DEPOSITORY AGREEMENT - TML



DEPOSITORY AGREEMENTThis agreement is made and entered into between the Texas Municipal League Intergovernmental Risk Pool, with offices at 1821 Rutherford Lane, First Floor, Austin, Texas 78754, hereinafter referred to as "the Pool," and ____________________, hereinafter referred to as either "Depository," "Bank," or "Depository Bank."The Pool desires to obtain the depository services as herein set forth from a qualified banking institution; andThe Depository Bank desires to provide such depository services to the Pool in accordance with the terms and conditions of the Agreement;Therefore, in consideration of the mutual covenants, terms, and conditions contained herein, the parties agree as follows:ARTICLE 1 DEFINITIONSFor purposes of construing this Agreement, the terms set forth below shall have the following meanings:"Account Executive" shall mean the officer, employee, or agent designated by the Depository to handle the implementation and operation of this Agreement."Account Transfers" shall mean written, electronic, telephonic, facsimile, or oral requests or orders issued by an Authorized Pool Representative for the transfer of Pool funds on deposit from Pool accounts maintained at the Depository to other Depositories for credit to persons or accounts designated by the Authorized Pool Representative."Authorized Pool Representative" means the Executive Director or the persons designated by the Executive Director of the Pool by execution of an Authorization for Depository Accounts, a copy of which is attached hereto as Addendum A, to perform the duties of the Pool as required by and set forth in this Agreement."Collateralized Deposits" shall mean all deposits held by Depository, which Depository is required to pledge securities or interest for, as required by Section 105.031 of the Local Government Code or this Agreement."Deposits" shall mean demand deposits and time deposits. Demand deposits shall mean deposits of funds that may be withdrawn on the demand of the Pool. Time deposits shall mean deposits of funds subject to a contract between the Pool and the Depository under which the Pool may not withdraw any of the funds by check or by other manner until the expiration of a certain period following written notice by the Pool's intent to withdraw the funds."Depository Services" means all services, products, or other items required to be provided to the Pool by this Agreement and as specified in the attached Addendum B, Bank Services and Fees Schedule."Operating Accounts" means all accounts held by the Pool at the Depository."Operating Platform" means Windows network. This platform will be used for online transmittal of bank transactions."Total Pool Balance" means the aggregate sum of all ledger balances of operating accounts held by Depository."Total Pool Collected Balance" means the aggregate sum of collected funds of the Total Pool Balance held by the Depository.ARTICLE2TERMS AND CONDITIONSTerm. The term of this agreement is from June l, 2020 to May 31, 2023. This Agreement shall automatically renew for additional one-year periods, not to exceed two one-year periods, unless either party gives written notice to the other party at least ninety (90) days prior to the end of the initial term or the first one-year renewal period that such party does not desire to renew the Agreement. For any year this Agreement is renewed, the terms, conditions, and fees set forth herein shall apply.The Pool may terminate this Agreement at any time and for any reason by giving the Depository sixty (60) days written notice. The Depository may terminate this Agreement for failure of the Pool to pay any fees or charges in this Agreement. However, the Depository shall first give the Pool ninety (90) days written notice of such delinquent fees and charges. Should the Pool fail to cure the delinquency within thirty (30) days after receiving such ninety (90) days’ notice, the Agreement shall terminate at the end of the ninety (90) days.Upon termination of this Agreement, all finished or unfinished documents, data, studies, or reports prepared by the Depository, at the option of the Pool, shall be delivered to the Pool and become the property of the Pool.Service Charges and Payments. This contract is written for the Pool to receive Depository Services on a fee per item basis. The Depository agrees to provide certain designated services, materials, and other items as specified in Addendum B, at the bid unit price throughout the term of the contract. The list of services that the Pool will be provided is listed in Addendum B. The Depository must provide all the services indicated. The Depository will provide an account analysis to the Pool within ten (10) business days of the close of the month in which the services were provided, and after the Pool receives its Depository statements. The Depository will indicate on the account analysis the number of items processed, multiply that number by the rate, and indicate the amount due for that month by line item, and by total for the month. The Depository shall debit the Master Account for service charges on the last business day of the month following the close of the month in which the services were provided.The Depository shall provide the Pool an earnings credit on the monthly account analysis. The Depository will utilize the previous month's average ninety-one (91) day T-bill auction rate as an earnings credit rate on the account analysis. The earnings credit rate will be applied to the combined average daily collected balances less combined average daily Federal Reserve requirements. Any interest paid on checking accounts is considered an expense on the account analysis. The interest rate on checking is set at 2%. The Depository reserves the right to pass on FDIC assessments.Structure of Accounts. The Pool utilizes four (4) Depository accounts. (See Addendum C: Diagram of Cash Management Program.) The first is a Master Bank Account, which shall be an interest bearing account, into which all deposits will be made.The Master Bank Account will fund two (2) controlled disbursement accounts and one payroll account:The Pool's Claims Account - this account will be used to pay workers' compensation, property, and