effective date of the prior Business Day. Customer may be required to maintain a compensating balance. This compensating balance is not eligible for earnings credit on Customer's account analysis. 3. MAXIMUM GUARANTEED INVESTMENT AVAILABILITY AMOUNT. Collected Balances in the Checking Account over the Maximum Guaranteed Investment Availability Amount specified on the Application will be invested by the Bank on the Customer's behalf only if sufficient Anticipatory Purchases exist. 4. ANTICIPATORY PURCHASES. Customer understands that the Bank will act as Customer's agent and, as agent, may from time to time make Anticipatory Purchases of shares of the designated Money Market Mutual Fund on Customer's behalf. Once the actual amount of Money Market Mutual Fund purchases are calculated for Customer's Sweep Account, Customer's Checking Account will be used to repay Bank for the Anticipatory Purchases made on Customer's behalf. 5. DIVIDENDS/INTEREST. Money Market Mutual Fund dividends are accrued daily and paid monthly. Any dividends will be credited to the Customer's Sweep Account once a month in the form of additional shares. 6. STATEMENTS/CONFIRMATIONS. A Sweep Account statement will be sent to Customer each month and will be sent in lieu of a daily confirmation. The Customer will receive one monthly statement from the Bank and one monthly statement from NFS. Page 1 of 4 7. APPLICABLE RULES AND REGULATIONS. All Money Market Mutual Fund transactions are subject to the rules, regulations, and usages of the exchange or market (and its clearing house, if any) where executed, the requirements of the Money Market Mutual Funds, and applicable federal and state laws, rules and regulations. 8. SECURITY INTEREST. All securities and other property now or hereafter held, carried or maintained by NFS for any of the accounts of the Customer now or hereafter opened, shall be subject to a lien for the discharge of all indebtedness and other obligations of the Customer to Bank and its subsidiaries and affiliates, and are held by NFS as security for the payment of any liability or indebtedness of the Customer to Bank and its subsidiaries and affiliates. Bank shall have the right to sell, assign or transfer securities and any other property so held by Bank and Investment Services from or to any other of the accounts of the Customer whenever, in Bank's judgment, Bank considers such a transfer necessary for the enforcement of a lien. Additionally, Customer grants to Bank a security interest in all deposit accounts maintained at Bank by Customer to secure performance of Customer's obligations under this Agreement. 9. PAYMENT UPON DEMAND. Customer will at all times be liable for the payment upon demand of any debit balance in or other obligation relating to the Sweep Account. If after demand, Customer fails to pay any amounts owing, Bank or Investment Services may close Customer's Sweep Account and liquidate the assets in an amount sufficient to pay Customer's indebtedness. 10. CUSTOMER ACKNOWLEDGMENT — IMPORTANT INFORMATION. Customer acknowledges and understands: • Bank, Investment Services and NFS do not provide investment advice regarding the purchase or sale of securities in connection with the Brokerage Sweep Account, nor do they give advice or offer any opinion with respect to the suitability of any securities for purchase by Customer. • It is fundamental policy of a Money Market Mutual Fund to use every effort to maintain a stable net asset value of $1.00. Although the Fund seeks to preserve the value of Customer's investment at $1.00 per share, it is possible to lose money by investing in the Fund. • Customer acknowledges receipt of the Fund prospectus and has carefully read and considered the Fund's investment objectives, risks and charges and expenses described in the prospectus prior to investing. • Customer further understands that Money Market Mutual Fund balances and cash held in the Brokerage Sweep Account: • are not insured by the FDIC or any other governmental agency • are not deposits in or obligations of Union Bank, N.A. or any affiliate or subsidiary • are not guaranteed by Union Bank, N.A., UnionBanc Investment Services LLC, or any other affiliate or subsidiary Customer also understands that the Bank and its affiliates may perform various roles in connection with the HighMark Funds including without limitation, investment advisor, sub -administrator, custodian, sub -fund accountant, sub -transfer agent and shareholder servicing agent, and that Bank and its affiliates and subsidiaries receive fees from HighMark Funds for such services. HighMark Capital Management, Inc. is a subsidiary of Union Bank, N.A. and serves as investment adviser for the HighMark Funds. 11. ACCOUNT PROTECTION. Securities in accounts carried by National Financial Services LLC (NFS), a Fidelity Investments company, are protected in accordance with the Securities Investor Protection Corporation ("SIPC") up to $500,000 (including up to $100,000 for cash awaiting reinvestment). NFS also has arranged for coverage above these limits. Neither coverage protects against a decline in the market value of securities, nor does either coverage extend to certain securities that are considered ineligible for coverage. For more details on SIPC, or to request a SIPC brochure, visit www.sipc.org or call 1- 202-371-8300. 