HomeMy WebLinkAbout2018-015 Resolution Authorizing the Creation and Establishment of an Intergovernmental Investment Pool Pursuant to Section 218.415, F.S. and Section 163.01, F.S. RESOLUTION NO. 2018-015
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
OCOEE, FLORIDA, AUTHORIZING THE CREATION AND
ESTABLISHMENT OF AN INTERGOVERNMENTAL INVESTMENT
POOL PURSUANT TO SECTION 218.415, FLORIDA STATUTES, AND
SECTION 163.01, FLORIDA STATUTES; AUTHORIZING THE
EXECUTION AND DELIVERY OF AN INTERLOCAL AGREEMENT
FOR THE PURPOSE OF JOINTLY EXERCISING ITS POWER TO
INVEST SURPLUS FUNDS IN SUCH INTERGOVERNMENTAL
INVESTMENT POOL; APPROVING THE FORM OF SUCH
INTERLOCAL AGREEMENT AND DIRECTING EXECUTION
THEREOF; APPROVING THE INVESTMENT OF CERTAIN SURPLUS
FUNDS OF THE CITY OF OCOEE, FLORIDA IN THE FLORIDA
SHORT TERM ASSET RESERVE; APPOINTING AN AUTHORIZED
REPRESENTATIVE;AND PROVIDING AN EFFECTIVE DATE.
WHEREAS,Section 218.415, Florida Statutes, authorizes any governmental entity within
the State of Florida (the "State") and not part of State government, including, but not limited to,
counties, municipalities, school districts, special districts, clerks of circuit court, sheriffs,
property appraisers, tax collectors, supervisors of elections, authorities, boards, public
corporations, or any other political subdivision of the State (each a "Unit of Local Government"
and, collectively, "Units of Local Government") to invest and reinvest any surplus funds in their
control or possession in any intergovernmental investment pool authorized pursuant to Section
163.01, Florida Statutes;and
WHEREAS, Section 163.01, Florida Statutes, permits political subdivisions, agencies, or
officers of the State, including, but not limited to State government, counties, cities, school
districts, single and multipurpose special districts, single and multipurpose public authorities,
metropolitan or consolidated governments, separate legal entities or administrative entities
created under Section 163.01(7), Florida Statutes, or independently elected county officers (each
a "Public Agency" and, collectively, "Public Agencies"), to enter into an interlocal agreement to
jointly exercise any power, privilege, or authority which such Public Agencies share in common
and which each might exercise separately, permitting the Public Agencies to make the most
efficient use of their powers by enabling them to cooperate on a basis of mutual advantage and
thereby provide for the sharing of their powers in a manner and pursuant to forms of
governmental organization that are in the best interests of the Public Agencies; and
WHEREAS, the City of Ocoee, Florida is a Unit of Local Government and Public
Agency, and is authorized pursuant to Section 218.415 of the Florida Statutes, and its own local
laws to invest certain of its surplus funds in statutorily permitted investments, including, but
not limited to, any intergovernmental investment pool authorized pursuant to Section 163.01,
Florida Statutes; and
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WHEREAS, the City of Ocoee, Florida desires to execute and deliver an interlocal
agreement, in substantially the form attached hereto as Exhibit A (the "Interlocal Agreement"),
in order to provide the Participants (as defined in the Interlocal Agreement), a substantial
benefit by establishing the intergovernmental investment pool to be known as the Florida Short
Term Asset Reserve ("FLSTAR"), which is an intergovernmental investment pool as described in
Section 218.415, Florida Statutes, and managed, operated, and supervised by a board of trustees,
which is a separate legal entity and public body corporate and politic pursuant to Section
163.01(7), Florida Statutes; and
WHEREAS, the City of Ocoee, Florida desires to execute and deliver the Interlocal
Agreement in order to jointly exercise its investment power and invest its surplus funds in
concert with the other Participants pursuant to the Interlocal Agreement in order to (a)
participate in diversified and professionally managed Portfolios (as defined in the Interlocal
Agreement) to meet its investment needs, (b) create greater purchasing powers through
economies of scale, (c) lower the costs associated with the investment and reinvestment of its
surplus funds; and (d) be provided assistance on investment alternatives and other investment
issues of concern; and
WHEREAS, the City of Ocoee, Florida further desires to invest and reinvest a portion of
its surplus funds in FLSTAR; and
WHEREAS, the City of Ocoee, Florida has adopted written investment policies
authorizing investment in intergovernmental investment pools authorized pursuant to Section
163.01, Florida Statutes, and with respect to the funds to be invested in such intergovernmental
investment pools, all authorized investments set forth in the investment policies of such
intergovernmental investment pools.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Ocoee,
Florida as follows:
SECTION 1. AUTHORITY. This Resolution of the City of Ocoee, Florida (the "City") is
adopted pursuant to the provisions of Section 163.01, Florida Statutes (the "Interlocal Act"),
Section 218.415, Florida Statutes (the "Local Government Investment Act"), Chapter 166, Florida
Statutes, and other applicable provisions of law(collectively,the "Act").
