TC Res. No. 1997-03RESOLUTION NO. 97-03 -
SERIES OF 1997
A RESOLUTION AUTHORIZING PARTICIPATION IN THE COLORADO
COOPERATIVE LIQUID ASSET SECURITIES SYSTEM ("Colorado CLASS')
WHEREAS, the Town of Avon desires to pool its funds with other local
government entities by becoming a participant in Colorado CLASS; and
WHEREAS, pursuant to the provisions of C.R.S. Section 24-75-701, et seq., as
amended, it is lawful for any local government entity (including cities, towns; school
district, special districts or counties) to pool any moneys in its treasury, which are currently
surplus funds and not immediately required to be disbursed, with similar, moneys from
other local government entities, in order for these entities to take advantage of short-term
investments and maximize net interest earnings; and
WHEREAS, Colorado CLASS is a trust formed under the laws of the State of
Colorado in accordance with the provisions of C.R.S. 24-75-701 et seq., as amended, for
the purpose of investing, pooling for investment, and protecting public funds; and
WHEREA, pursuant to a Transition Agreement dated as of March 15, 1995, MBIA
Municipal Investors Service Corporation became the Program Administrator for the Trust
and the Trust began to do business as Colorado CLASS; and
NOW, THEREFORE BE IT HEREBY RESOLVED BY THE TOWN COUNCIL
OF THE TOWN OF AVON:
1) The Town of Avon hereby approves and adopts that certain Master Agreement
relating to Colorado CLASS dated July 15, 1995, as amended from time to
time, the terms of which are incorporated herein by this reference and a copy of
which shall be filed with the minutes of the meeting at which this Resolution
was adopted; and
2) The Finance Director, who is the local government official empowered to invest
the funds in the Town's treasury, or his successor, is hereby designated our
official representative to Colorado CLASS and shall serve as a member of the
Board of Participants 'of Colorado CLASS and is hereby authorized and directed
to execute the Master Agreement and to take such other action as may be
necessary to be a participant in Colorado CLASS; and.
3) The Finance Director, as designated in Section 2 above, is hereby authorized to
invest from time to time moneys held in the Town's treasury, which are not
immediately required to be disbursed, in Colorado CLASS and to request
payment from the Town's balance in Colorado CLASS from time to time as
funds are needed; and.
4) The certifications, instructions, and authorizations contained in this Resolution
will remain in effect until Colorado CLASS receives written notice of change.
ADOPTED AND PASSED, this 14'b day of January, 1997
TOWN OF AVON
By:
J ck Fawcett
ayor
1VY~11 V1V111
EXECUTION COPY
MASTER AGREEMENT
Dated as of July 15, 1995:-
by and among
The Colorado .Part iciparits'
that have entered into this Agreement,
Bank One, Colorado, N.A., as Ctstodian
Colorado Statewide Asset, Trust d/b/a/ Colorado CLASS
The Board of Trustees of Colorado Statewide Asset'-Trust
d/b/a Colorado CLASS
and
MBIA Municipal Investors Service Corporation
TABLE OF CONTENTS
P::: r~E
A!-. I-- THE TRUST AND DEFINITIONS
zior. 1.1. The Trust. . . . . . . . . . . . .
=ior. 1.2. Definitions. . . . , , , , , , , ,
A: I= - PARTICIPANTS
AF:
AR:
'.ior. 2.1. Investments . . . .
Dior. 2.2. Payments
2.3: Additional-Participants
After Initial Execution. .
=ion 2.4. Termination of Participation . . .
:--ion 2.5. Receipt of Statements and
Reports; Requests. . . . . . . .
:ior_ 2.6. Representatives. . . . . . . . .
III -;TRUSTEES AND THE BOARD OF TRUSTEES
I
- 1
I
- 2
II
- 1
II
- 1
II -
3
II -
3
II -
3
II -
4
:ion 3.1.
Selection of-Trustees
III
- 1
pion 3.2.
Board of Trustees . . . . . .
. III
- 2
::ior.'. 3.3.
Meetings
or. 3.4.
-
Terra
III
III
• •
- 2
-
2
-
ion 3.5.
Vacancies . . . . . . . . . .
.
III
,
_ 2
.ior. 3.6.
Costs . . . . . . . . . . . .
. . . III
- 3
IV - PROGRAM ADMINISTRATOR
-ion.
4.1.
Appointment; General Provisions. .
'.ion
4.2.
Monthly Statements . . . . . .
,ion
4.3.
Reports . . . .
-ion
4.4.
• . ,
Investment Activities and Powers
=ion
4.5.
Daily Calculation of Program Value
and Rate of Return .
. .
pion
4.6.
Administration of Program. . . .
.ion
4.7.
Resignation and Removal.
:ion
4.8.
Liability and-Indemnification
-ion
4.9.
Power•to Receive Investment
Advice . . . , , .
•
ion
4.10.
Advice to Other Clients .
• .
.?on
4.11
Special Sub-accounts . . . . . . . .
V
THE
CUSTODIAN
:ion 5.1. Appointment and Acceptance . . . . .
:ion 5.2. Resignation and Removal;
Successors . . . . . . . . . . . . .
.:ion 5.3. Powers . . . . . . . . . . . . . . .
IV-1
IV - 1
IV - 2
IV - 2
IV - 3
IV - 4
IV - .5
IV 5
IV - 6
IV - 6
IV-7
V - 1
V - 1
V - 2
Section
5.4.
Custodial
Relationship;
Custodian
Records. . . . . . .
Section
5.5.
Reliance
on Instructions .
Section
5.6.
Degree of
Care; Indemnification. . .
Section
5.7.
Subrogati
on . . . . . . . . . . . .
Section
5.8.
Insurance
Section
5.9.
Setoff
.
ARTICLE VI - TRUST EXPENSES
Section 6.1. Expenses . . . . . . . . . . . .
ARTICLE VII - REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of
Each Participant .
. . .
. . .
Section 7.2.
Representations and
Warranties
of
the Custodian.
.
Section 7.3.
Representations and
Warranties
of
the Program Administrator
Section 7.4
Representations and
Warranties
of
the Trust . .
. .
. . .
Section 7.5
Representations and
Warranties
of
Board of Trustees
ARTICLE VIII - COVENANTS
Section 8.1. Source of Investments
Section 8.2. Truth of Representations and
Warranties . . . . . . . . . . . . .
ARTICLE IX - AMENDMENT AND TERMINATION
Section 9.1. Amendment . . . . . . . . . . . . . .
Section 9.2. Termination . . . . . . . . . . . . .
ARTICLE X - MISCELLANEOUS
Section 10.1.
Section 10.2.
Section 10.3.
Section 10.4.
Section 10.5.
Section 10.6.
Section'10.7.
Section 10.8.
Section 10.9.
Section 10.10.
Section 10.11.
Section 10.12
Section 10.13
Governing Law. .
Counterparts .
Severability . . . . . . . . . .
Gender; Section Headings and
Table of Contents. . . . . . . . . .
No Assignment. . . . . . . . . . . .
No Partnership . . . . . . . . . . .
Notice . . . . . . . . . . . . .
Entire Agreement .
Confidentiality . . . . . . . . .
Disputes
Majority of Participants .
Writings . . . . . . . . . . . . . .
Effective-Date . . . . . . . . . . .
V - 4
V - 4
'V - 5
V - 6
V - 6
V - 6
VI - 1
VII - 1
VII - 1
VII - 2
VII - 2
VII - 2
VIII - 1
VIII - 1
IX - 1
IX-1
X - 1
X - 1
X -,.1
X - 1
X - 1
X - 1
X - 2
X -2
X - 2
X - 3
X - '3
X - 3
X 3
EXHIBIT A - INVESTMENT PROCEDURES
EXHIBIT B - PAYMENT PROCEDURES
EXHIBIT'C - VALUATION PROCEDURES
EXHIBIT D - PARTICIPATION CERTIFICATE
EXHIBIT E = INVESTMENT CRITERIA
EXHIBIT F - PROGRAM ADMINISTRATOR'S FEE_
EXHIBIT G - CUSTODIAN'S FEE
PREAMBLE
This Master Agreement dated as of July 15, 1995 (the
"Agreement") is by and' among the Colorado. local governmental
entities that on the Effective Date are participants in the
Colorado Statewide Asset Trust (d/b/a Colorado CLASS) (the
"Initial Participants") and after the Effective Date any other
Colorado governmental and public entities that adopt resolutions
required by Part 7 of Article 75 of Title 24 of the Colorado
Revised Statutes and that have either executed this Agreement or
that have or will execute counterparts of this Agreement or
Participation Certificates pursuant to Section 2.3 hereof
(collectively 'referred. to with the Initial Participants.-as the
"Participants"), Bank One, Colorado, N.A., as Custodian (the
"Custodian"), the Colorado Statewide Asset Trust (d/b/a) Colorado
CLASS ("CSWAT"), the Board of Trustees of CSWAT (the "Board of
Trustees") and MBIA Municipal Investors Service Corporation (the
"Program Administrator").
WHEREAS, each Participant is permitted-pursuant to Part 7 of
Article 75 of Title 24 of the Colorado Revised Statute's to pool
any moneys in its treasury, which are not immediately -required to
be disbursed, with any similar moneys in the treasury of other
Participants for the purpose of investing such funds in statutory
permitted investments; and
WHEREAS, each Participant will receive a substantial benefit
by agreeing to invest such funds in concert with the other
Participants because of economies of scale; and
WHEREAS, it will.-Increase the efficiency of such investment
if the funds to be invested in concert are-invested through one
entity, the Custodian, which will hold such funds"and investments
in its capacity as custodian for the benefit-of the' Participants;
and
WHEREAS, it will increase the efficiency of such investment-
if the advisory, record-keeping and other administrative
functions are performed by one entity, the Program Administrator.,
acting on behalf of the Board of Trustees and the Participants
and if the investment instructions of the Participants, are
transmitted through one entity, the Program Administrator, to the
Custodian; and
WHEREAS, the Initial Participants have entered into an
Indenture of Trust dated as of June 12, 1991, as amended, (the
"Prior Indenture",) with the Board of Trustees in order to form
CSWAT; -and
WHEREAS, CSWAT acting through the Board of Trustees entered
into a Custodian Agreement dated as of June 12, 1991, as amended
(the "Prior Custodian Agreement") with First National Westminster
Bank and Lakeside National.Bank, which was succeeded by the
Custodian; and
."WHEREAS, CSWAT acting through its Board of Trustees entered
into an Investment Management Agreement dated as of June 12,
1991, as amended (the "Prior Investment Management Agreement")
with Statewide Investment Services,'Inc. ("Statewide"); and
WHEREAS,-the Program Administrator has purchased the rights,
title and interests of Statewide in the CSWAT investment program,
including, without limitation the rights, title and interests of
Statewide in the Prior Investment,Management Agreement; and
WHEREAS, CSWAT and the Program Administrator have entered
into a Transition._Agreement dated as of March 15, 1995 pursuant
to which certain matters involving the transition 'from Statewide
to,:the Program Administrator could be resolved; and
WHEREAS, the Transition Agreement served as the
administration agreement required by the Prior Indenture; and
WHEREAS,,it is in the best interests of the parties hereto
that the-Prior Indenture, the Prior Custodian Agreement, the
Prior,Investment Management Agreement and the Transition
Agreement be amended and restated by this Agreement in order to
make all of the foregoing agreements consistent with each other
and to comply with applicable law.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained
herein, each party hereto agrees that (i) the Prior Indenture,
the Prior Custodian Agreement, the Prior Investment Management
Agreement and the Transition Agreement are hereby amended and
restated by this Agreement and (ii) all moneys, assets,
securities and property.now or hereafter acquired by CSWAT shall
be held and managed in trust by the Board:of_Trustees for the
equal and proportionate benefit of the Participants, without
privilege, priority distinction among the Participants, and
subject to the terms, covenants, conditions, purpose and
provisions hereof as follows:
ARTICLE I
THE TRUST AND DEFINITIONS
1.1 The Trust.
(a) The name of the Trust created by this Agreement
shall be the "Colorado Statewide Asset Trust".'. or IICSWAT". For so
long as MBIA Municipal Investors Service Corporation is the
Program Administrator pursuant to this Agreement,- CSWAT may do
business as "Colorado Cooperative Liquid Assets Securities System
Trust" or "Colorado CLASS". CSWAT using any.of the foreoing
designations shall be referred to herein as the "Trust".- So far
as may be practicable, the Custodian and the Board of.Trustees
"shall conduct the Trust's activities, execute all documents.and-,
sue or be sued under any of the foregoing names. If MBIA
Municipal Investors Service Corporation is no longer the-Program
Administrator hereunder, the Board of Trustees thall-cease using
the designations "Colorado Cooperative Liquid Assets Securities
System Trust" and "Colorado CLASS" and use such other designation
or they shall adopt such other name for the Trust as they deem
proper, and the Trust shall hold property and conduct its
activities under such other designation or name.
(b) The purpose of the Trust is to,establish a local
government surplus funds trust fund for the Participants pursuant
to Part 7 of Article 75 of Title 24 of the Colorado Revised
Statutes through which'a Participant may pool any moneys in-its
treasury which are not immediately.required- to be disbursed, with
the same such moneys in.the treasury of any-other Participant in
order- to take advantage of short-term investments and maximize
net interest earnings in-accordance with the provisions of Part 6
of Article 75 of Title 24 of the Colorado Revised Statutes and-
the Public Deposit Protection Act of 1975 or other laws of.the
State of Colorado, from time.to time in effect, governing-the
investment of'moneys in the treasury of a Participant.
Y
(c) The Trust shall maintain an office of record.in
the State of Colorado and may maintain such other offices-. or
places of business as the Board of Trustees may from time to-time
determine. The office of record may be-changed from time to time
by resolution of the Board of Trustees, and notice.of-such change
of the office of record shall be given to each Participant, the"
Custodian and the Program Administrator.
(d) (i) The Trust shall be a trust organized and
existing under the laws of the State of Colorado. The Trust is
not intended to be, shall not be deemed to be,.and-shall not-be
treated asa general partnership, limited partnership, joint .
venture, corporation, investment company or joint stock company.
The Participants shall be beneficiaries of the Trust,,and their
relationship to the Board of Trustees shall be solely in their
I - 1
capacity as Participants and beneficiaries in accordance with the
rights conferred upon them hereunder.
(ii) This Agreement is an agreement of indefinite term
regarding the investment, reinvestment and withdrawal of
Participants''- local government funds within the meaning of Parts-
6, and 7 of Article 75 of-Title 24 of the Colorado Revised
Statutes and Articles' 10.5 and-47 of Title 11 of the Colorado
Revised Statutes.
1.2 Definitions.
"Account" shall have the meaning set forth in Section 5.3(a)
hereof.
"Affiliate" means, with respect to any Person, another
Person directly or indirectly in' control of, controlled-by or
under common-control with such Person, or any officer, director,
partner or employee of such Persons.
"Agreement" means this Master Agreement dated as of July 15,
1995, as amended, by and among MBIA Municipal Investors Service
Corporation, Bank One, Colorado, N.A., as custodian, the Trust,
the Board of Trustees and the Participants.
"Balance" for each Participant means an amount, initially
equal to zero that-is adjusted pursuant to Article II hereof to
reflect, among other things, cash investments by such
Participant; cash payments to, such Participant, a pro rata
distribution of incoIIte,"from the earnings of the Trust, investment
results and expenses and fees incurred pursuant to this
Agreement.
"Board of Trustees" means the board of the Trustees
established pursuant to Article III hereof.
"Business Day" means a day on which banks are not required
or authorized by law to close in Colorado.
"Conflicting-Provisions" shall have the meaning set forth in
Section 10.3 hereof.
"CSWAT" means the Colorado Statewide Asset Trust d/b/a
Colorado CLASS.
"Custodian" means Bank One, Colorado, N.A., as custodian, or
any Person or Persons appointed, employed or contracted with by
the Trust pursuant to Article V hereof.
"Effective Date" means the first day that execution copies
of this Agreement have been executed by the Trust, the Board of
Trustees, the Program Administrator, the Custodian, and all of
I - 2
the local governmental entities that are participants in CSWAT on
such dav.
- "Initial Participants" means any Participants that on the
Effective Date are participants in the CSWAT investment program.
"Investment Funds" means immediately available funds
delivered by each Participant to the Custodian for investment
pursuant to this Agreement but only if (i),the Representative
appointed by such Participant is authorized pursuant to the laws
of the State of Colorado to invest such.funds,and (ii) the
Participant has taken all-actions necessary pursuant to the laws
of the State of Colorado to authorize the delivery and investment
of such funds.
"Investment Procedures" means the procedures for making
investments in the Investment Property set forth' in.Exhibit A
attached hereto, as the same may be amended from time to time
(notwithstanding Section 9.1(a) hereof) by. the Program
Administrator providing notice of such changes to-the Custodian
and the Participants.
"Investment Property" means any and all property, real,
personal-or otherwise, tangible or intangible, which is trans-
ferred, conveyed or paid to the Account pursuant-to Section 2.1
hereof or otherwise and all proceeds, income, profits and gains
therefrom that have not been distributed to a Participant
pursuant to Section 2.2 hereof, used to discharge an Investment
Property Liability or offset by losses, if any, and expenses.
"Investment Property Liability" means.a#y liability (whether
known, unknown, actual,- contingent or otherwise) incurred in con-
nection with the Investment Property pursuant to this Agreement
that is not specified in Section 6.1 hereof as being paid by the
Program Administrator or specified in this Agreement as being
paid directly by a Participant.
"Investment Property Value" means the value of the Invest-
ment Property net of the amount of the Investment Property
Liabilities as determined pursuant to Section 4.5 hereof and the
Valuation Procedures.'
"Meeting of the Board of Trustees" means a duly-called
meeting of the Board of Trustees.
"Particitiants" means any county, city and county, city,
town, school district, special district or other political sub-
division of the State of Colorado, or any department,'agency or
instrumentality thereof, or any political or public corporation
of the State of Colorado that (i) on the Effective Date is a
participant in the CSWAT investment program or (ii) after the
Effective Date, has adopted the resolutions required by Part 7 of
I - 3
A=" of Title 24 of the Colorado Revised Statutes and that
ha: _ed either this Agreement or counterparts of this
Ag: or Participation Certificates pursuant to Section 2.3
he:
icipation Certificate" means a certificate entered into
Pu: o Section 2.3 hereof.
'-ant Procedures" means the procedures for requesting
pa` '.it of the Investment Property,set forth in Exhibit B
ate areto,-as the same may be amended from time to time
(nc anding Section 9.1(a). hereof) by the Program
Sidi. -or providing notice of such change to the Custodian
anc ._ticipants.
-2n" means any city, county, city and county, town;
sc7' :rict, special district, political, or public
CC' - •:1, corporation, natural person, firm, joint venture,
Pa-- "o, trust, unincorporated organization, group,
roc or any political subdivision, department, agency or
_n_ _tlity of any governmental entity.
.=am Administrator"' means MBIA Municipal Investors
Ser ,:poration or any Person or Persons appointed, employed
or :-"--ad with by the Trust pursuant to Article IV hereof.
-am'Administrator Liabilities" shall have the meaning
set =:n Section 4.8(a) hereof.
.isentatives" means those persons who have been desig-
nat Inpresentatives by the Participants pursuant to Section
2.6
means the Colorado trust created as set forth in
Sec of this Agreement.
means any Representative selected pursuant.to-
?,rt- hereof.
::tion Procedures" means the procedures for determining
the :;f the Investment Property set forth in Exhibit C
att: <•reto, as the'same may be amended from time to'time
(no- anding section 9.1(a) hereof) by the Program
Adm. or providing notice of such change to the Custodian
and ticipants.
I - 4
ARTICLE II~
PARTICIPANTS
2.1 Investments.
(a) Each Participant shall have the right from time to
time to invest Investment Funds for credit to such Participant's
Balance. A Participant that wishes to make such an investment
shall notify the. Program Administrator acting on behalf of the
Board of Trustees and follow the Investment Procedures..set forth
in Exhibit A. Upon such investment in accordance with Exhibit A,
the Participant shall have an undivided beneficial interest in
the Investment Property.
(b) The Balance of a Participant shall be increased
upon the investment of Investment Funds by an_amount equal-to the
amount-of such Investment Funds.
(c) No later than the next Business Day -after a
Participant has made-an investment of Investment-Funds, the
Custodian shall deliver a confirmation to the Program .
Administrator. The Program Administrator shall-retain;a-copy of
the confirmation in its records.
(d) Any funds that do not meet the conditions set
forth in clauses (i) or (ii) of the definition of Investment
Funds shall be returned to the Participant.investing such funds
by the Custodian at the request of the Program Administrator and
such Participant shall bear all of the hosts and liabilities
associated with the return-of such funds.----
(6) -There is no maximum or minimum',amount that must-be
invested pursuant to this Agreement nor is there any maximum or
minimum limitations on the aggregate amount *of Investment Funds
that any Participant may have invested at one time.
2.2 Payments.
(a) Each Participant shall have the right from-time to
time to-request, in accordance with the Payment Procedures set
forth in Exhibit B. hereto, that the Program. Administrator notify.
the Custodian to pay to the Participant (by the transfer of the-
proceeds received from the sale, or maturity of'securities held by
the Custodian), or on its behalf; any amount (rounded to the
nearest whole cent) that is less than. or equal to the -
Participant's Balance at the time that payment -is - made pursuant
to such request. Except,as,provided in Exhibit B;.there shall be
no limitation on the period of time that Investment Funds may be
invested through the'Trust prior to such payment.
