1
EXHIBIT 10.49
[FEDERAL HOME LOAN BANK OF TOPEKA LETTERHEAD]
American Investors Life Insurance Company (Customer) and the Federal Home Loan
Bank of Topeka (Custodian) hereby agree on April 12, 2000, that the Custodian
shall hold and dispose of all securities and other property of the Customer
deposited with, delivered to or received by the Custodian, subject to the
following terms and conditions:
1. (a) The Custodian will hold the securities in one or more custodial
accounts (referred to as Custodial Account, whether one or more) which the
Custodian will open and maintain in such name(s) as may be agreed upon from
time to time with the Customer.
(b) The Customer authorizes and instructs the Custodian to maintain the
securities in the Custodial Account directly in its offices or indirectly
through custody accounts which have been established by the Custodian with
the following other securities intermediaries: (i) another bank or trust
company located within the United States (Subcustodian); and (ii) a
securities depository or clearing agency or system in which the Custodian or
Subcustodian participates (Depository). The Custodian may, at any time in
its discretion, terminate any custody account at any Subcustodian or
Depository.
(c) Subject to the aforesaid provision, securities are to be held in the
Custodial Account in coupon bearer form; with respect to securities that are
received in registered form, the Custodian is authorized to reregister such
securities in the name of its nominee or the nominee of a Subcustodian or
Depository, unless alternate registration instructions are furnished.
(d) In consideration of the registration of any stocks, bonds, securities
or other property in the name of a nominee, the Customer agrees to pay on
demand to the Custodian or nominee the amount of any loss or liability
claimed or asserted against the Custodian or its nominee by reason of such
registration, including any liability for stockholders' assessments.
(e) Should any securities that are forwarded to the Custodian by the
Customer, and that are subsequently deposited with a Depository, not be
deemed acceptable for deposit by the Depository for any reason, the Customer
shall immediately furnish the Custodian with like securities in acceptable
form or, in the alternative, the Custodian is authorized to charge the
Customer's account for the cost of replacing such securities and for any
other fees or charges as may be payable to such Depository as a result of
such unacceptable deposit.
(f) The Custodian is authorized to accept, act upon and rely upon each of
the following (Instructions): (i) all signed, written statements given by
one or more of the officers, employees or agents of the Customer as are
designated by resolution of the Customer's board of directors, as provided
to the Custodian, and any amendments thereto, from time to time; and (ii)
all statements received by telephone, facsimile transmission, bank wire or
other teleprocess acceptable to the Custodian which it believes in good
faith to have been given by such authorized person or which are transmitted
with proper testing or authentication pursuant to terms and conditions which
the Custodian may specify. The Custodian shall incur no liability to the
Customer, or otherwise, as a result of any act by the Custodian in
accordance with instructions on which the Custodian is authorized to rely
pursuant to the provisions of this paragraph.
(g) In complying with Instructions for delivery of securities, the
Custodian will make deliveries through (i) the Federal Reserve system,
pursuant to applicable regulations and operating circulars of the Federal
Reserve Banks, all as amended from time to time; or (ii) the facilities of
any Depository pursuant to the Kansas Uniform Commercial Code and the rules
and procedures of such Depository, and any subsequent amendments thereto.
Page 1 of 7
2
(h) The Customer acknowledges familiarity with the current securities
industry practice of delivering physical securities against later payment
on delivery date. Notwithstanding instructions to deliver securities
against payment the Custodian is authorized to make delivery against a
temporary receipt (sometimes called a "window ticket") in lieu of payment.
The Custodian will use its best efforts to obtain payment thereof during
the same business day, but the Customer solely assumes all risks of payment
for such deliveries. The Custodian may accept checks, whether certified or
not, in payment for securities delivered, and the Customer assumes sole
responsibility for the risks of collectibility of such checks.
2. Unless instructed otherwise in writing, the proceeds of sales,
redemptions, collections and other receipts, and dividend and interest
income will be credited to the Customer's account. The term "account" shall
be deemed to mean any one or more of the Customer's deposit accounts
maintained with the Custodian at the time of the transaction referred to.
