HomeMy WebLinkAboutCooperative Liquid Assets Securities System JUDITH T. TERRY
TOWN CLERK
REGISTRAR OF VITAL STATISTICS
MARRIAGE OFFICER
Town Hall, 53095 Main Road
P.O. Box 1179
Southold, New York 11971
Fax (516) 765-1823
Telephone (516) 765-1801
OFFICE OF THE TOWN CLERK
TOWN OF SOUTHOLD
THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION WAS ADOPTED BY THE
SOUTHOLD TOWN BOARD AT A REGULAR MEETING HELD ON MARCH 10, 1992:
WHEREAS, New York State General Municipal Law, Article 5-G, Section 199-o
("Section 199-o") empowers municipal corporations (defined in Article 5-G, Section
.119-n to include school districts, boards of cooperative educational services, cities,
towns and villages) and districts to enter into, amend, cancel and terminate
agreements for the performance among themselves (or one for the other) of their
respective functions, powers and duties~ on a cooperative or contract basis; and
WHEREAS, the Town of Southold (the "Participant") wishes to invest certain of its
available investment funds in cooperation with other municipal cooperations and/or
districts pursuant to a municipal cooperation agreement; and
WHEREAS, the Participant wishes to assure the safety and liquidity of its funds;
and
WHEREAS, each member of the Participant's Board has reviewed the proposed
municipal cooperation agreement; and
WHEREAS, to the extent any general or special law would require the Participant
to do so before performing by itself any function, power or duty that may be
performed cooperatively under the proposed cooperation agreement, the Participant
has held all necessary public hearings, conducted all necessary referenda, obtained
all necessary consents of governmental agencies and (upon adoption of the following
resolutions) satisfied all other requirements applicable to the making of contracts;
NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS:
1. The form of Cooperative Liquid Assets Securities System Municipal
Cooperation Agreement (the "Agreement") attached hereto (including, but not limited
to, the Investment Guidelines set forth in Exhibit A thereto) is hereby approved
and adopted.
2. Supervisor Scott L. Harris is hereby authorized and directed to execute
an deliver the Agreement in the name and on behalf of the Participant.
Judith T. Terry~/
Southold Town Clerk
March 11, 1992
JOHN CUSHMAN
Department Head
ACCOUNTING & FINANCE DEPARTMENT
Telephone (516) 765 -4333
Fax (516) 765-1823
OFFICE OF THE SUPERVISOR
TOWN OF SOUTHOLD
March 6, 1992
To: Town Board
SCOTT L. HARRIS
Supervisor
SOUTHOLD TOWN HALL
P.O. BOX 1179, 53095 MAIN ROAD
SOUTHOLD, NEW YORK 11971
In an effort in increase the Townts interest earning, I am
submitting for your consideration a Municipal Cooperative Agreement
which will allow our participation in MBIAts Cooperative Liquid Assets
Securities System (CLASS). I am encloslnff copies of infornmtion
regarding the program for your review. After careful review, I am
recommending that the Board adopt a resolution to approve and adopt
the Agreement, as well as authorize the Supervisor to execute and
deliver the Agreement.
Matt KiernAn has reviewed the program and finds no legal
obstacles in adopting a resolution to participate. In addition, Kevin
Crawford from the Association of Towns is not aware of any problems
with the program (which is in place in several other Towns) and
understands that the program is acceptable to the State Comptroller.
George Sullivan also recommends participation.
cc: George Sullivan
Town Attorney
COOPERATIVE LIQUID ASSETS SECURITIES SYS'-'~4
(C.L.A.S.S.)
CERTIFICATE OF
TOWN OF SOUTHOLO
(insert name of Participant)
RELATING TO AF;END~T OF
MUNICIPAL COOPERATION AGREEMENT
I, the undersigned, am the Supervisor of the
above-named municipal corporation or district (the "Certifying
Participant"), which is a Participant under the MUNICIPAL
COOPERATION AGREEMENT (the "Agreement") made pursuant to New
York General Municipal Law, Article 5-G, Section 119-o, dated
as of September 19, 1989, by and among the Putnam/Northern
Westchester Board of Cooperative Educational Services (the
"BOCES") and each district and municipal corporation, as
defined in Section llg-n of the New York General Municipal Law,
that enters into the Agreement.
I hereby certify, on behalf of the Certifying
Participant, in accordance with a notice, dated May 19, 1992,
from the BOCES, as Agent Participant under the Agreement (the
"Notice"), that the Certifying Participant, pursuant to a
resolution (or ordinance) adopted by its governing board at a
duly called and convened meeting held on June 2 , 1992, a
copy of which is annexed hereto, which resolution (or
ordinance) is in full force and effect on the date hereof,' and
has not been repealed, revoked or amended, has approved the
amendment of the Agreement as described in the Notice and as
set forth in such resolution (or ordinance) (the "Amendment"),
and has authorized the execution and delivery of this
certificate and an amended and restated version of the
Agreement incorporating the Amendment.
I hereby further certify, in accordance with Section
13.1 of the Agreement that: (a) the Certifying Participant has
held any necessary public hearings, conducted any necessary
referenda and obtained any necessary consents of governmental
agencies required as a condition to the approval by it of the
Amendment; (b) the amendment has been approved by a majority
vote of the voting strength of the Certifying Participant's
governing body; and (c) the Certifying Participant has
satisfied any other requirements applicable to its making
contracts, as such requirements may relate to its approval of
the Amendment and the execution on its behalf of the amended
and restated version of the Agreement which incorporates the
Amendmen:. J~ ~,~,~~ ~
Name :' S~6tt~ui~' H~ ~ris -* --
Title: Supervisor
Date:
Southold , New York
June , 3 , 1992
IN WITNESS WHEREOF, the undersigned
caused this Agreement to be executed in its
behalf as of the date written below.
Participant has
name and on its
Name: Scott ~ouis Harris
Title: Supervisor
Dated as of: July 20, 1992
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IN WITNESS WHEREOF, the undersigned Participant has
caused this Agreement to be executed in its name and on its
behalf as of the date written below.
Name: Scott Lof~is Harris '
Title: Supervisor
Dated as of: July 20, 1992
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60999.301
RESOLUTION OF: TOWN BOARD OF THE TOWN OF SOUTHOLD
DATED: JUNE 2, 1992
ADOPTED AT A DULY CALLED AND CONVENED REGULAR~
(select one)
MEETING.
PRESENT:
Supervisor Scott L. Harris
Justice Raymond W. Edwards
Councilman George L. Penny IV
Councilman Thomas H. Wickham
Councilman Joseph J. Lizewski
Councilwoman Alice J. Hussie
Town Clerk Judith T. Terry
Town Attorney Harvey A. Arnoff
Assistant Town Attorney Matthew G.
Kiernan
RBS~: None
The following resolution was offered by Councilman Penny ,
who moved its adoption, seconded by Justice Edwards , to-wit:
RESOLUTION DATED June 2 , 1992.
A RESOLUTION APPROVING CERTAIN AMEI%rDMENTS TO THE
MUNICIPAL COOPERATION AGREEMENT MADE PURSUANT TO NEW
YORK GEI~ERAL MUNICIPAL LAW, ARTICLE 5-G, SECTION
119-O, DATED AS OF SEPTEMBER 19, 1989, BY AND AMONG
PUTNAM/NORTHERN WESTCHESTER BOARD OF COOPERATIVE
EDUCATION;iL SERVICES AS LEAD PARTICIPANT AND THE OTHER
PARTICIPANTS REFERRED TO THEREIN RELATING TO THE
COOPERATIVE LIQUID ASSETS SECURITIES SYSTEM, AND THE
AMENDM~52~T AND RESTATEMENT THEREOF.
WHEREAS, the Board of Cooperative Educational Services of
the Sole Supervisory District of Northern Westchester and
Putnam Counties, also known as the Putnam/Northern Westchester
BOCES (the "BOCES") has heretofore entered into a certain
MUNICIPAL COOPERATION AGREEMENT (the "Agreement") made pursuant
to New York General Municipal Law, Article 5-G, Section 119-o,
dated as of September 19, 1989, by and among the BOCES and each
district and municipal corporation, as defined in Section llg-n
of the New York General Municipal Law, that enters into the
Agreement (with the BOCES, the "Participants") relating to the
Cooperative Liquid Assets Securities System (known as
"C.L.A.S.S."); and
WHEREAS, the Town of Southold is one
(insert name of Participant)
such Participant; and
WHEREAS, Section 13.1 of the Agreement provides that the
Agreement, including the Exhibits thereto, can be amended, from
time to time, in the manner set forth therein; and
WHEREAS, for various reasons, including, but not limited to
changed circumstances relating to C.L.A.S.S., of which the
Agreement is an integral part, the Participants are desirous of
amending the Agreement; and
WHEREAS, among
and/or ommissions,
identified; and
WHEREAS, among such
the Agreement have been
light of other provisions
WHEREAS, among
by Bear, Stearns &
Corporation (also
subsidiary of Municipal
(also known as MBIA),
Agreement dated August
Inc. and the BOCES, as
such reasons is that certain misstatements
in and from the Agreement, have been
reasons is that certain provisions
identified as being unnecessary,
of the Agreement; and
such changed circumstances
Co. Inc. to MBIA Municipal
known as MBIA-MISC),
of
in
is the assignment
Investors Service
a wholly-owned
Bond Investors Assurance Corporation
of its obligations under the Services
10, 1989, between Bear, Stearns & Co.
Agent Participant under the Agreement,
which assignment was heretofore consented to, on behalf of the
Participants, by said Agent Participant; and
WHEREAS, in accordance with paragraph b of said Section
13.1 of the Agreement, this Participant has received notice,
given by or on behalf of the Agent Participant, that, in
accordance with paragraph a of said Section 13.1, by resolution
dated May 19, 1992, duly adopted by a majority of the voting
strength of the governing body of the Agent Participant on said
date, the Agent Participant has approved amendment of the
Agreement in the manner, form and in accordance with the terms
set forth therein, and the preparation of an amended and
restated version of the Agreement incorporating such amendment;
and
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WHEREAS, in accordance with said paragraph b of such
Section 13.1, said notice stated that each Participant has
sixty (60) days from the date of the adoption of such
resolution by the Agent Participant to approve the amendment of
the Agreement in the manner, form and in accordance with the
terms set forth therein; and
WHEREAS, accompanying such notice was a copy of said
resolution of the Agent Participant and a copy of said amended
and restated version of the Agreement; and
WHEREAS, pursuant to paragrap~ c of such Section 13.1, any
Participant which fails to deliver to the Agent Participant a
certificate to the effect that: (a) such Participant has held
any necessary public hearings, conducted any necessary
referenda and obtained any necessary consents of governmental
agencies required as a condition to the approval by it of the
amendment of the Agreement in the manner, form and in
accordance with the terms set forth in said notice; (b) the
proposed amendment has been approved by a majority vote of the
voting strength of such Participant's 'governing body; and (c)
such Participant has satisfied any other requirements
applicable to its making contracts, as such requirements may
relate to its approval of said amendment and the execution on
its behalf of the amended and restated version of the Agreement
which incorporates said amendment, such Participant shall be
deemed to have given notice of its withdrawal from C.L.A.S.S.;
and
3
WHEREAS, this Participant is desirous of approving the
amendment in the manner, form and with the terms set forth in
the notice received from the Agent Participant, of directing
the execution and delivery on
restated version of the agreement
and its certificate as described
participation in C.L.A.S.S.;
NOW THEREFORE, BE IT RESOLVED, as follows:
Section 1. All capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in
the Agreement.
Section 2. In accordance with the aforesaid notice
received from the Agent Participant, as provided in said
its behalf of the amended and
incorporating such amendment
above, and of continuing its
Section 13.1, amendment of
approved:
a. The cover page of
the Agreement,
as follows, is hereby
the Agreement shall be
delete therefrom reference to "Bear Stearns &
and to replace the same with "MBIA-Municipal
Service Corporation."
b. The definition of "Investment Advisor" shall
to read, in its entirety, as follows:
"Investment Advisor" means MBIA-Municipal
Service Corporation, also known as MBIA-MISC.
c. The definition of "Permitted Investments"
amended to read, in its entirety, as follows:
amended to
Co. Inc."
Investors
be amended
Investors
shall be
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"Permitted Investments" means the
set forth under the heading
Investments" in Exhibit A hereto,
time to time be amended in accordance
Agreement.
The definition of "Services Agreement" is
types of investments
"Legally Permitted
as the same may from
with this
Agent Participant
amended from time
and investment
amended to
read, in its entirety, as follows:
"Services Agreement" means the agreement between the
and MBIA-MISC, as the same may be
to time, providing for administrative
advisory services to the Agent
Participant.
e. Ail other references, if any, in the Agreement, whether
direct or indirect, to Bear Stearns & Co. Inc. are, and
shall be deemed to be, references to MBIA-MISC.
f. Section 6.1 of the Agreement is amended to read, in its
entirety, as follows:
6.1. Source of Contributions. Each Participant
convenants that all contributions made to the Joint
Property by it shall be from funds which it is
permitted, pursuant to the provisions of statutes,
local laws, resolutions, ordinances, charters, codes,
rules, regulations, and agreements applicable to such
Participant to invest and otherwise apply in the manner
contemplated by this Agreement.
g. The cross-reference included in Section 6.3 of the
Agreement is corrected to read "Section 3.2 hereof."
