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HomeMy WebLinkAboutAmerican Community Bank~'~~ ~®~~ RESOLUTION 2008-623 ADOPTED DOC ID: 3984 THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION NO.2008-623 WAS ADOPTED AT THE REGULAR MEETING OF THE SOUTHOLD TOWN BOARD ON NNE 17, 2008: WHEREAS, Section 64 of the Town Law requires the Town Boazd to designate, by resolution, banks in the State in which the Supervisor or other officers of the Town shall deposit moneys coming into their hands by virtue of their office; and WHEREAS, the Town Board may require any bank, so designated, to deposit with such Boazd bonds or certificates of the United State, of the State of New York or any county, town, city, village or school district of the State of New York, such security for such funds so deposited, but such bond or certificate shall be subject to the approval of the Town Board and shall be deposited in such place and held under such conditions as the Town Board may determine; now, therefore, be it RESOLVED that the following bank is added for fiscal year 2008 as a deoositorv of the Town of Southold. and that securities are required as collateral for anv cash balances in said banks: American Community Bank $ 1,000,000.00 AND BE FURTHER RESOLVED that the Town Board hereby authorizes Supervisor Scott A. Russell to execute Collateral Agreements between the Town of Southold and the above designated bank and its Third Party Custodial Institutions, all in accordance with the approval of the Town Attorney. AND BE IT FURTHER RESOLVED that Supervisor Scott A Russell is hereby authorized and directed to exercise all of the powers listed in the Corporate Authorization Resolution, including executing documents relating to the opening of accounts, withdrawing or borrowing, executing checks and other orders. Resolution 2008-623 ~Q Elizabeth A. Neville Southold Town Clerk Boazd Meeting of June 17, 2008 RESULT: ADOPTED [UNANIMOUS] MOVER: Louisa P. Evans, Justice SECONDER: Thomas H. Wickham, Councilman AYES: Ruland, Orlando, Krupski Jr., Wickham, Evans, Russell Updated: 6/17/2008 11:21 AM by Lynda Bohn Page 2 CORPORATE AUTHORIZATION RESOLUTION gy; Town of Southold Referred to in this document as "Financial Institution" Referred to in this document as "Corporation" I, Elizabeth A. Neville ,certify that I am Secretary Iclerkl of the above named corporation organized under the laws of _the State o£ New York ,Federal Employer I.D. Number 11-6001939 ,engaged in business under the trade name of the Town of Southold ,and that the resolutions on this document are a correct copy of the resolutions adopted at a meeting of the Board of Directors of the Corporation duly and properly called and held on June 17. 2008 Idatel. These resolutions appear in the minutes of this meeting end have not been rescinded or modified. AGENTS Any Agent listed below, subject to any written limitations, is authorized to exercise the powers granted as indicated below: Name and Title or Position A. SrnCt Russell. Supervisor x g, John Sepenoski, Deputy Supervisor X C. x D. E. F. X X X POWERS GRANTED (Attach one or more Agents to each power by placing the letter corresponding to their name in the area before each power. Following each power indicate the number of Agent signatures required to exercise the power.) Indicate A, B, C, Description of Power D, E, and/or F A, B 111 Exercise all of the powers listed in this resolution. 121 Open any deposit or share accountlsl in the name of the Corporation. 131 Endorse checks and orders for the Dayment of money or otherwise withdraw or transfer funds on deposit with this Financial Institution. 141 Borrow money on behalf and in the name of the Corporation, sign, execute and deliver promissory notes or other evidences of indebtedness. 151 Endorse, assign, transfer, mortgage or pledge bills receivable, warehouse receipts, bills of lading, stocks, bonds, real estate or other property now owned or hereafter owned or acquired by the Corporation as security for sums borrowed, and to discount the same, unconditionally guarantee payment of all bills received, negotiated or discounted and to waive demand, presentment, protest, notice of protest and notice of non-payment. 161 Enter into a written lease for the purpose of renting, maintaining, accessing and terminating a Safe Deposit Box in this Financial Institution. 171 Other LIMITATIONS ON POWERS The following are the Corporation's express limitations on the powers granted under this resolution. EFFECT ON PREVIOUS RESOLUTIONS This resolution supersedes resolution dated Indicate number of signatures required 1 If not completed, all resolutions remain in effect. CERTIFICATION OF AUTHORITY I further certify that the Board of Directors of the Corporation has, and et the time of adoption of this resolution had, full power end lawful authority to adopt the resolutions on page 2 and to confer the powers granted above to the persons named who have full power and lawful authority to exercise the same. IApply seal below where appropriate.) ^ If checked, the Corporation is anon-profit corporation. In Witness Whereof, I have subscribed my name to this do ument and affixed the seal of the Corporation on ^u- BOO ~ Id tel. Attest by One Other Officer Secretary ~~ ©19fi5, 199] Bankers Systems, Inc., at. CIOUa. MN Farm CA4 5/1 /2003 /page 7 of 2J RESOLUTIONS The Corporation named on this reaoluNon resdves that 111 The Financial Institution is designated as a depository for the funds of the Corporation and to provide other financial accommodations indicated in this resolution. (21 This resolution shall continue to have effect until express written notice of its rescission or modification has been received and recorded by the Finenciel Institution. Any and all prior resolutions adopted by the Board of Directors of the Corporation and certified to the Financial Institution as governing the operation of this corporation's accountlsl, are in full farce and effect, until the Finenciel Institution receives and acknowledges an express written notice of its revocation, modification or replacement. Any revocation, modification or replacement of a resolution must be accompanied by documentation, satisfactory to the Financial Institution, establishing the authority for the changes. 