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Security Agreement Ol../2'1/!003 09:28 FAX 7853095738 .. - - ---- -.-_0 ..>-0>. ø..." "cr. ~~v.. CITY OF SALINA :):)lj Corporate [4J 002 IaIOO2 SECURI1Y AGREEMENT This security agreement is made and emered into this 17!b day of 1anu~, 20@, by and between City of Salina. hereinafter caned the "municipalitY', Security Savings Bank.. E. S.B..., hereinafter called "depository bank", and -, hereinafter called the .Cagent", WHEREAS. the municipality has deposited and will in the future deposit public funds in the depository bank in amounts exceediQg the amounts insured by the Federal Deposit Insurance Corporation or it successor, hereinafter called "FDIC"; and WHEREAS, the munidpaJity requires that the amounts of its deposits in excess of the amounts insured by the IDIC be secured by pJedge of collateral as requÛ'ed and authorized by KS.A 9-1401. ~ &çL and amendments thereto~ and WHEREAS, the depository bank desires to deposit, maintain, pledge and assign., for the benefit of the governing body of the municipality, investment property and fmancial assets consisting of certificated securities, uncertificaíed securities, security entitlements> and undivided fractional interests therein, and negotiable promissory nOtes and mortgages securing payment thereof, to secure the deposits of public funds by municipality in the depository bank: and. if an agent is a party to this agreement, to cause the agent to do so; and \VHEREAS, the parties hereto have entered into a Custodial Agreement with Feder~ Home Loan Bank ofToDek~ as CUStodian, dated January 17. 2003.. hereinafter called Custodial Agreement, which CuStocUaJ Agreement is incorporated herein by reference and made a part hereof: and/or have investment property held in a restricted securities account with the Federal Reserve Bank of Kansas City; and WHEREAS, the partíes hereto desire to reduce their security agreement to writing: NOW, THEREFORE, the municipality, the depository bank and, if an agent is a parry to thj s agreement, the agent agree as foHows: 1- The investment propcny and financial assets in which a security interest is hereby granted the municipality by the depository bank and, if an agent is a party to this agreement, the agent to secure payment of deposits made by the municipality in the depository bank shall consist of one or more oftbe fonowing or security erttitlements with respect thereto: (a) Direct obJígations of, or obligations that are insured as to princ:ipal and interest by, the United States of America or any agency thereof and obJigations, including but not limited to letters of credit, and securities of United States sponsored corporations which under federal law may be accepted as security for public funds; (b) bonds of any municipal corporation or quasi-municipal corporation of the state afKansas which have been refunded in advance oftbeÚ" maturity and are r;/24!~003 09:29 FAX 78ß}O9§7~8__~ a~ù~ CITY OF SALINA ~;)þ \,;orporate [4]003 I4J 003 fully secured as to payment of principal and interest thereon by deposit in trust, under escrow agreement with a bank, of direct obligations of: or obligations the principal of and the interest on which are unconditionally guaranteed by, the United States of America; (c) bonds of the state of Kansas; (d) general obligation bonds of any municipal corporation or quasi-municipal corporation of the state of Kansas; (e) Tevenuð bonds of any munic:ipal corporation or quasi.municipaJ corporation of the state: arKansas if approved by the state bank commissioner. (t) temporBIy notes of any municipal corporation or quasi-municipal corporation of the state of Kansas which ace genera] obligations of the municipal or quasi- municipal corporation issuing the same; (g) warrants of any municipal corporation or quasi-municipal corporation of the state of Kansas the issuance of which is authorized by the state board of tax appeosls and which are payable ftom the proceeds of a mandatory tax levy; (h) bonds of either a Kansas not-far-profit corporation or of a local housing authority that are rated at least Aa by Moody's Investors Service or AA by Standard & Poor's Corp.: (i) bonds issued pursuant to KS.A12-1740, et ~'. and amendments thereto, tbat are rated at least MIG-l or Aa by Moody's Investors Service or AA by Standard & Poor's Corp.~ (j) notes of a Kansas not-for-profit corporation that are issued to provide only the interim funds for a mortgage Joan that is insured by the federal housing administration; (k) bonds issued pursuant to KS.A 74-8901 through 74-8916. and amendments thereto: (1) bonds issued pursuant to KS.A 68-2319 through 68-2330, and amendments thereto; or (m)negotiable promissory notes together ~th first lien mortgages on one to four family residential rea) estate located in Kansas securing payment of such notes, which notes and mortgages satisfy the limitations set out at KS.A. 9-1 402(d)(l 3), and amendrnents thereto. 01/24.,/200309:29 FAX 7853095738 " - - .