HomeMy WebLinkAboutPeople's United Bank Third Party Custodial Agreement r -
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4 = RECEIVED
iy NOV - 2 2018
xx Southold Town Clerk
Office of the Town Attorney
Town of Southold
Town Hall Annex, 54375 Route 25
P.O. Box 1179
Southold, New York 11971-0959
Telephone : 631-765-1939
Facsimile: 631-765-6639
MEMORANDUM
To: Ms. Elizabeth A. Neville, Town Clerk
From: Mary Silleck
Secretary to the Town Attorney
Date: November 1, 2018
Subject: Third Party Custodian Agreement between the Town of
Southold and People's United Bank, National Association
With respect to the above-referenced matter, I am enclosing the three (3) original
Agreements.
If you have any questions regarding the enclosed, please do not hesitate to call
me. Thank you.
/ms
Enclosures
11-6001831
THIRD PARTY CUSTODIAN AGREEMENT
(Collateralized Municipal Deposits)
THIS AGREEMENT, made and executed as of A,9,14 31/)0',9 between Town of Southold
Receiver of Taxes ("Local Government"), People's United Bank, National Association ("Bank") and The Bank of
New York Mellon("Custodian").
WITNESSETH
WHEREAS,Local Government desires to maintain or continue to maintain public deposits with the Bank;
WHEREAS, the Bank desires to obtain such deposits and to provide security therefor as required by the
General Municipal Law,Banking Law and other applicable statutes;
WHEREAS, the Custodian agrees to provide safekeeping services and to hold any securities pledged.by the
Bank in a custodial account established for the benefit of the Local Government as secured party pursuant to this
Agreement;
NOW,THEREFORE, in consideration of the mutual promises set forth hereafter, the parties hereto agree as
follows:
1. Security Requirements.
(a) The Bank,to secure the timely payment of Uninsured Deposits heretofore or hereafter made by the
Local Government, including any interest due thereon and any costs or expenses incurred by Local Government and
arising out of the collection of any deposits made with the Bank, shall provide the Local Government with Eligible
Collateral having an Adjusted Market Value equal to the Collateral Requirement. Whenever Eligible Collateral is
provided pursuant to this paragraph,the Bank hereby grants to the Local Government a pledge and security interest in
and to such Eligible Collateral and shall deliver such Eligible Collateral to the Custodian in the manner prescribed in
Section 2 of this Agreement. The security interest of the Local Government in Eligible Collateral shall terminate upon
the transfer of such Eligible Collateral from the Account. Eligible Letters of Credit and Eligible Surety Bonds
provided pursuant to this paragraph shall be subject to the prior approval of the Local Government unless the Local
Government has approved in writing the form of an Eligible Letter of Credit or Eligible Surety Bond to be issued by a
specific entity or the form of such Eligible Letter of Credit or Eligible Surety Bond is attached hereto as an Exhibit.
(b) The Custodian will daily determine the Adjusted Market Value of the Eligible Collateral provided
pursuant to this Agreement(except that the Bank shall provide to the Custodian the Market Value of Eligible Surety
Bonds). If the Adjusted Market Value of such Eligible Collateral is less than the Collateral Requirement, the
Custodian will so notify the Bank and the Bank shall, upon such notice, be required to provide additional Eligible
Collateral having an Adjusted Market Value equal to or greater than such deficiency no later than one Business Day
after receipt of such notice. If the Adjusted Market Value of the Eligible Collateral provided pursuant to this
Agreement exceeds the Collateral Requirement, the Custodian, at the direction of the Bank, shall transfer securities
from the Account,or in the case of other Eligible Collateral,cause or consent to a reduction in the amount thereof,to
the extent of such excess.
(c) The Bank may substitute Eligible Collateral ("Substitute Collateral") for any Eligible Collateral
previously provided pursuant to this Agreement so long as the Substitute Collateral has an Adjusted Market Value
equal to or greater than the Eligible Collateral which it will replace. The Bank shall give Written or Oral Instructions
to the Custodian with respect to any proposed substitution. If the Substitute Collateral described in such Written or
Oral Instructions consists exclusively of Eligible Collateral having sufficient Adjusted Market Value, the Custodian,
at the direction of the Bank,shall transfer the Eligible Collateral out of the Account against delivery to the Account on
the same Business Day of the Substitute Collateral. In the event the Substitute Collateral described in such notice
consists of an Eligible Letter of Credit or Eligible Surety Bond, the prior consent of the Local Government shall be
required before the Bank or Custodian may complete the substitution described in such notice unless the Local
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Government has, in writing,previously approved and consented to the form and issuer of the Eligible Letter of Credit
and/or Eligible Surety Bond to be provided as Substitute Collateral
2. Custody of Eligible Collateral
(a) The Bank and Local Government hereby appoint the Custodian as custodian of all Eligible
Collateral at any time delivered to the Custodian pursuant to this Agreement. The Custodian hereby accepts
appointment as such Custodian and agrees to establish and maintain the Account and appropriate records identifying
the Eligible Collateral as pledged by the Bank to the Local Government. Securities in the Account shall be kept
separate and apart from the general assets of the Custodian and will not, in any circumstances,be commingled with or
become part of the backing for any other deposit or liability of the Custodian or any other person or entity. The
Custodian, in performing its duties and responsibilities pursuant to this Agreement, shall act as custodian for, and
agent of,the Local Government.
(b) The Bank and Local Government agree that Eligible Collateral delivered to the Custodian for
deposit in the Account may be in the form of credits to the accounts of Custodian at the Book Entry System or a
Depository or by delivery to the Custodian of physical certificates in a form suitable for transfer or with an assignment
in blank to the Local Government or Custodian. The Bank and Local Government hereby authorize the Custodian on
a continuous and ongoing basis to deposit in the Book Entry System and/or the Depositories all Eligible Collateral that
may be deposited therein and to utilize the Book Entry System and/or Depositories and the receipt and delivery of
physical Securities or any combination thereof in connection with its performance hereunder. Eligible Collateral
credited to the Account and deposited in the Book Entry System or Depositories or other financial intermediaries will
be represented in accounts of Custodian that include only assets held by Custodian for its customers,and including but
not limited to accounts in which Custodian acts in a fiduciary, agency or representative capacity. Eligible Collateral
that is not held in the Book Entry System, Depositories or through another financial intermediary will be held in the
Custodian's vault and physically segregated from securities and other non-cash property belonging to the Custodian.
(c) (i)The Custodian shall provide to the Local Government weekly and monthly statements reflecting
the activity in the Account. Upon request,the Custodian shall also provide to the Local Government a daily statement
on any Business Day on which Eligible Collateral is transferred to or from the Account.
(ii) Local Government agrees that it shall promptly review all statements and shall promptly advise
Custodian by Oral or Written Instruction of any error, omission or inaccuracy in such statements. In the event that
Custodian receives such a Written or Oral Instruction identifying a specific concern with respect to the Market Value,
Adjusted Market Value, or any other matter connected with the Account, Custodian shall undertake to correct any
errors, failures or omissions, provided that Custodian determines in its sole discretion that such error, failure or
omission actually occurred. Any such corrections shall be reflected on subsequent statements.
(d) The Account shall not be subject to any security interest,lien or any right of set-off by or against the
Custodian_
(e) With respect to all Eligible Collateral held in the Account, the Custodian by itself, or through the
use of the Book Entry System or the appropriate Depository, shall, unless otherwise instructed to the contrary by the
Bank: (i) collect all income and other payments reflecting interest and principal on the Eligible Collateral in the
Account and credit such amounts to the account of the Bank; (ii) forward to the Bank copies of all information or
documents that it may receive from an issuer of Eligible Collateral which,in the opinion of the Custodian, is intended
for the beneficial owner of the Eligible Collateral including, without limitation all proxies and other authorizations
properly executed and all proxy statements, notices and reports; (iii) execute, as Custodian, any certificates of
ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection
with the collection of bond and note coupons; (iv)hold directly, or through the Book Entry System or Depository, all
rights issued with respect to any Eligible Collateral held by the Custodian hereunder; and(v)upon receipt of Written
Instructions from the Bank, the Custodian will exchange Eligible Collateral held hereunder for other securities and/or
cash in connection with (a) any conversion privilege, reorganization, recapitalization, redemption in kind,
consolidation,tender offer or exchange offer,or(b)any exercise,subscription,purchase or other similar rights.
3. Events of Default
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In the event the Bank shall fail to pay the Local Government any amount of the Deposits by the Local Government
covered by this Agreement in accordance with the terms of such Deposit, or should the Bank fail or suspend active
operations, the Deposits in such Bank shall become due and payable immediately and the Local Government shall
have the right to unilaterally demand delivery of all Eligible Collateral in the Account by notice to the Custodian and
to sell such securities at public or private sale. In the event of such sale, the Local Government, after deducting all
legal expenses and other costs, including reasonable attorneys fees, from the proceeds of such sale, shall apply the
remainder towards any one or more of the liabilities of the Bank to the Local Government and shall return the surplus,
if any,to the Bank.
4. Representation and Warranties
(a) Representations of the Bank. The Bank represents and warrants, which representations and
warranties shall be deemed to be continuing,that:
(1) it is the legal and actual owner, free and clear of all liens and claims, of all Eligible
Collateral pledged pursuant to this Agreement;
(2) this Agreement was executed by an officer of the Bank who was authorized by the Bank's
board of directors to do so and will at all times be maintained as an official record of the
Bank;
(3) all securities pledged pursuant to this Agreement are Eligible Collateral;
(4) the Bank is a banking organization located and authorized to do business in the State of
New York;
(5) all acts, conditions and things required to exist, happen or to be performed on its part
precedent to and in the execution and delivery of this Agreement exist or have happened or
have been performed.