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Section 3. As provided in said Section 13.1, amendment of
Exhibit A to the Agreement, entitled: "INVESTMENT GUIDELINES
AND PROCEDURES," as follows, is hereby approved:
a. Paragraph "(a)" under "1) General Objectives"
read, in its entirety:
(a) Legality: invest in investments legally
school districts
shall
only
permissible for both New York State
and municipal corporations.
b. Subparagraph "( iii )" of Paragraph "(a)" under "4 )
Legally Permitted Investments" shall read, in its
ent ir ety:
(iii) With the approval of. the New York State
Comptroller, tax anticipation notes and revenue
anticipation notes issued pursuant to Section 24.00 and
Section 25.00 of the Local Finance Law, respectively,
by any New York State municipal corporation, school
district, or district corporation not participating in
C.L.A.S.S.
c. Subparagraph "(vi )" of Paragraph "(a)" under "4 )
Leqally Permitted Investments" shall read, in its
ent i r ety:
(vi) Such other investments as may from time to time be
legally permissible investments for both school
districts and municipal corporations in the State of
New York.
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and
A
instruments or securities as may from
be legally permissible collateral for
and municipal
new subparagraph "(v)" shall be added to Paragraph
"(b)" under "5) Collateral," which shall read, in its
entirety:
(v) such other
time to time
deposits of both New York school district
corporation moneys.'
"7) Concentration of Investments"
its entirety, and each succeeding
shall be deleted in
section of Exhibit A,
shall be. appropriately renumbered.
Section 4. This Participant hereby finds and determines
represents to the Agent Participant and the other
Participants that: (a) said Participant has held any necessary
public hearings, conducted any necessary referenda and obtained
any necessary consents of governmental agencies required as a
condition to the approval by it of the amendment of the
Agreement in the manner, form and in accordance with the terms
set forth herein; (b) upon this resolution taking effect, the
proposed amendment will have been approved by a majority vote
of the voting strength of such Participant's governing body;
and (c) such Participant has satisfied any other requirements
applicable to its making contracts, as such requirements may
relate to its approval of said amendment and the execution on
its behalf of the amended and restated version of the Agreement
which incorporates said amendment.
- 7 -
Section 5. Upon this resolution taking effect, the
Supervisor Scott L. Harris is hereby directed to execute a
(insert title of designated Participant otticer)
counterpart of such amended and restated agreement on behalf of
this Participant, and to deliver, or to cause to be
a copy of the same to the Agent Participant or its
together with a certificate in the form described in
c of Section 13.1 of the Agreement.
Section 6. This resolution shall take effect immediately.
delivered,
designee,
paragraph
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The question of the adoption of the foregoing resolution
was duly put to a vote on roll call, which resulted as follows:
Supervisor Harris VOTING Yes
Justice Edwards VOTING Yes
Councilman Penny VOTING Yes
Councilman Wickham VOTING Yes
Councilman Lizewski VOTING Yes
Councilwoman Hussie VOTING Yes
VOTING
.- VOT I NG
VOT I NG
' VOTING
VOT I NG
The resolution was thereupon declared duly adopted.
-9-
the
"Participant"), of which I am the Southold Town Clerk
including the resolutions contained therein, held
day of June , 1992 with the original thereof on
I, the undersigned, DO HEREBY CERTIFY:
That I have compared the annexed extract of the minutes of
meeting of the Town Board of the Town of Southold (the
on the 2nd
file in my
transcript
office, and that the same is a true and correct
therefrom and of the whole of said original so far as the same
relates to the subject matters therein referred to.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the seal of said Participant this Srd day of June , 1992.
( CORPORATE
SEAL)
N~me: Judith T. Terry ~'
Title: Southold Town Clerk
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CL S
NIAY 2 61992
May 21, 1992
Dear Class Participant:
Enclosed please find two letters with accompanying packets.
The first packet contains those documents you must have approved by your Board,
signed and dated and returned no later than July 20, 1992.
The second packet contains documents for your records.
We thank you for your cooperation.
Please call on any of us here at MBIA CLASS if you have any questions.
Sincerely,/~ ~"['~'3°"Lt'~ ~
Francie Heller
Executive Vice President
1-800-YES-2 MBIA
MUNICIPAL INVESTORS
SERVICE CORPORATION 1 I3 KING STREET AP. MONK, NEXV YORK 10504 1-800-YES-2 MBIA
CL S
PACKET ONE
May 21, 1992
Dear CLASS Participant:
Enclosed for your immediate attention is the CLASS Cooperation Agreement
Amendment.
This Amendment was discussed and approved at the last quarterly meeting, as
well as at several previous Investment Committee and quarterly meetings.
Please note, the Amendment must be adopted by July 20, 1992 for you to
continue your participation in the CLASS Cooperative.
The Amendment rectifies any errors, omissions, name changes, etc., and provides
clarification for issues that were considered vague or confusing in the original
Agreement.
As you well know, none of these amendments result in any meaningful changes
in any of the operations or procedures pertaining to your participation in the CLASS
Cooperative.
The amendment process will occur annually and is part of an ongoing effort to be
certain that CLASS meets your needs.
Please complete the following steps, prior to July 20, 1992 and return in the self
addressed stamped envelope provided.
1] Complete the attached Resolution authorizing approval of the
Amendment and send to us.
2] Complete and date the attached Certificate and send to us.
3]
Sign and date the two attached copies of "Page 25" of the
New Agreement and send to us.
If you have any questions about this process please contact your CLASS
Marketing Representative. Please send all requested information to:
Ted Gilpin, Vice President-Administration
MBIA-MISC, 113 King Street, Armonk, NY 10504
Francie Huller
Executive Vice President
1-800-YES-2 MBIA
MUNICIPAL INVESTORS
SERVICE CORPORA~I1ON 113 KING STREET ARMONK, NE~Y/YORK 10504 1-800-YES-2 MBIA
PLEDGE AND ASSIGNMENT AGREEMENT
PLEDGE AND ASSIGNMENT AGREEMENT ("Agreement"), dated as of
_~ 10, 19 9__~, made by the CHEMICAL BANK, (the "Pledgor"), to
the Town of Southo]d , as TRUSTEE
(the " Town " or "Trustee").
WHEREAS, the Trustee is the recipient of grant funds ("Grant
Funds") from the New York State Affordable Housing Corporation
("Corporation") (a public benefit corporation established pursuant
to Section 45-b of the New York State Private Housing Finance Law)
and that the Trustee holds said funds in trust for the benefit of
certain eligible home buyers ("Home Buyers") pursuant to separate
conditional grant agreements between the Town and the
Corporation; and
WHEREAS, the Pledgor has been duly designated as a depository
for Grant Funds and interest acCrued thereon and has received or
may receive for deposit additional moneys; and
WHEREAS, the Town as Trustee for the Corporation for the
benefit of said Home Buyers has the legal authority to require and
has requested the Pledgor to collateralize such deposits;
NOW, THEREFORE, subject to the terms and
hereinafter set forth, the parties agree as follows:
SECTION 1. Pledqe and Assiq~ent.
conditions
The Pledgor hereby pledges and assigns to the Trustee, and
grants to the Trustee a security interest in, collateral consisting
of United States Treasury Obligations with respective maturity
periods not to exceed one (1) year in duration (the "Collateral").
SECTION 2.. Security for Obliqations.
This Agreement secures the deposits of Grant Funds held by the
Pledgor in certain deposit accounts (the "Account(s)") listed on
the annexed Schedule of Accounts ("Schedule"), as the same may be
amended from time to time, now or hereafter existing under this
Agreement.
BECTION 3. Delivery of Collateral.
Ail certificates or instruments, if any, representing or
evidencing the Collateral shall be delivered to the Custodian as
identified in Section 8 hereof, and held thereby on behalf of
Trustee pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank.
SECTIO~ 4. Minimum Collateral Value: Substitutions;
Evaluations.
The market value of the Collateral shall equal one hundred
three percent (103%) of the estimated amount of the aggregate
collected balances of the Accounts. If at any time during the
period of this Agreement, the aggregate market value of the
Collateral shall fall below said amount, the Pledgor shall pledge
to the Trustee and deliver to the Custodian pursuant hereto
additional Collateral to cover the amount of such deficiency. In
addition, the Pledgor may substitute for any Collateral subject to
this Agreement other Collateral, equivalent in value to the
Collateral for which substitution is being made. All additional or
substituted Collateral pledged to the Trustee pursuant to this
Section 4 and delivered to the Custodian pursuant to Section 8
hereof shall be accompanied by proper instruments of transfer or
assignment executed by the Pledgor. Any Collateral released by the
Trustee shall be redelivered to the Pledgor and be accompanied by
proper instruments of reassignment executed by the Trustee in favor
of the Pledgor. On a monthly basis the Custodian shall evaluate
and provide the Trustee and Pledgor with a statement of the
aggregate market value of the Collateral ("Evaluation"). In
preparing such Evaluations, the Custodian may rely upon data listed
in daily publications such as the Wall Street Journal or the New
York Times, or provided by electronic data investment pricing
services such as or comparable to those furnished by Telerate
Systems, Inc., with respect to the market value of the United
States Treasury Obligations with respective maturity.periods not in
excess of one (1) year which constitute the Collateral.
SECTIO~ 5. Events of Default.
Each of the following events shall constitute an event of
default hereunder ("Event of Default"):
(a) The Pledgor shall, without cause, refuse to pay to
the Trustee, on demand, any collected balance in the
Accounts plus interest upon maturity or upon demand (as
applicable), or
2
(b) The Pledgor sh~ll b~ deemed insolvent by O~der of
the Federal Deposit Insurance Corporation, who shall then
distribute the assets of Pledgor.
SECTION 6. Remedies upon Default.
If an Event of Default shall have occurred and be continuing,
then Trustee may without being required to give any notice to the
Pledgor, sell or cause Custodian to sell the Collateral, or any
part thereof, at any public or private sale or at any broker's
board or on any securities exchange, for cash, upon credi~ or for
future delivery. Trustee may authorize any such sale to be
restricted to prospective bidders or purchasers who will represent
and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or
sale thereof. Upon consummation of any such sale, Trustee shall
have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Except as the Trustee
may be required by the Corporation, Trustee shall not be obligated
to make any sale of Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of Collateral may have
been given. Trustee shall pay or cause Custodian to pay the
Pledgor, its successors or assigns, any amount of cash received
from the sale of the Collateral that exceeds the collected balances
of the Accounts, if any.
SECTION 7. Return of Collateral.
To the extent that Trustee withdraws moneys from the Accounts
or the Pledgor fulfills its obligations hereunder by paying to the
Trustee the collected balances of the Accounts upon maturity or
upon demand (as applicable), then in such instance,
(a) this Agreement shakl terminate and be of no further
force and effect, and
(b) all Collateral shall be released immediately by
Trustee and shall be redelivered to the Pledgor
accompanied by proper instruments of. reassignment
executed by Trustee in favor of the Pledgor.
SECTION S. Custodian Aqreement.
Trustee has appointed security Pacific National Bank, with an
office at 116 John Street, 5th Floor, New York, New York 10038, as
custodian (the "Custodian") to hold the Collateral. subject to this
Agreement and the Custodian has indicated that it will, upon
receipt of a copy of this Agreement, retain physical possession of
the certificates and instruments representing or ~viden¢ing the
Collateral, segregate the Collateral and act solely in accordance
with the terms and provisions of this Agreement and with written
instructions which may be furnished pursuant hereto
("Instructions"). Except as required in such Instructions, which
shall be duly executed by the appropriate party as provided below,
the Custodian shall not deliver, transfer, sell, assign, pledge, or
redeem the Collateral or any portion or proceeds thereof:
(a) Instructions which certify that an Event of Default
has occurred and any Instructions with respect to
remedies upon an Event of Default shall be executed by
the Trustee.
(b) Instructions with respect to a substitution of
Collateral or to a Pledge and Assignment of additional
Collateral or a return of Collateral shall be executed by
the Pledgor.
(c) Except in connection with the Instructions from the
Pledgor with respect to a substitution or return of
Collateral as provided in Sections 4, 7, and 8(b) hereof,
Collateral may be released and redelivered to the Pledgor
by Custodian solely pursuant to the Instructions of
Trustee.
(d) This Agreement may be terminated, amended, or
modified solely pursuant by Instructions executed by both
parties hereto, or as may otherwise be provided in
Section 10 hereof.
SECTION 9. Bindinq Aqreement; Assiqnment.
This Agreement, and the terms, covenants and conditions
hereof, shall be binding upon aad inure to the benefit of the
parties hereto and their respective successors and assigns, except
that the Trustee shall not be permitted to assign this Agreement or
any interest herein or in the Collateral, or any part thereof, or
otherwise pledge, encumber or grant any option with respect to the
Collateral, or any part thereof without: (a) obtaining the prior
written consent of the Corporation and (b) furnishing prior written
notice thereof to the Pledgor. The foregoing notwithstanding, no
such assignment of Trustee's interest in the Collateral shall be
made or shall be valid without a concurrent and parallel assignment
of Trustee's interest in the Accounts.
SECTION 10. Miscellaneous.