3. (a) In no event shall the Custodian be responsible to ascertain or to
take any action concerning any puts, calls, conversions, exchanges,
reorganizations, offers, tenders or similar matters relating to securities
held in the Custodial Account other than to transmit to the Customer, in a
timely manner, all information relating to any such action received by the
Custodian from any offerors or otherwise. All Instructions to the Custodian
with respect to tender offers must be in writing and delivered to the
Custodian within sufficient time for the Custodian to act thereon if any
action is required. As used herein, "sufficient time" shall mean at least
one business day before the last permissible date for action by the
Custodian, and the Custodian shall have no liability to the Customer for
failure to act upon Instructions received by the Custodian at any time
after such date.
(b) All proxies and material pertaining thereto received by the Custodian
in connection with stocks, bonds, securities and other property held in the
Custodial Account will be forwarded to the Customer.
(c) Should any securities held by a Depository be called for a partial
redemption by the issuer of such securities, the Custodian is authorized to
accept allocation as determined pursuant to the program then in effect at
such Depository or, in the absence of any such program, in the Custodian's
sole discretion to allot the called portion to the respective holders in
any manner deemed to be fair and equitable in its judgment.
(d) Recapitalizations and stock distributions will be credited to the
Custodial Account within five (5) business days after the Stock Exchange
due bill redeemable date (ten [10] business days after payable date) in
order to comply with the normal course of settling the Custodian's position
at the Depository and sufficient time to allocate these shares to the
Custodial Account. Stock dividends will be credited on the payable date.
(e) The Custodian is authorized to exchange temporary for definitive
certificates and old certificates for new or overstamped certificates
evidencing a change therein.
4. (a) With respect to foreign securities or securities for which
adequate financial information is not readily available, the Custodian's
responsibility is expressly limited to safekeeping. With respect to such
securities, the Custodian assumes no responsibility for coupon payments,
redemptions, exchanges or similar matters affecting such securities.
(b) Collections of monies in foreign currency, to the extent possible, are
to be converted to U.S. dollars at customary rates. All risk and expense
incident to such foreign collections and conversions are for the Customer's
account, and the Custodian shall have no responsibilty for fluctuations in
exchange rates affecting such collections or conversions.
Page 2 of 7
3
5. The Customer acknowledges its responsibility as a principal for all of
its obligations arising under or in connection with this Agreement,
notwithstanding that the Customer may be acting on behalf of other persons.
The Customer warrants its authority to deposit in the Custodial Account
and any other account of the Customer any securities and funds which the
Custodian or its agents receive from the Customer and to give Instructions
relative thereto: The Custodian shall not be subject to, nor shall its
rights and obligations with respect to this Agreement and the Custodial
Account be affected by, any agreement between the Customer and any other
person. The Custodian assumes no liability to any customer of the Customer
or to any beneficiary for which the Customer may be acting as agent, bailee
or fiduciary.
6. (a) The Custodian shall be responsible for the performance of only
such duties as are set forth herein or contained in Instructions given to
the Custodian which are not contrary to the provisions of this Agreement.
The Custodian will use reasonable care with respect to the safekeeping of
securities in the Custodial Account and, except as otherwise expressly
provided herein, in carrying out its obligations under this Agreement. So
long as and to the extent that it has exercised reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness
of any securities or evidence of title thereto received by it or delivered
by it pursuant to this Agreement and shall be held harmless in acting upon,
and may conclusively rely on, without liability for any loss resulting
therefrom, any notice, request, consent, certificate or other instrument
reasonably believed by it to be genuine and to be signed or furnished by
the proper party or parties, including, without limitation, Instructions,
and shall be indemnified by the Customer for any losses, damages, costs and
expenses (including, without limitation, the fees and expenses of counsel)
incurred by the Custodian and arising out of action taken or omitted with
reasonable care by the Custodian hereunder or under any Instructions. With
respect to a Depository, the Custodian shall only be responsible or liable
for losses arising from employment of such Depository caused by the
Custodian's own failure to exercise reasonable care. In the event of any
loss to the Customer by reason of the failure of the Custodian or a
Subcustodian to exercise reasonable care, the Custodian shall be liable to
the Customer to the extent of the Customer's actual damages at the time
such loss was discovered, without reference to any special conditions or
circumstances. In no event shall the Custodian be liable for any
consequential or special damages. The Custodian shall be entitled to rely,
and may act, on any advice provided by counsel for the Customer on any
matters relating to this Agreement, and the Custodian shall be without
liability for any action reasonably taken or omitted pursuant to such
advice.