12. ADDITIONAL FDIC -REQUIRED DISCLOSURE. The FDIC requires the Bank to disclose what would happen to Customer monies subject to a sweep arrangement In the event of Bank failure. In the event of Bank failure, the FDIC would normally allow the Bank's customary end -of -day processing to be completed on the date of failure. As a result: • If a HighMark Money Market Funds Sweep purchase were already in progress and shares in the designated HighMark Money Market Mutual Fund had been transferred into the Customer's Brokerage Sweep Account at NFS, even if the Customer's Bank Deposit Account had not yet been debited for the purchase of the shares, the Bank believes that the FDIC would recognize the Customer's ownership interest in the Fund's shares. The FDIC would reduce the Customer's end -of -day ledger balance in the Deposit Account by an amount equal to the purchase of the Money Market Mutual Fund shares. • The FDIC would use this reduced, end -of -day ledger balance in the Customer's Deposit Account for insurance determination purposes. 13. LIMITATION OF LIABILITY. In the event that Bank or Investment Services is unable to place funds in the Investment Vehicle on any given day, Customer will be compensated for the value of the amount not invested by way of Account Analysis earnings credits. Bank's and Investment Services' liability to Customer for any damage, loss, or liability, regardless of the form, shall not exceed the fees and charges incurred by Customer in connection with the Sweep Service for the one (1) month period prior to the time damages are suffered. The fees charged to Customer for the performance of the Sweep Service shall be deemed to have been established in contemplation of these limitations on liability. Bank or Investment Services will not be liable for any damage, loss, liability or delay caused by: the action or inaction of Customer or its agents, by accidents, strikes, fire, flood, war, riot, equipment breakdown, electrical, mechanical or communication line failure, acts of God, acts or omission of third parties, market volatility, trading volumes, or any cause which is beyond the Bank's reasonable control. 14. PRESUMPTION OF RECEIPT OF COMMUNICATIONS. Communications may be sent to the address given on the Application or at such other address as Customer may later specify in writing. Customer agrees to notify Bank immediately of any errors or discrepancies between Customer's records and the information Bank provides concerning Customer's accounts or transactions. If Customer does not notify Bank of any errors within a reasonable time (not to exceed 14 days) of the statement FORM 02371-HM (06/2009) Page 2of4 THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. BY SIGNING AN ARBITRATION AGREEMENT, THE PARTIES AGREE AS FOLLOWS: (A) ALL PARTIES TO THIS AGREEMENT ARE GIVING UP THEIR RIGHT TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO ATRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED. (B) ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY'S ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION IS VERY LIMITED. (C) THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS AND OTHER DISCOVERY IS GENERALLY MORE LIMITED THAN IN COURT PROCEEDINGS. (D) THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL REASONING, AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED. (E) THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY. (F) THE RULES OF SOME ARBITRATION FORUMS MAY IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN ARBITRATION. IN SOME CASES, A CLAIM THAT IS INELIGIBLE FOR ARBITRATION MAY BE BROUGHT IN COURT. (G) THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, AND ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT. IF THE CUSTOMER FILES A COMPLAINT IN COURT AGAINST UNIONBANC INVESTMENT SERVICES THAT CONTAINS CLAIMS THAT ARE SUBJECT TO ARBITRATION PURSUANT TO THIS PREDISPUTE ARBITRATION AGREEMENT, UNIONBANC INVESTMENT SERVICES MAY SEEK TO COMPEL ARBITRATION OF THE CLAIMS THAT ARE SUBJECT PLEASE KEEP THIS DOCUMENT FOR YOUR RECORDS mailing date, the statement will be considered correct. 15. FEES. Customer agrees to pay fees as disclosed to Customer from time to time. Fees may be changed upon thirty days' prior written notice. 16. TERMINATION. This Agreement may be terminated upon thirty day's prior written notice by any party to the others, or immediately if the Checking Account is closed. Termination will not affect the rights or duties of any party arising out of transactions occurring prior to termination. In the event of termination, all Money Market Mutual Fund shares will be liquidated. 