liability claims.The Pool's Administration Account - this account will be used to pay the Pool's administrative expenses.The Payroll Account - a standard commercial account.Money Market Fund. Depository shall provide a government money market fund for investment by the Pool in accordance with the Texas Public Funds Investment Act and the Pool's investment policy.The Cash Cycle. The Master Bank Account serves as the pivotal point of the cash cycle. Once the funds are deposited in the Master Bank Account via lockbox and/or in-house deposit, the funds will, at the direction of an Authorized Pool Representative, (1) be used to fund the two controlled disbursement accounts and the payroll account, (2) invested in a government money market fund in accordance with the Texas Public Funds Investment Act, or (3) be wire transferred into an investment account at TexPool or the Pool's investment custodian.Additional Services. The award of this contract designates the Bank as a Depository for the Pool for depository and other services in this Agreement. The Pool reserves the right to separately contract for services provided by other institutions.Investments. This contract in no manner binds or obligates the Pool to purchase and trade investments exclusively with the Depository. The Pool shall invest its funds in instruments authorized under state law and in compliance with the Pool's Investment Policy. The Pool may receive competitive bids on each investment, and award the investment to the bidder providing the highest interest on specified securities or Certificates of Deposit.Designated Depository Contact Personnel. The Depository shall provide a list of contact personnel within the Depository who are qualified to provide information and assistance in the following areas on a daily basis:General Information about AccountsInvestments and SafekeepingAccounting/BookkeepingConcentration/Sweep AccountDeposit DiscrepanciesInformation about Lockbox OperationsIn addition, there shall be designated one bank officer responsible for overseeing the Pool's entire account, who serves as liaison with the Pool.Authority of Authorized Pool Representative. An Authorized Pool Representative may approve or request depository services necessary to deposit and transfer the Pool funds or to otherwise implement this Agreement.ARTICLE3PROVISIONS OF DEPOSITORY SERVICESSecured Internet Banking Portal. The Depository shall provide the Pool a secured internet banking portal as part of the depository services. The Pool shall designate authorized users of the portal.Deposits. The Depository agrees to accept all deposits made by the Pool during the term of this Agreement. The Pool reserves the right to invest in Certificates of Deposits, government securities, fully collateralized repurchase agreements, or similar instruments authorized by law and the Pool's Investment Policy. The Depository shall furnish the Pool with its time schedule for clearing of deposits to maximize funds available to the Pool.Deposit Locations. The Pool will have the option to make deposits at the lockbox, branch banks, motorbanks, and/or main bank. A deposit ticket shall be presented to the Depository with each deposit. The Depository agrees to accept deposits for ledger credit until 4:00 p.m. each Banking Day for the benefit of the Pool and credit the Pool's accounts on the date each deposit is received. Deposits received by the Depository for the benefit of the Pool after 4:00 p.m. will be credited to the Pool's accounts on the next Banking Day.Remote Deposit Capture. The Depository shall provide to the Pool all processing equipment and access to processing software to permit the Pool to perform remote capture activities. The remote capture activities shall enable the Pool to convert original checks or substitute checks into electronic images for deposit into the Pool's accounts with the Depository.Automated Clearing House Services {ACH}. The Depository shall have available for the Pool's use Automated Clearing House service for disbursements. The Depository shall guarantee the turnaround time for processing and delivering payments as determined by the Pool.Controlled Disbursements.The Depository will notify the Pool of the amount required to fund the Pool's two disbursement accounts to meet disbursement requirements, subject to the following:Notification: Depository agrees to notify the Pool of the aggregate amount of all checks and other items drawn and/or payable against the disbursement accounts which will post to the disbursement accounts that night, such notification to be provided no later than 12:00 noon central time on each day on which Depository is open for substantially all of its business ("Banking Day").Transfer of Funds: On each Banking Day, the Pool shall transfer or cause to be transferred to the disbursement accounts no later than 3:00 p.m. central time, readily available funds in an amount sufficient to pay the aggregate amount of all checks and other items drawn and/or payable against the disbursement accounts which will post to the disbursement accounts on each such Banking Day.Disbursement Amount Unavailable: If, on any Banking Day and for any reason, the Depository is unable to notify the Pool of the amount required to be transferred to the disbursement accounts pursuant to Paragraph a. above, the Depository will so notify the Pool, and the Pool will transfer to the disbursement accounts readily available funds in an amount estimated by the Pool to be the aggregate amount of checks and other items to be presented to the Depository on such day. The Depository will make all necessary adjustments to reflect under- or over-payments on the next day on which exact figures become available. The Depository will make an extraordinary charge or credit to themonthly account analysis for the disbursement accounts based upon the applicable federal funds rate in order to reflect any such under- or over-payment. This action may affect compensating balance levels for the disbursement accounts.Return Items: The Depository shall have the right at all times to return unpaid any checks and/or items presented against the disbursement accounts for which readily available funds are not available.Pool Checks: The format and size of