Except as otherwise provided herein, neither this Agreement
nor any provisions hereof may be amended, modified, waived,
discharged or terminated orally nor may any of the Collateral be
released or the pledge or the sequrity interest created hereby
extended, except by an instrument in writing signed by a duly
authorized officer or representative of Trustee and by a duly
authorized officer of the Pledgor. The Section headings used
herein are for convenience of reference only and shall not define
or limit the provisions of this Agreement.
SECTION 11. Severabilit¥.
In case any lien, security interest or other right of any part
hereto shall be held to be invalid, illegal or unenforceable, such
invalidity, illegality, or unenforceability shall not affect any
other lien, security interest or other right granted hereby.
SECTION 12. Notices.
Ail communications and notices hereunder shall be in writing
and, if to the Pledgor, mailed or delivered to it, addressed to 277
Park Avenue, New York, New York 10172, Attention:
, and if to the Trustee, To~n ~ Sou~dmailed or delivered to
it, addressed to it at Town Hall, Main Road, Southold, N.Y. 11971
, Attention: 3ames C. McMahon, CD Administrator ,
or as to each party, at such other address as shall be designated
by such party in a written notice to the other party complying as
to delivery with the terms of this Section. All notices, request,
demands and other communications provided for hereunder shall be
effective when deposited in the mails (postage prepaid) or
delivered by hand addressed as aforesaid. All Instructions,
communications, and notices to the Custodian shall be in writing
and addressed to the Custodian at its address set forth in Section
8 hereof, to the attention of Ms. Anne Mohen. Upon its request,
the Corporation shall be furnished by the sender thereof with a
copy of any such Instructions, communication, notice, request,
demand, or other writing issued~in connection herewith. Such
copies to be furnished to the Corporation shall be addressed to the
New York State Affordable Housing Corporation, 3 Park Avenue, 33rd
Floor, New York 10016, Attention: Director, Affordable Home
Ownership Development Program.
SECTION 13. Costs, ExDenses and Taxes.
Each party agrees to pay its own costs, expenses and taxes due
(including penalties) in connection with the preparation,
execution, delivery, administration and enforcement of this
Agreement, and the instruments and documents to be delivered
hereunder.
5
SECTION 14. Governinq Law.
This Agreement is made under and shall be governed by the laws
of the State of New York in all respects, including matters of
construction, validating and performance.
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to
be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
CHF~{IC~L BANK
By:
Name
Na~e: Scott Louis Harris
T~tle-~-: ~
6
CUSTODIAN'S ACKNOWLEDGMENT
The undersigned Custodian acknowledges receipt of a copy of
the foregoing Pledge and Assignment Agreement between Chemical Bank
and the Town of Southo]d
(,, the Town ,,) (the "Agreement"), certifies that no notice of any
other security agreement or claim affecting the Collateral has been
received by it and that the Collateral has been segregated for the
benefit of the Town as provided in the Agreement, and agrees
to hold the Collateral solely for the benefit of the parties to the
Agreement and subject to the terms specified therein.
Dated: , 19 9__2.
Custodian:
LONG ISLAND SAVINGS BANK
By:
Name:
Title:
Address:
201 Old Country Road
Melville, New York 11747
SCHEDULE OF ACCOUNTS
ACCOUNT NUMBER:
8
DEPOSIT ACCOUNT A~REEMENT
This Deposit Account Agreement ("Agreement"), is made and
entered into this l0th day of March , 1992, by and between the
Town of Southold ("Grantee"), having
offices at 53095 Main Road Southo]d, N.Y. 11971
, as Trustee for the
New York State Affordable Housing Corporation ("Corporation"), for
the benefit of certain eligible home buyers to be named later, for
use as conditional grant subsidies, and the Chemical Bank, having
an office at 277 Park Avenue, 12th Floor, New York, New York 10172
("Bank"),
WITNESSETH
Whereas, the Corporation, a public benefit corporation
established pursuant to Section 45-b of the New York State Private
Housing Finance Law ("Law"), and the Grantee have entered into an
agreement with respect to the provision of a grant awarded under
the Affordable Home Ownership Development Program, pursuant to
Article 19 of such Law, in connection with each affordable housing
project ("Project") designated in the Schedule of Project Accounts
("Schedule") annexed hereto and made a part hereof, in the
respective amounts set forth in the Schedule; and
Whereas the Grantee has determined to establish a master
account ("Master Account") and subaccount(s) ("Subaccount(s)") at
the Bank in connection with grants for such Projects;
Now, therefore, in consideration of the foregoing and the
covenants contained herein, the Grantee and the Bank have agreed to
the following terms and conditions with respect to the Master
Account and the Subaccounts to be established and maintained at the
Bank by the Grantee:
1. Account Structure
There will be established and maintained with the Bank a
Master Account in the name of the "New York State Affordable
Housing Corporation" for the benefit of certain eligible home
buyers to be named later, for use as conditional.grant subsidies.
For each Project specified by the Grantee, a Subaccount shall be
established and maintained with the Bank. The Grantee shall
deposit and identify specific funds attributable to each
Subaccount. The Schedule ttached hereto contains the initial list
a '
of such Subaccounts and the dollar amounts attributable to each
Subaccount as of this date. The Schedule may be amended, from time
to time, upon notice from the Grantee to the Bank
2. Interest
The Subaccounts therein shall earn interest at the Bank's
Government Unit Variable rate. This is a variable rate of interest
which can change periodically. The Bank reserves the
a different index upon notice to the Grantee and with right to Use
the approval
of the Corporation. The Bank will transfer from time to time, at
least on a quarterly basis, all interest earned and credited on the
Subaccounts into the Master Account; and, on a quarterly basis,
will remit the interest to the Corporation.
3. Account Authority and Withdrawals
The Grantee shall execute forms and documents required by
the Bank for the establishment and maintenance of the Master
Account and Subaccounts. Allocations with respect to the Master
Account and Subaccounts shall be made directly by signers
designated by the Grantee. Withdrawals from each Subaccount shall
be made by the Grantee on . .
("~struction(s),,) furnished t~o~ 3~s~ of Instructions
saclsfactory to the Bank m~_ ~2~t~ ~u ~ne Bank in forms
. · ~-~ ~£~n~ee, snell provide the Bank, in
forms satisfactory to the Bank, with a list of all signers
authorized to make withdrawals or act and provide Instructions on
behalf of the Grantee with respect to the Master Account and
Subaccounts. The Grantee shall specify the particular Project(s)
and Subaccount(s) with respect to which each signer is permitted to
make withdrawals or act and issue Instructions. Instructions shall
be in writing, executed by a du~y authorized
furnished to the Bank by any method of delivery signer, and may be
acceptable thereto,
including but not limited to transmission of facsimiles via
electronic telecopier or by tested telex. Withdrawals will be made
by wire transfer, pursuant to the Instructions received by the
Bank. Except with respect to transfers of interest/as provided in
Section 2 hereof, the Bank will not permit the withdrawal of funds
in excess of the principal balance contained in the Subaccount(s)
for which the respective signer is designated, and withdrawals from
each Subaccount will be limited to. one p~r month, an
Instruction requesting a withdrawal is received by the When
Bank by
noon, the transfer will be made by no later than the next banking
day.
4. Representations and Warrantie:~
The Grantee represents and warrants that:' (a) it is the
recipient of grant funds from the Corporation pursuant to Article
2
19 of the New York State Private
Gr~n~ee holds said fu ' Housing
ellglble home bu ..... ~nds in trust fo~ ~{nance Law and that
grant suh~. ~=z~ co be n=~ · ~ une ben~ the
a~r~ ~ules Solely ~. ~-=u ~ater, for n-i~ of certai
respect~.~ ~_ · -" une Gra-~^~ -~ ~ec forth ~ ~u~Onal
and Suh%~_~_r~°~ect; (b) all ~ ~and the cor~2L.~9 a Separate
-~Un~s ren~_~ ~ ~,u~ ~eposlt~ :_~ ~ulon for
Trustee; and .... =uu funds to wh~ ~ ~ ~nco the Mas~_ -
-.c, uhe Gr=.~_ . ~=r aCCount
party for the ' · ~-==e is entitled as
Master Account and SUbaccount(s). account
5. Stateiiltls Trustee, it is the duly authorized
The Bank Shall prOVide the Grantee with monthl b
statements for the Master Account and the SUbaccounts ~= %Y ank
shall be in ~a S~rm generally Used
C~stomers; a · ouatements
mp~e of SUch .... Dy the Banu ~__ .
Exhibit A. A COpy of each m--~.statement is at~_~ ~ similar
the Security Pacific National Bank, 116 John --~a me furnished
~uunly Statement ~h=~o~~eu hereto
York, New York 10038, Attention:Ms. Anne Mohen.
Street, 5th Floor, New
6. The Bank,s Role
The Bank ~s
Grantee,s role as t~ ' ' ' '
responsibility With -espect to
(including without
or With respect to ~ny agreemethe
Corporation and any limitation, the Grante ,.
for the respective agreement of th~ ~ . e s agreeme,~ ~:~_ nts
~- ~rantee With ~-- ~ w&c~ the
Project) other than this Agreement or any
agreement executed ='~y Other party
Bank,s Stan~-~ - by the Bank. '~h~_
has been ~,~%~ Terms and Condit~_-"~° agreement su--~- Other
~-~vlued to the G~=-~- -~,~s rot Commerc~=~ .~w~ments the
7. Genera~ ~~-==e. -~ aCCOunts which
a. This Agreement shall be governed by and COnstrued in
accordance with the laws of the State of New York.
shall notb~ff The invalidity of a
portions ~ ~.ec~ the validit "~ section or portion hereof
~ =n~s Agreement. Y of the remaining sections and
c. This Agreement shall bind and inure to the benefit
of the parties hereto and their
N°._~assignment of an i re.Spective SUCcessors
~n_o_ut.... 1. obta~ni~n~ter~e~st in this A ..... ~ and assigns.
,~_~_~oratlon, and 2. ~.-:~ .~n.e prior wr~%~.=~menu may be
~uposed assi~n~.~ = ~urnlshlng nrio~ ..-.~.~en COnsent o
the fore-~- =-.--=-u uo the r~-~-'-. = ~ wrl=ten .... f the
=~,,g, no assi,,.^ ~,,,~nlng party her~ ,~uul.c.e of such
shall be made or Shall be valid without a - ~,~e Urantee hereing
=.,.,,=nu of any interest jf~'~ N_°twlthstandin-
assignment of the Grantee,s parallel · .
COncurrent and parallel
pledged to the Grantee by the Bank in lnteres.t in any. COllatera1
Connection herewith.
3
d. Except as ot~erwiDe provided in section 1 hereof
with respect to the Schedule, this Agreement may be amended only in
a writing executed by the parties hereto and approved by the
Corporation.
e. The title and heading of any section hereof shall
not be deemed to affect the meaning and construction of any of the
provisions of this Agreement. Words in the masculine or feminine
gender appearing herein may be deemed to refer to either or both
male or female persons, words in the singular may be read as if in
the plural, and words in the plural may be read as if in the
singular, as the sense of the sentence requires.
f. This Agreement may be executed in any number of
counterparts. All such counterparts shall be deemed to be
originals and together shall constitute one and the same
instrument.
GRANTEE:
TOWN OF SOUTHOLD
53095 Main Road
Southold, N.Y. 11971
BANK:
CHEMICAL BANK
Name: Scott Louis Harris Name:
Title: Supervisor Title:
Consented to by the
NEW YORK STATE AFFORDABLE
HOUSING CORPORATION
By:
Name:
Title:
SCHEDULE OF
PROJECT ACCOUNTS
~I~ANT E E:
PROJECT NME
M~STER ACCOUNT
PROJECT ID ~
GRANTEE'S TAX ID ~:
AWi~RD i~MOUNT SUB~CCOUNT ~
5
EXHIBIT B
APPENDIX:
Security Requirements
Notwithstanding anything in this Grant Agreement' to the
contrary, Grant monies are furnished to the Grantee in connection
herewith as funds to be held in trust for the benefit of certain
eligible Home Buyers to be named later, to be used solely for
Eligible Costs in the manner set forth herein. As a prerequisite
for the disbursement of Grant funds to the Grantee and a term of
the trust with respect to the Grant.funds created in connection
with such disbursements, the Grantee is hereby required to comply
with the following conditions:
With respect to such Grant funds and Program Income to be
held in trust, the Grantee shall act for the benefit of
certain eligible Home Buyers to be named later pursuant
hereto.
The Grantee is required to cause an interest bearing and
fully collateralized account ("Master Account") to be
established with the Chemical Bank or such other
depository as the parties hereto may agree upon in
writing ("Depository"). For the purposes hereof, "fully
collateralized" shall mean collateralized as provided
herein at one hundred three percent (103%) of the value
of the aggregate balance of the Master Account to be
established and maintained with the Depository.
Any Grant funds furnished to Grantee for a Project
hereunder shall be deposited in the Master Account which
shall be established with the Depository...
The Master Account shall be used exclusively for deposit
and withdrawal of the Grant funds provided for the
respective Project and the Program Income accrued
thereon.
