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1997-304AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON DESIGNATING A DEPOSITORY FOR CITY FUNDS FOR A TERM BEGINNING DECEMBER 1, 1997 AND ENDING NOVEMBER 30, 1999, AUTHORIZING THE MAYOR TO EXECUTE A DEPOSITORY CONTRACT WITH TEXAS BANK AS THE PRIMARY DEPOSITORY, AND PROVIDING FOR AN EFFECTIVE DATE WHEREAS, the City of Denton has noUfied all the banking institutions within the City of Its intent to receive bid appheatmns for the custody of City funds for a term beginning October l, 1997, and ending on September 30, 1999 an accordance w~th the requirements of Section 105 012 of the Local Government Code, and WHEREAS, the City of Denton has received a bid application from a banking institution desiring to be designated as the primary depository for both operations and payroll accounts and standard banking services as requested m the proposal, and WHEREAS, after such opemng, the City Council found, on the basis of the bid applleaU0n, that Texas Bank has submitted the application offenng the most favorable terms and conditions to the City for the handling of such funds, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS SECTION I That Texas Bank IS hereby selected and designated as the primary depository for operations and payroll accounts and banking services beginning December l, 1997, and ending November 30, 1999 The Mayor, or in his absence, the Mayor Pro Tem, is authorized to execute a depository contract with Texas Bank SECTION II That the contract with said depository having its office and place of business in the City of Denton, Texas, shall be attached hereto and made a part hereof, and the same is hereby in all things accepted SECTION III That the following officials, Ted Benavldes, City Manager, Rack Svehla, Deputy City Manager, Kathy DuBose, Assistant City Manager for Finance, and Diana Ortiz, Direetur of Fiscal Operations, are hereby authorized to transact business w~th the above listed mstituUons regarding dmly banking transactions or investments for the City of Denton S]~CTION IV That the City Manager is authorized to make the expenditure of funds and fees as indicated in the attached contracts and proposals S~CTION V That this ordinance shall become effective immediately upon its passage and approval JENNIFER WALTERS, CITY SECRETARY Ap~.R~vED'A~/"'f -- ' 't? TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY ¢ \docs\ord\doposltovyordinanco Page 2 DATE OCTOBER21, 1997 CITY COUNCIL REPORT TO Mayor and Members of the City Council FROM Kathy DuBose, Assistant City Manager of Finance SUBJECT BID It 2071 -- DEPOSITORY AGREEMENT ~th: Staffrecommends fins bid be awarded to the lowest bidder, Texas Bank, as listed e ordinance The estimated annualized amount is $ 38,503 00 per year Investment Committee recommends approval SUMMARY. Tlus bid is to acqmre a bank deposito~y for public funds from eligible financial institutions The agreement Wall not cover any investment transaction actlwt~es other than safekeeping sei~ncas and possible purchase of eert~ficates of daposa watlun a predefined hnnt The City plans to manage its own investment portfoho The contract period Wall be for two years beginning December 1, 1997 and ending November 30, 1999 The primary obje~ves of the depository agreement are · To employ, a Bank that is both capable of prowdlng banking sermces and Walling to be attentive to the City s money matters, · To mamnuze the total dollars earned by the City on invested monies in order to be prudent and effective custo&ans of the taxpayers' financial resources, · To maintain a good working relat~onstup w~th the depository Bank, and · To adequately compensate the depository Bank for services provided to the C~ty and to allow a reasonable profit to be earned, subject to competmve forces in the marketplace · To fully comply Wath tho reqmrements of Texas Local Government Code Chapter 105, as amended, and Chapter 252 as amended Ex}ubit A (the tabul~on sheet) mchcates the specific sarvmes and the amount charged for each sarvace The actual usage of the tnthv~dual serwces Wall vary creating a variance in the annual total expenditure This wall reflect a substantial amount of saxnngs for the City This ts the first t~me in several years that compettuon has presented itself for the bank depository bid The chanl0ng of accounts is a sigmficant acaon and a very complete evaluation has been performed prior to presenang our recommendation to Council First State Bank has extended the current contract for 60 days while the evaluation was completed and wlale the transit~on is in process The costs involved m changing bank accounts has also been considered They include acquiring checks, daposlt shps, endorsement stamps, lockable bags, stafft~me involved in reconciling new accounts at two banks dunng the transition, and, coordinat~ng all courier services A presentation has been made to the Investment Committee and they concur wath this recommendanon Bids were sohcaed from all local banks pROGRAMS. DEPARTMENTS OR GROUPS AFFECTED. Finance Department, Treasury D~v~slon 3 CITY COUNCIL REPORT OCTOBER 21, 1997 PAGE 2 OF 2 ~ Payments of deposxtory agreement charges w~ll be taken from budget funds ~n the Treasury D~wsxon account # 100-042-024M-8935 Attachment Tabulation Sheet Contract Pledge Agreement Proposal Respectfully submitted Approved Name Tom D Shaw, C P M Title Purch~mg Agent 943 AGENDA 4 14. 9 O0 ~~e oloooo o oo oo oo~olo X o : < · ~o ooo ~o o 0 0 0,0 0 0 00lOI 0 0 ~ ooo~oo oooo o ooo,ooo oo ~ oo~ oo oo,oo~ ;~ ~EE- w DEPOSITORY CONTRACT STATE ~)F TEXAS § COUNT Y OF DENTON § ARTICLE I Texas B~nk, hereinafter referred to as "Depository" at 729 Ft Worth Drive, Denton, Denton County, ~exas 76201, a bank located tn the State of Texas and the deposits of which are insured by the F.~deral Deposit Insurance Corporation, was duly selected m compliance with the terms and pro~tstons of Tex Loc Gert Code §131 903 and Tex Tax Code 6 09, by the City Counctl of the Cgy o~f Denton located m Denton County, Texas hereinafter referred to as "City" to serve as the d~posltory of the funds of C}ty The actton of the City Councd was duly taken and the Depostt¢ ry Is tO serve pursuant to this contract for a period of two years, beginning December 1, 1997 ant ending November 30, 1999, and until tts successor shall have been duly selected and qualified therea~er, unless sooner termmated by Deposttory's failure to adhere to all reqmrer~ mrs of this contract ARTICLE II ~ The Depomory shall pledge to the City and deposit m safekeeping and trust wtth another bank acceptable to the City approved secunues as defined or referred to in Texas Local Governn~ent Code 105 031 and the Collateral for Public Funds Act, Chapter Act, Chapter 2257 of the T~xas Government Code, m a,n amount of market value sufficiently adequate to protect all funds of C~ty on deposit with Depository dunn8 the terms oftlus contract, but not less than that reqmred[by Chapter 105 of the Texas Local Government Code, {}2257022 of the Texas Governn ent Code, the City's mvastment Policy, and all other apphcable laws and Depository shall ex~ cute the Depository Pledge Agreement attached to this contract as Exhibtt "A" and made a t art hereof as if written word for word herein All deposits, including accrued lnteiest, are to be fully collaterahzed in accordance wtth the above terms Depository will be responsible for detemimn$ daily tf the collateral is sufficient m accordance wtth this contract, the Deposlt¢ nea for Mumcipal Funds Act, the Collateral for Pubhc Funds Act and all other laws Pledged s~¢untles will be listed as an addendum to the Depository Contract m Exhtba "A" Pledged lecunties ~wdl be held by the Federal Reserve Bank m joint custody wtth the City and the Dope sltory Provtded further th0,t 1~ The approved securmes shall be of the ktnd defined or referred to in Texas Local Governr0ant Code 105 031 and acceptable to the C~ty, and the amount pledged shall be tn a total market v~.lue as directed at any ttme by the Ctty Councd tn accordance w~th standards acceptable to the C~ly Councd and as required by apphcable laws 21 The con&lions of the pledge of approved secunttes reqmred by this contract are that the Dep~sttory shall cre&t the account(s) of C~ty wtth the full amount or all State of Texas Warrant~presented to Deposttory for the account of the Cay no later than the banking day next followlnl/~ the day of Depository's receipt of such warrants, that Depository shall faithfully perform ~ll duties and obhganons d~v,o, lwng upon Depository by law and this contract, including specifically the duty to collect w~th diligence checks, drains, and demands for money deposited w~th Depository, PaY upon presentation all checks or drafts drawn on order of the City ~n accordance with its,orders duly entered according to the laws of Texas, pay any time deposit or cert~ficat~ of deposit of C~ty m Depository upon maturity or aider the period of notice required. and fa~tllfully keep, account for as required by law. and faithfully pay over, at maturity or on demand, !as City may elect, to any successor depository all balances of funds the City then has on deposit W~th Depository 31 The pledge of approved securities required by this contract shall be a continuing pledge, ~easing only upon the later of l:he terminanon of this contract or the fulfillment by Deposlto~ Of all of its duties and obhganon arising out of this contract, (and a continuing security interest in favor of City shall attach ~mmedlately upon any such pledge to all proceeds of sale and io ifil substitutions, replacements, and exchanges of such securities, and ~n no event shall such continuin$ security ~ntorest be voided by any act of Depository), but notwithstanding the foregoml/ Depository shall have the right, with the consent City, to purchase and sell and substltut~ or replace, any and all of tho approved securities pledged pursuant to tbas contract with other apl~rOved securities, provided that ifil of the other conditions ofth~s contract are adhered to by DepoSitory, and such pledge shall be m addition to ifil other remedies available ~n law to C~ty 41 This contract shall become binding upon City and Depository only upon approval by the City Council of the contract and the proposal attached hereto To the extent of conflict, if any there,be, between this contract and the proposal, the terms of this contract shall control 5 i Upon executwn, Depository shall immediately furmsh or cause to be furnished to City original a~nd valid sgfekeepmg or trust receipts issued by the bank holding the approved securities pledged l~ursuant to this contract, marked by the holding bank on their face to show the pledge and market value as required above, and City shall promptly furmsh two executed copies of this contract, photoc~,pies of all such receipts, and photocopies of new receipts for subst~tutions and additions and written notice of deletion, when made, to Depository 6 ~ On the execution date of this Depository Contract the depository bank agrees to pledge anI amount that is equal to funds anticipated to be on deposit from day to day 7 ~ Any clo~mg or failure of' Depository. or any event deemed by C~ty to constitute a closing o~' failure of Depository, shall be deemed to have vested full title to all approved secuHtlesfpledged pursuant to this Depository Contract in C~ty, and C~ty ~s hereby empowered to take possession of and sell any and all of such pledged approved securities, to the extent not forbiddenI by law, whether m safekeeping at another bank or in possession of C~ty. and C~ty ~s spec~ficifi~y so empowered by Depository 8~ Depository agrees that it will act, and the C~ty hereby designates Depository as ~ts primary qepos~tory, with both part~es agreeing that all ~unds hereto shall be deposited and invested ~ compliance w~th all applicable local, state, and federal laws including, but not l~m~ted to, the [~epository for Mumc~pal Funds Act, Chapter 105. §10S 001-105 092 of the Texas Page 2 Governt ~ent Code(V A T C S ), the Collateral for Pubhc Funds Act, Chapter 2257, §2257 00t- 2257 08 of the Texas Government Code (V A T C S ), the Pubhc Funds Investment Act, Chapter 2256, §22,56001-2256 104 of the Texas Government Code (V AT C S), the C~ty Charter md Code of Ordinances of the C~ty of Denton, Texas as amended, and the Investment Pohcy a~ lopted by the C~ty It ~s also the mtentmn of the part~es hereto, m conformance w~th the above-n~ rationed laws, that the C~ty shall remain at maximum flex~bihty to revest its funds prudentl ~ to earn the h~ghest rate of return consistent w~th the C~ty's Investment Pohcy and all other aPl fl~cable reqmrements of the law 9 Depository shall, m return for the C~ty depositing its funds ~n the Depository, prowde profess~qnat banking services as an independent contractor for the charges as set forth m the Depositc~ry's proposal dated August 25, 1997, which proposal is attached hereto as Exhibit "B" and mad~ a part ofth~s contract for all purposes 1~0 Depository shall perform all those banking services set forth m Exhibit "A", ~ts proposal! attached hereto as Exhibit "B", the B~d #2071 - Request for Apphcanon for Bank Depos~tc~ry, which ~s attached hereto as Exhibit "C' and made a part of th~s contract for all purposes,~ and Exhibit "D", Cash Management Contract, which ~s also attached hereto and made a part h~reof for all purposes In case of conflicts between th~s depository contract and the aforementioned exhibits or m ease of a conflict between such exhibits, the conflict will be resolved[as follows Fxrst, flus depository contract controls over all exh~bxts, second, Exhibit "A' controls Dver Exhibits "B', "C", and "D", third, Exhibit "C" controls over Exhibits "B" and "D", and fourth, Exh~blt "D' controls over Exhibit "B" ARTICLE III Subsequent to the executmn date ofth~s contract, should the amount of deposit exceed that which is mlnally pledged, sa~d amount will be increased, and the safekeeping receipts of the additional secunt~e~ will be prowded m accordance with Paragraph A(5) of Article II hereto ARTICLE IV Th~s con Iract shall be non-exclusive and the City reserves the right to designate secondary or addiuon~ 1 depositories ,and to, if necessary, enter into Depository Agreements for other City funds w~ :h other banks m Denton County or adjacent counties whenever the interests of the City may den and The City also reserves the right to contract vath other financial mst~tutions under separate contract if the City determines that additional finaneml services are necessary m the admm~st 'at,on, collection, investment, and/or transfer of mumcipal funds ARTICLE V Depository and its officers and employees perforrmng services hereunder agree that m the performa~nce of these professional services, they shall be responsible to the level of competency and shalIff use the same degree of Skill and care as presently maintained by other practicing profess~qnals performing the same or s~mflar types of work ~n the State of Texas Page 3 ARTICLE VI Depository shall l.n. demmfy and hold harmless the City, ~ts officers, agents, and employees from loss, damage, liability, or expenses on account of any claims, damages, or injuries, whatsoever to all perso~s ~ncluding employees of Depository and C~ty, which may arise from any negligence, error, or,mission in the performance ofthls contract on the part of Depository or any breach of their obhgatlons or duties under this contract, and shall defend, at its own expense, any suits or other pro~eedlngs brought against the City, Its o~cers, agents, and employees, and shall pay any expenses io satisfy all judgments which may be incurred or rendered against them or the City ARTICLE VII All exh~bits attached to tlus contract are ~onsldered to be integral parts of same, and Depository will fully ~omply with the terms and condmons of same ARTICLE VIII For purposes of determining venue and the law governing this contract, services performed under this contract are performed m the City and County of Denton, Texas Any dispute regarding this contract shall be decided and settled in a court of competent jurisdiction sitting m Denton County, TExas ARTICLE IX This contract may be executed ~n any number of counterparts, and each such counterpart shall be deemed fc~r all purpose~ to have the same effect as if all part~es to this contract had signed one and the sa~e s~gnature page of this contract ARTICLE X The City 8nd Depository shall, as a matter of right w~thout necessity of default on the part of City or D~epos~tory, terminate th~s cofitract at any time by giving the City or Depository, terminate ~his contract at any time by g~vlng the City or Depository ninety (90) days prior notice in writing I Should Depository default in any of its obhgatlons to C~ty under this contract, City shall give tDeposltory notice of default in writing, and Depository shall have thirty (30) days from receipt of the not~ce to correct the default If Depository fails to remedy default wlthm this time, Clty,I at its s01e option, may cancel flus contract and Depository shall be fully responsible to pay City ~ny and all damages caused by ~ts default Depository shall be pa~d for all services satisfactorily performed in accordance W~th th~s contra~ up to date of any termination hereunder Depositor~'s filing of a petition in bankruptcy or being declared insolvent by a federal bank regulatory!agency shall be considered a material breach of this contract Nothing herein shall deprive Clty of any other remedies in law and equity to enforce the terms, condit~ons, and obhgat~on~ of ~his contract including, but not hmlted to, instituting suit for damages or, m the alternativel specific performance of this contract Page 4 ARTICLE XI All not,cps required under this contract must be g~ven by certified marl or registered marl, addressedto the proper party, at the following addresses CITY DEPOSITORY Ted Benawdes, C~ty Manager Texas Bank C~ty of D~nton Cathy Fraz~er 215 E MeKmney Assistant V P - Business Development Denton, Texas 70201 729 Ft Worth Drive ~ Denton, Texas 76201 E~ther pa~ may change the address to which not,ce ~s sent by gwxng the other party not,ce of the new a~ldress in the manner prowded ~n this section ARTICLE XII Depository shall not assign any interest ~n th~s contract and shall not transfer any ~nterest xn thxs contract (~hether by assignment, novation, or otherwise) w~thout the prior written consent of the C~ty thereto ARTICLE XIII Th~s contract shall be binding upon and enure to the effect of the pames hereto and their respect~v~/,helrs, executors, admlmstrators, legal representatives, successors, and assigns where permitted ~by th~s contract ARTICLE XIV Th~s contract and the attached exhibits constitute and express the enure agreement between the part,es and shall not be amended or modified except by written instrument s~gned by both part~es ARTICLE XV Depos~to~ hereby does represent to the Ctty that ~ts offcer or officers who have executed th~s contract h~v~ full and complete capacity and authomy to execute a binding Depository Contract which ~s effective, for all purposes, as to all services to be prowded and all terms and obhgat~ons under thts icontract ARTICLE XVI Th~s contract ~s executed by the C~ty and the Depository ~n three cop~es, all of whtch shall be deemed originals Page 5 ! AGREED AND ACCEPTED on bohalf of Depository thxs the 21 day of OC~mER , 1997 CITY OF DENTON By Date Name (Print) ~ED B~li~VTDES T~tle cx~ Address Ci~y of Denton 215 E. McK~nney Denton. Texas 76201 ATTEST JENNIFER WALTERS, CITY SECRETARY HERBERT L PROUTY, CITY ATTORNEY TEXAS BANK By ~ Date AUTHORIZED SIGNATURE Name (Print) Title ~.H ~ e.lr' Page 6 ORDINANCE EXHIBIT EXHIBIT B DEPOSITORY PLEDGE AGRF~EMF~NT Exhibit B DEPOSITORY PLk'~GE Whereas, City of Denton (heremat~er called "Depositor") has selected 'T~_ ~._~ ~c._ .a bank charteredby the State of Texas, (hereinafter called the 'Bank'), as a depository for certain of its funds in demand deposits and/or interest-bearing nme deposits enutled as follows Account Name (s) Type of Account Account Number Employee Claims Account Public Funds Chackmg Operauug Account Pubhc Funds Checking Unhty Smlung Fund Public Funds Checking Payroll Account Public Funds Clteckius Rehabilitation Commission Public Funds Checking Transporla?aon Grant Public Funds Checking CDBG Commercial Development Block Grant Public Funds Chackmg ~)_~ Control Concentration Public Funds NOW Chackms Industrial Development Authority Public Ftmds Chackm~ Denton Rettremem & Nursing Center Finance Authority Public Funds Checking and such addtuonal accounts as Depositor may from time to tune dsslsnate, and thc Bank desires to be the depository of such funds; and WHEREAS, any and all cash balances m any funds deposited wtth the Bank must be conunuously secured by a valid pledge to Depositor of certain securlnns (hemg herem called the 'Approved Secunues") Approved Securmes shall mean all secunn~s which under the laws of the State of Texas, can be used to secure the deposits of Depositor The aggregate market value of the Approved Securities shall be at all umes be, exclusive of accrued interest, equal to or in excess of the total fuods of Depositor on deposit vath tho Bank, to the extent that sad funds are not insured by the Federal Deposit Insurance Corporatton NOW, THEREFORE, for value received and tn considerauon of the mutual promises and covenants herein contained, Depositor and the Bank agree as follows Depositor deposits shall be secur~ and, ~ank' ~ereby.lE, ants a.s, ecurn7 interest to Depositor in all Approved Secunflnshaldmsafekeepmgat~(the Safekceptoglnsomuon ) Except as provlded in paragraph 6 of such Approved Secunnns shall be subject only to the joint inslrucnons of both (a) anthortacd individuals appointed by Depositor, and (b) specifically anthortzed officers of the Bank The Depositor shall provlds to the Bank written nonce and specimen signatures of authorized represcntauves of Depositor on Addendum A of this document for the purpose hereof, and thereafter written notice of the removal from or addition to the exisnng names of such author,,ad representatives The Bank shall provide to the Board of Directors of Depositor or its authorized representatives wrnlen notice and specimen signatures of authorized officers of the Bank on Addendum B of this document for the purposes hereof, and thereafter wrtrten nonce of addtoon to or removal from the extsung list of names of such officers Addendum A and B are attached to and made a pan of this agreement as if written word for word herein I of B 2 The Bank may make additions to or subsumuons of Approved Securmes from time to rune and may vathdraw excess Approved Securmes, with the amount and charac,-r of the new and/or remaiamg secunues to be subject to die approval of Depositor If the Approved Sec~rmas, so propnsed for subsumuon are of ~he kind, character amount and value required by law, such subsumdon shall be pcnmltod If approved, ibe subsumted Approved Securities shall thereafter be subject to all the ~erms and conditions of this Pledge Agreement as fully as if originally incorporated herein 3 Contsmporaneously with the execution of this agreement and at the umc of the subsmuuon or release of any of the Approved Securities, the Bank shall execute and dehver to Depositor a Memorandum describing the Approved Securities deposited ~o or withdrawn from the securmes held pursuant to this Agreement 4 The Bank shall nor be obligated to accept interest bearing time deposits of Depositor m excess of $20,000,000 (twenty million dollars), but may choose to accept such deposits at its discranon 5 The Bank shall faithfully do and perform all of the duties and obhganons required by the laws of the State of Texas for depositories of Depositor, and shall upon presentaUon pay all checks drawn on it by the duly aUthorized reprerenteuves of Depositor asainst collected fimds of Deposl~or on demand deposit, and shall at thc expiration of the term for which it has been chosen as depository of Depositor torn over to its successor all funds, property and things of value coming into its hands as depository Upon default of any of the Bank's obligations hereunder or upon insolvency of the Bank or upon the appomunem of a receiver of the Bank and at any time thereafter, Depositor may sell at public or private sale the Approved Securities or any part theranf and apply the proceeds of such sale to the sansfacuon of any indebtedness caused by virtue of said default This right is in adthuon to oflter remethns which Depositor may have under this agreement and without prejudice to its rights to maintain any suit In any court for redress of lnjurlcs sustained by the Depositor under this Agreement 7 The Safekeeping Institution named herein hereby agrees to hold all Approved Securmes deposited with it pursuani to the ierms of this Agreement and to deliver them m accordance with the terms hereof Additionally Safekeeping Institution agrees to serve as collateral agent for Depositor to the extent necessary to allow Deposuor to perfect its security interest granted herein m the Approved Securities 8 This agreement may be terminated by either the Bank, Depositor or thc Safekeeping Institution by giving thim (30) days prior written notice m the other parties, by giving notice to thc following persons at thc following addresses Depositor City of Denton, Texas Teodoro Benavldas, City Manager 215 East McKmney Denton, Texas 76201 All applicable provisions and requirements of the laws of the State of Texas govermng depositories for Depositor shall be a pan of this Agreement 10 The vallthty, operanon, and performance of this Agreement shall be governed and conu'olled by thc laws of the State of Texas, and the terms and conditions of this Agreement shall be construed and interpreted in accordance with the laws of this State Venue for any proceeding brought for any breach of this Agreement shall be m Denton County, Texas ATTEST DEPOSJTOR CITY O~N~OIq, TEXAS NAME [~lennife:i~Walte~ - - , TITLE ~,.,.,~l~v Sect~_tary NAMEBY ('~.[ack Mdler TITLE ~ ,~^o~ ~c 2 of 8 BANK ATTEST BANK BY Lyn R. Jackson NAME -A..~. ~ ~-~,~ch~'~.,,. TexasBank · - ' "~ -- A Bank Chartered by ~e Sm~ of Tex~ N~E Gwen ' ~TLE ~n ~ ~y A~EST BY SAFEKEEPING INSTITUTION NAME A Bank Char~red by ~he Slate of Texas BY NAME TITLE APPROVED AS TO LEGAL FORM HERBERT C PROUTY, CITY ATTORNEY BY 3 of 8 ADDENDUM A e tollowmg designated md,vlduais are authorized re~resan~auvas empowered to direct ~ a bank chartered by the State of Texas ("Bank') and "{;'e~,l '~,~L Lo,~. '~d.,,.~ ('Safelr. zepmg Insutuuon ) selected under Item 1 or the Deposttory Pledge Agreement m r~gard to collateral pledges releases and subsumr, ons m the joint safekeepmt accoum !tuch pledges releases and subsumtmns shall follow procedures scl forth in the Deposttorv Pledge Agreement TOfficer's Signature Name and Title ACCEPTED NAME TITLE ADDF.~DUM B "~"~.~ , a bank charteredby the Sta~ of Texas (~13an~') has designated the follovan~. offi~:ers ~s SPecffi,~-ally authorized to msn'uct Ctty of Denton ("Depositor") and ~"l~d ~.~ k~,~-. ~ ("Safekeeping lnsutution") selected under Item I of the Deposttory Pledge Agreement tn regard to collateral pledges releases and substitutions m the joint safekeeping account Such pledges, releases lind subsntuuons shall follow procedures set forth m the Depostto~ Pledge Agreement Authorized Officer's Stgnature Name and Title ,~o~ ~c 5 of 8 CERTIFICATE OF SECRETARY OF -~HE~ENtfg~-L~MN-~TrDIfi~OUNT~I~WHTTL~-OF BOARD OF DIRECTORS OF TexasBank A BANK CHARTERED BY THE STATE OF TEXAS Board of Dzrectors The undersigned, be,ng the duly appointed Secretary of the Semo~-{:~aa-aae~-Dts~olm~-~ommmc~-(the -:C. ommato~:').of TexasB/~lk , a bank chartered by the S~ate of Texas (the Bank"), hereb~ certifies that (1) In accordance wlth thc authonv/ granted to lt by the Board of Direcwrs of the Bank, on October 22, _, 1997 the Committee approved the pledge of collateral, as required by the depository comract with the City of Denton ("the City"), to secure the Bank's obhganons with respect to deposits malntemed at the Bank by the City (2)The Commmec approval has not been amended, modified or repealed in any respect and is in full force and effect on the date hereof, and Board (3) The minutes of the e~miiiiii~ meeung held on Oct 2 2 , 1997, will be maintained as part of the permanent records of the Bank NAME Gwen unzcK TITLE CFO & Secretary 6 of 8 CF~'I'II~ICATE OF SECKETARY OF THE BOARD OF DIRECTORS OF TexasBank A BANK CHARTERED BY THE STATE OF TEXAS TexasBank Weather fordThe undersigned, betng the duly ale¢~d $~rem.ry of ~ Board of Directors (~he "Board") of'Denten;, Texas, a bank chartered by the S~a~ of Texa~, hereby cemfies that anached hereto is a mm and correct copy of a resoluuou of the Board adopted at a meeunl~ held on __~..~y.~, 1997, and such resolu-on h~ not been amended, modified, or repealed in any respect, and lsm full force and effect on the da~e hereof NAME Gwen Chick TITLE CFO & Secretary 7 of 8 R~$OLUTION GRANTING CF.,RTAIN CORPORAT£ AUTHORITY TO LOAN AND DISCOUNT COMMITTEE Board of Directors RESOLVED, that the S~mor-L-oan-and'Btscm~m ~.~l~,~ee'~s hereby granted the co.orate authority to approve on behalf of TexasBank ("BANK') such security agreement, and other agreements related to the deposit of funds In this BANK by any governmentalentity as such ~ s~l_-D~moaa~-.C-oammle~-shall deem m the best in.rests of thls BANK from time to time ~oara of D:Lrec~:ors 8 of 8 ORDINANCE EXHIBIT B DEPOSITORY AGREEMENT REQUEST FOR PROPOSAl, CITY OF DENTON, TEXAS AUGUST 1997 BID # 2071 OPENING DATE: AUGUST 26, 1997 NOTICE TO BIDDERS Sealed blc[ proposals wtll be received by the City of Denton, Texas at the office of the Purchasing Agent prior to 2 00 p m August 26, 1997 then publicly opened to purchase the following listed items as per bid instructions and specifications BID # :1071 - RltIQUEST FOR APPLICATION FOR BANK DEPOSITORY SERVICES Qualified prospective b~dders may obtain copies of the bid invitat~on with mformatlon to b~dders, bid proposals, plans and/or spec~fications at the office of the Purchasing Agent, located at 901-B Texas Street, Denton, Texas in the Purchasing/Warehouse portion of the Service Center complex The City of Denton, Texas reserves the right to reject any and all bids and to wmve defects in bids No officer or employee of the City of Denton shall have a financial interest, direct or indirect, m any contract with the City of Denton Minority and small business vendors or contractors encouraged to bid on any and all City of Denton projects CITY OF DENTON (940) 34947100 TOM D SHAW, C P M PURCHASING AGENT This advertisement to mn August 6, and August 13, 1997 TABLE OF CONTENTS P~(SE I Introducuon 1 II Calendar of Events 2 III Criteria for Evaluation 2 IV Bank Questlouna~re 3 V Account Descnptions 3 A Oeneral 3 B Services and Fees 4 C ~Automa.t~c Payroll D.~ps~t . . 6 D ~weep Acco_un.~. al!~..M, oney Man, et Fund 6 E AutomatlCe l'eller Macllmes 7 F Payment for Services O C611ected Funds Definition 7 H Super NOW Rates 7 I Other Services 7 VI Collateral Ra~lulrements 7 A Securities ~ledged 7 B Reporting g~ulrements 8 C Safekeep~.njg .~eqmremants 8 D Collaterm ~unstltuuons 8 E Maximum Amount Offered 9 F City to Handle Investments 9 G Safekeepmg/W~re Services 9 H Interest'Raies Prod - Certificates of Deposit 9 I Interest Rate Calculations 9 VII Overdrafts 9 A Defimtion 9 B Terms 9 VIII Other Stlpulauons 10 .R..egura_tlon Nouces l0 1~ wire irans~ers 10 C Account Balances 10 D Bank Statements 10 E ~Rlght to,A~udit Records 10 F ~lnanclm ~,eports 10 G .Term of the~Agreeme~ . 