(b) Representations of the Local Government. The Local Government hereby represents and warrants,
which representations and warranties shall be deemed to be continuing,that:
(1) this Agreement has been legally and validly entered into, does not and will not violate any
statute or regulation applicable to it and is enforceable against the Local Government in
accordance with its terms;
(2) the appointment of the Custodian has been duly authorized and no other action by the
Local Government is required and this Agreement was executed by an officer of the Local
Government duly authorized to do so;
(3) it will not transfer or assign its rights or interests in or with respect to any Eligible
Collateral pledged pursuant to this Agreement, except as authorized pursuant to Section 3
of the Agreement;
(4) all acts, conditions and things required to exist, happen or to be performed on its part
precedent to and in the execution and delivery of this Agreement exist or have happened or
have been performed.
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5. Concerning the Custodian.
(a) The Custodian shall not be liable for any loss or damage, including reasonable counsel fees,
resulting from its action or omission to act or otherwise, except for any loss, damage,claim or expense arising out of
its own negligence or willful misconduct, and shall have no obligation hereunder for any loss or damage, including
reasonable counsel fees,which are sustained or incurred by reason of any action or inaction by the Book Entry System
or any Depository. The Custodian may,with respect to questions of law,apply for and obtain the advice and opinion
of competent counsel and shall be fully protected with respect to anything done or omitted by it in good faith and
conformity with such advice or opinion. The Local Government and Bank agree,jointly and severally,to indemnify
the Custodian and to hold it harmless against any and all costs, expenses, damages, liabilities or claims, including
reasonable fees and expenses of counsel, which the Custodian may sustain or incur or which may be asserted against
the Custodian by reason of or as a result of any action taken or omitted by the Custodian in connection with operating
under this Agreement except those costs, expenses, damages, liabilities or claims arising out of the negligence or
willful misconduct of the Custodian or any of its employees or duly appointed agents. This indemnity shall be a
continuing obligation of the Local Government and Bank notwithstanding the termination of this Agreement.
(b) The Custodian shall not be responsible for, or considered to be the Custodian of, any Eligible
Collateral received by it for deposit in the Account until the Custodian actually receives and collects such Eligible
Collateral directly or by the final crediting of the Custodian's account on the books of the Book Entry System or the
appropriate Depository. The Custodian will be entitled to reverse any credits made on the Local Government's behalf
where such credits have been previously made and the Eligible Collateral is not finally collected.
(c) The Custodian shall have no duties or responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement and no covenant or obligation shall be implied against
the Custodian in connection with this Agreement. In no event shall Custodian be liable to Local Government,Bank or
any third party for special, indirect or consequential damages,or lost profits or loss of business,arising in connection
with this Agreement.
(d) The Local Government's authorized officer, upon reasonable notice, shall have access to the
Custodian's books and records maintained with respect to the Local Government's interest in the Account during the
Custodian's normal business hours. Upon the reasonable request of the Local Government,copies of any such books
and records shall be provided by the Custodian to the Local Government or the Local Government's authorized officer
at the Local Government's expense.
(e) In performing hereunder,the Custodian may enter into subcontracts,agreements and understandings
with third parties(including subsidiaries of The Bank of New York Mellon Corporation),whenever and on such terms
and conditions as it deems necessary or appropriate. No such subcontract,agreement or understanding shall discharge
the Custodian from its obligations hereunder
(f) Reliance on Pricing Services. Custodian is authorized to utilize any generally recognized pricing
information service (including brokers and dealers of securities) in order to perform its valuation responsibilities
hereunder, and the Bank and the Local Government agree that Custodian shall not be liable for any loss, damage,
expense, liability or claim (including attorneys' fees) incurred as a result of errors or omissions of any such pricing
information service,broker or dealer.
(g) Force Majeure. Custodian shall not be responsible or liable for any failure or delay in the
performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including without limitation, acts of God, earthquakes, fires, floods, wars, civil or
military disturbances,sabotage,epidemics, riots, loss or malfunctions of utilities,computer(hardware or software)or
communications service outside of Custodian's reasonable control,labor disputes,acts of civil or military authority,or
governmental,judicial or regulatory action(a"Force Majeure Event");provided however,that Custodian shall use its
best efforts to resume normal performance as soon as practicable under the circumstances. Notwithstanding the
foregoing, in the event that a Force Majeure Event delays performance for a period of more than thirty (30)
consecutive calendar days, the Bank or the Local Government may terminate this Agreement upon notice to the
Custodian and any prepaid fees shall be refunded on a pro rata basis as of the date such Force Majeure Event first
occurred.
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(h) Bank shall pay to Custodian the fees and charges as may be agreed upon from time to time. Bank
shall also reimburse Custodian for reasonable out-of-pocket expenses which are a normal incident of the services
provided hereunder.
6. Termination
Any of the parties hereto may terminate this Agreement by giving to the other parties a notice in writing
specifying the date of such termination, which shall be the earlier of(i) not less than 90 days after the date of giving
such notice or(ii)the date on which the Deposits are repaid in full. Such notice shall not affect or terminate the Local
Government's security interest in the Eligible Collateral in the Account. Upon termination hereof,the Custodian shall
follow such reasonable Written Instructions of the Bank and the Local Government concerning the transfer of custody
of Eligible Collateral,collateral records and other items. In the event of a discrepancy between Written Instructions of
the Bank and the Local Government,the Custodian shall act pursuant to the Local Government's Written Instructions.
Upon the date set forth in the termination notice,this Agreement shall terminate except as otherwise provided herein
and all obligations of the parties to each other hereunder shall cease.
7. Miscellaneous.
(a) The Local Government and Bank each agrees to famish to the Custodian a new Certificate in the
event that any present Authorized Person ceases to be an Authorized Person or in-the event that any other Authorized
Persons are appointed and authorized. Until such new Certificate is received,the Custodian shall be fully protected in
acting upon Oral or Written Instructions or signatures of the present Authorized Persons.
(b) Any Written Instructions or other instrument in writing authorized or required by this Agreement
shall be given to the Custodian and shall be sufficiently given if sent to the Custodian by regular mail to its offices at
One Wall Street, 4`t'Floor, New York, New York 10286, Attn: BDS—Collateral Manager, or at such other place as
the Custodian may from time to time designate in writing.
(c) Any notice or other instrument in writing authorized or required by this Agreement to be given to
the Bank shall be sufficiently given if sent to the Bank by regular mail to its.offices at 850 Main St., 12`h Floor,
Bridgeport,CT 06604,Attn: Rosemary McCabe,Government Banking&Finance Group,or at such other place as the
Bank may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized or required by this Agreement to be given to
the Local Government shall be sufficiently given if sent to the Local Government by regular mail to its offices at
53095 Main Rd., Southold, NY 11971, or at such other offices as the Local Government may from time to time
designate in writing.
(e) In case any provision in or obligation under this Agreement shall be invalid,illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby and if any provision is inapplicable to any person or circumstances, it shall
nevertheless remain applicable to all other persons and circumstances.
(f) This Agreement may not be amended or modified in any manner except by written agreement
executed by all of the parties hereto.
(g) This Agreement shall extend to and be binding upon the parties hereto, and their respective
successors and assigns; provided however, that this Agreement shall not be assignable by any party without the
written consent of the other parties.
(h) This Agreement shall be construed in accordance with the substantive laws of the State of New
York,without regard to conflicts of laws principles thereof. Bank, Local Government and Custodian hereby consent
to the jurisdiction of a state or federal court situated in New York in connection with any dispute arising hereunder.
Bank, Local Government and Custodian hereby irrevocably waive, to the fullest extent permitted by applicable law,
any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a
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court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. Bank,
Local Government and Custodian each hereby irrevocably waives any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
(i) Waiver of Immunity. To the extent that in any jurisdiction any party may now or hereafter be
entitled to claim, for itself or its assets, immunity from suit,execution,attachment(before or after judgment)or other
legal process,each party irrevocably agrees not to claim,and it hereby waives,such immunity in connection with this
Agreement.
8. Definitions.
Whenever used in this Agreement,the following terms shall have the following meanings:
(a) "Account" shall mean the custodial account established with the Custodian for the benefit of the
Local Government as secured party in accordance with this Agreement.
(b) "Adjusted Market Value" shall be one hundred percent of Market Value, except that: (1) in the
case of Eligible Collateral enumerated in subparagraphs (v),(vi)and(vii) of Exhibit"B," the Adjusted Market Value
shall be an amount equal to its Market Value multiplied by 0.9 if such Eligible Collateral is not rated in the highest
rating category by at least one Nationally Recognized Statistical Rating Agency,but is so rated in the second highest
rating category, and an amount equal to its Market Value multiplied by 0.8 if such Eligible Security is not so rated in
one of the two highest categories, but is so rated in the third highest rated category; (2) in the case of Eligible
Collateral enumerated in subparagraphs (viii), (x) and (xi) of Exhibit "B," the Adjusted Market Value shall be an
amount equal to its Market Value multiplied by 0.8;(3)in the case of Eligible Collateral enumerated in subparagraph
(ix)of Exhibit"B," the Adjusted Market Value shall be an amount equal to its Market Value multiplied by 0.7;and(4)
in the case of Eligible Letters of Credit, the Adjusted Market Value shall be an amount equal to its Market Value
divided by 1.4.
(c) "Authorized Person"shall be any officer of the Local Government or Bank,as the case may be,duly
authorized to give Oral Instructions or Written Instructions on behalf of Local Government or Bank, such persons to
be designated in a Certificate substantially in the form of Exhibit "C"- attached hereto, as such Exhibit may be
amended from time to time.
(d) "Book Entry System" shall mean the Federal Reserve/Treasury Book Entry System for receiving
and delivering U.S. Government Securities.
(e) "Business Day"shall mean any day on which the Custodian and the Bank are open for Business and
on which the Book Entry System and/or the Depositories are open for business.
(f1 "Certificate"shall mean the Certificate attached hereto as Exhibit"C".
(g) "Collateral Requirement"shall mean the amounts required in Exhibit"A"unless the Bank and Local
Government agree to a different amount in accordance with this Agreement.