(b) Upon the receipt of any payment request, the
Program Administrator shall notify the Custodian, in writing or
II - 1
•:e=bally to be followed by written confirmation, of the payment
request from the Participant, and the requested amount (rounded
to the nearest whole cent) shall be paid (by the transfer of the
roceeds received from the sale or maturity of securities held by
tie Custodian) by the Custodian to, or on behalf of, such
Participant as provided in Exhibit B.
(c) Whenever any payment is made to, or on behalf of,
any Participant pursuant-to Section 2.2(b)-hereof, such
Participant's Balance shall be reduced by the Program
administrator by the amount of such payment.
(d) Each Participant agrees that, without prior
notice, the right'to payments may be temporarily suspended or
=ostponed for the whole or any part of any period .(i) during
which trading-in fixed income securities generally in any
:rational trading market shall have been suspended or minimum
prices or maximum daily charges shall have been established on
such market, (ii) a general banking moratorium shall have been
aclared by federal or Colorado "state authorities 'or (iii).- there
s'1all have occurred-any outbreak, or material escalation, f
:,stilities, or other calamity or crisis, the effect of which on
e financial markets of the United States is such as to make it
impracticable (a) to dispose of the Investment Property because
of the substantial losses which might be incurred or (b) to
determine the Investment Property Value in-accordance with the
7aluation Procedures set, forth in Exhibit C from time to time.
. e Custodian and each Participant shall be notified as soon as
~-acticable orally or in.writing by the Program Administrator in
:he event that such a suspension or postponement is commenced.
Such a suspension or postponement shall not itself directly alter
)r affect a Participant's Balance. Such a suspension or
?ostponement shall take.effect at such time as is determined by
:he Program Administrator, and thereafter there shall be no right
o request or receive payment until the first to occur of: (a)
i: the case of (i) or (ii) above, the time at which the Program
'c.ministrator declares the suspension or postponement at an end,
-hich declaration shall occur on the first day on which the
?eriod specified in,clause (i) or (ii) above shall have - expired;
rr.d (b) in the case of (iii) above, the end of the' first day on
ch the period specified in clause (iii) above is no longer
:cntinuing as determined by the Program A'dministra'tor. Any
larticipant that requested a payment prior-to any•suspen_sion or
)ostponement of payment may withdraw its request at any time-
-or to the termination.of the suspension or postponement.
ucwithstanding anything contained in this Section 2a2(d) to the.,
ontrary, if during a suspension or postponement period, a
participant demands in-writing the, right to receive _a a-payment and
t is not impossible to accommodate such demand, the Program
aministrator shall make all reasonable efforts to effectuate
uch payment demand.
II - 2
2.3 Additional Participants After Initial Execution. Any
governmental entity of the State of Colorado that has the
authority to pool any of its money pursuant to Part 7 of Article
75 of Title 24 of the Colorado Revised Statutes that wishes to
become a party to this Agreement after the Effective Date may do
so by adopting the,reso.lutions required by Part 7 of Article 75
of Title 24 of the Colorado Revised Statutes and by executing
either a counterpart to this Agreement or a Participation
Certificate attached hereto as Exhibit D and-delivering the
counterpart or the original executed Participation Certificate to
the Program Administrator. The Program Administrator shall
provide written notification monthly to the Board of Trustees and
the Custodian of the admission of a new Participant. Any entity
that becomes a Participant pursuant to this Section 2.3 shall
have the same rights and obligations hereunder as the other
Participants.
2.4 Termination of Participation.
(a) Any Participant may withdraw from this Agreement
at any time without penalty upon written notice to the Program
Administrator, who shall notify the Custodian and-the Board of
Trustees upon receipt of such notice of withdrawal. Upon its
withdrawal from this Agreement, a Participant shall cease to have
any rights or obligations under this Agreement except for any
obligations, including, - without limitation, indemnification
obligations.set forth in,Sections 4.8 and 5.6(4), arising on or...
before the date of withdrawal. A notice of withdrawal shall be
deemed to constitute (i) a request under the Payment Procedures.
that an amount equal to the requesting Participant's entire
Balance as of the date of, such notice-be paid to such Participant
and (ii) a termination of the Board of,Trustees' trust
relationship hereunder with the Participant. "_No withdrawal shall
become effective until such Participant's Balance is equal to.
zero, and until. such time, such Participant shall continue to
possess all of the rights,,-and to be subject to all-of the
obligations, arising from this Agreement.
(b) Any Participant that breaches any material-cove-
nant contained in'Article VIII hereof or for which any of the
representations contained in Article VII hereof ceases to be true
shall be deemed to have given a notice of withdrawal pursuant to
Section 2.4(a) hereof immediately upon such breach or cessation,
but shall not be deemed to have requested the payment of its
Balance unless and until it either makes an actual payment
request or the Program Administrator determines that such a
breach or cessation has,occurred.
2.5 Receipt of Statements and Reports; Recruests.
(a) The Program Administrator, on behalf of the Board
of Trustees, shall provide to each Participant a copy of the
II - 3
statements prepared pursuant to Section 4.2 hereof and of the
reports prepared pursuant to Section 4.3 hereof applicable to'
such Participant.
(b) In addition, each Participant may direct the-
Program Administrator to provide - a statement-of-the value of the
Participant's Balance as of the date of the request. The Program
Administrator--shall provide such statement, subject-only to
account activity as of such date.
(c) On behalf of-,each Participant,,the Program
Administrator shall maintain the records relating to such
Participant in a.manner that records.the Participant's Balance as
one or more subaccounts or other-special accounts to-accommodate
the desire'of such Participant to segregate-a portion of its
Investment Funds. The Program Administrator shall maintain a
separate record for each Participant and shall record the
individual transactions involving each such Participant and the
total value by subaccount of all investments or portions thereof
belonging to each such Participant.
(d) No Participant shall be entitl"ed to any reports or
statements applicable solely to another Participant.
2.6 Representatives.
(a) Each Participant shall designate a Representative
to act for the Participant, hereunder for all purposes, including,
without limitation, to give,consents on behalf of the Participant
and to'receive notices on behalf--of'the Participant. Such
Representative--shall be the person that is empowered by the
statutes of the State of Colorado and the charter, ordinances or
other rules or-regulations of the Participant to direct the
investment of such Participant's Investment Funds. The,
Representatives, in their capacity as Representatives shall not
be required to devote their entire time to duties-iinder.the
Agreement. To the extent permitted by law, eachRepresentative
may designate additional persons who may act on behalf of the
Representative to transmit the Representative's instructions to
the Program Administrator, the Custodian or the Board of
Trustees.
(b) Each Representative shall be the official respon-
sible for the investment of.Investment Funds into the Trust and
all payments made from the Trust for the Participant represented
by such Representative. In making such investments and payment'
requests, each Representative shall use prudence and care to
preserve the principal and to secure the maximum rate'of interest
consistent with safety and.liquidity.
II - 4
ARTICLE III
TRUSTEES AND THE BOARD OF TRUSTEES
3.1 Selection of Trustees.
(a) Commencing, in 1996 and in each calendar year
thereafter, the Program Administrator shall:'call, upon at least
thirty days' written notice to the Part icipahts,'„a meeting,of the
Participants for=the- purpose of selecting Trustees for the Trust.
The election shall b_e to fill the offices of-the Trustees whose
terms expire during that-calendar year. Such notice shall be-
mailed by October 31 in each such year. If the Program-
Administrator-shall fail to call such a meeting, any two
Participants may -callsuch a meeting by•providing at-least
fifteen days'-written notice to the other Participants. The
Program Administrator shall compile the nominations submitted by,
the Board-and by any Participant,-.and shall mail the ballots to.
the Participants and otherwise assist the Board'.in the conduct.of
the election' of ,Trustees., In.order to qualify to be nominated as
a Trustee, a candidate must be a Representative. The number-of
Trustees on the Board of Trustees shall be nine (9) unless a
different number is set by the Board of Trustees prior,to the
mailing of ballots, provided that the number of'Trustees shall'-
always be an - odd'number of three (3) or more. In order to be
elected as a Trustee; a candidate must receive A majority of the
votes of the Participants voting by mail or at such meeting. A
quorum for such meeting-shall be the Representatives of the
lesser of (i) twenty five"percent of the. total number of
Participants determined at the time the notice of the meeting is
sent or (ii) nine Participants. If a quorum is not present, the
meeting may be adjourned to a future time-and place set at such
meeting. Each Participant shall be entitled-to one vote
!regardless of the amount of funds invested in the Trust.
(b) Until the 1996 election, ' allof the current
Trustees shall continue to serve as the Trustees of the Trust.
Prior to the 1996 election of Trustees, the Board of -Trustees
shall divide the current Trustees into three -separate_gr-oups,-
with each group to consist of one-third of the total number of,
Trustees or as close to one-third as practical. The initial
terms for such groups shall expire in 1996, 1997 and 1998..
Commencing in 1996, Trustees elected each year shall serve for
the term specified in Section 3.4 hereof. If - the size of the
Board of Trustees is adjusted as provided in Section 3.1(a), the
Trustee positions, shall, be added to or subtracted-from each. group
by the Board -of trustees in order to maintain approximately equal
staggered terms.
(c) The.Program Administrator shall send written
notice to the Participants and the Custodian listing the names of
the Trustees elected at each annual meeting.
III - 1
3.2 Board of Trustees.
The Board of Trustees shall. be made up of all of the
Trustees elected by the Participants or designated pursuant to
Section 3.5 hereof. The Board of Trustees shall supervise the
Trust and the affairs of the -Trust and shall act as the liaison
between the Participants and the Custodian and the Program
Administrator. The Board of Trustees shall have the power to
administer the affairs of the trust, .and',to.enter,into contracts
and agreements on behalf of the Trust in'order to effectuate the
terms of this' Agreement. The_Board- of Trustees shall have the
power to select all of the Trust's consultants,_ including,
without limitation, the Program Administrator and the Custodian,
subject to the terms of this Agreement. The Trustees shall
select by majority vote a chairman of. the Board of Trustees; and
may select such other officers of the Board of trustees,
including, without limitation, a vice chairman and a secretary,
as,--the Trustees deem appropriate. The chairman or :the vice
chairman may designate a recording secretary to'take minutes at
Meetings of the Board of Trustees. Ift the absence of the
chairman, the. vice chairman or the secretary, if any, shall have
the power to'act in place of the chairman.
3.3 Meetings. Meetings of the Board of Trustees may be
called by the Program-Administrator at any time, and shall be
called by the Program-Administrator upon the request of at least
two Trustees, on at'-least seventy-two hours',hotice to each
Trustee and shall be held at-the time and place and for, the
purposes stated.in the call'of the meeting. There shall be at
least one meeting of the Board of Trustees in each in each
calendar year commencing January 1, 1996.