Se
Within the Master Account a subaccount shall be
established and maintained by the Depository with respect
to each Project for which a disbursement is made
("Project Account"). Monthly statements shall be
provided by the Depository to the Corporation with
respect to the Master Account and to the respective
e
Project Accounts thereunder. The statements shall each
attribute to the appropriate Project Account each
transaction involving Grant funds and Program Income,
including but not limited to any deposit or withdrawal of
funds, and report any accrual of interest and give the
rate thereof. Notwithstanding anything herein to the
contrary, any accrual of interest on the funds in the
Master Account shall be remitted to the Corporation on a
quarterly basis, or on such other basis as the
Corporation may require.
Disbursements of funds from the Master Account shall be
made pursuant to the provisions of this Grant Agreement
in conjunction with the terms of the Project Documents
for the respective Project.
As a requirement for disbursement of Grant funds, the
Grantee and the respective Depository shall enter into
certain agreements in the form attached hereto with
respect to the Master Account and with respect to
collateral to be delivered to a trustee approved by the
Corporation ("Custodian") as security for the funds in
the Master Account.
The Grantee's duties and obligations
respect to these Security Requirements,
set forth in this Exhibit B.
as trustee, with
are definitively
2
FILE:
Chemical Bank
Affordable Housing - General
Affordable Housing Corporation (New York State)/,~.~
March 16, 1992
Mr. John Cushman
Controller
Town of Southold
5395 Main Road
Southold, NY 11971
Dear John:
I am pleased that the Town of Southold has chosen to participate in the CLASS program.
I am confident you will find the enhanced investment safety, total liquidity, compliance
with all collateral requirements and increased income offered by CLASS, to be of
considerable benefit to the Town and its taxpayers.
I have enclosed a copy of your Municipal Cooperation Agreement together with an
original signature page for your files. I have also enclosed a copy of our most recent
economic newsletter.
I look forward to working with you. If you should have any questions, or if I can be of
assistance, please feel free to call me at 1-800-937-2624.
Sincerely,
['Dierdre M. Jordan /
Regional Marketing Representative
Enclosures
MBIA's CLASS Notes
Economic, Market' anti Portfolio Review
Recent shifts in market psychology have created a volatile market of price extremes.
Underlying these wild mood swings is our age old arguement over the current and future
state of the U.S. and world economy. On the home front signs of an economic upturn per-
meate the market like a fresh spring breeze. On the one hand, stronger reported home sales
and a rise in auto sales have suggested that the U.S. economy has bottomed out and will
strengthen throughout the year. On the other, a continued rise in unemployment (which
should intensify with General Motors' recent announcement) and sagging consumer con-
fidence have suggested that we have yet to turn the corner. All this posturing on either side
of the economic coin has lead to our recent bout with volatility and market schizophrenia.
We take the latter view, albeit a guarded one, that the economy still must work through
some pockets of weakness. We believe that for now Federal Reserve Bank policy is on hold
and there is no room to raise rates given the tentative nature of this recovery in a Presiden-
tial election year. Our view of the Treasury Bill market is a positive one with a wary eye
toward supply both from the Treasury and corporate issues. But in the final analysis, we
believe that Treasury bill rates are attractive, and the weighted average maturity should be
increased on market weakness.
CLASS Performonce
vs. 5 Month Treasury Bill Average
& Donoghue's Treasury Funds Average*
Gabelli-O'Connor Fixed Income Management Co February 1992
CONFIDENTIAL
For Participants Only
Not for Distribution
Bear Stearns & Co. Inc.
cooperative Liquid Assets Securities System
MUNICIPAL COOPERATION AGREEMENT
Pursuant to New York General Municipal Law,
Article 5-G, Section 119-o
Dated as of SaDt. 19, 1989
Among
THE DISTRICTS AND MUNICIPAL CORPORATIONS
THAT }{AVE ADOPTED THIS AGREEMENT
as Participants
ARTICLE
ARTICLE
2 1
2 2
2 3
2 4
2 5
2 6
2.7
ARTICLE
TABLE OF CONTENTS
DEFINITIONS .............................
II CONTRIBUTIONS, ADJUSTMENTS AND PAYMENTS
Page
ARTICLE
ARTICLE
ARTICLE
3.1 Term ....... 8
III THE AGENT PARTICIPANT
ARTICLE
IV POWERS OF AGENT PARTICIPANT
4.1 Exercise of Power ............................ 9
4.2 General ........................ 9
4.3 Constraints on Joint Agreements ~~ 12
4.4 Investment Powers ................ 13
4.5 Transactions Involving Affiliates [[[[~[[[[[~[ 13
4.6 No Borrowing ................................. 15
V
REPRESENTATIONS AND WARRANTIES
5.1 District or Municipal Corporation ............ 15
5.2 Approvals · 15
5.4 Execution; Enforceability .................... 15
5.5 Accuracy of Certificates ..................... 15
VI COVENANTS
6.1 Source of Contributions .
16
16
6.3 Resignation of Agent Participant ............. 16
6.4 Supplemental Information ..................... 16
VII PARTICIPANTS
7.1 Admission . 16
7.3 Forced Withdrawal ............................ 17
Adjustments .................................. 6
Suspensmon
of Requests; postponement
of Payments ................................ 7
Records ...................................... 8
ARTICL~
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
ARTICLE
VIII ADVISORS
Powers ..................... ~ ..... ~...
N- er, Designetion .nd Qu,l fioat on'""'"'"""
Committees .....................
Quorum .........................
Action Without Meeting .........
IX STATEMENTS AND REPORTS
Page
17
18
18
18
19
19
2O
2O
9.1 Monthly Statement of Balances ................ 20
9.2 Reports ...................................... 20
ARTICLE X
THE INVESTMENT ADVISOR
10.1 Appointment ............
ARTICLE XI THE ADMINISTRATOR
11.1 Appointment ..................................
11.2 Successors ...................................
ARTICLE XII THE CUSTODIA3~
12.1 Appointment ...
12.3 Successors ...................................
ARTICLE XIII AMENDMENT AND TERMINATION
13.1 A~end~ent ..........
ARTICLE XIV MISCELLANEOUS
14.1 Governing Law ...........................
14.2 Counterparts ...........
14.4 Provisions in Conflict with Law .....
14.5 Gender; Section Headings ............
14.6 No Assignment .......................
14.7 No Partnership ......................
14.8 Construction of Powers ..................
14.9 Notice ..................................
EXHIBITS
[xhibit A Inves=nent Guidelines
21
21
22
22
22
22
23
23
24
25
25
26
26
26
26
27
27
27
MUNICIPAL COOPERATION AGREEMENT made pursuant to
New York General Municipal LaW, Article 5-G, Section 119-o
("Section 119-o"), as of Sept. 19, 1989, by and among
Putnam/Northern Westchester BOCES (the "P/NW BOCES") and
each district and municipal corporation, as defined in
Section l19-n of the New York General Municipal Law
("Section l19-n"), that enters into this Agreement pursuant
to Section 8.1 hereof (collectively, together with the P/NW
BOCES, the ,,Participants").
WITNESSETH:
WHEREAS, each Participant wishes to invest certain
of its available investment funds in cooperation with the
other Participants to enhance its investment returns;
WHEREAS, each Participant wishes to assure the
safety and liquidity of funds invested cooperatively with
the other Participants:
WHEREAS, each Participant wishes to strictly limit
its potential liability under or in connection with this
Agreement;
WHEREAS, each Participant is a district
(including, but not limited to, a school district or a
board of cooperative educational services) or municipal
corporation as defined in Section llg-n;
WHEREAS, Section 119-o empowers districts and
municipal corporations to enter into, amend, cancel and
terminate agreements for the performance among themselves
(or one for the other) of their respective functions,
powers and duties on a cooperative or contract basis;
WHEREAS, this Agreement has been approved by a
majority vote of the voting strength of the governing body
of each Participant; and
WHEREAS, each Participant has, to the extent any
general or special law would require it to do so before
performing by itself any function, power or duty that may
be performed under this Agreement, held all necessary
public hearings, conducted all necessary referenda and
obtained all necessary consents of governmental agencies
and has satisfied all other requirements applicable to the
making of contracts;
NOW, THEREFORE, in consideration of the premises
and the representations, warranties, covenants and
agreements contained herein, each Participant hereby acts
and agrees as follows:
ARTICLE I
DEFINITIONS
"Administrator" means any Person or Persons
appointed, employed or contracted with by the Agent
Participant pureuant to Sections 4.2(f) and 11.1 hereof.
"Advisors" means those persons who have been
designated as Advisors by the Participants pursuant to
Section 8.2 hereof.
"Affiliate" means, with respect to any Person,
another Person directly or indirectly in control of,
controlled by or under common control with such Person, or
any officer, director, partner or employee of such Person.
"Agent Fiscal Officer" means, at any time, the
Fiscal Officer of the Agent Participant at such time.
"Agent Participant" means the P/NW BOCES, but
solely in its capacity as Agent Participant hereunder,
not individually.
and
"Balance" for each Participant means an amount
initially equal to zero that is adjusted pursuant to
Article II hereof to reflect, 'among other things, cash
contributions by such Participant, cash payments to such
Participant, expenses and investment results.
"Business Day" means a day on which banks are not
required or authorized by law to close in New York City.
"Contribution Procedures" means the procedures for
making contributions to the Joint Property adopted from
tine to time by the Agent Fiscal Officer.
"Custodian" means any Person or Persons appointed,
employed or contracted with by the Agent Participant
pursuant to Sections 4.2(e) and 12.1 hereof.
2
"Custody Agreement" =eans.the agreement between
the Agent Participant'and the Custodian as the same may be
amended from time to time.
"Fiscal Officer" of a Participant means, at any
time, the fiscal officer of such Participant who is, at
such time, charged by such Participant with t.he custody,
investment and administration of funds. For purposes of
this Agreement, each Participant shall be deemed at any
time to have only a single Fiscal Officer.
"Investment Advisor" means Bear, Stearns & Co. Inc.
"Investment Guidelines" means the investment
guidelines and auditing procedures set forth in Exhibit A
as the same may be amended from time to time pursuant to
Section 13.1 hereof.
"Joint Liability" means any liability (whether
known, unknown, actual, contingent or otherwise) incurred
in connection with the Joint Property by the Agent
Participant pursuant to this Agreement.
"Joint Agreement" means any agreement entered into
by the Agent Participant pursuant to Section 4.2 hereof.
"Joint Property" means any and all property, real,
personal or otherwise, tangible or intangible, which is
transferred, conveyed or paid to the account of the Agent
Participant by any Participant pursuant to Section 2.2 or
2.3 hereof and all proceeds, income, profits and gains
therefrom that have not been distributed to a Participant
pursuant to Section 2.5 hereof, used to discharge a Joint
Liability or offset by losses and expenses.
"Joint Value" means the value of the Joint
Property net of the amount of the Joint Liabilities as
determined pursuant to Section 2.4 hereof and the Valuation
Procedures.
"Laws" means common law and all ordinances,
statutes, rules, regulations, orders, injunctions,
decisions, opinions or decrees of any government or
political subdivision or agency thereof, or any court or
similar entity established by any thereof.
"Payment Procedures" means the procedures for
re.=uesting payments out of the Joint Property adopted from
time to time by the Agent Fiscal Officer.
"Permitted Investment" me,ns investments of the
following types:
(a) special time deposit accounts in, or
certificates of deposit issued by, a bank or trust
company located and authorized to do business in the
state of New York that are secured by a pledge of:
(i) obligations of the United States,
(ii) any obligation fully guaranteed or
insured as to interest and principal by the United
States acting through an agency, subdivision,
department or division thereof,
(iii) obligations of the state of New York or
(iv) obligations of any municipality, school
district or district corporation of the state of
New York,
(b) obligations of the United States, whether or
not subject to a repurchase agreement, and
(c) obligations of the state of New York, whether
or not subject to a repurchase agreement.
"Person" means any municipal corporation,
district, corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, group,
government, or any political subdivision, department or
agency of any government.
"Services Acreement" means the agreement between
the Agent Participant and Bear, Stearns & Co. Inc., as the
same may be amended from time to time, providing for
investment advisory and administrative services to the
Agent Participant.
"Total Balances" means the aggregate total of the
Participants' Balances.
"Valuation Procedures" means the procedures for
determining the Joint Value adopted from time to time by
the Agent Fiscal Officer.
4
ARTICLE SI
CONTRIBUTIONS f ADJUSTMENTS AND PAYMENTS
2.1. General. Except as otherwise provided in
this Agreement:
(a) no Participant shall have any beneficial
interest in the Joint Property, including earnings;
(b) no Participant can be called upon to share or
assume any Joint Liabilities, including losses in
connection with the Joint Property, or suffer an assessment
of any kind by virtue of its being a Participant;
(c) no Participant is entitled to any preference,
preemptive, appraisal, conversion or exchange rights of any
kind in connection with this Agreement or the Joint
Property;
(d) no Participant shall have any right to call
for any partition or division of any Joint Property; and
(e) each Participant's rights under this Agreement
shall be personal property giving only the rights
specifically set forth in this Agreement.
2.2. Cash Contributions. Unless otherwise
determined by the Agent Fiscal Officer, each Participant
may, from time to time, increase its Balance by making a
payment to the Custodian for the account of the Agent
Participant in accordance with the Contribution
Procedures. Each time that a Participant makes such a
payment, its Balance shall be increased (as of the time
specified in the Contribution Procedures) by the amount of
such payment. The minimum amount that may be contributed
pursuant to this Section 2.2 at any one time shall be the
minimum contribution specified in the Contribution
Procedures.