(h) "Depository" shall include the Depository Trust Company, the Participants Trust Company and
other securities depositories and clearing agencies (and their successors and nominees) registered with the Securities
and Exchange Commission or otherwise regulated by appropriate federal or state agencies as a securities depository or
clearing agency.
(i) "Deposits" shall mean all deposits by the Local Government in the Bank that are available for all
uses generally permitted by the Bank to the Local Government for actually and finally collected funds under the
Bank's account agreement or policies.
(j) "Eligible Collateral" shall mean any securities of the types enumerated in the Schedule of Eligible
Collateral attached hereto as Exhibit "B" as such Schedule may be amended by the parties in writing from time to
time,Eligible Letters of Credit,and Eligible Surety Bonds.
(k) "Eligible Letter of Credit" shall mean an irrevocable letter of credit issued in favor of the Local
Government for a term not to exceed ninety days by either: (1)a bank(other than the Bank)whose commercial paper
and other unsecured short-term debt obligations (or, in the case of a bank which is the principal subsidiary of a
holding company, whose holding company's commercial paper and other unsecured short-term debt obligations) are
rated in one of three highest rating categories based on the credit of such bank or holding company by at least one
Nationally Recognized Statistical Rating Organization, or (2) a bank (other than the Bank) which is in compliance
with applicable Federal minimum risk-based capital requirements.
(1) "Eligible Surety Bond" shall mean a bond executed by an insurance company authorized to do
business in the State of New York,the claims paying ability of which is rated in the highest rating category by at least
two nationally recognized statistical rating organizations.
(m) "Margin Percentage" shall mean the percentage indicated on Exhibit B attached hereto with respect
to particular types of Eligible Collateral.
(n) "Market Value" shall mean, with respect to any Eligible Security held in the Account, the market
value of such Eligible Security as made available to the Custodian by a generally recognized source selected by the
Custodian plus, if not reflected in the market value, any accrued interest thereon, or, if such source does not make
available a market value, the market value shall be as determined by the Custodian in its sole discretion based on
information furnished to the Custodian by one or more brokers or dealers;provided however that, if agreed in writing
by the parties hereto, the Bank may provide the Custodian with such Market Values. The Market Value of Eligible
Letters of Credit and Eligible Surety Bonds shall be the face amount thereof.
(o) "Nationally Recognized Statistical Rating Organization" shall mean Moody's, Standard and Poor's,
Fitch,Duff and Phelps,BankWatch and IBCA and in the case of Eligible Surety Bonds,shall also include Bests.
(p) "Oral Instructions" shall mean verbal instructions actually received by the Custodian from an
Authorized Person or from a person reasonably believed by the Custodian to be an Authorized Person.
(q) "Substitute Collateral" shall have the meaning set forth in paragraph C of Section 1 of this
Agreement.
(r) "Uninsured Deposits" shall mean that portion of the Local Government's Deposits with the Bank
which exceeds the insurance coverage available from the Federal Deposit Insurance Corporation.
(s) "Written Instructions" shall mean written communications actually received by the Bank or the
Custodian from an Authorized Person or from a person reasonably believed by the Bank or the Custodian to be an
Authorized Person by a computer,telex,telecopier or any other system whereby the receiver of such communications
is able to verify by codes or otherwise with a reasonable degree of certainty the identity of the sender of such
communication.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective
officers thereunto duly authorized and their respective seals to be hereunto affixed, as of the day and year first above
written.
TOWN OF SOUTHOLD RECEIVER OF TAXES PEOLE'S UN E� BANK,NATIONAL
ASS IATI
By&ow R� S(-'11iVCCr1 By. George Deecken
nt
Title: ��G�r � Title:
THE BANK LLON
By.
Cobert Schwa
Title: Director
Peoples United
(4-15)
EXHIBIT A
Collateral Requirement
Collateral Requirement. On any Business Day that the Local Government has Uninsured Deposits in the
Bank, the Bank, in accordance with paragraph b of Section 1 of this Agreement, agrees to deliver or cause to be
delivered to the Custodian for deposit in the Account, Eligible Collateral having an Adjusted Market Value equal to
the Collateral Requirement. For purposes of this Agreement, Collateral Requirement shall mean the amount of such
Uninsured Deposits times the Margin Percentage, if any.
y
1
EXHIBIT B
Schedule of Eligible Collateral
Margin%
102 (i) Obligations issued by the United States of America, an agency thereof or a United States
government sponsored corporation or obligations fully insured or guaranteed as to the
payment of principal and interest by the United States of America, an agency thereof or a
United States government sponsored corporation.
102 (ii) Obligations issued or fully guaranteed by the International Bank for Reconstruction and
Development, the Inter-American Development Bank, the Asian Development Bank, and
the African Development Bank.
102 (iii) Obligations partially insured or guaranteed by any agency of the United States of America,
at a proportion of the Market Value of the obligation that represents the amount of the
insurance or guaranty.
102 (iv) Obligations issued or fully insured or guaranteed by the State of New York, obligations
issued by a municipal corporation, school district or district corporation of such State or
obligations of any public benefit corporation which under a specific State statute may be
accepted as security for deposit of public moneys.
102 (v) Obligations issued by states (other than the State of New York) of the United States rated
in one of the three highest rating categories by at least one nationally recognized statistical
rating organization.
102 (vi) Obligations of Puerto Rico rated in the three highest rating categories by at least one
nationally recognized statistical rating organization.
102 (vii) Obligations of counties,cities and other governmental entities of a state other than the State
of New York having the power to levy taxes that are backed by the full faith and credit of
such governmental entity and rated in the three highest rating categories by at least one
nationally recognized statistical rating organization.
102 (viii) Obligations of domestic corporations rated in one of the two highest rating categories by
at least one nationally recognized statistical rating organization.
102 (ix) Any mortgage related securities, as defined in the Securities Exchange Act of 1934, as
amended, which may be purchased by banks under the limitations established by Federal
bank regulatory agencies.
102 (x) Commercial paper and bankers' acceptances issued by a bank(other than the Bank),rated
in the highest short term category by at least one nationally recognized statistical rating
organization and having maturities of not longer than 60 days from the date they are
pledged.
102 (xi) Zero coupon obligations of the United States government marketed as"Treasury strips".
EXHIBIT C
CERTIFICATE OF AUTHORIZED PERSONS
(Local Government-Oral and Written Instructions)
The undersigned hereby certifies that he/she is the duly elected and acting —A 1Wgt C �`ca y p of
(the "Local Government"), and further certifies that the following officers or employees of the Local Government
have been duly authorized in conformity with the Local Government's resolutions to deliver Oral and Written
Instructions to The Bank of New York Mellon ("Custodian") pursuant to the Third Party Custodian Agreement
between the Local Government, People's United Bank, National Association ("Bank") and Custodian dated
and that the signatures appearing opposite their names are true and correc
—TIMLn SL&QQ r its &Jvp
Name Tit e Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
This certificate supersedes any certificate of authorized individuals you may currently have on file.
[seal]
Title: /r 40—e e�/
Date:
s: I-003307
THIRD PARTY CUSTODIAN AGREEMENT
(Collateralized Municipal Deposits)
THIS AGREEMENT, made and executed as ofS�n�7) 9MY between Town of Southold
Fishers Island Ferry("Local Government"), People's United Bank,National Association("Bank") and The Bank of
New York Mellon("Custodian").
WITNESSETH
WHEREAS,Local Government desires to maintain or continue to maintain public deposits with the Bank;
WHEREAS, the Bank desires to obtain such deposits and to provide security therefor as required by the
General Municipal Law,Banking Law and other applicable statutes;
WHEREAS,the Custodian agrees to provide safekeeping services and to hold any securities pledged by the
Bank in a custodial account established for the benefit of the Local Government as secured party pursuant to this
Agreement;
NOW,THEREFORE,in consideration of the mutual promises set forth hereafter,the parties hereto agree as
follows:
1. Security Requirements.
(a) The Bank,to secure the timely payment of Uninsured Deposits heretofore or hereafter made by the
Local Government,including any interest due thereon and any costs or expenses incurred by Local Government and
arising out of the collection of any deposits made with the Bank, shall provide the Local Government with Eligible
Collateral having an Adjusted Market Value equal to the Collateral Requirement. Whenever Eligible Collateral is
provided pursuant to this paragraph,the Bank hereby grants to the Local Government a pledge and security interest in
and to such Eligible Collateral and shall deliver such Eligible Collateral to the Custodian in the manner prescribed in
Section 2 of this Agreement. The security interest of the Local Government in Eligible Collateral shall terminate upon
the transfer of such Eligible Collateral from the Account. Eligible Letters of Credit and Eligible Surety Bonds rovided
pursuant to this paragraph shall be subject to the prior approval of the Local Government unless the Local
Government has approved in writing the form of an Eligible Letter of Credit or Eligible Surety Bond to be issued by a
specific entity or the form of such Eligible Letter of Credit or Eligible Surety Bond is attached hereto as an Exhibit.
(b) The Custodian will daily determine the Adjusted Market Value of the Eligible Collateral provided
pursuant to this Agreement(except that the Bank shall provide to the Custodian the Market Value of Eligible Surety
Bonds). If the Adjusted Market Value of such Eligible Collateral is less than the Collateral Requirement, the
Custodian will so notify the Bank and the Bank shall, upon such notice, be required to provide additional Eligible
Collateral having an Adjusted Market Value equal to or greater than such deficiency no later than one Business Day
after receipt of such notice. If the Adjusted Market Value of the Eligible Collateral provided pursuant to this
Agreement exceeds the Collateral Requirement, the Custodian, at the direction of the Bank, shall transfer securities
from the Account,or in the case of other Eligible Collateral,cause or consent to a reduction in the amount thereof,to
the extent of such excess.