131 The signature of en Agent on this resolution is conclusive evidence of their authority to act on behalf of the Corporation. Any Agent, so long es they act in a representative capacity as an Agent of the Corporation, is authorized to make any end all other contracts, agreements, stipulations and orders which they may deem advisable for the effective exercise of [he powers indicated on page one, from time to time with the Financial Institution, subject to any restrictions on this resolution or otherwise agreed to in writing. 141 All transactions, if any, with respect to any deposits, withdrawals, rediscounts end borrowings by or on behalf of the Corporation with the Financial Institution prior to the adoption of this resolution are hereby ratified, approved end confirmed. 151 The Corporation agrees to the terms and conditions of any account agreement, properly opened by any Agent of the Corporation. The Corporation authorizes the Financial Institution, at any time, to charge the Corporation for all checks, drafts, or other orders, for the payment of money, that are drawn on the Financial Institution, so long as they contain the required number of signatures for this purpose. 181 The Corporation acknowledges and sprees that the Financial Institution may furnish at its discretion automated access devices to Agents of the Obrporatio~t"1:o fadlitete those powers authorized by this resolution or other resolutions in effect at the time of issuance. The term "automated access tlevice:'.inc~udes, but is notGmited to, credit cards, automated teller machines IATMI, and debit cards. 171 The Corporation acknowledges and `at~fees that the Financial Institution may rely on alternative signature and verification codes issued to or obtained from the Agent named on this resolution. The term "alternative signature and verification codes" includes, but is not limited to, facsimile signatures on file with the Financial Institution, personal identification numbers (PINT, and digital eignaturea. If a facsimile signature specimen has been provided on this resolution, for that are filed separately by the Corporation with the Financial Institution from time to time) the Financial Institution is authorized to treat the facsimile signature as the signature of the Agent(s) regardless of by whom or by what means the facsimile signature may have been affixed so long as it resembles the facsimile signature specimen on file. The Corporation authorizes each Agent to have custody of the Corporation's private key used to create a digital signature and to request issuance of a certificate listing the corresponding public key. The Financial Institution shall have no responsibility or liability for unauthorized use of alternative signature end verification codes unless otherwise agreed in writing. Pennsylvania. The designation of an Agent does not create a power of attorney; therefore, Agents are not subject to the provisions of 20 Pa. C.S.A. Section 5607 et seq. (Chapter 56; Decedents, Estates and Fiduciaries Codel unless the agency was created by a separate power of attorney. Any provision that assigns Financial Institution rights to act on behalf of any person or entity is not subject to the provisions of 20 Pa.C.S.A. Section 5601 et seq. (Chapter 56; Decedents, Estates and Fiduciaries Codel. FOR FINANCIAL INSTITUTION USE ONLY Acknowledged and received on Idatel by linitials) ^ This resolution is superseded by resolution dated Comments: ©1985, 1997 Bankers Systems, Inc., St Cloutl, MN Form CA-1 5/1/2003 /page 2 of 2J Port #: Account#: Desc: Town of Southold General Fund Whole Town PO Box 1179 Southold, NY 11971-0959 /RE CARD it DATE: INTERNAL USE THE SPECIFIED OWNERSHIP WILL REMAIN THE SAME FOR ALL ACCOUNTS. ^ INDIVIDUAL ^ CORPORATION -FOR PROFIT ^ CONVENIENCE ACCOUNT ^ CORPORATION -NONPROFIT ^ JOINT WITH $URVIVOflSMIP ^ PAflTNERSHIP (NOT AS TENANTS IN COMMON) ^ SOLE PROPRIETORSHIP ^ JOINT WITH NO SURVIVORSHIP ^ LIMITED LIABILITY COMPANY IAS TENANTS IN COMMON( ^ TRUST-SEPARATE AGREEMENT DATED: (CHECK APPROPR/ATE OWNERSN/P ABOVE/ ^ REVOCABLE TRUST (CHECK APPROPR/ATE BENfF/C/ARY OES/GNATiON ABOVE( IMPORTANT ACCOUNT OPENING INFORMATION: FEDERAL LAW REQUIRES US TO OBTAIN SUFFICIENT INFORMATION TO VERIFY YOUR IDENTITY. VOU MAV BE ASKED SEVERAL OUESTIONB ANO TO PROVIDE ONE OR MORE FORMS OF IDENTIFICATION TO FULFILL THIS REQUIREMENT. IN SOME INSTANCES WE MAV USE OUTSIDE SOURCES TO CONFIRM THE INFORMATION. THE INFORMATION VOU PROVIDE IS PROTECTED BV OUR PRIVACY POLICY AND FEDERAL LAW. ENTER NON-INDIVIDUAL OWNER INFORMATION ON PAGE 2. THERE IS ADDITIONAL OWNER/SIONER INFORMATION SPACE ON PAGE Z. NAME SCOtt Russell RELATIONSHIP TO ACCOUNT (OWNER AND/OR SIGNER, ETC.1 Supervisor