2.3. Other Contributions. Each Participant may,
from time to time, if previously approved by the Agent
Fiscal Officer, transfer to the Custodian, for the account
of the Agent Participant, property of a type other than
cash that is a Permitted Investment. Each such transfer
must be made in accordance with the terms and conditions
specified by the Agen~ Fiscal Officer. Each time that a
Participant makes such a transfer, it shall receive a
written confirmation of such t~ansf'er and its Balance shall
be increased by the amount, or according to the formula,
specified by the Agent Fiscal Officer. Any approval by the
Agent Fiscal Officer in connection with this Section 2.3
shall be made in the sole discretion of the Agent Fiscal
Officer and may specify such terms and conditions as the
Agent Fiscal Officer may deem to be in the best interests
of the Participants taken as a whole, as evidenced by his
adoption thereof.
2.4. Adjustments. (a) Immediately upon the
determination of the Joint Value on each Business Day
pursuant to Section 2.4(b) hereof or from time to time
pursuant to Section 2.4(c) hereof, the Participants'
Balances shall be increased or decreased proportionately
(and rounded to the nearest whole cent) such that after
such adjustment the Total Balances shall be equal, as
nearly as practical, to the Joint Value as so determined.
(b) The Joint Value
each Business Day at the time
the Valuation Procedures.
shallbe determined once on
and in the manner provided in
(c) In addition, the Agent Fiscal Officer may
determine the Joint Value in the manner provided in the
Valuation Procedures at or as of any additional time that
the Agent Fiscal Officer may deem to be appropriate, as
evidenced by his.so doing.
(d) For purposes of calculating the Joint Value,
the amount of any uncertain or contingent Joint Liability
shall be deemed to be equal to the amount of the reserve,
if any, against such Joint Liability that has been approved
from time to time by the Agent Fiscal officer.
(e) For purposes of calculating the Joint Value,
if the value of any part of the Joint Property is
uncertain, the value of such part of the Joint Property
shall be deemed to be equal to the amount determined from
time to time by the Agent Fiscal Officer.
(f) A Participant's Balance can also be adjusted
as provided in Section 2.7 hereof.
2.5. Payments. (a)
conditions of this Agreement,
Subject to the terms and
(i) each Participant. shall have the right
from time to time to request, in accordance with the
Payment Procedures, the payment to it, or on its behalf, of
any amount (rounded to the nearest whole cent) that is less
than or equal to its Balance at the time that payment is
made pursuant to such request~ and
(ii) upon the receipt of any such request,
the requested amount (rounded to the nearest whole cent)
shall be paid, out of the Joint Property, to, or on behalf
of, such Participant.
(b) Subject to the terms and conditions of this
Agreement, the Agent Fiscal Officer may from tame to time,
in his sole discretion, pay to a Participant, out of the
Joint Property, any amount (rounded to the nearest whole
cent) that is less than or equal to such Participant's
Balance at the time payment is made.
(c) W~enever any payment is made to, or on behalf
of, any Participant out of the Joint Proper~y, such
Participant's Balance shall be reduced by the amount of
such Payment.
2.6. Suspension of Requests; Postponement of
Pa~rments. Each Participant agrees that the Agent Fiscal
Officer may, without prior notice, temporarily suspend the
Participants' right to request payments out of the Joint
Property or postpone the time or date of payment for
requests already made for the whole or any part of any
period (i) during which trading in securities generally on
the New York Stock Exchange or the American Stock Zxchange
or the over-the-counter market shall have been suspended or
minimum prices or maximum daily changes shall have been
established on such exchange or market, (ii) a general
banking moratorium shall have been declared by federal or
New York state authorities or (iii) there shall have
occurred any outbreak, or material escalation, of
hostilities, or other calamity or crisis, the effect of
which on the financial markets of the United States is such
as to make it, in the judgment of the Agent'Fiscal Officer,
impracticable (a) to dispose of the Joint Property because
of the substantial losses which might be incurred or (b) to
determine the Joint Value in accordance with the Valuation
Procedures. Each Participant shall be immediately notified
by telephone or telegraph in the event that such a
suspension or postponement is commenced. Such a suspension
7
or postponement shall not itself directly alter or affect a
Participant's Balance. Such a suspension or postponement
shall take e~fect at such time as is determined by the
Agent Fiscal Officer, and thereafter there shall be no
right to request or receive payment until the first to
occur Of: (a) the time at which the Agent Fiscal Officer
declares the suspension or postponement at an end, such
declaration to occur on the first day on which the period
specified in clause (i) or (ii) above shall have expired;
and (b) the end of the first day on which the Agent Fiscal
officer no longer reasonably believes that the period
specified in clause (iii) above is continuing. Any
Participant that requested a payment prior to any
suspension or postponement of payment may withdraw its
request at any time prior to the termination of the
suspension or postponement.
2.7. Records. The Agent Participant shall, or
shall cause the Administrator to collect, and to maintain
for three years (or such longer period as may be required
under any applicable Laws), written records of all
transactions affecting the Joint Property or the Balances,
including, but not limited to: (a) contributions by and
payments to or on behalf of Participants; (b) acquisitions
and dispositions of Joint Property; (c) pledges end
releases of collateral securing the Joint Property; (d)
determinations of the Joint Value; (e) adjustments to the
Participants' Balances; and (f) the current Balance for
each Participant. There shall be a rebuttable presumption
that any such records are complete and accurate.
ARTICLE III
THE AGENT PARTICIPANT
3.1. Term. The Agent Participant shall continue
to serve as Agent Participant until it resigns pursuant to
this Article III, it withdraws from this Agreement pursuant
to Section 7.2 hereof or this Agreement is amended
(pursuant to Section 13.1 hereof) to name a new Agent
Participant.
3.2. Resignation. The Agent Participant may
resign as Agent Participant only upon giving at least
ninety-day's written notice of such resignation to each of
the other Participants. The Agent Participant may continue
to be a Participant after such .resignation; provided this
Agreement is amended p~rsuant to SeCtion 13.1 hereof to
name a new Agent Participant before this Agreement
terminates pursuant to section 13.2 hereof.
ARTICLE IV
POWERS OF AGENT PARTICIPANT
4.1. Exercise of Power. The Agent Participant,
acting through the Agent Fiscal Officer, is primarily
responsible for executing the provisions of this
Agreement. The Agent Participant shall perform any and all
of its duties under this Agreement through the Agent Fiscal
officer, and every decision made or action taken by the
Agent Fiscal Officer in the name of the Agent Participant
shall be for and on behalf of the Agent Participant acting
on behalf of all the Participants. The Agent Participant
hereby expressly authorizes the Agent Fiscal Officer to
take such actions in the name of and on behalf of the Agent
Participant as he shall deem to be in the best interests of
the Participants taken as a whole. In addition to any
requirements under applicable Laws, the Agent Participant
may require the Agent Fiscal Officer to be bonded upon such
terms as it deems appropriate. If the office of the Agent
Fiscal Officer becomes vacant or if the Agent Fiscal
officer is replaced, the Agent Participant shall promptly
notify all the other Participants. If the office of the
Agent Fiscal Officer becomes vacant, the Agent Participant
shall fill such vacancy in accordance with applicable Laws
as quickly as practicable.
4.2. General. The Agent Participant shall at all
times retain custody of the Joint Property. In connection
therewith, and subject to the terms and conditions of this
Agreement, the Agent Participant shall have the exclusive
power, from time to time, upon such terms and conditions
and for such consideration as the Agent Participant may
deem proper and ~he Investment Guidelines may permit, (i)
to do and perform any or all of the following and (ii) to
negotiate, make, complete, execute, eign, acknowledge,
deliver, amend, waive, submit, record and file any
agreements or other documents in connection with the
following, in each case, as the Agent Participant deems to
be necessary or proper, as evidenced by its so doing:
9
(a) subscribe for, invest in, reinvest in,
purchase or otherwise acquire, hold, sell, assign,
transfer, exchange, distribute or otherwise deal in or
dispose of Permitted Investments as permitted under
applicable Laws;
(b) sell, exchange or otherwise dispose of any
and all Joint Property free and clear of any and all
interests of any and all Participants, at public or private
sale, with or without advertisement; and execute and
deliver any deed, power, assignment, bill of sale, or other
instrument in connection therewith;
(c) exercise all of the rights, powers and
privileges appertaining to the ownership of all or any of
the Joint Property to the same ex'cent that any individual
might, and, without limiting the generality of the
foregoing, to vote or give any consent, request or notice
or waive any notice either in person or by proxy or power
of attorney, with or without the power of substitution, to
one or more Persons, which proxies and powers of attorney
may be for meetings or actions generally, or for any
particular meeting or action, and may include the exercise
of discretionary powers;
(d) enter into the Services Agreement upon terms
(including, but not limited to, indemnification provisions)
approved by a resolution of the governing board of the
Agent Participant;
(e) appoint the Custodian in accordance with
Section 13.1 hereof and enter into the Custody Agreement
upon terms (including, but not limited to, indemnification
provisions) approved by a resolution of the governing board
of the Agent Participant;
(f) with respect to enforcing rights in
connection with the Toint Property: (i) collect, sue for,
receive and receipt for all sums of money or other property
due; (ii) consent to extensions of the time for payment, or
to the renewal of any securities, investments or
obligations; (iii) engage or intervene in, prosecute,
defend, compromise, abandon or adjust by arbitration or
otherwise any actions, suits, proceedings, disputes,
claims, demands or things relating to the Joint Property;
(iv) foreclose any collateral, security or instrument
securing any investments, notes, bills, bonds, obligations
10
or contracts that are part of ~r relate to the Joint
Property; (v) exercise any power of sale, and convey good
title thereunder free of any and all interests of any and
all Participants, and in connection with any such
foreclosure or sale, purchase or otherwise acquire title to
any property; (vi) be a party to the reorganization of any
Person and transfer to and deposit with any corporation,
committee, voting trustee or other Person any securities,
investments or obligations of any Person which form a part
of the Joint Property, for the purpose of euch
reorganization or otherwise; (vii) participate in any
arrangement for enforcing or protecting the interests of
the holders of such securities, investments or obligations
and to pay any assessment levied in connection with euch
reorganization or arrangement; (viii) extend the time (with
or without security) for the payment or delivery of any
debts or property and to execute and enter into releases,
agreements and other instruments; (ix) pay or satisfy any
debt or claims; and (x) file any financing statements
concerning the Joint Property with the appropriate
authorities to protect the Joint Property from any
potential claim of any creditors of any of the Participants;
(g) with respect to the payment of expenses, on
audit of the auditing official or body of the Agent
Participant: (i) pay charges or expenses necessary or
incidental to or proper for carrying out any of the
purposes of this Agreement; (ii) reimburse others,
including the Agent Participant, for the payment thereof;
and (iii) pay appropriate compensation or fees from the
Joint Property to Persons, including the Agent Participant,
with whom the Agent Participant has, pursuant to this
Agreement, contracted or transacted business;
(h) purchase and pay for, entirely out of Joint
Property, insurance policies insuring the Participants,
Advisors, Agent Participant, Agent Fiscal Officer and
officers, employees and agents of the Participants
individually, against all claims and liabilities of every
nature arising out of or in connection with this Agreement,
including, but not limited to, Joint Liabilities that arise
out of any action alleged to have been taken or omitted by
any such Person in such capacity, including any action
taken or omitted that may be determined to constitute
negligence, whether or not the Participants would have the
power to indemnify such Person directly against such
liability; provided that the Participants each have the
1!
right to provid such insurance;,
(i) to the extent permitted by applicable Laws,
indemnify or enter into agreements with respect to
indemnification with any Person with whom the Agent
Participant has dealings in connection with the Joint
Property, including, without limitation, the Investment
Advisor, the Administrator, and the Custodian; provided,
however, that the Agent Participant shall not indemnify any
Person against any loss, damage, cost, exl0ense, liability
or claim arising from such Person's willful misfeasance,
bad faith or negligence;
(j) deposit (through a Permitted Investment) any
monies or funds included in the Joint Property, end
intended to be used for the payment of expenses hereunder,
with one or more banks or trust companies located and
authorized to do business in the State of New York, whether
or not such deposits will draw interest; such deposits to
be subject to withdrawal in such manner as the Agent
Participant may determine;
(k) pay out of the Joint Property all taxes or
assessments, of whatever kind or nature, validly and
lawfully imposed upon or against or in connection with the
Joint Property or income thereon or any part thereof;
settle and compromise disputed tax liabilities; and for the
foregoing purposes make such returns and do all such other
acts and things as may be necessary or desirable;
(1) such other actions as the Agent Participant
shall deem necessary, proper or desirable to carry out its
responsibilities under this Agreement, as evidenced by its
taking such action.
4.3. Constraints on Joint Agreements. (a) The
Agent Participant shall use its reasonable best efforts to
assure that each Joint Agreement entered into by the Agent
Participant pursuant to this Agreement (any other provision
thereof to the contrary not withstanding) provides that:
(i) such Joint Agreement has been made by
the Agent Participant pursuant to this Agreement and is
subject to the terms of this Agreement as the same may be
amended from time to time;
12
(ii) the obligations of the Agent Participant
under such Joint Agreement shall be' non-recourse against
the assets of any Participant other than the Joint Property;
(iii) if at any time a new Person becomes the
Agent Participant under this Agreement, the old Agent
Participant shall be deemed to have assigned such Joint
Agreement to the new Agent Participant, the new Agent
Participant shall be deemed to have assumed such Joint
Agreement and the old Agent Participant shall be released
from all obligations and liabilities as Agent Participant
under or in connection with such Joint Agreement.