(c) The Bank may substitute Eligible Collateral ("Substitute Collateral") for any Eligible Collateral
previously provided pursuant to this Agreement so long as the Substitute Collateral has an Adjusted Market Value
equal to or greater than the Eligible Collateral which it will replace. The Bank shall give Written or Oral Instructions
to the Custodian with respect to any proposed substitution. If the Substitute Collateral described in such Written or
Oral Instructions consists exclusively of Eligible Collateral having sufficient Adjusted Market Value,the Custodian,
at the direction of the Bank,shall transfer the Eligible Collateral out of the Account against delivery to the Account on
the same Business Day of the Substitute Collateral. In the event the Substitute Collateral described in such notice
consists of an Eligible Letter of Credit or Eligible Surety Bond, the prior consent of the Local Government shall be
required before the Bank or Custodian may complete the substitution described in such notice unless the Local
7156260_1
2
Government has,in writing,previously approved and consented to the form and issuer of the Eligible Letter of Credit
and/or Eligible Surety Bond to be provided as Substitute Collateral.
2. Custody of Eligible Collateral
(a) The Bank and Local Government hereby appoint the Custodian as custodian of all Eligible
Collateral at any time delivered to the Custodian pursuant to this Agreement. The Custodian hereby accepts
appointment as such Custodian and agrees to establish and maintain the Account and appropriate records identifying
the Eligible Collateral as pledged by the Bank to the Local Government. Securities in the Account shall be kept
separate and apart from the general assets of the Custodian and will not,in any circumstances,be commingled with or
become part of the backing for any other deposit or liability of the Custodian or any other person or entity. The
Custodian, in performing its duties and responsibilities pursuant to this Agreement, shall act as custodian for, and
agent of,the Local Government.
(b) The Bank and Local Government agree that Eligible Collateral delivered to the Custodian for
deposit in the Account may be in the form of credits to the accounts of Custodian at the Book Entry System or a
Depository or by delivery to the Custodian of physical certificates in a form suitable for transfer or with an assignment
in blank to the Local Government or Custodian. The Bank and Local Government hereby authorize the Custodian on
a continuous and ongoing basis to deposit in the Book Entry System and/or the Depositories all Eligible Collateral that
may be deposited therein and to utilize the Book Entry System and/or Depositories and the receipt and delivery of
physical Securities or any combination thereof in connection with its performance hereunder. Eligible Collateral
credited to the Account and deposited in the Book Entry System or Depositories or other financial intermediaries will
be represented in accounts of Custodian that include only assets held by Custodian for its customers,and including but
not limited to accounts in which Custodian acts in a fiduciary,agency or representative capacity. Eligible Collateral
that is not held in the Book Entry System,Depositories or through another financial intermediary will be held in the
Custodian's vault and physically segregated from securities and other non-cash property belonging to the Custodian.
(c) (i)The Custodian shall provide to the Local Government weekly and monthly statements reflecting
the activity in the Account. Upon request,the Custodian shall also provide to the Local Government a daily statement
on any Business Day on which Eligible Collateral is transferred to or from the Account.
(ii)Local Government agrees that it shall promptly review all statements and shall promptly advise
Custodian by Oral or Written Instruction of any error, omission or inaccuracy in such statements. In the event that
Custodian receives such a Written or Oral Instruction identifying a specific concern with respect to the Market Value,
Adjusted Market Value, or any other matter connected with the Account, Custodian shall undertake to correct any
errors, failures or omissions, provided that Custodian determines in its sole discretion that such error, failure or
omission actually occurred. Any such corrections shall be reflected on subsequent statements.
(d) The Account shall not be subject to any security interest,lien or any right of set-off by or against the
Custodian.
(e) With respect to all Eligible Collateral held in the Account, the Custodian by itself, or through the
use of the Book Entry System or the appropriate Depository, shall,unless otherwise instructed to the contrary by the
Bank: (i) collect all income and other payments reflecting interest and principal on the Eligible Collateral in the
Account and credit such amounts to the account of the Bank; (ii) forward to the Bank copies of all information or
documents that it may receive from an issuer of Eligible Collateral which,in the opinion of the Custodian,is intended
for the beneficial owner of the Eligible Collateral including, without limitation all proxies and other authorizations
properly executed and all proxy statements, notices and reports; (iii) execute, as Custodian, any certificates of
ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection
with the collection of bond and note coupons;(iv)hold directly,or through the Book Entry System or Depository,all
rights issued with respect to any Eligible Collateral held by the Custodian hereunder; and(v)upon receipt of Written
Instructions from the Bank, the Custodian will exchange Eligible Collateral held hereunder for other securities and/or
cash in connection with (a) any conversion privilege, reorganization, recapitalization, redemption in kind,
consolidation,tender offer or exchange offer,or(b)any exercise,subscription,purchase or other similar rights.
3. Events of Default
3
In the event the Bank shall fail to pay the Local Government any amount of the Deposits by the Local Government
covered by this Agreement in accordance with the terms of such Deposit, or should the Bank fail or suspend active
operations, the Deposits in such Bank shall become due and payable immediately and the Local Government shall
have the right to unilaterally demand delivery of all Eligible Collateral in the Account by notice to the Custodian and
to sell such securities at public or private sale. In the event of such sale, the Local Government, after deducting all
legal expenses and other costs, including reasonable attorneys fees, from the proceeds of such sale, shall apply the
remainder towards any one or more of the liabilities of the Bank to the Local Government and shall return the surplus,
if any,to the Bank.
4. Representation and Warranties
(a) Representations of the Bank. The Bank represents and warrants, which representations and
warranties shall be deemed to be continuing,that:
(1) it is the legal and actual owner, free and clear of all liens and claims, of all Eligible
Collateral pledged pursuant to this Agreement;
(2) this Agreement was executed by an officer of the Bank who was authorized by the Bank's
board of directors to do so and will at all times be maintained as an official record of the
Bank;
(3) all securities pledged pursuant to this Agreement are Eligible Collateral;
(4) the Bank is a banking organization located and authorized to do business in the State of
New York;
(5) all acts, conditions and things required to exist, happen or to be performed on its part
precedent to and in the execution and delivery of this Agreement exist or have happened or
have been performed.
(b) Representations of the Local Government. The Local Government hereby represents and warrants,
which representations and warranties shall be deemed to be continuing,that:
(1) this Agreement has been legally and validly entered into,does not and will not violate any
statute or regulation applicable to it and is enforceable against the Local Government in
accordance with its terms;
(2) the appointment of the Custodian has been duly authorized and no other action by the
Local Government is required and this Agreement was executed by an officer of the Local
Government duly authorized to do so;
(3) it will not transfer or assign its rights or interests in or with respect to any Eligible
Collateral pledged pursuant to this Agreement,except as authorized pursuant to Section 3
of the Agreement;
(4) all acts, conditions and things required to exist, happen or to be performed on its part
precedent to and in the execution and delivery of this Agreement exist or have happened or
have been performed.
4
5. Concerning the Custodian.
(a) The Custodian shall not be liable for any loss or damage, including reasonable counsel fees,
resulting from its action or omission to act or otherwise,except for any loss,damage, claim or expense arising out of
its own negligence or willful misconduct, and shall have no obligation hereunder for any loss or damage, including
reasonable counsel fees,which are sustained or incurred by reason of any action or inaction by the Book Entry System
or any Depository. The Custodian may,with respect to questions of law,apply for and obtain the advice and opinion
of competent counsel and shall be fully protected with respect to anything done or omitted by it in good faith and
conformity with such advice or opinion. The Local Government and Bank agree,jointly and severally,to indemnify
the Custodian and to hold it harmless against any and all costs, expenses, damages, liabilities or claims, including
reasonable fees and expenses of counsel,which the Custodian may sustain or incur or which may be asserted against
the Custodian by reason of or as a result of any action taken or omitted by the Custodian in connection with operating
under this Agreement except those costs, expenses, damages, liabilities or claims arising out of the negligence or
willful misconduct of the Custodian or any of its employees or duly appointed agents. This indemnity shall be a
continuing obligation of the Local Government and Bank notwithstanding the termination of this Agreement.
(b) The Custodian shall not be responsible for, or considered to be the Custodian of, any Eligible
Collateral received by it for deposit in the Account until the Custodian actually receives and collects such Eligible
Collateral directly or by the final crediting of the Custodian's account on the books of the Book Entry System or the
appropriate Depository. The Custodian will be entitled to reverse any credits made on the Local Government's behalf
where such credits have been previously made and the Eligible Collateral is not finally collected.
(c) The Custodian shall have no duties or responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement and no covenant or obligation shall be implied against
the Custodian in connection with this Agreement. In no event shall Custodian be liable to Local Government,Bank or
any third party for special,indirect or consequential damages,or lost profits or loss of business,arising in connection
with this Agreement.
(d) The Local Government's authorized officer, upon reasonable notice, shall have access to the
Custodian's books and records maintained with respect to the Local Government's interest in the Account during the
Custodian's normal business hours. Upon the reasonable request of the Local Government, copies of any such books
and records shall be provided by the Custodian to the Local Government or the Local Government's authorized officer
at the Local Government's expense.
(e) In performing hereunder,the Custodian may enter into subcontracts,agreements and understandings
with third parties(including subsidiaries of The Bank of New York Mellon Corporation),whenever and on such terms
and conditions as it deems necessary or appropriate. No such subcontract,agreement or understanding shall discharge
the Custodian from its obligations hereunder.
(f) Reliance on Pricing Services. Custodian is authorized to utilize any generally recognized pricing
information service (including brokers and dealers of securities) in order to perform its valuation responsibilities
hereunder, and the Bank and the Local Government agree that Custodian shall not be liable for any loss, damage,
expense, liability or claim(including attorneys' fees) incurred as a result of errors or omissions of any such pricing
information service,broker or dealer.