ADDRESS 9009b' Rbihfd 25, Southold, NY MAILING ADDRESS IIF DIFFERENT) PO BOX 1179 Southold, NY 11971-0959 HOME PHONE WORK PHONE 631) 765-4333 MOBILE PHONE E-MAIL BIRTH DATE SSN/TIN IDENTIFICATION: TYPE, ISSUE BY, VALUE . ISSUE DATE, EXP. DATE P. IDENTIFICATION 121: TYPE, ISSUE BV, VALUE ISSUE DATE, EXP. DATE 15 E: EXP: MOTHER'S MAIDEN NAME EMPLOYER'S NAME EMPLOYER'S ADDRESS NAME John Se enoski ACCOUNTSOWNOR AND/OR SIGNER, ETL.1 Deputy Supervisor ADDRESS 53095 Route 25, Southold, NY MAILING ADDRESS IIF DIFFERENT) PO BOX 1179 Southold, NY 11971-0959 HOME PHONE WORK PHONE (631) 765-4333 MOBILE PHONE E-MAIL BIRTH DATE SSNRIN IDENTIFICATION: TYPE, ISSUE BV, VALUE, ISSUE DATE, EXP. DATE , IDENTIFICATION 111: TYPE, ISBUE BV, VALUE ISSUE DATE, E%P. DATE MOTHER'S MAIDEN NAME EMPLOVEfl'S NAME EMPLOYER'S-ADDRESS ^ IF CHECKED, THIS IS A TEMPORARY ACCOUNT AGREEMENT. NUMBER OF SIGNATURES REQUIRED FOR WITHDRAWAL: 1 THE UNDERSIGNED AUTHORIZE THE FINANCIAL INSTITUTION TO INVESTIGATE CREDIT AND EMPLOYMENT HISTORY ANO OBTAIN REPORTS FROM CONSUMER REPORTING AGENLVIIESI ON THEM AS INDIVIDUALS. EXCEPT AS OTHERWISE PROVIDED BY LAW OR OTHER DOCUMENTS, EACH OF THE UNOEflSIGNED I$ AUTHORIZED TO MAKE WITHDRAWALS FROM THE ACCOUNTI51, PROVIDED THE REQUIRED NUMBER OF SIGNATURES INDICATED ABOVE IS SATISFIED. THE UNDERSIGNED PERSONALLY AND A5, OR ON BEHALF OF, THE ACCOUNT OWNERISI AGREE TO THE TERMS OF, AND ACKNOWLEDGE RECEIPT OF COPVIIESI OF, THIS DOCUMENT AND THE FOLLOWING: ^ TERMS AND CONDITIONS ^ TRUTH IN SAVINGS ^ PRIVACY ^ ELECTRONIC FUND TRANSFERS ^ FUNDS AVAILABILITY ^ COMMON FEAT 5 ^ ~X ~~~ ~ LX ~ ~'' _ J [X ] [X ^ CONVENIENCE SIGNER IIF CHECKED AND ACCOUNT IS INDIVIDUAL AND CONSUMER PURPOSE, THE LAST OF THE ABOVE SIGNERS IS A CONVENIENCE SIGNER.) Fj(~+~ ®1003 Bankers Systems, Inc., SL CIOUO, MN Form MPMP-LAZ-NV 5/28/1003 /page f a/ 2) I L r NAME RELATIONSHIP TO ACCOUNT (OWNER AND/OR SIGNER, ETC.1 ADDRESS MAILING ADDRESS IIF DIFFERENT( HOME PHONE WORK PHONE MOBILE PHONE E-MAIL BIRTH DATE SSNRIN IDENTIFICATION: TYPE, ISBUE BY, VALUE, ISSUE DATE, EXP. DATE IDENTIFICATION 121: TYPE, ISSUE BY, VALUE ISBUE DATE, E%P. DATE p; MOTHER'S MAIDEN NAME EMPLOYER'S NAME EMPLOYER'S ADDRESS NAME RELATIONSHIP TO ACCOUNT (OWNER AND/OR SIGNER, ETC.1 ADDRESS MAILING ADDRESS IIF DIFFERENT( HOME PHONE WORK PHONE MOBILE PHONE E-MAIL BIRTH DATE SSNRIN IDENTIFICATION: TYPE, ISBUE BY, VALUE, ISBUE DATE, EXP. DATE IDENTIFICATION 121: TYPE, ISSUE BY, VALUE E DATE EXP. DATE MOTHER'S MAIDEN NAME EMPLOYER'S NAME EMPLOYER'S ADDREBS /lF NOT A W.S. PERSON,' LERiYFY FORE/GN STATUS SEPARATELY.( TIN: 11-6001939 ® TAXPAYER 1.0. NUMBER (TIN) -THE NUMBER, SHOWN ABOVE IS MV CORRECT T A XPAYER IDENTIFICATION NUMBER. ' ~ } F„J BACKUP WITHNOLDIN6 - 1 AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN NOTIFIED THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO flEPORT ALL INTEREST OR DIVIDENDS, OR THE INTERNAL REVENUE BERVICE HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. ® EXEMPT RECIPIENTS - I AM AN EXEMPT RECIPIENT UNDER THE INTERNAL REVENUE SERVILE REGULATIONS. I CERTIFY UNDEA PENALTES OF PERWflY THE STATEMENTB CHECKED IN THIS SECTION AND TNAT I AM A U.S. PERSON (INCLUDING A U.S. RESIDENT AUENI. X IDATEI NAME Y EIN PHONE MOBILE PHONE EMAIL TYPE OF ENTITY STATE/COUNTRY B DATE OF ORGANIZATION NATUflE OF BUSINESS ADDRESS MAILING ADDRESS IIF DIFFERENT) AUTHORIZATION/ flESOIUTION DATE PREVIOUS FINANCIAL INST. 8 ^ CASH ^ CHECK 8 ^ CASH ^ CHECK S ^ CASH ^ CHECK ^ ATM ^ DEBIT/CHECK CARDS IND. REQUESTED: ^ ^ ^ ^ 1 SS#: Chex Systems SS#: SS#: SS#: OFAC Verified ~--^I-~• 4 ©2003 Bankers Bystema, Inc., S[. Cloud, MN Form MPMP-LAZ-NY 5/28/2003 /{uge 2 0! 2/ THIRD PARTY CUSTODY AGREEMENT THIS THIRD PARTY CUSTODY AGREEMENT ("Agreement"), made and executed this ~~' day of June, 2008 between The Town of Southold, New York located at 53095 Route 25, Southold, New York 11971 in the County of Suffolk, State of New York (the "Local Government"), and American Community Bank (the "Bank"), having branch offices at Glen Cove, and Southold, NY, and Manufacturers and Traders Trust Company, having offices at One M&T Plaza, Buffalo, New York 14203 (the "Custodian"). WITNESSETH WHEREAS, the Local Govemment desires to maintain or continue to maintain public deposits with the Bank; WHEREAS, the Bank desires to obtain such deposits and to provide security therefor as required by the New York General Municipal Law, the New York Banking Law and other applicable statutes; WHEREAS, the Custodian agrees to provide safekeeping services and to hold any securities pledged by the Bank in a custodial account established for the benefit of the Local Government as secured party pursuant to this Agreement; NOW, THEREFORE, in consideration of the mutual promises set forth hereafter, the parties hereto agree as follows: Schedule of Deposits and Reouired Security Attached as Exhibit A hereto is a schedule of the maximum amount of the Deposits anticipated by the Local Govemment and the Bank during the periods indicated and the Collateral Requirement to be provided by the Bank during each such period. The obligation of the Bank to provide Eligible Collateral pursuant to this Agreement shall not be less than the Collateral Requirement shown in Exhibit "A" unless the Bank requests and obtains the Local Government's written consent at least three (3) Business Days before the Collateral Requirement is reduced. The Local Government and Bank may, at any time during the term of this agreement, agree to amend Exhibit "A". Any such amendments to either increase or decrease the Collateral Requirements shown in Exhibit "A" shall be confirmed in writing by both the Bank and the Local government at least three (3) Business Days before the new Collateral Requirement becomes effective. A copy of any amendments made pursuant to this section shall be furnished to the Custodian. 