(b) Notwithstanding Section 4.3(a), the omission
of any provision req~/ired pursuant to Section 4.3(a) shall
not operate to impose personal liability on the Agent
Fiscal officer, the Agent Participant or any other
Participant.
4.4. Investment Powers. The Agent Participant,
acting through the Agent Fiscal Officer, is permitted to
make Permitted Investments only in accordance with this
Agreement. Except as otherwise provided in this Agreement,
the Agent Participant shall have full authority and power
to make any and all Permitted Investments within the
limitations of this Agreement that it, acting through the
Agent Fiscal Officer, in its absolute discretion, shall
determine to be advisable and appropriate as evidenced by
its so doing, regardless of whether such investments may be
held or retained by trustees or other fiduciaries. The
Agent Participant shall have no liability for loss with
respect to Permitted Investments made within the terms of
this Agreement, even if such investments were of a
character, or in an amount, not considered proper for the
investment of trust funds by trustees or other fiduciaries.
4.5. Transactions Involving Affiliates. Any
provision of this Agreement to the contrary not
withstanding, except to the extent restricted by any
applicable Law or the Investment Guidelines:
(a) the Agent Participant may approve, enter into
and ratify transactions in which the Investment Advisor is
acting as principal;
(b) without limiting the foregoing, the Agent
Participant may enter into transactions with any
Participant, the Investment Advisor, the Administrator,-the
13
Custodian or any Affiliate, off$cer, director, employee or
agent of any of' the foregoing (except that in no event
shall the Agent Participant enter into any transaction with
any of the officers, directors, employees or agents of any
Participant, including, but not limited to, the Agent
Fiscal officer) if (i) each such transaction has, after
disclosure of such affiliation, been approved or ratified
by the affirmative vote of a majority of the members of the
governing board of the Agent Participant, including a
majority of the members then in office who are not
Affiliates of any Person (other then the Participants es
Pa~cicipants) who is a party to the transaction and (ii)
such transaction is, in the opinion of the Agent Fiscal
officer, as evidenced by a written declaration stating such
opinion, on terms fair and reasonable to the Participants
and at least as favorable to them as similar arrangements
for comparable transactions (of which the Agent Fiscal
Officer has knowledge) with organizations unaffiliated with
the Participants or with the other Person who is a party to
the transaction;
(c) in the absence of fraud, a contract, act or
other transaction, made, done or entered into by the Agent
Participant pursuant to this Agreement (unless entered into
with any of the officers, directors, employees or agents of
any Participant, including, but not limited to, the Agent
Fiscal Officer), is valid, and no Advisor, Participant or
Affiliate, member of the governing board, officer, employee
or agent of any of the foregoing (including, but not
limited to, the Agent Participant) shall have any liability
by reason of one or more of such Persons, individually or
jointly with others, being a party or parties to, being
directly interested in, or being affiliated with, such
contract, act or transaction, or any party thereto,
provided that such interest or affiliation is disclosed to
the Agent Participant and the Agent Participant authorizes
such contract, act or other transaction in writing; and
(d) any Advisor, Participant or Affiliate,
officer, employee, or agent of any of the foregoing may, in
his personal capacity, or in a capacity as trustee,
officer, director, stockholder, partner, member, agent,
advisor or employee of any Person, have business interests
and engage in business activities in addition to those
relating to this Agreement, which interests and activities
may be similar to those contemplated by this Agreement and
may include the acquisition, syndication, holding,
management, operation or disposition of securities,
investments and funds, for such Person's own account or for
14
the account of other Person(s)~ No Person shall have any
obligation to present.to the Agent'Participant any
investment opportunity which comes to him in any capacity
other than solely as Advisor, Agent Fiscal Officer or
Participant, even if such opportunity is of a character
which, if presented to the Agent Participant, could be
taken by the Agent Participant.
4.6. No Borrowing. Neither the Agent Participant
nor the Agent Fiscal Officer shall have the power to borrow
money or incur indebtedness under this Agreement.
ARTICLE V
REPPd~SENTATIONS AND WARP~%NTIES
5.1. District or Municipal Corporation. Each
Participant hereby represents and warrants to the other
Participants that it is a municipal corporation or district
as such terms are defined in Section llP-n.
5.2. Approvals. Each Participant hereby
represents and warrants to the other Participants that this
Agreement has been approved by a majority vote of the
voting strength of its governing body.
5.3. Hearings~ Referenda and Consents. Each
Participant hereby represents and warrants to the other
Participants that it has, to the extent any general or
special law would require it to do so before performing by
itself any function, power or duty that may be performed
under this Agreement, held all necessary public hearings,
conducted all necessary referenda and obtained all
necessary consents of goverrn~ental agencies and satisfied
all other requirements applicable to the making of
contracts.
5.4. Execution; Enforceability. Each Participant
hereby represents and warrants to the o~her Participants
that it has duly executed this Agreement in accordance with
its internal procedures and that this Agreement is binding
upon and enforceable against such Participant.
5.5. Accuracy of Certificates. Each Participant
hereby represents and warrants to the other Participants
that each of the certificates delivered heretofore or
hereafter by such Participant pursuant to this Agreement,
15
as of the date specified therein, is true and complete and
contains no material misstatements ~f fact or omissions
that render them misleading to the Agent Participant or any
other Participant.
ARTICLE VI
COVENANTS
6.1. Source of Contributions. Each Participant
covenants that no contributions made to the JOint Property
by such Participant shall be, in whole or in part: (a) from
any reserve; (b) from funds belonging to any Person other
than the Participant; (c) from funds that could not be used
to pay fees to the Administrator, the Custodian and the
Investment Advisor; or (d) from any funds that must be
maintained in separate bank accounts.
6.2. Truth of Representations. Each Participant
covenants that it shall withdraw from this Agreement
pursuant to Section 7.2 hereof prior to the time that any
of the representations made by it pursuant to Article V
hereof ceases to be true.
6.3. Resignation of Agent Participant. The Agent
Participant covenants that it shall not resign as Agent
Participant except in accordance with Section 3.3 hereof.
6.4. Supplemental Information. Each Participant
covenants that if at any time any certificate delivered by
it pursuant to this Agreement shall at such time be
incomplete or false or contain material misstatements of
fact or omissions that render it misleading (including, but
not limited to, changes in inc,~hent officers), such
Participant shall deliver promptly to the Agent Participant
a new certificate that sets forth the correct information.
ARTICLE VII
PARTICIPANTS
7.1. Admission. Each Participant (including, but
not limited to, the Agent Participant) hereby expressly
agrees that any district or municipal corporation (as
defined in Section llP-n) can enter into this Agreement and
become a Participant upon its: (a) holding any necessary
public hearings, conducting any necessary referenda and
16
obtaining any necessary consents of governmental agencies;
(b) approving this Agreement by a ~ajority vote of the
voting strength of its governing body; (c) satisfying any
other requirements applicable to its making contracts; (d)
delivering to the Agent Participant an executed counterpart
of this Agreement; and (e) delivering to the Agent
Participant a certificate, in a form acceptable to the
Agent Participant, to the effect that the requirements of
clauses (a) through (c) above have been satisfied and
setting forth such other information as t_he Agent
Participant may require.
7.2. Withdrawal. Any Participant except the
Agent Participant may withdraw from this Agreement at any
time upon written notice to the Agent Participant. The
Agent Participant may withdraw only upon at least
ninety-day's prior notice to all the other Participants.
Upon its withdrawal from this Agreement, a Participant
shall cease to have any rights or obligations under this
Agreement. A notice of withdrawal shall be deemed to
constitute a request under the Payment Procedures that an
amount equal to the requesting Participant's Balance be
paid to such Participant. No withdrawal shall become
effective until such Participant's Balance is equal to
zero, and until such time, such Participant shall continue
to possess all the rights, and to be subject to all the
obligations, arising from this Agreement.
7.3. Forced Withdrawal. Any Participant that
breaches any covenant contained in Article V hereof or for
which any of the representations contained in Article VI
hereof ceases to be true, shall be deemed to have given a
notice of withdrawal pursuant to Section 7.2 hereof
immediately upon such breach or cessation, but shall not be
deemed to have requested the payment of its Balance unless
and until it either makes an actual payment request or the
Agent Fiscal Officer makes a final determination that such
a breach or cessation has occurred.
ARTICLE VIII
ADVISORS
8.1. Powers. The Advisors have the power to
advise the Agent Participant through the adoption of
resolutions that set forth non-binding recommendations to
the Agent Participant. The agent Participant has no
17
obligation to comply with any re=ommendation made by the
Advisors. Without limiting the generality of the
foregoing, the Advisors do not have any power to amend this
Agreement, make investment decisions or manage the Joint
Property.
8.2. Ntu~bert Designation and Qualification. The
total D~her of Advisors shall be equal to ~he n~er of
Participants. Each Participant is entitled ~o designate,
from time to time, by notice to ~he Agent Participant, one
individual to serve as an Advisor. Until a Participant
appoints an Advisor (either initially upon its becomming a
Participant or after the end of the ter~ of, the
resignation of, or the removal of, the last Advisor
appointed by it), the office of the Advisor that it has the
power to appoint shall be vacant. The designation of any
individual as an Advisor by a Participant shall not become
effective unless and until (a) such individual has accepted
such designation in writing, (b) such individual has agreed
in writing to be bound by the terms of this Agreement and
(c) such Participant has delivered to the Agent Participant
a certificate, in a form acceptable to the Agent
Participant, to the effect that such individual is the
Fiscal Officer of such Participant and is authorized by
such Participant to se=ye as an Advisor under this
Agreement. The Advisors, in their capacity as Advisors,
shall no= be required to devote their entire time to their
duties under this Agreement.
8.3. Term. Each Advisor shall hold office after
his designation and qualification until the first to occur
of: (a) his resigning, (b) his being removed, (c) his
dying, (d) his becoming bankrupt, (e) his being adjudicated
incompetent or otherwise losing the capacity to discharge
the duties of the office of an Advisor and (f) his ceasing
to serve as the Fiscal Officer of the Participant who
designated him as an Advisor.
8.4. Resignation and Removal. Any Advisor may
resign by an instrument in writing signed by him and
delivered to the Agent Participant and such resignation
shall be effective upon such delivery, or at a later date
according to the terms of such instrument. Any Advisor may
be removed for or without cause at any time by notice to
the Agent Participant by the Participant that designated
such individual as an Advisor. The designation by a
Participant of a new individual as an Advisor pursuant to
i£
Section 8.2 hereof shall be deemed to remove any incumbent
Advisor appointed by such Participa'nt effective upon the
qualification of such new individual as an Advisor.
8.5. Committees. The Advisors may, by resolution
or resolutions passed by a majority of the total n~her of
Advisors, designate one or more committees, each committee
to consist of three or more Advisors. The Advisors may
designate one or more Advisors ss alternative members of
any committee, who may replace any absent or disqualified
member at any meeting of the committee. Except as
otherwise provided in this Agreement, any such committee,
to the extent provided in the resolution of the Advisors
which designated such committee, shall have and may
exercise all the powers and authority of the Advisors.
8.6. Meetings. (a) Regular meetings of the
Advisors (or any committee) may be held without notice at
such places and times as shall be determined from time to
time by resolution of the Advisors (or such committee).
Special meetings of the Advisors (or a committee) may be
called by the Agent Participant at any time, and shall be
called by the Agent Participant upon the request of any two
Advisors (or committee members), on at least two days'
notice to each Advisor (or committee member) and shall be
held at the time and place stated in the call of the
meeting. The Advisors (or committee members) shall cause
minutes to be prepared which accurately reflect the
discussions and actions at each such meeting.
(b) For purposes of this Section 8.6, (i) a
waiver of notice in writing, signed by the individual
entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the timely
giving of such notice, and (ii) attendance of an individual
at a meeting shall constitute a waiver of notice of such
meeting unless such individual attends such meeting for the
express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground
that the meeting Qas not properly called or convened.
(c) Advisors (or committee members) may
participate in a meeting of the Advisors (or a co~mittee)
by utilizing conference telephone or similar co~munications
equipment by means of which all individuals participating
in the meeting can hear each other at the same time, and
such participation in a meeting shall constitute presence
in person at such meeting.
19
8.7. Quorum. A majority of the total nu~er of
Advisors (or committee members)'shal~ constitute a quorum
for the transaction of business by the Advisors (or
committee). .If a quoru~ shall be present, the act of a
majority of the Advisors (or committee members) present
shall be the act of the Advisors (or committee), except as
otherwise provided by this agreement (and/or the resolution
designating such committee). If at any meeting of the
Advisors (or any committee) there shall be less than a
quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum is obtained, and
no further notice thereof need be given other than by
announcement at the meeting which shall be so adjourned.
Advisors (or committee members) who are interested
(personally, as an Affiliate of an interested Person or
otherwise) in any action to be taken may be counted for
quorum purposes and shall be entitled to vote.
