HomeMy Public PortalAbout07879 O R D I N A N C E NO. 7879 AN ORDINANCE to provide for the selection of Approved Depositary Banks and Approved Securities Dealers, the making and terms of time and demand deposits and Authorized Investments, the form of security for safekeeping of District funds, the approval of Authorized District Representatives for purposes of signing of checks and making of transfers of District funds, the furnishing of surety bonds for Authorized District Representatives, and reports of the Secretary-Treasurer to the Board of Trustees of the District with respect to the deposit and investment of District funds, and repealing prior ordinances and resolutions inconsistent herewith. BE IT ORDAINED BY THE BOARD OF TRUSTEES OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT: Section 1. Time and Demand Deposits - Approved Depositary Banks/Contracts. A. The Secretary-Treasurer shall maintain a list of banks or trust companies, situated in the District, approved for deposit of District funds ("Approved Depositary Banks"). The list of Approved Depositary Banks, attached hereto as Exhibit A, is hereby approved; provided that such list may be modified from time to time by resolution of the Board of Trustees of the District. B. The Secretary-Treasurer shall determine, by the exercise of his best judgment, the amount of District funds that are not immediately needed for the purpose to which such funds are applicable, and shall keep on demand deposit in Approved Depositary Banks the amount of District funds which he has so determined are needed for current operating expenses of the District and disburse the same as authorized by state law and the District's Plan. C. The Secretary-Treasurer shall place the District funds which he has determined are not immediately needed for the purpose to which said funds are applicable, on time deposit drawing interest in Approved Depositary Banks, or place them outright or by repurchase agreement in Authorized Investments described in Section 2 of this Ordinance, as he in the exercise of his best judgment determines to be in the best overall interest of the District, giving due consideration to: (1) The preservation of such moneys; (2) The comparative yield to be derived therefrom; (3) All other factors which to him as a prudent Secretary-Treasurer seem to be relevant to the welfare of the District in the light of the circumstances at the time prevailing.
In making such deposits or investments, the Secretary-Treasurer shall follow the applicable investment strategy submitted to the Board of Trustees of the District as a part of his monthly report as required by Section 3 of this Ordinance; provided that the Secretary-Treasurer may make investments or deposits, which are not consistent with such investment strategy, when such action is, in the judgment of the Secretary-Treasurer, in the best interest of the District, taking into consideration the factors set forth in this Section, provided the Secretary-Treasurer will note such action in his next monthly report to the Board of Trustees District. D. In placing moneys on demand or time deposit, the Secretary-Treasurer shall use his best efforts to obtain three quotes from Approved Depositary Banks and shall place such funds with the Approved Depositary Bank selected by him, taking into consideration the quote of such Approved Depositary Bank and the factors set forth in Section (C) above. The Secretary-Treasurer shall maintain a record of all quotes received. The Secretary-Treasurer may place such funds with an Approved Depositary Bank, without obtaining quotes, when such action is, in the judgment of the Secretary-Treasurer, in the best interest of the District taking into consideration the factors set forth in Section (C) above, provided that the Secretary-Treasurer shall note such action in his next monthly report to the Board of Trustees of the District. E. The Executive Director and Secretary-Treasurer of the District are authorized and directed to execute a contract with each Approved Depositary Bank holding funds of the District. The contract shall be in substantially the form of Exhibit "B" attached hereto with such changes therein as shall be approved by the Executive Director, Secretary-Treasurer and General Counsel of the District, provided that such officers' signatures on such contract shall constitute conclusive evidence of the approval thereof. Section 2. Authorized Investments - Approved Securities Dealers - Contracts. A. The Secretary-Treasurer may subscribe for or purchase outright or by repurchase agreement obligations of the United States government which are lawful for investment of the District's funds under state law and the District's Plan ("Authorized Investments") which he, in the exercise of his best judgment, believes to be the best for investment of District funds at the time and in payment therefor may withdraw moneys from any bank account, demand or time, maintained by him. The Secretary-Treasurer may bid on subscriptions for such Authorized Investments in accordance with his best judgment. Such Authorized Investments may be purchased from any primary government securities dealer certified as such by the New York Federal Reserve Bank, from any Authorized Depositary Bank or from any securities dealer with offices in the District selected by the Secretary-Treasurer and approved by resolution of the Board of Trustees of the District ("Approved Securities Dealers"). The Secretary-Treasurer shall