3.4 Term. The term of office for Trustees, elected pursuant
to Section 3.1(a) hereof shall commence thirty days after the
notice specified in Section 3.1(c) is sent to the Participants
and the Custodian. The term of office for Trustees selected
pursuant to-Section 3.5-here6f shall commence immediately upon :
such selection. Each Trustee shall hold office for a term of
three (3) years'(except -as provided in Section 3.5 hereof) or
until the* first to occur- of! (a) the Trustee's resigning, (b)
the Trustee ceasing to be a Representative. of a Participant, (c)
the Trustee's death, (d) the Trustee's being adjudicated incomj-'
petent or otherwise losing the capacity to discharge the duties
of the office of z 'Trustee and .(e) the term of office of the
Trustee's successor having begun pursuant to this Section 3.4.
3.5 Vacancies. If any Trustee resigns or is-.removed or
otherwise ceases to serve, the remaining Trustees may designate a
qualified successor to fill such vacancy until the next annual
meeting of Participants at which time a new Trustee shall be
elected to fulfill the remaining portion of the three (3) year
term of the replaced Trustee.
III - 2
3.6 Costs.
(a) The expenses of each Representative to attend the
annual meeting shall be borne by each Participant.
(b) The reasonable out-of-pocket expenses of the
Trustees incurred in the performance of their duties hereunder
and of attending a meeting of the Board of Trustees shall be
Investment Property Liabilities.
*1. 1
III - 3
ARTICLE IV
PROGRAM ADMINISTRATOR
4.1 Appointment; General Provisions.
('a) The Board of Trustees hereby appoints MBIA
Municipal Investors Service Corporation as the Program.
Administrator under this Agreement, subject-to the overall super-
vision of the Board of Trustees, for the period and on the terms
set forth in this Agreement.
(b) MBIA Municipal Investors Service Corporation
accepts such appointment and agrees to render the services and to
assume the obligations set forth herein, for the compensation
herein provided.
(c) The. Participants and the Board of Trustees
delegate no investment discretion to the Program Administrator
hereunder to invest in investments not meeting the criteria set
forth in Exhibit E and the Program Administrator expressly
refuses to accept any delegation of such discretion. The
decision concerning-which criteria shall be contained on Exhibit
E shall remain at all times under the control of the Board of
Trustees. The Board of Trustees shall ensure that the criteria
set forth on Exhibit E are permitted by, and consistent with the
standards and the duty of care set forth in, Sections 702(3) and
702(4) of Article 75 of Title 24 of the Colorado Revised
statutes.
(d) Each Participant directs the Custodian to act, and
the Custodian agrees to act, in accordance with the
recommendations of the Program Administrator. The Program
Administrator shall at no time have custody of, or physical
control over, any of the Investment Property. If a Participant
in error delivers Investment Funds for investment to the Program
Administrator instead of to the Custodian, the Program
Administrator shall immediately transfer such Investment Funds to
the Custodian. The Program Administrator shall not be liable for
any act or omission of the Custodian, but shall be liable for the
Program Administrator's acts and omissions as provided herein.
4.2 Monthly Statements.
(a) Within 15 days subsequent to the end of each
month, the Program Administrator shall, on behalf of the Board of
Trustees, prepare and submit to each Participant which was a
Participant during such month a statement disclosing any activity
in each of its accounts, including changes in investments and
rate of return thereon, and a closing Balance for each of its
accounts for such month.
IV - 1
(b) The Program Administrator, upon the request of a
Participant, shall furnish to the Participant a statement of such
Participant's Balance as of the date of.,such request, subject
only to account activity as of such date.
4.3 Reports. The Program Administrator shall prepare or
cause to be prepared (i) at least annually a-report of operations
containing a statement of the Investment Property and the Invest-
ment Property Liabilities and statements of•operations and of net
changes in net assets prepared in conformity with generally
accepted accounting principles consistently applied and (ii) at
least annually an opinion of an independent certified public
accountant on such financial statements based -on' in"examination
of the books and records of the Program Administrator,and the
Custodian with respect to the Investment Property,: performed in
accordance with generally accepted auditing standards. ''A copy of
such signed report of operations and accountant Is opinion shall
be filed with the Board of Trustees and-the Participants within _
ninety (90) days after the close of the period covered thereby.
In addition to the foregoing, the Program Administrator, shall
also provide a copy, of the quarterly report to be filed with the
Colorado Securities commissioner pursuant to-Colorado Revised
Statutes S 11-51-906 to each Participant within sixty (60) days
of such filing.
4.4 Investment Activities and-Powers. Subject to the
supervision of the Board,of-Trustees, the Program Administrator
shall perform the following services:
(a) advise the Board of Trustees concerning.
investments which appear to the Program-Administrator to be
advantageous to the Participants within the investment criteria
set forth in Exhibit E and within all applicable law; . -
(b) implement or cause to be implemented securities
transactions for the Trust on behalf of the Board of Trustees•and
the Participants as"-permitted by the investment criteria set
forth in Exhibit•E (including, without' limitation, by executing or causing to be executed on.behalf of and as - an agent of the'
Trust agreements and. other documents containing representations,
warranties and covenants that are common or standard for"such_
agreements and documents within the investment'industryj or,
despite the intention of the parties hereto to always have-the
Investment Property fully invested, cause, the Custodian to hold
the Investment Property uninvested in a custodial account
maintained for the benefit of the Trust, provided, however, that
neither the_Program Administrator nor any Affiliate"of the
Program Administrator shall act as -a -principal in the sale or
purchase of securities for the Trust;
(c) from time to time, review the permitted invest-
ments and the investment criteria set forth-in Exhibit E and, if
IV - 2
circumstances and applicable law permit, recommend changes in
such permitted investments and'such investment criteria;
(d) provide such advice and information to the
Participants and the Board of Trustees on matters related to
investments as the Participants or the Board of Trustees may
reasonably request, including, without limitation, research and
statistical data concerning the Investment Property and other
matters within the scope of the-permitted investments and
investment criteria, set-forth in Exhibit E;
(e) advise whether and in what manner all rights
conferred by the Investment Property shall be exercised;
(f). prepare such-information and material as may be
required in the -implementation- of'the Valuation Procedures or the
computation of the Balances.and the preparation of any and all
records and reports required by.this Agreement or applicable
laws; and .
(g) employ, consult with, obtain advice from and
exercise any of the Program -Administrator!s rights or powers
under this Agreement through the use.of agents, including
investment advisors, brokers, dealers, auditors and legal counsel
(who may.be counsel to the Program Administrator or-the Board of
Trustees) .or.other •advisors. Notwithstanding Section 10.9
hereof, the Program Administrator may transmit information
concerning the Investment Property and the Participants to such
agents.
4.5 Daily-Calculation of Proctram Value and Rate of Return.
(a) The Program Administrator shall calculate the
Investment Property Value once on each Business Day at the time
and in the manner provided in the Valuation Procedures.
(b) Upon performing the valuation specified in section
4.5(a) hereof, the Program. Administrator-shall calculate
(rounding off to the nearest whole cent) the Balance 'of each
Participant and each-Balance of each of the Participants shall be
adjusted proportionately so -that the -total Balances of all -the`
Participants equals the Investment.Property Value.
.(c) For purposes of calculating the Investment
Property Value, the amount of any uncertain or contingent
Investment Property Liability,shall be deemed to be equal to the
amount of„the reserve, if any, against such Investment Property
Liability that has been approved from time to time by the-Program~
Administrator.
(d) For purposes of calculating the Investment
Property Value, if.--the' value. of any part of the Investment
IV - 3
Property is uncertain, the value of such part of the Investment
Property shall be deemed to be equal to the amount determined
from time to time by the Program Administrator.
(e) The Program Administrator shall calculate daily
the rate of return earned on the Investment Property.
4.6 Administration of Program. The Program Administrator
shall perform the following administrative functions on behalf of
the Board of Trustees in connection with the implementation of
this Agreement:
(a) collect and maintain for such time period as may
be required under any applicable federal or Colorado law written
records of all transactions affecting the Investment Property or
the Balances, a copy of which records shall be maintained in the
State of Colorado, including, but not limited to (a). investments-
by and payments to or on behalf of each Participant; (b)
acquisitions and dispositions of Investment Property; (c) pledges
and releases of collateral securing the Investment Property;
(4) determinations of the Investment Property Value; (e)
adjustments to the Participants' Balances; and (f) the current
Balance and the Balances-at the end of each month for each
Participant. There shall be a rebuttable presumption that any
such records are complete and accurate. On behalf of each
Participant, the Program Administrator shall maintain the records
relating to such Participant in a manner that subdivides _the
Participant's Balance into subaccounts or other special accounts
to accommodate the desire of such Participant to segregate a
portion of its Investment Funds;
(b) assist in the organization of the annual meeting
required by Section 3.1(a) hereof and of Meetings of the. Board of
Trustees, including preparation and distribution of the notices
and agendas therefor;
(c) respond to all inquiries and other communications
of Participants, if any, which are directed to the Program
Administrator, or, if any such inquiry or communication is more
properly addressed by an officer of the Custodian, referring such
inquiry or communication to such person. and coordinating his
response thereto;
(d) pay all Investment Property Liabilities in
accordance with this Agreement from the Investment Property; and
(e) engage in marketing activities to promote
participation of Colorado governmental entities... in the Trust.
IV - 4
4.7 Resignation and-Removal.
(a) The Program Administrator may resign as Program
Administrator upon the giving of at least sixty (60) days prior
written notice of such resignation to the Board of Trustees and
the Custodian.
(b) A majority of the Board of Trustees may remove the
Program Administrator upon the, giving of at least-sixty (60)
days' prior written notice to the Program Administrator and the
Custodian.
(c) In the event that the Program Administrator shall
give notice of its resignation or if the Board of Trustees shall
give notice of the removal of the Program. Administrator, a
majority of the Board of Trustees shall appoint a successor.
4.8 Liability and Indemnification.
- (a) Each Participant agrees that-the Program
Administrator and its officers, directors,. agents and employees
shall not be liable for any action performed or omitted, to be'
performed or for any errors of.judgment made in good faith in
connection with, any matters to which this Agreement_relates,
provided that' such disclaimer shall not relieve any of them for
liability arising from negligence, malfeasance, material breach
of this Agreement by the Program Administrator or violation of
applicable law by any of them ("Program Administrator
Liabilities"). Nothing herein shall constitute a waiver or
limitation of any rights which the Participants may have under
any federal or state securities laws.
(b) Each Participant-agrees to defend, indemnify and
hold harmless the Program Administrator, any permitted subcon-
tractors, their respective Affiliates (including,any controlling
person) and the respective directors, officers; agents and
employees of 'any of the foregoing from and against any and all
claims, liabilities, damages or expenses,-whether they-proceed 'to
judgment or are settled or otherwise brought to'a conclusion,_
arising out of or related, to (i) any breach of- a representation,
warranty or covenant hereunder by any Participant, respectively
or (ii) any, services performed, - or to be performed, hereunder bpi'
the Program'Administrator (including, but not 'limited* to, invest-
ment advice or the failure to give investment advice at any
time), except for any Program Administrator Liabilities and
provided that no indemnification hereunder'shall apply to any
liability of the Program Administrator arising under federal or
state securities laws..