10 H investment l~xtenslon ~'erlou 10 I Bank Failure 10 IX Prol~osal Instructions 11 A Date, Time, Location 11 B Rasl~onse to the B~d 11 C Additional Information 11 D Right to Reject Bids 11 X Other M~scellaneons 1 A Periodic Rewew 11 B City Council Action 11 C Bid Advertlsement 11 D Designation of Individuals XI Subnnsslon Checklist 12 XII Alternate Bid-Lockbox Services 12 Exhibit A Depository Contract 14 Exhibit B Deposxtory Pledge Agreement 18 Exhibit C Cash Management Contract 27 I. INTRODUCTION The City of Denton is seeking apphcatlons from ehgtble financial restitutions (*Bank") to be the banking services depository for public funds of the City Tlus agreement will not cover any mveslment transaction activities other than safekeeping services and possible purchase of certificates of deposit within a pre-defined lumt The City plans to manage tis own mvesunent portfolio The contract period will be two yearslbegmmn~ October 1, 1997 and ending September 30, 1999 At the outset, the City wishes to commumcate the primary objectives of the depnsltOry agreement, an important component of the overall treasury and debt management program of the City of Denton o To seek a Bank that is both capable of provithn~ banking services and willing to be attentive to the City's money matters, o To maxuTnZe the total dollars earned by the City on invested momes in order to be prudent and effective custodians of the taxpayers' financial resources, o To maintain a good working relationship with the depository Bank, and o To adequately compensate the depository Bank for services provided to the City and to allow a reasonable profit to be earned, subject to competitive forces m the market place o To fully comply with the reqmrements of Texas Local Ooverument Code Chapter 105, as amended This Request for Proposal (Bid) is intended to serve as the proposal form for the depository agreement There are several blanks to fill m and questions to be answered Any alterations, changes, or deletions to this Bid may be reason for the City to disregard and reject the proposal Any terms m tlus Request for Proposal which are m conflict with Chapter 105, as amended, of the Texas Local Government Code shall be deemed superseded by such chapter Conflicts discovered between this RFP and state law by a bidder should be noted in such bidder's proposal form Bidders will be required, if awarded the depository agreement bid, to execute the documents attached as Exhibits A, B, and C unless bidders note in their bid exceptions to the ternunology in such exhibits City will disregard any exceptions which conflict with Chapter 105 referenced above All points outlined and materials requested will be incorporated into the bidder's reply to be considered for evaluation Attachments will be appropriate in order to answer some of the enclosed questions Questions regarding this Bid may be addressed to Purchasing Agent, c/o City of Denton - Purchasing Department, 901 B Texas St, Denton, TX 76201, FAX 940/349~?302 IL CALENDAR OF EVENTS Target Date Descnntton of Events August 4, 1997 Btd sent to all banks located in Denton and those outside the city that requested a copy August 6-13, 1997 Advertise Bank depository notice m local newspaper August 26, 1997 Receive proposals from interested banks September 2, 1997 Review recommendatton with the Investment Conumttee September 9, 1997 City Council to award contract October 1, 1997 New Bank depository contract period begins HI. CRITERIA FOR EVALUATION The City staff will review the subnutted proposals carefully The recommendations will be based on the proposal determined to be best on behalf of the City and the taxpayers The following areas w~ll be considered In the evaluation of the proposals CRITERIA WEIGHTED PERCENTAGE · Ability to perform the requested services 30% · Agreement to points outlined ~n this Bid and Contract 10% · Cost of banking services 25 % · Rates paid on Super NOW accounts 10% · Financial stablhty of the Bank 15 % · Safekeeping agreements accepted 5 % · Quality of all repons requested S % 2 IV. BANK QUI~TIONNAIRE The Bank is requested to thoroughly answer the following questions Additional pages may be appended if space is inadequate 1 How is the bank chartered? 2 What percent of current loans are classified as non-perfornung9 3 Does the Bank have any sigmficant problems noted by resulatory agencies in the past twenty-four months? If "yes", please explain 4 Indicate the Bank's capital to assets ratio for the last five years $ What was the Bank's 1996 return on assets (ROA)? 6 Attach copies of the Bank's most recent FDIC ~UPBR) call reports V. ACCOUNT DF.,SCRIPTIONS A General The City intends to establish the following Bank accounts Account Name Tvoe Employees Claims Account Zero-Balance Account Operating Account Zero-Balance Account Smlong Account Zero-Balance Account Payroll Account Zero-Balance Account Industrial Development Authority Super Now Rehab Account Zero-Balance Account Concentration Account Super Now Insurance Account Zero-Balance Account Electric Dlstrthutton Account Zero-Balance Account Clordie Account Super Now CDBG Account Zero-Balance Account Contractual Obhgatlon Super Now Ray Roberts Lake Account Super Now Public Properties Super Now Security Account Super Now The City reserves the right to open or close any number or type of accounts throughout the period tf necessary although no changes are anticipated 3 B S~rv~ces and Fees Th~ s~rvices winch should be made available to thc CiD' include but arc not lmuted to the following TOTAL FEE CHARGED/ ESTIMATED MONTHLY PER UNIT VOLUME CHARGE DESCRIPTION OF SERVICE 1 16 accounts Account Mamtenanc¢ 2 16 accounts a) First original bank statemcm per accouni 20/month b) Balance inquiries by phone 20/month c) Balance reporting (dmly computer rcporung system which hs~ previous and curreni day balances, debits, crethts, averages, and check prescnUnents for all accounm) 3 80/month Deposit uclce~s (crethi posUng) 4 25,000/month Items deposited (uncodtng) 5 3,$00/month Checks Pa~d (debit posting) 1,700/month a) Payroll checks 1,800/month b) General thsbursement checks SO/month c) Other debil posUng 6 60/month Wire services 20/month a) Incoming transfers 40/munth b) Outgoing (excludes a¢~lVlttes iff safekeeping account) 2S/month 1) Rcpetutve by computer 5/month 2) Rcpemive by phone S/month 3) Free-form by computer S/month 4) Free-form by phone l$/month $) ACH transfers 7 ~/month Stop payment request 3/month a) Writ~n requcsl 2/month b) Automated request by terminal 8 5 boxes of Coin wrappers furmshcd type/ each cmn month 9 130 books/mo Deposit slips printed 4 TOTAL FEE CHARGED/ ESTIMATED MONTHLY PER UNIT VOLUME CHARGE DESCRIPTION OF SERVICE 10 3 bags/year Large vault cash bags 11 35 bags/year Plasuc drawsmng check bags 12 l/box Safe deposit boxes (10xl0) 13 4 hfs/month Research hours 14 $300,000 on Cost of collateral pledged by the average for 15 bank (quote cost per million accounts pledged) 15 I account Controlled Disbursement service charge 16 9 account Zero balance automauc transfers 17 50/month a) Return items 120/month b) Return items recleared 2/munth c) Return item telephone advice 18 15 accounts FDIC insurance cost 19 I account Secunues clearing and safekeeping a) Mmntenancc charge 13/munth b) Receipts dcpoan~d 12/month c) Receipts withdrawal 2/month d) Coupon collecnons $90 tmlhon e) Safekeeping of assets, per receipt 8/month f) Book-entry security transfers via Federal Rcscrve, per l/year g) Audit confirmations 20 BI-weekly Fees for direct deposit services for payroll employees (950 employees, total payroll ~ $710,000) a) Tape charge b) ACH seulomcm c) Stop payment orders d) Credit/debit posting e) Other (list each specific charge) 5 21 Cash Management System (See Exhiblt C for terms and condmons) A Monthly base fee Normal Service 22 Automated Teller Machines (ATM), see Section E, page 7 A Included as part of overall depository bid award Fee charged per umt , Totel monthly charge , Fee charged per transaction B If awarded ns a separate contractual agreement Fee charged per umt , Total monthly charge , Fee charged per transaction 23 List any other apphcable bank charges NOTE Under a straight fee arrangement with the bank, analysis charges would be debited to thc control concentration account and an analysis fee statement vail be mailed to the City each month Under a compensaung balance method, all accounts would be tied to a main account and collected balances would be maintained to offsc~ service charges Aisc note, that estimated volume above are projecuons based on current annual volumes C Av, tomatic Payroll Deposit Is a service the City offers l~s 950 employees Thc bank would be required to produce bi-weekly payroll transfers from a magnetic tape furmshed by the City m ACH format for transfer of funds directly to the employee bank, savings and loan, or credit umon account Please state the bank's procedure for this service and list appropriate cut-off Umes that wotild apply The City's net payroll is approximately $710,000 each pay period State whether the bank would offer any type of special checking, money market or loan account for the City employees D Does the bank offer any type of sweep account where excess city funds could be invested at a higher rate overnight than tn a Super Now account arrangement~ Does the bank have money market funds consisting of treasuries, agencies, prime commermalpaper, prime domestic bankers acceptances and collateralized or insured certificates of deposit, that the City could uuhze dally as an investment alternanve'~ If so, please explain the fund's parameters and interest earnings history or at~ach a separate prospectus Automated Teller Machines fAT1W~ The bank vail install and maintain Al'Id umts at the following locanons o Mumctpal Bufldm~, 21S E McKinney o D~nton Mumclpal Complex, 601 E Hickory o City Hall West, 221 N Elm The City agrees m furmsh a lighted, inside locanon and sufficient alec~rlcal power for each machine mstellauon Note The City of Denton raserves the n~ht to remove this sectwn from consideration m the award process and to rebid an award under a separate cover Payment for Services The City intends to pay for all account services provided by the Bank as set fourth m Saction V B-E The method expected to be used for the payment of these services is the direct payment method The Bank should d~tbit the appropriate account on a monthly basis The City will require an account analysis each month which will clearly show volume counts, fees charged, and total price for servlCln~ th~ account The aecouot analySiS should also show average ledger balances, average uncollected fends, and average collected balances, interest rates and die amount of in~erest paid or credited to the account These fees are not subject to change for the length of this contract Planse submit a sample of the monthly account analysis statemant that will be provided to the City of Danmn Safekeepln~ fees fur the City's investments shall also be set up on an account analysis and paid monthly Please submit a sample of the safekeeping account analysis Collected l~unds Definition The City desires to receive same day credit for all funds deposited by 3 00 p m The funds should be mvastablc fer any investment Iransacdons that can be executed If not invested, the fends should earn interest at the rate being paid for Super NOW accounts Please attach proposed availabthty schedule Use a separate attechmcnt if necessary Suoer NOW Rates Please provide a detaded explanation of die Bank's policy and methodology used in the semns of rates paid on Supar NOW accounts Also, provide a schedule of all rates paid on Super NOW accounts since January 1, 1996 Speclfically indlcate lf the rates ase apphed to ledger balancas or collected balances Inthcate when the rates chan~e and if they are based on a market rate such as T-Bill thscoum or yield rate If the Bank proposes m pay the City a different rate on Its Super NOW accounts, indicate that proposal Other Services Please specify any other services available m the City of Denton which may be thought to be beneficial or that may apply to the City State all related fees VI COLLATERAL REi~UIREMEN'~ S~tanrities Pledged AS security for the deposits of the City of Denton, the Bank shall pledge to the City securiues equal to the largest total balances the City of Denton maintains in the Bank Certificates of deposit and other evidences of deposit shall be collaterahzed at 102% of market, for U S Treasury Bills, Notes, and Bonds with a remaimn/maturity of three years or less and at 102 % of market for other securities The securi~,as so pledged the amounts thereof and the tune for pledgin~ same must satisfy the requsrements of Texas Local Government Code Chapter 105, as amended The City vail accept as collateral for ~ts certificates of deposit and demand deposits only those securmes ldemlfled by the Public Funds Invesunent Act as ehglble mvasUnco~s Additionally, U S Treasury securmes shall be the primary secuntias acuepted as collateral The maxunum levels needing to be collaterahzod are estunated to be the maximum amounts for the Super NOW accounts and cerUficates of deposn esuma,,'d to be $:3,000,000 These Items constitute the only acceptable means of collaterallzmg tbe City's deposits Tbe securmcs must be held In safnkeepmg by the Federal Reserve Bank of Dallas or another third party financial institution pursuant to a safekeeping ngreemen! signed by the Depository Bank and the City Repurchase agreements are not acceptable as collateral to the City of Denton B Revomna Recmremen~s The Bank shall provide the City a report of securmes pledged on a monfltly basis or at any nme rcques','d by the City Manager, Assislant City Manager of Finance, Director of Fiscal Operauons, or a designated representative This report should reflect the followulg reformation as of the end of each month and be debvered to the City by the 5th of each month Total pledged securities itenuzed by o Name o Type/Dascnpuon/Cusip Number o Par Value o Current Market Value o Maturity Date o Moody's or Standard & Peers Reting (both, if available) C Safekecoma Reumremen~s The securities pledged shall be held in safekeeping by a separate and different Bank other than the depository Bank The original copy of all safekeeping receipts shall be filed with the Director of Fiscal Operanons of the City of Denton The City will reimburse the depository Bank for any safekeeping charges, if any Specify thc safekeeping chargcs that vail apply The City, Depository Bank, and the Safekeeping Bank shall operate in accordance with a master safekeeping agreement signed by all ~hree parties The safekeeping agreement must clearly slate that the Safekecpmg Bank is instructed to release the collateral secunues to the City if the City has determined that ~be Depository Bank has failed to pay on any accounts, or Is m default of ~his agreement, or the City has determined that the City's funds are in leopardy for whatevar reason mclodmg involuntary closure or change of ownership, and if die las~ructioas for release have been formally requested by the Clt~ Council by ordinance or rasolution A copy of thc safekeeping agreement and the name of the safekeeping bank to bc used in thc event you arc awarded the Bank Depository Agreement must be submitted with thc proposal D Collateral Subsumtions Any substituttons of the secormes or roducUoas In the total amount pledged may be made only by and with proper written authorizauon approved by the City Manager, the AsslsUmt City Manager of Finance, Director of Fiscal Operatmns, or his designated representative In the case of a reducuon, the Bank must provide m writing that collateral vail be available when needed to meet normal City balance increases throughout the year The City must approve all securmes pledged Any slate or local government bonds pledged must have a rating of at least A or Al or better by Moody's Investor Services or Standard & Peers Corporauon E Maximum Amoum Offered Please state the maxtmum amount, tf any. of pledged secunues which the Bank is valhng or able to commit for collatorahzed Super NOW accounts throughout the cooti'act period above the $1,000,000 rmmmum requirement F Ctw to Handle Investments The City of Denton vail be responsthle for handling the mvastment bidding process The Depository Bank, along with any ehgthle financial tnsfltutmn shall be included m the bidding process as deemed appropriate and m accordance vath the City's investment policies G Safekeemn~/WIre Services The third-party safekeeping bank must be a subscriber to the Federal Security Wire System In addmon to the safekeeping account tn winch pledged collateral ts held, the City must have access tu a safnkeepu~ account to which Federal securities can be delivered via the Federal Reserve book entry system for a customer account H Interest Rates Paid - Certificates of Denoslt The City may choose to invest in certificates of deposit in the depository Bank or any other eligible fiuanclal mstlmuon The depository Bank agrees to accept time deposits from the City for investment purposes m the form of certificates of deposits in varying amounts and maturities at rates determined by the depository's competitive bid as submitted m accordance vath periodic competitive bid sohcltatious conducted by the City What is the shortest mamnty length in days that the Bank villi accept for certificates of deposit in amounts of $100,000 or greater? Interest Rate Calculations Interest on all certificates of deposit shall be computed on an actual day basis (3§5), and the interest vall be paid to the City on the maturity date Interest calculanous will include the first day m the mvestment period bm vail not Include tile day of maturity Payment vail be made by crediting the Bank account VII OVERDRAFTS A Defimnon The CIW does not intend to have a net overdraft position throughout the course of the coturact An overdraft ,s defined as a negative demand balance in the City accounts collectively, not by individual accoum B Terms Should an overdrat~ occur in the aggregate, the follovang stipulation shall apply The maxltuum number of days the overdraft will be allowed is 2 The maximum amount of the net overdraft to be allowed w~ll be $. 3 The interest rate charged for overdrafts will be per annum computed on an actual day basis VIII. OTHER ~Tu'LrI.ATIONS A Regulation Not~ces The B~ ~11 nou~ &= C~ m ~u~ ~ln ~n (10) days of ~y ch~g=s m Federal or S~g re~lauo~ or laws ~at would ~ore~r aff=ct ~o ~pOSl~ agreement ~e B~ ~all ~so nou~ ~e C~ of ~y ~w ~;co~ ~t ~come ava;lablo m ~o Cl~ ~oughout ~ con.act ~r]od B W~re Tr~fers No~ficaUon of w~re ~rs sh~l ~ made w~m one ho~ of &e ~acuon ~d a duphca~ copy ~shed ~ &e C~ ~n ~en~-four hours C Account B~ces ~c Ba~ shall have a me~ of con~c~ ~e CtW prior W 9 ~ ~ each business ~y to give ~e ending ledger bal~ces for MI ~coun~ ~om &e prewous working ~y D Bt~ Submenu Ba~ gm.menU or sm~ment acuv~w ~11 be rendered by &o first working day a~er ~e close of ~ c~en~ men& ~esmmmentmustincludo~pos~madcon&el~tdayof~cmon~ ~eaccomp~y~ngchec~must bo ~ranged m numerical order E ~ht w Audit ~cords ~e Ba~'s recor~ relatl~ to ~e CIW of Denwn accoun~ shMl be open to rewew by e~er CIW s~ff members or CIw-appom~d independent auditors during no~ business hours F Financial Re~s ~c B~ wgl submu a copy of ~o l~t audited ~ual fi~c~al smtemen~ ~d ~e subsequent queerly supplemenu along m~ ~ ~ual ye~ end umform Ba~ Peffo~ce ~port Term of ~e A~reement ~e ~rm of ~ con~act period m ~b~t A ~11 be for ~o ye~s beg~ng ~tobcr 1, 1997 ~d end~ng September 30, 1999 H Inves~ent Ex~mmn Period ~c Ba~ agrees ~ honor ~d con.hue ~y mves~enu ma~ during ma~e a~r ~e e~rauon ~ of ~e depos~to~ agreement at ~e s~e ra~ esmbbshed before ~e expirat~on of &e conifer ~e mves~ent ex~nsion period will not exceed mne~ ~ys Ba~ Fagure Should ~e B~ f~l, close, or be forced mw reorg~zauondunng ~e ~rm of ~s con~act, C~W rese~es ~e right m c~col ~e conu~t and re-bid for C~'s dopos~m~ 10 IX. PROPOSAL INsriiUCTIONS A Date. Time. Locanon Sealed proposals clearly marked 'Proposal for Bank Depository Agreement" should be delivered to the Purchasing Division located at the City's Service Center, no later than 2 00 p m, August 26, 1997 to the attention of Tom Shaw Purehasm~ Agent 901-B Texas Street Denton, TX 76201 NO PROPOSAL WILL BE RE~ A~'i'A~R 2 00 P.M B l~soonse to the Bid The proposing Bank should use this Bid form to subnut rates and to answer quesUons wherever possible However, any point that the Bank cannot agree vath should be clearly noted with attachments which explain this disagreement Please reference the section and paragraph in these cases Also, please clearly restate the qunsuon when supplying amwers on any supplemental pages C Adthtlounl Informanon The City reserves the right to request adthuonal information or to meet with representauves from proposing orgunizauons to dm:uss points in the proposal before and after submission, any and all of which may be used in fortmng a reconunandauon The City reserves the right to reject any and all proposals X. OTHER MISCELLANEOUS A Periodic Review The City of Denton shall require a review meeting at least once every s~x months to evaluate the worlang relationship between the City and the depository Bank The objncuve will be to address any problems and to seek a responsible solution More frequent meetings may be called If necessary B City Council Acuon The final appointment of a depository Bank will be made by the City Council of the City of Denton C Bid Advertisement This Bid vail be duly advemsed and ~s being offered for conslderauon to all financial insutouons Inside the corporate limits of the City of Denton, as pertmt~d by state laws D Deslgnauon of Individuals Upon being awarded the con~act, the depository bank shn!! designate, In writing, an individual to be the official contact person for all correspondence The City of Denton shall do the same The Depository Bank shall be responsible for trmtong and commumcatmg the terms of dus contract to Bank employees 11 XI. SUBMISSION CHECK A "Bid" vath fill-in-the-blank format B Sample bank statement C Availability of funds sckedule D Money Market Fund prospectus if applicable E Sample monthly collateral report F Sample safekeeping agreement with the Federal Reserve Bank for collateral G Sample safekeeping agreement w~th the Depository Bank for the City's investment securmes H Sample controlled disbursement agreement I Sample wire agreement J Sample stop payment agreement K Sample account analysis statement L Annual financial statement of the bank along vath the last two quarterly FDIC call reports XlI. ALTERNATE BID-LOCKBOX SERVICES The City of Denton Is seeking applications fi.om eligible f'mnnclal msutuuons bidding on the main Request for Proposal (Bid) to include an alternate bid for Lockbox services The contract period w~ll be the same as the main Bid, beginning on October 1, 1997 and ending Septetober 30, 1999 or thereafter until the successor Depository shall have been duly selected and quahfied according to state laws The City of Denton requires a lockbox account for the purpose of collecting and processing the City's utility bills and property tux,ravenues The volume of utlhty bills the City currently receives through the mall is estimated to be 25,000 pieces per month Tax revenues received in the mall are heawest during the months of December and January and average 8,000 places par month During the rntoalnder of the year, tsx revenues mailed ~n are approximately 200 places per month These volume esumates are based on fiscal year ended September 30, 1996 totals The City separates utility bill collections and tax collections into two divisions because of their umqne needs and record keeping constraints Each division would require a separate tape returned for mput to the C~ty's system The Uuhty Dlwslon metchas the accnnnt nnmber, the nnme of the payor, and the address on the coupon and cbeck It does not matter If the amou~ on the check does not malch the amonnt owed on the coupon Tho City's system will antomancally mcldde the past due ,amount on thc next billing All coupons must be returned for reference in handling customer lnqtmuc~ The Tax Division matches the account number, and the amount They also require a printout of who the payor on each account number is If the amounts of the coupon and thc check do not match, this must be separately accounted for on a different tape or prmteut The Tax Division would need eltimr a copy of each cbeck returned or easy and timely access to check copies on a request basis as well as coupons returned with the tape or printout 12 Attach a step by step explanauon of the matl collection and remittance processing pwcedure that the bank follows Bid the cost of services based on the opUons listed below l, Lockbox collection and processing with separate computer printouts for Tax and Utlhty Divisions returned to the City each day 2 Lockbox colloction and processing vnth a magneuc tape returned to the City each day Format specifications of the bank given to the City for internally progrnmmmg the interface needed for mpumng the tape directly Into the City's system 3 Lockbox collection and procassmg with a magnetic tape returned to the City each day Bank supplies format based on the City each day Bank supplies format based on the City's system speclficanons City uses this format to program the mterfaee for thc mngneuc 4 Lockbox collection and processing vath a magnetic tape retonted to the City each day Bank does all progrannm~ necessary to convert City's system to capability of handlin~ the magnetic tape Explain the procedure the bank follows for the record keeping of checks and stubs Does the bank put checks and stubs on microfiche as part of the procedure? Explain the procedure and cost of processtu~ returned checks The C~ty requires that returned checks be sent through twice before returmng them to the City Atiach a cash analysis of the dollar savings and efficiency the City would achieve by having the lockbox service (Bxample take an average deposit of $250,000 which is currently reeelvcd by the City and processed one day before the deposit is made to the bank Checks are currently encoded by the bank instead of m-house and are delivered to the bank by courier each afternoon at 2 00 pm The City docs not proccss chccks on Saturdays, Sundays, or holidays The City is closed for business days during the calendar year in recogmtion of holidays Deposit size Increases during tax collection time which occurs Novembur throngh Sannary Deposits as large as $1,000,000 coldd be made during these months with an average Deposit s~ze of approximately $350,000 per day ) List any addlttonal services connected with the lockbox lmttation procedure that the bank would provide Prmung of coupons with bar code Printing of envelopes with bur code Other List any adtht~onal fees not previously addressed in this bid All fees bid shall remain the same for the length of the contract period and no addtuonal fcas shall be added after this proposal is accepted Please return this sealed alternate bid along with mare bid to the office of the following person by 2 00 pm, August 26, 1997 Tom Shaw, Purchasing Agcm City of Denton 901-B Texas Street Denton, Texas 76201 NO BID SHALL BE RECEIVED Atci's:R 2:00 P.M. AND SHALL BE RETURNED UNOPENED The C~ty reserves the right to request additional informauon or to meet with representatives from proposing of~nm=auons to discuss points in the proposal before and after submission and may reject any and all options In tlus proposal EXHIBIT A DEPOSITORY CONTRACT 14 Exhibit A DEPOSITORY CONTRACT CITY OF DENTON ARTICLE I Bank, besema~r referred to as "Depository," located at , Siam of Texas, a bank located in the state of Texas and the deposits of which are msored by the Federal Deposit Insurance Corporation, was duly selected In compliance with the terms and provisions of Tex Loc Govt Code Chapter 105, as mended, by the City Council of the City of Denton located m Denton County, Texas haremafler ref~rrod to as "City" to serve as the depository of the funds of City The acuon of thc City Council was duly taken and the Depository is to serve pursuant to this contrect fur a period of two years, beg~nmn~ , and eudlng , and uunl i~s successor shall have been duly selected and qualified thereai~er, unless sooner terminated by Depository'S fudure to adhere to all requiremenls of dm contract Said acUon was a result of a proposal dasd ARTICLE II A The Depository shall pledge to the City and deposit m safekeeping and trust with another bank acceptable to the City approved secuntias as defined or referred to in Texas Local Government Code §105 031, m an amount of market value suffictendy adequate to protect all funds of City on deposit with Deposlwry dunng the terms of this con,feet, provided further that 1 The approved securmes shall be of the kind defined or referred to in Texas Local Government Code §105 031 and acceptable to the City, and the amount pledged shall be In a total market value as directed at any dine by the City Council in accordance with standards acceptable to the City Council 2 The conthUons of the pledge of approved secunuas required by this contract arc the Depository shall credit the accouut(s) of City with the full amount or aH State of Texas Warrants presented to Depository for the account of the City no later thun the bnnk!ng day next following the day of DepoSltOry*s receipt of such warrants, that Depository shall faithfully perform all duties and obhgauons devolving upon Depository by law and this contract, inchithng specifically the duty to collect with due diligence checks, drafts, and demands for money deposited with Depository, pay upon presentatton all checks or drafts drawn on order of the City in accordance with its orders duly entered according to the laws of Texas, pay upon demand any demand deposit of City in Depository, pay any ume deposit or ceruficate of deposit of City in Depository upon matuuty or after the penod of noucc required, and faithfully keep, account for as required by law, and faithfully pay over, at maturity or on demand, as City may elect, to any successor depository all balances of funds the City then has on deposit with Depository Page 1 of 3 The pledge of approved securities required by this contract shall be a conunumg pledge, ceasing only upon the later of the termination of this contract or the fulfillment by Depository of all of its duues and obligation arising out of ~ contract, (and a continuing security interest in favor of City shall attach immediately upon any such pledge to all proceeds of sale and to all substitutions, replaccmants, and exchanges of such securities, and in no event shall such continuing security interest be voided by any act of Depository), but notwithstanding the foregoing Depository shall have the right, with the consent of City, to purchase and sell and subsutute or replace, any and all of the approved securmas pledged pursuant to this conUact with other approved securities, provided that all of the other conditions of this contract are adhered to by Depository, and such pledge shall be in addition to all other remethes available in law to City This contract shall become binding upon City and Depository only upon approval by the City Council of the contract and the proposal attached hareto To the extent of conflict, if any thare be, between this contract and the proposal, the terms of this contract shall control Upon execution, Depository shall immethately furmsh or cause to be furnished to City original and valid safekeeping or trust receipts issued by the bank holding the approved securities pledged pursuant to this contract, marked by the holding bank on their face to show the pledge and market value as reqmrcd above, and City shall prompdy furmsh two executed copies of this contract, photocopies of all such receipts, and photocopies of new receipts for subsutotions and additions and writtcu notice of dalcuon, when made, to Depository On the executton date of this Depository Contract tho depository bank agrees to pledge an amount that is equal to funds anticipated to be on deposit from day to day Any closing or failure of Depository, or any event deemed by City to constitute a closing or failure of Depository, shall be deemed to have vested full title to all approved securmes pledged pursuant to this Depository Contract in City, and City is hereby empowered to take possession of and sell any and all of such pledged approved securities, to the extent not forbidden by law, wbethcr in safekeeping at another bank or in possession of City, and City is specifically so empowered by Depository ARTICLE IIi Subsequent to the execution date of this contract, should the amount of deposit exceed that which is initially pi¢dged, said amount will be increased, and thc safekeeping receipts of the additional securities will be provided in accordance with Paragraph A(5) of ArUcle Il herein ARTICLE IV This contract is executed by the City and the Depository in three copies, all of which shall be deemed originals AGREED AND ACCEPTED on behalf of Depository this the day of , 1997 Page 2 of 3 BUYER City of Denton By Date Name (Print) Title Address C~tv of Denton 215 E. McKmnev Denton. TX 76201 AGENT By Date AUTHORIZED SIGNATURE Name (Print) Tttle Page 3 of 3 ORDINANCE EXHIBIT A EXHIBIT B DEPOSITORY PLEDGE AGRF~EMENT -18- Exhibit B DEPOSITORY P~E AGR~'.I~MENT Whereas, City of Denton (hereinafter called "Depositor") has selected , a bank chartered by the State of Texa~, (hereinafter called the "Bank"), as a deposttory for certain of its fonde in demand deposits and/or interest-bearing time deposits enutlnd as follows A~:count Name (s) Type of Acemmt Account Number Employee Clatms Account Public Funds Chocking Operanng Account Public Funds Cbeckmg Unllty Slnkin~ Fund Public Funds Cbecking Payroll Account Public Funds Checking Rehabilitation Comnusslon Public Funds Checking Transportatton Grant Public Funds Checking CDBG Commerczal Development Block Grant Public Funds Checking Control Concentrauon Public Funds NOW Checking City of Denton Public Funds NOW Checking Clorlde Branch Public Funds Money Market Security Account Public Funds Money Market Industrial Development Authority Public ~ Checking Denton ReUrement & Nursing Center Finance Authority Public Funds Checking Electric Dismbuuon Public Funds Checking Electric Meter Public Funds Checking and such additional accounts as Depositor may from time to Ume designate, and the Bank desires to be the depository of such funds, and WHEREAS, any and all cash balances in any funds depuszted with the Bank must be continuously secured by a valid pledge to Depositor of certain securittes (heing harem called the "Approved Securmes") Approved Securmes shall mean all securltlas which undar the laws of the State of Texas, can be used to secure tbe deposits of Depositor The aggregate market value of the Approved Securltias shall be at all times be, exclusive of accrued interest, equal to or in excess of the total fonds of Depositor on deposn vath the Bank, to the extent that smd funds are not insured by the Federal Deposit Insurance