maintain a list of Approved Securities Dealers. The list of such -2- Approved Securities Dealers, attached hereto as Exhibit "C", is hereby approved; provided that such list may be modified from time to time by resolution of the Board of Trustees of the District. The Secretary-Treasurer shall provide for the safekeeping of all such Authorized Investments so acquired in the same manner that securities pledged to secure the repayment of District funds deposited in Approved Depositary Banks are kept by him pursuant to law. The Secretary-Treasurer may hold any such Authorized Investments so acquired by him until its maturity or prior thereto may sell the same outright for a negotiated fee as he, in the exercise of his best judgment, deems necessary or advisable for the best interest of the District in the light of the circumstances at the time prevailing. The Secretary-Treasurer may pay all costs and expenses reasonably incurred by him in connection with the subscription, purchase, sale, collection, safekeeping or delivery of all such Authorized Investments at any time acquired by him. In purchasing or selling Authorized Investments the Secretary-Treasurer shall use his best efforts to obtain two quotes from Approved Securities Dealers and shall purchase or sell Authorized Investments with the Approved Securities Dealers selected by him, taking into consideration the quote of such Approved Securities Dealers, the costs and expenses to be paid by the District in connection with such transaction, and the factors set forth in Section (C) above. The Secretary-Treasurer shall maintain a record of all quotes received. The Secretary-Treasurer may purchase or sell Authorized Investments, without obtaining quotes, when such action is in the judgment of the Secretary-Treasurer, in the best interest of the District taking into consideration the factors set forth in Section (C) above, provided that the Secretary-Treasurer shall note such action in his next monthly report to the Board of Trustees of the District. B. The Executive Director and Secretary-Treasurer of the District are authorized and directed to execute a contract with each Approved Depositary Bank or each Approved Securities Dealer with whom the District enters into a repurchase agreement. The contract shall be in substantially the form of Exhibit "D" attached hereto with such changes therein as shall be approved by the Executive Director, Secretary-Treasurer, and General Counsel of the District, provided that such officers' signatures on such contract shall constitute conclusive evidence of the approval thereof. Section 3. Secretary-Treasurer's Report. The Secretary-Treasurer shall prepare a monthly report to the Board of Trustees of the District relating to the deposit and investment of District funds pursuant to this Ordinance. The Secretary-Treasurer's monthly report shall include a prospective overview of the Secretary-Treasurer's investment strategy for the deposit and investment of District funds for the next succeeding monthly period and a report regarding the deposit and investment of District funds for the preceding monthly period including the
performance of such funds for the reporting period. -3- Section 4. Security for Safekeeping of District Funds. For the security of the funds deposited by the Secretary-Treasurer under the provisions of this Ordinance, the Secretary-Treasurer shall, from time to time, submit a list of acceptable securities to be approved by resolution of the Board of Trustees of the District and the Secretary-Treasurer shall require of the Approved Depositary Banks as security for the safekeeping and payment of deposits, securities from the list provided for in this section, which list may include only securities of the kind and character permitted by state law and the District's Plan ("Approved Collateral"). The list of Approved Collateral, attached hereto as Exhibit "E" is hereby approved; provided that such list may be modified from time to time by resolution of the Board of Trustees of the District. Such securities shall be delivered to the Secretary-Treasurer or to a disinterested banking institution or safe depositary, as escrow agent or trustee, as directed by the Secretary-Treasurer. Section 5. Authorized District Representatives. All requests for transfers of funds from District accounts to other accounts of the District maintained at the same Approved Depositary Bank, other than transfers by check, may be authorized by the telephonic, telegraphic, oral or written request received from an Authorized Representative of the District. A transfer of funds from District accounts in favor of third parties shall be authorized only at the request of any two Authorized Representatives of the District. All checks drawn on any accounts of the District shall be signed, either manually or by means of a check-signing machine, by any Authorized Representative of the District; provided that checks of $5,000 or more may not be signed by means of a check signing machine or other facsimile but only by manual signature, and checks of $50,000 or more must be signed by the manual signatures of two authorized representatives of the District. The Authorized Representatives of the District, which include the Secretary-Treasurer, Assistant Secretary-Treasurer, General Counsel, Assistant Executive Director, and Director of Administration of the District are hereby approved; provided that the Board of Trustees may, from time to time, by resolution change such Authorized Representatives of the District. Section 6. Official Bonds. The Secretary-Treasurer of the District shall, before entering upon the discharge of his duties hereunder, give bond in the sum of not less than $1,000,000 to the District and any other Authorized Representative of the District shall give bond in the sum of not less than $500,000; provided that the District may purchase such bond in additional amounts which the Executive-Director deems in the best interest of the District, taking into consideration the security of District funds as well as the cost of such bond. The bond shall be furnished with a surety company authorized to do business in the State of Missouri and shall be in such form as may be prescribed