2. Security Requirements a. The Bank, to secure the timely payment of Uninsured Deposits heretofore or hereafter made by the Local Government, including any interest due thereon, shall provide the Local Government with Eligible Collateral having an Adjusted Market Value equal to the Collateral Requirement. Whenever Eligible Securities are provided pursuant to this paragraph, the Bank hereby grants to the Local Government a pledge and security interest in and to such Eligible Securities and shall deliver such Eligible Securities to the Custodian in the manner prescribed in section 3 of this Agreement. The security interest of the Local Government in Eligible Securities shall terminate upon the transfer of such Eligible Securities from the Account. Eligible Letters of Credit and Eligible Surety Bonds provided pursuant to this paragraph shall be subject to the prior approval of the Local Government unless the Local Government has approved in writing the form of an Eligible Letter of Credit or Eligible Surety Bond to be issued by a specific entity or the form of such Eligible Letter of Credit or Eligible Surety Bond is attached hereto as an Exhibit. b. At least monthly if Option A under Exhibit A is elected or daily if Option B under Exhibit A is elected and the Bank advises the Custodian of the amount of Uninsured Deposits, the Custodian will determine the Adjusted Market Value of the Eligible Collateral provided pursuant to this Agreement. If the Adjusted Market Value of such Eligible Collateral is less than the Collateral Requirement, the Custodian shall notify the Bank and the Bank shall, upon such notice, be required to provide additional Eligible Collateral having a Adjusted Market Value equal to or greater than such deficiency no later than one Business Day after receipt of such notice. If the Adjusted Mazket Value of the Eligible Collateral provided pursuant to this Agreement exceeds the Collateral Requirement, the Custodian, at the direction of the Bank, shall transfer securities from the Account, or in the case of other Eligible Collateral, cause or consent to a reduction in the amount thereof, to the extent of such excess. c. The Bank may substitute Eligible Collateral ("Substitute Collateral") for any Eligible Collateral previously provided pursuant to this Agreement so long as the Substitute Collateral has an Adjusted Market Value equal to or greater than the Eligible Collateral which it will replace. The Bank shall give Written or Oral Instructions thereof to the Custodian of any proposed substitution. In the event that the Custodian determines that the Substitute Collateral described in such notice consists exclusively of Eligible Securities having sufficient Adjusted Market Value, the Custodian, at the direction of the Bank, shall transfer the Eligible Securities out of the Account against delivery to the Account on the same Business Day of the Substitute Collateral. In the event the Substitute Collateral described in such notice consists of an Eligible Letter of Credit or Eligible Surety Bond, the prior consent of the Local Government shall be required before the Bank or Custodian may complete the substitution described in such notice unless the Local Government has, in writing, previously approved and consented to the form and issuer of the Eligible Letter of Credit and/or Eligible Surety Bond to be provided as Substitute Collateral. 3. Custodv of Eligible Securities a. The Bank and Local Government hereby appoint the Custodian as custodian of all Eligible Securities at any time delivered to the Custodian pursuant to this Agreement. The Custodian hereby accepts appointment as such Custodian and agrees to establish and maintain the Account and appropriate records identifying the Eligible Securities as pledged by the Bank to the Local Government. The Account shall be kept separate and apart from the general assets of the Custodian and will not, in any circumstances, be commingled with or become part of the backing for any other deposit or liability of the Custodian. The Custodian, in performing its duties and responsibilities pursuant to this Agreement, shall act as Custodian for, and agent of, the Local Government. b. The Bank and Local Government agree that Eligible Securities delivered to the Custodian for deposit in the Account may be in the form of credits to the accounts of the Custodian at the Book Entry System or a Depository or by delivery to the Custodian of physical certificates in a form suitable for transfer or with an assignment in blank to the Local Government or Custodian. The Bank and Local Govemment hereby authorize the Custodian on a continuous and ongoing basis to deposit in the Book Entry System and/or the Depositories all Eligible Securities that may be deposited therein and to utilize the Book Entry System and/or Depositories and the receipt and delivery of physical securities or any combination thereof in connection with its performance hereunder. Eligible Securities credited to the Account and deposited in the Book Entry System or Depositories or other financial intermediaries will be represented in accounts of the