all checks printed by the Pool or by an independent printer at the request of the Pool shall be approved by the Depository prior to use.The Depository shall establish a zero balance accounting service arrangement for the Pool on its two disbursement accounts, subject to the following:The Depository will link a master checking account maintained with the Depository to one or more disbursement accounts, also with the Depository, which may be updated, from to time, by the Pool providing notice to the Depository.A balance is not required to be maintained in any disbursement account, unless a determined amount is so specified by the Pool or as a compensation condition agreed to between the Pool and the Depository.At the close of business each working day, excepting bank holidays, the Depository will initiate a credit or debit to each disbursement account equal to the day's net balance in order to bring the balance back to the pre-determined balance amount (zero or specific amount, as discussed in Paragraph b. above) and a corresponding debit or credit is applied to the master account as each disbursement account's net balance warrants.In addition to the regular checking account statements for the master and each disbursement account, which will be furnished monthly or at more frequent periodic intervals if so requested, which reflects all such transfers described in Paragraph c. above, and information report documenting inter-account transfers for those accounts linked under a zero balance accounting service arrangement reflecting all such transfers on a daily basis will be furnished if so requested by the Pool.Sufficient balance will be expected to be maintained in the master account or deposited in one or more of the disbursement accounts and transferred on a same day basis to the master account to cover all disbursements presented for payment against any account within the zero balance accounting arrangement.Fees in conjunction with this service will be charged against the account analysis of the master account in accordance with the fee schedule provided in Addendum B.Access to Account Balances. The Depository shall provide to the Pool on-line daily balance reporting access to the Pool's transactions and the accounts' current collectible and ledger balances. The balances shall include the most recent deposit from the lockbox, the current day controlled disbursement presentments, and previous day transactions. This information must be available on-line by 11:00 a.m. each day, except for controlled disbursements which must be available no later than 12:00 noon each day.Depository agrees to provide the Pool access to its balance reporting system under the following terms:The Pool agrees and understands that upon written acceptance of this Agreement, Depository will provide the Pool access to the balance reporting system, which will report to the Pool account balance and other cash management data on the Pool's Depository accounts.Depository will provide the Pool with a balance reporting system User Manual, which fully explains the operation and servicing of the balance reporting system, a User Name and a Password, the latter of which may be changed by the Pool at the Pool's convenience. The Pool will provide any hardware necessary to utilize the balance reporting system.In the event the Pool elects to use the balance reporting system to make concentration, disbursement, or intra Depository transfers, the Pool warrants that Depository may rely upon any transfer instructions it received from the Pool through the balance reporting system bearing the Pool's User Name and Password as properly authorized instructions. The Pool agrees to execute and deliver to Depository an Agreement for Electronic Funds Transfer through the Automated Clearing House. The Pool also agrees to complete and/or provide any other reasonable documentation deemed necessary for Depository to effect transfer instructions.Depository shall take reasonable precautions to insure that the Pool information input into the balance reporting system will remain confidential and protected from unauthorized access by third parties in the event the Pool elects to use the data exchange Multi? Depository Reporting feature.Lockbox Facility. The Depository shall provide a lockbox facility in Texas that will receive and image TMLIRP's lockbox deposits. Lockbox imaging services shall include access to lockbox images via internet and/or monthly CD-ROM of images. Paper documentation of rejected items shall be mailed to TMLIRP on a daily basis. The Depository's automated lockbox services shall allow TMLIRP to download daily received deposit information via daily file transfer which shall occur prior to 11:00 a.m. each business day. The Depository shall also provide TMLIRP special lockbox procedures to facilitate the application of multiple-check deposits using Optical Character Recognition.Insufficient Funds (NSF)/Returned Items. The Depository shall return NSF checks that are deposited in the Pool accounts. Each NSF item shall be processed twice before being returned.Depository Statements. All Depository statements shall be on a monthly cycle ending on the last business day of each month. The Depository shall mail all Depository statements no later than the fifth working day following the Depository cut-off date.Cancelled Checks on CD-ROM or Other Electronic/ Web-Based Options. All cancelled checks shall be provided to the Pool on CD-ROM or other electronic/web-based options. The services provided by the Depository shall include maintenance, check images, and disk output for the two controlled disbursement accounts and one payroll account from the first of the month to the last day of the month. The information output shall be provided within the 10 business days after the end of the month. The Depository is not required to return physical checks.The Depository will provide the Pool with a license to use the Depository installed software for accessing the CD-ROM image data. The software will be distributed and installed in object code from a diskette and shall be compatible with one or more personal computers and operating software (Windows applications). When the software is distributed to the Pool, the Pool shall consider