by the General Counsel of the District. The bond shall be filed in accordance with Section 7.070 of the District Plan. -4- Section 7. Prior Ordinances. The provisions contained in this Ordinance shall take the place of and supersede the provisions of all prior ordinances or resolutions relating to the same subject matter which are herewith inconsistent, including but not limited to Ordinances No. 101 and 15 and Resolutions No. 1869, 1852, 1811, 471, 464, 72, and 62 and such ordinances and resolutions are hereby repealed. -5-
EXHIBIT "A" LIST OF APPROVED DEPOSITARY BANKS American Bank Boatmens National Bank Bremen Bank & Trust Capital Bank & Trust Company Cass Bank & Trust Company Century Bank Bank of Chesterfield Chippewa First Financial Citizens National Bank Colonial Bank Commerce Bank of St. Louis Commercial Bank Eagle Bank & Trust Enterprise Bank First Exchange Bank First Bank & Trust Company First National Bank of St. Louis County Gateway National Bank of St. Louis Heritage National Bank Jefferson Bank & Trust Company Landmark Bank Lemay Bank & Trust Company Lindell Trust Company Mark Twain Banks Mega Banks Meramec Valley Bank Mercantile Bank Missouri State Bank Normandy Bank Pioneer Bank & Trust Company Royal Banks Bank of South County South Side National Bank in St. Louis Southern Commercial Bank Southwest Bank St. Johns Bank & Trust Company United Missouri Bank of St. Louis N.A. U.S. National Bank of Clayton Village Bank of St. Louis County - A-1 -
EXHIBIT "B" DEPOSITARY CONTRACT FOR DEPOSITS OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT THIS CONTRACT, made the _____ day of_________________, 198__, between the Secretary-Treasurer of The Metropolitan St. Louis Sewer District (hereinafter the "District") and ___________ ______________ (hereinafter the "Depositary"); WITNESSETH: Pursuant to the provisions of Section 7.080 of the District's Plan and Ordinance No.__________ of the District, Depositary has been selected as a depositary of moneys of the District; and it is hereby agreed as follows: 1. Demand Accounts. The Secretary-Treasurer of the District will from time to time deposit moneys with Depositary on demand deposit. The District agrees to establish and maintain with Depositary the following demand deposit accounts:___________ _______________________________________________. Depositary agrees to safely keep the demand deposits made hereunder, to promptly collect all checks, drafts and other instruments of exchange deposited with it under this contract, and to pay out such sums as the District may draw by check or other transfer as hereinafter provided. 2. Certification of Deposit. The Secretary-Treasurer of the District will from time to time purchase certificates of deposit from the Depositary. The rates of interest, basis of calculation of interest, time of payment of interest and maturity of each such certificate of deposit shall be as agreed to by the District and the Depositary at the time of purchase. 3. Collateral for Deposits. The Secretary-Treasurer shall from time to time provide the Depositary a list of approved securities ("Securities") which may be provided as collateral for District deposits. The current list of Securities is attached hereto as Addendum A. To secure the safekeeping of the moneys deposited under this contract, Depositary will deliver Securities, in an amount at least equal in market value to the amount of deposits of District and its subdistricts in the Depositary hereunder, as directed by the Secretary-Treasurer. Such Securities shall be delivered to the Secretary-Treasurer or to a disinterested banking institution or safe depositary, as escrow agent or trustee (the "Custodian") as directed by the Secretary-Treasurer in writing. The current written direction of the Secretary-Treasurer as to the Custodian for such Securities is attached hereto as Addendum B. Depositary does hereby grant, bargain, convey and pledge a security interest in any and all Securities deposited with the Secretary-Treasurer of the District or the Custodian in accordance with the terms of this contract. Upon an increase in
- B-1 - the deposits of the District in the Depositary, the Depositary will make additional deposits of Securities with the Secretary-Treasurer or Custodian, equal in market value to the amount by which such deposits have increased. Upon a decrease in the deposits of the District in the Depositary, the Secretary-Treasurer of the District shall consent to a withdrawal of deposits of Securities in such amounts as will insure that all deposits are fully collateralized in the amount required hereunder. 4. Accounting and Safekeeping of Securities. The Secretary-Treasurer of the District may from time to time inspect or request an accounting of the securities to determine that they are kept and maintained as required in paragraph 3. Any expenses charged by the Custodian for the deposit, safekeeping and inspection of said securities shall be paid by Depositary. If in any case, or at any time, the Secretary-Treasurer of the District determines that the Securities given by Depositary do not satisfactorily secure the deposits made or to be made hereunder, the District may require additional or substitute security to be given and Depositary shall furnish additional or substitute security as is satisfactory to the Secretary-Treasurer of the District. 5. Substitution of Securities. The Depositary may, at any time with the consent of the Secretary-Treasurer, withdraw any of the Securities deposited to secure the safekeeping of the moneys deposited hereunder upon depositing in lieu thereof other Securities of like kind and character and at least equal in market value to the Securities withdrawn. Securities so deposited will be pledged to secure payment by the Depositary of District funds as directed by the District pursuant to the provisions hereof, and such Securities shall be released and delivered to the District on its sole demand made to the Custodian, in the event that the Depositary should fail to pay such secured funds, or any part thereof, as directed by the District pursuant to the provisions hereof, and that securities so released and delivered to the District shall be converted into money and the District shall use the same in lieu of such secured funds. 6. Statement of Accounts. Depositary shall, at times specified in writing by the Secretary-Treasurer of the District, render a statement showing the daily balance, or amount of money, held by it under this contract and shall include with such statement all cancelled checks drawn on any accounts of the District covered by such statement. - B-2 -