(g) Force Majeure. Custodian shall not be responsible or liable for any failure or delay in the
performance of its obligations under this Agreement arising out of or caused, directly or indirectly,by circumstances
beyond its reasonable control, including without limitation, acts of God, earthquakes, fires, floods, wars, civil or
military disturbances,sabotage,epidemics,riots,loss or malfunctions of utilities,computer(hardware or software)or
communications service outside of Custodian's reasonable control,labor disputes,acts of civil or military authority,or
governmental,judicial or regulatory action(a"Force Majeure Event");provided however,that Custodian shall use its
best efforts to resume normal performance as soon as practicable under the circumstances. Notwithstanding the
foregoing, in the event that a Force Majeure Event delays performance for a period of more than thirty (30)
consecutive calendar days, the Bank or the Local Government may terminate this Agreement upon notice to the
Custodian and any prepaid fees shall be refunded on a pro rata basis as of the date such Force Majeure Event first
occurred.
5
(h) Bank shall pay to Custodian the fees and charges as may be agreed upon from time to time. Bank
shall also reimburse Custodian for reasonable out-of-pocket expenses which are a normal incident of the services
provided hereunder.
6. Termination
Any of the parties hereto may terminate this Agreement by giving to the other parties a notice in writing
specifying the date of such termination,which shall be the earlier of(i)not less than 90 days after the date of giving
such notice or(ii)the date on which the Deposits are repaid in full. Such notice shall not affect or terminate the Local
Government's security interest in the Eligible Collateral in the Account. Upon termination hereof,the Custodian shall
follow such reasonable Written Instructions of the Bank and the Local Government concerning the transfer of custody
of Eligible Collateral,collateral records and other items. In the event of a discrepancy between Written Instructions of
the Bank and the Local Government,the Custodian shall act pursuant to the Local Government's Written Instructions.
Upon the date set forth in the termination notice,this Agreement shall terminate except as otherwise provided herein
and all obligations of the parties to each other hereunder shall cease.
7. Miscellaneous.
(a) The Local Government and Bank each agrees to furnish to the Custodian a new Certificate in the
event that any present Authorized Person ceases to be an Authorized Person or in the event that any other Authorized
Persons are appointed and authorized. Until such new Certificate is received,the Custodian shall be fully protected in
acting upon Oral or Written Instructions or signatures of the present Authorized Persons.
(b) Any Written Instructions or other instrument in writing authorized or required by this Agreement
shall be given to the Custodian and shall be sufficiently given if sent to the Custodian by regular mail to its offices at
One Wall Street,4's Floor,New York,New York 10286, Attn: BDS—Collateral Manager,or at such other place as
the Custodian may from time to time designate in writing.
(c) Any notice or other instrument in writing authorized or required by this Agreement to be given to
the Bank shall be sufficiently given if sent to the Bank by regular mail to its offices at 850 Main St., 12`' Floor,
Bridgeport,CT 06604,Attu:Rosemary McCabe,Government Banking&Finance Group,or at such other place as the
Bank may from time to time designate in writing.
(d) Any notice or other instrument in writing, authorized or required by this Agreement to be given to
the Local Government shall be sufficiently given if sent to the Local Government by regular mail to its offices at
PO BOX H, Fishers Island, NY 06390 or at such other offices as the Local Government may from time to time
designate in writing.
(e) In case any provision in or obligation under this Agreement shall be invalid,illegal or unenforceable
in any jurisdiction,the validity,legality and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby and if any provision is inapplicable to any person or circumstances, it shall
nevertheless remain applicable to all other persons and circumstances.
(f) This Agreement may not be amended or modified in any manner except by written agreement
executed by all of the parties hereto.
(g) This Agreement shall extend to and be binding upon the parties hereto, and their respective
successors and assigns; provided however, that this Agreement shall not be assignable by any party without the
written consent of the other parties.
(h) This Agreement shall be construed in accordance with the substantive laws of the State of New
York,without regard to conflicts of laws principles thereof. Bank,Local Government and Custodian hereby consent
to the jurisdiction of a state or federal court situated in New York in connection with any dispute arising hereunder.
Bank, Local Government and Custodian hereby irrevocably waive, to the fullest extent permitted by applicable law,
any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a
6
court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. Bank,
Local Government and Custodian each hereby irrevocably waives any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
(i) Waiver of Immunity. To the extent that in any jurisdiction any party may now or hereafter be
entitled to claim, for itself or its assets,immunity from suit,execution,attachment(before or after judgment)or other
legal process,each party irrevocably agrees not to claim,and it hereby waives,such immunity in connection with this
Agreement.
8. Definitions.
Whenever used in this Agreement,the following terms shall have the following meanings:
(a) "Account" shall mean the custodial account established with the Custodian for the benefit of the
Local Government as secured party in accordance with this Agreement.
(b) "Adjusted Market Value" shall be one hundred percent of Market Value, except that: (1) in the
case of Eligible Collateral enumerated in subparagraphs(v),(vi)and(vii)of Exhibit"B,"the Adjusted Market Value
shall be an amount equal to its Market Value multiplied by 0.9 if such Eligible Collateral is not rated in the highest
rating category by at least one Nationally Recognized Statistical Rating Agency,but is so rated in the second highest
raring category, and an amount equal to its Market Value multiplied by 0.8 if such Eligible Security is not so rated in
one of the two highest categories, but is so rated in the third highest rated category; (2) in the case of Eligible
Collateral enumerated in subparagraphs (viii), (x) and (xi) of Exhibit "B," the Adjusted Market Value shall be an
amount equal to its Market Value multiplied by 0.8;(3)in the case of Eligible Collateral enumerated in subparagraph
(ix)of Exhibit"B,"the Adjusted Market Value shall be an amount equal to its Market Value multiplied by 0.7;and(4)
in the case of Eligible Letters of Credit, the Adjusted Market Value shall be an amount equal to its Market Value
divided by 1.4.
(c) "Authorized Person"shall be any officer of the Local Government or Bank,as the case may be,duly
authorized to give Oral Instructions or Written Instructions on behalf of Local Government or Bank, such persons to
be designated in a Certificate substantially in the form of Exhibit "C"- attached hereto, as such Exhibit may be
amended from time to time.
(d) "Book Entry System" shall mean the Federal Reserve/Treasury Book Entry System for receiving
and delivering U.S.Government Securities.
(e) "Business Day"shall mean any day on which the Custodian and the Bank are open for Business and
on which the Book Entry System and/or the Depositories are open for business.
(f) "Certificate"shall mean the Certificate attached hereto as Exhibit"C".
(g) "Collateral Requirement"shall mean the amounts required in Exhibit"A"unless the Bank and Local
Government agree to a different amount in accordance with this Agreement.
(h) "Depository" shall include the Depository Trust Company, the Participants Trust Company and
other securities depositories and clearing agencies (and their successors and nominees)registered with the Securities
and Exchange Commission or otherwise regulated by appropriate federal or state agencies as a securities depository or
clearing agency.
(i) "Deposits" shall mean all deposits by the Local Government in the Bank that are available for all
uses generally permitted by the Bank to the Local Government for actually and finally collected funds under the
Bank's account agreement or policies.
0) "Eligible Collateral" shall mean any securities of the types enumerated in the Schedule of Eligible
Collateral attached hereto as Exhibit "B" as such Schedule may be amended by the parties in writing from time to
time,Eligible Letters of Credit,and Eligible Surety Bonds.
7
(k) "Eligible Letter of Credit" shall mean an irrevocable letter of credit issued in favor of the Local
Government for a term not to exceed ninety days by either: (1)a bank(other than the Bank)whose commercial paper
and other unsecured short-term debt obligations (or, in the case of a bank which is the principal subsidiary of a
holding company, whose holding company's commercial paper and other unsecured short-term debt obligations) are
rated in one of three highest rating categories based on the credit of such bank or holding company by at least one
Nationally Recognized Statistical Rating Organization, or(2) a bank (other than the Bank) which is in compliance
with applicable Federal minimum risk-based capital requirements.
(1) "Eligible Surety Bond" shall mean a bond executed by an insurance company authorized to do
business in the State of New York,the claims paying ability of which is rated in the highest rating category by at least
two nationally recognized statistical rating organizations.
(m) "Margin Percentage" shall mean the percentage indicated on Exhibit B attached hereto with respect
to particular types of Eligible Collateral.
(n) "Market Value" shall mean, with respect to any Eligible Security held in the Account, the market
value of such Eligible Security as made available to the Custodian by a generally recognized source selected by the
Custodian plus, if not reflected in the market value, any accrued interest thereon, or, if such source does not make
available a market value, the market value shall be as determined by the Custodian in its sole discretion based on
information fumished to the Custodian by one or more brokers or dealers;provided however that,if agreed in writing
by the parties hereto,the Bank may provide the Custodian with such Market Values. The Market Value of Eligible
Letters of Credit and Eligible Surety Bonds shall be the face amount thereof.
(o) "Nationally Recognized Statistical Rating Organization" shall mean Moody's, Standard and Poor's,
Fitch,Duff and Phelps,BankWatch and IBCA and in the case of Eligible Surety Bonds,shall also include Bests.
(p) "Oral Instructions" shall mean verbal instructions actually received by the Custodian from an
Authorized Person or from a person reasonably believed by the Custodian to be an Authorized Person.
(q) "Substitute Collateral" shall have the meaning set forth in paragraph C of Section 1 of this
Agreement.
(r) "Uninsured Deposits" shall mean that portion of the Local Government's Deposits with the Bank
which exceeds the insurance coverage available from the Federal Deposit Insurance Corporation.
(s) "Written Instructions" shall mean written communications actually received by the Bank or the
Custodian from an Authorized Person or from a person reasonably believed by the Bank or the Custodian to be an
Authorized Person by a computer,telex,telecopier or any other system whereby the receiver of such communications
is able to verify by codes or otherwise with a reasonable degree of certainty the identity of the sender of such
communication.
8
IN WITNESS WHEREOF,the parties hereto have caused this Agreement to be executed by their respective
officers thereunto duly authorized and their respective seals to be hereunto affixed,as of the day and year first above
written.