Corporation NOW, THEREFORE, for value received and m constdarauon of the mutual promises and covenants herein contained, Depositor and the Bank agree as follows 1 Depositor deposits shall be secured and Bank hereby grants a s~urity interest to Depositor m all Approved S0curlfles held In safekeeping at (the "Safekeeping Institution") Except as provided in paragraph 6 of such Approved Securiues shall be subject only to the joint lnstroctiom of both (a) authorized individuals appointed by Depositor, ~ (h) specifically authorized officers of the Bank The Depositor shall provtde to the Bank written notice and sl~clmen signatures of anthonzed representanves of Deposttor on Addendum A of ~ documant for the purpose hereof, and thereL~r written notice of the removal from or addition to the ex,sting names of such authorized representauves The Bank shall provide to the Board of Directors of Depositor or its authorized representatives written nouce and spectman signatures of authorized officers of the Bank on Addendum B of this document for the purposes hereof, and thereafter wrlnen nouce of addition to or removal from the existing list of uames of such officers Addendum A and E are attached to and made a part of this agreement as if wrlt~n word for word herein AAA0~28C I of 8 The Bank may make addmons to or subantotions of Approved Securmes from nme to nme and may w~thdraw excess Approved Secuntias, vath the amount and character of the new and/or remmmng securmas to be subject to the approval of Depositor If the Approved Securiues, so proposed for subanmuon are of the kind, character amounl, and value required by law, such substitotion shall be parmlUed If approved, the substitoted Approved SeCUnUas shall thereafter be subject to ail the terms and conthtions of this Pledge Agreement as fully as if originally incorporated hereto Contemporaneously w~th the execution of this agreement and at the ume of the subsutotion or release of any of the Approved Securities, the Bank shall execute and dehver to Depositor a Memorandum describing thc Approved Secuntias deposited to or vathdrawn from the securities held pursuant to flus Agreement 4 The Bank shall not be obligated to accept interest basnng rune deposits of Depositor In excess of $20,000,000 (twenty million dollars), but may choose to accept such deposits at its discreuon $ The Bank shall faithfully do and perform ail of the dutias and obligations required by the laws of the State of Texas for depositories of Depositor, and shall upon presenteuon pay all checks drawn on it by the duly authorized representatives of Depositor against collected funds of Depositor on demand deposit, and shall at the expiration of the term for which It has been chosen as depository of Depositor torn over to its successor ail funds, property and things of value conuag into Its hands as depository 6 Upon defanlt of any of the Bank's obhgattons herannder or upon insolvency of the Bank or upon the appomunent of a receiver of the Bank and at any time thereafter, Depositor may sell at public or private sale the Approved Securities or any part thereof and apply the proceeds of such sale to thc satisfaction of any mdebteducse caused by virtue of smd default This right is In addtoon to other remethes which Depositer may have under this agreement and w~thout prejudice to its rights te mamtmn any suit in any court for redress of injuries susiamed by the Depositor under this Agreement ? The Safekeeptn~ Instimuon named herein hereby agrees to hold ail Approved Secunuas deposited vnth it porsuant to the tenns of this Agreement and to dehver them m accordance with the terms hereof Additionally, Safekeeping Institution agrees to serve as collateral agent for Depositor to the extent necessary to allow Depositor to perfect its security Interest granted herein in the Approved Securmes 8 This agreement may be terminated by either the Bank, Depositor or the Safckecpmg Institution by glvln~ thirty (30) days prmr written notice to the other parties, by giving notice te the following persons at the fullowms addresses Depositor City of Denton, Texas Teodoro Benavtdns, City Manager 21:5 East McKinney Denton, Texas 76201 9 All applicable provisions and rcqulremants of the laws of the State of Texas governing dcposltonns for Depositor shall be a part of this Agreement 10 Tho validity, operation, and performance of this Aarecmcnt shall be governed and controlled by the laws of the State of Texas, and the terms and conditions of this Agreement shall be construed and interpreted In accordance with the laws of this State Venue for any proceeding brought for any breach of this Agreement shall be in Denton County, Texas ATTEST DEPOSITOR BY CITY OF DENTON, TEXAS NAME lanmfi.'r Walters TITLE City Secreterv BY NAME Jack Miller TITLE Mg¥gr 2 of 8 BANK ATTEST BANK BY NAME A Bank Chartered by the State of Toxas BY NAME ATTEST BY SAFEKEEPING INSTrI'UTION NAME A Bank Char~red by the Stat~ of Texas BY NAME TITLF- APPROVED AS TO LEGAL FOR'vi HERBERT C PROUTY, CITY ATTORNEY BY 3 of 8 The ~ollowlns designated individuals are authorized represan~auves empowered to direct a bank chartered by ~he 5~ate of Texas ("Bank") and (#Safekeeping lnanmuon") selected under Item i of the Deposltol~/Pledge Agreement m regard to collateral pledges, releases and subsumuons in the jotul safekeeping accouni Such pledges, releases, and subs~lmtlon~ shall follow procedures sm forth m die Depoanory Pledge Agreement Authorized Officer's Signature Name and Title ACCEPTED NAME TITLE ,~,o~ sc 4 of 8 ADDENDUM B , a bank chartered by the Sta~e of Texas ("Bank") has designated the follovang officers as Specifically authorized to ,ns~uct Cit~ of Denton ("Depositor") and. ("Safckeepitlg Inarlmuon") saloc2d under l~m I of the Deposl~ory Pledge Asreement m regard to colla~ral pledges, releases and, submmtlons in the joint safekeepln~ account Such pledges, releases and submmuons shall follow procedures set forth m the Depository Pled{e Asreement Authorized Officer's Signature Name and Title ~ of 8 CERTIFICATE OF SECRETARY OF THE SENIOR LOAN AND DISCOUNT COMMITTEE OF A BANK CHARTERED BY THE STATE OF TEXAS The undersigned, being the duly appointed Secretary of the Semor Loan and Discount Committee (the "Commluee") of , a bank chartered by the State of Texas (the "Bank"), hereby cerufies that (1) In accordance w~th the authority granted to it by the Board of Directors of the Bank, on _. 1997 the Committee approved the pledge of collateral, as reqmred by the daposlto~ contract vnth the City of Denton ("the City"), to secure the Bank's obhganons w~th respect to deposits mamt~ned at the Bank by the City (2) The Commlt~e approval has not been amended, modified or repealed in any respect, and ts m full force and effect on the date hereof, and (3) The minutes of the Committee meeung held on , 1997, will be maintained as part of the permanent records of the Bank Date BY NAME TITLE 6 ofg CER~I]PiCATE OF SECRETARY OF THE BOARD OF DIRECTORS OF A BANK CHARTERED BY THE STATE OF TEXAS The undersigned, bmng the duly elected Secretary of the Board of Directors (the *Board") of First State Bank of Denton, Texas, a bank chartered by the State of Texas, hereby certifies that at~ached hereto is a true and correct copy of a resoluuun of the Board adopted at a meeting held on , 1997, and such resolution has not hean anlend~d, modified, or repealed in any respect, and is in full force and effect on the date hereof Date BY NAME TITLE 7 of 8 RESOLUTION GRANTING CERTAIN CORPORATE AUTHORITY TO LOAN AND DISCOUNT COMMITTEE RESOLVED, that the Senior Loan and Discount Committee is hereby granted the corporate authorl~ co approve on behalf of ("BANK') such security agreements and other agreements ralatcd te the deposit of funds in this BANK by any governmentel enuty as such Senior Loan and Discount Committee shall deem in the best ll~erests of this BANK from Ume to time 8 of 8 ORDINANCE EXHIBIT D EXHIBIT C CASH MANAGEMENT CONTRACT 27 Exhibit C CASH MANAGEMENT CONTRACT TABLE OF CONTENTS Page I TERMS AND CONDITIONS 2 2 ADDENDUM ONE SERVICES 7 3 ADDENDUM TWO COINS AND CURRENCY REQUEST 8 4 ADDENDUM THREE ACCOUNT SETUP AND TRANSFER LIMITS 9 5 ZERO BALANCE AUTHORIZATION 11 6 ADDENDUM FOUR FEE SCHEDULE 12 7 ADDENDUM FIVE WIRE TRANSFER AGREEMENT 13 8 ADDENDUM SIX ELECTRONIC FEDERAL TAX PAYMENTS 19 9 ADDENDUM SEVEN ACH ORIGINATION AGREEMENT 27 10 MASTER REPURCHASE AGREEMENT 34 AFFO150E I of&O CA]iH MANAGF_.,M~NT CONTIe, ACT TEAMS AND CONDITIONS Tins Agreement (the "Agreement") ts between City of Denton (heremafier called "Principal") (tfmore than one understgned, each jotntly and severa//y), and (ber~mafler called ~Bank") for dehvery of the Cash Management System as dasc~bed below The intent of this Ag~ement ~s to clarify the respoaslbthtlas of each party Seetinn 1. Definitions Accounts. Any Commercial or Personal Account as included on the Cash Control Account Application and approved by the Bank m writing U~er Any Indlwdual that Pnnclpal has anthonzed the access and use of the Cash Management System aacordmg to the Cash Control User Authonzauon Report ~ The day during winch the mare office of Bank ~s open for busmeas, m accordance with specific cut-off tunes, and dunng winch the Bank is able to download Principal's information and process transactions Current Balance. The Account balance that is the result of the total debit and credit actlwty as of a specific date and tlme for all Accounts Collected Balance. The Current Balanee of the Account, less float Available Balance. Current Balance of the Account minus holds, all but one day Float, and memo posted debits plus memo posted credits Float Dollar amount of deposited items that are m the process of collection from the payable bank Also known as uncollected funds Hold. A restriction on payment of all or any pan of the balance m an account Memo Posted Debits. Any debtts being posted to the account for the business day For example, ACH debits transactions, wire transfers, and teller cashed checks Memo.Posted Credits. .amy credit being posted to the account for the business day For example, ACH credit transactions and wu'e transfers Cash i'daua,,ement System. FIServ Cash Management System, Version 2 30, F~Serv Copynght 1994,1995 AFF0160E 2 of 40 Section 2. Function Capabilities As a user of the Cash Management system, Principal and User may request any of the sesvleeS hsted below The specific services selected by the Principal are see forth in Addendum One wluch may be updated from time to t~me A Perform Account mqmnes on Account data and transection history on the Accounts B lmtlate stop payments request Pnnclpal understands the electromcally transuntted stop payment orders are pending final verification that check has not been processed and that stop payment is valid The Bank must receive the stop-payment order m time to allow the Bank reasonable opportunity to ect on it before the stop-peyment cut-off tune which is one hour after the opening of the next bnnlrm$ day a.qer the banking day on which the Bank receives the item C Request a wire transfer Principal and User understand that wire transfers received after Bank's cut-off time (2 00 p m Central Time) will not be processed until the following business day Bank has a right not to process any wire request if collected funds sufficient to cover the wire transfer amount are not available m the Account Wire Transfer requests must be made m accordance with the approprmte Wire Transfer Agreement, See Addendum Five D Request a Coin and Currency Order m accordance with Addendum Two E Send and receive messages (to and from Bank) Bank will open message mailbox twice daily (between 10 00 - I1 00 a m and 2 30 - 3 130 p m Central Time) and is not responsible for any delay of messages Principal and User are responsible to periodically check for massages sent by the Bank F Imtiate transfer between accounts set up with the Cash Management System with the exception of time accounts Refer to Addendum Three for optional transfer limits Principal is limited to six preanthonzed automatic transfers or withdrawals per mouth out of money market savings and two regular savings accounts Three of the slx transfers for MMS can be made by check, draft or debit card Transfers made via Cash Management arc included as preauthonzed or automatic transfers subJeCt to these limitations Any transfers in excess of these limits must be done in person at the Bank G Pnnclpal is not permitted to transfer more than the Available Balance from deposit eccounts H Initiate eleeeromc Treasury Tax and Loan payments through thc Cash Management system Refer m Addendum Five for enrollment requirements I initiate ACH transactions Principal understands ACH transactions received after Bank's cut-off nme (2 00 p m Central Standard ) will not be processed until the following business day ACH transectlons must be accordance with the appropriate ACH Ongmeelon Agreement, Refer to Addendum Six I Perform Account Reconeeliatlun K Principal can utthze any report functions for requested services Section 3, Aclmowlednment of Princinai A Principal and User are responsible for obtalmng, installing, maintaining, and updating the necessary hardware and related equipment needed to utilize the Cash Management System As of the date of this Agreement, the necessai'y equipment includes AFFO150E 3 of 40 IBM compatible 80386 or hi~hor Mimmum 4 megabytes of RAM DOS 5 0 or lugher MS Windows 3 1 or lu/her Minimum 20 megabytes of available hard disk space Mouse VGA momtor (color preferred) Hayes compatible modem - up to 9600 Band Access to a volcograde telephone line *Bank will notify Principal of changes m equipment requirements B Bank reserves the fi/lit to allmmate or change any fnnctlon capabilities at any tune without prior notice C Principal will receive one copy of the User Man~ and periodic updates Additional User Manuals can be obtained from the Bank for a charge Principal agrees not to copy or otherwise duplicate the User's Manual or updates Upon termination of use of the Cash Management System, Pnuclpal will retorn the man,Iai alld updates to the Benk D Bank may from tune to time send updates of software and documentation to the Principal, and such updates will be sublect to tius a/reement Principal is responsible for prompt installation and testing of software updates Pnuclpal has no n~ht, title, or interest to the Cash Management software or copies of it Pnuclpal will not make or permit anyone else to make copies of the Cash Management Software and User's Manual Principal agrees to notify Bank promptiy and m writing of any circumstances of which Pnuclpal has knowledge relating to any possession, use, or knowledge relating to any possession, use of knowledge of any portion of the Cash Management System and the User's Manual by an unauthonzed person E Bank agrees to conduct initial tr~mmg for the Principal to set up the uuual security provisions for the Cash Management system llsnk is net responsible for Principal's actions or negligence in setting up Principal's security access to Cash Management Prmclpal will be responsible for anthonzmg system and function access to Cash Management to appropriate employees and assigning User IDs to such appropriate employees Principal and Users will not tn,eke any password or User IDs avmlable to any non-authorized persons Bank offers filrther security procedure under Cash Management whereby Principal and l~snk can establish dollar limits for transactions, refer to Addendum Three Bank and Principal agree that the password, User ID, and the dollar limit security procedures provided under Cash Management are commercially reasonable and parties further agree that transactions conducted under the password and User IDs shall be deemed anthontlc payment orders bnldmg on the Principal Principal is responsible for all transactions made through the User ID and password security system, regardless of whether such transaction was anthonzed F Bank will not be liable for non- anthonzed use of Cash Management or for any losses that may result Principal and User will notify Bank Immediately If Principal or User believes that a User ID and/or password has been used without Pnuclpal's penmsston Principal and User will not disclose any mformauun pertaining to Its ~ or the components of the Cash Management System to any non-authorized User AFF0150E 40f40 Principal has received and understands all ai~atnce card rnles and regulations and all agreements and disclosures connoted with opening of Accounts and acknowledges thai this Agreement is m addition to any of these agreements and disclosures Prmaipal can commumcate (l e, upload transactions and download Account data) with Bank twenty*fourhoursaday Principallsawareofcutofftimeshstedmthtsagreemant Transactions completed after cutoff time wdl be processed as of next bnsmess day Pnncipal understands that if it chooses to utilize the Cash Management System afar or before Bank hours (8 00 a m m 5 00 p m ), Bank will not be available for support should problems occur Pnnclpal will contmne to receive re/ular Account statements that descnbe all transactions for the Accounts tucludtug the transactions that the Pnnclpal has lmtiatad through Cash Management Principal is responsible to promptly review all statements and report m writing any ln'egulantlcs to the Bank at once For all electrom¢ transactions governed by Res E, errors must be reporting m wntlng within (60) sixty days, other discrepancies must be repor~d within (30) thirty days after the statement date Principal acknowledges that the fees for the Cash Management System will be paid monthly as thsclosed on the Bank's Cash Management System Fee Scbedule, refer to Addendem Four These fees are in addition to any fees and service charges currently being paid Any pricing or policy changes adopted by Bank In the future will constitute mothficatlons and addends to the Agreement but will not nullify tt This Agreement shall contmne until Bank receives written notice of Prmaipal's revocation or until Bank advises Principal in writing that the Bank will not conttuue this service for Principal Ternunatlon by either party does not relieve Principal of its liability for transactions or responsthihties for payment of all fees mculred prior to termination The Bank agrees to add or delete services provided to the Principal within a reasonable tune period after receipt by the Bank of written notice by the Principal, refer to Addendum One Section 4. Acknowlednments. Resoonsibiiities. and Liabilities of Bank Bank will install the software at Principal's location and provide traintug on the use of Cash Management The Bank has entered Into a licensing agreement with FISERV CIR, Inc, CBS Division for the delivery of the Cash Management System Cash Management shall be considered pan of the CBS System, and all rights, title, and interest shall remain with FISERV Except for acts of gross negligence or willful breach of duties by Bank, Bank will not be liable to Pnnclpal for any matters related to the Agreement, including without huntatlons, lost profits or consequential, special, or putative damages, inaccuracy, or delays in transnussion of tuformatlon D Bank makes no warranties or representations with respect to the Cash Management software, expressed or implied including but not limit to, implied warranties of merchantability or fitness for a particular purpose AFFO150E 5 of 40 Section $. Joint Aeknowledtnnents and Reorasentations ^ This Agreement is governed and will be interpreted under the laws of the State of Texas B This Agreement incorporates by reference all mformnt!on on Principal's Account Application which Princtpal represents as tn~ and complete m all respects C The Principal's authorization to lease the Cash Management System software must be executed m conjunction with this A/reement D Principal has read and understands this Agreement and has had opportumty to review tlna Agreement with an advisor of its choice if so desired E Upon occurrence of any overdraft recto'red in the Accounts, Bank shall have the right, m Bank's sole discretion to (0 refuse payment of uny outstanding and unpaid check drawn on any Account listed on the Account Application, and (ii) withhold from processing any transaction generated on the Account (mcludmg Cash Mnnn.*_ement generated) until sufficient collected funds to cover such transactions have been credited to the Accounts F Each party represents and warrants to the other that it ~s authorized to enU~r into this Agreement G If at any time any section of this Agreement is found to be invalid, that does not make the remmmng sections or terms mvahd By signing below, the Principal hereby accepts and a~rees to the terms and condition of thls Agreement Principal Cl~y of Denton Name Title Date By thc signature of Bank's authorized officer below, Bank hereby accepts the terms and conditlons of this Agreement Bank Name Title Date AFFO150E 6 of 40 Addendmn One Services I Thxs agreement, mnde on , by and between ("Bank") and the Pnnmpal named below 2 Bank a~'ces to provide the services below selected by the Principal 3 Prmclpal agroas to provide the Bank with written notice if Principal wishes to modify services as statod below ~el'~ices ¢Cheek all that an~lv} Account lnqmry Stop Payments Orders Iutrabank Transfers Wire Transfers ACH Batches Treasury Tax and Loan Payments Corn and Currency Requests Account Recunclhat~un PC Import and Export Files Send and Receive Messages By the signature of the Pnnclpal's authorized officer or agent below, Pnnc~pal hereby accepts the terms and conditions of this Agreement C~tv of Denton Pnnclpal Name T~tle Date By sl§Ilature of the Bank's officer below, Bank hereby accepts the terms and conditions of this Agreement Bank Officer Name T~tle Date AFF01$0E 7 of40 Addeadum Two Time Orders wtll be Picked Up. Courier Service Yes __, No __ Name of Service 1 Bank sludl provide corn and cu~ency order service to the Principal according to the specifications listed above to the extent such orders do not exceed the avMlable balance m the stated account 2 Principal understands that Corn and Currency order~ received after the Bank's cum and currency cutoff time (9 00 a m Central) Mil not be processed until the followm~ business day Pnnclpal Is responsthle to make arrangements for pickup of Corn and Currency Orders either m person or by courier service 4 PrincIpal authorizes the Bank to release corn and currency to the following individuals or A B C D By the signature of the Principal's authorized officer or authorized agent below, Principal hereby accepts the terms and conchtions of this Agreement (~tv of Denton Principal Name T~tle Date By the signature of the Bank's anthorlzed officer below, Bank hereby accepts the terms and condmons of this Agreement Bank Officer Title Date AFFOI$OE 8 of 40 Addendum Three Cash Mananement Account Setuo/Transfer Lunits ! This agreement, made on , by and between ("Bank") and the Principal named below 2 Bank agrees to set up Pnnclpal account reformation on Cash Management as described below 3 Bank assumes no habihty for changes or modtficattons to the account setup after untlal installation of Cash Management 4 Pnnclpal agrees to provide Bank with a maximum transfer lmut per account lh'mctpal understands that they wtll not be able to mslre transfers over the stated amount All transfer attempts over the maximum wtll be rejected 5 Pnuctpal understands that Account Transfers recetved after Bank's transfer cutoff time (3 00 p m Central Time) wtll not be processed until the following business day 6 Principal understands that Account Transfers to a loan account wtll be considered an unscheduled pnnctpal payment and will not affect the payment schedule of the loan account The Pnnclpal can make scheduled loan payments and payoffs by including a message to the bank with the payment and they mtum will execute the transacttun 7 Account Setup Option 1 Prmctpal authorizes the Bank m set up ali accounts opened by the Principal on Cash Management Principal reahzes that addntnna[ accounts set up on Cash Management may alter the monthly maintenance fee as described in Addendum Four PrmclpaI agrees to pay ail service fees as modified under Addendum Four Bank will set up all new accounts with a transfer iumt of $ Prmcmal must notl~ Bank in writing at the tune a new account is onened If Pnncmal wishes not to have a new account set un on Cash Manaaement or if Prtnclnal wishes to establish a different transfer lunlt on a uew accoum, Account Number Account Type Account Name Maximum Transfer Amount 1 2 3 4 Option 2 Principal authorizes the Bank to set up the accounts listed below on Cash Management Principal must notify Bank m writing ff Prmmpal wishes Bank to set up addmonal accounts Principal reahzes that adthnonal accounts set up on Cash Management may alter the monthly maintenance fee as described tn Addendum Four Prmmpal agrees m pay all service fees as modified under Addendum Four AFFO150E 9 of 40 Account Number Account Type Account Namo Maxtmum Trunsfor Amount 1 2 3 4 6 7 8 9 10 By the signature of Pnncipal's authorized officer or authorized agent below, Principal hereby accepts the terms and conditions of th~s Agreement Principal Name Title Da~e By the stgnature of the Bank's authonzed officer below, Bank hereby accepts the terms and contht]ons of this Agreement Bank Officer Name Title Date AFFO160E 10 of 40 Authority to Transfer Funds Zero Balance Account The undersigned, an authorized signatory on account number(s) m the name of City of Denton (hereinafter referred to as "Company"), hereby authorizes and d~rects _ ("Bank") to msm~am the above-mentioned account(s) at a zero balance at the close of each bnsmess day by transfen'mg momes to or from account number ('master account') tn the name of the Company Thts authonzation shall tvmnm in full force and effect until Bank receives five (5) business days advance written notice from the undersigned or any other anthonzed officer of the Company or unul such time as Bank gives the Company written notice stating that they will no longer offer tins service and a date on winch the service will terminate No advance notice Is required of Bank and such notice of termination other than the date of receipt In perfonmng the transfer authorized and directed heroin, Company hereby agrees to mdemmfy and hold harmless Bank for any damage or ltainhty, including reasonable legal expense, that n may recur m connection with suv. h transfer, except for its own gross negligence or willful nusconduct This agreement shall be governed by the laws of the State of Texas and shall not be amended unless such amendment is executed by both the Company and Bank and is mwnting Customer Acknowledgment Accepted By City of Denton Bank By By Name Name Title Title Date Date AFF0150E 11 of 40 Addendmn Four Fee Schedule 1 Th~s agreement, m~l~ on , by and between ('Bank") and the Principal named below 2 Pnnctpal agrees to pay a maximum of $175 for the mstallatton of Cash M~,~gement Pnncipal authorizes Bsn~ t~ debit stated account below for flus one-tune fee upon mstallauon of Cash Management, or arrange for compensatory balances Upon termination of this agreement, installation fees will not be refunded 3 The fee entities Pnocipal to software and documentation updates when they become available, subject to the terms and restrictions of the software license agreements Pnncipal authorizes Bank to debit spentfied account below (#Account") for the software license fee upon the untial mstallauon of the software, or arrange for compensatory balancing In the event of term~n~!on, the Bank will retain any software license fee already pard, up to one full billing penod 4 Pnnclpal anthonzes Bank to debit Account to a pay monthly mam~enanee fee assessed according to the schedule below or arrange for compensating balances Fees wall be debited from Principal's account at the end of the month Principal acknowledges that additional accounts opened and set up on Cash Management may alter their monthly msm~nanee fee 5 Bank reserves the right to methfy tins fee schedule upon pwvldmg Pnncipal with 30 days wntten notice 6 A monthly base fee of $50 will be charged, 7 Normal service charge plan will apply with reduce transaction fees for wire transfer and stop payment orders 8 Pnncipal authorizes Bank to debit account number for all related service charges and fees stated above By the signature of Pnnclpal's authomed officer or anthonzed agent below, Pnnclpal hereby accepts the terms and conditions of this Agreement Cl~v of Denton Pnncipal Name Title Date By the signature of Bank's authonzed officer below, Bank hereby accepts the terms and conditions of tins Agreement Bank Officer Name Title Date AFF016OE 12 of 40 Adde~du~ Five Wire TramPer A~nent 1 The undersigned Cltv of Denton ('Customer') authonzes and requests ('Bank') to ma~e transfers of funds from time to tlnl~ ul accordance with the provl$1on~ more fully set forth m this Agreement Such transfers shall include transfers of Customer's funds from Customer's account(s) at Bank ('Account(s)") to Customer's account(s) at other depository msutotlons, and to account(s) of third parties at other depoalto~ restitutions, and shall also include transfers of funds to Customer's account(s) from third panics 2 Specific requests from Customer to Bank are to be made by Customer's representatives listed on the List of Authorized persons flmnsbed by Customer to Bank from tune to tile Ehmmatlon of any names from such List(s) or addition of another name or names to such List(s) shall be made effective by actual written notice received by Bank's Wire Transfer Department 3 Any request by a representative of Customer may anthonze one, or more than one, funds transfer Request for transfers may be made by cash management system, telephone, orally, or In wnttng 4 Bank may make the requested funds transfers by any means for the transmission of funds and may also make transfers by Internal means (including, as an example but without limitation, bookkesping entries betwecn Bank and its correspondent bAn~:.) Transfers of funds m Customer's account(s) from third pames shall be received anblect to umo deadlines estabhshed by Beak Bank may cancel a requested transfer If Bank receives Customer's request for cancellation, m from satisfactory to Bank, m such time and m such manner as to allow Bank a reesonable opponumty to act 5 In consideration of Bank's transfers of funds pursuant to Customer's anthonzed request, Customer shall pay to Bank such transfer fecs as Bank shall from txme to tune unpose 6 Bank will use ordinary care in implementing funds transfer request received by it from Customer Customer agrees that Bank and its agents and correspondents shall be conclusively deemed to have exercised ordma~ care if it or they hes or have followed the procedures conuiled m this Agreement, or if Customer shall have failed to follow such procedures Bank shall be emptied to rely on any request that it believes to have been ongmated by Customer, and any such request shall for puspose of this Agreement be deemed to have been authonzed by Customer 7 Bank shall not be hable for direct, redirect, consequential, or putative damages of any party (including without liiltatlon Customer) Bank shall have no liability to third parties for any damages recurred by such third parties arising out the performance or non-performance or services or transfers under this Agreement, and Customer agrees to and hereby does indemnify end hold Bank harmless form and against all such clntrn.s of third pertleS and all expenses (including, without lumtatlon, attorney's fees and court costs) of such claims Bank's only responslinhty to Customer occasioned by Bank's performance or non-performance of its obhgatmns under tins Agreement shall be to correct at Bank's expense any errors that are due solely to Bank's personnel, Bank's computer progrnm.