17. SEVERABILITY. In the event any provision of this Agreement is declared invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect. 18. ENTIRE AGREEMENT. This Agreement, the Sweep Application and the Mutual Fund Prospectus constitute the entire agreement among the parties concerning its subject matter. Bank may change, delete or add to the terms and conditions of this Agreement or the Investment Vehicle upon 30 days written notice to Customer. Customer's continued use of the Sweep Account after the effective date of the change will indicate Customer's agreement to the new terms and conditions. 19. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. Customer may not assign this Agreement without Bank's written consent. 20. PRE -DISPUTE ARBITRATION PROCEDURES. By and at the signing of this Agreement, Customer acknowledges receipt of a copy of this Agreement, and the parties agree to the following Pre -Dispute Arbitration procedures. BROKERAGE ACCOUNT PRE -DISPUTE ARBITRATION AGREEMENT TO ARBITRATION; PROVIDED THAT UNIONBANC INVESTMENT SERVICES MUST AGREE TO ARBITRATE ALL OF THE CLAIMS CONTAINED IN THE COMPLAINT IF THE CUSTOMER SO REQUESTS. THE CUSTOMER AGREES THAT ALL CONTROVERSIES THAT MAY ARISE BETWEEN THE PARTIES CONCERNING ANY ORDER OR TRANSACTION, OR THE CONTINUATION, PERFORMANCE OR BREACH OF THIS OR ANY OTHER AGREEMENT BETWEEN US, WHETHER ENTERED INTO BEFORE, ON, OR AFTER THE DATE THIS ACCOUNT IS OPENED, SHALL BE DETERMINED BY ARBITRATION BEFORE A PANEL OF INDEPENDENT ARBITRATORS SET UP BY THE FINANCIAL INDUSTRY REGULATORY AUTHORITY AS THE CUSTOMER MAY DESIGNATE. IF THE CUSTOMER DOES NOT NOTIFY UNIONBANC INVESTMENT SERVICES IN WRITING WITHIN FIVE (5) DAYS AFTER THE CUSTOMER RECEIVES FROM UNIONBANC INVESTMENT SERVICES A WRITTEN DEMAND FOR ARBITRATION, THEN THE CUSTOMER AUTHORIZES UNIONBANC INVESTMENT SERVICES TO MAKE SUCH A DESIGNATION ON THE CUSTOMER'S BEHALF. THE CUSTOMER UNDERSTANDS THAT JUDGEMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION. NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY PRE -DISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURTAPUTATIVE CLASS ACTION; OR WHO IS A MEMBER OF A PUTATIVE CLASS ACTION WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (I) THE CLASS CERTIFICATION IS DENIED; OR (II) THE CLASS IS DECERTIFIED; OR (III) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN. FORM 02371-HM (06/2009) Page 3 of 4 Notice to National Financial Services LLC (NFS) This is to advise NFS that the undersigned Customer has instructed UnionBanc Investment Services LLC (Investment Services) to establish on Customer's behalf and as Customer's agent, a Brokerage Sweep Account with NFS. ("Account"). Customer appoints Investment Services as its exclusive agent to act for and on Customer's behalf with respect to all matters regarding the Account. Customer acknowledges that no fiduciary relationship exists. NFS shall look solely to Investment Services (and/or Union Bank, N.A.) with respect to orders or instructions regarding the Sweep Account. Any such communications delivered to Investment Services shall be deemed to have been delivered to Customer. Customer agrees to hold NFS harmless from and against any losses, costs or expenses arising in connection with the delivery or receipt of any such communication(s) regarding the Account. The foregoing shall be effective as to the Account until written notice to the contrary is received by NFS and Investment Services. TO UNIONBANC INVESTMENT SERVICES, UNION BANK, N.A. AND NFS: Customer understands that NFS will disclose Customer's name to issuers of securities if securities are held in the Brokerage Sweep Account so that Customer can receive important information unless Customer does not consent to such disclosure, and Customer agrees to notify Investment Services if Customer does not consent. Customer certifies under penalty of perjury (1) that the taxpayer identification number indicated on the Application is correct, and (2) that the IRS has never notified Customer that it is subject to backup withholding, or has notified Customer that Customer is no longer subject to such backup withholding. (Note, if part (2) is incorrect, please strike out that part before signing.) Customer understands that telephone calls to Investment Services may be recorded and hereby consents to such recording. Customer also consents to Union Bank and Investment Services sharing information about Customer's Sweep Account with their affiliates in accordance with corporate policies regarding the confidentiality of customer information. IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused it to be executed in their name and on their behalf by their respective duly authorized representatives on this day of Customer: Union Bank, N.A. By: By: Title: Title: UnionBanc Investment Services, LLC By: By: Title: Title: FORM 02371-HM (06/2009) Page 4 of 4 1 to UnionBank CUSTODY AGREEMENT For Public Funds This agreement is made between the City of Palm Desert ("Client") and Union Bank, N.A. ("Bank"). TERMS AND CONDITIONS 1. APPOINTMENT AS AGENT Client hereby appoints Bank as agent to act as custodian of cash, securities, and other property ("Property") described on Schedule A, attached hereto, and other property which may be deposited by Client with Bank from time to time to be held in the account established by this Agreement ("Account") and Bank agrees to act as Client's agent for such property according to the terms and conditions of this Agreement. 