Custodian that include only assets held by the Custodian for customers, including but not limited to accounts in which the Custodian acts in a fiduciary, agency or representative capacity. Eligible Securities that are not held in the Book Entry System, Depositories or through another financial intermediary will be held in the Custodian's vault and physically segregated from securities and other non-cash property belonging to the Custodian. c. The Custodian shall provide the Local Government and the Bank each month with a statement identifying all Eligible Securities in the Account, the Market Value thereof as of the date of such statement. Upon request, the Custodian shall provide the Local Government and Bank with a written confirmation within three (3) Business Days of any day on which Eligible Securities are transferred to and from the Account. Such confirmation shall identify the specific securities that are the subject to the confirmation and state the Market Value thereof as of the date of such transaction. d. The Account shall not be subject to any security interest, lien or any right of set- off by or against the Custodian. e. With respect to all Eligible Securities held in the Account, the Custodian by itself, or through the use of the Book Entry System or the appropriate Depository, shall, unless otherwise instructed to the contrary by the Bank: (i) collect all income and other payments reflecting interest and principal on the Eligible Securities in the Account and credit such amounts to the account of the Bank; (ii) forward to the Bank copies of all information or documents that it may receive from an issuer of Eligible Securities which, in the opinion of the Custodian, are intended for the beneficial owner of the Eligible Securities including, without limitation all proxies and other authorizations properly executed and all proxy statements, notices and reports; (iii) execute, as Custodian, any certificates of ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection with the collection of bond and note coupons; (iv) hold directly, or through the Book Entry System or Depositary, all rights issued with respect to any Eligible Securities held by the Custodian hereunder; and (v) upon receipt of written instrnction from the Bank, the Custodian will exchange Eligible Securities held hereunder for other securities and/or cash in connection with (a) any conversion privilege, reorganization, recapitalization, redemption in kind, consolidation, tender offer or exchange offer, or (b) any exercise, subscription, purchase or other similar rights. 4. Events of Default In the event the Bank shall fail to pay the Local Government any amount of the Deposits by the Local Government covered by this Agreement in accordance with the terms of such Deposit, or should the Bank fail or suspend active operations, the Deposits in such Bank shall become due and payable immediately and the Local Government shall have the right to unilaterally demand delivery of all Eligible Securities in the Account by notice to the Custodian and to sell such securities at public or private sale. In the event of such sale, the Local Government, after deducting all legal expenses and other costs, including reasonable attorneys fees, from the proceeds of such sale, shall apply the remainder towards any one or more of the liabilities of the Bank to the Local Government and shall return the surplus, if any, to the Bank. 5. Representation and Warranties (a) Representations of the Bank. The Bank represents and warrants that: (1) it is the legal and actual owner, free and clear of all liens and claims, of all Eligible Securities pledged pursuant to this Agreement; (2) the form of this Agreement was approved by its board of directors; (3) this Agreement was executed by an officer of the Bank who was authorized by the Bank's board of directors to do so and will at all times be maintained as an official record of the Bank; (4) all securities pledged pursuant to this Agreement are Eligible Securities and that all letters of credit and surety bonds obtained by the Bank in satisfaction of its obligations hereunder and of which the Local Government is the beneficiary are Eligible Collateral; (5) the Bank is a bank or trust company located and authorized to do business in the State of New York; (6) all acts, conditions and things required to exist, happen or to be performed on its part precedent to and in the execution and delivery of this Agreement exist or have happened or have been performed. (b) Representations of the Local Government. The Local Government hereby represents and warrants that: (1) this Agreement has been legally and validly entered into, does not and will not violate any statute or regulation applicable to it and is enforceable against the Local Government in accordance with its terms; (2) the appointment of the Custodian has been duly authorized and no other action by the Local Government is required and this Agreement was executed by an officer of the Local Government authorized to do so; (3) it will not transfer, assign its interests in or the rights with respect thereto any Eligible Securities pledged pursuant to this Agreement except as authorized pursuant section 4 of the Agreement. (4) all acts, conditions and things required to exist, happen or to be performed on its part precedent to and in the execution and delivery of this Agreement exist or have happened or have been performed. 