~ of mnlfurlctlons of Bank-controlled machine 8 Bank shall not be liable for delays or failures m processing that are caused by such events as fires, power failures, energy shortages, stokes, boycotts, riot, war, governments regulations, failures of Bank's vendors or suppliers, acts of God, or other cucumstances or causes over which Bank has no control If because of circumstances or causes beyond Bank's control, Bank shall be delayed beyond apphceble time limits (provided berem or by law) m taking any action hereunder, the tune litmt for talem_g such action shall be extended for such time after the cause of the delay ceases to be operettve as shall be necessary for Bank to take or complete such action AFF0150E 13 of40 9 Bank in its discreuon may aasi~n a security code, security test, or other security procedure to be used by Customer to authenticate ~md~ transfer requests Customer a~rces ~ use all such scctmty codes, security tests, and other security proceduses as may be ~ .reposed by Bank l0 Bank will furmsh to Customer a confirming noUflcatlon of a funds transfer after it is resale, either m form of a specific advice or a peno&c account statement Customer will ex~mme such advice and account statement to detect the presence or absance of any disc~pancles between Customer's records and the advice or statement sent by Bank, and vail report any such discrepancies to Bank wi,h,, thirty (30) days after the date that Bank sends the advice or account statement ll Bank hereby anthonzad to record on tape or other retenuon devices any or all of its telephone conversations with Customer involving any transfer iustructions Cusu~mer asrecs to supply Bank information that Bank may reasonably request in connectlun with any prospective or completed funds transfer hereunder, including without inmtation any wntmgs showing confirmation of any request for transfer of 13 Bank shall not be obhl~ated to matte any funds u-ansfer if the ~mr*unt of such transfer exceeds the finally collected and imme&ately avadable p_md. by Customer with Bank, or exceeds any other liunt established by Bank If Bank in its discretion m.tr~ any such transfer that exceeds the amount of Customer's deposited funds, Customer sh*!l be liable for any and all overdraft ~mounts 14 All data relating to Customer's inlslness provided to Bank by Customer pursuant to thts Agreement will be treated confidentially and safes, uarded by Bank, using the same care and discretion that is used with data that Bank designates confldenual Bank may modify or cancel this Aircemant upon flf~cen (13) days' notice to Customer Customer may cancel this Agreement upon fifteen (15) days notice to Bank 16 This Agreement represents the entire understanding between Bantr and Customer with respect to the matters contamad hereto There are no representaUons or warranties, express or unphed, other than those contained herein 17 This Agreement shall be ~ovemad by and construed in accordance with Texas Law, and it shall be performable in Denton, Denton County, Texas 18 Any notice hereunder shall be in writing and may be given by personal service or by depusltmg in the United States mail postage prepatd u) the addresses of the parties as follows (or as changed through wnttan notice to the other pan'y) BANK Name City of Denton Address Atiantlon AFF0150E 14 of40 19 This Agreement ~s binding on the panics hereto and their respective successors and assigns Customer may not asstgn this Agrenment w~thout the pnor wntten consent of Bank EXECUTED on , cuSTOMER Ciw of Denton Name Title Bank Bank Officer Title CERTIFICATION OF RESOLUTION AUTHORIZING EXECUTION OF WIRE TRANSFER AGREEMENT I, , the Secretary of City of Denton, hereby cemfy that the following is a true copy of a resolutlon duly adopted by the Board of Directors at a mectmg held on the and that the resolution ~s full force and effect as of the date of tim cemficauon Be it resolved that , the of ,~s hereby anthonzed to execute thc W~re Transfer Agreement, attached along w~th thls Resolutton, on behalf of C~ty of Denton wtth Dated the day of of ,19 __ AFF0150E 16 of 40 WIRE TRANSFER AD'i~ORIZATION CF.J/,'i~'iCATE The u~ders~gned authorized officer of the City of Denwn hereby cemflas that the followmg-n~med officers or employees of the City of De~ton have been authorized by appwpnate action of the City of Denton to ~lt//Z~ r~q//e~$ 0~' orde~ on behalf of th~ City of Denton to (thereafter called Bank) using the anthonzatmn code which h~ bcen iasued m the City of D~nton by Ba~k Optional Security Procedure The following-named officers or employees of the City of Denton are author~,d to recev~ecall~ackver~cationfromBank Complete this mformanon only If you Imve selected Option B on AV. achment A to the Wire Transfer Agreement Nmnel '~ Title ~ t~one Number l 2 4 The City of Denton agrees that the officers or employees nnm~,,d above shall have full and complete authority to tmtzate requests or orders to Bank and/or approve callback venficatxons from Bank pursuant to the Wire Transfer Agreement as revised from time to txme and tins Cemficate unless and unul the Ctty of Denton dehvers written nottce to Bank modifying or rescinding such anthonty, which notice shall be in the form of this Cemficate Thts Certificate supersedes any prior Certificate of the Czty of Denton dehvered to Bank Dated on City of Denton Name Title AFFO150E 16 of 40 A'I'rACIiMENT A WIRE TRAN.~y~f,R SECURITY PROCEDURE This Attachment ts hereby incorporated into that cert.t,~ Wue Transfer A$,reement with an effective date of (the "Agreement") by and between (Bank) and ~he CRv of Denton (User) I Seconty Procedure Selection Bank's standards Secunty Procedure consists of confummg tha~ the authop~'~t!on coda that accompanies a wue transfer mstrocuon corresponds with a valid authonzatlon code esSllpled to the City of Denton If the order is voice unuated revolving $100.00 or more, and the order Is not a repetitive order. Bank's standard security procedure also mcludas a callback to a person desl~lated by User, the City of Denton A "repetitive order" is an matructlon to Bank to pay a specified amount of money to a previously duslgnated beneficiary at a previously designated beneflcmry's bank Bank also offers a number of opuonal Security Procedure features that allow the CRy of Denton to customize the Security Procedure Bank vail use to verify that the User City of Denuln has authorized an order The User acknowledges that Bank has provided the User vath a description of each of the optional Security Procedures described below The User refuses to have its order vended by any Security Procedure Identified in this section other than the Seannty Pwcedure(s) it has expressly designated berem The User has reviewed Bank's standard Security Procedure and each of Bank's optional Security lh'ocedure features and has determined that Bank's S~And_~rd Security Procedure, as modified by the following optloasi Security Procedure feature(s), best meets its requirements, given the s~ze, type and frequency of the orders it will issue to Bank OPTIONAL SECURITY PROCEDURE FEATURES A No callback on any orders, ff this box is checked. Bank will not perform a callback on any order, including voice-untiated, non-repetitive orders, regardless of amount B Callback to a desi~.nated individual on (check only one) 1 All volco-unuated, non-repetitive orders that equal or exceed $ 2 All vesce-unttated orders (repetitive and non-repetitive) that equal or exceed S 3 All orders based on the specific dollar lurers the User has notified Bank. m writing, Il has estabhshed for each dasl~nated individual for the purpose of imtlatmg transfers C Cash Manasement. Customer is responsible for establishing security provlswns for individuals untlatmg wire transfers through the Cash Management syst~n If an Option B is selected and no amount is specified above, a callback will be made on orders that equal or exceed $100,000 Unless the User has indicated that Bank is not u) perform a callback, Bank will attempt to contact a desl/,,nated individual at a telephone number that the User has previously provided to Bank If an mdlvnlual so contacted by Bank identifies hun or herself as the designated individual and confirms that the order was sent to Benk by the User, Bank shall be conclusively deemed to have complied with tile callback Security Procedure 2 The User is bound by orders. The User agrees that it is bound by any order, whether or not authorized, Issued m its nam0 and aCCepted by Baok in compllallC~ with the Sectlrlty Procedul~ ~hosen by tho User 3 Effect on prior agreements as to Security Procedures, This Attachment supersedes any and all pnor agreements between the User and Ba~k regarding tho Secunty Procedure to be used to verify the orders received by Bank In the nsrne of the User, mcindmg any other document previously executed by the parties and designated to be 'Attachment A" to the Agreement AFF0160E 17 of40 4 Security Procedure Protection. Thc User and Bank agree to preserve the confidentlahty of the Security Procedure uscd by the User If the User becomes aware of a breach of the Security Procedure, or suspects that a breach of the Security Procedure may occur, the User sh~ll !mme&ately report this mfonnatton to Bank m such a m~n,~er as to afford Bank a reasonable opportunity to act on the mformanon In Witness Whereof, the parties have caused this Agreement to be executed and do each hcreby warrant and represent that theuc respective signatory, whose signature appears below, has been and is on the date of this Agreement, duly authorized by all necessary and appropriate corporate action to execute tlus Agreement Agreed to and Accepted By Agreed to and Accepted By City of Denton Bank (the 'User~) By By Name Name Title Tide Date Date AFFO160E 18 of 40 Addendum Six ELECTRONIC FEDERAL TAX PAYMENT SYSTEM ACH CREDIT ORIGINATION AGREEMENT Tins 'Agreement' is made on , by and between ~I1~ of Denton ('The Company') and ("Tho Bank") The Company has requested that the Bank penmt it to initiate electromc signals for paperless enmas through the Bank to accounts m~mtamed at the Bank and at other ftnsnc~al matltutlons, by means of the Automated Clecnng House (the "ACH") The Bank has agreed to do so on the terms of tins Agreement Now, therefore, the Company and the Bank agree as follows I RULES The Company acknowledges receipt of a copy of the operating mlas of SWACHA (as amended from time ~o time, the "Rules") The Company agr~ to comply with and be bound by the Rules The Bank agrees to reform the Company of recessions ~) the Rules of winch the Bank has knowledge 2 TRANSMISSION OF EN'I'RIF~. SECURITY PROCEDURES The Company will transmit all credit enmes to the Bank at the locanon, on or before the deadlines, descnbed on Attachment 1 to this Agreement The Company will confirm all entries to the format, coment and specifications contained m the Rules, except as provided with the security procedures descnbed m Attechment 2 to this Agreement The Company authorizes the Batik to transml! ali entnes received by the Bank from the Company m accordance with the terms of thts Agreement and to debit entries ~ the specified accounts 3 BANK OBLIGATIONS In a timely manner and m accordance with the Rules, the Bank will pwcess, transmit, end settle for the entries received from the Company which comply with the terms of this Agreement, including the security procedures 4 WARRANTU~S The Company warrants to the Bank all warrenttes the Bank Is deemed by the Rules to make with respect to entries originated by the Company Without hmitmg the foregoing, the Company warrants and agrees that (a) each entry ts accura~ and timely, and (b) the Company will comply with the terms of the ttlec~ronic Funds Transfer Act if applicable, or Umform Commercial Code Article 4A (UCC4A), If apphcable, and shall otherwise perform Its obligations under this Agreement m accordance with all applicable laws and regulations The Company shall indemnify the Bank against any loss, liability or expense (meluding attorney fees and expenses) resulting from or ansmg out of any breach of any of the foregoing warranties or agreements 5 SErlI~EMENT. FINANCIAL INFORMATION AND ACCOUNT BALANCES The Company will mmntatll an account with the Banjo at all tunes dunng the term of this Agreement The Company will maintain in the account al least two bnsmess days prior to the applicable settlement date, ~mmedialely available funds sufficient to cover all cretht entnes by it The Bank will place a hold on all ACH proposed mx payment funds until payment is completed on the applicable settlement da~ The Company anthonzes the Bank to debit its account on the applicable settlement date in the amount of each 6 CANCELLATION OR AMENDMENT The Company shall have no right to cancel or amend any entry/file after lis receipt by the Bank However, the Bank shall use reasonable efforts to act on a request by the Company to cancel an entry/fflo before transmitting It to the ACH Any such request shall comply with the security procedures described on Attachment 2 to this Agreement The Bank shall have no habflity If l~ fa~ls to effect the cancellation AFFO160E 19of40 7 RF. JECTION OF ENTRIES The Bank sh~!l reject any entry winch does not comply with the requirements of Section 1 of this Agreement and may rejact any entry if the Company is not otherwise m compliance with the terms of flus Agreement The Bank shall noufy the Company by telephone of such rejection no later than the busmeas day such entry would otherwise have been transmitted by the Bank to the ACH The Bank shall have no habflgy to the Company by reason of the reJection of any entry or the fact that such notice is not g~van at an earlier time than thnt provided for herein 8 NOTICE OF RETURNED ENTI~IIiS The Bank shall notify the Company by telephone or fax of the receipt of a returned entry from the ACH no later than one bnsmess day afire' the bnsmess day of such receipt The Bank shall have no obligation to retransmtt a returned entry ~f the Bank complied with the terms of this Agreement with respect to the original entry The Ba~ has no obhgauon to originate a transaction where anthonza~lon has been revoked 9 REVERSALS After receiving approval from the Internal Revenue Service (IRS), the Company may unttate a reversing entry or file of entries as penmtted by the Rules 10 PERIODIC STATEMENT The penothc statement ~asued by the Bank for the Company's account will reflect entnes debited to the Company's account The Company agrees to noufy the Bank within a reasonable time not to exceed thirty (30) days after the Company receives a periodic statement of any discrepancy between the Company's records and the reformation m the periodic statemant 11 FEES The Company agrees to pay the Bank for services pwvuled under this Agreement m accordance with the schedule of charges attached to flus Agreement as Attachment 3 The Bank may change its fees from time to time upon notice to the Company Bank Is authorized to charge account number for fees 12 LIABILITY (a) The Bank shall be responsible only for performing the services expressly provided for m this Agreement and shall be liable only for its gwss negligence m performing those services The Bank shall not be responsible for the Company's acts or omissions (including without limitation the amount, accuracy, tunalmess of transmittal or due authorization of any entry received from the Company) or those of any other person, including without lmtuation any Federal Reserve Financial Insutuuun or transm~aslun or communications facility, any receiver or Recewmg Depository Fmnncial Instituuon (including w~thout hmitauon on the return of an entry by such receiver or Recewmg Depository Financial Institution), and no such person shall be deemed the Bank's agent The Company agrees to mdemmfy the Bank against any loss, liability or expense (including attorney fees and expenses) resulting from or arising out of any claim of any person that the Bank is responsible for any act or onnsaion of the Company or any other person described m this Section 12(a) (b) In no event shall the Bank be hable for any consequenual, special, pumuve or redirect loss or dnmnSe which the Company may rocor or suffer m connection with this Agreement, including without lhnttutton, loss or damage from subsequent wwn~ful dishonor resulting from the Bank's acts or onuasions pursuant to tins Agreement (c) Without limiting the generality of the foregoing provlaions, the Bank shall be excused from failing to act or delay m acting If such failure or delay Is caused by legal constraint, interruption of trananllaslon or commumcatlon faclhtleS, equipment failure, war emergency condltlons or other circumstances beyond the Bank's control In additlon, the Bank shall be excused from failing to transnm or delay m trananuttmg an entry ff such trananuttal would result in the Bank's having exceeded any hnutauon upon ~ts lntra-day net funds posmon established pursuant to present or future Federal Reserve guldelmes AFFO160E 20of40 or m ~he Bank's o~herw~se vmlafln$ ~ny pwv~on of ~y p~ent or ~ risk ~ntrol pwgr~ of ~e F~e~ ~o~e or ~y ~e or ~on of ~y o~er U S g~e~en~ ~a~o~ ~on~ (d) SubJ~ to ~e fo~gom~ l~t~om, ~ B~'s h~fll~ for loss ~1 be 1~ to E~ mo~ d~m~ not to ~ ~ ~ ~o~t prod by &e Co~y for ~t~ ACH se~, ~ ~ffo~ by ~e B~ ~r ~s ~m~t for ~ p~t 30 ~d~ ~ys 13 ~CONSIS~CY OF N~ ~ ACCO~ ~ER ~e Comply ~owl~ges · a~, ff ~y en~ describes ~e ~ver m~st~y by ~e ~d ~ n~ber, pay~ of · e en~ ~y be msde on ~e b~s of ~e ~t n~ber ev~ ff ~t ~den~fles a ~rson dfffer~ ~m ~e ~m~ R~v~ 14 BUS.SS DAY ~e ~e~ 'b~ss ~y" ~ ~ helm s~l ~fer ~o ~ose ~ys w~ch ~ o~n for b~s for ~e F~e~ R~e~e ~e B~ wall ~sh ~ ~e Comp~y's ~qu~ a ~en~ c~e~ of smd N~ Rese~e b~ss ~ys DATA ~ON ~e Co~y ~81 ~ ~ on ~e ~ua~e to pe~ rem~m~ of ~mes for five (3) b~mess ~ys following ~e ~e of ~e~r ~ ~o ~e B~ ~ prowd~ he~m, ~d s~l pmwde such ~ to ~e ~ upon ~ ~qu~ 16 ~A~ON ~e B~ ~y ~end ~ ~e~ of ~s Ag~emen~ ~m ~e ~o ~me by no~ m ~ Comply E~er p~ ~y ~e~a~e ~s Agleam u~n ~n (10) ~ys wnu~ no~ce ~ ~e o~er ~e B~ s~l have ~ obhg~on ~o ~ ~mes ff ~e Comply ~s m defa~t of ~s obhga~o~ ~ ~ A~t, including ~ obhg~on ~o pay ~e B~ for ~ c~ ~ ~e B~ s~l ~ ~t~tl~ to ~ly on ~y wn~ no~ b~ev~ ~ ~ m good ~o be s~gncd by one of ~e au~o~ ~s~auves whose ~s ~ s~a~ ~ se~ fo~ on At~a~ment 4 to ~s Ag~m~ 17 E~T~ AG~E~ ~is Ag~nt (~cludmg ~e At~ ~ hello), ~oge~er w~ ~e ~ agr~, ~s ~e ~mple~e ~d excl~ve sm~n~ of ~e agree~m between ~e B~ ~ ~e Co~y w~ ~sp~ ~o ~e sub]~ ~ter he.of ~d supe~ ~y prior ag~e~n~(s) ~n ~e B~ ~d ~e Comply w~ r~p~ ~o su~ sub~t mauer · e evem of ~y ~om~s~n~ be~n ~e ~ of ~s Ag~m~ ~d ~e ~co~ ~menL · e ~e~ of ~s A~ment s~l govern ~ ~e event ~ffo~ of ~e ~ces pmv~d~ he~n m ~ w~ ~e ~ of ~s A~nt would ~uk m a wol~mn of ~y p~s~ or ~re s~, ~a~on, or ~ove~en~ poll~ m w~ ~e B~ ~s sub~ec~ ~d wh~ gove~ or ~ec~ ~e ~tio~ ~n~e~la~ed by ~is Ag~L ~ ~s Ag~men~ ~l be d~m~ ~ended to ~e ex~t ne~s~ ~o ~ly ~ su~ s~m~e, ~auon, or poh~, ~d ~e B~ · ~l mc~ no hab~h~ to ~e Comply ~ a ~sul~ of such wolat~on or ~endment 18 NON-ASSIG~ ~e Comply ~y no~ ~s~ ~s Agreem~ or ~y of ~e n~s or du~es he~er ~o ~y person w~ou~ ~e B~'s prior ~ ~en~ 19 B~ AG~ B~I'I' ~s Ag~m~ ~l be b~dmg upon ~d m~ ~o ~e ~nefit of ~e p~es hello ~ ~e~r ~s~ve leg~ ~s~anves, su~ssom, ~d ~s~g~ ~s Agree~n~ ~s not for ~ ~efi~ of ~y o~er pe~on, ~d no o~r pe~on ~l have my n~h~ ag~m~ ~e B~ or ~e Comply ben.der 20 ~GS He~ ~ ~ for ~fe~n~ p~os~ o~y ~d s~l no~ be ~ a p~ of ~is 21. ~~ LAW ~s Ag~men~ sh~l ~ ~m~ m ~ce w~ ~d governed by · e laws of ~e SUre of Tex~ ~d SWACHA ~es AFFO150E 21 of40 Company C~tv of Denton By Name, Title Date Bank By Title Date AFF0150E 22 of 40 AUTOMATED CORPORATE SERVICES AGREEMENT ELECTRONIC FEDERAL TAX PAYMENT SYSTEM ACH CREDIT ORIGINATION AGREEMENT SCm~ULE A EYrPS ACH CREDIT TRANSACTION PROCESSING SCHEDULE Bank Originated 10 00 Two Business Days prior to Effective (fax/hand deliver worksheet) a nl Dat~* Sam~ Day Settlement 10'00 On Tax Effective Date am Transmission 2 00 p m Two Business Days pnor to Effective Date* Cash' Manager 2 00 p m Two Bus~ness Days prior Da~e* *Credits originated before Two Brain.s Days prior to the Effective Date will be rejected and returned by the Federal AFFO15OE 23 of 40 AUTOMATED CORPORATE SERVICES AGREEMENT ELECTRONIC FEDERAL TAX PAYMENT SYSTEM ACH CREDIT ORIGINATION AGREEMENT SCI-H~I~ULE B SECURITY PROCEDURES The Bank shall be ~n~tled to rely on any written not,ce or other written commumcauon behaved by ~t ~n good faith to be genmne and to have been signed by an anthonzed representative, and any such communication shall be deemed to have beea signed by such person PERSONAL COMlqYlT~ FILE TRANSMISSION The Company's authorized representative will access the ACH system by uul~g the prearranged logon procedures, remote ID, and file ID The Company's authorized representative will provide the Bank with verification of the totals conhsaned m the transnnsslon by sending a fax transm~smon to the Bank's contact In the event that the Company or the anthonzed representative is unable to fax the information, the Company's authonzed representative wdl telephone the Bank's contact w~th the venficat~on and also mini the mformauon as back-up on the same day tranatmtted The Bank will anticipate the receipt of a transrmssion from the Company on each scheduled processing date Mantffied by the Company in wntmg and agreed to by the Bank The Company's Authonzed RepresenteUve will notify the Bank if a transnnssion w~ll not take place on the prearranged scheduled processing date The Company ls responsible for cnsunng that the Bank receives the transunssion on each processing date indicated m the processing schedule The Bank w~ll venfy that the file totals agree with the Company ~nformanon given by fax or phone In the event of a discrepancy m the totals, the Bank will call the specified Company Authonzed Representative designated by an authorized signatory of the Company If an Authorized Representative ls not available for nottficauon, then the f'fle will not be processed until the Company's Authonzed Represematxve can be contacted on the next bns~ness day The Company is solely responsthlc for the accurate creatlon, mochficanon, and dcleuon of the account mformauon maintained on the Company's personal computer and used for ACH money transfer The Company agrees to comply with written procedures provided by the Bank for the creation, maintenance, and mmanon of ACH money transfer The Company ts solely responsible for access by ~ts employees of the data files maintained on the Company's computer The Company is responsible for operator seeunty,l~rocedures on the one personal computer licensed for use of the Program AFF0150E 24 of 40 AUTOMATED CORPORATE ~ERVICES AGREEMENT ELECTRONIC FEDERAL TAX PAYMENT SY~'rEM ACH CREDIT ORIGINATION AGREEMENT SCg~ULE C Bank Originated ACH Credit $ Same Day Settlement Credit $ Cash Management Tax Payment $ AFFO150E 25 of 40 AUTOMATED CORPORATE SERVICES AGREEMENT ELECTRONIC FED~ TAX PAYMENT SYSTEM ACH CREDIT ORIGINATION AGREEMENT SCHEDULE D ACH AUTHO~ SIGNATURE FORM DATE SENDING ENTITY NAME COMPANY ID# ACCOUNT# ACH CREDIT MAXIMUM AMOUNT $ DAYTIME PHONE NUMBER ~40-349-8212 AFTER HOURS PHONE NUMBER FAX NUMBER THE SIGNATURES BELOW ARE THE SIGNATURES OF EMPLOYEES VESTED BY OUR BOARD OF DIRECTORS ~VITH FULL AUTHORITY TO SIGN TRANSMITTAL REGISTERS USED IN CONJUNCTION WITH THE DEPOSIT OF ACH FILES NAME SIGNATURE 1 2 3 4 6 Dne of the above will be contacted for notification of returned or rejected enmes Authorl?.~d Signature T~tle AFFO150E 26 of 40 Addendum Seven ACH Ori~ination A~reement A The City of Dentt)~l wishes to Uutlate Credit and Debit Entries pursuant to the terms of the Agreement and the rules relating to Corporate Trade Payment Entries (the ~Rules') of the National Clearing House Association, for the purpose of processing payments by means of electromc debits, and , hereinafter referred to as Bank, is wllhng to act as an Originating Depository Financial Institution with respect to such l~ntries B Unless otherwise defined herein, capitalized terms shall have the meamngs provided in the Rules AGREEMENT NOW, THEREFORE, m consideration of the mutual promisas contained harem, The City of Denton and Bank agree as follows 1 Preoaratlon of Entries. Bank shall prepare Pranotlfications and Entrias (referred to herein collectively as #Entries") on the basis of data transrmtted by the City of Denton The ~ shall provide such data (referred to herein as ~Entry Data") in the form, have the content, and be transmitted to the Bank location at The data shall include a file of payees names, bank numbers, account number and debit amounts This file shall be to specifications of Federal Reserve Bank, SWACHA and the Bank Bank may change such requirements from tune to tune upon 30 days' written notice to the City of Denton. Bank shall have no obligation to act on Entry Data received that does not comply with the foregoing requirements, or to reverse, adjust, or stop payment or posting of any Entry Data received or any Entry prepared therefrom 2 Transmittal of Entries and Settlement. l~xcept in the case of Entries initiated to accounts ma~ntained with Bank (referred to herein as "On-Us-Entries') Bank shall transmit Entries that comply with the requirements provided for hereto to its Automated Clearing House and settle for such Entries m accordance with the Rules The City of Denton shall deliver file to the Bank bv 2.00 n.m. two (2~ worlonlz days orior to oavment date Where Entry Data that complies with the requirements provided for herein is received by the Bank Deadline, Bank shall transmit the Entries prepared from such Entry Data (other than On-Us-Entries) to its Automated Clearing House prior to the Applicable ACH Deadline In the event Bank receives Entry Data after a particular Bank Deadline, it shall have no obligation to transmit the Entries derived therefrom to its Automated Clearing House by the applicable ACH Deadline Any Bank Deadline may be changed by Bank form tune to tune on 30 days' prior written notice to the City of Denton. 3 Payment With Resnect to Entne~, (a) Credit Entries The City of Denton shall pay Bank in unmediately available funds the amount of each Credit Entry with respect to which Entry Data is transmitted to Bank under this Agreement These funds shall be deposited at such tune as agreed upon by the parties Bank shall promptly recredit the account specified below (the #Account") with the amount of each On-Us-Entry rejected by Bank as provided in Section 4, and AFF01EOE 27 of40 each other Entry returned by the Reeelvmg DFI, provided Bank has obtained the returned Entry from such Receiving DFI Co) Debit Entries Bank shall credit the account specified below (the "Account') with the amount of each Debit Entry transmitted to Bank by its Account under tins Agreement Bank shall credit the City of Denton on Settlement Date m accordance with the Bank's customary posting procedure differences between On-Us-Entries and other Entries The City of Denton shall be entitled to withdraw the amount of such credit upon Bank's receipt of entry In the event such an Entry is returned by a Receiving DFI in accordance with the Rules after Bank has provided such credit, the Cltv of Denton shall, upon demand, repay Bank the amount of such Entry 4 On-Us-Entries. In the case of On-Us-Entries, subject to Bank's right to reject any such Entry as provided below, Bank shall credit and debit the amount of each such Entry prepared from Entry Data received that complies with the requirements provided for herein to the appropriate Receiver's account maintained with Bank Bank shall have the right, in its sole discretion, to reject any On-Us-Entry for an account not in an open status 5 Entry Informattoll, Bank shall provide the City of Denton with notice of the return or rejection of Entries under this Agreement as follows The Bookkeeping DeparUnent will notify the ~ by telephone of any returned debit the next working day after the item xs received in the Bank's returns Returns will be received by 1 Treasury Analyst Phone # 940-349-'/743 2 Admimstrative Secretary Phone # 940-349-8531 6 Comnhance with Rules. ~]I~IL~LiJ~I~!I and Bank shall comply with and be bound by the Rules as in effect from tune to time Cooneratlon. The Cttv of Denton and Bank agree to cooperate promptly and fully in the Investigation of any clann asserted by any person arising out of this Agreement or the transactions contemplated thereby 8 Bank Llabihtv. Notwithstanding any provision to the contrary contained herein. Bank shall only be liable to the City of Denton under this Agreement for its failure to provide any credit or make any payment provided for herein or for its gross negligence or willful misconduct In perforrmng the service provided for herein Bank shall have no habdlty or responsibility with respect to any other matter, including without Imutatlons, any act or omission by Bank's Automated Cle/rlng House, any other financial Institution, or any other person Bank shall have no liability for any consequential damages Delay by Bank beyond time lunltS provided in this Agreement is excused if caused by interruption of cornnmmcatlon facilities, strikes, emergency conditions, or other circumstances beyond its control 9 The City of Denton Llablhtv, Except as specified below, the ~ shall be deemed to make the same warranties to Bank with respect to both On-Us-Entries and other Entries subject to this Agreement as Bank Is deemed to make under the Rules, and AFF0150E 28 of 40 Bank shall have no responslblhty with respect to the matters so warranted by the City of Denton. In the case of On-Us-Enmes, such warranties shall apply as of the tune such Entries are processed by Bank Bank shall not be liable for (a) the debltmg or crediting of the amount of an Entry to the account of any person, as required by the City of Denton. (b) the delay of any financial restitution other than Bank m debiting or credning, or the failure of such mstltutionto debit or credit the amount of an Entry, as required by the CItv of Denton. and (c) delay of the City of Denton m untlatlng or the failure of the City of Denton to untlate any Entry 10 Advertising,. No advertising or publicity concerning this Agreement in which the name of Bank Is used will be undertaken without prior wnttan approval of Bank 11 Verifications. After Bank receives the file from the (~ltV of Denton. Bank will verify the following by telephone A Total Amount B Number of Records C Pay Date This information will be verified by one of the following employees 1 2 12 Payment for Bank Services. The cost of this service will be 13 The Account. The Account Is the following deposit account maintained by the CItY of Denton with Bank Account # Bank Office Locatton The City of Denton may, without demand, debit the Account for any amount payable by the City of Denton to Bank under this Agreement The City of Denton represents to Bank that the Account is, and dunng the term of tins Agreement w~ll be maintained primarily for business, and not for personal, fanuly or household purpose 14 Notices. Except as otherwise provided herem, any wnttan nottce or other written commumcatton reqmred or pernutted to be given under the Agreement shall be delivered or sent by United States registered mai, postage prepaid, and, if to Bank, addressed to AFFOlSOE 29 of 40 and, if to the City of Denton addressed to Director of Fiscal Operations 215 E. McKmnev Denton. Texas 76201 Unless another address is substituted by notice delivered or sent as provided hereto Any such notice shall be decmad given when recelvad The cost of such ACH credit or debit will be entered monthly as a hard-dollar charge or payment by compensating balances may be substituted 16 Termination. This Agreement may be terrmnatad by the Cltv of Denton or Bank at any tlme by giving thirty days' prior written notice thereof to the other party Notwithstanding such terrmnatlon, this Agreement shall remain In force and effect es to all transactions that shall have occurred prior to the date of terrmnatlon 17 Govermmz Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas 18 Heathmzs. Headings are used for reference purposes only and shall not be deemed a part of this Agreement 19 ~ This Agreement embodies the entire agreement of the parties with respect m the subject matter hereof, and supersedes all previous negotiations, representations, and agreements with respect hereto, and shall be binding upon the parties hereto, and their respective successors and assigns Tins Agreement may be amended only by a writing signed by both pames City of Denton Bank Signed Signed By By. Tttle Title Date Dau~ AFF0160E 30 of 40 zc~ s~mwc,~ Compauy N~ C~ of D~mn Ad.ess ~ Con.ct Phon~ 940-349-8224 Ope~tto~ Cont~t ~one~ ~-349-8224 ~-note ~tnes L~ve Enm~ (da~) (~) Comply C~eu~ Re~lvvd (~) ACH S~CE ~ON ACH ~e~ (. ) Aum~uc Deb~s hpu~ M~ia ACH for ~e PC ( .) Diske~le ( ) ~one Line Co~y IDg Dehve~ Me~ ( ) Courier ( ) Comply C~er ( ) ~l ( ) O~er-~ec~ ~pm Dehve~ BANK ACH DMSION INFORMATION Primary Contact Phone// Operations Contact Phone# AFF015OE 31 of 40 ACH DELIVERY SCHEDULE 1 AUTOMATIC DEBIT FILES All ACH Automauc Debit files shall be delivered m the Bank no later than 12 00 p m, two business days prior to the file Settlement Date, i e if the settlement day is Fnday, the file must be at the bank facility disclosed in the a~reement by the previous Wednesday before 12 00 p m 2 All ACH Direct Deposit files shall be delivered to the Bank no later than 12 00 p m two business day prior to the file Settlement Date, l e if the settlement day is Friday, the file must be a~ the bank faclhty disclosed m the agreement by the previous Wednesday before 12 00 p m Always take into account bank holidays when scbedulmg your file delivery dates and tune Below is a schedule of benk holidays for thc 1997/98 year HOLIDAY SCHEDULE Hohdav Dti~l~ Day Columbus Day October 13 Monday Veterans Day November I1 Tuesday Thanksgiving Day November 2"/ Thursday Christmas Day December Z5 Thursday New Year's Day January 1 Thursday Martin Luther King Day January 19 Monday Presidents Day February 16 Monday Memorial Day May 25 Monday Independence Day July 3 Fnday Labor Day September ? Monday ACH ORIGINATION FEE SCHEDULE ACH for the PC Software $ ACH File $ Individual File Records $ Returned Entries $ These fees may be paid direct or compensaung balances may be used to offset any and all charges These charges will be calculated on the final day of each month and charged to the account of the of Dent~n number on the . day of the month By City of Denton Date AFF0150E 32 of 40 ACH CHART Business Name City of Denton AFFO160E 33 of 40 MASTER REPURCHASE AGREEMENT Dated as of Between (Seller) and City of Dento~ (Nam~ Of Customer) (Buyer) I Applicability From tune to nme ~he parties hereto may enter into transactions m which one party ("Seller") agrees to transfer to doe other ("Buyer") securntas or fmancml instruments ("Securities") against the mmsfer of funds by Buyer, with