2. HANDLING OF INCOME AND PRINCIPAL 2.1 Income. Bank shall collect the income, when paid on said Property, and hold it in a demand deposit income account until invested or otherwise disposed of pursuant to Client's written instructions. 2.2 Principal. Bank shall collect principal of Property when paid on maturity, redemption, sale, or otherwise, and hold it in a demand deposit principal account until invested or otherwise disposed of pursuant to Client's written instructions. 2.3 Collection Obligations. Bank shall diligently collect income and principal of which the Bank has received actual notice in accordance with normal industry practices. However, Bank shall be under no obligation or duty to take any action to effect collection of any amount if the securities or other Property upon which such amount is payable is in default, or if payment is refused after due demand unless the Bank has been adequately indemnified by Client in advance. Bank, however, shall notify Client promptly of such default or refusal to pay. 2.4 Additions to and Withdrawals from Account. Bank shall make all additions and withdrawals of Property to and from this Account only upon receipt of and pursuant to written instructions from Client except for those withdrawals provided for in Section 4. Upon receipt of such order for each withdrawal, unless otherwise instructed in writing, Bank shall deliver the Property so withdrawn to Client or to Client's designee, upon an appropriate receipt. 3. INVESTMENT OF PROPERTY 3.1 Directions by Client. Client shall have sole responsibility for the investment, review, and management of all Property held in this Account. Bank shall make all purchases, sales, conversions, exchanges, investments and reinvestments of Property held in this Account only upon receipt of and pursuant to written instructions from Client. Bank shall have no duty or obligation to review, or make recommendations for, the investment and management of any Property held in this Account, including uninvested cash. 3.2 Handle Corporate Actions. Bank shall notify Client of the receipt of notices of redemptions, conversions, maturities, exchanges, calls, puts, subscription rights, and scrip certificates ("Corporate Actions"). Bank need not monitor financial publications for notices of Corporate Actions and shall not be obligated to take any action without waiting for Client's instruction. If a Corporate Action has a fixed expiration date, and Bank has not received written instructions regarding it from Client five business days prior to such date, Bank shall take such action as it deems appropriate in its sole discretion. © Union Bank, N.A. (2009-007) 1 of 6 • 3.3 Fractional Interests. Bank shall receive and retain all stock distributed by a corporation as a dividend, stock split, or otherwise. However, in connection therewith, if a fractional share is received, Bank shall sell such fractional share. 3.4 Use of Nominees. Bank shall have the right to hold all registered securities in the name of its nominee. 3.5 Use of Securities Depository. Bank may, in its discretion, deposit in a securities depository any securities, which, under applicable law, are eligible to be deposited. 4. PLEDGE OF SECURITIES Client shall inform Bank in writing in the event that Client has pledged any Property held in the Account as collateral ("Pledged Collateral") for any loan or advance ("Secured Obligation") made to Client by The Union Bank, N.A., or by any other lender designated by Client ("Secured Party"). Client's notice to Bank shall precisely identify the Pledged Collateral and state the name, address, telephone number and telex number of the Secured Party and the appropriate officer, if any, to contact in connection with the Pledged Collateral, and Client shall provide evidence that a copy of such notice has been provided to the Secured Party. Client shall be responsible to Bank for keeping Bank informed of any changes to this information, and Bank shall be fully protected in relying on such notice until receipt of a notice providing additional or substituted information. Bank shall segregate and identify such Property in its records as pledged. Notwithstanding anything to the contrary contained in this Agreement, by providing the notice referred to above, Client acknowledges and agrees that the terms of this Custody Agreement are superseded by the terms of any pledge or security agreement covering the Pledged Collateral, and that Bank cannot release the Pledge Collateral without the prior written consent of the Secured Party. In the event that the Secured Party shall notify the Bank in writing of a default of such Secured Obligation, Bank shall follow, with no further obligation, the written instructions of the Secured Party regarding the Pledged Collateral and shall be fully protected in so doing. Any interest or principal payments due on the Secured Obligation may be charged to the Account upon written instruction from Client. 