(b) In the event the Customer subscribes to an electronic on-line service
and communications system offered by the Custodian, the Customer shall be
fully responsible for the security of the Customer's connecting terminal,
access thereto and the proper and authorized use thereof and the initiation
and application of continuing effective safeguards with respect thereto and
agrees to defend and indemnify the Custodian and hold the Custodian
harmless from and against any and all losses, damages, costs and expenses
(including the fees and expenses of counsel) incurred by the Custodian as a
result of any improper or unauthorized use of such terminal by the Customer
or by any others.
(c) Subject to the exercise of reasonable care, the Custodian shall have
no liability for any loss occasioned by delay in the actual receipt of
notice by the Custodian or by a Subcustodian of any payment, redemption or
other transaction regarding securities in the Custodial Account in respect
of which the Custodian has agreed to take action under this Agreement. The
Custodian shall not be liable for any loss resulting from, or caused by,
acts of governmental authorities (whether de jure or de facto), including,
without limitation, nationalization, expropriation and the imposition of
currency restrictions; devaluations of or fluctuations in the value of
currencies; changes in laws and regulations applicable to the banking or
securities industry; market conditions that prevent the orderly execution
of securities transactions or affect the value of securities; acts of war,
terrorism, insurrection or revolution; strikes or work stoppages; the
inability of a local clearing and settlement system to settle transactions
for reasons beyond the control of the Custodian; nuclear fusion, fission or
radioactivity, or hurricane, tornado, cyclone, earthquake, volcanic
eruption or other acts of God.
Page 3 of 7
4
(d) The Custodian shall have no liability in respect of any loss, damage
or expense suffered by the Customer, insofar as such loss, damage or
expense arises from the performance of the Custodian's duties hereunder by
reason of the Custodian's reliance upon records that were maintained for
the Customer by entities other than the Custodian prior to engagement of
the Custodian under this Agreement.
(e) The Custodian shall not be liable to the Customer, and the Customer
agrees to indemnify the Custodian and its nominees, for any loss, damage or
expense suffered or incurred by the Custodian or its nominees arising out
of any violation of any investment restriction or other restriction or
limitation applicable to the Customer pursuant to any contract or any law
or regulation.
(f) The provisions of this section shall survive termination of this
Agreement.
7. The Custodian may charge any account of the Customer for all costs incurred
by the Custodian in connection with its receipt of securities for the
Custodial Account. The Custodian is not obligated to effect any transaction
or make any payment in connection therewith unless there are sufficient
available funds on deposit in the Customer's account or funds have
otherwise been made available to the Custodian to its satisfaction. The
amount by which payments made by the Custodian with respect to property in,
or to be received for, the Custodial Account, or with respect to other
transactions pursuant to this Agreement, exceed available funds and result
in an account overdraft shall be deemed a loan from the Custodian to the
Customer in the amount of such overdraft, payable on demand. Such overdraft
loan shall bear interest, to the maximum extent permitted by law, at a rate
per annum for each day during the period commencing on the due date thereof
until such amount shall be paid in full equal to 315 basis points above the
previous business day's daily effective federal funds rate as published in
Federal Reserve Statistical Release H.15, or any equivalent successor rate,
release or publication. Any such overdraft loans shall be based on the
Custodian's sole determination to make (or refrain from making) the
underlying advance in each case.