a sunultaneous agreement by Buyer to transfer to Seller such Securities at a data certain or on demand against doe transfer of funds by Seller Each such transaction shall be referred to hereto as a "Transaction" and shall be governed by tillS Agreement, Includmg ally supplemental terms or conditions contained m Annex I hereto, unless otherwise agreed m writing 2 Definitions (a) "Act of Insolvency' with respect to any party, (l) the commencement by such part~ as debtor of any case or proceeding under an bankruptcy, insolvency, reorganization, hquldauon diasolutmn or sundar law, or such party seeking doe appomtmeet of a receiver, trustae, custodian or sundar officizl for such party or any substantial part of its property, or (ii) doe commancement of any such case or prncecdmg against such party or another seeking such appointment, or the films against a party of an application for a protecuve decree under doa proviatons of the Securmes Investor Protecuon Act of 1970, which (^) is consented to or not umely contested by such party, (B) results m doe entry of an order for relief, such an appomunem, the lssnsnce of such a protective decree or the entry of an order harms a sunflar effect, or (C) ss not dismissed wldom 15 days (iii) doe making by a party of a general asslgnmem for the benefit of creditors or (iv) the admission m writing by a party of such party's mabdlty to pay such party's debts as they become due (b) "Addottoeal Purchased Secuntias", Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof (c) ~Buyer's Margin Amount" with respect to any Transaction as of any date the amoum obtsmed by application of a percentage (winch may equal to the percentage that ts agreed to as the Seller*s Margin Amoum under subparagraph (q) of this paragraph), agreed to by Buyer and Seller prior to entering into doe transactmn to the Repurchase Price for such Trensactton as of such date (d) "Confirmation", doe muanmg specified m Paragraph 3(b) hereof, (e) ~lucome', with respect to any Security at any tune, any prmcipal thereof then payable and all interest dividends or other distributions thereon, (0 "Margm Deficit", the meaning specified m Paragraph 4(a) hereof, (~) "Margin Excess*, the meaning specified m Paragraph 4(b) hereof, (h) "Market Value", with respect to any Securntes as of any date the price for such Securities on such date obtained from a generally recognized source to by doe parties or doe most recent clnsmg bid quotation from such a source, plus accrued income to doe extant not included doerem (other doan any Income credotad to transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereo0 as of such date (unless contrary to market practice for such Securmes), 0) 'Price Differential", with respect to any Transaction hereunder as of any date, the aggregata amount obtamed by daily apphcatlon of doe Prlcmg Rata for such Transaction to the Purchase Price for such Transacttun on a 360 day per year basis for doe actual number of, days during doe period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Trensactmn) (J) "Pricing Rata", the per annum percentage rate for determtuatmn of the Price Differential, (k) ~'Prune Rate", the prune rata ofU S money centar commercial banks as published m The Wall Street Journal (I) 'purchase Date", doe data on which Purchased Securities are transferred by Seller to Buyer (m) 'purchase Price", (t) on the Purchase Date, the price at which Purchased Secorttlas are transferred by Seller to Buyer, and (ii) thereaftar, such price increased by doe amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased by die amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or apphed to reduce Seller's obligations under clause (ii) of Paragraph 5 hereof, AFFO150E 34 of 40 (n) "Purchased Securities", the Securities trunst'erred by Seller to Buyer m a Transaction hereunder and any Securities substituted therefor m accordance with Paragraph 9 be~of The term "Purchased Secunues' with respect to any Transaction at any time also shall include Additional Purchased Securiues daltvercd pursuant to Paragraph 4(a) and shall exclude Seceriuas returned pursuant to Paragraph 4(5), (o) 'Repurchase Date** the date on which the seller ts to repurchase the Purchased Securities form Buyer mnludmg any date detormmed by application of the provtsmns of Paragraphs 3(c) or 11 hereof, (p) 'Repurchase Price*, the price at which Purchased Securthes are to be transferred from Buyer to Seller upon termmatinn of a Transaction which wdl be determined m each case (including Transactions terminable upon demand) as the sum of the Purchaso Price and the Price Different.mi as of the date of such determmauon, increased by any amount determined by the application of the provisions of Paragraph I 1 hereof, (q) "Seller's Margin Amount*, with respect to any Transaction as of any date, the mount obtemed by application of a percentage (which may be equal to the percentage that is agreed to as the Buyer's Margm Amount under subparagraph (c) of this Paragraph), agreed to by Buyer and Seller prmr to entering mm the Transaction, to the Repurchase Price for such Transaction as of such date Initiation, Confirmation, Termination (a) An agreement to enter mm a Trensuction may be made orally or m wrUmg at the mlnauun of either Buyer or Seller On the Purchase Date for the Transaction, the Purchased Securities shall be transferred m Buyer or its agent agamst the transfer of the Purchase Price to un account of Seller (b) Upon agrcemg to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed shall promptly deliver to the other party a written confirmation of each Transection (a "Confirmation*) The Confirmtumn shall describe the Purchased Securities (including CUSIP number, if any), ldemlfy Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price (iii) the Repurchase Date, unless the Transaction ts to be termmable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conthtions of the Transaction not inconsistent with this Agreement The Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed Between Buyer and Seller with respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmanun specific obJect, on Is made promptly after receipt thereof In the event of any conflict between the terms of such Confirmation and this Agreement thIs Agreement shall prcvad (c) hi the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller no later than such time se is customary m accordance with market practice, by telephone or otherwise on or prior to the business day on which such termination will be effective On the date specified in such demand or on the date fixed for termination m the case of Transecuona having a fixed term, termmatiun of the Transacuun will be el'footed by transfer to Seller or lt*s agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not prevmnsly credited or transferred to, or applied to the obllgatmns of Seller pursuant th Paragraph ~ hereof) against the transfer of the Repurchase Price to an account of' Buyer Margin l~*~aintanunea (a) If at any tune the aggregate Market Value of all Purchased Securities subJeCt to all Transactions in which a particular part,/hereto ts acting sa Buyer is less than the aggregate Buyer's Margin Amount for ail such Transactions (a "Margin Deficit"), then Buyer may by untice to Seller require Seller in such TransecUons at Seller's option, to transfer to Buyer cash or addtlinnal securities reasonably acceptable to Buyer (~AddlUonsl Purchased Securities*), so that the cash and aggregate Market Value of the Purchased Securities including any such Additional Purchased Securities, wdl thereupon equal or excead such aggregate Buyer s Margm Amount (decreased by the amount of any Margin Deficit as of such deto arlsmg from any Transactions m which such Buyer is acting as Seller) Co) If' at any time the aggregate Market Value of' all Pm*chased Securities subJeCt m ali Transactions in which a particular party hereto is ectmg as Seller exceeds the aggregate Seller's Margin Amount ~'or all such Transactions at such tune (a 'Margin Excess*), then seller may by nonce to Buyer require Buyer in such Transactions, at Buyer's option, to transfer cash or Purchased Securities to Seller, so that the aggregate market Value of the Purchased Securities, afier deduction of any such cash or any Purchased S~curlties so transferred will thereupon not exceed such aggregate Seller's Margm Amount (mcreased by the mount of any Margin- Excess as o~ such date ~rom any Transactions in which such Seller is actmg as Buyer) (c) Any cash transferred pursuant to this paragraph shall be ato'thtued to such Transactions as shall be agreed upon by Buyer and Seller (d) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Boyer or Seller (or both) under subparagraphs (a) and (5) et' this Paragraph may be exercised only where a Margin Deficit or Margm Excess exceeds a specified dollar amount or a specified percentage of the Repurchase Prices t'or such Transactions (winch amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transasttons) AFFO150E 36 of 40 (e) Seller and Buyer may agree, with respect to any or all Transactmns hereunder, that the respective rights el~ Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the aiunmatton of a Margin Deficu or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margm Excess exlsfs with respect to any aiunle Transaction hereunder (calcuhted without regard to any other Trensacuon outstanding under this Al~reement) 5 lnuome Paylnants Where a particular Transaction's term extends over an Income payment date on the Sccnstues subject to that Transaction, Buyer shall, as the parties may agree with respect to such Transaction (or, m the absanee of any agreement, as Buyer shall reasonably determine m its discretion), on the date such Income is payable either (l) transfer to or credit to the account of Seller an amount equal to such Income payment or payments with respect to any Purchased Securities subject to such Transaction or (u) apply the Income payment or payments to reduce the amount to be transferred to Buyer by Seller upon termmunon of the Trenscctton Buyer shall not be obligated to take any action pursuant to the preeedmll sentence to the extent that such action would result in the creation of Margm Deficit, unless prior thereto or sanuhansously therewith Seller transfers to Buyer cash or Additional Purchased Securities suf~cinnt to eliminate such Margin Deficit 6 Security Interest Although the panes intend that all Transactions hareunder be sales and purchases and not loans m the event any such Transactions are deemed to be loans, Seller shall be deemed to have pledgad to Buyer as security for the performance by Seller of tls obllgauoos under each Transactions, and shall be deemed to have granted to Buyer a security interest m, all of the Purchased Secunttes with the respect to all Transactions hereunder and ail proceeds thereof 7 Payment and Transfer Unless otherwise mutually agreed, all transfers of funds hereunder shall be m immediate]}, available lands All Secunues transferred by one party hereto to the other party (I) shall ha m suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment m blank and such other documentation as the party recinvmg possession may reasonably request, (11) shall be transferred on the book-entry system of a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer As used herein with respect to Securities, "transfer* is unended to have the same ,meaning as when used in Section 8-313 of the Texas Business and Commerce Code or, where applicable, in any federal regalatmn gavernmg transfers of the Securities 8 Segregation of Purchased Securities To the extent required by applicable law, ail Purchased Securities m the possession of Seller shall be segregated from other securities m its possession and shall be identified as subject to this Agreement Segregation may be accomplished by appropriate identification on the books and records of the holder, lucludmg a i'mancial intermediary or a clearing corporation Tide to all Purchased Securities shall pass to Buyer and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer from enl~agiog tn repurchase transactions with the Purchased Securities or otherwise pledllinll or hypothecating the Purchased Securities, but no such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraphs 3, 4 or 11 hereof, or of Buyer's obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Paragraph $ hereof Required Disclosure for Transactions In Which the Seller Retains Custody of the Purchased Securities Seller is not permitted to substitute other securities or those to this Agreement and therefore must keep Buyer*s securities segregated at all tune, unless in this Agreement Buyer llrants Seller the right to substitute other securities If Buyer grants the right to substitute, this means that Buyer's securmes will likely be commingled with Seller's own securities during the iradmS day Buyer Is advised that, during any iradmll day that Buyer's securities are commmgled with Seller's seeurtons, they wdl be subject to liens granted by Seller to its cleermg bank and may be used by Seller for deliveries on other securities transactions Whenever the securities are conunmgled, Seller s ability ito resegrcgate substitute secunttns for Buyer will be subject to Seller's ability to satisfy the clearing lien to obtain substitute securities AFF0150E 36 of 40 9 SUhafitut~on (a) Seller may, subJeCt to agreement with and acceptance by Buyer, suhantote other SeCurings for any Purchased SeCurttias Such suhaumtion shall be mede b~ mmafor to Buyer of such other Securmes and mmsfor m Seller of such Purchased Securings After suhatoution, the substituted Seeuriuas shall be deemed m be Purchased SeCurities (b) I In Transectmns m which the Seller relams custody of' Pur~ Securtoes, the Parties expressly agree that * Buyer shall be deemed, for purposes of subparesraph (a) of this Paragraph, to have agreed to and accepted m this Agreement substitution by Seller of other Securities for Purchased Seanntles, ,nrov~ed/~t~t, er, that such other SeCurities shall have a lv~arket Yalua at least equal to the market Value of' the Purchased Securmee for which they are substituted 10 Representations Each of Buyer and Seller represents and warrants to the other that (l) it m duly authorized to execute and deliver this Agreement, to enter rote the Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary acnon to authorize such execunon, delivery and performance, (u) ~t wdl engage in such Transactions us prmmpal (or, if agreed m writing m advance of' any Trensacuen by the other party hereto, us agent for a disclosed prmcipal), (fid the person sluniog this Asrsemant on its behalf, ts duly ,authorized to do so on its behalf. (or on behalf of any such disclosed principal), (iv) it has obtemed all authorizations of any governmental body reqmred m couneeUon with this Agreement and the Transactions hereunder and such authorizations are m foil force and (v) the exeeution, delivery end performance of this Agreement and the Transactions hereunder will not vmlate any law, ordinance, charier, by-inw or applicable to it or any agreement by which it Is bound or by which any of its assets are affected On the Purchase Date for any Transaction Buyer and Seller shall each be deemed to repast all the foregoing representations made by it 11 Events of Default In the event that (i) Seller fails to repumhase or Buyer fails to transfer Purchased Securities upon the applicable ,Repurchase Date, (ii) Seller or Buyer fails, al~er one bnsmass day's notice, m comply with Paragraph 4 hereof, (iii) Buyer fails to comply with Paragraph 5 hereof, (iv) an Act of Insolvency occurs with respect to Seller or Buyer, (v) any representenon made by Seller or Buyer shall have been mcorrect or enffun m any memnal respeCt when made or repeated or deemed to have been made or repeated, or (vi) Seller or Buyer shall admit to the other its inability to, or ils mtenoon not to, perform any of' its obligations hereunder (asch an 'Event of Default") (a) At the optmn of the non defaulting party, exercised by written notice to the defanltmg party (which option shall be deemed to have been exercised, even if' no notice is glVan, tmmedistely upon the oecurmnca of an Act of Insolvency), the Repurchase Date for each Transaction hereunder shall be deemed munediately to occur (b) In all Transactions in which the defaultolg party is acting as Seller, if the non defaultmg party exercises or is deemed to have exercised the option referred to m subparagraph (a) of this paragraph, (t) the defanltmg party's obligations hereunder to repurchase all Purchased Secunuas m such Transacnons shall thereupon become immediately due and payable, (ti) to the extent permlt**'d by applicable law, the Repurchase Priee with respect to asch such Transaction shall be increased by the a~gregato amount obtemed by daily application of (x) the greater of the Pricing Rate for sach Transaction or the Prune Rate m 0') the Repurchase Price for such Transaction as of the Repurchase Date us detormmed pursuant to subparagraph (a) of this Paragraph (decreased as of any day by (A) any amounts retained by the non defaulting party with respect to such Repurchase Price pursuant to clause (Ul) of this subparagraph, (B) any proceeds from the sale of Purchased Seeurmes pursuant to subparagraph (d)(i) of this Paragraph, and (C) any amounts credited to the account of the defaulting party pursuant to subparagraph (e) of this Paragraph) on a 360 day per year basis for the actual number of days during the period from and mcindtng the date of the Event of Defauh giving rise to such option to but excluding the date of payment of the Repurchase Price as so mcreased, (ih) all Income paid after such exercise or deemed exercise shall be retained by the non defaultmg party and applied to the agllrcgatn unpaid Repurchase Prices owed by the defaulting party,,and (iv) the defaulting party shall unmedmtoly deliver to the non defaulting party any Purchased Securities subject to such Transactions then m the defanltmg party's- possession (c) jn all Transactions tn which the defaultmg party is acting as Buyer upon tender by the non defanltmg party of payment of the agllregato Repurchase Prices for all such Transactions, the defaulting party's right, tide and interest tn ail Purchased Securities subject to such Transactions shall be deemed transferred to the non defaultmll patty, and the defaulting parly shall deliver all such Purchased Securities to the non defaulting party (d) A~er one bnstnass day s notice to the defan ting party (which nonce need not be given if an Act of Insolvency shall have occurred, and which may be the notice given under subparagraph (a) of this paragraph or the notice referred to tn clause (It) of the first sentence of this Paragraph), the non defanltmg party may AFF0160E 370f40 (i) as to Transactions m which the defaulting party m acting ns Seller, (A) immediately sell, tn a recognized market at such price or prices as the non dafauinng party may reasonably deem satufectot~, any or all Purchased Secuntins subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owmg by the defaulting party hereunder or (B) m its sole discretion elect, m lieu of selling all or a portion of anch Purchased Securtoes, to give the defaulting party credit for such Purchased Securldns m an amount equal to the price dierefor on such date, obtemed from a generally recognized source or the most recent elnsmg bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owmg by the dafaulung party hereunder, and (il) as to Transactions m which the defaultmg pasty is acting as Buyer, (A) purchase securities ('Replacement Securilins*) of the same class and amount as any Purchased Securities that arc not dehvered by the defaulting party to the non defaulting party as required thereunder or (B) to its sole discretion elect, In lieu of purchasmg Replacement Securities, to ha deemed to have purchased Replacement Securiues at the price therefor on such date, obtemed from a generally recogtozed source or the most recent closing bid quotation from such a source (e) As to TransectInns in which the defaulting party ts ecung as Buyer, the dafaultmg party shall be Imble to the non dafaultmg party (i) with respect to Purchased Securities (other than Addtooual Purchased Securities), for any excess of the price paid (or deemed paid) by the non dafaultmg party for Replacement Securities therefor over the Repurchase Price for such Purchased Securities and (il) with respect to Additional Purchased Securtues, f~r the price paid (or deemed paid) by die non dafoultmg party for the Replacement Securities therefor In eddttinn, the defaulting party shall be liable to the non defaulting par~ for mteresl on such remaiomg liability with respect to each such purchase (or deemed purchase) of Replacement Securities froin the date of such purchase (or deemed purchase) until paid in full by Buyer Such mterest shall be a rate equal to the greater of the Pricmg Rate for such Transaction or the Prune Rate (0 For purposes of this Paragraph 11, the Repurchase Price for each Transacuon bemunder In respect of which the defaulting party Is acting as Buyer shall uol mereace above the amount of such Repurchase Price for such Transaction determmnd as of the date of the exercise or deemed exercise by the non defaultIng party of its option under subparagraph (a) of this Paragraph (g) The dafaultmg party shall be liable to the non defaulting party for the amount of all reasonable legal or other expenses incurred by the non defaulting party m connection wnh or as a consequence of an Event of Default together with miorest thereon at a rate equal to the greater of the PricIng Rate for the relevant Transaction or the Prime Rate (h) The non defaultmg party shall have, in addition to Its rights hereunder any rights otherwme available io it under any other agreement or applicable law 12 Single Agreement Buyer and Seller acknowledge that, and have entered hereunto and will enter mm each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single busIness and contractual relationship and have been made in consideration of each other AucordmgJy, each of Buyer and Seller agrees (i) to perform ali of its obligations m respect of each Transaction hereunder, and that a default tn the performance of any obligations shall constitute a default by it In respect of all Transactions hereunder (Ii) that each of them shall be entitled to set off cinJms and apply properP/held by thetn In respecl of any TreasactInn agamst obhgatiuns owmg to them In respect of any transaction agamst obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them In respect of any Transaction shall ha deaIned to have made In consldarauon of payments deliveries and other transfers m respect of any other Transactions hereunder, and the obhganons to amice any such payments, deliveries and other transfers may be applied against each other and netted 13 Notices and Other Consmunleatfons Unless another address Is specified m writing by the respective party to whom any notice or other conununlcndon Is to ha given hereunder, all such notices or communications shall he tn wriung or confirmed m writing and delivered at the respective addresses set forth tn Annex [ a~lachad hereto ld Entire Agreement, Severabllity This Agreement shall supersede any existing agreements between the parties conmmmS general terms and conditions for repurchase transectioos l~ach provision and agreemem herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable untwlthsrandmg the unenforceabJhty of any such other provision or agreement AFFO160E 38 of 40 15 Non.ensignability; Termfnatinn The rights and obhgauuns of the pumas under this Agreement and under any Transaction shall not be assigned by either party without the peer written consent of the other party SubJeCt to the foregomg, this Agreement and any Transnatlons shall be binding upon and shall insure to the benefit of the pames and their respounve successors and assigns This Agreement may be canceled by either paW upon giving written notice to the other, except that this Agreement shall, notwlthstsndmg such nonce, remain applicable to any Trensacuons then outstanding 16 Governing Law This AnFeement shall be noverned bv the hws of the SUte of Texas without nivfnn effect to the ennfllet of law ns'fneinlos thereof. Venue of any IManflnn lavolvlan the A~amns~t ernst be mnh*ntnnd In Dnntfln County. Texos. to the exclusion of nil other vamt~q 17 NO Waivers, utc No express or unpiled waiver of any Event of Defenlt by either party shall consntute a waiver of any other Event of Default and fie exercise of any remedy hereunder by any par~ shah consuntte a waiver of its r~ght to exercise any other remedy hereunder No mothficaUun or waiver of any provisam of this Agreement and no consent by uny paw to a depaflure herefrom shall be effective unless and unUl such shall be m wntmg and duly executed by both of the parties hereto Without Innltstton on any of the 1'oregomg, the failure to give a nnt~e pursuant to subparesraphs 4(a) or 4(b) hereof will not conanmte a waiver of any Fight to do so at a later date 18 Use o1' lbnpinyen Pinn Assets (a) If assets of an employee benefit plan subject to any provision of the Employee Reurement Income SeCurity Act of 1974 ("ERISA") are mtended to be used by either party hereto (the "Plan Party") m a transaction, the Plan Party shall so notify the other paw prior to the Transaction The Plan Part~ shall represent m writing to the other party that the Transaction does not constitute a prohibited transantton under ERISA or ~s otherwise exempt therefrom, and the other PeW may proceed m relisnce thcrecn but shell not be required SO to proceed (b) SubJect tn the last sentence of subparagraph (a) of this Paragraph, any such Transacuon shall pmcced only tf Seller fi2ralsbos or has furnished to Buyer Its most recent available audited statement of 1ts financml condition and its most recent subsequent unaudited statement of its financial condition (c) By efltermg mtn a Transaction pursuant to this Paragraph, Seller shall be deemed (0 to represent to Buyer that since the date of Seller's latest such flnancisl statements, there has been no nmterml adverse chan~e m Seller s flnsnsisl condition which ,Seller has not discinsed to Buyer, and (n) to agree to provide Buyer with Intore audited and unaudited stetemants of its financial cundnton as they are ~ssued, so long as n ts a Seller in any outstanding Transaction ntvoivntg a Phn PaW 19 Intent (a) The parties recogntxe that each Transection is a "repurchase agreement' as that term is defined m Section 101 of Title 11 of the United States Code, as amended (except insofar ns the type of Securnles subject to such Transnctam or the term of such Transncnon would render such definition ~ospphcnble), and a "securities contract" as that term is defined m Sent~on 741 of Title 11 of the United States Code, es amended Ce) rt Is understood that either paW's fight to liquidate Securthes delivered to It m coanncnon with Transactions hereunder or to exercise uny other rentedtes pursuant to Paragraph 11 hereof, is a contrncmal right to hqtndets such Trensactlon as described in Secfluns 555 and 559 of Title I 1 of the United States Code as amended 20 Disclosure Rehting to CeFthin Fedeenl Protections The parites acknowledge that they have been advised that (a) tu the case o1' Transanttuns m which one of the parues t~ a broker or denier registered with the Securities and Exchange Commission ("SEC") under Section 15 o1' the SeCuriues Exchange Act of 1934 ("1934 Act"), the Securities Investor Protection Corporattun has taken the position that the prOVISIOns of the Securities Investor Protect~un Act of 1970 ("SH)A'') do not protect the other pawty with respect to any Transaction hereunder, Ce) nt the case of Transactions tn which one of the parties is a sovenunant seCurntes broker OF a government SeCurtoes dealer registered with the SEC under Section 15C of the ! 934 ACt SIP^ will not provide proteunon to the other paw with respect to any Trensnctlon hereunder, and AFFO150E 39 of 40 (c) m the c~se of TransacUons m which one of tho p~m~ ~s a Fmaucml Insumoon, funds held by the flmmcmi msumUon pursuant to a Transaction hereunder are not a depos~ and therefore are not insured by ~he Federal Doposu l~ursuc~ Corpor~Uon ~mk: City of Denton By By Title Title Date Date ,~nneX I The items listed below are a~u'~ed by Buyer and Seller as excepuom or restrictions to this Master Repurchase Agreement dated By acknowledging the below items, the listed items become provisions of this agreement and am subject m the gmdelmas of the preceding document BY City of Denton 215 E. McKinnev Denton. Texas 7629~ 940-349-8224 AFFO150E 40of40 August 25, 1997 Mr Tom Shaw Purchasing Agem City of Denton 901-B Texas Street Denton, Texas 76201 RE Depository Bid Dear Mr Shaw Please find enclosed the completed depository bid subnutted by TexasBank If you should have any questions regarding the bid or need additional information, please feel free to call one of the following contact personnel Gwen Chick, CFO or Cathy Fravaer, AVP Business Development (817) 598-2323 (940) 383-1868 Denton South Bankm$ Center We look forward to the opportumty of working w~th you and the City of Denton Sincerely, Gwen Cluck Cluef Financial Officer GC/mys enclosures IV. BANK QUESTIONNAIRE The Bank is requested to thoroughly answer the followln~ questions Adihtlonal pages may be appended if space is inadequate How m the bank chartered? State 2 What percent of current loans are classified as non-perfonmng~ .31% 3 Does the Bank have any sigmflcant problems noted by regulatory agenczes m the past twent)'-four months? If "yes", please explain No. 4 Indicate the Bank's cap,tal to assets rauo for tbe last five years 12/31/93 =7.40% , 12/31/9- = 7.91%; 12/31/95 = 8.91t; 12/31/96 =9.34% ; 6/30/97 = 7.72% 5 What was the Bank's 1996 return on assets (REA)? 1.66% 6 Attach copies of the Bank's most recent PDIC (UPBRl call repons 3/31/97 & 6/30/97 are attached. V. ACCOUNT DESCRIFI'IONS A The City Intends to establish the following Bank accounts c ub!. .gual.l/im Tvoe Employees Clanns Account Zero-Balance Account Operating Account Zero-Balance Account $,nkmg Accoum Zero-Balance Account Payroll Account Zero-Balance Account Industrial Development Authority Super Now Rehab Account Zero-Balance Account Concentration Account Super Now Insurance Account Zero-Balance Account Electric Distribution Account Zero-Balance Account Clordle Account Super Now CDBG Account Zero-Balance Account Contractual Obhgatlon Super Now Ray Roberts Lake Account Super Now Public Properties Super Now Security Account Super Now The City reserves the right to open or close any number or type of accounts throughout the period ,f necessary although no changes are anticipated s The services winch should be made avmlable to the City include but are not lmuted to the following TOTAL FEE CHARGED/ ESTIMATED MONTHLY PER UNIT VOLUME CHARGE DESCRIPTION OF SERVICE 5.0 0 16 accounts 8 0 0 0 Account Maintenance --- 16 accounts --- a) First original bank statement per account 20/month - - - b) Balance Inqutnes by phone § 0.0 0 ?mort t h20/month 5 0.0 0/mc~ r~co rapomng (dally computer raportmg system which hsts previous and current day balances, debits, crethts averages, and check presentments for all accounts) .1 0 80/month $. 0 0 Deposit uckets (credit posting) · 0 2 5 2~,000/month 6 2 5.0 0 Items deposited (encoding) .055 3,$00/month 192.50 Checks Paid (debit posting) · 0 5 5 1,700/month 9 3.5 0 a) Payroll checks · 0 5 5 1,800/month 9 9.0 0 b) General disbursement checks · 0 5 5 SO/month 2 ? 5 c) Other debit posting - - - 60/month - - - Wire services --- 20/month --- a) Incoming transfers 5.0 0 4e/month 2 0 0.0 0 b) Outgoing (excludes activities in safekeeping account) 5.0 0 28/month 12 5.0 0 l) Repetitive by computer 5 o 0 0 S/month 2 5.0 0 2) Repetiuve by phone 5.0 0 S/month 2 5.0 0 3) Free-form by computer 5.0 0 S/month 2 5.0 0 4) Free-form by phone · 0 5 5 IS/month .8 3 $) ACH transfers 10.0 0 S/month 5 0.0 0 Stop payment request 10.0 0 3/month 3 0.0 0 a) Wrlt~n request 5.0 0 2/month 10.0 0 b) Automated request by terminal --- $ boxes of --- Coin wrappers furmshed type/ each coin month --- 130 books/mo .1 0 each Deposit slips printed or TexasBank's cost, whichever Ks less. 4 TOTAL FEE CHARGED/ ESTIMATED MONTHLY .. PER UNIT VOLUME CHARGE r~$C-~IPTION OF SERVICE I0 --- 3 bags/year --- Large vault cash bags 11 - - - 35 bags/year - - - Plasuc drawstring check bags 12 --- l/box - - - Safe deposit boxes (10xl0) -., 4 hfs/month --- Re.arch hours 14 --- $300,000 on --- Cost of collateral pledged by the average for 15 bank (quote cost per uulhon accounts pledged) 15 1 0 0.0 0/raon t:1]1 account Z 0 0.0 0/mort t:tControlled Disbursement service charge 16 --- 9 account --- . Zero balance aummauc transfers 17 2.5 0 SO/month 1 2 5.0 0 a) Remm items ~.. 0 0 120/month ]. 2 0.0 0 b) l~mrn items recleared - - - i/month - - - c) Return item telephone advice 18 --- 15 accounts --- FDIC insurance cost 19 --- I account --- Secunues cleanng and safekeeping - - - a) Maintenance charge ]. 0 0 0 13/month '1 3 0.0 0 b) Receipts deposited ]. 0.0 0 Ii/month 1 2 0.0 0 c) Receipts withdrawal ]. 0.0 0 i/month 2 0.0 0 d) Coupon collceuons --~ $90 million --- .... e) Safekeeping of assets, per receipt ~. 