(c) Subject to Section 4.'8 (a) above, the indeminifica-
tion rights set forth-in Section 4.8(b) above shall be in
addition to any other rights that any indemnified party may have
IV - 5
at common law or otherwise, including, but not limited to, any
right to contribution. Each of the Participants hereby consents
to personal jurisdiction and service and venue in any court in
which any claim that is subject to such indemnification right,is
brought against any indemnified party.
(d) Each Participant and the Board of Trustees
understand that in performing,-its services hereunder the Program
Administrator will rely on information provided by others and .
agree that the Program Administrator is not responsible for the
accuracy of such information.
4.9 Power to Receive Investment Advice. The Program
Administrator has retained MBIA Securities Corp., at the cost of
the Program Administrator, to provide investment advice
concerning the Investment Property. The Program Administrator
shall have.the right, at its own cost, to receive investment
advice concerning the Investment Property from any other third
party. Notwithstanding the provisions of Section 10.9 hereof,
the Program Administrator may transmit information concerning the
Investment Property and the Participants to MBIA Securities Corp.
and such other third parties in order to obtain such investment
advice. The Program Administrator shall notify the Board of
Trustees'if any third parties are retained in addition to MBIA
Securities, Inc. pursuant to.this Section 4.9 within 45 days of
such retention.
4.10 Advice to Other Clients. It is understood that the
Program Administrator performs investment advisory services for
various clients. The Participants and the Board of Trustees
agree that the Program Administrator may give advice and "take
action with respect to any of its other clients which may differ
from the advice given to, or the.timing or nature'of action taken
with respect to, the Investment Property; provided-that the
policy and practice of the Program Administrator is not to favor
or disfavor consistently or,consciously any client-or class of
clients in the allocation of investment opportunities and that,
.to the extent practical, such opportunities are allocated among
clients over a period of time on a fair-and equitable basis.
Nothing herein contained shall be construed so as to prevent the
Program Administrator or any of its directors, officers,
employees, shareholders or affiliates in any way from purchasing"
or selling any securities for its or their"own accounts prior_to,
simultaneously with or subsequent to any recommendation or
actions taken with respect to the Investment Property or impose
upon the Program Administrator any obligation to purchase or sell
or to recommend for purchase or sale for.the Investment Property
any security which the Program Administrator or any of its share-
holders, directors, officers, employees or affiliates may pur-
chase or sell for its or their own accounts or for the account of
any other client, advisory or otherwise; provided-always, how-
ever, that the Program Administrator shall use its best efforts
IV - 6
to maximize the gains for the Investment Property in a manner
consistent with the investment criteria set forth in Exhibit E
hereof.
4.11 Soecial Sub-accounts.
The Program Administrator from time to time-may propose to'
the Participants that the Participants establish specially
designated subaccounts with investment;,payment,procedures, fees
or other characteristics,different from those- set -.forth in this
Agreement. Such characteristics may include, without limitation,
certain restrictions on amounts to be invested, holding periods
prior to payments or certain other conditions.to be met for
payments, such as possible payment penalties, or additional fees
for administering such specially designated subaccounts. A
Participant in its sole discretion may create- any such special
subaccount using the same procedures for establishing other.
subaccounts.'.The establishment of such special subaccounts shall
not be deemed an amendment of this Agreement. Any special
subaccount that is created shall be subject to the terms set
forth In. the proposal of the Program Administrator-until the
terms governing such special subaccount.are.amended pursuant to-
this Agreement. .The-Program Administrator may calculate the
return'realized by such special subaccounts separate and apart
from the returns realized by-other subaccounts_maintained for
each Participant.
IV - 7
ARTICLE V
THE CUSTODIAN
5.1
intment and Acceptance.
appointed
Bank one, Colorado, N.A., as custodian, is
A
collective
e Board of Trustees to be the Custodian for the
the period
=rests of the Participants under this Agreement for
Colorado
on the terms set forth herein. Bank One,
,
to render
as Custodian, accepts such appointment and agrees
-
herein
fo:
services and to assume the obligations set forth
,
i compensation herein provided.
custodians
The Custodian shall have the right to utilize sub-
:h
provided t:
e performance of its obligations hereunder '
under th
a) the use of such sub-custodians is permitted
e
custodians
of the State of Colorado, (b) the use of such sub-
not render the performance
f
this Agree:
o
any provision of
by any of the parties hereto invalid
illegal or
not permit-
,
:nder the laws of the State of Colorado
(c) the
Custodian ;
of the T
-
,
use its best efforts to ensure that the interest
ru;
custodial c
:ollective interests of the Participants or the
;it
of th
clearly inc
.
y
e Custodian in the Investment Property is
:ed on th
Custodian =
e records of any sub-custodian and (d) the
us
it
b
collective
.
e
s
est efforts to ensure that the
.rests of the Participants in th
I
Property iE
e
nvestment
diminished or adversely affected because of the
Custodian's
of a sub-custodian.
t
received
No Investment Funds or Investment Property
or
shall b
.d by the Custodian pursuant to this Agreement
e ac
Investment
ted for in any manner which might cause such
liabilities
.s or Investment Property to become assets or
the Custodian.
5.2
nation and Removal: Successors.
r
(
least sixty
The Custodian may resign upon the giving of at
) days
rior w
itt
Trustees an
p
r
en notice to the Board of
= Program Administrator. A majorit
of th
o
of Trustees
y
e B
ard
remove the Custodian upon at least sixty (60)
days prior -
Administr
t
.en notice to the'Custodian and the Program
a
custodian s'
Notwithstanding the foregoing, the removal of the
have been c-
not be deemed effective until a successor shall
.
1 pursuant to Section 5.2(b) hereof.
of its resin
in the event that the Custodian shall give notice
:
.
of the
l
on or if the Board of Trustees shall give notice
remo
Df the custodian, a majority of the Board of
Trustees shz
appoint a successor provided, however, that so long
'
as the Prog=
administrator is required to pay the fees of the
Custodian pL
.
ant to Article VI hereof, the appointment of such
V - 1
successor Custodian shall require the prior written consent of
the Program Administrator.
5.3 Powers.
-(a) (i) The Custodian is authorized and directed to
open and maintain, 'and the Custodian shall open and
maintain, one trust account for the benefit of the Trust
(the "Account") in'the name of "(Name of Custodian]-as
Custodian for the Benefit of the Colorado Statewide Asset
Trust (d/b/a Colorado CLASS)" and will accept"for
safekeeping and for credit to the Account,_in'accordance
with the terms hereof','all securities representing
investment of Investment Funds pursuant to Section'2.1`
hereof, and the income-or earnings derived therefrom. The
Custodian may-Accept funds hereunder. for the - purpose'of
purchasing securities to be held by the Custodian and shall
not be"required to make an independent determination whether
such funds are~Investment Funds.
(ii) All securities and other non-cash Investment
Property held in the Account shall be segregated from other
securities and non-cash property in the possession ofthe
Custodian-and shall be identified as subject to this-
Agreement.
(b) In.accordance with instructions of 'the Program
Administrator acting in a manner consistent-,-with this Agreement,
the Custodian shall, for the account and benefit and burden of
the Participants:
(i) receive and deliver Investment Funds and all
other Investment Property;
(ii) exchange securities in temporary or bearer'
form for securities in definitive or registered, form; and
surrender- securities at maturity or earlier when. advised of
a call. for redemption;-
make;-execute, acknowledge and deliver as
Custodian, any and all documents or instruments (including
but not limited to all declarations;. affidavits and''
certificates of. ownership). that, may be necessary or
appropriate to carryout the powers granted herein;
(iv) make any payments incidental to or in con-
nection with this. Section 5.3(b);
(v) -sell, exchange, or otherwise dispose; -of any
and all Investment Property free and clear of any and-all
interests of the Trust and any and all Participants, at
public or private sale, with or without advertisement; and-
V - 2
execute and deliver any deed-, power, assignment, bill of
sale. or other instrument in connection therewith;
(vi) with respect to enforcing rights in connec-
tion with the Investment Property: (a)' collect, sue for,
rece:_ve and receipt for all sums of, money or other property
due; (b) consent to extensions of the time for payment, or
to t.e renewal of any securities, investments or obliga
tion_-; (c) engage or intervene in, prosecute, defend, com
prom__se, abandon or. adjust by arbitration or otherwise any
acticas, suits, proceedings, disputes, claims, demands or
thin_a relating to the Investment Property;,(d)' foreclose
any collateral, security or instrument securing any invest-
ment notes, bills, bonds,- obligations, or contracts that
are rart of. or relate to the Investment Property; (e) exer-
cise -ny power of sale, and convey good title thereunder
free of any and all interests of any and all Participants,
and in connection with an"y'such foreclosure or sale;
pure: _ ase or otherwise acquire title to ' any property; ( f ) be
a par=y to the reorganization of any Person and transfer to
and c-2posit,with any corporation, committee, voting trustee
or other Person any securities, investments or obligations
of ar.-i Person which form a part of the Investment Property,
for tae purpose of such reorganization or otherwise;
(g) participate in any arrangement for enforcing or pro-
tect-4.+g the interests of the holders of such securities,
invez :ments or obligations and to pay any assessment levied-
in ccnnection with such. reorganization-or arrangement; (h)
extez•; the time (with-or without security) for-the payment
or de Uvery of any debts or property and to execute and
enter into releases, agreements and other instruments; (i)
pay, c_: satisfy any debt or claims; and (j) file "any
finai::ing statements concerning the Investment Property with
the appropriate authorities to protect the Investment
Property from-any potential claim of any creditors of any of
the P •.rticipants; , and
(vii) exercise all other rights and powers and to
take zny action in carrying out the purposes of this
Agree:.ent.
(c) (i) The Custodian shall collect the income on the
Investment Property, and allocate it in accordance with
instrr ations from the Program-'Administrator in accordance
with _ .:ticle II hereof;
(ii) the Custodian shall notify the Program
Administrator, in writing or verbally with written or
facsii-ile confirmation, of any elective action involving the
Investment Property; and
V - 3
(iii) the Custodian shall hold-the Investment
Property (a) in its vaults segregated and held separate and
apart from other property of the Custodian; (b) in its .
account at the Depository Trust Company or other depository,
sub-custodian or clearing corporation; or-(c)*in a_ book
entry account with the Federal Reserve Bank, in which case a
separate accounting of the Investment Property shall.be
maintained by the Custodian-at all times. The Investment
Property held by any such depository, sub-custodian,
clearing corporation or Federal Reserve Bank may be held in
the name of their respective nominees; provided, 'however,'
that the custodial. relationship and the interests of.the _
Trust or the Participants regarding such Investment Property
shall be noted on the records of the Program Administrator
and the custodial relationship on behalf of the Trust or the
Participants shall be noted on the records of,the Custodian
and, to the extent possible, the Custodian shall cause the
trust relationship on behalf of Trust or the Participants to
be noted on the records of such depository, sub-custodian,,
clearing house or .Federal Reserve Bank.