8. In order to secure the payment and performance of all of the Customer's
liabilities to the Custodian at any time outstanding, the Customer hereby
grants a lien and right of setoff as to the balance in any non-custodial
account of the Customer, from time to time, and the Custodian may, at any
time, in its sole discretion and without notice, appropriate and apply
toward the payment of liabilities to the Custodian the balance of each such
account and or take such other action(s) or exercise any other options,
powers and rights which the Custodian now or hereafter has as a secured
party under the Kansas Uniform Commercial Code or any other applicable law.
The term "liabilities" shall include all of the Customer's liabilities
arising hereunder, including, but not limited to, loans, other advances,
interest, fees, charges, expenses and attorneys' fees and expenses.
9. The Custodian agrees to provide the Customer with regular monthly reports
of holdings in the Custodial Account, or at such more frequent intervals as
the parties may agree. To the extent that the Custodian reports the market
value of the Custodial Account holdings, the Customer acknowledges that the
Custodian now obtains and will in the future obtain such information from
outside sources that it deems to be reliable, and confirms that the
Custodian does not verify or represent or warrant either the accuracy or
the completeness of any such information furnished to the Customer.
10. (a) The Custodian shall be under no duty to take any action with respect
to any property held in any Custodial Account except to the extent of any
Instructions properly issued by the Customer.
(b) In the event that the Custodian agrees, at the request of the
Customer, to appear on behalf of the Customer, and prosecute or defend any
legal or equitable proceeding, the Customer agrees to indemnify the
Custodian for any and all costs and expenses including, without limitation
attorneys' fees and expenses.
Page 4 of 7
5
(c) The Custodian is authorized and empowered, in the name and on
behalf of the Customer, to execute any certificates of ownership or
other reports, declarations or affidavits that the Custodian is or may
hereafter be required to execute and furnish under any regulation of
the Internal Revenue Service, or other authority of the United States,
so far as the same are required in connection with any property that
is now or may hereafter be held in the Custodial Account, claiming no
exceptions on behalf of the Customer. The Customer shall notify the
Custodian immediately in writing of any material change in the
Customer's status that may affect any such certificates, reports or
other required documents, or on the contents thereof.
11. The Customer agrees to pay the Custodian, as compensation for its
services hereunder, its applicable fees in effect from time to time,
of which the Custodian will provide the Customer with notice.
12. The Customer agrees to and does hereby indemnify and hold harmless
the Custodian from any and all loss, liability (excluding any liabi-
lity occasioned by the negligence or misconduct of the Custodian's
employees, or by robbery, burglary, theft or other disappearance of
any securities while in the Custodian's physical possession), claims,
damages and expenses (including, without limitation, attorneys' fees
and expenses) arising from the Custodian's performance of services as
Custodian hereunder, including matters arising out of a settlement of
any dispute prior to the Custodian's being named as a defendant in
any litigation or proceeding, and whether or not the Custodian is a
party to such litigation or proceeding.
13. This Agreement shall continue until terminated by either party upon
at least sixty (60) days' prior written notice to the other. In the
event of the termination of this Agreement at the Customer's request,
the Custodian may transfer to the Customer all stocks, bonds,
securities and other property registered in the name of the
Custodian's or Subcustodian's nominee or a Depository, and the
Custodian shall charge all expenses incident to such transfer to the
Customer's account. If termination of this Agreement is made at the
Custodian's request, the above-described charges shall be at the
Custodian's expense. Notwithstanding the foregoing, if the Customer
fails to pay any amount when due under this Agreement, and fails to
make such payment within twenty (20) days after the Custodian sends
the Customer written notice of nonpayment, the Custodian may terminate
this Agreement upon at least seven (7) days' prior written notice to
the Customer and charge all expenses incident to such transfer to the
Customer's account.
14. Any notice, request, consent or Instruction given, made or withdrawn
pursuant to this Agreement shall be in writing or by machine-readable
electronic transmission, and shall be deemed to have been duly given
to and received by a party hereto three (3) business days after it
shall have been mailed to such party at its address herein provided,
postage prepaid, if delivered by first-class mail, or, if delivered
by hand or by machine-readable electronic transmission, when actually
received by such party at its principal office.