5.0 0 8/month l 2 0 0 0 f) Book-entry security transfers via Federal Reserve, per transacllon l/year -- - g) Audit confirmations 20 - - - Bi-weekly - - - Fees for threct deposit services for payroll employees (950 employees, total payroll -. $710,000) ]-5.00 ].5 00 a) Tape charge b) ACH settlement c) Stop payment orders · 04 each .04 each d) Cred~t/debltposting e) Other (l~st each spemfic charge) 5 21 Cash Management System (See Exhthtt (2 for terms and conditions) A Monthlybnsefes $50.00 for all accounts Normal Servtee 22 Automated Teller Machines (ATM), see $ccuon E. page 7 A Included as pan of overall depository bid award Fee charged per umt · 5 0, Total monthly charge $ 2 0 0, lee charged per transaction 1.0 0 * · to customer who does not ha B If awarded as a ~parate contracmalagreement a TexasBank account. Fee charged per umt ..- 5 0 , Total monthly chargeS 4 0 0 , Fee charged per transacuon 1.0 0 23 List any other appl,cahle bank charges None NOTE Under a straight fee arrangement with the bank, analysts charl~es would be debited to the control concentration account and an analysis fee statement will be mailcd to the City each month Under a compensa-ng balance method, all accounts would be tied to a main account and collected balances would be maintained to offset service charges Also note, that estimated volume above are projections based on current annual volumes C Automatic Payroll Deposit Is a setwtce the City offers its 950 employees The bank would be required to produce bt-weekly payroll transfers from a magnetic tape furnished by thc City in ACH format for transfer of funds directly to the employee bank, savings and loan, or cretht umon accoum Please state the bank's pmcederc for this service and list appropriate ctit-off times that would apply The (2ity's net payroll Is approximately $710,000 each pay period State whether the bank would offer any ty~e. of special checlong, money market or loan account for thc City employees See Attachment A tape or dzskette can be delivered to either of our Denton locatzons for the transfer of these payroll funds v~a ACH. The tape or diskette MU~T De at nne weannerford offic~e-'N~ T~A~f~/~--than 3 0 ?_m. AT LEAST 2 days Drlor to pay day. See attached ACH Agreemen< D Does the bank offer any type of sweep accomlt where excess city funds could be invested at a higher rate overmght than In a Super Now acconnt arrangement9 Does the bank have money market funds consisting of treasuries, agencies, prime commercial paper, prime domestic bankers acceptances and collateraltzed or Insured certificates of deposit, that the City could utthze daily as an investment alternative9 It' so, please explain the fund's parameters and interest earmnes history or attach a separate prospectus See Attached. 6 Automated Teller Meehmes (ATM~ The beak Mil install and mmntsm ATM umts at the felloMng locauons o Mumcipal Braiding, 215 E McKinn~y o Denton Mummpai Complex, 601 E Hickory o City Hall West, 221 N Elm The C~ty agrees m furmab a Ilghtsd, ms,de location and sufficient el~'cmcal power for ~ maclun~ ~mtallatton Nots The City of Denton reserves the right to remove this secuon from consldaraUon m the award proc&ss and to rabid an award under a separats cover P~vment for Serwe~* The C~ty mtsnds to pay for ail a~ouat s~*rv~¢es provided by the Baak as se~ fourth m Sacuon V B-E The method expectsd to be ns~[ for the payment of ~ sarvlc~s ~s th~ ~ paym,~ar m~scd The Bank should d~bit the appropr~ats account on a momhiy be~s The City wtil requu~ aa a~:ouat *~*!¥s~ each mon~ wluch will clearly show volumc counts, faes abargad, and total price for servmm~ the account The ac~ouat should also show average lodger b~!~nc~s, averaga uacoll~tsd feada, ami avecagc coll~:tsd balances, mtsrest rates and the amount of m~rest prod or cr~'ditsd to tim acoount ~ fees ar~ no~ subject to chan~e for the length of this ountrac~ plceso subml~ a sample of th~ momhiy acm~uar ~n,!ys~s sts~ment that will be provuled m the City of Denton Sofeheupmg fees for thc C~ty's investments ~h~ also he set up on an account analysis and pMd munthly Plaese subnut a sample of the safekeapmg account nnnlys~s The City dustres to receive same day credit for afl fends dapostted by 3 00 p m The funds should be ~nvestsble for any mvesnnent transactions that can bc executed If not mvestsd, the funds should earn ~ntsrest at the rate being paul for Super NOW accounts Plaasc attach proposed avnulnhihty schedule Use a separats attachment if necessary See At:~:achec~. Please provide a detstied eaplanauon of the Bank's policy and methodology used ~n the sarong of rates pa~d on Super NOW accounts Also, provtde a schedule of all rates paid on Super NOW accounts s~nce Sanuary 1, 1996 SpeclflcallymthoatslftheratssareapplledtoledgarbalancesorcoHect.,dbahnces Inthcatswbenthe ratss Change and if they are based on a market rate such as T-Bill discount or yteld ra~ If the Bank proposes t° PaY the Ctty a different rats on ,ts Super NOW accounts, red,cam that proposal See Other Service* Please spectfy any other sarvtces available to the C~ty of Denton which may be thought to be beneficial or that may apply to the C~ty Stats ali related fees See At:l:achmenl: C. As security for thc d~postts of the City of Denton, the Bank shall pledge to ti~ C~ty securlues equal to the largest total balances the CAty of Denton mmntains ~n thc Back Cemflcatss of dupostt and other ewdunces of dupos~t shall be collateralized at 102% of market, for U S Treasury Bills, Notes, and Bonds Mth a remmmng mantnty of three years or less and at 102 % of market for other sccunues The secunues so pledged the amounts thereof and the tune for pledging same must sathfy the raqmrements of Texas Local Government Code Chaptsr 105, as amended 7 The City will ancept as collateral fi:)r iu cemflcar~s of deposit and demand deposm only ,~ose secunues idannfied by the Public Funds Investment Act as eligible Invemuents Addmonally, U S Treasury secunues shall he thn primary szcaritins ace~pt-,d as collateral The maximum levels needing to he coliz~ra~z~d are esumated to be the maximum mounts for the Super NOW accounts and cerUflcatos of deposit asuma~,'d to be $i;,ooo,ooo Thase Items consutute tho only acceptable masns of collateraltzlng the City's deposits The securlues must be held m safekeeping by the l~nderal Raserve Bank of Dallas or another third party financial tusumuon pursuant to a safekeeping agreement signad by the Depository Bank and the City Reparchese agreemnats are not aeceptable as collateral to the City of Denton B Renortme Reouiremems The Bank shall provide the City a report of secunues pledged on a monthly baclS or at any ~lme requested by the City Manager, Assmtant City Manager of Finance, Director of Fiscal Operanons, or a daslgna~d rnpresantanve Tlus report should reflect the following mformauon as of the end of each month and he d~hvered to the City by the Sth of each month Total pledged seanriues itemized by o Name o Type/Description/Cusip Number o Par Value o Current Market Value o Maturity Date o Moody's or Standerd& Peers Rating (both, if available) The securxtles pledged shall be held in safekeeping by a separate and different Bank other dian the depnsltorv Bank The original copy of all safekeeping receipts shall be filed with the Director of Fiscal Operanons of the City of Denton The City will reimburse the depository Bank for any safekeeping charges, if any Specify the safekeeping charges that will apply ,, 1~one The City, Depository Bank, and the Safekeeping Bank shall operate in accordance with a master safekeeping ag~*eement slgnad by all three partias Thn safeheeplng agreement must clearly state that the Safekeeping Bank is instructed to release the collateral sncurtiies m the City if thc City has determlnad that the Depository Bank has faded to pay on any accounu, or Is in d~fault of this agreement, or the City has d-'*,'rnuned that the City's fellds are in j~opardy for whatever reason including involuntary closure or change of ownership, and if the InStrllCflOns for release have been formalfy requested by file City (~ouncll by ordinance or rasolunon A copy of the safekeeping agreement and the name of the safekeeping bank to be used In the event you arc awarded the Bank Depository Agreement must be submitted with the proposal See A/:tache(]. t~ede:a~. Home Loan Han]~ of Any substitunons of the securities or reductions in the total amount pledged may be made onJy by and with proper Wt*lu~n anthorlzanon approved by the City Manager, the ASSlSL~nt City Manager of Finance, Director of Fiscal Operanons, or his deslguetod reprnsenta**ve In din case of a reducnon, the Bank must provide in writing that collateral will be available when needed to meet normal City balance increases throughout the year The City must approve all secunues pladged Any state or local government bonds pladgad must have a ranng of at least A or Al or barfer by Moody's Investor Services or Standard & Peers Corporanou 8 Please state the maxunum amount, If any, of pledged securmas which the Bank ts willing or able to comm!t for S, ar ...0 _..,_.._._...._ the pc.od n, , ,000 re .,.munt No maximum,_ a?w~:v~.a, Texas~anK requires zG-nour no~loeon any pledge requirement exceeding $3 million. Thn City of Denton will be responsible for handling the mvestmunt bidding process The Deposlte~ Bank. along with any eligible flnenmal lasumgon shall be mcleded in the bidding process as deemed appropnam and in accordance with the City's tovesmlant pohctes The third-party sal'ekeeptog bank must be a subscriber to the Federal Security Wire System In ad&non to the safekeeping account tn which pledl~ed collateral is held, the City must have accuse to a sefekcepms account to which Fedaral secnnuas can be delivered via the Federal Reserve bock entry system for a customer account H Interest Rates Paid - Ccrtlpentp* Of D~o*~t The City may choose to invest in certificates of deposit in the depository Bnnk' or ally other eligible financial institution The depository Bank a~rnes to accept ume deposits from the City for mvestment purposes in the form of certificates of deposits In varying amounts and mn__.,nuas at rates datermmed by the deposlmry's competitive bid as submitted in accordencn with penodte compenuve bid solicitations conducted by the City What Is the shortest maturity length in days that the Bank will accept for cemflcates of deposit in amounts of $100,000 or greater? ].4 days. i Interest on all certificates of deposit shall be computed on an actual day basis (365). and the Interest will be pald to the City on the maturity date Interest calculauons vail include the first day tn the Investment period but will not Include the day of maturity Payment will be made by crethnng the Bank account VII, OVERDRAFI~ A Definition The City does not intend to have a net overdraft postnon throughout the course of the contract An overdraft Is defined as a neganve demand balance In the City accounts collecnveiy, not by todmldual account B Terms -Should an overdraft occur in the aggregate, the tallowing supulanon shall apply I The maximum number of days the overdraft will be allowed u 5 days. 2 The maximum amount of the net overdraft to be allowed vail be $ ]. 0 0,0 0 0.0 0 3 The Interest rate charged for overdrafts will be * per annum computed on un actual day basis · Wall Street Journal prams less 200 bas~s points. City of Denton Depository Bad Attachment A Pa~_e 6. Section C = Automatic Payroll Deposit: TexasBank proposes to offer a flee "basic" checking account to all City employees ~f TexasBank is the successful b~dder oftlus depository account The free checkm8 account vail be free of normal serwce charges for the contract period /n ad&tlon, the City will receive a free supply of Texa~Bank stock checks, along vath their selection of TexasBank's Financial Insights or OnLine Banking products free of charge for the first year (See attached brochures for more ~nformat~on on these two products ) City of Denton Depository Bid Attachment B Pa~e ?. Section H - Super NOW In heu ora paying a typical Super NOW interest rate on checlang accounts, TexasBank proposes to pay the City of Denton an rate,est rate equal to the 13-week U S Treasury Bill chscount rate, less ten b/ms points on all ohechn~ accounts maintained m TexasBank Tbs index ~s quoted dmly m the Wall Street $ournal and changes weekly City of Denton Depository Bid Submitted by Texas Bank Attachment C Other Services ~ * Another set.ce avadable from TexasBan~ is a prosram referred to as controlled disbursement As a means o£be~er mana~ng the City's cash on a davy basis, TexasBank would ILke to Offer the use oflts controlled disbursement service Very bnefly stated, controlled chsbursement allows us to nervy you, on a daily basis, the total amount of"m clearings" presented from the Federal Reserve Bank (In cleanngs represents the total City checks and deposits processed by all other financial institutions, sent to the contral!~ed processmg of the Federal Reserve, and forwarded to TexasBank to be posted to your bank account tomght ) Tins will allow you to keep your funds in a tu~her !aalchng account and transfer only the amount needed for these items that w~ll be posted These totals will be sent to you each morning wa the Desktop Banking Semce E-mail system Charges $100 00 per account per month plus $13 per item * In addition, TexasBank prowdes very competitive pncmg on leasing We could offer a full line of lease-purchase financing semcos to the City * Lastly, TexasBank has investment semce representatives at all of our banlcng centers that would be avmlable to the City to provide mvestmant semces and recommendations Tins semce would be pmwded free of charge to the City ORDINANCE EXHIBIT D EXHIBIT C CASH MANAGEMF~NT CONTRACT 27 Exhibit C CASH MANAGEMENT CONTRACT TABLE OF CONTENTS Page 1 TERMS AND CONDITIONS 2 2 ADDENDUM ONE SERVICES 7 3 ADDENDUM TWO COINS AND CURRENCY REQUEST 8 4 ADDENDUM THREE ACCOUNT SETUP AND TRANSFER LIMITS 9 5 ZERO BALANCE AUTHORIZATION 11 6 ADDENDUM FOUR FEE SCHEDULE 12 7 ADDENDUM FIVE WIRE TRANSFER AGREEMENT 13 8 ADDENDUM SIX ELECTRONIC FEDERAL TAX PAYMENTS 19 9 ADDENDUM SEVEN ACH ORIGINATION AGREEMENT 27 10 MASTER REPURCHASE AGREEMENT 34 AFFO150E 1 of 40 CASH MANAGEM~qT CONTRACT TRRMS AND CONDITIONS This Agreement (the "Agreement') ~s between City of Denton (hereinafter called "Pnnczpal*) (tf more than one unde~tgned, each jointly a~l severally), and ~ 01eremafler called ~Bank') for dehvery of the Cash Management System as described below The intent of this Agreement is to clarify the r~sponslbzlmes of each party Accounts. Any Commemial or Personal Accoullt as included on the Cash Control Account Apphcauon and approved by the Bank in writing User Any Inthvldual that Pnnmpal has anlhonzed the access and use of the Cash Management System according to the Cash Control User Authonzauon Report ~ The day during which ine mare office of Bank ~s open for bnsmess, m accordance with specific cut-off t~m~.~s, and dunml which the Bank is able to download Pnnclpal's mformat~on and process transactions ~ The Account balance ~ ~s lhe result of the total deb~t and credit act~vlty as of a specific dsie and t~me for all Accounts ~ The Current Balance of ~he Account. less float ~ Current Balance of the Account minus holds, all bul one day Nloal and memo posted debl~ plus memo posted credits Floal. Dollar amount of deposzted ~tems ~hat are m the process of ¢olleetmn from ~he payable bank Also known as uncollected funds A resmctlon on paymem of all or any pan of the balance In an accounl ~ Anydebl~sbemgposted~oiheaccuuntforthebnsmessday For example, ACH debgs transactions, wlre transfers, and teller cashed checks ~ Any credit being posted ~o the accoun~ for the business day Nor example, ACH credit transactions and wu'e Iransfers System. NiServ Cash Management System, Version 2 30, N~Serv Copyright 1994,199~ AFFO150E 2 of 40 Section ~, Function Caoabilitfes As a user of the Cash Management system, Prmcxpal and User may request any of thc services listed below The specific services selected by the Prulcipal are set forth m Addendum One which may be updated from tu~o to time A Perform Account mqmnes on Account data and transaction history on the Accounts B Imtlate stop payments request Pnnctpal understands the electromcally transmitted stop payment orders are pending f'mal verification that check has not been processed and that stop payment is valid The Bank must receive the stop-payment order m time to allow the Bank reasonable oppormmty to act on it before the stop-payment cot-off time which Is one hour after the openmg of the next banlcmg day altar the banking day on which the Bank receives the item C Request a wire transfer Principal and User understand that wire transfers received a.tier Bank's cut-off time (2 00 p m Central Time) will not be processed until the following business day Bank has a right not to process any wire request if collected ftmds sufficient to cover the wire transfer amount am not available m the Account Wire Transfer requests must be made m accordance with the appropriate Wire Transfer Agreement, See Addendum Five D Request a Corn and Currency Order m accordance with Addendum Two E Send and receive messages (to and from Bank) Bank will open message mailbox twice da~ly (between 10 00 - 11 00 a m and 2 30 - 3 30 p m Central Time) and is not responsible for any delay of messages Principal and User are responsible to periodically check for messages sent by the Bank F Imtlaie transfer between accounts set up with the Cash Management System with the exception of time accounts Refer to Addendum Three for optional transfer llunls Pnnctpal is Imuled to slx preanthonzed automatic trimsfers or withdrawals per month out of money market savings and two regular savings accounts Three of the slx transfers for MMS can be made by check draft or debit card Transfers made via Cash Management are included as preanthonzed or automatic transfers subject to these lluntaiions Any transfers in excess of these limits must be done in person at the Bank G Pnncipal is not pernutted to transfer more than the Available Balance from deposit accounts H Initiate electromc Treasury Tax and Loan payments through the Cash Management system Refer to Addendum Five for enrollment requirements Initiate ACH transactions Principal understands ACH transactions received after Bank's cot-off time (2 00 p m Central Standard ) will not be processed until the following business day ACH transactions must be accordance with the appropriate ACH Origination Agreement Refer to Addendum Six J Perform Account Reconciliation K Pnnclpal can utilize any report functions for requested services Section 3. Acknowledlmant of Pri~lc!.nal A Principal and User are responsible for obtaining, installing, maintaining, and updating the necessary hardware and related equipment needed Io utlhze the Cash Management System As of the date of this Agreement, the necessary equipment Includes AFFO150E 3 of 40 IBM compatible 80386 or higher [~[imm~ll 4 Ul~gaby~s of ~ DOS 3 0 or ~er MS W~dows 3 I or ~tmm~ 20 ~g~ of av~le ~d ~ sp~ Mo~e VGA momtor (color p~fe~) Hayes co~at~ble m~em - up to 9~ Baud Ace.s to a vmco~e tol~ho~ 1~ *B~ w~ll not~ ~c~p~ of ~ges ~ ~p~t ~ukemen~ B B~ r~e~es ~e n~t to eliminate or ~ge ~y ~CtlOn ~llt~es ~ ~y t~c w~ou~ prior ~c~p~ will ~e~ve one copy of ~ User M~ ~d ~o~c updates Ad~r~o~ User M~u~s c~ be ob~ ~om ~e B~ for a ~ge ~c~p~ ag~ nor ~o ~ or o~e~se duphcae ~e User's M~ or upas Upon le~,n~,,on of ~e of ~e C~h M~gemen~ System, P~c~p~ w~l ~ ~e mln~ ~ up~8 tO ~e D B~ may ~m ~ to r~e s~ updar~ of so~ ~d d~en~on io ~e ~c~p~, ~d such updales w~ll be subj~ to ~s agreemen~ ~cip~ ~s ~spo~ble for pmmpl ~lat~on ~d resting of so~ up~ ~clp~ ~ no fl~, ll~e, or mle~sr lo ~e C~ M~gemem so~e or ~ples of ~ ~clp~ will nor ~e or ~ ~yo~ gse ro m~be ~pms of ~e C~ M~gemem Sonic ~d User's M~u~ ~c~p~ ~ lo nod~ B~ pmmpdy ~d m wntmg of ~y c~rc~r~ces of which ~c~p~ ~ ~owl~ge ~l~mg m ~y ~s~slon. ~e, or ~owledge ~larmg ~o ~y possession, ~e of ~owledge of ~y ~mon of ~e C~h M~gc~nt Sysmm ~d ~c User's M~ by ~ ~u~o~ pe~on B B~ agrees ro conduct ~li~ t~smm~ fOr ~e ~cIp~ [O S~l up ~e ~I1~ s~ prows~o~ for ~e C~h M~ge~n~ ~s~em B~ ~s nol ~po~ble for ~p~'s ~uom or neghgencc m seumg up P~c~p~'s s~unW ~ss to C~h M~ge~m ~c~p~ will ~ ~spons~ble for ~onzmg sysiem ~d ~rlon ~s to C~ M~gem~l to ~pmpna~ employes ~d ~s~gmng User IDs ~ su~ ~ropna~ ~loy~ ~c~p~ ~d Users w~ll nor ~e ~y p~sword or User IDs av~able lo ~y non-auroral ~o~ B~ offe~ ~er secunv procure ~der C~h M~ge~nr whe~by ~c~p~ ~d B~ ~ cs~h~ doll~ h~ for Ir~rm~, ~fer lo Adde~ ~ B~ ~ ~c~p~ ~ ~at ~e p~sword, User ~, ~d ~e doll~ ll~l s~ pro~ pmv~d~ ~der C~h M~gemen~ ~ co~e~l~ly ~o~ble ~d p~ ~er ~ ~ ~r~o~ ~nducl~ ~der ~e p~sword ~d User IDs sh~l be d~m~ au~enl~c pay~nl o~e~ b~g on ~e ~p~ ~c~p~ ~s ~spo~ble for ~l tr~llo~ m~d~ ~U~ ~e User ~ ~d p~sword s~ system, ~g~dless of whe~er such tr~llon w~ au~o~ F B~ w~ll not be li~le for non- ~o~ ~e of ~h M~ns~ement or for ~y losses ~at ~y reset ~clp~ ~d User wffi nott~ B~ 'mm~a~ly ff~tp~ or User believes ~at a User ~ ~or p~sword h~ b~n ~ wl~out ~cxp~'s pension ~cip~ ~d User will not disclose ~y lnfo~9tlo~ ~m~ lo l~ ~e or ~e co~o~eB~ of ~e C~h M~ement System to ~y non-auroral User AFFOISO~ & of 40 Pnncipal has received and understands all signature card rules and regulations and all agreements and disclosures comiectod with opting of Accounts and acknowledges thai chis Agreement Is m addltlOa to any of these a~r~ments and disclosures Pnnclpal can commumcate (i e,, upload transactions and download Account data) with Bank twanty-fourhours a day Principal ts awa_~ ofcutofftunes listed m this agreement Transactions completed after cutoff time will be processed as of next business day Principal understands thai if it chooses to utihze the Cash Managemem System after or before Bank hours (8 00 a m to ~ 00 p m ), Bank will not be available for support should problems Occur Pnnclpal will continue to receive re/ular Account statements that describe all transactions for the Accounts including the transactions that the Pnncipal has lmtlated through Cash Management Principal is responsible to promptly review all statements and report m writing any irregularities to the Bank at once For all electromc transactions governed by Reg E, errors must be reponmg m writing within (60) sixty days, other discrepancies must be reported within (30) thirty days after the statement date Pnnclpal acknowledges that the fees for the Cash Management System will be paid monflflv as dlsclosed on the Bank's Cash Management System Fe-- Schedule, refer to Addandum Four These fees are in adthtlon to any fees and service charges currently being prod Any pricing or pohcv changes adopted by Bank m the future will constitute modifications and addends to the Agreement but will not nullify It This Agreement shall continue until Bank receives written notice of Principal's revocation or until Bank advises Pnnclpal m writing ~at the Bank will not cuntmue this service for Pnnclpal Termination by either paily does not relieve Principal of its hab~hty for transactions or responstblhtles for payment of all fees incurred poor to termination The Bank agrees to add or delete services provided to the Prmclpal within a reasonable time period after receipt by the Bank of Whiten notice by the Pnnclpal, refer tO Addendum One Section 4. Acknowiediments. Resnnns!hilities. aqd Liabllitl~ of Rank Bank will Install the software at Principal's location and provide training on the use of Cash Management The Bank has entered into a hconsmg agreement with FISERV CIR, loc, CBS Diwstoo for the dehvery of ~he Cash Management System Cash Managemant shall be considered part of the CBS System, and all rights, title, and interest shall remain with FISERV Except for acts of gross negllgonce or willful breach of duties by Bank, Bank will not be liable to Pnnclpal for any matters related to the Agreement, including without hmitailuns, lost profits or consequential, special, or putative damages, Inaccuracy, or delays m transmission of reformation D Bank makes no warranties or representauons w~th respect to the Cash Management software, expressed or implied including but not limit to, ~mphed warrant~es of merchaatabfluy or fitness for a particular purpose AFF0150E 5 of 40 Section $. Joint ~eknowledmnenLs a~d Renrespntntions A Ttus Agreement is governed and will be interpreted imder the laws of the S~a~c of Texas B This Agreement incorporates by reference nH mformanon on Prmclpnl's Account Apphcauon whmh Principal represents as true and complete m nil respects C The Principal's authormauon to lease the Cash Management Sysmm software must be executed m conjununon with tl~s Ag~ement D Pnncipal has read and understands thts Agreement and has had opportumty to revtew tlus Agreement wtth an advisor of tls chmce if so dearred E Upon occurrence of any overdraft recurred m the Accounts, Bank shall have the right, m Bank's sole dlscreuon to (0 refu,~e payment of any outstanding and unpmd check drawn on any Account listed on the Account Apphcation, and (it) w~thhold from processmg any transaction generated on the Account (mcluding Cash Management generated) unul anfficmnt collected funds to cover such transacuous have been credtted to the Accounts F Each party represents and warrants to the other that tt is authortzed to enter uno th~s Agreement G If at any tune any sact~on of thts Agreement is found to be mvalid, that does not make the remmnmg secuous or terms mvahd By sl§nmg below, the Principal hereby accepts and agrees to the terms and condmon of this Agreement By ~ s~gna~e of B~'s an~onzed officer below, B~ he.by ~pts ~e Agreement B~ Title CH(~-~ ~I~A~I~L AFF01 §OE 6 of 40 Addeudum One Services 1 This agteemant, made on 10fl,~/,~. y and betwecn ~('Bank') and the Principal n~med below ' 2 Bank agrees to prowde the services below selected by the Prmclpal 3 Prmcipa] agrees to pwvide the Bank with wmten notice ,f Pnncipal wishes to modify services as stated below Services ('Check all that anolv) Accotmt Inqmry ~ Stop Payments Ordem ~ Intrahank Transfers Wire Transfers ACH Batches Treasury Tax and Loan Paym*nts ¢/ eom and C-hm. ancy Requests ~ Account Re¢oncflla£1oa PC Impo~ and Export Files ~ Send and Receive Messages I/ By the signature of the Principal's authonzed officer or agent below, Pnncipal hereby accepts the ierms and conditions of th~s Agreement By signature of the Bank's officer below, Bank hereby accepts the terms and condmon~ of this Agreement Bank Officer ~ Name Date I 1'~'] -'47 AFF0150E 7 of 40 Addendum Two ¢0]~ and Currency Time Orders wtll be Picked Up · · Courier Service Yes ~,No Name of Service Bank shall provide corn and currency order servtce to the Principal according to the speclficattons listed above to the extent such orders do not exceed the available balance m the stated account 2 Pnncipal understands that Corn and Currency orders received after the Bank's corn and currency cutoff time (9 O0 a m Central) will not be proceased until the following business day 3 Pnnclpal is responsible to make arrangements for pickup of Corn and Currency Orders either m person or by courier service 4 Pnnclpal authonzes the Bank to release corn and currency to the following individuals or By the slgnamre of the Pnnclpal's authonzed officer or anthonzed agent below, Pnnclpal hereby accepts the terms and conthtlons of this Agreement By the signature of the Bank's authorized officer below, Bank hereby accepts the terms and conditions of this Agreement Ba~ Officer Title Date AFFO150E 8 of 4.0 Addendum Three Cash Mana~emem Account Setun/Transfer L~mtt~ agreemenL made on ~ by and belween ~ ('Bank") and 1 the Pnn~tpal named below 2 Bank agrees to set up Pnnctpal account Information on Cash Management as described below 3 Bank assumes no liability for changes or modifications to the account setup after unual installation of Cash Management 4 Pnnctpal agrees to prevtde Bank vath a maxamum transfer limit per account Pnnctpal understands that they vail not be able to mnke transfers over the stated amount All transfer attempts over the maximum will be rejected 5 Pnnclpal understands that Account Transfers received after Bank's transfer cutoff time (3 00 p tn Central Time) will not be processed until the following business day Pnnctpal understands that Account Transfers to a loan account will be considered an unscheduled pnnctpal payment and will not affect the payment schedule of the loan account The Pnn¢lpal can mske scheduled loan payments and payoffs by including a message to the bank with the payment and they m turn will execute the transaction 7 Account Setup Optlo~ _Prmctpal authorizes the Bank m set up all accounts opened by the ~.nclpal on Cash Management Principal reahzes that additional accounts set /1 up~,~ash Management may alter the monthly maintenance fee as described m ~ ~/] AddendIl~.Four Principal agrees to pay all service fees as modified under ,/[ }/~ ]~/ Ad~te_ndum 1~ Bank will set up all new accounts w~th a transfer lung of a new account, n~M~ Account Humber Account Type Accou aximum Transfer Amount . 3 4 /~"'~'~~ authortzes, the Bank to set up the accounts hsted below on Cash %,,,.,.._ / Management Principal must notify Bank in writing ff Principal wishes Bank to set AFFO150E 9 of 40 Account Number Account Type Account Nam~fl~Of~_,.~M/~unum Transfer Amount ~0 By ~e signature of P~c~p~'s au~o~d offi~r or au~o~ agent below, ~c~p~ hereby ~cepls the te~ ~d condmo~ of ~s Agreement By the s~gnature of the B~'s au~o~d officer below, B~ hereby a~pts ~e te~ ~d condltlO~ of · ~s A~reement B~ Officer ~ Date I {-I ~ *~ AFF0150E 10 of ~0 Authority to Transfer Funds Zero Balance Account The understgned, an authorized signatory on account number(s) m~the name of ~ (herem.~er referred to as "Company"), hereby authorizes and directs ~m~am the above-mentioned account(s) at a zero balance at the close'~ e,.ach bu.sm~ess da)' ,by transferring momes to or from account number ("master account~) ~ the name of the Company This anthorlzatlon shall remain m full force and effect until Bank receives five (5) business days advance written notice from the undersigned or any other authorized officer of file Company or until such time aa Bank gives the Company written notice stating tha~ they will no longer offer this service and a date on which the service will terminate No advance notice Is required of Bank and such notice of temunanon other than the date of receipt In perfonmng the transfer authorized and directed harem, Company hereby agrees to indemnify and hold harmless Bank for any dsmA!~e or liability, mcludiilg reasonable legal expense, that it may recur m cormcctlon with such transfer, except for its own gross negligence or willful misconduct This agreement shall be governed by the laws of the State of Texas and shall not be amended unless such amendment is executed by both the Company and Bank and is m writing Customer Acknowledgment Accepted By C~ of Demgll Bank Date Date AFF0150E 11 of 40 Addead-m Four This agreement, m_~de on {~//~.~by and between ~ ("Bank*) and tile Pnnclpal named below .... 2 Pnnmpal agrees to pay a maximum of $175 for the installation of Cash Management Pnnclpal authorizes Bank to debn stated account below for this one-rune fee upon installation of Cash Management, or arrange for compansaio~ balances Upon termmst~on of this agreement, mstallauon fees will not be refunded 3 The fee entities Principal to soft'ware and documentation updates when they become available, subject to the terms and resmcttons of the software hcense agreements Principal authorizes Bank to debit specified account below ('Account*) for the software license fee upon the tmual installation of the software, or arrange for compensatory balancing In the event of termination the Bank will ratam any software hcense fee already paid, up to one full billing period 4 Pnnmpal anthonzes Bank to debit Account to a pay monthly m*mtenanee fee assessed according to the schedule below or arrange for compensating balanees Fees wtil be dabned from Pnnctpal's account at the end of the month Principal acknowledges that additional accounts opened and sci up on Cash Management may alter their monthly msmtenance fee $ Bank reserves the nght to modify this fee schedule upon providing Pnnctpal with 30 days wnnen notice A monthly base fee of $50 will be charged, 7 Normal service charge plan will apply with reduce transaction fees for wire iransfer and stop payment orders 8 Principal anthonzes Bank to debit account number ~7 ~.,q ~ } .~'~ for all related service charges and fees stated above By the signature of Pnnclpal's authorized officer or anthonzed agent below, Pnnmpal hereby accepts the terms and conditions of this Agreement Prmclpal Title b ;t~ (.