5. PROXIES AND CORPORATE LITERATURE 5.1 Proxies. Bank shall forward all proxies and accompanying material issued by any company whose securities are held in the Account to Client unless directed in writing not to do so. 5.2 Corporate Literature. Bank shall have no duty to forward or retain any other corporate material received by the Account unless required to do so by law. 5.3 Disclosure to Issuers of Securities. Unless Client directs Bank in writing to the contrary, Client agrees that Bank may disclose the name and address of the party with the authority to vote the proxies of the securities held in this Account as well as the number of shares held, to any issuer of said securities or its agents upon the written request of such issuer or agent in conformity with the provisions of the applicable law. 6. CONFIRMATIONS 6.1 Confirmations. Bank shall have no responsibility to send confirmations of security transactions occurring in this Account to Client; however, Client may request confirmations for security transactions at any time at no additional cost to Client, and such confirmations shall be sent to Client within the time prescribed by law. 6.2 Statements. Each month, Bank shall send Client a cash statement and an asset statement showing market values. The statements will show all income and principal transactions and cash, securities and other Property holdings. Client may approve or disapprove such statement within sixty (60) days of their receipt and, if no written objections are received within the sixty-day © Union Bank, N.A. (2009-007) 2 of 6 day (60) period, such statements of the account shall be deemed approved. 7. USE OF OTHER BANK SERVICES Client may direct Bank to utilize for this Account other services or facilities provided by Bank, its subsidiaries or affiliates. Such services shall include, but not be limited to (1) the purchase or sales of securities as principal to or from, or, (2) the placing of orders for the purchase, sale, exchange, investment or reinvestment of securities through any brokerage service conducted by, or (3) the placing of orders for the purchase or sale of units of any investment company managed or advised by Bank, UnionBanCal Corp., or their subsidiaries or affiliates. Client hereby acknowledges that Bank will receive additional fees for such services in accordance with Bank's standard fee schedules, which shall be delivered to Client from time to time. If Client or Manager uses UnionBanc Investments Services, or other brokerage affiliate of Custodian, for the purchase or sale of securities as principal to or from, or the placing of orders for the purchase, sale, exchange, investment or reinvestment of securities, Client authorizes and directs Custodian to accept the confirmation of security transactions received from UBIS as the instructions from Client or Manager contemplated by this Agreement and no further instructions to Custodian shall be required. Notwithstanding the above, Client hereby directs Bank to utilize for this Account for cash management purposes the HighMark mutual funds advised by Bank. Client shall designate the particular HighMark Fund that Client deems appropriate for the Account. Client hereby acknowledges that Bank will receive management fees for such services in accordance with Bank's standard fee schedules, which shall be delivered to Client from time to time. These management fees will be in addition to those fees charged by Bank as agent for the Client's Custody Account. 8. INSTRUCTIONS All instructions from Client shall be in writing, and shall continue in force until changed by subsequent instructions. Pending receipt of written authority, Bank may, in its absolute discretion at any time, accept oral, wired, or electronically transmitted instructions from Client provided Bank believes in good faith that the instructions are genuine. 9. COMPENSATION AND OTHER CHARGES 9.1 Compensation. Bank's annual fee as agent shall be based on the published standard fee schedule of the Bank for Custody Accounts as it exists from time to time. Fees shall be taken quarterly. 9.2 Charging the Account. Bank is authorized to charge the Account for incidental expenses as well as for funds necessary for Bank to complete any purchase or expense, to make any directed disbursement or take any other action regarding the Account. Bank shall have no duty to make any purchases, exchanges, or disbursements or to incur any expenses, unless the funds necessary to cover the amount of the expense are available in the Account. 