TOWN OF SOUTHOLD FISHERS ISLAND FERRY PEOPLE'S UNITE ANK,NATIONAL
ASS IATION
ftken
By. T `ISSQ�� By: G1AGG 681dent
Title � Title:
THEBANK OF)`
By:
Title: Robert Sesmeca
Director
Peoples United
(4-15)
EXHIBIT A
Collateral Requirement
Collateral Requirement. On any Business Day that the Local Government has Uninsured Deposits in the
Bank, the Bank, in accordance with paragraph b of Section 1 of this Agreement, agrees to deliver or cause to be
delivered to the Custodian for deposit in the Account, Eligible Collateral having an Adjusted Market Value equal to
the Collateral Requirement. For purposes of this Agreement, Collateral Requirement shall mean the amount of such
Uninsured Deposits times the Margin Percentage,if any.
EXHIBIT B
Schedule of Eligible Collateral
Margin%
103 (i) Obligations issued by the United States of America, an agency thereof or a United States
government sponsored corporation or obligations fully insured or guaranteed as to the
payment of principal and interest by the United States of America,an agency thereof or a
United States government sponsored corporation.
103 (ii) Obligations issued or fully guaranteed by the International Bank for Reconstruction and
Development, the Inter-American Development Bank, the Asian Development Bank, and
the African Development Bank.
103 (iii) Obligations partially insured or guaranteed by any agency of the United States of America,
at a proportion of the Market Value of the obligation that represents the amount of the
insurance or guaranty.
103 (iv) Obligations issued or fully insured or guaranteed by the State of New York, obligations
issued by a municipal corporation, school district or district corporation of such State or
obligations of any public benefit corporation which under a specific State statute may be
accepted as security for deposit of public moneys.
103 (v) Obligations issued by states(other than the State of New York)of the United States rated
in one of the three highest rating categories by at least one nationally recognized statistical
rating organization.
103 (vi) Obligations of Puerto Rico rated in the three highest rating categories by at least one
nationally recognized statistical rating organization.
103 (vii) Obligations of counties,cities and other governmental entities of a state other than the State
of New York having the power to levy taxes that are backed by the full faith and credit of
such governmental entity and rated in the three highest rating categories by at least one
nationally recognized statistical rating organization.
103 (viii) Obligations of domestic corporations rated in one of the two highest rating categories by
at least one nationally recognized statistical rating organization.
103 (ix) Any mortgage related securities, as defined in the Securities Exchange Act of 1934, as
amended, which may be purchased by banks under the limitations established by Federal
bank regulatory agencies.
103 (x) Commercial paper and bankers' acceptances issued by a bank(other than the Bank),rated
in the highest short term category by at least one nationally recognized statistical rating
organization and having maturities of not longer than 60 days from the date they are
pledged.
103 (xi) Zero coupon obligations of the United States government marketed as"Treasury strips".
1
EXHIBIT C'
CERTIFICATE OF AUTHORIZED PERSONS
(Local Government-Oral and Written Instructions)
The undersigned hereby certifies that he/she is the duly elected and acting Lcjw. k�Q��6 oCt�of
(the "Local Government"), and further certifies that the following officers or employees of the Local Government
have been duly authorized in conformity with the Local Government's resolutions to deliver Oral and Written
Instructions to The Bank of New York Mellon ("Custodian") pursuant to the Third Party Custodian Agreement
between the Local Government, People's United Bank, National Association (`B ") and Custodian dated
,and that the signatures appearing opposite their names are true and c ect:
r ��
Name `\ \ Title Signature
4^ 1
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
This certificate supersedes any certificate of authorized individuals you may c ently have on file.
AYIN
[seal]
Title: Sl lL�QyC'�!L S U r
Date:
9 ,
Il-6001131
THIRD PARTY CUSTODIAN AGREEMENT
(Collateralized Municipal Deposits)
THIS AGREEMENT, made and executed as of�C T N) between Town of Southold
("Local Government"), People's United Bank, National Association ("Bank") and The Bank of New York Mellon
("Custodian").
WITNESSETH
WHEREAS,Local Government desires to maintain or continue to maintain public deposits with the Bank;
WHEREAS, the Bank desires to obtain such deposits and to provide security therefor as required by the
General Municipal Law,Banking Law and other applicable statutes;
WHEREAS,the Custodian agrees to provide safekeeping services and to hold any securities pledged by the
Bank in a custodial account established for the benefit of the Local Government as secured party pursuant to this
Agreement;
NOW,THEREFORE, in consideration of the mutual promises set forth hereafter,the parties hereto agree as
follows:
1. Security Requirements.
(a) The Bank,to secure the timely payment of Uninsured Deposits heretofore or hereafter made by the
Local Government, including any interest due thereon and any costs or expenses incurred by Local Government and
arising out of the collection of any deposits made with the Bank, shall provide the Local Government with Eligible
Collateral having an Adjusted Market Value equal to the Collateral Requirement. Whenever Eligible Collateral is
provided pursuant to this paragraph,the Bank hereby grants to the Local Government a pledge and security interest in
and to such Eligible Collateral and shall deliver such Eligible Collateral to the Custodian in the manner prescribed in
Section 2 of this Agreement. The security interest of the Local Government in Eligible Collateral shall terminate upon
the transfer of such Eligible Collateral from the Account. Eligible Letters of Credit and Eligible Surety Bonds rovided
pursuant to this paragraph shall be subject to the prior approval of the Local Government unless the Local
Government has approved in writing the form of an Eligible Letter of Credit or Eligible Surety Bond to be issued by a
specific entity or the form of such Eligible Letter of Credit or Eligible Surety Bond is attached hereto as an Exhibit.
(b) The Custodian will daily determine the Adjusted Market Value of the Eligible Collateral provided
pursuant to this Agreement(except that the Bank shall provide to the Custodian the Market Value of Eligible Surety
Bonds). If the Adjusted Market Value of such Eligible Collateral is less than the Collateral Requirement, the
Custodian will so notify the Bank and the Bank shall, upon such notice, be required to provide additional Eligible
Collateral having an Adjusted Market Value equal to or greater than such deficiency no later than one Business Day
after receipt of such notice. If the Adjusted Market Value of the Eligible Collateral provided pursuant to this
Agreemdnt exceeds the Collateral Requirement, the Custodian, at the direction of the Bank, shall transfer securities
from the Account,or in the case of other Eligible Collateral,cause or consent to a reduction in the amount thereof,to
the extent of such excess.
(c) The Bank may substitute Eligible Collateral ("Substitute Collateral") for any Eligible Collateral
previously provided pursuant to this Agreement so long as the Substitute Collateral has an Adjusted Market Value
equal to or greater than the Eligible Collateral which it will replace. The Bank shall give Written or Oral Instructions
to the Custodian with respect to any proposed substitution. If the Substitute Collateral described in such Written or
Oral Instructions consists exclusively of Eligible Collateral having sufficient Adjusted Market Value, the Custodian,
at the direction of the Bank,shall transfer the Eligible Collateral out of the Account against delivery to the Account on
the same Business Day of the Substitute Collateral. In the event the Substitute Collateral described in such notice
consists of an Eligible Letter of Credit or Eligible Surety Bond, the prior consent of the Local Government shall be
required before the Bank or Custodian may complete the substitution described in such notice unless the Local
7156260_1
2
Government has, in writing,previously approved and consented to the form and issuer of the Eligible Letter of Credit
and/or Eligible Surety Bond to be provided as Substitute Collateral.
2. Custody of Eligible Collateral
(a) The Bank and Local Government hereby appoint the Custodian as custodian of all Eligible
Collateral at any time delivered to the Custodian pursuant to this Agreement. The Custodian hereby accepts
appointment as such Custodian and agrees to establish and maintain the Account and appropriate records identifying
the Eligible Collateral as pledged by the Bank to the Local Government. Securities in the Account shall be kept
separate and apart from the general assets of the Custodian and will not,in any circumstances,be commingled with or
become part of the backing for any other deposit or liability of the Custodian or any other person or entity. The
Custodian, in performing its duties and responsibilities pursuant to this Agreement, shall act as custodian for, and
agent of,the Local Government.
(b) The Bank and Local Government agree that Eligible Collateral delivered to the Custodian for
deposit in the Account may be in the form of credits to the accounts of Custodian at the Book Entry System or a
Depository or by delivery to the Custodian of physical certificates in a form suitable for transfer or with an assignment
in blank to the Local Government or Custodian. The Bank and Local Government hereby authorize the Custodian on
a continuous and ongoing basis to deposit in the Book Entry System and/or the Depositories all Eligible Collateral that
may be deposited therein and to utilize the Book Entry System and/or Depositories and the receipt and delivery of
physical Securities or any combination thereof in connection with its performance hereunder. Eligible Collateral
credited to the Account and deposited in the Book Entry System or Depositories or other financial intermediaries will
be represented in accounts of Custodian that include only assets held by Custodian for its customers,and including but
not limited to accounts in which Custodian acts in a fiduciary, agency or representative capacity. Eligible Collateral
that is not held in the Book Entry System,Depositories or through another financial intermediary will be held in the
Custodian's vault and physically segregated from securities and other non-cash property belonging to the Custodian.
(c) (i)The Custodian shall provide to the Local Government weekly and monthly statements reflecting
the activity in the Account. Upon request,the Custodian shall also provide to the Local Government a daily statement
on any Business Day on which Eligible Collateral is transferred to or from the Account.
(ii)Local Government agrees that it shall promptly review all statements and shall promptly advise
Custodian by Oral or Written Instruction of any error, omission or inaccuracy in such statements. In the event that
Custodian receives such a Written or Oral Instruction identifying a specific concern with respect to the Market Value,
Adjusted Market Value, or any other matter connected with the Account, Custodian shall undertake to correct any
errors, failures or omissions, provided that Custodian determines in its sole discretion that such error, failure or
omission actually occurred. Any such corrections shall be reflected on subsequent statements.
(d) The Account shall not be subject to any security interest,lien or any right of set-off by or against the
Custodian.