6. Concerning the Custodian a. The Custodian shall not be liable for any loss or damage, including counsel fees, resulting from its action or omission to act or otherwise, except for any loss, damage, claim or expense arising out of its own negligence or willful misconduct, and shall have no obligation hereunder for any loss or damage, including counsel fees, which are sustained or incurred by reason of any action or inaction by the Book Entry System or Depository. The Custodian may, with respect to questions of law, apply for and obtain the advice and opinion of competent counsel and shall be fully protected with respect to anything done or omitted by it in good faith and conformity with such advice or opinion. The Local. Government and Bank agree, jointly and severally, to indemnify the Custodian and to hold it harmless against any and all costs, expenses, damages, liabilities or claims, including reasonable fees and expenses of counsel, which the Custodian may ' sustain or incdr or which maybe asserted against the Custodian by reason of or as a result of any action taken or omitted by the Custodian in connection with operating under this Agreement, except those costs, expenses, damages, liabilities or claims arising out of the negligence or willful misconduct of the Custodian or any of its employees or duly appointed agencies. This indemnity shall be a continuing obligation of the Local Govemment and Bank notwithstanding the termination of this Agreement. b. The Custodian shall not be responsible for, or considered to be the Custodian of, any security received by it for deposit in the Account until the Custodian actually receives and collects such security directly or by the final crediting of the Custodian's account on the books of the Book Entry System or the appropriate Depository. The Custodian will be entitled to reverse any credits made on the Local Government's behalf where such credits have been previously made and the Eligible Securities are not finally collected. c. The Bank shall pay to the Custodian such fees as may be agreed upon from time to time. d. The Custodian shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and no covenant or obligation shall be implied against the Custodian in connection with this Agreement. e. The Local Government's authorized officer, upon reasonable notice, shall have access to the Custodian's books and records maintained with respect to the Local Government's interest in the Account during the Custodian's normal business hours. Upon the reasonable request of the Local Government, the Custodian shall provide copies of any such books and records to the Local Government or the Local Government's authorized officer at the Local Government's expense. 7. Termination Any of the parties hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall be the earlier of (i) not less than 90 days after the date of giving such notice or (ii) the date on which the Deposits are repaid in full. Such notice shall not affect or terminate the Local Government's security interest in the Eligible Securities in the Account. Upon termination hereof, the Bank shall pay to the Custodian such compensation as maybe due to the Custodian as of the date of such termination and the Custodian shall follow such reasonable Written Instructions of the Bank concerning the transfer of custody of Eligible Securities, collateral records and other items. In the event the Custodian also receives separate Written Instructions from the Local Government concerning the transfer of Eligible Securities, the Custodian shall act pursuant to the Local Government's Written Instructions. Upon the date set forth in the termination notice, this Agreement shall terminate except as otherwise provided herein and all obligations of the parties to each other hereunder shall cease. 8. Miscellaneous (a) The Local Government and Bank each agrees to notify the Custodian in the event that any present Authorized Person ceases to be an Authorized Person or in the event that any other Authorized Persons are appointed and authorized. Until such new notification is received, the Custodian shall be fully protected in acting upon Oral or Written Instructions or signatures of the present Authorized Persons. (b) Any Written Instructions or other instrument in writing authorized or required by this Agreement shall be given to the Custodian and shall be sufficiently given if sent to the Custodian by regular mail to its offices at One M&T Plaza, 9 Floor, Buffalo, New York 14203, Attn: Institutional Ctirstody Services or at such other place as the Custodian may from time to time designate in writing. (c) Any notice or other instrument in writing authorized or required by this Agreement to be given to the Bank shall be sufficiently given if sent to the Bank by regular mail to its address listed at the end of this Agreement or at such other place as the Bank may from time to time designate in writing. (d) Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Local Government shall be sufficiently given if sent to the Local Government by regular mail to its address listed at the end of this Agreement or at such other offices as the Local Government may from time to time designate in writing. (e) In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and unenforceability of the remaining provisions or obligations shall not in any way be affected or impaired thereby and if any provision is inapplicable to any person or circumstances, it shall nevertheless remain applicable to all other persons and