10. COST BASES AND DATES OF ACQUISITION Client agrees to furnish Bank with the income tax cost bases and dates of acquisition of all Property held in the Account to be carried on its records. If Client does not furnish such information for any such Property, Bank shall carry the Property at any such nominal value it determines, such value to be for bookkeeping purposes only. All statements and reporting of any matters requiring this information will use this nominal value. Bank shall have no duty to verify the accuracy of the cost bases and dates of acquisition furnished by Client. Property purchased in the Account shall be carried at cost. 11. LIMITED POWER OF ATTORNEY ©Union Bank, N.A. (2009-007) 3 of 6 Bank is hereby granted a limited power of attorney by Client to execute on Client's behalf any declarations, endorsements, assignments, stock or bond powers, affidavits, certificates of ownership or other documents required (1) to effect the sale, transfer, or other disposition of Property held in the Account, (2) to obtain payment with respect to Property held in the Account, or (3) to take any other action required with respect to the Property held in the Account, and in the Bank's own name to guarantee as Client's signature so affixed. 12. INDEMNIFICATION As additional consideration for the Bank's acceptance of this Account and Agreement to act as "Agent," Client agrees to indemnify, and hold Bank, its officers, directors, employees and agents harmless from and against any and all losses, liabilities, demands, claims, and expenses, any attorney's fees and taxes (other than those based on Bank's net income) arising out of or in connection with this Agreement, or out of any actions of Client or Client's agents which are not caused by Bank's gross negligence or willful misconduct. This provision shall survive the termination of this Agreement and shall be binding upon each party's successors, assigns, heirs and personal representatives. 13. AMENDMENT AND TERMINATION OF AGREEMENT 13.1 Amendment. This Agreement may be amended only by a written agreement executed by both Bank and Client. 13.2 Termination. This Agreement may be terminated at any time by written notice from one party to the other. Such termination shall be effective immediately. In addition, this Account shall terminate upon notification to the Bank of Client's incapacity or Client's death. Upon termination, Bank shall have a reasonable amount of time to transfer the Property held in the Account in accordance with the written instructions of Client or the person or entity legally entitled to receive such property. Costs related to termination, including without limitation, costs for shipping securities and other Property held in the Account and costs of re -registering securities, generating reports and accounting for disposition of cash shall be charged to the Account. 14. ENTIRE AGREEMENT This Agreement and Addendum (not Applicable) constitutes the entire Agreement between the parties. All previous agreements, whether written or oral, between the Bank and Client, are hereby superseded, except any direction to Bank prohibiting it to disclose information to issuers of securities as provided in Section 5.3. 15. SINGULAR AND PLURAL If more than one person shall execute this Agreement, then where the context permits, singular pronouns shall be deemed to be plural personal pronouns. 16. GOVERNING LAW This agreement shall be governed by, and construed under, the laws of the State of California. 17. TAXATION OF ACCOUNT 17.1 W-9 Certification. Client agrees to provide a completed W-9 or W-8 certification, as appropriate, to Bank. 17.2 Client's Tax Identification Number is: © Union Bank, N.A. (2009-007) 4 of 6 17.3 Client's responsibility for Filing Tax Returns and Paying Taxes. Client is responsible for filing any and all tax returns and for paying all taxes on Property and income held in this Account. 18. NOTICES 18.1 Mailing of Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed as having been duly given on the date of service, if served personally on the party to whom notice is to be given, or on the fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed as follows: Client: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 Attn: Treasurer Bank: Union Bank, N.A. 350 California Street, 6th Floor San Francisco, CA 94104 Attention: Moon Shil Lee, Senior Vice President 18.2 Change of Address. Either party may change the address at which notice may be given by giving ten (10) days prior written notice of such change to the other party. 19. EFFECTIVE DATE This Agreement shall become effective upon the date of receipt by the Bank of the securities and other property described in the attached Schedule A. BY CLIENT: By: Name and Title: Date: By: Name and Title: Date: ACCEPTED: Union Bank, N.A. By: Name and Title: © Union Bank, N.A. (2009-007) 5 of 6 Date: By: Name and Title: Date: SCHEDULE A Bank Accounts Bankers Acceptances Certificates of Deposit Collateralized Mortgage Obligations Commercial Paper Common Stocks Convertible Stocks Corporate Bonds Foreign Securities Futures Government Agency Issues Government Bonds Insurance Contracts Publicly Traded Limited Partnership Units Municipal Bonds Mutual Fund Options Preferred Stocks Private Placements Repurchase Agreements Reverse Repurchase Agreements © Union Bank, N.A. (2009-007) 6 of 6