Security Agreement (2000)SECURITY AGREEMENT
This security agreement is made and entered into this 20th day of January ,
2000 ) by and between The City of Salina , hereinafter called the "municipality",
UMB NATIONAL BANK OF AMERICA , hereinafter called the "depository bank", and
UMB BANK n. a. , hereinafter called the "agent".
WHEREAS, the municipality has deposited and will in the future deposit public funds
in the depository bank in amounts exceeding the amounts insured by the Federal Deposit
Insurance Corporation or its successor, hereinafter called the "FDIC"; and
WHEREAS, the municipality requires that the amounts of its deposits in excess of the
amounts insured by the FDIC be secured by pledge of collateral as required and authorized by
K.S.A. 9-1401, et seq., 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 financial assets
consisting of certificated securities, uncertificated 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
WHEREAS, the parties hereto have entered into a Custodial Agreement with
N/A , as custodian, dated , hereinafter called
Custodial Agreement, which Custodial 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 parties hereto desire to reduce their security agreement to writing:
NOW, THEREFORE, the municipality, the depository bank and, if an agent is a party
to this agreement, the agent agree as follows:
1. The investment property 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 of the following or security entitlements with respect thereto:
(a) Direct obligations of, or obligations that are insured as to principal and
interest by, the United States of America or any agency thereof and obligations,
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 of Kansas which have been refunded in advance of their maturity and are
OVER, PLEASE
M 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) revenue bonds of any municipal corporation or quasi—municipal corporation
of the state of Kansas if approved by the state bank commissioner.
(f) temporary notes of any municipal corporation or quasi—municipal corporation
of the state of Kansas which are general 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
appeals and which are payable from the proceeds of a mandatory tax levy;
(h) bonds of either a Kansas not—for—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 K.S.A. 12-1740, et seg., and amendments thereto,
that are rated at least MIG -1 or Aa by Moody's Investors Service or AA by
Standard & Poor's Corp.;
I]
0) notes of a Kansas not—for—profit corporation that are issued to provide only
the interim funds for a mortgage loan that is insured by the federal housing
administration;
(k) bonds issued pursuant to K.S.A. 74-8901 through 74-8916, and amendments
thereto;
(1) bonds issued pursuant to K.S.A. 68-2319 through 68-2330, and amendments
thereto; or
(m) negotiable promissory notes together with first lien mortgages on one to four
family residential real estate located in Kansas securing payment of such notes,
which notes and mortgages satisfy the limitations set out at K.S.A. 9-1402(d)(13),
and amendments thereto.
2
-
2. The depository bank and, if an agent 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 securities account of
depository bank with custodian under the Custodial 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 secure deposits of municipality in depository 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 perfect the security interest herein granted. The security
interest in the investment property, financial 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 com inercial code to be given to the
municipality.
4. The depository bank and, if an agent is a party to this agreement, the agent shall
grant municipality a security interest in eligible investment property, financial assets and security
entitlements with respect thereto having an aggregate market value equal to 100 percent of the
amount of the total deposits of public funds in the depository institution, including accrued
interest, less so much of any deposits as is 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 federal home loan bank of Topeka, or a state or national bank or trust
company authorized to do business in Kansas, as provided in K.S.A. 9-1405, and amendments
thereto.
U
6. Except when the collateral investment property, financial assets and security
entitlements with respect thereto are held by the Federal Reserve Bank of Kansas City, a
Custodial Agreement between the depository bank, the municipality, the office or institution to
which collateral financial assets are transferred pursuant hereto, herein called the "custodian"
and, if an agent is a party to this agreement, the agent shall be executed by the parties to the
Custodial Agreement, and be retained in the records of the depository bank. The joint custody
receipt issued pursuant to the terms of the Custodial Agreement and the records of the custodian
shall describe the specific investment property, financial assets and security entitlements with
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 held by the custodian to secure
deposits by municipality in the depository bank.
When the investment property, financial assets and security entitlements with
respect thereto are deposited with the Federal Reserve Bank of Kansas City, they shall be held
9
OVERS PLEASE
• in a restricted securities account as collateral to secure deposits of the municipality in the
depository bank, and not withdrawn or transferred from the restricted securities account except
upon the direction of the municipality and the depository bank, except as provided in paragraph
9. Payments of interest on investment property, financial assets and security entitlements with
respect thereto may be 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 municipality that;
(a) No other person or entity is a legal and equitable owner of the investment
property, financial assets 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 in the aggregate for all time and savings deposits, and up
• to $100,000 in the aggregate for all demand deposits.
(d) It is duly authorized to execute this agreement and the Custodial Agreement,
that this agreement and the Custodial Agreement have been approved and
authorized by its board of directors, that this agreement and the Custodial
Agreement are reflected in the minutes of said board of directors, and that this
agreement and the Custodial Agreement will be continuously maintained from the
time of their execution as official records of the depository bank.
8. The depository bank shall be in default and the municipality shall be entitled to
foreclose the security interest in the investment property, financial assets and security
entitlements with respect thereto deposited, maintained, pledged and assigned pursuant hereto in
the event the depository bank fails to pay, according to its terms, any deposit of funds of the
municipality.
9. In the event of default, investment property, financial assets and security
entitlements with respect thereto deposited, maintained, pledged and assigned pursuant to this
agreement shall be subject to sale pursuant to the laws of the state of Kansas to satisfy the
obligations of the depository bank to the municipality.
10. This security agreement may not be assigned in whole or in part, and is binding
upon the parties, their successors and assigns.
rd
•
•
0
THE CITY OF SALINA
(Municipality)
UM$ NATIONAL BANK OF AMERICA (Depository Bank)
By:
,t4L4k—�
Its 5-;� . t-1.
By:
Its
100952
(Agent)
5