this Agreement to be a non-exclusive, non-transferable license to use the software. Should this Agreement terminate, the software license shall not terminate, and Depository shall continue to update such software for the Pool's use. The Pool acknowledges that the software is the original, confidential,valuable, and proprietary product of Depository and that the Pool has only the right to use the software consistent with the terms of this Agreement. The Pool has no right of ownership in or to the software and may not sell, lease, transfer, or assign its interest as licensee under this Agreement, nor sell, lease, assign, transfer, sub-license, permit reproduction or copying of, or otherwise make the software available, either gratuitously or for consideration, to any person or entity other than the Pool. The Pool may, however, make copies of the software for its necessary backup purposes. The Pool shall not alter, modify, or reverse compile the software.The Depository will retain the cleared item data (checks) for 90 days before this data is destroyed. Should another CD-ROM be needed by the Pool, a recapture of cleared items data would be necessary for an additional fee due and payable by the Pool.The Pool may deliver cleared item data (checks) from its archive files for the Depository to capture to CD-ROM. Fees for the service provided in this section are set forth in Addendum B.Security Transfers. The Depository shall act as the transfer agent for security transactions undertaken by the Pool. All transfers made shall be executed payment versus delivery (i.e., payment shall not be made until the security is received). Instructions will be given initially by phone and will be followed by a written letter and must be approved by at least two Authorized Pool Representatives.Accounts Reconciliation. The Pool requires the Accounts Reconciliation Service for the two controlled disbursements. The service provides a simple listing of paid checks with detailed information on all checks issued on the accounts. The online account reconciliation files must be available electronically daily and monthly for the claims controlled disbursement account and monthly for the admin controlled disbursement account. The monthly account reconciliation files must be available by the second business day after the end of the statement cycle.The Depository hereby licenses the Pool to use the Depository installed software for accessing the data via on-line transmission. The software will be distributed and installed in object code from a diskette and shall be compatible with one or more personal computers and operating software (Windows applications). When the software is distributed to the Pool, the Pool shall consider this Agreement to be a non-exclusive, non-transferable license to use the software. Should this agreement terminate, the software license is also terminated and without any requirement of notice or the passage of time. The Pool acknowledges that the software is the original, confidential , valuable, and proprietary product of Depository and that the Pool has only the right to use the software consistent with the terms of this Agreement. The Pool has no right of ownership in or to the software and may not sell, lease, transfer, or assign its interest as licensee under this Agreement, nor sell, lease, assign, transfer, sub-license, permit reproduction or copying of, or other make the software available, either gratuitously or for consideration, to any person or entity other than the Pool. The Pool may, however, make copies of the software for its necessary backup purposes. The Pool shall not alter, modify, or reverse compile the software.The Depository will be responsible for the creation of the data files for the Pool each month and will make those file(s) available for the Pool. The Pool will be responsible for the retrieval of its file(s) through the installed software in a data communications/transmission mode. The Depository will provide access to this information in this mode only.The Depository will retain the cleared item data in the storage data set for the period of one month, after which the Depository will create the next month file(s) and overwrite those from the previous month. It is the responsibility of the Pool to retrieve their previous months data file(s) no earlier than the third business day of each month and no later than the last working day of that month.Positive Pay. The Depository shall provide Positive Pay Service for the two controlled disbursement accounts and one payroll account via on-line transmission. The Pool will provide check issue information, Automated Clearing House information, and voided check information to the Depository via electronic data transmission on the same day or any day prior to releasing funds for payment. The Depository must electronically compare items that have been presented for payments to the issued files provided. The Pool agrees to deliver or transmit the serial number, amount, date issued, and status of each check by account number to the Depository in the format specified by the Depository. Data received by 6:00 p.m. each Banking Day will be used to verify any check posting to the account that day except for items cashed by a teller at the Depository. Although a teller-cashed item will appear on the Pool's exception report the next morning, the item(s) will be posted to the Pool's account. Data must be transmitted to the Depository by 6:00 p.m. in order for issued check data to be matched against Depository's on-line teller file the same business day as the checks are issued. Should the Pool fail to routinely update its issued check file, the Depository may terminate this service with written notice.The Depository will provide an exception listing to the Pool for review by 9:00 a.m. each Banking Day on the balance reporting system. Any items that the Pool desires to be paid must be confirmed via on-line by an authorized Pool representative by 12:00 p.m. the same Banking Day. If the Depository receives no response from the Pool by this time, all exception items will be returned "Refer to Maker." The Depository shall check exceptions against previously cleared items. The Depository must only pay those checks in the