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Pledge and Security AgrPLEDGE AND SECURITY AGREEMENT THIS PLEDGE AND SECURITY AGREEMENT ("Agreement') is made and entered into this 18tNay of _J U 1 y , 2005 by and between UMB Bank, n.a. ("Pledgor") and City Of Salina , a ("Pledgee") to induce Pledgee to deposit public funds with Pledgor from timeupon such ter to time in such amounts, for such times and ms as Pledgee and Pledgor may agree ("Deposits"). NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor and Pledgee agree: DEFINITIONS. All terms used but not defined herein shall have the meanings ascribed thereto in Operating Circular No. 7, Appendix C ("Operating Circular No. 7") of the Federal Reserve Bank of Kansas City ("FRBKC") TRANSFER AND PLEDGE OF SECURITIES. As collateral security for the payment of any and all Deposits in excess of One Hundred Thousand and 00/100 Dollars ($100,000.00), or such other limitation on deposit insurance coverage applicable for depositors of the same type as Pledgee announced from time to time by the Federal Deposit Insurance Corporation, now or hereafter made by Pledgee with Pledgor and all renewals thereof (collectively, "Liabilities"), Pledgor hereby pledges to Pledgee and grants Pledgee a security interest in securities pledged to Pledgee, held in a Restricted Securities Account at FRBKC and evidenced by the FRBKC Statement of Holdings. III. THE RESTRICTED SECURITIES ACCOUNT. 1. Pledgor and Pledgee agree and acknowledge that the Book -Entry Securities pledged hereunder will be maintained by the FRBKC in a Restricted Securities Account for the benefit of Pledgee in accordance with the terms and conditions of Operating Circular No. 7. 2. As outlined in Operating Circular 7, FRBKC will send a confirmation ("Confirmation") to Pledgee and Pledgor for each Collateral Transaction related to the Restricted Securities Account established hereunder, evidencing the Book -Entry Securities pledged hereunder. 3. Notwithstanding any provision of Operating Circular No. 7 to the contrary, Pledgor and Pledgee agree that each Book -Entry Security held in the Restricted Securities Account established hereunder may be the subject of a Collateral Transaction from time to time as Pledgor requests and Pledgee authorizes as outlined in Operating Circular No 7. 4. FRBKC may be required to transfer or deliver the security to Pledgee or to any other entity pursuant to any statute or regulation applicable to securities pledged for public deposits. FRBKC is authorized and directed to comply with all requirements of any applicable statute or regulation related to the securities. FRBKC shall thereafter be released and discharged from any further liability or duty whatsoever with respect to such securities. 5. Notwithstanding any provision of Operating Circular No. 7 to the contrary, Pledgor and Pledgee agree that as long as FRBKC has not received written notice from Pledgee certifying that Pledgor is in default of its obligations under this Agreement, Pledgor shall be entitled to receive all principal payments, interest and other income on the Book -Entry Securities held in the Restricted Securities Account established hereunder (including, without limitation, any such securities received by FRBKC as a substitute for, proceeds of, or otherwise with respect to, any securities held in such Restricted Securities Account) and FRBKC is hereby authorized and directed to pay over, deliver or transfer same to Pledgor (or any entity or account designated by Pledgor). 6. Notwithstanding any provision of Operating Circular No. 7 to the contrary, Pledgor and Pledgee agree Pledgor shall have the right to substitute for one or more designated Book -Entry Securities then held in the Restricted Securities Account established hereunder, other Book -Entry Securities of at least equal par value. REPRESENTATIONS, WARRANTIES AND COVENANTS. 1. Pledgor's Representations Warranties and Covenants. Pledgor hereby represents, warrants and covenants to Pledgee: 1) the execution and performance of this Agreement and the pledge, lien and security interest granted herein was approved by Pledgor's Board of Directors and/or Loan Committee and such approval is reflected in the minutes thereof; 2) a copy of this Agreement (including each Confirmation issued by FRBKC hereunder from time to time) shall be continuously maintained as an official record of Pledgor; 3) the execution, delivery and performance of this Agreement and the transactions contemplated hereunder will not violate any law, charter, by-law, rule or court order applicable to it or any agreement by which it is bound or by which its assets are affected; 614(R 102) 4) it will provide any information and execute such documents as FRBKC may require to establish the Restricted Securities Account contemplated hereunder and/or evidence the agreements of the parties related thereto set forth in this Agreement; and 5) the market value of the Book -Entry Securities pledged hereunder shall at all times equal hundred percent 1( 00 %) of the Liabilities or such other ratio as Pledgor and Pledgee may from time to time agree in writing. 2. Pledgee's Representations Warranties and Covenants. Pledgee hereby represents, warrants and covenants to Pledgor: 1) it is a state or local government or a unit thereof; 2) it is duly authorized to execute and deliver this Agreement, to perform its obligations hereunder; and to deposit funds and monies with Pledgor; 3) the execution, delivery and performance of this Agreement and the transactions contemplated hereunder will not violate any law, charter, by-law, rule or court order applicable to it or any agreement by which it is bound or by which its assets are affected; and 4) it will provide any information and execute such documents as FRBKC may require to establish the Restricted Securities Account contemplated hereunder and/or evidence the agreements of the parties related thereto set forth in Article III of this Agreement, including expressly but not limited to any documentation, notification or authorization required by FRBKC to effect the release or substitution or Book -Entry Securities pledged hereunder and/or the termination of this Agreement. 5) if a collateral transaction requested by Pledgor results in pledged securities adequately collateralizing current Pledgee deposits, Pledgee agrees to promptly authorize FRBKC to release the excess collateral as requested by Pledgor. V. DEFAULT. Pledgor will be in default of its obligations under this Agreement upon its failure to perform its obligations hereunder or its failure to pay the Liabilities when due according to the terms and conditions of any agreement between Pledgor and Pledgee governing any of such Liabilities. Upon Pledgoes default hereunder, Pledgee shall have all rights of a secured party granted under the Uniform Commercial Code then in effect in the state in which Pledgee is located. VI. TERMINATION. The Pledgee or Pledgor may terminate this Agreement and close any Restricted Securities Account established at FRBKC with 30 calendar days advance written notice of the termination to the other party and the FRBKC. VII. MISCELLANEOUS. 1. Governing Law. This Agreement shall be governed by and construed under the laws of the State under which Pledgee is organized except to the extent that such laws are preempted by federal law. 2. Counterparts. This Agreement may be executed in counterparts. 3. Assignment. This Agreement is neither assignable nor transferable, 4. Third Party Beneficiary. FRBKC shall be entitled, as a third party beneficiary, to all benefits and rights accruing to or applicable to it under this Agreement, and shall not be obligated or incur any duty or obligation hereunder to any person whomsoever. There is no requirement that the Agreement be acknowledged or accepted by FRBKC before delivery, transfer or designation of any Book -Entry Securities as collateral hereunder. 5. Notices. All notices, Confirmations and other documents and notices required or authorized herein may (as permitted) be delivered, sent electronically, or mailed to the parties hereto at the respective addresses set forth above or below. li UMB National Bank of America ("Pledgor") P.O. Box 560 Salina, KS 67402-0560 By: Name: DALE PFIEFER Title: VICE PRESIDENT Citv of Salina Address: 300 W. Ash Salina, KS 67401 By: e: Name: Rodney Fr Title: Director of Finan e ("Pledgee") 614 (R 1102)