~ Date I ~)/~'11 ~ By the signature of Bank's authorized officer below, Bank hereby accepts the terms and conditions of this Agreement Bank Officer Title AFF0150E 12 of 40 Addendum Five Wire Tranzfer Am'eem~nt The undersigned ~ ("Customer") authorizes and requests ~#Banlc") to m~ke transfers of flmds from time to tram m accordance with the pwvlsrons more tully set forth m this Agreement Such ~ramfers shall meinde mmsfers of Customer's funds from Customer's account(s) at Bank ("Account(s)') to Customer's account(s) at other depository institutions, and to account(s) of third parties at other deposuory restitutions, and shall also include transfers of funds to Customer's account(s) from thud parties Specific requests from Customer to Bank are to be rn~do, by Customer's representatives listed on the List of Authorized persons furmshed by Customer to Bank from time to tune Bhmm~lon of any names from such ]Mst(s) or addition of another name or names to such ]Mst(s) shall be made effective by actual wnlian notice received by Bank's Wire Transfer Department Any request by a representative of Customer may authorize one, or more than one, funds transfer Request for transfers may be made by cash management system, telephone, orally, or in writing Bank may m~ke the requested funds transfers by any means for the transmission of funds and may also make transfers by internal means (including, as an example but without llmitailon bookkeeping enmes bev,veen Bank and it.s correspondent banks) Transfers of funds to Customer's acc°urn(s) from third par~les aball be received sub.~ect to time deadhnes estabhshed by Bank Bank may cancel a requested transfer if Bank receives Customer's request for cancellation, in from satisfactory to Bank, m such time and m such manner as to allow Bank a reasonable oppommlt} to act In consideration of Bank's transfers of funds pursuant to Customer's anthonzed request, Customer shall pay to Bank such transfer fees as Bank shall from time to tlme impose Bank will use ordinary care m tmplemetumg fimds transfer request received by it from Customer Customer agrees that Bank and Its agents and correspondents shall be conclusively deemed to have exercised ordinary care if it or they has or have followed the procedures comamed m this Agreement, or If Customer shall have fa~led to follow such procedures Bank shall be entitled Io rely on any request that It believes to have been ongmami by Customer and any such request shall for purpose of this Agreement be deemed to have been anthonzed by Customer Bank shall not be liable for threct, mdlreat, consequential, or putative damages of any parry (including without limitation Customer) Bank shall have no hainlivj to third panics for any damages incurred by such third panics arising out the performance or non-performance or services or transfers under this Agreement, and Customer agrees to and hereby does mdemmfy and hold Bank harmless form and agmnst all such claims of third panics and all expenses (including, without limitation, attorney's fees and court costs) of such clarms Bank's only respousthlhry to Customer occasioned by Bank's performance or non-perforrnnnce of Ils obligations under ~ins Agreement shall be to correct at Bank's expense any errors that are due solely to Bank's personnel, Bank's compmer programs, or malfunctions of Bank-controlled machine Bank shall not be liable for delays or failures m proceasmg thai are caused by such events as fires power failures, energy shortages, strikes, boycotts, not, war governments regulations, failures of Bank's vendors or suppliers, acts of God, or other circumstances or causes over which Ba~k has no control If because of circumstances or causes beyond Bank's conlrol, Bank shall be delayed beyond applicable time hmils (provided herein or by law) in taking any action hereunder the time lmut for taking such action shall be extended for such time after the cause of the delay ceases to be operative as shall be necessary for Bank to take or complete such action AFFO150E 13 of 40 9 Bank m ~s discret~on may ess~gn a security code, security test, or o~er security procedure to be used by Customer to anthenucale funds u'ausfer requests C'~tomer a~m~a to u~¢ all such s~-~u'lty codes, security tests, and other security p~ures as may be unpoasd by Bank 10 Bank will furmab to Customer a conflrmm~ noUficaUon of a funds wamfer after it ts ,~e~ either In form of a specific advice or a periodic accouat statement Customer will exnmtne such advice and account statemant to detect the p~sence or absence of any disc~=panctes between Customer's records and the advtce or statement sent by Bank, and will report any such discrepancies to Bank within thirty (30) days after the date that Bank sends the adwce or account smement 11 Bank hereby anthonzed to record on tape or other re~unuon devices any or all of tts telephone conversations with Cuatomer revolving any transfer msu'ucuuns 12 Customer agrecs to supply Bank mforms~on that Bank may recso~shly request m counectton with any prospecttve or completed funds transfer hereunder, including wtthout lmatatlon any wntmgs showing confirmation of any request for u'ansfer of funds 13 Bank shall not be obligated to malre any funds u'ansfer tfthe amount of such transfer exceeds the finally collected and ~mmediately available funds by Customer w~th Bank, or exceeds any other lint estabhshed by Bank If Bank m its discretion mnlres any such transfer that exceeds the amount of Customer's deposited funds, Customer sh~!! be liable for any and all overdraf~ amounts 14 All data relating to Customer's business pmvtded to Bank by Customer pursuant to tlus Agreemen~ wall be treated confidsnttally and safeguarded by Bank, using the same care and thscreunn that ~s used w~th data that Bank daal~ates confidanual 15 Bank may modify or cancel this A/reement upon fifteen (15) days' notice to Customer Customer may cancel this Agreement upon fifteen (15) days nouce to Bank 16 This Agreement represents the entire understanding between Bank and Customer with respect io the matters contained hereto There are no representauons or warramtes, express or unphed other than those contained herem 17 This Agreement shall be governed by and construed m accordance with Texas Law, and ~t shall be performable m Denton, Denton County, Texas 18 Any nottce hereunder shall be m wntmg and may be gtven by personal service or by depos~1mg m the Unned States mail postage prepaid to the addresses of the parties es follows (or as changed through wntten notice to the other party) AFFOI$OE 14 of 40 19 This Agreement ~s binding on ~he part~es hereto and their respective successors and assigns Customer may not assign this Agreement without thc pnor written consent of Bank F. XECUTED on ! 0/.~ ! ~ .~ CUSTOMER City of D~mon Bank Officer ~ Title: C.~]~rF ~AMC~C. (~ri~lC. ti~. CERTIFICATION OF RESOLUTION AI~'rlIORIZING F.~ECUTION OF WIRE TRANSFER AGREI!IMF_.~ ~s a ~ '~o~ of a ~olutlon d~y ~opt~ by &e Bo~d of D~r~to~ at a meeting held on ~~ ~d ~at ~e ~soluuon ~s ~1 force ~d effect ~ of ~e date of ~s cemficauon ~J~ ~ ~ - -~ ,~s hereby ~on~O execut~ A~t, ~ ~ong wt~ ~ R~oluuon, on ~h~f of C~F of D~tou w~~ AFFOl EOE 1E of 40 WIRE TRANSFER At~'I'ItORIZATION CERT~vlCATE The undersmned author,.zed officer of the City of Denton hereby cemfies thai the followmg-nzmed officers or employees of the City of Denton have been authorized by appropnale action, of the City of Denton to imitate requests or orders on behalf of the City of Denton to ~(thereafler called Bank) using the authorization code which h~ been tssnod to the City of Denton by Bank Name Iltla ]~houe Opgonal Security Procedure The following-named officers or employees of lhe Cnly of Denton are amhonzed to recetvecallbaclcver~cnr~onfromBank Complem ~h~s mformauon only if you have selecmd Opuon B on Av. achmem A lo Ihe W~re Transfer Agreement Name ~tle Phone Number 4 The City of Denton agrees that the officers or employees named above shall have full and complete authority to imitate requests or orders to Bank aud/or approve callback venficatmns from Bank pursuant to the W~re Transfer Agreement es revised from time to tune and this Cemficate unless and until the C~ty of Denton delivers wntton notice to Bank modd'ymg or rescinding such anthonty, which notice shall be m the form of tim Cemficate Th~s Cemficate supersedes any pnor Cemficate of the City of Denton dehvered to Bank Dated on ~ City of Dent~ .: .~ By ~ ~ ~}~'"~ AFFOISOE 18 of 40 ATTACI~iM~NT A ~ TEANSFER SECURITY PROCEDURE This A~tta~hment is hereby mcorporaied rote that cennln Wtre Trsnsier Agreement with an effecuve date ,of, ~ (the "Agreement") by and batween-'-"~¢~. ~, ~ (Bank) and tuser) ' 1 Secunty Procedure Selection Bank's standards Seannty Procedure consists of confirming thai the authonzatton code that a~compamas a w~re transfer mairuct~on corresponds w~th a vahd authorization code asstgned to the City of Denton If the order Is voice untlated revolving $100,00 or more, and the order is not a repeuuve order, Bank's standard security procedure also includes a callback to a person daslgnated by User, the City of Denton A 'repetttive order' an mstructton to Bank to pay a specified amount of money to a prevtously dastgnated beneficiary at a prevtously deaianaied beneflc~a~y's bank Bank also offers a number of opttonal Secunty Procedure features that allow the Ctty of Denton to castonuze the Security Procedure Bank w~ll use to verify that the User City of Denton has authorized an order The User acknowledges thai Bank has provided the User with a descnpuon of each of the optional Security Procedures deacnbed below The User refuses to have ~ts order verified by any Seennty Procedure tdemffied m this section other thnn the Security Precedure(s) It has expressly dastgnaied hereto The User has revtewed Bank's standard Security Procedure and each of Bank's opttonal Security Procedure features and bas determined thai Bank's s~andard Security Procedure, as mothfied by the following opuonal Security Procedure feature(s), bast masts its reqmrements, g~ven the s~ze, type and frequency of the orders ~t will issue to Bank OPTIONAL SECURITY PROCEDURE FEATURES A No callback on any orders. If this box is checked, Bank will not perform a callback on any order, including votce-mmated, non-repetmve orders, regardless of B Callback to a desi~notrd individual on (check only one)' 1 All volce-untlated, non-repettttve orders that equal or exceed $ 2 All voi,ce-..un~.tlaied orders (repentlVe and non-repenttve) that equ-al or exeeed All orders based on the specific dollar linuts the User has not~fied Bank, m writing, it has established for each designated individual for the purpose of initiating transfers C Cash Management. Customer Is responsible for astabhshing secunty provlslous for lndiwduals initiating w~re transfers through the Cash Management system If an Optton B is selected and no amount is specified above, a callback will be made on orders that equal or exceed $100,000 Unless the User has md~cated that Bank ~s not to perform a callback, Bank will attempt to contact a das~gnaied individual at a telephone number that the User has previously provided to Bank If an mdivtdual so contacted by Bank ~dentifias him or herself as the designated mdiv~dual and confirms that the order was sent to Bank by the User, Bank shall be conclusively deemed to have complied with the callback Secunty Procedure 2 The User is bound by orders. The User agrees that It is bound by any order, whether or not authorized, issued m its n~me and accepted by Bank m compliance w~th the Security Procedure chosen by the User Effect on prior ag, reemen~s as to Security Procedures Tlus Attachment supersedes any and ail prior agreements between the User and Bank regarding the Sacunty Procedure to be used to venD] the orders reeelved by Bank m the name of the User, including any other document previously executed by the par~tes and dasts:nated to be #Attachment A~ to the Agreement AFF0150E 17 4 Secur/ty Procedure Protection. The User and Bank agree to preserve the confidentiality of the $~cunty Proc~ure used by the User If the User becomes aware of a breach of the Security Procedure, or suspects that a breach of the $~cunty Procedure may occur, the User shall ~mmedlatcly report this ufformatwn to Bank m such a m~nner as to afford Bank a reasonable opportunity to act on the mform~t~on In Witness Whereof, thc parties have caused this Agreement to be executed and do each hereby warrant and represent that thctr respective signatory, whose signature appears below, has been and is on the date of tim Agreement, duly authorized by ail necessary and appropriate corporate action to execute this Agreement Agreed to and Accepted By Agreed to and Accepted By City of Denton Bank I Date AFFO150E ~8 of 40 Addmdum Six ~L~CTRONIC FEDERAL T,~X PAYMENT ~YSTEM ACH CREDIT ORIGINATION AGREEMENT _3~h~s #~greement' ts made on ~ by and between ~ ('The Company') and l-~k, ('The Bank') ~ The Company has requested that the Bank penmt tt to uutlatc electromc stgnals for peperless crones thl'OU~l the Bal~ to accottl~ts rnmntnin~ at th~ Bank and at other l~nsnclnl ulstltUttons, by means of the Automated Cleanng House (the "ACH') The Bank has agreed to do so on the terms of thts Agreement Now, therefore, the Company and the Bank agree as follows I RULES The Company acknowledges receipt of a copy of the operating rnles of SWACHA (as amended from time m tune, the "Rules") The Company agrees to comply with and be bound by the Rules The Bank agrees to reform the Company of recesstons to the Rules of which the Bank has knowledge 2 TRANSMISSION OF ENTIilES: SECURITY PROCEDURES The Company will transmit all credit entries to the Bank at the location, on or before the deadlines, described on Attachment 1 to this Agreement The Company will confirm all antnes to the format, content and specfficattons contained in the Rules, except as provided with the security procedures described m Attachment 2 to this Agreement The Company authorizes thc Bank to transmit all entnes received by the Bank from the Company m accordance vath the terms of tins Agreement and to debit entries to the specffied accounts 3 B~ OBLIGATIONS In a timely rnnnnef and m accordance with the Rules, the Bank will process, transmit, and settle for the entnes recetved from the Company which comply with thc terms of thts Agreement, including the security procedures 4 WARRANTt~$ The Company warrants to the Bank all warranties the Bank is deemed by the Rules to make with respect to entries onginated by the Company Wtthout hmitmg the foregoing, the Company warrants and agrees that (a) each entry ts accurate and timely, and (b) the Company will comply with the terms of the Electronic Funds Transfer Act if applicable, or Umform Commerctal Code A.,tlcte 4A (UCC4A), If apphcable, and shall othetwtse perform its obhgatlous under thts Agreement m accordance with all applicable laws and regnianons The Company shall indemnify the Bank against any loss, liability or expense (including attorney fees and expenses) resulting from or arising out of any breach of any of the foregoing warranttes or agreements 5 SE'rt'~EMENT, FINANCIAL INFORMATION AND ACCOUNT BALANCES The Company will mnmtnin an account with the Bank at all tunes dunng the term of thts Agreement The Company will rnn,~tam m the account at least two business days prior to the applicable settlement date, ~mmedlately available funds sufficient to cover all credit entries uutlated by it The Bank will place a hold on all ACH proposed tax payment funds until payment is completed on the applicable sattlement date The Company authorizes thc Bank to debit its account on the applicable settlement date in the amount of each ent~ 6 CANCELLATION OR ~IVIENT The Company shall have no right to cancel or amend any entry/file after its receipt by the Bank However, the Bank shall use reasonable efforts to act on a request by the Company to cancel an entry/ffie before transmitting It to the ACH Any such request shall comply with the security procedures described on Attachment 2 to thts Agreement The Bank shall have no liability ~f It fags to effect the cancellation AFFO150E 19 of40 7 REJECTION OF ENTRIES The Bank shall reject any entry winch does not comply with the reqinrements of Secuon I of this Agreement and may reject any entry ff tho Company ~s not otherwise m comphance with the terms of tins Agreement The Bank shall notify the Company by telephone of such rejection no later than the business day such entry would otherwise have been transnutted by the Bank to the ACH The p. nnl: shall have no hablhty to the Company by reason of the rejection of any entry or the fact that such notice is not given at an earlier tune than thai provided for herein 8. NOTICV. OF RETURNED ElqTRIE$ The Bank shall notify the Coinpany by telephone or fax of the receipt of a returned entry from the ACH no later than one busmess day after the business day of such receipt The Bank shall have no obhgatinn to retrausnut a returned entry if the Bank complied with the terms of this Agreement with respect to the original entry The Bank has no obhganon to originate a transaction where authorization has been revoked 9 REVERSALS After receiving approval from the Internal Revenue Service (IRS), the Coinpany may miuaie a reversing entry or file of entries as penmtted by the Rules 10 PERIODIC STATF_,ME.NT The periodic statement issued by the Bank for the Company's account will reflect enmes debited to the Company's account The Company agrees to notify the Bank within a rec~onable time not to exceed thu'ty (30) days after the Company receives a penodic statement of any discrepancy between the Company's records and the information in the periodic statement 11 FEES The Coinpany agrees to pay the Bank for services provided under this Agreement m accordance with the schedule of charges attached to flus Agreement as Attachment 3 The Bank may change Its fees from tune to time upon notice to the Company Bank is authorized to charge account number t~ ~../~ ~ { ~ ~ for fees 12 LIABILITY (a) The Bank shall be responsible only for performing the services expressly provided for tn this Agreeinent and shall be liable only for its gross negligence m performing those services The Bank shall not be responsible for the Company's acts or omissions (including without lhmtatlon the amount, accuracy, timeliness of transmittal or due anthonzanon of any entry received froin the Coinpany) or those of any other person, including without limitation any Federal Reserve Financial Institution or transunsslon or commuincations facility, any receiver or Receiving Depository Fmnncial l~tltunon (including without lumtatinn on the return of an entry by such receiver or Receiving Depository Financial Institution), and no such person shall be deemed the Bank's agent The Company agrees to tndemmfy the Bank agnm*r any loss, liability or expense (including attorney feas and expenses) resulting from or arising out of any claim of any person that the Bank Is reaponsthle for any act or omission of the Company or any other person deacnbed in this Section 12(a) (b) In no event shall the Bank be liable for any con.sequential, special, punitive or Inthrect loss or damage which the Coinpany may recur or suffer In connection with this Agreement, including without lmutatwn, loss or damage from subsequent wrongful dishonor resulting froin the Bank's acts or omissions pursuant to flus Agreement (c) Without linutmg the generall~ of the foregoing provisions, the Bank shall be excused from failing to act or delay In acting if such failure or delay ts caused by legal constraint interruption of transrmsslon or commumcation facilities eqmpinent failure, war emergency conthtinns or other cireumstances beyond the Bank's control In eddltion, the Bank shall be excused from failing to transmit or delay tn transmitting an entry if such transmittal would result in the Bank's having exceeded any limitation upon its lntra-day net funds position established pursuant to present or future Federal Reserve guidelines AFFOi SOE 20 of 40 or m the Bank's othervase vlolaun$ any prowaton of any present or furore risk control program of the Fede~ Reserve or any rule or regulaUon of any other U S governm0ntal regulatory authority (d) Subject to the foregoing lumtauous, the Bank's liability for loss shall be lumted to general monetary damages not to ~¢~.~,~ the total amount prod by the Company for the affected ACH service, as performed by the Bank under ~us agreement for the preceding 30 cnle,~d~ days 13 INCONSISTENCY O1~ NAME AND ACCOUNT NUMBF...R The Company aclmowledges that, If any entry de~cnbes the receiver mconststently by name and account number, payment of the entry may be m.,~o on the basts of the account number even If It tdeatlfies a person thfferant from the named Recetver 14 BUSINESS DAY The term 'business day* as used hereto shall refer to those days wluch are open for business for the Federal Reserve The Ba~k w~ll furmsh at the Company's request a current calendar of said Federal Reserve bumness days 15 DATA RETENTION The Company shall retain ,~.t~ on file adequate to pernut rem~g of entries for five (:~) business days fnllowmg the dele of their trausunttai to the Bank as provided berem, and shail provide such d~t~ to the Bank upon tts requmt 16 TERM]NATION The Bank may amend the ter~s of this Agreement from tune to ume by notice to the Company Father pray may terrain*re this Agreement upon ten (10) days wnuen notice to the other The Bank shall have no obhgatmn to trananut enmes ~f the Company cs m default of its obligations under this Agreemant. including the obhgatton to pay the Bank for each cretht entry The Bank shall be entttled to rely on any written nouce believed by ~t m good froth to be stgned by one of the authorized represemauves whose names and signatures are set for~ on Attachment 4 to tlus Agreement l? EN'i'IRE AGREEMENT This Agreement (including the Attachments a~tached hereto), together w~th the account agreement, is the complete and exclusive statement of the agreement between the Bank and the Company with respeet to the subject matter hereof and supersedes any prior agreement(s) between the Bank and the Company w~th respect to such subject matter In the event of any mcon$cstency between the terms of tlus A~'eement and the account agreement, the terms of this Agreement shall govern In the event perform.nee of the services provtded berem m accordance w~th the terms of this Agreement would result m a vmlatlon of any present or future stature, regulaUon, or government policy to which the Bank ~s subject and which governs or affects the transacttous contemplated by tins Agreement. then th~s Agreement shail be deemed amended to the extent necessary to comply w~th such statute, regnlattun, or pohcy, and the Bank shail recur no hab~hty to the Company as a result of such v~olatlon or amendment 18 NON-ASSIGNMENT The Company may not assign this Agreement or any of the rights or duties hereunder to any person without the Bank's prior written consent 19 BINDING AGREEMENT BENEI~IT This Agreement *h*!! be binding upon and mute to the benefit of the penias hereto and their respecuve legal represantattves, successors, and assigns This Agreement cs not for the benefit of any other person, and no other person shail have any right against the Banlc or the Company hereunder 20. I~EADINGS Headings are u~ed for reference purposes only and shail not be deemed a par~ of this A~reement 21 GOVERNING LAW Thcs Agreement shall be con~trued m accordance w~th and governed by the laws of the State of Texas and SWACHA rules AFF0150E 21 of 40 AFF0150E 22 of 40 AUTOMATED CORPORATE SERVICES &GRE~ ELECTRONIC FEDERAL TAX PAYMENT SYSTEM ACH CREDIT ORIGI~&TION AGREEMENT SCHEDULE A E~'rr'~ ACH CREDIT TRAnSACTiON PROCESSING ~CHEDULE Bank Ongmat~l 10 ~ ~o B~s Days prior to (f~d ~hver worth.t) a m D~e* S~e Day Setfle~nt i0 ~ On T~ Eff~ve D~e am Tr~s~ssmn 2 ~ p m ~o B~mess Days prior to Eff~t~ve D~* C~h M~ager 2 ~ p m Two B~s Days prior lo Eff~tve D~e* *Cr~ o~ginated before ~o Brain.s Days pgor to the Eff~ive Date ~!! be rej~ed and re~ed by the Fed~i R~e~e. AFF015OE 23 of 40 AUTOMATED CORPORATE SERVICES AGREEMENT ELECTRONIC FEDERAL TAX PAYM~ENT SYSTEM ACH CREDIT ORIGINATION AGREEMENT SCHEDULE B SECURITY PROCEDURES The Bank shall be entitled to rely on any written notice or other wntten commumca~ion believed by Lt in good faith to be genuine and to have been sl~ned by an anthonzed represemanve, and any such communication shall be deemed to have been signed by such person PERSONAL COMPUTER FILE TRANSMISSION The Company's authorized representative will access the ACH system by utthzmg file prearranged logon procedures, remote ID, and file ID The Company's anthonzed representative will provide the Bank with venficaimn of the totals comamed in file transmission by sending a fax transm,ssion to the Bank's contact In the event that the Company or file authorized represemauve is unable to fax the reformation, the Company's authorized represenlailve will telephone the Bank's contact with file vcnficatlon and also mml the ulformatlon as back-up on the same day Iransmltted The Bank will anticipate the receipt of a transmisaion from file Company on each scheduled processmg dale ~dandfied by the Company m writing and agreed to by the Bank The Company's Authonzed Represantanve will notify the Bank If a ~ansmisslon will not take place on the prearranged scheduled processing dale The Company ~s responsible for ensunng thai the Bank receives file transmission on each processing date mthcated m the processing schedule The Bank will venfy that the file totals agree with the Company mformauon given by fax or phone In file event of a discrepancy tn file totals, the Bank will call the specified Company Authonzed Represenlailve deslgnaed by an authonzed signatory of the Company If an Authorized Represantalve is nol available for notlfiCailon, dlen the file will not be processed untd the Company's Authorized Represemai~ve can be conlacted on the next business day The Company is solely responsible for the accurate creation, modification, and deletion of the accounl mformat~on mmntamed on the Company's personal computer and used for ACH money Iransfer The Company agrees lo comply wlfil wnttan procedures provided by the Bank for the creation, mainrenance, and lllltlatlon of ACH money transfer The Company Is solely responsible for access by its employees of the data files maintained on file Company's computer The Company is responsible for operator seannty procedures on the one personal compuler licensed for use of file Program AFF0150E 24 of 40 AUTOMATED CORPORATE SERVICES AGREEMENT ELECTRONIC FEDERAL TAX PAYMENT SYSTEM ACH CREDIT ORIGINATION AGREEMENT SCHEDULE C FEE SCHEDULE Bank Originated ACH Cr~xi~t $ ._~ Same Day Settlement Credit $ C~h Management Tax Payment $ AFF01$0E 25 of40 AUTOMATED CORPORATE SERVICES AGREEMENT ELECTRONIC FEDERAL TAX PAYMENT SYSTEM ACH CREDIT ORIGINATION AGREEMENT SCHEDULE D ACH AUTHORIZED SIGNATURE FORM DATE SENDING ENTITY NAME COMPANY ID# ACCOUNT# ACH CREDIT MAXIMUM AMOUNT $ DAYTIME PHONE NUMBER 940-349-8212 AFTER HOURS PHONE NUMBER FAX NUMBER THE SIGNATURES BELOW ARE THE SIGNATURES OF EMPLOYEES VESTED BY OUR BOARD OF DIRECTORS WITH FULL AUTHORITY TO SIGN TRANSMITTAL REGISTERS USED IN CONJUNCTION WITH THE DEPOSIT OF ACH FILES NAME SIGNATURE 1 2 3 4 5 6 ~ne of the above will De con[acted tot llOtil~icalion o[ returned or reJec[ec[ entries Authorized S~gnamre Title AFF0150E 26 of 40 Addmdum Seven ACH Origination Agreement A ~ wishes to uuthste Credit and Debit Entries pursuant to the terms of the Agreement and the rules relating to Corporate Trade Payment Entries (the "Rules") of the National Clearmg House Aasociatlon, for the purpose of processing payments by means of electromc debits, and ~, hereinafter referred to as Bank, is willing to act as an Ongmatmg Depository Financial l. nstttutlon with respect to such Enmes B Unless otharWlSe defined herein, capitalized terms shall have the meanings provided In the Rules AGREEMENT NOW, THEREFORE, in consideration of the mutual promises contained herein, The C~)¥ of Denton and Bank agree as follows 1 ~ Bank shall prepare Prenotlficatlons and Entries (referred to herein collectively as "Entries') on the basts of data transmitted by the ~ The ~ shall provide such data (referred to hereto as "Entry Data") in the form have the content, and be transmitted to the Bank location at ._~e, at:her forcl e TX The data shall include a file of payees names, bank numbers, account number and debit amounts This file shall be to specifications of Federal Reserve Bank, SWACHA and the Bank Bank may change such requirements from tune to tune upon 30 days' written notice to the ~ Bank shall have no obligation to act on Entry Data received that does not comply with the foregoing requirements, or to reverse, adjust, or stop payment or posting of any Entry Data received or any Entry prepared therefrom 2 Transmittal of Entries and Settlement Except in the case of Entries imtlated to accounts maintained with Bank (referred to herein as "On-Us-Entrles') Bank shall transmit Entries that comply with the requirements provided for herein to its Automated Clearing House and settle for such Entries m accordance with the Rules ~ shall deliver file to the Bank bv 2.00 o.m. two (2) work~ne days orior to oavm~llt a~?, Where Entry Data that complies with the requirements provided for herein is received by the Bank Deadline, Bank shall transmit the Entries prepared from such Entry Data (other than On-Us-Entries) to its Automated Clearing House prior to the Applicable ACH Deadline In the event Bank receives Entry Data after a particular Bank Deadline, it shall have no obligation to transmit the Entries derived therefrom to its Automated Clearing House by the applicable ACH Deadline Any Bank Deadline may be changed by Bank form tune to tune on 30 days' prior wnttan notice to the City of Denton, 3 Payment With Resnect to Entr~, (a) Credzt Entries ~ shall pay Bank in munediately available funds the amount of each Credit Entry with respect to which Entry Data is transmitted to Bank under this Agreement These funds shall be deposited at such tune as agreed upon by the parties Bank shall promptly recredtt the account specified below (the 'Account') with the amount of each On-Us-Entry rejected by Bank as provided in Section 4, and AFFO150E 27 ~40 each other Entry returned by the Recetvmg DH, provided Bank has obtatned the returned Entry from such Receiving DFI ih) Debit Entries Bank shall credit the account specified below (the "Account") with the amount of each Debit Entry transmitted to Bank by tm Account under this Agreement Bank shall credit the ~ on Settlement Date m accordance with the Bank's customary posting procedure differences between On*Us-Entries and other Entries Thc ~ shall be entitled to wlthdraw the amount of such credit upon Bank's receipt of entry In the event such an Entry is returned by a Recelvmg DFI m accordance with the Rules after Bank ha~ provided such credit, the .~!..QJL.D..~.IK~ shall upon demand, repay Bank the amount of such Entry 4 ~ In the case of On-Us-Entries, subject to Bank's right to reject any such Entry as provided below, Bank shall credit and debit the amount of each such EnID prepared from Entry Data received that complies with the requirements provided for herein to the appropriate Receiver's account maintained with Bank Bank shall have the right, in its sole discretion, to reject any On-Us-Entry for an account not m an open status 5 ~ Bank shall provlde the ~ with not,ce of the return or rejection of Entries under tMs Agreement as follows The Bookkeeping Department will notify the ~ by telephone of any returned debit the next working day after the item is received in the Bank's returns Returns will be received by I Treasury Analyst Phone # 940-349-7743 2 Administrative Secretary Phone # 94,0-349-8531 6 ~ ~ and Bank shall comply with and be bound by the Rules as in effect from tune to time 7 e.~&.qp..~tt2.~ ~ and Bank agree to cooperate promptly and fully tn the investigation of any clann asserted by any person arising out of this Agreement or the transactions contemplated thereby 8 ~ Notwithstanding any provision to the contrary contained herein, Bank shall only be liable to the f. CaIL9.!.~_.~ under this Agreement for Its failure to provide any credit or make any payment provided for herein or for Its gross negligence or willful misconduct In performing the service provided for herein Bank shall have no liability or responsibility with respect to any other matter, including without Imutatlons, any act or omission by Bank's Automated Clearing House, any other financial institution, or any other person Bank shall have no liability for any consequential damages Delay by Bank beyond tune lunits provided In this Agreement is excused if caused by interruption of eommumcatlon faclhtleS, strikes, emergency cOOdltlOns or other circumstances beyond its control 9 The Cltv of Denton Llabiht3,, Except as specified below, the City of Dentola shall be deemed to make the same warranties to Bank with respect to both On-Us-Entries and other Entries subject to this Agreement as Bank ~s deemed to make under the Rules, and AFFO150E 28 of 4.0 Bank shall have no responstbthty with respect to the matters so warranted by the City of Denton. In the case of On-Us-Entries, such warraunes shall apply as of the tune such Entries are processed by Bank Bank shall not be liable for (a) the debiting or crediting of the amount of an Entry to the account of any person, as required by the City of Denton. (b) the delay of any financial Institution other than Bank m debiting or crediting, or the fmlure of such m-~tttutlon to debit or credit the amount of an Entry, as required by the ~, and (c) delay of the .~ff..9.t.12~ in imitating or the fmlure of the ~ to nutlata any Entry 10 ve/k/ly.