electronic record and must notify the Pool of any rejects or other checks presented for payment on the next day.The Depository must have structured Automated Clearing House blocks and filters that allow the Pool to universally or selectively block incoming Automated Clearing House debits from posting to accounts.The Pool shall designate individuals authorized to approve items to be paid.Note that the serial number on the Pool's issued check file must match the serial number on the Magnetic Ink Character Recognition line of the Pool's checks. A starting serial number must be disclosed for each account. The Pool acknowledges that any stop payment issued on a check will supersede any payment instructions. The Depository prefers to obtain the checks issued data for the month previous to the start of this service to reduce rejects during the first month of service. The Depository requires three Banking Days to set up this service. Manual checks should be included on the Pool's transmission to the Depository. Additions and deletions by telephone must be followed by a fax or email signed by the authorized signer(s) and are not effective until the next Banking Day.Research Requests. The Depository shall fully answer all research requests from the Pool within a reasonable period of time from receipt of a written request from the Pool. The Depository shall provide documents as requested by the Pool.Errors. Interest lost to the Pool because of Depository errors will be promptly reimbursed by the Depository to the Pool.Supplies. The Pool currently purchases its deposit slips and checks on the open market. Although the Pool reserves the option to purchase this stock on the open market, it may request that this service be provided by the Depository at the Pool's cost.Stop Payments. The Depository shall provide stop payment services to the Pool. The Depository will provide automated stop payment capability via on-line. In addition, verbal stop payment orders from an Authorized Pool Representative shall be accepted.Special Signature Requirement. For any checks issued by the Pool, two signatures of the authorized Pool representatives are required. The Depository shall confirm the two signatures requirement for every check issued and cleared by the Pool.Additional Accounts and/or Services. If the Pool develops a need for additional accounts or services during the life of this Depository Agreement, those new accounts or services shall be provided under the same conditions as apply to existing accounts at the time. If the Federal Reserve, Depository Institutions Deregulation Committee, or any other regulatory body or bodies, provide for the establishment of new accounts or other regulations which are favorable to the Pool, and which the Depository provides, then the Depository shall make those new services available to the Pool at prices mutually agreeable to the Depository and the Pool.ARTICLE4SECURITY FOR DEPOSITSQualification of Depository. The Depository acknowledges that it shall qualify as the Pool's Depository by providing security for the Pool's funds by pledging securities or interests in them as provided below. Only such securities as specifically permitted under this Article shall be acceptable as eligible and lawful security for all deposits made under this Agreement. The security shall be provided not later than five (5) days before the commencement of the term of this Agreement.Permissible Security. Not later than five (5) days before the beginning of the term of this Agreement and throughout the term of this Agreement the Depository shall pledge to the Pool as security under this Agreement any of the securities set forth below. However, all securities must receive the prior approval of an Authorized Pool Representative as to kind and value.Obligations of the United States or its agencies and instrumentalities;Direct obligations of the State of Texas or its agencies and instrumentalities;Mortgage backed securities directly issued by a federal agency or instrumentality except for collateralized mortgage obligations.Other obligations, the principal of and interest on which are unconditionally guaranteed or insured by, or backed by the full faith and credit of the State of Texas or the United States or their respective agencies and instrumentalities;Obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than A or its equivalent;Representations of Depository. The provisions of this Agreement for the pledge of securities is conditioned upon the following obligations of the Depository:Faithfully keep the Pool's funds and faithfully perform the duties and obligations imposed by law on the Depository and under this Agreement;Pay on presentation all checks drawn on a demand deposit account with the Depository;Pay all checks drawn on a time deposit account after the required period of notice;Pay all transfers properly payable as directed by a designated officer;Provide and maintain security at 102% of the Total Pool Balance; andAccount for the Pool funds as required by law.Amount of Securities. Securities pledged to secure the Pool funds on deposit in the Depository shall have a market value of at least 1 million or a market value that is at least equal to l 02% of the Total Pool Balance, whichever is greater, during the months of October through February of each year this Agreement remains in effect. During the months of March through September of each year of this Agreement, the securities pledged to secure the Pool funds on deposit in the Depository shall have a market value of at least $400,000 or a market value that is at least equal to 102% of the Total Pool Balance, whichever is greater. An Authorized Pool Representative shall determine the value of the security, and said determination shall be final and binding on the Depository. However, upon request of the Depository, the value of such securities shall be confirmed by one or more primary security dealer(s).Federally Insured Deposits. The Depository is not required to provide security for the deposit of the Pool funds to the extent deposits are insured under 12 U.S.C.A. Sections 1811-1832.New Security. An Authorized Pool Representative may by written order require the Depository to pledge additional or other Permissible