7. Conversion of Securities. In the event that Depositary defaults in any manner in performing any of the terms and conditions of this contract between the parties or fails to keep safely the moneys deposited with it, or to pay any demand ordered by the Secretary-Treasurer of the District, the Secretary-Treasurer of the District shall be authorized forthwith without notice, advertisement or demand and at public or private sale to convert into money the Securities deposited by Depositary or as many of them as may be necessary to pay the whole amount of the moneys deposited; and District may purchase at the then market value any or all of the Securities sold at any such sale. 8. Charges for Services. The District will be responsible for all charges for services provided by Depositary, as mutually agreed in the attached Pricing Schedule, Addendum C. The Depositary agrees to give the District 60 days advance written notice prior to the effective date of any changes in Pricing Schedule, Addendum C. The Depositary will bill the District monthly for charges for services and will not automatically debit any account of the District maintained with the Depositary for such charges. The Depositary retains its right to set off against any such account for charges which remain unpaid 30 days from date of billing, provided that if the District disputes any charge within such 30 day period the Depositary's right to set off with respect to such disputed charge may only be exercised for such charges which remain unpaid 30 days following notice by the District to the Depositary that such charge is in dispute. 9. Transfer of Funds. The Depositary is authorized to honor, execute and charge to the District's account at the Depositary all telephonic, telegraphic, oral or written requests received from an Authorized Representative of the District for transfers of funds from District accounts to other accounts of the District maintained with Depositary, provided that a transfer of funds from District Accounts in favor of third parties, other than a transfer by check, shall be made by the Depositary at the request of any two Authorized Representatives of the District. The names, offices, manual signatures and facsimile signatures of individuals presently serving as Authorized Representatives of the District are set forth on Addendum D. The Executive Director and Secretary-Treasurer of the District shall notify the Depositary in writing of any changes in such Authorized Representatives of the District. 10. Checks of the District. The Depositary is authorized to honor, execute and charge to the District's accounts at the Depositary all checks drawn on any such accounts, signed either manually or by means of a check signing machine, by any Authorized Representative of the District as set forth in Addendum B; provided that checks of $5,000 or more may not be signed by means of a check signing machine or other facsimile but only by manual signature and checks of $50,000 or more must be - B-3 -
signed by the manual signatures of two Authorized Representatives of the District. 11. Assignment. Depositary shall not transfer by assignment, subcontract or otherwise any interest in this contract without the prior written consent of the SecretaryTreasurer of the District. 12. Access. Depositary shall permit reasonable access by the Secretary-Treasurer of the District for purposes of performing audit procedures relating to any aspect of services provided by Depositary to District in connection with this contract. 13. Records. Depositary shall maintain complete records relating to deposits made hereunder in accordance with state and federal laws, rules and regulations. No listing, report or other material generated from date covered by this contract may be disclosed or transferred by Depositary to any other person, except as required by state and federal laws, rules and regulations, and then only after notice to the Secretary-Treasurer of the District. 14. Term. This contract shall continue in force and effect until ________________, provided that such contract shall automatically renew on each June 30 for an additional one year period unless Depositary is notified by the Secretary-Treasurer of the District that this contract will terminate on such June 30; provided, however, that each party reserves the right to terminate this contract at any time on giving sixty (60) days written notice to the other party of its intention to do so, and this contract shall continue in effect until so terminated. 15. Depositary Resolution. There is attached hereto a certified copy of the resolution adopted by the Board of Directors of Depositary authorizing the execution and delivery of this contract by the officers of Depositary, whose names are affixed on behalf of Depositary. 16. Modification. This Agreement and Addendum may be modified or amended only in writing and agreed to by both parties. 17. Applicable Law. This Agreement and all sections thereof shall be governed by the laws of the State of Missouri. [18. Additional Services. The Depositary and the District mutually agree that the Depositary shall perform certain additional banking services as described in Addendum E under the terms and conditions as described in Addendum E, which is incorporated herein by reference; provided that in the event of conflicts between this contract and Addendum E, as to the - B-4 -