5-.4 Custodial Relationship; Custodian' Records.
(a) The Custodian shall hold the Investment Property_
in its capacity as custodian for the benefit of the Trust. The
Investment Property shall be custodial property of the Custodian
and shall not be, or be deemed to be, an asset of the Custodian:
Each Participant has an undivided beneficial interest in the
Investment Property to the extent of such Participant's Balance.
(b) The Custodian acknowledges that the records con-
cerning the Investment Property shall be maintained by the
Program Administrator and that such records shall conclusively
determine the beneficial interests of each Participant in,-the
Investment Property; and the Custodian hereby agrees. that such
records are conclusively determinative of the beneficial
interests of the Participants. Notwithstanding the foregoing,
the Custodian shall maintain its own internal records concerning
the Account and the transactions contemplated by this Agreement
and the Custodian shall cause all of such records to reflect the
custodial relationship created by this Agreement and the fact
that the Investment Property belongs to 'the Trust for the
collective benefit of the Participants.
5.5 Reliance on Instructions.
(a) The Custodian is authorized to accept and shall be
fully protected if it relies upon the instructions given by any
authorized officer, employee or agent of the Program
Administrator including any verbal instructions which the
individual receiving such instructions on behalf of the Custodian
believes in good faith to have been given by an authorized
V - 4
officer, employee or agent of the ProgramAdministrator, and all
authorizations shall remain in full force and effect until can-
celled or superseded by subsequent instructions received by the
appropriate account officer of the Custodian.' The authorized
officers, employees or agents of the Program Administrator shall
be only such persons as are designated.in writing to the
Custodian by the Program Administrator: The-Custodian may rely
on instructions received by telephone,'tested telex, facsimile
transmission or by bank wire which the Custodian believes in good
faith to have been given by an authorized person. The Custodian
may also rely on.instructions transmitted electronically through
a customer data entry system or any similar electronic
instruction system acceptable-to the Custodian. Any instructions
delivered to the Custodian by telephone-shall promptly thereafter
be confirmed in writing by an authorized.-person, but the
Custodian will incur no liability for the-Program Administrator's
failure to send such confirmation in writing.
(b), In the absence of bad faith or negligence ori'its
part, the Custodian may,conclusively rely, as-to the truth and
correctness of the statements expressed in notices, certificates
or documents submitted,-to it, and the Custodian need not
investigate any fact or matter stated in_any such notice, certif-
icate or document submitted to it or verify the accuracy of the
contents thereof.
5.6 Decrree of Care-Indemnification.
(a) The-Custodian shall hold the-Investment Property
in the,Account with the same degree of care and protection with
which it holds its own property., The Custodian agrees that it
shall be responsible for any loss of Investment Property caused
by the negligence or bad faith of the Custodian-or its agents or
any material breach of this Agreement by.the Custodian.- In the
event of any such loss of Investment Property, the Custodian
shall promptly replace the Investment-Property or the value
thereof and the value of any such loss of rights or privileges
resulting from such loss. The Custodian shall not be responsible
for the acts or *omissions' or. solvency, of any broker or agent
selected by the Program Administrator to effect any transactions-
for the Account.
(b) The Custodian shall not be liable for any error of
judgment made in good faith by an employee, officer or agent of
the Custodian, unless it was proved that the Custodiaft'.was negli-
gent in ascertaining the pertinent facts.
(c) Except as provided in Section 5.6(a),.the
Custodian shall not be required to-expend or risk:its own funds
or otherwise incur any financial liability in.the performance of
any of its duties hereunder or in the exercise of any of its,
V - 5
rights or powers unless it receives indemnity satisfactory to it
for repayment of such funds or against such risk of liability.
(d) The Participants shall indemnify the Custodian and
hold it harmless against any loss or liability or expense
incurred by it in connection with the performance of its duties
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of its duties hereunder. The Custodian shall notify
the Program Administrator promptly of any claim asserted against
the Custodian for which it may seek indemnity and the Program
Administrator shall so notify the Board of Trustees and the
Participants. The Custodian shall not be indemnified against any
loss or liability incurred by the Custodian through its
negligence, breach of applicable law, material breach of this
Agreement by the Custodian or bad faith.
5.7 Subrogation. At the election of a majority of the
Board of Trustees, the Trust shall be entitled to be subrogated
to the rights of the Custodian, with respect to any claim against
any other Person or institution which the Custodian may have, as
a consequence of any loss or damage to the Investment Property.
In such event, the Board of Trustees shall consult with the
Custodian concerning selection of counsel and management of any
litigation to recover for such loss.
5.8 Insurance. The Custodian shall maintain, during the
term of this Agreement, adequate surety bonds and insurance
coverage necessary to protect the Trust and comparable to the
types, amounts and limits which are customary for financial
institutions acting in a fiduciary capacity, but in no event
shall such coverage be below the following minimum amounts;
provided that.such coverage may be obtained through one aggregate
policy:
(a) Financial Institution Bond - $50,000,000
(b) Electronic Computer Crime - $50,000,000
Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, the Custodian may self-insure for
risks usually covered by a standard fiduciary and trust errors
and omissions insurance policy-customary for financial
institutions acting in a fiduciary capacity and shall be liable
to the Trust for any losses if any such risks occur.
5.9 Setoff. The Custodian shall not have, and shall not
seek to enforce, any right of setoff, recoupment or similar
rights against the Investment Property for any amounts owed to
the Custodian pursuant to this Agreement.
V - 6
ARTICLE VI
TRUST EXPENSES
6.1 Expenses. In consideration of the performance of its
obligations hereunder, the Program Administrator shall receive a
fee from the Trust as set forth on Exhibit F, which fee shall be
paid from the earnings of the Trust. The Program Administrator's
fee shall be an investment Property Liability. The Program
Administrator shall submit a monthly bill to the chairman of the
Board of Trustees for approval stating the amount of the fee for
the previous month and providing sufficient information to
demonstrate that the fee was calculated in accordance with
Exhibit F. The chairman of the Board of Trustees is hereby given
the authority to approve or disapprove the bills submitted by the
Program Administrator. After receiving the approval of the
chairman of the Board of Trustees of such bills, the Program
Administrator shall submit such bills to the Custodian for
payment and the Custodian shall pay such bills. From its fee,
the Program Administrator shall pay the following costs and
expenses: the Custodian's fee set forth in Exhibit G, the costs
of third parties retained by the Program Administrator to render
investment advice pursuant to Section 4.9, all custodial and
securities clearance transaction charges, the cost of valuing the
Investment Property, all Investment Property record-keeping
expenses, the costs of preparing monthly and annual reports, the
expenses of the Trust's outside auditors (but only if the Program
Administrator selects such auditors), the fees of the Program
Administrator's legal counsel, the cost of meetings of the
Participants or the Board of Trustees (but not including the
attendance costs of the Representatives or the Trustees,
respectively), outgoing wire charges of the Custodian and the
costs'of Participant surveys and mailings. No Participant shall
be required to make an appropriation to enter into this Master
Agreement or, after the Effective Date, to finance the initial
establishment of the Trust. The fees and expenses of any letter
of credit or other credit or liquidity enhancement obtained for
the benefit of the Trust or the Participants, and the costs of
obtaining a rating, if any, for the Trust from a nationally
recognized rating agency, shall be Investment Property
Liabilities borne by the Trust.
VI - 1
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
-7.1 Representations and Warranties of Each Participant.
Each Participant: hereby represents and warrants that:
(a) the Participant has taken all,necessary actions
and has received all necessary approvals and consents and adopted
all necessary resolutions, including, without limitation, the
resolutions required by Part 7 of Article 75 of Title 24 of the
Colorado Revised Statutes in order to execute and deliver-this
Agreement and to perform its obligations hereunder, including,'
without limitation, the appointment of the Trustee= as Trustees;
the appointment of the Custodian as Custodian and the appointment
of the Program Administrator as Program Administrator;-and
(b) the execution, delivery and performance of this
Agreement does not violate the laws of the State of Colorado or
the Participant's charter or its organizational statute or
documents or any state or local ordinance, resolution, rule or
regulation; and
(c) the execution, delivery and performance of this
Agreement has been.duly authorized and this Agreement is the
legal, valid and binding obligation of the Participant enforce-
able against the Participant in accordance with its terms; and
.(d) the certificates-delivered heretofore or hereafter
by the Participant pursuant to this Agreement, as of the date
specified therein, are true and complete and contain no material
misstatements of fact or omissions that render them misleading;
and
(e) the execution, delivery and performance'of this
Agreement does not conflict with or result in - the breach-or
termination of, or otherwise give any other person the right to
terminate, or constitute a default, event-of-default or an event
with notice or lapse of time or both would constitute a default -
or an event of default-under the terms of-any contract or permit
to which the Participant is a party or by which the Participant
or its properties are bound.
7.2 Representations and Warranties of the Custodian. The'
Custodian hereby represents and warrants that:
(a) the Custodian is a duly organized and validly
existing national banking association, organized under the laws
of the United States with its-principal office in Denver, .
Colorado and is duly qualified to conduct business in the State
of Colorado; and
VII - 1
(b) the execution, delivery and performance of this
.greement have been duly authorized by all necessary action on
:he part of the Custodian and this Agreement is the legal, valid
nd binding obligation of the Custodian enforceable against the
:ustodian in accordance with its terms; and
(c) the performance by the Custodian of its
:bligations under this Agreement does not violate any laws, rules
r regulations of the State of Colorado.
7.3 Representations and Warranties of the Program
.dministrator. The Program Administrator hereby represents and
arrants that:
(a) the Program. Administrator is a duly organized and
-alidly existing Delaware corporation, and is an investment
.dvisor duly registered under the Investment Advisers Act of
940; and
(b) the execution, delivery and performance of this
greement has been duly authorized by all necessary action on the
art of the Program Administrator and this Agreement is the
egal, valid and binding obligation of the Program Administrator,
nforceable against the Program Administrator, in accordance with
"s terms.
(c) the performance by the Program Administrator of
`:s obligat-ons under this Agreement does not violate any laws,
ales or regulations of the State of Colorado.
7.4 Representations and Warranties of the Trust.
(a) The Trust is a duly organized and validly existing
ocal government investment pool trust under Colorado law, duly
.ialified to conduct business in the State of Colorado.
(b) The execution, delivery and performance of this
freement has been duly authorized by all necessary action on the
in of the Trust and this Agreement is the legal, valid and
:.nding obligation of the Trust enforceable against the Trust in
:cordaace with its terms.
(c) The performance by the Trust of its obligations
Lder the Agreement does not violate any laws, rule or
:gulations of the State of Colorado.
7.5 Representations and Warranties of the Board of
-ustees.
(a) The Board of Trustees is duly organized and
tlidly existing under the laws of Colorado, and qualified to
)nduct business on behalf of the Trust.