Securities at any time it is determined to be advisable or necessary for the protection of the Pool. If for any reason the Total Pool Balance on deposit with the Depository exceeds the market value of pledged security, the Depository shall immediately pledge additional Permissible Securities to the Pool. The Pool may at any time investigate the value of securities pledged by the Depository to secure the Pool funds. Should the Depository fail to pledge the required Permissible Securities within five (5) days after the date the Depository is served with a copy of said order, the Pool's Board of Trustees may select a new depository and terminate this Agreement without any further obligation to the Depository.Substitution of Securities. The Depository may substitute one type of security for another if the substituting security meets the requirements of a Permissible Security.Release of Security. If the securities pledged by the Depository exceed the amount required under this Agreement, such excess securities may be released.Surrender of Interests on Securities. Upon the request of the Depository, the Pool shall surrender, when due, interest on securities deposited by the Depository with the Pool if the value of the securities remaining pledged by the Depository are adequate to meet the requirements of this Agreement.Safekeeping of Pledged Securities.All securities pledged by the Depository to the Pool shall be delivered to the Federal Home Loan Bank of Dallas or an approved independent third-party custodian bank, for holding such securities in safekeeping for the benefit of the Pool under this Agreement. Such pledged securities shall be held in safekeeping in accordance with the provisions of a Custodial Agreement with said Federal Home Loan Bank of Dallas or an approved independent third-party custodian bank, which shall be properly executed by the Depository and the Pool. Depository shall cause the said Federal Home Loan Bank of Dallas or an approved independent third-party custodian bank to issue and deliver the Pool safekeeping receipts for the pledged securities delivered and to be held in safekeeping. Depository hereby grants to the Pool a security interest in, and hereby pledges to the Pool, the securities which are delivered to the said Federal Home Loan Bank of Dallas or an approved independent third-party custodian bank under this Agreement as collateral to secure Pool funds deposited with the Depository. The parties acknowledge that, for perfecting a security interest in said securities in accordance with the Texas Business and Commerce Code, possession of the above listed securities by the said Federal Home Loan Bank of Dallas or an approved independent third-party custodian bank shall be deemed as possession of such securities by the Pool.Should (a) Depository fail at any time to pay immediately and satisfy upon presentation any check, draft, or voucher lawfully drawn upon the Deposits of the Pool and any interest on such Deposits or (b) in case the Depository becomes insolvent or in any manner breaches this Agreement with the Pool, the Pool shall give written notice of any event (a) and/or (b) and the Depository shall have the duty and absolute obligation, within two (2) Banking Days of receiving said written notice, to either cure such event (a) and (b) in a manner satisfactory to the Pool or to authorize the said Federal Home Loan Bank of Dallas or an approved independent third-party custodian bank to release the pledged securities in safekeeping to the Pool in accordance with the Custodial Agreement. For purposes of the preceding sentence, the term "insolvent" shall include, but not be limited to, dissolution, cessations of operations, or liquidation of the Depository, the institution by or against the Depository of a proceeding or action seeking reorganization, liquidation, dissolution, winding up, readjustments of debts, or any other relief under any bankruptcy, insolvency, reorganization, liquidation, dissolution, readjustment of debt, or other similar act of law at any jurisdiction, or in the event the assets of the Depository are taken over by and are placed under the supervision of the Federal Reserve or other regulatory agency or a federal or state governmental authority. Upon release of the said securities to the Pool, the Pool shall then retain the securities or sell the securities at either a public or private sale and apply the proceeds therefrom to all damages and losses sustained by the Pool, together with all expenses of any kind and every kind incurred by it on account of such failure, insolvency, or breach of this Agreement, accounting to the Depository for the remainder, if any, of said proceeds. If the Pool desires to sell such securities, the Depository shall execute any other documents necessary to consummate such sale.Warranty of Pledged Securities. The Depository warrants that it is the true and legal owner of the securities being pledged and will be of any other additional securities that may be pledged by the Depository to the Pool at some future time, and that such securities will be free and clear of all liens and claims and not have been pledged for any other purpose. Further, the Depository warrants that such securities will not be obtained under a repurchase agreement with any other party or that such pledged securities will not at the time of pledging be affected by or covered by any other repurchase agreement whereby the Depository has agreed to resell all or a portion of the pledge securities.Fees for Safekeeping of Pledged Securities. Depository agrees to pay all fees charged by the said Federal Home Loan Bank of Dallas or any approved independent third-party custodian bank for the safekeeping services provided for safekeeping of securities pledged to the Pool under this Agreement. Security Interest in Pledged Securities. Depository agrees to take all steps necessary to insure that the Pool has a perfected security interest in the securities pledged under this Agreement including authorizing by book entry or otherwise the pledge of such securities to the Pool.Monthly Report. Depository shall provide the Pool a monthly report showing at the end of the month all securities pledged under this Agreement and the market