(e) With respect to all Eligible Collateral held in the Account, the Custodian by itself, or through the
use of the Book Entry System or the appropriate Depository,shall,unless otherwise instructed to the contrary by the
Bank: (i) collect all income and other payments reflecting interest and principal on the Eligible Collateral in the
Account and credit such amounts to the account of the Bank; (ii) forward to the Bank copies of all information or
documents that it may receive from an issuer of Eligible Collateral which,in the opinion of the Custodian,is intended
for the beneficial owner of the Eligible Collateral including, without limitation all proxies and other authorizations
properly executed and all proxy statements, notices and reports; (iii) execute, as Custodian, any certificates of
ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection
with the collection of bond and note coupons; (iv)hold directly,or through the Book Entry System or Depository,all
rights issued with respect to any Eligible Collateral held by the Custodian hereunder;and(v)upon receipt of Written
Instructions from the Bank,the Custodian will exchange Eligible Collateral held hereunder for other securities and/or
cash in connection with (a) any conversion privilege, reorganization, recapitalization, redemption in kind,
consolidation,tender offer or exchange offer,or(b)any exercise,subscription,purchase or other similar rights.
3. Events of Default
3
In the event the Bank shall fail to pay the Local Government any amount of the Deposits by the Local Government
covered by this Agreement in accordance with the terms of such Deposit, or should the Bank fail or suspend active
operations, the Deposits in such Bank shall become due and payable immediately and the Local Government shall
have the right to unilaterally demand delivery of all Eligible Collateral in the Account by notice to the Custodian and
to sell such securities at public or private sale. In the event of such sale, the Local Government, after deducting all
legal expenses and other costs, including reasonable attorneys fees, from the proceeds of such sale, shall apply the
remainder towards any one or more of the liabilities of the Bank to the Local Government and shall return the surplus,
if any,to the Bank.
4. Representation and Warranties
(a) Representations of the Bank. The Bank represents and warrants, which representations and
warranties shall be deemed to be continuing,that:
(1) it is the legal and actual owner, free and clear of all liens and claims, of all Eligible
Collateral pledged pursuant to this Agreement;
(2) this Agreement was executed by an officer of the Bank who was authorized by the Bank's
board of directors to do so and will at all times be maintained as an official record of the
Bank;
(3) all securities pledged pursuant to this Agreement are Eligible Collateral;
(4) the Bank is a banking organization located and authorized to do business in the State of
New York;
(5) all acts, conditions and things required to exist, happen or to be performed on its part
precedent to and in the execution and delivery of this Agreement exist or have happened or
have been performed.
(b) Representations of the Local Government. The Local Government hereby represents and warrants,
which representations and warranties shall be deemed to be continuing,that:
(1) this Agreement has been legally and validly entered into,does not and will not violate any
statute or regulation applicable to it and is enforceable against the Local Government in
accordance with its terms;
(2) the appointment of the Custodian has been duly authorized and no other action by the
Local Government is required and this Agreement was executed by an officer of the Local
Government duly authorized to do so;
(3) it will not transfer or assign its rights or interests in or with respect to any Eligible
Collateral pledged pursuant to this Agreement,except as authorized pursuant to Section 3
of the Agreement;
(4) all acts, conditions and things required to exist, happen or to be performed on its part
precedent to and in the execution and delivery of this Agreement exist or have happened or
have been performed.
4
5. Concerning the Custodian.
(a) The Custodian shall not be liable for any loss or damage, including reasonable counsel fees,
resulting from its action or omission to act or otherwise,except for any loss,damage,claim or expense arising out of
its own negligence or willful misconduct, and shall have no obligation hereunder for any loss or damage, including
reasonable counsel fees,which are sustained or incurred by reason of any action or inaction by the Book Entry System
or any Depository. The Custodian may,with respect to questions of law,apply for and obtain the advice and opinion
of competent counsel and shall be fully protected with respect to anything done or omitted by it in good faith and
conformity with such advice or opinion. The Local Government and Bank agree,jointly and severally, to indemnify
the Custodian and to hold it harmless against any and all costs, expenses, damages, liabilities or claims, including
reasonable fees and expenses of counsel,which the Custodian may sustain or incur or which may be asserted against
the Custodian by reason of or as a result of any action taken or omitted by the Custodian in connection with operating
under this Agreement except those costs, expenses, damages, liabilities or claims arising out of the negligence or
willful misconduct of the Custodian or any of its employees or duly appointed agents. This indemnity shall be a
continuing obligation of the Local Government and Bank notwithstanding the termination of this Agreement.
(b) The Custodian shall not be responsible for, or considered to be the Custodian of, any Eligible
Collateral received by it for deposit in the Account until the Custodian actually receives and collects such Eligible
Collateral directly or by the final crediting of the Custodian's account on the books of the Book Entry System or the
appropriate Depository. The Custodian will be entitled to reverse any credits made on the Local Government's behalf
where such credits have been previously made and the Eligible Collateral is not finally collected.
(c) The Custodian shall have no duties or responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement and no covenant or obligation shall be implied against
the Custodian in connection with this Agreement. In no event shall Custodian be liable to Local Government,Bank or
any third party for special,indirect or consequential damages,or lost profits or loss of business,arising in connection
with this Agreement.
(d) The Local Government's authorized officer, upon reasonable notice, shall have access to the
Custodian's books and records maintained with respect to the Local Government's interest in the Account during the
Custodian's normal business hours. Upon the reasonable request of the Local Government,copies of any such books
and records shall be provided by the Custodian to the Local Government or the Local Government's authorized officer
at the Local Government's expense.
(e) In perfortning hereunder,the Custodian may enter into subcontracts,agreements and understandings
with third parties(including subsidiaries of The Bank of New York Mellon Corporation),whenever and on such terms
and conditions as it deems necessary or appropriate. No such subcontract,agreement or understanding shall discharge
the Custodian from its obligations hereunder.
(f) Reliance on Pricing Services. Custodian is authorized to utilize any generally recognized pricing
information service (including brokers and dealers of securities) in order to perform its valuation responsibilities
hereunder, and the Bank and the Local Government agree that Custodian shall not be liable for any loss, damage,
expense, liability or claim(including attorneys' fees) incurred as a result of errors or omissions of any such pricing
information service,broker or dealer.
(g) Force Majeure. Custodian shall not be responsible or liable for any failure or delay in the
performance of its obligations under this Agreement arising out of or caused,directly or indirectly,by circumstances
beyond its reasonable control, including without limitation, acts of God, earthquakes, fires, floods, wars, civil or
military disturbances,sabotage,epidemics,riots,loss or malfunctions of utilities,computer(hardware or software)or
communications service outside of Custodian's reasonable control,labor disputes,acts of civil or military authority,or
governmental,judicial or regulatory action(a"Force Majeure Event");provided however,that Custodian shall use its
best efforts to resume normal performance as soon as practicable under the circumstances. Notwithstanding the
foregoing, in the event that a Force Majeure Event delays performance for a period of more than thirty (30)
consecutive calendar days, the Bank or the Local Government may terminate this Agreement upon notice to the
Custodian and any prepaid fees shall be refunded on a pro rata basis as of the date such Force Majeure Event first
occurred.
5
(h) Bank shall pay to Custodian the fees and charges as may be agreed upon from time to time. Bank
shall also reimburse Custodian for reasonable out-of-pocket expenses which are a normal incident of the services
provided hereunder.
6. Termination
Any of the parties hereto may terminate this Agreement by giving to the other parties a notice in writing
specifying the date of such termination,which shall be the earlier of(i) not less than 90 days after the date of giving
such notice or(ii)the date on which the Deposits are repaid in full. Such notice shall not affect or terminate the Local
Government's security interest in the Eligible Collateral in the Account. Upon termination hereof,the Custodian shall
follow such reasonable Written Instructions of the Bank and the Local Government concerning the transfer of custody
of Eligible Collateral,collateral records and other items. In the event of a discrepancy between Written Instructions of
the Bank and the Local Government,the Custodian shall act pursuant to the Local Government's Written Instructions.
Upon the date set forth in the termination notice, this Agreement shall terminate except as otherwise provided herein
and all obligations of the parties to each other hereunder shall cease.
7. Miscellaneous.
(a) The Local Government and Bank each agrees to furnish to the Custodian a new Certificate in the
event that any present Authorized Person ceases to be an Authorized Person or in the event that any other Authorized
Persons are appointed and authorized. Until such new Certificate is received,the Custodian shall be fully protected in
acting upon Oral or Written Instructions or signatures of the present Authorized Persons.
(b) Any Written Instructions or other instrument in writing authorized or required by this Agreement
shall be given to the Custodian and shall be sufficiently given if sent to the Custodian by regular mail to its offices at
One Wall Street,46'Floor,New York,New York 10286,Attn: BDS—Collateral Manager, or at such other place as
the Custodian may from time to time designate in writing.
(c) Any notice or other instrument in writing authorized or required by this Agreement to be given to
the Bank shall be sufficiently given if sent to the Bank by regular mail to its offices at 850 Main St., 12d'Floor,
Bridgeport,CT 06604,Attn:Rosemary McCabe,Government Banking&Finance Group,or at such other place as the
Bank may from time to time designate in writing.
(d) Any notice or other instrument in writing,authorized or required by this Agreement to be given to
the Local Government shall be sufficiently given if sent to the Local Government by regular mail to its offices at
53095 Main Rd, Southold, NY 11971 or at such other offices as the Local Government may from time to time
designate in writing.
(e) In case any provision in or obligation under this Agreement shall be invalid,illegal or unenforceable
in any jurisdiction,the validity, legality and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby and if any provision is inapplicable to any person or circumstances, it shall
nevertheless remain applicable to all other persons and circumstances.
(f) This Agreement may not be amended or modified in any manner except by written agreement
executed by all of the parties hereto.
(g) This Agreement shall extend to and be binding upon the parties hereto, and their respective
successors and assigns; provided however, that this Agreement shall not be assignable by any party without the
written consent of the other parties.