services described in Addendum E the provisions of such Addendum shall control.] IN TESTIMONY WHEREOF, the parties have executed this contract in duplicate and hereunto subscribed their names and affixed their seals as of the date first above written. (SEAL) THE METROPOLITAN ST. LOUIS SEWER DISTRICT By ______________________________ Executive Director of The Metropolitan St. Louis Sewer District ATTEST: _____________________________ Secretary-Treasurer Approved as to form: _____________________________ General Counsel (SEAL) ______________________________ By ______________________________ Title: __________________________ ATTEST: _____________________________ Secretary or Assistant Secretary - B-5 -
ADDENDUM A LIST OF APPROVED COLLATERAL The following securities are hereby designated as acceptable collateral for District funds on deposit, as required by Sec. 30.270.1 RSMo 1986, as amended: 1.Marketable Treasury securities of the United States. *2.General obligation debt securities issued by the State of Missouri. *3.General obligation bonds of any city in the state having a population of not less than two thousand. *4.General obligation bonds of any county in the state. *5.General obligation bonds, approved and registered, of any school district situated in the state. *6.General obligation bonds, approved and registered, of any special road district in the state. *7.General obligation state bonds of any of the 50 states. 8.Debt securities of the Federal Farm Credit System or any of the Banks of Cooperative, Federal Intermediate Credit Banks or Federal Land Banks. 9.Debt securities of the Federal Home Loan Banks (FHLB). 10.Debt securities of the Federal National Mortgage Association (FNMA). 11.Debt securities of the Student Loan Marketing Association (SLMA). 12.Debt securities of the Government National Mortgage Association (GNMA), including mortgage-backed securities. (Note: non-book-entry registered securities must be in nominee name). 13.Debt securities of the Federal Home Loan Mortgage Corporation (FHLMC). - B-6 -
14.Farmers Home Administration insured notes. *15.Bonds of any political subdivision established under the provisions of Section 30, Article VI, of the Constitution of Missouri. *16.Tax anticipation notes issued by any county of class one in Missouri. 17.Public housing notes and bonds ("project notes and bonds") issued by public housing agencies, guaranteed as to the payment of principal and interest by the government of the United States or any agency or instrumentality thereof. 18.Revenue bonds issued by the Missouri Board of Public Buildings or Department of Natural Resources. *19.Revenue bonds of the Missouri Housing Development Commission, Missouri Health and Education Facilities Authority, Missouri Higher Education Loan Authority, Missouri Environmental Improvement and Energy Resources Authority, Missouri Agricultural and Small Business Development Authority, Missouri Industrial Development Board, or state-owned educational institutions. Note: No revenue bonds of any kind will be accepted under items 1-17. *Such bonds or notes must be rated "A" or better by Moody's Investors Service or Standard & Poor's Corporation ('Ml' on notes).
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ADDENDUM B DIRECTION REGARDING CUSTODIAN OF SECURITIES - B-8 -
ADDENDUM C PRICING SCHEDULE - B-9 -
ADDENDUM D AUTHORIZED REPRESENTATIVES OF THE DISTRICT
Title Name Signature
Facsimile
Secretary-Treasurer _____________ ____________ _____________
General Counsel _____________ ____________ _____________
Assistant Secretary-Treasurer _____________ ____________ _____________ General Counsel _____________ ____________ _____________ Assistant Executive Director _____________ ____________ _____________ Director of Administration _____________ ____________ _____________
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ADDENDUM E ADDITIONAL SERVICES - B-11 -
EXHIBIT "C" LIST OF APPROVED SECURITIES DEALERS Primary Government Securities Dealers* Bank of America NT & SA Bankers Trust Company Bear, Stearns & Co., Inc. Carroll McEntee & McGinley Incorporated Chase Manhattan Capital Markets Corporation Chemical Bank Citibank, N.A. Continental Illinois National Bank and Trust Company of Chicago County NatWest Government Securities, Inc. CRT Government Securities, Ltd. Daiwa Securities America Inc. Dean Witter Reynolds Inc. Dillon, Read & Co. Inc. Discount Corporation of New York Donaldson, Lufkin & Jenrette Securities Corporation The First Boston Corporation First National Bank of Chicago Goldman, Sachs & Co. Greenwich Capital Markets, Inc. Harris Government Securities Inc. Irving Securities, Inc. Kidder, Peabody & Co., Incorporated Kleinwort Benson Government Securities, Inc. Aubrey G. Lanston & Co., Inc. Lloyds Government Securities Corporation Manufacturers Hanover Securities Corporation Merrill Lynch Government Securities Inc. Midland Montagu Securities Inc. J. P. Morgan Securities, Inc. Morgan Stanley & Co. Incorporated The Nikko Securities Co. International, Inc. Nomura Securities International, Inc. PaineWebber Incorporated Prudential-Bache Securities, Inc. L. F. Rothschild & Co. Salomon Brothers Inc. Sanwa-BGK Securities Co., L.P. Security Pacific National Bank Shearson Lehman Government Securities, Inc. Smith Barney, Harris Upham & Co., Inc. Thomson McKinnon Securities Inc. S. G. Warburg & Co., Inc. Wertheim Schroder & Co. Incorporated Westpac Pollock Government Securities, Inc. Yamaichi International (America), Inc. _______________________ *Such Primary Government Securities Dealers shall be those certified as such, from time to time, by the New York Federal Reserve Bank.