8.8 Action Without Meeting. Unless prohibited by
any applicable Laws, any action required or permitted to be
taken at any meeting of the Advisors (or of any committee)
may be taken without a meeting and without notice if all
the Advisors (or committee members) consent thereto in
writing, and the writing or writings are filed with the
minutes of proceedings of the Advisors (or committee). Any
such written consent shall be effective as of the date
specified therein, or if no date is specified, on the date
when the last consent is expressed.
ARTICLE IX
STATEMENTS AND REPORTS
9.1. Monthly Statement of Balances. Within 15
days of the end of each month, the Agent Participant shall,
or shall cause the Administrator to, prepare and submit to
each Person who was a Participant during such month a
statement disclosing any activity in its Balance and a
closing Balance for such month.
9.2. Reports. The Agent Participant shall, or
shall cause the Ad=inistrator to, prepare at least annually
(i) a report of operations containing a statement of the
Joint Property and the Joint Liabilities and statements of
operations and of net changes in net assets prepared in
conformity with generally accepted accounting principles
20
consistently applied and (ii) an opinion of an independent
certified public accountant on ~uch~financial statements
based on an examination of the books and records of the
Agent Participant with respect to the Joint Property made
in accordance with generally accepted auditing standards.
A signed copy of such report and opinion shall be filed
with the Agent Fiscal Officer within ninety (90) days after
the close of the period covered thereby. Copies of such
reports shall be mailed promptly to each Person who is a
Par~icipant at the close of the period covered ~hereby.
The Administrator shall, in addition, cause to be prepared,
at least quarterly~ an interim report containing an
unaudited statement of the Joint Property and the Joint
Liabilities as at the end of such quarterly period and
statements of operations and changes in net assets for the
period from the beginning of the then current reporting
year to the end of such quarterly period. Within thirty
(30) days after the end of such quarter, a copy of such
report shall be sent to each Person who is a Participant at
the close of such quarterly period.
ARTICLE X
THE INVESTMENT ADVISOR
10.1. Appointment. The Agent Participant, acting
through the Agent Fiscal Officer, is ultimately responsible
for making all investment decisions regarding the Joint
Property in accordance with the Investment Guidelines.
Consistent with the Agent Participant's ultimate
responsibility as stated herein, the Agent Participant may
contract with the Investment Advisor, subject to the
approval of the governing board of the Agent Participant.
Although the Agent Participant may not delegate the
authority to make investment decisions to a Person who is
not its Fiscal Officer, the Agent Fiscal Officer may obtain
advice from the Investment Advisor before making such
investment decisions. The Investment Advisor may also
serve as the Administrator and/or the Custodian.
10.2. Sub-Investment Advisors. The Agent
Participant may also authorize the Investment Advisor to
employ one or more Sub-Investment advisors from time to
time. Any Sub-Investment advisor may perform such of the
acts and services of %he Investment Advisor, and upon such
terms and conditions, as may be agreed upon between the
Investment Advisor and such Sub-Investment Advisor.
21
ARTICLE XI
THE ADMINkSTRATOR
11.1. Appointment. The Agent Participant is
primarily responsible for the general supervision and
administration of the Joint Property. However, the Agent
Participant-is not required personally to perform all of
the aclministrative tasks required under this Agreement and,
consistent with the Agent Participant's ultimate
responsibility as stated herein, the Agent Participant
shall appoint, subject to the approval of the governing
board of the Agent Participant, an Administrator for
purposes of this Agreement and may grant or delegate such
administrative authority to perform ministerial functions
to the Administrator or to any other person the services of
whom are obtained by the Administrator; provided that no
investment discretion can be delegated to the
Administrator. The Agent Participant may appoint one or
more persons to serve jointly as Co-Administrators. The
Administrator may also serve as the Investment Advisor
and/or the Custodian.
11.2. Successors. In the event that, at any
time, the Administrator shall resign or shall be terminated
pursuant to the provisions of the Services Agreement, the
Agent Participant may appoint a successor thereto in
accordance with Section 11.1 hereof.
ARTICLE XII
THE CUSTODIAN
12.1. Appointment. The Agent Participant is
responsible for assuring the security of the Joint
Property. To fulfill such duty, the Agent Participant
shall at all times employ as Custodian a bank or trust
company that qualifies under applicable New York Law as a
custodian for investments of Participants and has been
approved by a resolution of the governing board of the
Agent Participant. The Custodian may also serve as the
Investmen% Advisor and/or the Administrator.
12.2. Sub-Custodians. The Agent Participant may
also authorize the Custodian to employ one or more
Sub-Custodians from time to time that qualify under
applicable New York Law as custodians for investments of
22
Participants and have been approved, by a resolution of the
governing board of the. Agent Participant. Any
Sub-Custodian may perform such of the acts and services of
the Custodian, and upon such terms and conditions, as may
be agreed upon between the Custodian and such Sub-Custodian.
12.3. Successors. In the event that, at any
time, the Custodian shall resign or shall be terminated
pursuant to the provisions of the Custody Agreement, the
Agent Participant shall appoint a successor ~hereto in
accordance with this Section 12.1.
ARTICLE XIII
AMENDMENT AND TERMINATION
13.1. Amendment. This Agreement, including the
Exhibits hereto, can be amended by the Participants from
time to time as follows:
(a) A majority of the voting strength of the
Agent Participant's governing body shall adopt a
resolution setting forth the proposed amendment and
declaring its advisability.
(b) The Agent Fiscal Officer shall promptly,
and in any event within five business days, notify each
Participant (i) of the terns of the proposed amendment,
(ii) of the date on which such resolution was adopted,
and (iii) that each Participant has sixty (60) days
from the date of the adoption of such resolution by the
Agent Participant to approve the proposed amendment.
(c) Sixty (60) days after the date of the
adoption of such resolution, each Participant shall be
deemed to have given notice of withdrawal pursuant to
Section 7.2 hereof, unless it has theretofore delivered
to the Agent Participant an executed counterpart of the
proposed amendment and a certificate, in a form
acceptable to the Agent Participant, to the effect
that: (i) such Participant has held any necessary
public hearings, conducted any necessary referenda and
obtained any necessary consents of governmental
agencies; (ii) the proposed amendment has been approved
by a majority vote of the voting strength of such
Participant's governing body; and (iii) such
Participant has satisfied any other requirements
applicable to its making contracts.
23
(d) The proposed.amendment shall become
effective once the withdrawal of every Participant
deemed to have given notice of withdrawal under Section
13.1(c) in connection with the proposed amendment has
become effective.
13.2. Termination. (a) This Agreement may be
terminated at any time pureuant to a duly adopted amendment
hereto. This Agreement shall terminate automatically if:
(i) at any time after December 21, 1989,
there are fewer than 2 Participants; or
(ii) this Agreement is not amended to name
a new Agent Participant on or before the day that
is i=~ediately prior to the date on which the
resignation or withdrawal of the Agent Participant
would otherwise become effective.
(b) Upon the termination of this Agreement
pursuant to this Section 13.2:
(i) The Agent Participant shall carry on no
business in connection with the Joint Property except
for the purpose of satisfying the Joint Liabilities and
winding up its affairs in connection with the Joint
Property;
(ii). The Agent Participant shall proceed to
wind up its affairs in connection with the Joint
Property, and all of the powers of the Agent
Participant, the Agent Fiscal Officer and the Advisors
under this Agreement shall continue until the affairs
of the Agent Participant in connection with the Joint
Property shall have been wound up, including, but not
limited to, the power to fulfill or discharge
obligations under the Joint Agreements, collect amounts
owed, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining
Joint Property to one or more persons at public or
private sale for consideration which may consist in
whole or in part of cash, securities or other property
24
of any kind, discharge or p~y Joint Liabilities, and do
all other acts appropriate to l£quidate its affairs in
connection with the Joint Property; and
(iii) After paying or adequately providing
for the payment of all Joint Liabilities, and upon
receipt of such releases, indemnities and refunding
agreements as the Agent Participant deems necessary for
its protection, the Agent Participant may distribute
the remaining Joint Property, in cash or in kind or
partly in each, among.the Participants according to
their respective proportionate Balances.
(c) Upon termination of this Agreement and
distribution to the Participants as herein provided, the
Agent Participant shall execute and lodge among the records
maintained in connection with this Agreement an instrument
in writing setting forth the fact of such termination, and
the Agen~ Participant, Agent Fiscal Officer, Participants
and Advisors shall thereupon be discharged from all further
liabilities and duties hereunder, and the rights and
benefits of all Participants hereunder shall cease and be
cancelled and discharged; provided that Section 2.7 hereof
shall survive any termination of this Agreement.
(d) If this Agreement is terminated pursuant to
Section 13.2(a) (ii) hereof, the resignation and/or
withdrawal of the Agent Participant shall be postponed
until the instrument contemplated by Section 13.2(c) hereof
has been executed and lodged among the records maintained
in connection with this Agreement.
ARTICLE XIV
MI$CELLA3~EOUS
14.1. Governing Law. This Agreement is executed
by the Participants and delivered in the State of New York
and with reference to the Laws thereof, and the rights of
all parties and the validity, construction and effect of
every provision hereof shall be s~bject to and construed
according to the laws of the State of New York.
14.2. Counterparts. This Agreement may be
executed in several counterparts, each of which when so
executed shall be deemed to be an original, and such
counterparts, together, shall cgnstitute but. one and the
same instrument, which shall be suff%ciently evidenced by
any such original counterpart.
14.3. Reliance by Third Parties. A~y Person
dealing with the Agent Participant shall be entitled to
rely upon a certificate executed by a Person who, according
to the records maintained hereunder, appears to be the
Agent Fiscal Officer, with respect to any of the following
matters: (i) the number or identity of Advisors or
Participants; (ii) the identity of the Agent Paz~icipant or
the Agent Fiscal Officer; (iii) the due authorization of
the execution of any instrument or writing; or (iv) the
existence of any fact or facts which in any manner relate
to this Agreement.
14.4. Provisions in Conflict with Law. The
provisions of this Agreement are severable, and if any one
or more of such provisions (the "Conflicting Provisions")
are in conflict with any applicable Laws, the Conflicting
Provisions shall be deemed never to have constituted a part
of this Agreement and this Agreement may be amended
pursuant to Section 13.1 hereof to remove the Conflicting
Provisions; provided, however, that such conflict or
amendment shall not affect or impair any of the remaining
provisions of this Agreement or render invalid or improper
any action taken or omitted (including, but not limited to,
selection of the Agent Participant and the designation of
Advisors) prior to the discovery or removal of the
Conflicting Provisions.
14.5. Gender; Sectio~ Headings. (a) Words of
the masculine gender shall mean and include correlative
words of the feminine and neuter genders and words
importing the sinTalar number shall mean and include the
plural number and vice versa.
(b) Any headings preceding the texts of the
several Articles and Sections of this Agreement and any
table of contents or marginal notes appended to copies
hereof, shall be solely for convenience of reference and
shall neither constitute a part of this Agreement nor
affect its meaning, construction or effect.
14.6. No Assignment. No Participant may sell,
assign, pledge or otherwise transfer any of its rights or
benefits under this Agreement to any other Person, and any
purported sale, assignment, pledge, or other transfer shall
be null and void.
26
14.7. No Partnership.. Notwithstanding any
provision hereof to the contrary, {his Agreement does not
constitute an association of two or more Persons to carry
on as co-owners a business for profit, and none of the
Participants intends this Agreement to constitute a
partnership or any other joint venture or association.
Furthermore, none of the Participants has any authority
hereunder to personally bind or act as agent for another
Participant in any manner whatsoever, except to the extent,
if any, expressly provided elsewhere herein.
14.8. Construction of Powers. In construing the
provisions of Section 4.2 hereof, the presumption shall be
in favor of a grant of power to the Agent Paz~cicipant and
the Agent Fiscal Officer. Neither the Agent Participant
nor the Agent Fiscal Officer shall be required to obtain
any court order to deal with the Joint Property.
14.9. Notice. Unless otherwise specified in this
Agreement, all notices required to be sent under this
Agreement: (a) shall be in writing, (b) shall be deemed to
be sufficient if given by depositing the same in the United
States mail, postage prepaid, addressed to the person
entitled thereto at his address as it appears on the
records maintained by the Agent Participant and (c) shall
be deemed to have been given on the day of such mailing.
IN WITNESS WHEREOF, the Agent Participant has
caused this Agreement to be executed in its name and on its
· behalf as of the date first written above.
PUTNAM/NORTHERN WESTCHESTER BOCES
Name: /Lois T. Vetare
Title: Board President
27
IN WITNESS WHEREOF, ~he undersigned Par~icipan~
has caused =his Agreemen= ~o'be executed in i=s name and on
i=s behalf as of ~he da=e wri=~en below.
Title:
Da=ed as of: March 10, 1992
28
EXHIBIT A
INVESTMENT GUIDELINES AND PROCEDURES
1 ) General Objectives
{a) Legality: invest only in investments legally per-
missible for school districts.
(b)
Safety: minimize risk by managing portfolio
investments so as to preserve principal and
maintain a stable asset value.
(c) Liquidity: manage portfolio investments to ensure
that cash will be available as required to finance
Participants' operations.
(d) Yield: maximize current income to the degree
consistent with legality, safety and liquidity.