VII - 2
(b) The execution, delivery and performance of this
Agreement has been duly authorized by all necessary action on the
part of the Board of Trustees and this Agreement is the legal,
valid and binding obligation of the Board of Trustees enforceable
against the Board of Trustees in accordance with its terms.
(c) The performance by the Board of Trustees of its
obligations under the Agreement does not violate any laws, rules
or regulations of the State of Colorado.
VII - 3
ARTICLE VIII
COVENANTS
8.1 Source of Investments. Each Participant hereby cov-
enants that it will invest pursuant to Section 2.2 only
Investment Funds that are permitted to be invested by it pursuant
to the laws of the State of Colorado and any charter,
organizational document or organizational statute applicable to
such Participant and any state or local ordinance, resolution,
rule or regulation applicable to such Participant, and that it
will perform all actions required by the laws of the State of
Colorado and any charter, organizational document or
organizational statute applicable to such Participant and any
state or local ordinance, resolution, rule or regulation
applicable to such Participant to be done prior to such
investment.
8.2 Truth of Representations and Warranties. Each party to
this Agreement hereby covenants that it shall withdraw from this
Agreement prior to the time any of the representations and war-
ranties made by it in Article VII hereof ceases to be true.
VIII - 1
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Am'andment.
(a) Unless explicitly set forth otherwise herein, this
agreement shall be amended only with the written consent of the
Program Administrator, the Custodian and the Trust, acting
through the Board of Trustees.
(b) Any amendment executed pursuant to Section 9.1(a)
hereof will be effective thirty (30) days after notice is mailed
to the Participants setting forth such amendment and stating that
the last consent required by Section 9.1(a) hereof has been
obtained.
(c) Notwithstanding the foregoing, Exhibit E shall be
amended only with the written consent of a majority of the Board
of Trustees. Any such amendment shall become effective thirty
(30) days after notice is mailed to the Program Administrator,
the Custodian and the Participants setting forth such amendment
and stating that such amendment has been consented to by a
majority of the Board of Trustees.
(d) Notwithstanding the foregoing, Exhibits A, B and C
may be amended by the Program Administrator. Any such amendment
shall become effective thirty (30) days after notice is mailed to
the Participants and the Custodian setting forth such amendment.
(e) Notwithstanding the foregoing, Exhibit G may be
amended by an amendment consented to by the Program Administrator
and the Custodian. Any such amendment shall become effective
upon the obtaining of such consents.
(f) All Participants that remain Participants after
any amendment becomes effective shall be deemed to have consented
to the amendment.
9.2 Termination.
(a) This Agreement shall continue in full force and
effect unless terminated as set forth in this Section 9.2. Thi`s`
Agreement may be terminated at any time pursuant to a duly
adopted amendment hereto. This Agreement shall terminate
automatically if this Agreement is not amended to name a new
Custodian or Program Administrator on or before the day that is
immediately prior to the date on which the resignation or
resignation or removal of the Custodian or Program Administrator
would otherwise become effective.
(b) Upon the termination of this Agreement pursuant to
this Section 9.2:
IX - i
(i) The Custodian, the Board of Trustees, the
'ust and the Program aninistrator shall carry on no
,siness in connection ,!ith the Investment Property except
the pu-pose of sat:,`ying the Investment Property
.abilitie.; and windin: up its affairs in connection with
-e Investment Proper-%
(ii) The Cus.odian, the Board of Trustees, the
'ust and the Program ?.ministrator shall proceed to wind up
sir affairs in connec ion with the Investment Property,
I all of the powers c the Custodian, the Board of
astees, the Trust anc• the Program Administrator under this
. eement shall continr. : until the affairs of the Custodian,
Board of Trustees, :he Trust and the Program
ninistrator in connect _on with the Investment Property
-i11 have been wound 'u including, but not limited to, the
ier to collect amount, owed, sell, convey, assign,
€ change, transfer or a herwise dispose of all or any part
c the remaining Invest ant Property to one or more persons
public or private sz. for consideration which may con-
: -;t in whole or in par of cash, securities or other
I .1perty of any kind, d.scharge or pay Investment Property
z abilities, and do all ther acts appropriate to liquidate
s affairs in connection with the Investment Property; and
(iii) After :aging or adequately providing for
t payment of all Invz:~ment Property Liabilities, and upon
i -eipt of such release:. indemnities and refunding agree-
i. :ts as each of the Cu. :odian, the Board of Trustees, the
1 ,ist and the Program Ac:Anistrator deem necessary for their
p atecti.on, the Program Idministrator shall direct the
C ztodian to distribute 'Che remaining Investment Property,
i cash or in kind or in each, among the Participants
a -:ording to their respE_;tive proportionate Balances.
(c) Upon terminat -a of this Agreement and distribu-
tion t -the Participants as :rein provided, the Program
Admini •.cator shall execute z:d lodge among the records main-
tained .n connection with tip - , Agreement an instrument in writing
settin forth the fact of suc:i termination, and the Program
Admini .rator, the Custodian, the Board of Trustees and the
Partic ants shall thereupon. )e discharged from all further
liabil ties and duties hereur,lar, the Trust shall cease, and the
rights nd benefits of all P~ ;:icipants hereunder shall cease and
be can. Lled and discharged; :ovided that Sections 4.6(a), 4.8
and 5.~ 3) hereof shall survi a any termination of this
Agreem, .
(d) If this Agree:a:nt is terminated pursuant to
Sectio, .9.2(a) hereof because of the resignation and/or with-
drawal ,i the Program Administrator, such resignation and/or
withdrz •al shall be postponed until the instrument contemplated
.Y - 2
by Section 9.2(c) hereof has been executed and lodged among the
records maintained in connection with this Agreement.
IX = 3
ARTICLE X
MISCELLANEOUS
10.1 Governing Law. This Agreement is executed by the
Participants and delivered in the State of Colorado and with
reference to the laws thereof, and the rights of all parties and
the validity, construction and effect of every provision hereof
shall be subject to and construed according to the laws of the
State of Colorado.
10.2 Counterparts. This Agreement may be executed in
several counterparts, each of which when so executed shall be
deemed to be an original, and such counterparts, together, shall
constitute but one and the same instrument, which shall be
sufficiently evidenced by any such original counterpart.
10.3 Sever ability. The provisions of this Agreement are
severable, and if any one or more of such provisions (the
"Conflicting Provisions") are in conflict with any applicable
laws, the Conflicting Provisions shall be deemed never to have
constituted a part of this Agreement and this Agreement may be
amended pursuant to Section 9.1 hereof to remove the Conflicting
Provisions; provided, however, that such conflict or amendment
shall not affect or impair.any of the remaining provisions of
this Agreement or render invalid or improper any action taken or
omitted prior to the discovery or removal of the Conflicting
Provisions.
10.4 Gender: Section Headings and Table of Contents.
(a) Words of the masculine gender shall mean and
include correlative words of the feminine and neuter genders and
words importing the singular number shall mean and include the
plural number and vice versa.
(b) Any headings preceding the texts of the several
Articles and Sections of this Agreement and any table of contents
or marginal notes appended to copies hereof, shall be solely for'
convenience of reference and shall neither constitute a part of
this Agreement nor affect its meaning, construction or effect.
10.5 No Assignment. No party hereto may sell, assign, `F
pledge or otherwise transfer any of its rights or benefits under
this Agreement to any other Person, and any purported sale,
assignment, pledge or other transfer shall be null and void.
10.6 No Partnership. Other than the creation of the Trust
by the Participants hereunder, no provision of this Agreement
shall create or constitute an association of two or more Persons
to carry on as co-owners a business for profit, and none of the
parties intends this Agreement to constitute a partnership or any
other joint venture or association.
X - 1
10.7 Notice. Unless oral notice is otherwise allowed in
this Agreement, all notices required to be sent under this
agreement:
(a) shall be in writing;
(b) shall be deemed to be sufficient if given by (i)
depositing the same in the United States mail, postage prepaid,
or (ii) electronically transmitting such notice by any means such
as by facsimile transmission, telegraph, telex or computer
hookup, or (iii) by depositing the same with a courier delivery
service, addressed to the person entitled thereto at his address
or phone number as it appears on the records maintained by the
Program Administrator;
(c) shall be deemed to have been given on the day of
such mailing, transmission or deposit; and
(d) any of the methods specified in Section 10.7(b)
shall be sufficient to deliver any notice required hereunder,
notwithstanding that one or more of such methods may not be
specifically listed in the sections hereunder requiring such
notice.
10.8 Entire Agreement. This Agreement shall constitute the
entire agreement of the parties with respect to the subject
matter and shall supersede all prior oral or written agreements
in regard thereto.
10.9 Confidentiality.
(a) All information and recommendations furnished by
the Program Administrator to the Participants or the Board of
Trustees that is marked confidential or is a trade secret and all
information and directions furnished by the Program Administrator
to the Custodian shall be regarded as confidential by each such
Person to the extent permitted by law. The Program Administrator
and the Custodian shall regard as confidential all. information
concerning the Investment Property and the affairs of the Trust
and Participants. Nothing in this paragraph shall prevent any
party from divulging information to civil, criminal, bank or
securities regulatory authorities where such party may be exposed
to civil or criminal proceedings or penalties for failure to
comply or to prevent the Program Administrator from distributing
copies of this Agreement or the aggregate value of the Trust to
third parties.
(b) In the event that on-line terminals or similar
electronic devices are used for communication from the Program
Administrator to the Custodian or from the Participants to either
the Program Administrator or the Custodian, the Program
Administrator and the Participants agree to safeguard and
X - 2
maintain the-confidentiality of all passwords or numbers and to
disclose them only to such of its employees and agents as
reasonably require access to the information concerning the
Investment Property. The Custodian agrees to safeguard and
maintain the confidentiality of all passwords or numbers and to
limit access to this information for the purpose of acting pur-
suant to this Agreement. The Custodian and the Program
Administrator may electronically record any instructions given by
telephone, and any other telephone discussions with respect to
the Account or transactions pursuant to this Agreement.
10.10 Disputes. In the event of any dispute between the
parties, the parties agree to attempt to resolve the dispute
through negotiation or a method of alternative dispute resolu-
tion. No litigation shall be commenced without a certification
by an authorized officer, employee, or agent of any party that
the dispute cannot be resolved by negotiation or alternative
dispute resolution provided in writing at least 10 days before
commencing legal action.
10.11 Mal ority of Participants. Whenever any provision
hereof refers to a majority of the Participants, such majority
shall be determined based upon the number of Participants at that
time and shall not be determined by a reference to the Balance of
each Participant.
10.12 Writings. Whenever this Agreement requires a notice,
_nstruction or confirmation to be in writing or a written report
to be made or a written records to be maintained, it shall be
sufficient if such writing is produced or maintained by
electronic means or maintained by any other data storage method
such as micro-fiche.
10.13 Effective Date. This Agreement shall become
effective on the Effective Date.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed in its name and on its behalf as of the date first
written above.