Securities Dealers in the District First St. Louis A. G. Edwards & Sons, Inc. District Authorized Depositary Banks - C-2 -
EXHIBIT "D" MASTER REPURCHASE AGREEMENT Dated as of _______________, 19__ Between: ______________________________ and ______________________________ 1. Applicability From time to time the parties hereto may enter into transactions in which one party ("Seller") agrees to transfer to the other ("Buyer") securities or financial instruments ("Securities") against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Securities at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a "Transaction" and shall be governed by this Agreement, including any supplemental terms or conditions contained in Annex I hereto, unless otherwise agreed in writing. 2. Definitions (a) "Act of Insolvency", with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law, or such party seeking the appointment of a receiver, trustee, custodian or similar official for such party or any substantial part of its property, or (ii) the commencement of any such case or proceeding against such party, or another seeking such an appointment, or the filing against a party of an application for a protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in the entry of an order for relief, such an appointment, the issuance of such a protective decree or the entry of an order having a similar effect, or (C) is not dismissed within 15 days, (iii) the making by a party of a general assignment for the benefit of creditors, or (iv) the admission in writing by a party of such party's inability to pay such party's debts as they become due; (b) "Additional Purchased Securities", 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 amount obtained by application of a percentage (which may be equal to the percentage that is agreed to as the Seller's Margin Amount under subparagraph (q) of this
Paragraph), agreed to by Buyer and Seller prior to entering into the Transaction, to the Repurchase Price for such Transaction as of such date; (d) "Confirmation", the meaning specified in Paragraph 3(b) hereof; (e) "Income", with respect to any Security at any time, any principal thereof then payable and all interest, dividends or other distributions thereon; (f) "Margin Deficit", the meaning specified in Paragraph 4(a) hereof; (g) "Margin Excess", the meaning specified in Paragraph 4(b) hereof; (h) "Market Value", with respect to any Securities as of any date, the price for such Securities on such date obtained from a generally recognized source agreed to by the parties or the most recent closing bid quotation from such a source, plus accrued Income to the extent not included therein (other than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such Securities); (i) "Price Differential", 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 Price for such Transaction on a 360 day per year basis for the actual number of days during the 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 Transaction); (j) "Pricing Rate", the per annum percentage rate for determination of the Price Differential; (k) "Prime Rate", the prime rate of U. S. money center commercial banks as published in The Wall Street Journal; (l) "Purchase Date", the date on which Purchased Securities are transferred by Seller to Buyer; (m) "Purchase Price", (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter, such price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce - D-2 -
Seller's obligations under clause (ii) of Paragraph 5 hereof; (n) "Purchased Securities", the Securities transferred by Seller to Buyer in a Transaction hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof. The term "Purchase Securities" with respect to any Transaction at any time also shall include Additional Purchased Securities delivered pursuant to Paragraph 4(a) and shall exclude Securities returned pursuant to Paragraph 4(b); (o) "Repurchase Date", the date on which Seller is to repurchase the Purchased Securities from Buyer, including any date determined by application of the provisions of Paragraphs 3(c) or 11 hereof; (p) "Repurchase Price", the price at which Purchased Securities are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination, increased by any amount determined by the application of the provisions of Paragraph 11 hereof; (q) "Seller's Margin Amount", with respect to any Transaction as of any date, the amount obtained by application of a percentage (which may be equal to the percentage that is agreed to as the Buyer's Margin Amount under subparagraph (c) of this Paragraph), agreed to by Buyer and Seller prior to entering into the Transaction, to the Repurchase Price for such Transaction as of such date. 3. Initiation; Confirmation; Termination (a) An agreement to enter into a Transaction may be made orally or in writing at the initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller. (b) Upon agreeing 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 such Transaction (a "Confirmation"). The Confirmation shall describe the Purchased Securities (including CUSIP number, of any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions 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 - D-3 -
Confirmation relates, unless with respect to the Confirmation specific objection is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this 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 time as is customary in 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 in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to an account of Buyer. 4. Margin Maintenance (a) If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer's Margin Amount for all such Transactions (a "Margin Deficit"), then Buyer may by notice to Seller require Seller in such Transactions, at Seller's option, to transfer to Buyer cash or additional Securities reasonably acceptable to Buyer ("Additional Purchased Securities"), so that the cash and aggregate Market Value of the Purchased Securities, including any such Additional Purchased Securities, will thereupon equal or exceed such aggregate Buyer's Margin Amount (decreased by the amount of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller). (b) If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller's Margin Amount for all such Transactions at such time (a "Margin Excess"), then Seller may by notice, 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, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller's Margin Amount (increased by the amount of any Margin Excess as of such date arising from any Transaction in which such Seller is acting as Buyer). (c) Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon by Buyer and Seller. - D-4 -