circumstances. (f) This Agreement may not be amended or modified in any manner by the Local Government or the Bank except with the written consent of the Custodian. The Custodian may amend or modify this Agreement upon thirty (30) days' prior written notice to the Local Government and the Bank, and continued the use of the services provided by the Custodian under this Agreement to the Local Government and the Bank after the effective date of such amendment or modification shall be deemed to constitute their consent to such amendment or modification. (g) This Agreement shall extend to and be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by any party without the written consent of the other parties. (h) This Agreement shall be construed in accordance with the laws of the State of New York without regard to conflict of law principles thereof. 9. Definitions Whenever used in this Agreement the following terms shall have the following meanings: a. "Account" shall mean the custodial account established with the Custodian for the benefit of the Local Govemment as secured party in accordance with this Agreement. b. "Adjusted Market Value" shall be one hundred percent of Market Value except that: (1) in the case of Eligible Securities enumerated in subparagraphs (v), (vi) and (vii) of Exhibit B, the Adjusted Market Value shall be an amount equal to its Market Value multiplied by 0.9 if such Eligible Security is not rated in the highest rating category by at least one nationally recognized statistical rating agency, but is so rated in the second highest rating category, and an amount equal to its Market Value multiplied by 0.8 if such Eligible Security is not so rated in one of the two highest categories, but is so rated in the third highest rated category; (2) in the case of Eligible Securities enumerated in subpazagraphs (viii), (x) and (xi) of Exhibit B, the Adjusted Market Value shall be an amount equal to its Market Value multiplied by 0.8; (3) in the case of eligible securities enumerated in subparagraph (ix) of Exhibit B, the Adjusted Market Value shall be an amount equal to its mazket value multiplied by 0.7; and, (4) in the case of Eligible Letters of Credit, the Adjusted Market Value shall be the amount of the letter divided by 1.4. c. "Authorized Person" shall be any officer of the Local Government or the Bank designated in writing from time to time as authorized to give Oral Instructions or Written Instructions on behalf of the Local Government or the Bank, as the case maybe. d. "Bank" shall have the meaning set forth in the heading of this Agreement. e. "Book Entry System" shall mean the Federal Reserve/Treasury Book Entry System for receiving and delivering government securities. f. "Business Day" shall mean any day on which the Custodian and the Bank are open for business and on which the Book Entry System and/or the Depositories are open for business. g. "Collateral Requirement" shall mean the amounts required in Exhibit "A" unless the Bank and Local Government agree to a different amount in accordance with this Agreement. h. "Depository" shall include the Depository Trust Company and other securities depositories and clearing agencies (and their successors and nominees) registered with the Securities and Exchange Commission or otherwise regulated by appropriate federal or state agencies as a securities depository or clearing agency. i. "Deposits" shall mean all deposits by the Local Government in the Bank that aze available for all uses generally permitted by the Bank to the Local Government for actually and finally collected funds under the Bank's account agreement or policies. j. "Eligible Collateral" shall mean Eligible Securities, Eligible Letters of Credit and Eligible Surety Bonds. k. "Eligible Letter of Credit" shall mean an irrevocable letter of credit issued in favor of the Local Government for a term not to exceed ninety days by either: (1) a bank (other than the Bank) whose commercial paper and other unsecured short- term debt obligations (or, in the case of a bank which is the principal subsidiary of a holding company, whose holding company's commercial paper and other unsecured short-term debt obligations) are rated in one of three highest rating categories based on the credit of such bank or holding company by at least one nationally recognized statistical rating organization; or, (2) by a bank (other than the Bank) which is in compliance with applicable federal minimum risk-based capital requirements. "Eligible Securities" shall mean any securities of the types enumerated in the Schedule of Eligible Securities attached hereto as Exhibit "B", as such Schedule may be amended by the parties in writing from time to time. Such a Schedule may establish limitations pertaining to the types or amounts of Eligible Securities that maybe provided pursuant to this Agreement. m. "Eligible Surety Bond" shall mean a bond executed by an insurance company authorized to do business in the State of New York, the claims paying ability of which is rated in the highest rating category by at least two nationally recognized statistical rating organizations. n. "Market Value" shall mean, with respect to any Eligible Security held in the Account, the market value of such Eligible Security as made available to the Custodian by a generally recognized source selected by the Custodian or by the Bank or the most recently available closing bid quotation from such source plus, if not reflected in the market value, any