MBIA MUNICIPAL INVESTORS
SERVICE CORPORATION
By 11~~ A I
Name: Leon i. Aarveiis,-Jr
Title: sident
X - 3
BANK ONE, COLORADO, N.A., as
Custodian
By
Name : Eugene H. YbshidS\
Title: 'ce Pres;dent & Trust Officer
COLORADO STATEWIDE ASSET TRUST,
D/B/A COLORADO CLASS
By
n~7a":Ve,~-
Name:
Title:
BOARD OF TRUSTEES OF COLORADO
STATEWIDE ASSET TRUST, D/B/A
COLORADO CLASS
By)
Name:
Title:
as Participant
By
Name:
Title:
PARTICIPANT EXECUTION DATE
X - 4
EXHIBIT B
PAYMENT PROCEDURES
1. The Participant shall call or send a written notice to
the Program Administrator indicating the amount requested to be
paid.
2. The Participant shall notify the Program Administrator
in writing of the payee of the amount requested, which may be the
Participant, and include wire, electronic or other instructions.
Such payee must be listed on-the list of approved payees that has
been provided by the Participant to the Program Administrator in
advance of the payment.
3. Requests for payments must be received by the Program
Administrator by 10:30 a.m. Mountain time for payments to.be made
that Business Day.
4. Requests for payments received by the Program
Administrator after 10:30 a.m. Mountain time will be processed
the following Business Day.
5. The Participant may only request payment of that
portion of its Balance that represents Investment Funds, and its
proportional share of the income from the Investment Property
which in all cases have actually been received by the Custodian.
6. These Payment Procedures may be amended from time to
time pursuant to Section 9.1(d) hereof.
EXHIBIT C
VALUATION PROCEDURES
1. Portfolio Valuation.
A. Amortized Cost Valuation
On a daily basis, normally at 3:00 p.m. Eastern time,
the Investment Property Value shall be determined using the
amortized cost valuation method. The amortized cost
valuation method involves initially valuing a security at
its cost and thereafter accreting to maturity any discount
or amortizing to maturity any premium, regardless of the
impact of fluctuating interest rates on the market value of
the instrument.
B. Mark to Market
At least monthly or more frequently if requested by a
majority of the Board of Trustees, the Investment Property
Value shall be determined on a mark to market basis as
follows:
The market value of all or a portion of the Account
securities will be determined from the bid and ask prices
for such securities as quoted in The Wall Street Journal
(Eastern Edition) or by an independent nationally recognized
pricing service for the Business Day-preceding the Business
Day on which the determination of such market value is made
(plus accrued interest to such preceding Business Day); if
the securities are not so quoted on such preceding Business
Day, their market value will be determined as of the next
preceding Business Day on which they were so quoted.
Securities not quoted in the Wall Street Journal or by an
independent nationally recognized pricing service will be
valued by taking the average of the bid quotes from two
primary dealers or if there are less than two primary
dealers in such securities by such other reasonable method
as the Program Administrator shall determine.
As an alternative to determining the market value
pursuant to the foregoing paragraph, the market value of all
or a portion of the Account securities may be determined
using the matrix method. Matrix pricing involves grouping
securities into a matrix by type, maturity and short term
credit rating. A primary dealer who makes markets in those
sect:~ities will provide the bid side prices for the matrix.
C. Amendment. These Valuation Procedures may be amended
from time to time pursuant to Section 9.1(d) hereof.
EXHIBIT D
PARTICIPATION CERTIFICATE
The undersigned does hereby request
that it be admitted as a Participant pursuant to Section 2.3 of
the Master Agreement (the "Agreement") dated as of July 15, 1995
by and between the Participants, Bank One, Colorado, N.A., as
Custodian, Colorado Statewide Asset Trust d/b/a Colorado CLASS
(the "Trust"), the Board of Trustees of the Trust and MBIA
Municipal Investors Service Corporation. By executing this
Participation Certificate, the undersigned agrees that, upon the
execution hereof by the Program Administrator, it will become
subject to the same obligations and shall have the same rights as
if it had executed the Agreement.
The undersigned hereby certifies that is the
duly designated Representative of the undersigned for all
purposes of the Agreement.
The undersigned hereby certifies that its governing body has
adopted the resolutions required by Part 7 of Article 75 of Title
24 of the Colorado Revised Statutes in order for it to
participate in the Trust created by the Agreement.
PARTICIPANT EXECUTION DATE
By:
Name:
Title:
Accepted:
MBIA Municipal Investors
Service Corporation
_11
By:
Name:
Title:
EXHIBIT E
INVESTMENT CRITERIA
1. General Objectives
a. Legality: invest only in investments legally
permissible under Colorado law.
b. safety: minimize risk by managing portfolio
investments so as to preserve principal and
maintain a stable asset value.
C. Liquidity: manage portfolio investments to ensure
that cash will be available as required to finance
Participants' operations.
d. Yield: maximize current income to the degree
consistent with legality, safety and liquidity.
2. Prudence
Investments shall be made with judgment and care, under
circumstances then prevailing, which persons of prudence,
discretion and intelligence exercise in the management of their
own affairs, not for speculation, but for investment, considering
primarily the safety of principal, as well as liquidity and
yield; asking proper questions of the issuer and obtaining
written assurance of collateral, maturity and yield.
3. Investments
Investment Funds may be invested in any or all of the legal
investments specified in Colorado Revised Statutes S 24-75-601.1,
as the same may be hereafter amended, or as may be provided in
any successor statute to Colorado Revised Statutes S 24-75-601.1!
subject to the limitations and restrictions now or hereafter
provided in Colorado Revised Statutes S 24-75-601.1, as' amended,
or in any successor statute including, without limitation, the
following:
U.S. Treasury Bills, Notes and Bonds
• Obligations of U. S. Government Agencies and
Instrumentalities
• Commercial Paper that, at the time of purchase, is
rated in its highest rating category by one or more
nationally recognized statistical rating organizations
which regularly rate such obligations (such as: A-1 by
Standard & Poor 's or P1 by Moody Is Investors Service).
• Bankers' Acceptances and Time Deposits of State or
National Banks which (a) have a combined capital and
surplus of at least $250 million, (b) whose deposits
are insured by the Federal Deposit Insurance
Corporation, and (c) whose long-term debt (or debt of
its holding company) is rated in one of the three
highest ratings categories (ex., AAA, AA, A) by one or
more nationally recognized statistical rating
organizations which regularly rate such obligations.
• U.S. Dollar Denominated Corporate or Bank Debt
(including Negotiable Certificates of Deposit and Bank
Notes) issued by a United States corporation or bank
which (a) has a net worth in excess of $250 million,
and (b) at the time of purchase has at least two credit
ratings from any of the nationally recognized
statistical rating organizations and must not be rated
below "AA" or "Aa3" by any such organization. In
addition: (a) the debt must mature within 3 years from
the date.of settlement; (b) no more than 30% of the
portfolio's total assets may be invested pursuant to
this section.
• Repurchase Agreements Collateralized Fully by
Obligations of the U.S. Treasury or U.S. Government
Agencies or Instrumentalities. All repurchase
agreement transactions will (a) be transacted with
primary dealers in government securities reporting to
the Federal Reserve Bank of New York, (b) the market
value of securities subject to repurchase agreements
will at all times be at least equal to the funds
invested and (c) securities subject to repurchase
agreements will be held by a third party custodian for
the benefit of the Participants.
All investments made on behalf of the Trust are those, that'
in the opinion of the Program Administrator, present minimal
credit risk. A determination that the issuer of eligible
investments presents minimal credit risk shall be based on a
variety of factors which bear upon the ability of the issuer to
make timely payment of its short-term debt. All issuers of
eligible investments are monitored through examination of
quarterly financial statements and day-to-day significant market
or economic events.
All eligible securities at the time of purchase will at
least be considered "First Tier" as that term is defined by Rule
2a-7 of the Investment Company Act of 1940. The Program
Administrator will generally look to the short-term ratings of
Moody's Investors Service and Standard and Poor's in making this
determination.
The maturity of any investment held by the Trust will be a
function, among other factors, of the yield curve and other
market conditions, the cash requirements of Participants, the
maturities of available investment alternatives, and the average
maturity of all other investments held by the Trust. The Trust
will only invest in portfolio instruments with a remaining
maturity of 436 days or less, with the exception of certain
eligible variable rate securities, which may have a remaining
maturity of greater than 5 years, but whose interest rate will
adjust at least annually. The weighted average maturity of all
portfolio investments may not exceed 120 days.
The Trust will attempt to mitigate risk by diversifying its
investments across various eligible security sectors, industries
and issuers. The Trust will limit its investment in securities,
other than United States government and United States government
agency or instrumentality securities, so that at the time of
purchase no more than 5% of its total assets will be invested in
the securities of any one issuer and no more than 25% of its
assets will be invested in the securities of issuers in any one
industry.
4. Allocation of Assets
The following maximum allocations will be maintained as a
guideline:
Security Type
Restriction
U.S. Treasury Bills, Notes
and Bonds 100%
Obligations of U.S. Government
Agencies and Instrumentalities 100%
Commercial Paper
100%
Bank Obligations (Bankers'
Acceptances and Time Deposits) 50%
Corporate or Bank Debt
(including Negotiable CD's
and Bank Notes) 30%
Repurchase Agreements
(no more than 10% of the portfolio
may be invested in repurchase agree-
ments maturing in greater than 7 days) 100%
Adjustable rate securities which
meet all other investment criteria
as previously stated, whose
coupon resets at least annually
off of a U.S. Treasury security
maturing in 1 year or less, U.S.
dollar LIBOR of one year or less
maturity, or the Prime Rate
published by the Federal Reserve.
The coupon must be expressed as
a positive value of the index
plus or minus a fixed number
of basis points. 25%
Eligible adjustable rate securities
with a remaining maturity of
greater than 5 years. 25%
5. Amendments
These Investment Criteria may be amended from time to time
pursuant to Section 9.1(c) hereof.
EXHIBIT F
PROGRAM ADMINISTRATOR'S FEE
For the performance of its obligations under this Agreement,
the Program Administrator will charge a 40 basis points fee from
the Investment Property Value (the "Daily Fee"). This Daily Fee
will accrue on a daily basis and be paid monthly.
The Daily Fee shall be calculated as follows:
The Investment Property Value
is multiplied by (x) .0040 (40 Basis Points)
and divided by 365 days
and that equals The Daily Fee Accrual
Fees may be waived or abated at any time, or from time to
time, at the sole discretion of the Program Administrator.
Should such fees be waived or abated, during the period of the
waiver or abatement, the Program Administrator must pay the costs
as provided in Section 6.1 hereof even if not covered by the
waived or abated fees.
EXHIBIT G
CUSTODIAN'S FEE
Rate Schedule
The Program Administrator shall pay to the Custodian the
costs and fees specified in the letter dated June 12, 1995 from
the Custodian 'to the Prdgram'Administrator, 'as -amended from time
to time by the Program Administrator and the Custodian pursuant
to Section 9.1(e) hereof.