2) Maximizing Yield
Knowledge of market conditions is to be maintained
daily. Current interest yields by type of investment together
with forecasts of future interest trends will be reviewed and
analyzed daily to determine what investments will maximize
earnings in a manner consistent with legality, safety and
liquidity. An active management policy will be pursued, mostly
with obligations of the United States, which means that
securities may not be held to maturity but instead may be sold
prior to maturity to capture, in the form of capital gains,
increases in the price of such securities.
3 Enaurin9 Liquidity
Cash flow pro)ectlons based on the nature and expected
timing of the various receipts and payments of Participants will
be prepared at least annually and used to determine amounts
available for investment and investment maturities. These
projections will be updated as needed to ensure cash
availability.
4) Legally Permitted Investments
(a) Types o£ legally permitted investments.
iTM ·
{i) Obligations of the United States.
(ii) Obligations of the State of New York.
(iii)
With the approval of the New York State
Comptroller, tax anticipation notes and
revenue anticipation notes issued pursuant to
Section 24 or Section 25 of the Local Finance
Law by any school district not participating
in CLASS, any municipal corporation or any
district corporation.
(iv)
Obligations of the United States or the State
of New York purchased by CLASS in a
repurchase transaction (REPO}.
(v)
Collateralized time deposit accounts in a
Permitted Bank, or collateralized
certificates of deposit issued by a Permitted
Bank. A Permitted Bank is a bank or trust
company located and authorized to do business
in the State of New York, including branches
of foreign banks if such branches are subject
to examination by the New York State
Department of Banking and also to the reserve
and other financial requirements generally
applicable to New York State chartered banks
and trust companies.
(vi)
Such other'investments as may from time to
time to time be legally permissible
investments for school districts in the State
of New York.
(b) Obligations of the United States are:
United States Treasury bills, notes, and
bonds, including STRIPS issued under the
Separate Trading of Registered Interest and
Principal of Securities program of the United
States Treasury; and
(ii)
other obligations of the United States which
by their terms are full faith and credit
obligations of the United States.
(c) Obligations of United States agencies and United
States government-sponsored enterprises, including the
Government National Mortgage Association (GNMA), are not at
present obligations of the United States in which school
districts are legally permitted to invest.
- 2
(d) Obligations of the State of New York are
obligations which by their terms are general obligations of the
State of New York.
5 ) Collateral
(a) The amount of any bank time deposit or certificate
of deposit (plus, in each case, accrued interest) which is not
covered by FDIC insurance (the "Uninsured Balance") must be
secured by eligible collateral having a market value at all
times equal to 102% of the Uninsured Balance. CLASS must have
the right to require any deficiency in collateral to be repaired
by prompt delivery to its custodian bank of additional
collateral.
(b) Eligible collateral consists of:
obligations of the United States;
(ii) obligations of the State of New York;
(iii) obligations which are fully guaranteed
or insured as to the payment, when and as
due, of principal and interest by the United
States acting through an agency, subdivision,
department or division thereof; and
(iv)
obligations of any municipal corporation,
school district or district corporation
the State of New York.
of
(c) The market value of all collateral accepted by
CLASS shall be determined at least once each Business Day.
6) Maturity of Investments
(a) The maturity of any investment held by CLASS will
be a function, among other factors, of the yield curve and other
market conditions, the cash requirements of Participants as
estimated on the basis of the cash flow projections used by
CLASS, the maturities of available investment alternatives, and
the average maturity of all other investments held by CLASS.
CLASS may invest in securities having a remaining term to
maturity of more than one year (measured from the day the
determination is made). However, the weighted average maturity
of all investments held by CLASS will generally be one year or
less, but this may vary from time to time based on factors such
as those mentioned herelnabove.
(b) For purposes of determining compliance with
paragraph 6(a), the maturity o£ Investments in repurchase
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agreements is the term of such agreements, not the maturity of
the securities which are subject to an obligation to resell
pursuant to such agreements, and the maturity of bank or trust
company time deposit and certificates of deposit is the stated
maturity of such deposits or certificates, not the maturity of
the securities which, collateralize them.
(c) All bank or trust company time deposits and
certificates of deposit will have a stated term of one year or
less.
(e) All obligations of municipal corporations, school
districts and district corporations of the State of New York
will have a remaining term to maturity o£ one year or less at
the time they are purchased by CLASS (tn the case of tax or
revenue anticipation notes).
(f) All repurchase agreements will have a stated term
of 30 days or less.
7 ) Concentration of Investments
(a) Concentration of investments by type will depend,
among other factors, on market conditions, on availability in
terms of desired maturities, collateral and creditworthiness, on
market yields, and on the effect of applying the single
institution limits set forth below. Normally the bulk of the
investments held by CLASS, measured by market value, will
consist of United States obligations and New York State
obligations, with lesser proportions consisting of investments
in repurchase agreements (measured by reference to the purchase
price paid by CLASS under such agreements) and bank and trust
company time deposits and certificates of deposit. This
investment concentration guideline may, however, vary from time
to time depending on factors such as those mentioned hereinabove.
(b) No repurchase agreement will be entered into with
any financial institution if upon the entering into of such
agreement all repurchase agreements between CLASS and such
financial institution would represent more than (i) $10 million
in value, or (ii) 15% of the market value of all investments
held by CLASS, whichever is greater. Compliance with this
requirement shall be determined by reference to the purchase
price paid by CLASS under such agreements.
(c) No time deposit will be opened with any bank or
trust company or certificate of deposit purchased from any bank
or trust company if upon such opening or purchase the aggregate
principal balance (plus accrued interest) of CLASS time deposits
with and certificates of deposit purchased from such bank or
trust company would exceed (1) $10 million, or ii) 1S% of the
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market value of all· investments held by CLASS, whichever is
greater.
8 ) Repurchase Agreements
{a) The market value of securities held by CLASS which
are subject to an obligation to resell pursuant to a repurchase
agreement shall at all times be equal to 102% of the repurchase
price payable to CLASS under such repurchase agreement. The
repurchase price is the price payable to CLASS by the seller of
the securities at the end of the term of the repurchase
agreement, CLASS must have the right to require any deficiency
in collateral to be repaired by prompt delivery to its custodian
bank of additional collateral.
(b) The market value of securities subject to an
obligation to resell pursuant to a repurchase agreement shall be
determined at least once each Business Day.
(c) Generally, repurchase transactions will not be
entered into for long-term bonds or other securities whose
liquidity is uncertain or whose market value is especially
volatile.
(d) So-called "hold-in-custody" or "premise" repurchase
transactions may not be entered into. These are transactions
where the seller of the securities retains possession or control
of the securities purchased. This means, among other things,
that repurchase agreements may not be entered into with the
custodian bank of CLASS.
9) Creditworthiness of Financial Institutions
(a) Repurchase agreements may be entered into only with
creditworthy banks and securities firms. This assessment of
creditworthiness may not take the nature or terms of tke
securities being purchased into account.
{b} Time deposits may be maintained only with, and
certificates of deposits may be purchased only from,
creditworthy banks and trust companies. This assessment of
creditworthiness may not take the nature or terms of the
collateral for such deposits or certificates into account.
(c) The financial statements of such banks, trust
companies and securities firms (and of their parent holding
companies, if any) must be reviewed at least quarterly for
creditworthiness. In the case of banks and trust companies,
financial statements for the fourth quarter should include the
call report for that quarter.
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(d) All trading partners must be creditworthy. The
financial statements of principal trading partners (and of their
parent holding companies, if any) must be reviewed at least
annually for creditworthiness.
(e) The custodian bank employed by CLASS for the
safekeeping of its investments must be a safe and sound banking
institution. Its financial statements and call reports must be
reviewed at least quarterly for safety and soundness.
(f) Repurchase agreements will be entered into only
with admitted primary dealers in government securities reporting
to the Federal Reserve Bank of New York.
(g) Repurchase agreements will not be entered into with
a securities firm unless that firm has a commercial paper rating
from Moody's or Standard ~ Poor's of P1 or A-l, respectively (or
an equivalent rating from another nationally recognized rating
agency), or, if that firm ts unrated, its parent holding company
has such a commercial paper rating.
(h) Repurchase agreements will not be entered into with
a bank or trust company, nor will certificates of deposit be
purchased from it or time deposits be maintained with it, unless
that bank or trust company:
(i) is subject to regulation and examination by the
New York State B~nking Department, and
(ii) has a certificate of deposit or other
short-term debt rating from Moody's or Standard g Poor's of Pl
or A-l, respectively (or an equivalent rating from another
nationally recognized rating agency), or, if that bank or trust
company is itself unrated, its parent holding company has such a
rating for its commercial paper.
(i) The creditworthiness of securities firms will be
assessed, at a minimum, in terms of capital adequacy and
leverage (debt to capital ratio). Capital should always be at
least $50 million.
(j) The creditworthiness (or safety and soundness) of
banks and trust companies wiil be assessed, at a minimum, in
terms of the following standards:
- Capital adequacy: to be determined by reference
to primary capital as a percentage of assets;
- Asset quality: to be determined by reference to
scheduled items shown on the most recent call report as a
percentage of total assets;
- § -
- Earnings or profitability:
return on equity and return on~ assets; and
to be measured by
- Liquidity: to be determined by reference to cash
and cash equivalents as a percentage of total assets.
10) Market Value
(a) Wherever possible, the market value of obligations
issued, guaranteed or insured by the United States will be
determined from such nationally recognized pricing service as is
employed by the custodian bank of CLASS. In all other cases, the
market value of such obligations will be the average of the bid
and asked prices for such obligations as quoted in The Wall
Street Journal (Eastern Edition) for the Business Day preceding
the day on which the determination of such market value is made
(plus accrued interest to and including such Business Day); if
the securities are not so quoted on such day, their market value
will be determined as of the next preceding day on which they
were so quoted.
(b) Wherever possible, the market value of obligations
of the State o£ New York and of New York State municipal
corporations, school districts and district corporations will be
determined from such nationally recognized pricing service as is
employed by the custodian bank of CLASS. In all other cases, the
market value' of such obligations will be the average of the
highest and lowest bid side indications obtained from three
dealers in such obligations.
(c) The market value of time deposits shall be the
balance in the account on the day on which such market value is
determined (plus accrued interest to the date of determination),
and the market value of certificates of deposit shall be the
principal amount of the certificate on the day on which such
market value ts determined (plus accrued interest to the date of
determination).
1 1 ) Operatincj Procedures
(a) The relationship between CLASS and its custodian
bank and between CLASS and any investment adviser employed by
the Agent Participant must be in writing and approved by the
Board of Education o£ the Agent Participant. All repurchase
transactions must be pursuant to written agreements with the
sellers in such transactions. All certificates of deposit must
be purchased pursuant to written agreements with the banks in
question.
(b) Payments for securities purchased, whether
ordinary purchases or repurchase transactions, will be made on
- 7 -
behalf of CLASS only against delivery of the securities to the
custodian bank of CLASS, whether by delivery in physical form or
by book-en'try to the Federal Reserve Bank account of the
custodian bank.
(c} Delivery of securities sold, whether in ordinary
sales or in repurchase transactions, will be made on behalf of
CLASS only against delivery of the purchase or repurchase price
to the custodian bank of CLASS in federal or {t£ in accordance
with generally accepted market practice} in clearing house
funds, provided that in the case of securities in physical form
(but only if this is in accordance with generally accepted
market practice} such delivery may be made against written
receipt with payment to be made by the close of business on the
day of such delivery.
(d) Except where market or competitive conditions do
not allow sufficient time to do so, price quotes from at least
three competing institutions will be obtained for each purchase
or sale of securities, for each certificate of deposit and time
deposit, and for each repurchase transaction. This requirement
does not apply to the purchase of United States obligations at
initial auction, nor to the purchase of New York State
obligations in the initial distribution thereof.
(e) All investments will be documented in accordance
with generally accepted market practice. At a minimum, all
transactions will be the subject of a confirmation in writing
delivered to CLASS. Ail such documentation will be retained for
audit purposes.
(f) The Agent Participant will establish and maintain a
system of internal controls, a data base or record setting forth
investments made, transaction dates, terms and other relevant
portfolio management information, and records by individual
Participants of Participant contributions to and withdrawals
from CLASS.
(g) The Agent Participant will maintain a daily record
of investments (asset record) held by CLASS and a daily ledger
record of transactions engaged in by CLASS. The asset record
will be verified no less often than monthly against the records
maintained by the custodian bank of CLASS.
(h) The custodian bank of CLASS wilt be required by
agreement with the Agent Participant to report daily all CLASS
transactions in the custody account.
(i) The preparation, and distribution of investment
reports is covered in the Municipal Cooperation Agreement to
which these Investment Guidelines and Procedures are attached.
- 8 -
( 12 ) Audit Procedures
(a) As part of the scope of their annual audit, the
independent auditors of CLASS will review and report on
compliance with the investment guidelines and procedures herein
set forth.
(b) The independent auditors
least annually, test and report on the
internal controls of CLASS.
of CLASS will also, at
investment practices and
(c) The securities and other assets held by CLASS will
be verified by internal auditors semi-annually and on a surprise
basis during each year. Such verifications may be made by the
internal or external auditors of the Agent Participant, or by
the internal auditors of the custodian bank or the investment
adviser o£ CLASS (with a copy of such internal auditors' report
thereon delivered to the Agent Participant).