15. This Agreement embodies the entire agreement and understanding
between the parties relating to the subject matter hereof and super-
sedes all prior agreements between such parties, and all oral and
written statements by either party, that relate to such subject
matter. No modification, amendment or waiver of any provision of this
Agreement, or consent in any departure therefrom, shall be effective
unless executed by the party against whom such change is asserted,
and any consent or waiver shall be effective only in the specific
instance and for the purpose for which given.
16. This Agreement shall be governed by the laws of the State of Kansas
(without reference to choice of law doctrine) and shall be binding
upon, and inure to the benefit of, the parties and their successors
and assigns.
17. The federal and state courts within the State of Kansas shall have
sole and exclusive jurisdiction over any claim or dispute which may
arise hereunder or which either party may allege or assert against the
other and/or any transactions contemplated hereunder.
18. If any provision of this Agreement is deemed to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other provisions of this Agreement.
Page 5 of 7
CusiAgreeAminvest.doc
6
19. Kansas Insurance Department Requirements
To the extent any provision in this Section is inconsistent with any other
provisions of this Agreement, the provisions of this Section shall govern.
All other terms of the Agreement shall remain in full force and effect.
(a) The Custodian will indemnify the Customer for any loss of securities
of Customer in the Custodian's custody occasioned by the negligence or
dishonesty of the Custodian's officers or employees, or burglary, robbery,
holdup, theft, or mysterious disappearance, including loss by damage or
destruction.
(b) In the event that there is a loss of the securities for which the
Custodian is obligated to indemnify the Customer, the securities shall be
promptly replaced or the value of the securities and the value of any loss
of rights or privileges resulting from said loss or securities shall be
promptly replaced.
(c) The Custodian shall not be liable for any failure to take any action
required to be taken hereunder in the event and to the extent that the
taking of such action is prevented or delayed by war (whether declared or
not and including existing wares), revolution, insurrection, riot, civil
commotion, act of God, accident, fire, explosion, stoppage of labor,
strikes or other differences with employees, laws, regulations, orders or
other acts of any governmental authority, or any other cause whatever
beyond its reasonable control.
(d) Securities held in physical form will be located at Bankers Trust
Company, 130 Liberty Street, New York, New York 10006.
(e) The Custodian's records shall identify the name of the clearing
corporation, securities depository or United States Bank, the location of
the securities, and if held through an agent, the name of the agent.
(f) All securities held in custody that are registered must be registered
in the name of the Customer; in the name of a nominee of the Customer; in
the name of the Custodian or its nominee, if held in a securities
depository, in the name of the securities depository or its nominee; or if
held in an authorized clearing corporation, in the name of the clearing
corporation or its nominee as provided in K.S.A. 40-2b20.
(g) The obligations of the Custodian under this Agreement shall not be
released as a result of a clearing corporation or securities depository
holding the securities held in custody.
(h) The Custodian may utilize the Federal Reserve System book entry
program.
(i) The Custodian may utilize the facilities of a securities depository or
authorized clearing corporation.
Page 6 of 7
7
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed in
their names by their duly authorized officers as of the date first
above-written.
American Investors Life Insurance Company, Inc.
555 S. Kansas Avenue
P.O. Box 2039
Topeka, KS 66601-2039
By: /s/ Mark V. Heitz
----------------------------------------------
Authorized Signature
Mark v. Heitz, President
----------------------------------------------
Typed Name and Title
Attest: /s/ Michael H. Miller
-----------------------
Michael H. Miller
- --------------------------------
Secretary
Federal Home Loan Bank of Topeka
2 Townsite Plaza
P.O. Box 176
Topeka, KS 66601-0176
Date: April 17, 2000 By: /s/ Steven D. Reichle
------------------------ -----------------------------------------
Steven D. Reichle, SVP
-----------------------------------------
Typed Name and Title
Attest: /s/ Tad Kramer
-----------------------
Tad Kramer
- --------------------------------
Secretary
Page 7 of 7