(h) This Agreement shall be construed in accordance with the substantive laws of the State of New
York,without regard to conflicts of laws principles thereof. Bank,Local Government and Custodian hereby consent
to the jurisdiction of a state or federal court situated in New York in connection with any dispute arising hereunder.
Bank, Local Government and Custodian hereby irrevocably waive,to the fullest extent permitted by applicable law,
any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a
6
court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. Bank,
Local Government and Custodian each hereby irrevocably waives any and all rights to trial by jury in any legal
proceeding arising out of or relating to this Agreement.
(i) Waiver of Immunity. To the extent that in any jurisdiction any party may now or hereafter be
entitled to claim, for itself or its assets,immunity from suit,execution, attachment(before or after judgment)or other
legal process,each party irrevocably agrees not to claim,and it hereby waives,such immunity in connection with this
Agreement.
8. Definitions.
Whenever used in this Agreement,the following terms shall have the following meanings:
(a) "Account" shall mean the custodial account established with the Custodian for the benefit of the
Local Government as secured party in accordance with this Agreement.
(b) "Adjusted Market Value" shall be one hundred percent of Market Value, except that: (1) in the
case of Eligible Collateral enumerated in subparagraphs(v),(vi)and(vii)of Exhibit"B,"the Adjusted Market Value
shall be an amount equal to its Market Value multiplied by 0.9 if such Eligible Collateral is not rated in the highest
rating category by at least one Nationally Recognized Statistical Rating Agency,but is so rated in the second highest
rating category,and an amount equal to its Market Value multiplied by 0.8 if such Eligible Security is not so rated in
one of the two highest categories, but is so rated in the third highest rated category; (2) in the case of Eligible
Collateral enumerated in subparagraphs (viii), (x) and (xi) of Exhibit "B," the Adjusted Market Value shall be an
amount equal to its Market Value multiplied by 0.8;(3)in the case of Eligible Collateral enumerated in subparagraph
(ix)of Exhibit"B,"the Adjusted Market Value shall be an amount equal to its Market Value multiplied by 0.7;and(4)
in the case of Eligible Letters of Credit, the Adjusted Market Value shall be an amount equal to its Market Value
divided by 1.4.
(c) "Authorized Person"shall be any officer of the Local Government or Bank,as the case may be,duly
authorized to give Oral Instructions or Written Instructions on behalf of Local Government or Bank,such persons to
be designated in a Certificate substantially in the form of Exhibit "C"- attached hereto, as such Exhibit may be
amended from time to time.
(d) 'Book Entry System" shall mean the Federal Reserve/Treasury Book Entry System for receiving
and delivering U.S.Government Securities.
(e) "Business Day"shall mean any day on which the Custodian and the Bank are open for Business and
on which the Book Entry System and/or the Depositories are open for business.
(f) "Certificate"shall mean the Certificate attached hereto as Exhibit"C".
(g) "Collateral Requirement" shall mean the amounts required in Exhibit"A"unless the Bank and Local
Government agree to a different amount in accordance with this Agreement.
(h) "Depository" shall include the Depository Trust Company, the Participants Trust Company and
other securities depositories and clearing agencies(and their successors and nominees)registered with the Securities
and Exchange Commission or otherwise regulated by appropriate federal or state agencies as a securities depository or
clearing agency.
(i) "Deposits" shall mean all deposits by the Local Government in the Bank that are available for all
uses generally permitted by the Bank to the Local Government for actually and finally collected funds under the
Bank's account agreement or policies.
0) "Eligible Collateral" shall mean any securities of the types enumerated in the Schedule of Eligible
Collateral attached hereto as Exhibit "B" as such Schedule may be amended by the parties in writing from time to
time,Eligible Letters of Credit,and Eligible Surety Bonds.
7
(k) "Eligible Letter of Credit" shall mean an irrevocable letter of credit issued in favor of the Local
Government for a term not to exceed ninety days by either: (1)a bank(other than the Bank)whose commercial paper
and other unsecured short-term debt obligations (or, in the case of a bank which is the principal subsidiary of a
holding company, whose holding company's commercial paper and other unsecured short-term debt obligations) are
rated in one of three highest rating categories based on the credit of such bank or holding company by at least one
Nationally Recognized Statistical Rating Organization, or(2) a bank (other than the Bank) which is in compliance
with applicable Federal minimum risk-based capital requirements.
(1) "Eligible Surety Bond" shall mean a bond executed by an insurance company authorized to do
business in the State of New York,the claims paying ability of which is rated in the highest rating category by at least
two nationally recognized statistical rating organizations.
(m) "Margin Percentage" shall mean the percentage indicated on Exhibit B attached hereto with respect
to particular types of Eligible Collateral.
(n) "Market Value" shall mean,with respect to any Eligible Security held in the Account, the market
value of such Eligible Security as made available to the Custodian by a generally recognized source selected by the
Custodian plus, if not reflected in the market value, any accrued interest thereon, or, if such source does not make
available a market value, the market value shall be as determined by the Custodian in its sole discretion based on
information furnished to the Custodian by one or more brokers or dealers;provided however that, if agreed in writing
by the parties hereto, the Bank may provide the Custodian with such Market Values. The Market Value of Eligible
Letters of Credit and Eligible Surety Bonds shall be the face amount thereof.
(o) "Nationally Recognized Statistical Rating Organization" shall mean Moody's, Standard and Poor's,
Fitch,Duff and Phelps,BankWatch and IBCA and in the case of Eligible Surety Bonds,shall also include Bests.
(p) "Oral Instructions" shall mean verbal instructions actually received by the Custodian from an
Authorized Person or from a person reasonably believed by the Custodian to be an Authorized Person.
(q) "Substitute Collateral" shall have the meaning set forth in paragraph C of Section 1 of this
Agreement.
(r) "Uninsured Deposits" shall mean that portion of the Local Government's Deposits with the Bank
which exceeds the insurance coverage available from the Federal Deposit Insurance Corporation.
(s) "Written Instructions" shall mean written communications actually received by the Bank or the
Custodian from an Authorized Person or from a person reasonably believed by the Bank or the Custodian to be an
Authorized Person by a computer,telex,telecopier or any other system whereby the receiver of such communications
is able to verify by codes or otherwise with a reasonable degree of certainty the identity of the sender of such
communication.
8
IN WITNESS WHEREOF,the parties hereto have caused this Agreement to be executed by their respective
officers thereunto duly authorized and their respective seals to be hereunto affixed,as of the day and year first above
written.
TOWN OF SOUTHOLD PEOP 'S UNIT ANK,NATIONAL
ASSO ATION
By: George Deecken
oce rest nt
Title: ®t.� sk -pQ;CVTitle:
THE BANK OF
By:
Title: Robert Scirneca
Director
Peoples United
(4-15)
EXHIBIT A
Collateral Requirement
Collateral Requirement. On any Business Day that the Local Government has Uninsured Deposits in the
Bank, the Bank, in accordance with paragraph b of Section 1 of this Agreement, agrees to deliver or cause to be
delivered to the Custodian for deposit in the Account, Eligible Collateral having an Adjusted Market Value equal to
the Collateral Requirement. For purposes of this Agreement, Collateral Requirement shall mean the amount of such
Uninsured Deposits times the Margin Percentage,if any.
EXHIBIT B
Schedule of Eligible Collateral
Margin%
103 (i) Obligations issued by the United States of America, an agency thereof or a United States
government sponsored corporation or obligations fully insured or guaranteed as to the
payment of principal and interest by the United States of America,an agency thereof or a
United States government sponsored corporation.
103 (ii) Obligations issued or fully guaranteed by the International Bank for Reconstruction and
Development, the Inter-American Development Bank, the Asian Development Bank, and
the African Development Bank.
103 (iii) Obligations partially insured or guaranteed by any agency of the United States of America,
at a proportion of the Market Value of the obligation that represents the amount of the
insurance or guaranty.
103 (iv) Obligations issued or fully insured or guaranteed by the State of New York, obligations
issued by a municipal corporation, school district or district corporation of such State or
obligations of any public benefit corporation which under a specific State statute may be
accepted as security for deposit of public moneys.
103 (v) Obligations issued by states (other than the State of New York)of the United States rated
in one of the three highest rating categories by at least one nationally recognized statistical
rating organization.
103 (vi) Obligations of Puerto Rico rated in the three highest rating categories by at least one
nationally recognized statistical rating organization.
103 (vii) Obligations of counties,cities and other governmental entities of a state other than the State
of New York having the power to levy taxes that are backed by the full faith and credit of
such governmental entity and rated in the three highest rating categories by at least one
nationally recognized statistical rating organization.
103 (viii) Obligations of domestic corporations rated in one of the two highest rating categories by
at least one nationally recognized statistical rating organization.
103 (ix) Any mortgage related securities, as defined in the Securities Exchange Act of 1934, as
amended,which may be purchased by banks under the limitations established by Federal
bank regulatory agencies.
103 (x) Commercial paper and bankers' acceptances issued by a bank(other than the Bank), rated
in the highest short term category by at least one nationally recognized statistical rating
organization and having maturities of not longer than 60 days from the date they are
pledged.
103 (xi) Zero coupon obligations of the United States government marketed as"Treasury strips".
EXHIBIT C
CERTIFICATE OF AUTHORIZED PERSONS
(Local Government-Oral and Written Instructions)
The undersigned hereby certifies that helshe is the duly elected and acting-TOlht i� ' of
(the "Local Government"), and further certifies that the following officers or employees of the Local Government
have been duly authorized in conformity with the Local Government's resolutions to deliver Oral and Written
Instructions to The Bank of New York Mellon ("Custodian") pursuant to the Third Party Custodian Agreement
between the Local Government, People's United Bank, National Association (`Ba " and Custodian dated
and that the signatures appearing opposite their names are true and co
Name Title Signature
Name Title Signature
Name Title Signature
i
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
Name Title Signature
This certificate supersedes any certificate of authorized individuals you in currently have on file.
[seal] V .p
Title:
Date:01 � l`b