accrued interest thereon, or, if such source does not make available a mazket value or a closing bid price for a particular security, the market value shall be as determined by the Custodian in its sole discretion based on information famished to the Custodian by one or more brokers or dealers or based on information otherwise reasonably acceptable to the Local Government; provided however that, if agreed in writing by the parties hereto, the Bank may provide the Custodian with such Market Values. The Market Value of Eligible Letters of Credit and Eligible Surety Bonds shall be the face amount thereof. o. "Margin Percentage" shall equal ~~ 2 percent. p. "Nationally Recognized Statistical Rating Organization" shall mean Moody's, Standard and Poors, Fitch, Duff and Phelps, BankWatch and IBCA and in the case of Eligible Surety Bonds, shall also include Bests. q. "Oral Instructions" shall mean verbal instructions actually received by the Custodian from an Authorized Person or from a person reasonably believed by the Custodian to be an Authorized Person. r. "Substitute Collateral" shall have meaning set forth in paragraph c of Section 2 of this Agreement. s. "Uninsured Deposits" shall mean that portion of the Local Government's Deposits with the Bank that exceeds the insurance coverage available from the Federal Deposit Insurance Corporation. t. "Written Instructions" shall mean written communications actually received by the Bank or the Custodian from an Authorized Person or from a person reasonably believed by the Bank or the Custodian to be an Authorized Person by a computer, telex, telecopier or any other system whereby the receiver of such communications is able to verify by codes or otherwise with a reasonable degree of certainty the identity of the sender of such communication. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the day and year first above written. ACKNOWLEDGED AND AGREED: Town of Southold, NY, as Pledgee and Pledgor,~f ~ ,.~ /~ By: P'" [~~f~i~I~J`r ` Name: Scott Russell Title: Supervisor PO Box 1179 53095 Route 25 Southold, PTI' 11971-0999 Address (6311 765-4333 Telephone Number American Community Bank, as Depositary By: Name: John K. Holland Title: Executive Vice President Chief Financial Officer Address: 300 Glen Street Glen Cove, NY 11542 Telephone Number: (516) 609-0975 Fax Number: (516) 609-0900 MANUFACTURERS AND TRADERS TRUST COMPANY, as Custodian By: Name: Title: EXHIBIT A* OPTION A Schedule of Anticipated Deposit and Collateral Requirements January February March April May June July August September October November December OPTION B Maximum Amount Amount of of Anticipated Collateral Uninsured Deposits Required Collateral Requirement. On any Business Day that the Local Government has Uninsured Deposits in the Bank, the Bank, in accordance with paragraph b of section 2 of this Agreement, agrees to deliver or cause to be delivered to the Custodian for deposit in the Account Eligible Collateral having an Adjusted Market Value equal to the Collateral Requirement. For purposes of this Agreement, Collateral Requirement shall mean the amount of such Uninsured Deposits times the Margin Percentage, if any. * This exhibit should include all official accounts on deposit in the bank including offices and departments whether Option A or B is utilized. EXHIBIT B / Schedule of Eligible Securities V (i) Obligations issued, or fully insured or guaranteed as to the payment of principal and interest, by the United States of America, an agency thereof or a United States government sponsored corporation. (ii) Obligations issued or fully guaranteed by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, and the African Development Bank. (iii) Obligations partially insured or guaranteed by any agency of the United States of America, at a proportion of the Market Value of the obligation that represents the amount of the insurance or guaranty. (iv) Obligations issued or fully insured or guaranteed by the State of New York, obligations issued by a municipal corporation, school district or district corporation of such State or obligations of any public benefit corporation which under a specific State statute maybe accepted as security for deposit of public moneys. . (v) Obligations issued by states (other than the State of New York) of the United States rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization. (vi) Obligations of Puerto Rico rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization. . (vii) Obligations of counties, cities and other governmental entities of a state other than the State of New York having the power to levy taxes that are backed by the full faith and credit of such governmental entity and rated in one of the three highest rating categories by at least one nationally recognized statistical rating organization. (viii) Obligations of domestic corporations rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization. (ix) Any mortgage related securities, as defined in the Securities Exchange Act of 1934, as amended, which may be purchased by banks under the limitations established by bank regulatory agencies. (x) Commercial paper and bankers' acceptances issued by a bank, other than the Bank, rated in the highest short term category by at least one nationally recognized statistical rating organization and having maturities of not longer than 60 days from the date they are pledged. (xi) Zero coupon obligations of the United States government marketed as "Treasury strips".