~[l~t~ No advertising or publicity concerning this Agreement m which the name of Bank is used will be undertaken without prior written approval of Bank 11 ~ After Bank receives the file from the ~ Bank will verify the following by telephone A Total Amount B Number of Records C Pay Date This reformation will be verified by one of the following employees 12 Payment for Bank Services, The cost of this service w,ll be 5£e GL 5c~t~-c]~ 13 ~ The Account IS the following deposit account maintained by the City of Denton with Bank Account # 0 ~.~ (~ I ~ ~ Bank Office Location ~ iT ~ The City of Denton may, without demand, debit the Account for any amount payable by the -~LY.9.t.D__~II to Bank under this Agreement ~ represents to Bank that the Account ts, and during the term of tlus Agreement will be mmntamed prunarlly for business, and not for personal, family or household purpose 14 Notices Except as otherwise provided hereto, any written notice or other written commumcatton reqmred or permitted to be given under the Agreement shall be delivered or sent by Umted States registered mall, postage prepaid, and, ~f to Bank, addressed to AFF0150E 29 0f40 and, if to the City of Denton addressed to Director of Fmcai Operations 215 E. McK~nnev Denton. Texas ?(~0~ Unless another address is substituted by notice delivered or sent as provided herein Any such notice shall be deemed given when received 15 The cost of such ACH credit or debit will be entered monthly as a hard-dollar charge or payment by compensating balances may be subsututed 16 Tenmnau011, This Agreement may be terrmnated by the ~ or Bank at any time by giving thirty days' prior written notice thereof to the other party Notwithstanding such ternunatlon, thls Agreement shall remain In force and effect as to all transactions that shall have occurred prior to the date of temunsuon 17 ve. Qg.Y.~q!lag.!~t~ This Agreement shall be construed m accordance with and governed by the laws of the State of Texas 18 ~ Headings are used for reference purposes only and shall not be deemed a part of this Agreement 19 ~ This Agreement embodies the entire agreement of the parties with respect to the subject matter hereof, and supersedes ail previous negotiations representations, and agreements with respect hereto, and shall be binding upon the parties hereto, and their respective successors and assigns This Agreement may be amended only by a writing signed by both parties AFFO$50E 30 of 40 ACH SERVICE SPECIFICATIONS Company Name ~ ~-nOte ~tnes L~ve Entries (~) (~) Comply Received ACH SER~CE ~O~A~ON ACH Se~ce ( ~. ) D~t Deposit ( ~ ) Au/o~t~c ~put Med~a ACH for ~ PC ( ~ .) D~k~*t, ( ) Phone Line Comply Dehve~ Me.od (.,) Couner( ~) Comply C~er ( ) ( ) O~er-Specl~ BANK ACH DMSION INFORMATION AFFO150E 31 of 40 ACH DELIVERY SCHEDUI.E 1 AUTOMATIC DEBIT FILES All ACH Auwrnsttc Debit files shall be dehvered to the Bank no later than 12 00 p m, two business days pnor to the ~e Settlement Date, i · if the settlement day is Fnday, the ~e must be at the bank facility disclosed in the agreement by the previous Wednesday before 12 00 p m 2 All ACH Direct Deposit files shall be delivered to the Rank no later than 12 00 p m two business day prior to the file Settlement Date, l · if the settlement day is Fnday, the file must be at the bank faclhtv disclosed m the agreement by the previous Wednesday before 12 00 p m Always take into account bank holidays when scheduling your ~e dehvery dates and time Below is a schedule of bank holidays for the 1997/98 year Hohdav ~)~te Columbus Day October 13 Monday Veterans Day November 11 'l%esdav Thanksgiving Day November 2'7 Thursda~ Christmas Day December 25 Thursday New Year's Day .lenuary 1 Thursday Mania Luther Krug Day January 19 Monday Presidents Day February 16 Monday Memorial Day May 2~ Monday Independence Day July 3 Fnday Labor Day September 7 Monday ACH ORIGINATION FEE SCHEDULE ~ Software $ ACH F~le $ Indivtdual Ftle Records $ Returned Entries $ These fees may be prod direct or compensating balances may be used to offset any and all charges These charges will be calculated on the final day of each month and charged to the account of the of Dentoll number on the day of the month By ~ Date AFF0150E 32 o~ 40 MASTER REPURCHASE AGREEMENT Between Da~ed as of (Seller) and (Name Of Cuswmer) (Buyer) 1 Applicability Prom tulle to tm'te fide parties hereto may en','r into transactions m which one party ("Seller") agrees io ~runsfer to the other ('Buyer") securmas or financial msu'umems ('$ecurnles') against the Uansfer of funds by Buyer, with a sanultsneons agreement by Buyer to transfer to Seller such Securntes at a date canam or on demand, against the transfer of thuds by Seller Bach such u'ansacuon shall be referred to hereto as a 'Transaction" and shall be governed by this Agreement, including any supp]ememal terms or coedninus comamed in Annex I hercto, unless otherwise agreed in writing 2 Definitions (a) "Act of Insolvency", with respect to any pan'y, (I) the cornmancemem by such party as debtor of any case or proceeding under an bankmptoy, insolvency, reorgamanuon, liquidation dtssoluuon or snnllar [aw, or such party seeking the appomnnent of a receiver, trustee, custodian or sumlar official for such party or any subs~amtsl pan of its propew/, or (it) the commencement of any such case or proceeding against such peny, or another seeking such sppmnunant, or the filing agamst a party of an application for a protecuve decree under the provisions of the Securlltes Investor Protection Act of 1970, which (A) is consented to or not luneIy contested by such paw/, (B) results m the cnw/of an order for relief, such an appomunem, the Issuance of such a protective decree or the enwy of an order having a slmdar effect, or (C) is not dismissed within 15 days (ut) the making by a party of a general assignment for the benefit of creditors or (Iv) the adunsslun m wnung by a party of such party's mabthty to pay such party's debts ns they become due (b) "Additional Purchased Securities ', Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof (c) "Buyer's Margin Amoum" with respect to any Transacllun as of any date, the amount obtained by apphcauon of a percantege (which may equal m the percantege diat ts agreed to as the Seller'S Masgm Amount under subparagraph (q) of this paragraph), agreed to by Buyer and Seller prior to entenng Into the transaction to the Repurchase Price for such Transacunn as of such date (d) "Confirmation" the meaning specified m Paragraph 3(b) hereof (e) 'Income", with respect to any Security a~ any time any pnninpai thereof then payable and all interest dividends or other distributions thereon, (f) "Margin Deficit', the meaning specified m Paragraph 4(a) hereof (g) "Margm Excess', the meaning specified m Paragraph 4('o) hereof, Ih) ~Masket Value', with respect to any Securities as of any date the price for such Securities on such date obtained from a generally recogmzed source to by the pamas or the most recent closing bid quotation from such a source, plus accrued income to the extent not incindad thereto (other than any Income credited to Iransferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereoO as of such date (unless contrary to ninrket practice for such Securities), (l) SPnce Dlfferunttsl", with respect to any Transaction hereunder as of any date the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Puce for such Transaction on a 360 day per year basts for the actual number of days during the period commencing on (and including) fide Purchase Date for such Transaction and ending on (but excluding) the date of determmat~un (reduced by any amount of such Pncc Differential previously pn'ld by Seller to Buyer w~th respect to such Transaction), {J) "Pricing Rate' the per annum percentege rain for determluatton of the Price Differential - (k) 'Prmte Rate'. the prune rate of U S money center commercial banks as pubhshed tn The Wall Street $ournal (1) 'purchase Date' the date on which purchased Securities are transferred by Seller Io Buyer (m) 'purchase Price" (0 on the Purchase Date, the puce at which Purchased Securmes are transferred by Seller m Buyer and (il) thereafter such puce Increased by the amount of any cash uansferred by Buyer to Seller pursuanl Io Paragraph 4ih) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller s obhgaunns under clause (Il) of Paragraph 5 hereof AFFO150E 34 of 40 (n) "Purchased Sacur~tias*, the SecurRias transferred by Seller to Buyer m a Transaction hereunder and any Securities substituted therefor m accordance with Paragraph 9 hereof The term "Purchased Securings* with respect to any Transacuon at any time also shall include AddtoonH Purchased Seourmes delivered pursuant to Paragraph 4(a) and shall exclude Securmes r~urned pursuant to Paragraph 4('o), (o) "Repurchase Dato" the date on whtch tho seller Is to repurchase the Purchased Secunuas form Buyer tocludtng any date datormmed by apphcauun of the provistons of Paragraphs 3(c) or 11 hereof (p) *Repurchase Price', the pace at which Purchased Secunuas arc to he transferred from Buyer to Seller upon tonutnaunn ora Transacuon wluch will be datermmed tn each case (tncludtng Transacuons terminable upon demand) as the sum of the Purchase Price and the Price Dlffercnual as of the date of such datermmatson mcraased by any amount determined by the appltcauon of the provmtnns of Paragraph I 1 hereof, (q), 'Seller's Margin Amount", with respect to any Tranascuon u of any date, the amount obtomed by apphceuon of a percentage (which may be equal to the percentsile that Is agreed to as the Buyer's Margm Amount under subparagraph (c) or' thls Paragraph), agreed to by Buyer and Seller prmr to entermg Into the Transaction to the Repurchase Price for such Transacuun as of such da*,. 3 lnftlation, Confirnsation; Termi-~tfon (a) An agreement to enter mtn a Transaction may be made orally or tn wrtung at the untmuon of either Buyer or Seller On the Pm'chase l)ato for tho Transacuon, the Purchased Secunuas shall be transferred to Buyer or its agent agamst the transfer of the Purchase Price to an account of Seller CO) ,Upon agrcetng to enter mtn a Transaanun hereunder, Buyer OF Seller (OF both), as shall be agreed shall promptly deliver to the other parP/ a written confirmauun of each Transacuon (a "¢onflrmanan*) The Confirmation shall dnscn"oe the Purchased Securities (tncledtnS CUSIP number, tf any). ~deunfy Buyer and Seller and set forth (0 the Purchase Date, (ii) the Purchase Pice (n0 the Repurchase Date unless the Transactlon is to be tormmable on demand, (iv) the Prtctng Rate or Repurchase Price apphcable to die Transaction, and (v) any edthttnual terms or condtooas of the Transaction not inconsistent wch this Agreement The Cunfirmatzun, together with this Agreement, shall constunte conclusive evidence of the terms agreed Between Buyer and Seller with respect to the Transasnon m which the Confirmation relates, unless with respect to the Conflrmanun specific objection Is made promptly after receipt thereof In the event of any conflict between the terms of such Confirmation and thu Agreement this Agreement shall prevail (c) In the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller no later than such nme as Is cuatomary tn accordance with market prucuce, by telephone or otherwise on or prior to the business day on which such tormmatton will be effective On the date specified tn such demand or on the date fixed for tormmattnn tn tho case of Tranascttons havtng a fixed term termtnatam of the Transaction will be effected by transfer to Seller or It's agent of the Purchased SecuFtnes and any Income tn respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obbgpt~uns of Seller pursuant to Paragraph $ heron0 asatnst the transfer of the Repurchase Price to an account of Buyer 4 MargIn Mahtenunce (a) l'f at any tune the aggregate A. farhat Value of all Purchased Securmns subject to ail Transactions in which a particular party hereto is acung as Buyer Is less than the aggregate Buyer's Margm Ansoum for all such Transactions (a "Masgtn Deficit"), then Buyer may by nonce to Seller r~qulra Seller In such Transactions at Seller*s option, to traasfer to Buyer cash or eddmoual securings reasonably acceptable to Buyer ("Additional Purchased Securmes*), so that the cash and agsreilato Market Value of the Purchased SeCUFItlns mcludtng any such Additional Purchased Securmas, will thereupon equal or exceed such aggregate Buyer's Margin Amount (decreased by the amount of any Margm Deficit as of such dam arising from any Transacunns in which such Buyer Is actmg as Seller) CO) If at any tune the aggregate Market Value of all Purchased Securmas subject to all Transactions in which a pamcular party harem ss acung as Seller exceeds the asgragato Seller's Margin Amount for all such Transucnuns at such tune (a 'Masgm Excess*). then seller may by nunce to Buyer require Buyer in such Transactions, at Buyer's optton, to transfer cash or Purchased Securmes to Seller, so that the aggregate market Value of the Purchased Secuctttes, after deduction of any such cash or any Purchased SCcuFmas so transferred will thereupon not exceed such aggregate Seller's Margin Amount (increased by the amount of any Margm l~xcess as of such date from any Transactions tn whtch such Seller is acttng as Buyer) (c) Any cash transferred pursuant to this paragraph shall be aurthmad to such Transactions as shall be agreed upon by Buyer and Seller (d) Seller and Buyer may agree with respect to any or ail Transacouns hereunder that the respective rlghu of Buyer OF Seller (or both) under subparagraphs (a) and Co) of this Paragraph may be exercised only where a Margm Deficit or Margm Excess exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percemage shall be agreed to by Buyer and Seller prior to entering into any such Transactions) AFF0150E 36 of 40 (e) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer and Seller under subparagraphs (a) and Co) of this Paragraph m reqmra the elunmauon of a Margin Deficit or a Margin Excess, as the case may be. may be exercised whenever such a Margin Defiint or Margin Excess exists with respect to any single Tranascunn hereunder (calculated without regard to any other Transaction outstanding under this Agreement) 5 Income Puynsente Where a particular Transactlun's term extends over an Income payment date on the Securities subject to that Transaction, Buyer shall, as the parties may agree with respect to such Transaction (or m the absence of any agreement as Buyer shall reasonably determine m its discretion), on the date such Income is payable either (I) transfer to or credit to the account of Seller an amount equal to such Income payment or payments with respect to any Purchased Securities subject to such Transaction or (ii) apply the Income payment or payments to reduce the amount to be transferred to Buyer by Seller upon termination of the Transaction Buyer shall not be obligated to take any action pursuant to the preceding sentence to the extent that such action would result m the creation of Margin Deficit, unless prior thereto or sunuhaneonsly therewith Seller transfers to Buyer cash or Additional Purchased Securities sui~ctera to chromate such Margin Deficit 6 Security Interest Although the parties intend that all Transactions hereunder be sales and purchases and not loans m the event any such Transactions are deemed to be loans Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each Transactions and shall be deemed to have granted to Buyer a security interest m, all of the Purchased Securities with the respect to all Transactions hereunder and all proceeds thereof 7 Payment and Transfer Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately available funds All Securities transferred by one patty hereto to the other party (i) shall be tn suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as the party receiving possession tuay reasonably request, (ii) shall be transferred on the book-entr~ system of a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer As used herein with respect to Secorinas ~transfer~ is intended to have the same meaning as when used in Section 8-313 of the Texas Business and Commerce Code or, where applicable, tn any federal regulation governing transfers of the Securities 8 Segregation of Purchased Securities To the extent required by applicable law, ali Purchased Securities in the possession of ~eller shall be segregated fi.om other securities m its possession and shall be identified as subject to this Agreement Segregation may be accomplished by appropriate identification on the books and records of the holder including a t'mancial intermediary or a clearing corporation Tide to ali Purchased Securities shall pass m Buyer and unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer fi.om engaging m repurchase transactions with the Purchased Securities or otherwise pledging or hypothecating the Purchased Securities but no such transaction shall relieve Buyer of na obligations to transfer Purchased Securities to Seller pursuant to Paragraphs 3, 4 or ! 1 hereof or of Buyer's obligation to credit or pay Income to or apply Income to the obligations of, Seller pursuant to Paragraph $ hereof Required Disclosure for Transactions in Which the Seller Re~ Custody of the Purchased Securities Seller ts not pertained to substitute other securities or those to this Agreement and therefore must keep Buyer's securities segregated at all time, unless in this Agreement Buyer grants Seller the right to subsnt~te other securthes If Buyer grants the right to substitote this means that Buyer s secur ties will likely be commlng ed with S ' eller s own securities during the trading day Buyer is advised that, during any trading day that Buyer s securities are commingled with Seller's securities, they will be subject to liens granted by Seller to *ts clearing bank and may be used by Seller for deliveries on other securities U~ansactinns Whenever the securities are commingled Seller s ability to resegregate substitute securities for Buyer will be subJect to Seller s abthty to satisfy the clearing lien to obtain substitute securities AFF0150E 36 of ao 9 Substitution (a) Seller may, subject to agreement with and acc~ptsnce by Buyer, substitute other Securmas for any Purchased Seeurtons Such subsu~ut~on shall ha made by transfer to Buyar of su~ other Securtoas and lrausfer to Seilar of such Purchased Securiues Afmr subsumuon, the subsmumd Secunti~ shall be deemed to be Purchased Secunuee (b) In Transactions m which the Seller retains custody of Purchased Securlues, the Pames expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, m have agreed to and accepted m this Agreement substimuon by Seller of other Socurmns for Purchased SeeurmM, p;'ov~dea*Aowe~er that such other Securities shall have a Market Value at least equal to the market Value of the Purchased Securmes for which they are substituted I0 Representations Bach of Buyer and Seller represents and warrants to the other that (I) *t is duly authorized to execute and dehver this Agreement, to enter rote the Transactions contemplated hereunder and to perform its obhganons hereunder and has taken all necessary action to anthortee such execution delivery and performance, (ii') it wdl engage m such Trausacfleus as prmclpul (or, ~f agreed m wrltmS m advance of any Trensaeuun by the adler party berem, as agent for a disclosed prmclpul), (in') the parson signing this Agreement on its behalf is duly authorized to do so on Its behalf (or on behalf of any such disclosed prmclpal), (iv) it has obtained all authorizations of any govermnantal body required m connectiun with this Agreement and the Transactions hereunder and such authorizations are m full force and (v) the execuuon, delivery and performance of this Agreement and the Transactions hereunder will not violate any law, ordinance, chatXer, by-law or rule applicable to it or any agreement by which it ts bound or by which any of its assets are affected On the Purchase Date for any Transastion Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it 11 Events of Default In the event that (i) Seller fads to repurchase or Buyer falls to transfer Purchased Securities upon the applicable Repurchase Date, (ii) Seller or Buyer falls, at~r ann business day's notice, to comply with Paragraph 4 hereof (In) Buyer falls to comply with Paragraph $ hereof, (iv) an Act of Insolvency occurs with respect m Seller or Buyer, (v) any representation made by Seller or Buyer shall have been toeurreet or untrue m any material respect when made or repeated or deeuted to have beim made or repeated or (vi) Seller or Buyer shall admit to the other Its mabihty to, or its retention not m, perform any of its obligations hereunder (each an "Evem of Default*) (a) At the option of the non defaulting party, exercised by written notice m the defaultmg party (which option shall be deemed to have been exercised, even if no notice is given, tmmedmtely upon the occurrence of an Acl of Insolvency), the Repurchase Date for each Transaction hereunder shall be deemed immediately te occur (b) In all Transactions in which the defanltmg party is ammg as Seller, if the non defaulting party exercises or is deemed to have exercised the option referred to m subparagraph (a) of this paragraph, (i) the defaultmg party s obhgauons hereunder to repurchase all Purchased Securities m such Trausacuous shall thereupon become immediately due and payable, (ii) to the extent per~ by apphcable law the Repurchase Price with raspecl to each such Transaction shall be utemased by the aggregate amount obtained by daily apphceuim of (x) the greater of the Pricing Rate for such Transaction or the Prune Rate to (y) the Repurchase Price. for st]ch Transectiim as of the Repurchase Date ns determmnd pursuant to subparagraph (a) of thru Paragraph (decreased as of any day by (A) any amounts returned by the non defaulting party with respect to such Repurchase Price pursuant to clause (In) of this subparagraph, (B) any proceeds from the sale of Purchased Securtiles pursuant to subparagraph (d)(0 of this Paragraph, and (C) any amoimts crethted to the account of the defanltmg party pursuant te subparagraph (e) of this Paragraph) on a :360 day per year basis for the actual number of d~ys during the period from and muludIng the date of the I~veut of Default giving rise to such option to but excluding the date of payment of the Repurchase Price as so mcrensed, (iii*) ali tnocme paid after such exercise or deemed exercise shall be retaIned by the non defaulting party and applied to the aggregate unpaid Repurchase Prices owed by the defaulting party, and (iv) the defaulting party shall tmntethately deliver to the non defaulting parP/ any Purchased Securitiee subject te such Transactions then in the defaulting palxy's pOSSeSSiOn (c) m all Transactions m which the defaulting party is uctmg as Buyer, upon tender by the non defaulting party of payment of the aggregate Repurchase Prtoes for all such Transactions the defaulting party s right, nde and interest m ail Purchased Securities subject to such Transecnuns shall be deemed transferred to the non defaulting party, and the defanltmg party shall deliver all such Purchased Seeurines to the non defaulting pariy (d) Al~er one busmess day*s nonce to the defaulting party (which notice need not be given if an Act of ~nsolvency shall have occurred, and which may be the notice given under subparagraph (a) of this paragraph or the nonce referred to in clause (n) of tho t~trst sentence of this Paragraph) the non defaulting party may AFFO150E 37 of 40 (I) as to Transacuons in which the defaulting party is acung as Seller, (A) munedmtely sell, tn a recognized market at such price or prices as the non dafaubtng party may reasonably deem satisfactory, any or ail Purchased Secunuas subject to such Transect*om and apply the proceeds thereof to the aggregate unpaxd Repurchase Prices and any other mounts owmS by tho dafaultms party hereunder or (13) in its sole dmcretion elect m lieu of sellmg all or a portion of suab Purchased Securthes, to give the defaulting party credit for such Purchased Secundas tn an amount equal to the price therefor on such date, obtained from a generally reangmzed source or the inost recellt closing bid quotation horn such a source, agamst the aggregate unpaid Repurchase Pncec and any other antounts twinS by the dafaultmg pa~ty hereunder, and (il*) as tn Transactions tn which the defaulting party is actmg as Buyer, (A) purchase securtnea ("Rapinecment Secur]tias") of the same class and amount as any Purchased Securtnas that are not dehvercd by the defaulting party to the non defaultmg party as required thereunder or (B) m ils sole dJecrcuon elect, in lmu of purchasing Replaceinent Securines to be deemed to have purchased Replacement Secun~ea at the pnea therefor on such date, obtemed from a generally recognized source or the most recent closing hid quotanon from such a source (e) As to Transactions in which the dafaultmg party Is acting as Buyer, the defaulting party shall be Imble to the non defaulting party (i) with respect tn Purchased Securtuas (other than Additional Purchased Secunues), for any excess of the price paid (or deemed paid) by the non defaultmg party t'or Replaceineet Secunues therefor over the Repurchase Pr]ce for such Purchased Securtnas and (u') with respect to Additional Purchased Securities, for the price paid (or deemed paid) by the non defaultmg party for the Replacement Securtnns therefor bt addition, the defaultmg party shall be habla to the non defaultinS party for mternst on such rcmammg Imbthty with respect to each such purchase (or decined purchase) of Replacement Securities from the date of such purchase (or deeined purchase) unul paid tn full by Buyer Such interest shall be a rate equal te the greater of the Prtemg Rate for such Transacuon or tho Prune Rate (t) For purposes of this Paragraph 11, the Repurchasa Pace for each Transaction hereunder tn respect of which the defaulting party is actmg as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exnrctse or deeined exercise by the non defaulting party of its option under subparagraph (a) of this Paragraph (g) The defaulting party shall be liable tn the non defaubtng part~ for the amount of all reasonable legal or other expenses incurred by the non defaulting party in connecuon with or as a consequence of an Event of Default together with interest thereon at a rate equal to tho greater of the Prtemg Rate for the relevant Transacnon or the Prune Rate 0l) The non defaultinS party shall have, tn addition to its rights hereunder, any rights otherwise available to zt under any other agreement or applicable law 12 S~gle Agreement Buyer and Seller acknowledge that, and have entered hereunto and will enter mtn each Transacuon hereunder in conslderaunn of and m reliance upon the fact that all Transactions hereunder consotote a stogie busmess and contractual relationship and have been inade in consideration of each other Accordingly, each of Buyer and Seller asrecs (I) to perform all of its obligations m respect of each Transaction hereunder and that a default tn the performance of any obligations shall constitute a default by U HI respect of all Transactions hereunder (n) that each of them shall be entitled to set off clauns and apply property held by them in respect of any Transaction agamst obligations owing tn them tn respect of any transacunn against obligations twos to them m respect of any other Transactions hereunder and (ill') ~t payinants deliveries and other transfers made by either of them m respect of any Transaction shall be deemed to have made In consideration of payments deliveries and other transfers m respect of any othnr Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may he applied agamst each other and netted 13 Notices and Other Consnsunicaflons Unless another address is specified m wrttmg by the respective party to whom any notice or other coininumcenon is to be given hereunder, all such nouces or communlceuuns shall be m writing or confinnsd In wruing and delivered at the respective addresses set forth m .~ex ! aunched hereto 14 Entire Agreement, SeverablUty , This Agreement shall supersede any existing agreements between the parties coinamm8 general terms and condinons for repurchase transactions Each provision and agreement hereto shall be treated as separate and mdependein from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceabthty of any such other provision ot agreement AFFO150E 38 of 40 IS Non-ansignabillU, Termination The rights and obhganons of the parnes under thts Agreement and under any Transecnon shall not be assigned by either party without the prior wn~n consent of the other party SubJect to the foregoing, this Agreement and any Transanuous shall be bmdins upon and shall manre m the benefit of the pames and their respecuve successors and asstsns This Asreemant may be canceled by euber party upon giving written nunce to the other, except that this Agreement shall, notwubstending such nonce, remain applicable m any Tranascnuns then outstanding 16 Governing Law This Agreement shall be eoverned by the laws of the SLate of Texas V~thmtt gJvinn afTt~p, to the ~,n,.fl~t Ol~ Jaw nl'jocinles theFeof'. Ventle of any Iitfamdan hVOIvjog the Aar~m~.t must be mo]nto]..d JO Fi~*ntn~l Count. Tanns. to the e.eh,.t,m of' all other v,,n,,,~ 17 NO Walvers~ etc No express or unphed wawer of' any Event o~ Default by rather part7 shall consnmte a wawer of' any other Event of' Default and no exerotse of' any remedy hereunder by an7 pan7 shall consutote a watver of' lu n$ht to exercise any other Famed), hereunder No moshficanon or waiver of. any provtsmn of. this Aereemant and no consent by any party m a departure harefi'om shall be efrecuve unless and unUl such shaft be m wnuna and duly executed by both of' the parties hereto Wtthno[ luntmuon on any of' the f'oresomi, the f'adure to Stye s notice pursuant to subpara8rapha 4(8) or 4(o) hereof will not consuto~ a waiver of' any nSin to do so a~ a later date IS Use of' Employee Plan Assets (a) l; easels of an employee benefit plan subject to any provision of. the Employee Retirement [ocoma Security Act of. 1974 ("ERISA") are intended to be used by either pan7 harem (the "Plan Party') m a ~anasctmn, the Plan Part7 shall so nenf7 the other Pan7 prtor to the Trensacnun The Plan Pan7 shall represent m worm8 to the other pan7 that the Transacnon does not consumte n prohlbtted u'ausacnon under ERISA or ts otherwise exempt therefrom, and the other pan~ nm)' proceed m rehance thereon but shall not be required so m proceed (b) Subject to the last sentence of. subparesraph (a) of'thu ParaSreph any such Transacnon shall proceed only ~t' Seller ~mtshns or has furmshed to Buyer Its most recent evadable authted stetemem of' IL~ financul coodulon and Its most recent subsequent unaudited statement of' its fimmcml condKmn (c) B)' enterms into a Treusecnon pursuant to thts perasraph, Seller shall be deemed (i) to represent to Buyer that since the date of' Seller's latest such f'manclal s~temente, there has been no material adverse chanEe m Seller s financial condtoon which Seller ~ not dtsclosed to Buyer, and (u) to asree to provide Buyer with ~uture audited and unaudited stetemne~s of' i~ financ,=l coodmon as they are issued, so lon~ ss it is a Seller m any nots~ndml Transac~lun mvolvms a Plan Pan7 19 [ntant (a) The ponies recosntze that each Transaction is a "repurchase asreemant' as ~bet term is de£med in Section 101 of' Tide 11 of' the Unned Stems Code, as amended (except msof.ar as the ~Ype of. Securmes sublect [o such Transacnon or the term of such Tmnsacnon would render such defimnon inapplicable) and a "securmes contract" as tha~ term is defined m Section 741 of' Tide 11 of' the Un]ted Sums Code, as amended (b) It is understood that e]ther party's nsht to liqmdeto Secunnos delivered to it m connection with Transactions hereunder or to nanretsn any other remedies pureuam m ParaSreph l I hereof' is a contractual nSJO to hquida[e such Transecnon ns described in Secuons ~$ and 5~9 of' Ttde 11 of' the Un]ted Stems Code ~s amended 20 Disclosure Reintin~ to Certain rede. Fsi Protect~uns The paruns acknowledge that they have bean advtsed that (a) m the case of. Transactions m which one of' the pamns ts a broker or dealer reststered with the S¢cunnns and Exchange Commtsslon ('SEC") under Secnon 15 of. the Secunnos Exchanse Act of' 1934 ("19:34 Act"), the Secunnes Investor Protecnon Corporanon hen taken the pos]non that the provisions of. the Securmns Investor Protecnon Act of' 1970 ("SIPA") do not pror-c,~ the other par~ with respect to an~' Transaction hereunder (b) m the case of' Transactions in wh[oh one of' the pontes ts a f~ovemmant secununs broker or a Sovernmem securmns dealer re~stered with the SEC under Section l..qC of' the 1934 Act SIP^ will not provide protecnon to the other part~ with respect to any Transacnon hereunder, and AFFO150E 39 of 40 (c) m ~he case of Transacuons m which one of ~he pames ~s a Pmancml Insmuoon funds held by ~he fimncml msumuon pursuam m a Traasac~on hereunder are not a deposit and lherefore are not msured by the Federal DepostZ Insurance Corporauon Annex I The items hsted below are agreed by Buyer end Seller a~ oxc~tlon* or r~trlctlon.~ to tlus Ma~ter Repurchase Agreement dated ~[.~.].4'~ By acknowledging the below items, the hsted Items become provlszons of tlus agreement nnd a~e subject to the gmdelmes of the pr_~__,~mg document BY City of Denton 215 E. MeIOnne¥ Denton. Texas 76~0~ 940-3~$9-8224 AFFO150E 40of40