(d) Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions). (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 (b) of this Paragraph to require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding under this Agreement). 5. Income Payments Where a particular Transaction'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, in the absence of any agreement, as Buyer shall reasonably determine in 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 in the creation of a Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional Purchased Securities sufficient to eliminate such Margin Deficit. 6. Security Interest Although the parties intent is that all Transactions hereunder be sales and purchases and not loans, in 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 such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the Purchased Securities with 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 party hereto to the other party (i) shall be - D-5 -
in 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 may reasonably request, (ii) 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 intended to have the same meaning as when used in Section 8-313 of the New York Uniform Commercial Code or, where applicable, in any federal regulation governing transfers of the Securities. 8. Segregation of Purchased Securities To the extent required by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in 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 financial intermediary or a clearing corporation. Title to all Purchased Securities shall pass to Buyer and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Securities or otherwise pledging 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 5 hereof. 9. Substitution (a) Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for any Purchased Securities. Such substitution shall be made by transfer to Buyer of such other Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted Securities shall be deemed to be Purchased Securities. (b) In Transactions in which the Seller retains custody of Purchased Securities, the parties expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased Securities; provided, however, that such other Securities shall have a Market Value at least equal to the Market Value of the Purchased Securities for which they are substituted. 10. Representations Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into the Transactions contemplated hereunder - D-6 -
and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this Agreement and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not violate any law, ordinance, charter, by-law or rule 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 repeat all the foregoing representations made by it. 11. Events of Default In the event that (i) Seller fails to repurchase or Buyer fails to transfer Purchased Securities upon the applicable Repurchase Date, (ii) Seller or Buyer fails, after one business day's notice, to 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 representation made by Seller or Buyer shall have been incorrect or untrue in any material 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 its intention not to, perform any of its obligations hereunder (each an "Event of Default"): (a) At the option of the nondefaulting party, exercised by written notice to the defaulting party (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Act of Insolvency), the Repurchase Date for each Transaction hereunder shall be deemed immediately to occur. (b) In all Transactions in which the defaulting party if acting as Seller, if the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, (i) the defaulting party's obligations hereunder to repurchase all Purchase Securities in which Transactions shall thereupon become immediately due and payable, (ii) to the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction shall be increased by the aggregate amount obtained by daily application of (x) the greater of the Pricing Rate for such Transaction or the Prime Rate to (y) the Repurchase Price for such Transactions of the Repurchase Date as determined pursuant to subparagraph (a) of this Paragraph (decreased as of any day by (A) any amounts retained by the nondefaulting party with - D-7 -
respect to such Repurchase Price pursuant to clause (iii) of this subparagraph, (B) any proceeds from the sale of Purchased Securities 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 including the date of the Event of Default giving rise to such option to but excluding the date of payment of the Repurchase Price as so increased, (iii) all Income paid after such exercise or deemed exercise shall be retained by the nondefaulting party and applied to the aggregate unpaid Repurchase Prices owed by the defaulting party, and (iv) the defaulting party shall immediately deliver to the nondefaulting party any Purchased Securities subject to such Transactions then in the defaulting party's possession. (c) In all Transactions in which the defaulting party is acting as Buyer, upon tender by the nondefaulting party of payment of the aggregate Repurchase Prices for all such Transactions, the defaulting party's right, title and interest in all Purchased Securities subject to such Transactions shall be deemed transferred to the nondefaulting party, and the defaulting party shall deliver all such Purchased Securities to the nondefaulting party. (d) After one business day's notice to the defaulting party (which notice 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 in clause (ii) of the first sentence of this Paragraph), the nondefaulting party may: (i) as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market at such price or prices as the nondefaulting party may reasonably deem satisfactory, any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Purchased Securities in an amount equal to the price therefor on such date, obtained from a generally recognized source of the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and (ii) as to Transactions in which the defaulting party is acting as Buyer, (A) purchase securities ("Replacement Securities") of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the nondefaulting party as required hereunder or (B) in its sole discretion elect, in lieu of - D-8 -
purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefor on such date, obtained from a generally recognized source of the most recent closing bid quotation from such a source. (e) As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the nondefaulting party (i) with respect to Purchased Securities (other than Additional Purchased Securities), for any excess of the price paid (or deemed paid) by the nondefaulting party for Replacement Securities therefor over the Repurchase Price for such Purchase Securities and (ii) with respect to Additional Purchased Securities, for the price paid (or deemed paid) by the nondefaulting party for the Replacement Securities therefor. In addition, the defaulting party shall be liable to the nondefaulting party for interest on such remaining liability with respect to each such purchase (or deemed purchase) of Replacement Securities from the date of such purchase (or deemed purchase) until paid in full by Buyer. Such interest shall be at a rate equal to the greater of the Pricing Rate for such Transaction or the Prime Rate. (f) For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party if acting as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise by the nondefaulting party of its option under subparagraph (a) of this Paragraph. (g) The defaulting party shall be liable to the nondefaulting party for the amount of all reasonable legal or other expenses incurred by the nondefaulting party in connection with or as a consequence of an Event of Default, together with interest thereon at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate. (h) The nondefaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law. 12. Single Agreement Buyer and Seller acknowledge that, and have entered hereinto and will enter into 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. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any
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Transaction against 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 be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted. 13. Notices and Other Communications Unless another address is specified in writing by the respective party to whom any notice or other communication is to be given hereunder, all such notices or communications shall be in writing or confirmed in writing and delivered at the respective addresses set forth in Annex II attached hereto. 14. Entire Agreement; Severability This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement. 15. Non-assignability; Termination The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by either party without the prior written consent of the other party. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. This Agreement may be cancelled by either party upon giving written notice to the other, except that this Agreement shall, notwithstanding such notice, remain applicable to any Transactions then outstanding. 16. Governing Law This Agreement shall be governed by the laws of the State of Missouri without giving effect to the conflict of law principles thereof. 17. No Waivers, Etc. No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy - D-10 -
hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to subparagraphs 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date. 18. Use of Employee Plan Assets (a) If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 ("ERISA") are intended to be used by either party hereto (the "Plan Party") in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall not be required so to proceed. (b) Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition. (c) By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent to Buyer that since the date of Seller's latest such financial statements, there has been no material adverse change in Seller's financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party. 19. Intent (a) The parties recognize that each Transaction is a "repurchase agreement" as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a "securities contract" as that term is defined in Section 741 of Title 11 of the United States Code, as amended. (b) It is understood that either party's right to liquidate Securities delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof, is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended. - D-11 -
20. Disclosure Relating to Certain Federal Protections The parties acknowledge that they have been advised that: (a) in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission ("SEC") under Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 ("SIPA") do not protect the other party with respect to any Transaction hereunder. (b) in the case of Transactions in which one of the parties is a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and (c) in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable. (Name of Party) (Name of Party) By ___________________________ By ___________________________ Title ________________________ Title ________________________ Date _________________________ Date _________________________ - D-12 -
EXHIBIT "E" LIST OF APPROVED COLLATERAL The following securities are hereby designated as acceptable collateral for District funds on deposit, as required by Sec. 30.270.1 RSMo 1986, as amended: 1.Marketable Treasury securities of the United States. *2.General obligation debt securities issued by the State of Missouri. *3.General obligation bonds of any city in the state having a population of not less than two thousand. *4.General obligation bonds of any county in the state. *5.General obligation bonds, approved and registered, of any school district situated in the state. *6.General obligation bonds, approved and regis-tered, of any special road district in the state. *7.General obligation state bonds of any of the 50 states. 8.Debt securities of the Federal Farm Credit System or any of the Banks of Cooperative, Federal Intermediate Credit Banks or Federal Land Banks. 9.Debt securities of the Federal Home Loan Banks (FHLB). 10.Debt securities of the Federal National Mortgage Association (FNMA). 11.Debt securities of the Student Loan Marketing Association (SLMA). 12.Debt securities of the Government National Mortgage Association (GNMA), including mortgage-backed securities. (Note: non-book-entry registered securities must be in nominee name). 13.Debt securities of the Federal Home Loan Mortgage Corporation (FHLMC). 14. Farmers Home Administration insured notes.
*15.Bonds of any political subdivision established under the provisions of Section 30, Article VI, of the Constitution of Missouri. *16.Tax anticipation notes issued by any county of class one in Missouri. 17.Public housing notes and bonds ("project notes and bonds") issued by public housing agencies, guaranteed as to the payment of principal and interest by the government of the United States or any agency or instrumentality thereof. 18. Revenue bonds issued by the Missouri Board of Public Buildings or Department of Natural Resources. *19. Revenue bonds of the Missouri Housing Development Commission, Missouri Health and Education Facilities Authority, Missouri Higher Education Loan Authority, Missouri Environmental Improvement and Energy Resources Authority, Missouri Agricultural and Small Business Development Authority, Missouri Industrial Development Board, or state-owned educational institutions. Note: No revenue bonds of any kind will be accepted under items 1-17. *Such bonds or notes must be rated "A" or better by Moody's Investors Service or Standard & Poor's Corporation ('Ml' on notes). The foregoing Ordinance was adopted August 9, 1989. - E-2 -