value of each pledged security as of the last business day of the month. Such report shall be provided within 10 calendar days of the end of the month.ARTICLESWIRE AND TRANSFER OF FUNDS SERVICESTelephonic. Electronic (via Secured Internet Banking Portal}. or Oral Requests for Account Transfers. The Depository shall honor and execute all telephonic, electronic, or oral requests or orders:for the transfer of funds from designated Pool accounts at the Depository to any other Pool Depository account, whether such other Pool Depository account is at the Depository or other financial institution; orfor the transfer of funds from designated Pool accounts at the Depository to the account of or the credit of a third party, whether such third party account is at the Depository or other financial institution.All transfers initiated on the Secured Internet Banking Portal by an authorized user of the portal require secondary approval by an Authorized Pool Representative. All other transfers require written authorization of two Authorized Pool Representatives.Process Transfers. Depository shall process all incoming transfers received by the Federal Reserve deadline of 3:00 p.m. for the same day credit to the Pool's account. Outgoing wire transfers will be processed by the Federal Reserve deadline on the same day as instructed by the Pool, provided that such instructions are received from the Pool by 3:00 p.m.Instructions for Transfer. The Depository shall act upon all properly received transfer requests on the date received, and use the Federal Reserve Wire for the transmission of the funds.Discrepancies/Loss of Interest/Error. In the event there is a loss of interest or loss of funds as a result of a Depository error for failure to properly execute a transfer request on the date received, or such other error within the Depository's control, the Depository agrees that compensation for such loss shall be corrected, at the option of the Depository, by:adjusting the aggregate ledger and collected balances of the Pool accounts to reflect properly the average balances of the amounts that would have resulted had no error occurred; orreimbursement by check of the loss with interest calculated at the average federal funds interest rate for the period and amount in questions, computed on a 365-day basis.The compensation provided by this section shall not exceed the loss incurred for a period not exceeding 61 days from the initial date of a discrepancy or the date of actual transfer or error correction whichever comes first.Designated Accounts. The Pool hereby designates the Master Account and the two controlled disbursement accounts as the designated accounts. The Pool agrees to supply the Depository, in addition to Addendum A, all other information that the Depository may reasonably request, including but not limited to: money amounts, accounts to be effected, date of transfers,supplemental instructions, and further evidence of any Authorized Pool Representative's authority to transfer funds or to consummate a wire transfer.ARTICLE 6GENERAL PROVISIONSCharging of Fees. The Depository is hereby authorized to charge the Pool accounts upon direct authorization by an Authorized Pool Representative for:fees owed to the Depository;correction of mathematical errors; andchargebacks under this Agreement.Equipment Compatibility. The Depository shall provide hardware and software which meets Pool specifications for equipment needed for remote capture and truncation of original checks, automated wire transfers, Automated Clearing House debits & credits, balance reporting, and any other equipment necessary.Confidentiality, Audits, and Inspections. Any reports, information, data, or studies given to or assembled by the Depository under this Agreement shall be kept confidential and shall not be made available to any individual or organization without the prior written approval of the Pool. During regular business hours and as often as the Pool deems necessary, the Depository will make available for examination by the Pool, its duly authorized agent, accountant, or legal representative, all of its records and data with respect to all matters covered by this Agreement. The Depository shall permit the Pool, upon reasonable notice and at the Pool's sole expense, to audit, examine, and make excerpts or transcripts from such records and to make audits of all contracts, invoices, materials, and other data relating to the matters covered by this Agreement.Other Adjustments. The Depository shall process any adjustment upon verbal authorization by an Authorized Pool Representative followed by written confirmation by the Pool the following work day, if possible, but no later than four (4) working days after the request is pliance with Laws. The Depository agrees to comply with all applicable federal, state, and local laws, rules, regulations, and ordinances. The Depository represents to have the personnel required and necessary to perform the services under this Agreement and that the personnel and the Depository are fully qualified and authorized under federal, state, and local law to perform the services under this Agreement.Indemnification. The Depository shall fully indemnify, save, and hold harmless the Pool, its officers, employees, and agents against any and all liability, damage, loss, claims, demands, and causes of action (collectively, "Claims") which arise out of:the Depository's failure to fulfill any of the terms and conditions of this Agreement; orany violation by Depository of any applicable federal or state law, rules, or regulation resulting from any act or omission of the Depository or its agents and employees;provided, however, the Depository shall only be liable for Claims to the extent of damages actually incurred and shall have no liability for special, consequential, indirect, or punitive damages.The Depository shall, at its own expense, investigate all such claims and demands, attend to their settlement or other disposition, defend all actions based thereon, and pay all charges of attorneys and all other costs and expenses of any kind arising from any such Claims. Notwithstanding anything to the contrary contained herein, this Article 6.6 shall not be construed to require indemnification