- - -. -- .,~ O.L" "..'" r1~,)" CITY OF SALINA SSB Corpors'te [4]004 141004 2. The depository bank and, if an asetlt is a party to this agreement, the agent hereby grant to the municipality and its governing body a security interest in the investment propertY.. financial assets and security entitlements with respect thereto held in the securíties account of depository bank with custodian under the Custodia] Agreement and identified as Pledged Financial Assets in joint safekeeping/custody receipts issued by custodian to mUnicipality and depository bank, or held in a restricted securities accoUnt with the Federal Reserve Bank of Kansas City to seœre the deposits of municipality in depositol}' bank. 3. The depository bank and. if an agent is a party to this agreement, the agent shall take such action or actions as are necessary to make the security interest granted herein enforceable and to attach, and to pertèct the security interest herein granted. The security imerest in the investment prop~, financ:iaJ assets and security entitlements with respect thereto granted herein shall be perfected by the depository bank and. if an agent is a party to this agreement, the agent causing control of the investment property, financial assets and security entitlements with respect thereto under the Kansas uniform commercial code to be given to the municipality- 4. The depository bank and, ¡fan agent is a pany to this agreement, the agent shall guu:rt municipality a security interest in eligible investment property, financial asscrs and security entitlements with respect thereto having an aggregate market value equaJ to 1 00 percent of the amount of the total deposits of public funds in the depository institution. including accrued interest, Jess so much of any deposits as in insured by the FDIC. 5 . The depository bank and, if an agent is a party to this agreement) the agent shall transfer or deposit the investment property, financial assets and security entitlements with respect thereto subject to the security interest to or with the Kansas state treasurer, the federal reserve bank of Kansas City. the federaJ home loan bank of Topeka, or a state or national bank or trust comparty authoñzed to do business in Kansa~ as provided in KS.A. 9~]405, and amendments thereto. 6. Except when tbe collateral ÌnveQtment property, financial assets and security entitlements with respect thereto are held by the Federal Reserve Bank of Kansas City, a Custodial Agreement between the depositoI)' bank, the municipality, the office or institution to which collateral financial assets are tTarJsferred pursuant hereto, herein caUed the "custodian)) and, if an agent ¡Iii a party to this agreemen~ the agent shall be executed by the parties to the Custodia] Agreement, and be retained in the recordB of the depository bank. The joint custody receipt issued purswuu to the terms of the Custodial Agreement and the records of the custodian shall deSCribe the specific investment property, financial assets and security entitlements wìth respect thereto in which a security interest is granted municipality by the depository bank, and, if an agent is a party to this agreement, the agent. and which are heJd by the cuStodian to secure deposits by municipality in the depository bank. When the investment propeny, financial assets and serority entitJements with respect thereto are deposited with the Federal Reserve Bank of:Kansas City. they shan be held 01/24/3003 09: 3_0 J~x..]8.5.~.~9!F!.J8oo.. I;>&.,U; CITY OF SALINA ~:SH Corporate [4] 005 [4]005 ìn a restricted securities account as collateral to secure deposits of the municipality in the depository bank, and not withdrawn or transferred &om the restricted securities account except Upon the direction of the municipality and the depository bank, except as provided ia paragraph 9. Payments of interest on investment property, financial assets and security entitlements with respect thereto maybe credited to an appropriate funds account. 7. The depository bank and, if an agent is a party to this agreement, the agent represent and warrant to the rnunicipaHty that~ (a) No other person or entity iB a legal and equitable owner of the investment property, financial 88setS and security entitlements with respect thereto deposited, maintained, pledged and assigned by it to secure the deposits made by the municipality in the depository bank. (b) No security interest has been or will be granted by it in the investment property, financial assets and security entitlements with respect thereto so deposited, maintained. pledged and assigned Other than that granted herein or which has been or may be granted in undivided fractional interests in financial assets not pledged to the municipality. (c) Deposits made by the municipality in the depository bank are insured by the FDIC up to $100,000 1n the aggregate for all time and savings deposits, and up to $100.000 in the aggregate for all demand deposits. (d) It is duly authorized to execute this agreement and the Custodial Agreement, that this agreement and the Custodial Agreement have been approved and authoril;ed by its board of directors. that this agreement and the Custodial Agreement are refleCted in the minutes of said board of directors, and that this agreement and the CuStodial Agreement will be continuously maintained from the 11 me of their execution as official records of the depositoIY bank 8. The depository bank shall be in default and the municipality shaH be entitled to foreclose the security interest in the investment property. financiaJ assets and security entitlements with respect thereto deposited. maintained, pledged and assigned pursuant hereto in the event the deposito-ry bank fails to pay, according to its terms. any deposit of funds of the municipality. 9. In the event of default, investment property. financial assets and security entitlements with respect thereto deposited. maintained, pledged and assigned pursuant to this agreement shall be subject to sale pursuant to the laws of the state of Kansas to satisfy the obligations of the depository bank to the municipality. 10. This security agreement may not be assigned in whole or in part, and is binding upon the parties, their successors and assigns. 0l/2,l/"lO03 09: 30 FAX 7853095738 , VLILI/UJ r~! ~4:LH YAX 913 894 9232 CITY OF SALINA SSB Corporat:e i4I 006 By: Its By: Its By: Its [4] 006 (MÙnicipality) (DepositoI)' Bank) ~PI'14fl43 (Agent)