against Claims to the extent caused by the negligence of the Pool, its officers, or employees.Duties after Termination. All obligations of the parties made or incurred or existing under this Agreement as of the date of termination, with respect to transactions initiated prior to the effective date of termination, shall survive such termination, including but not limited to, Depository's obligation to retain duplicates of transaction receipts and credit slips and any continuing obligation of the Depository with respect to chargebacks.No Endorsement. The Depository shall not advertise or publish the fact that the Pool has entered into this Agreement, except as may be necessary to comply with proper requests for information from or filing of reports of federal, state, or local government agencies.Amendment. This Agreement may be amended only by written agreement executed by the Depository and the Pool.Severability. In the event any provision contained herein shall be invalid, illegal, or unenforceable in any respect, then such provision shall not affect any other provision hereof and the Agreement shall be construed as if such invalid, illegal, or unenforceable provision was not a part of this Agreement.Notices. Notices provided herein shall be delivered to:On behalf of the Pool to:On behalf of the Depository to:Texas Municipal League Intergovernmental Risk Pool Attn: Chief Financial Officer1821 Rutherford Lane, First Floor Austin, Texas 78754__________________________________ __________________________________Assignment. This Agreement in whole or part may not be assigned by any party without the prior written consent of the other party. However, this Agreement shall extend to and be binding upon the successors and assigns of the respective parties.Conflicts of Interest. The Depository acknowledges during the term of this contract that no officer, director, or stockholder of the Depository is or shall be an employee or officer of the Pool. The Depository agrees to maintain a current, updated list of all officers, directors, and shareholders and upon request disclose such information on file with the Chief Financial Officer throughout the term of this Agreement.Entire Agreement. This Agreement and its Addenda constitute the entire agreement between the parties and shall supersede all previous negotiations, commitments, and erning Law. To the extent this Agreement is not governed by applicable federal laws and regulations, this Agreement shall be governed by and construed in accordance with laws of the State of Texas.Liability of the Parties.The BANK's and DEPOSITOR's duties and responsibilities to each other are limited as set forth in this Agreement, except with respect to any provisions of the law which cannot be varied or waived by agreement. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NEITHER BANK NOR DEPOSITOR WILL BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL, OR PUNITIVE DAMAGES (INCLUDING WITHOUT LIMITATION, LOSS OF REVENUE OR ANTICIPATED PROFITS), OR FOR ANY INDIRECT LOSS THAT THE OTHER PARTY MAY INCUR OR SUFFER IN CONNECTION WITH THE SERVICES PROVIDED HEREUNDER (EVEN IF THE SUCH PARTY HAS BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES), INCLUDING WITHOUT LIMITATION, ATTORNEYS' FEES.IN WITNESS HEREOF, the parties have executed this Agreement in duplicate originals, on the __day of ________, 2019.Texas Municipal League Intergovernmental Risk PoolBY: ____________________________________________ JEFFREY R. THOMPSON,Executive DirectorAPPROVED:BY: ____________________________________________Name:Chief Financial OfficerBY: ____________________________________________ DAVID W. REAGAN,Director of Legal ServicesDEPOSITORY: _ BY: ____________________________________________ Name: Title: ATTEST:BY: ____________________________________________ Name: Title: ADDENDUM A: ADDENDUM B: ADDENDUM C:Authorization for Depository Account Depository Services and Fees ScheduleTexas Municipal League Intergovernmental Risk Pool Cash Management ProgramADDENDUM A AUTHORIZATION FOR DEPOSITORY ACCOUNTSI, the undersigned, being the duly appointed and authorized Executive Director of the Pool, hereby designate the officers set forth below as the duly authorized representatives of the Pool to perform the duties of Authorized Pool Representatives as required by and set forth in the Pool Depository Agreement.The signatures below are the signatures of the Authorized Pool Representatives vested with full authority to sign and transact business for the Pool including, but not limited to, wire transfers, request extensions of credit, open and close accounts, request reports, or authorize other signatories to specific Depository accounts. The signatures of the officers subscribed below are true and genuine:NAMETITLEMANUAL SIGNATUREJeffrey R. ThompsonExecutive Director__________________________________ __________________Assistant Executive Director_____________________________________________________Chief Financial Officer__________________________________Julie NguyenController__________________________________This Authorization for Depository Accounts is entered into in addition to and shall not amend, modify, waive, or revoke any of the terms of the Pool Depository Agreement except as expressly provided herein. This authorization is entered into to facilitate the transfer of funds or administration of services to be provided pursuant to the Pool Depository Agreement. It is not intended to empower Authorized Pool Representatives to approve or accept amendments, waivers, or new provisions or terms to the Depository Agreement on behalf of the Pool. Authorized Pool Representatives shall continue to be authorized until such time as Depository receives written notification that said authorization has been revoked.THIS AUTHORIZATION FOR DEPOSITORY ACCOUNTS is effective this _____ day of ______, 2019.Texas Municipal League Intergovernmental Risk PoolBY: ____________________________________________ Jeffrey R. Thompson,Executive DirectorATTEST:BY: ____________________________________________ DAVID W. REAGAN,Director of Legal ServicesADDENDUM B121221517145000right55308500right17970500 ADDENDUM Ccenter1365250018 ................
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