SECTION 2. INTERLOCAL AGREEMENT.
(a) Pursuant to Article IV of the Interlocal Agreement, the City hereby approves and
joins the Interlocal Agreement, a copy of which is attached hereto as Exhibit A and incorporated
herein by reference, as an Initial Participant and agrees to be bound by all of the terms and
provisions thereof.
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(b) The Mayor, as attested by the City Clerk, or in each case their duly authorized
designee, are hereby authorized and directed to execute and deliver the Interlocal Agreement,
with such changes, amendments, modifications, deletions, and additions as may be approved
by the Mayor or his or her duly authorized designee, the execution thereof being conclusive
evidence of such approval.
(c) The Interlocal Agreement constitutes a joint exercise of power, privilege, or
authority by and between the Participants thereunder and is deemed to be an "interlocal
agreement"within the meaning of the Interlocal Act. The City shall file the Interlocal Agreement
with the Clerk of the Circuit Court of Orange County, Florida as provided in Section 163.01(11),
Florida Statutes.
SECTION 3. INVESTMENT IN FLSTAR; APPOINTMENT OF AUTHORIZED
REPRESENTATIVE; TAX PAYER IDENTIFICATION NUMBER; CONTACT
INFORMATION.
(a) The City is hereby authorized to invest and reinvest a portion of its surplus
funds in one or more Portfolios of FLSTAR. The City hereby acknowledges the board of
trustees' power to supervise FLSTAR and hereby agrees the surplus funds transferred to
FLSTAR shall be held and managed in trust by the board of trustees for the City's benefit.
(b) The following officers, officials, or employees of the City are hereby designated
as "Authorized Representatives" within the meaning of the Interlocal Agreement, with full
power and authority to, among other things, execute the Interlocal Agreement, an application to
join FLSTAR, and any other documents required to become an Initial Participant; deposit
money to and withdraw money from the City's FLSTAR account from time to time in
accordance with the Interlocal Agreement and the Information Statement; to agree to the terms
for the use of the website for online transactions; serve as a trustee on the board of trustees of
FLSTAR; and take all other actions deemed necessary or appropriate for the investment of
funds of the City:
1. Name: Robert Frank Title: City Manager, or designee
Signature: Phone:407-905-3100
Email: rfrank@ocoee.org
2. Name: Rebecca Roberts Title: Director of Finance
Signature: Phone:407-905-3190
Email: rroberts@ocoee.org
In accordance with FLSTAR's procedures, an Authorized Representative shall promptly notify
FLSTAR in writing of any changes in who is serving as Authorized Representatives.
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(c) The name of the Authorized Representative listed above that will be designated
as the primary contact and will receive all FLSTAR correspondence, including transaction
conformations and monthly statements, is:
Name: City Manager or designee.
(d) The following additional City representative (not listed above) is designated as
an inquiry only representative authorized to obtain account information:
Name: City Manager or designee.
(e) The City Manager may designate Authorized Representatives by written
instrument signed by the City Manager, an existing Authorized Representative or the City's
chief executive officer.
(f) The taxpayer identification number for the City is 596019764.
(g) The contact information for the City is:
Primary mailing address: 150 North Lakeshore Drive,Ocoee, Florida 34761
Main phone number:407-905-3100
Main fax number:407-905-3194
SECTION 4. DIRECTION AND AUTHORITY. The officials, officers, attorneys, and
other agents or employees of the City are directed and authorized to do all acts and things
required of them by this Resolution and the Interlocal Agreement for the full, punctual, and
complete performance of all the terms, covenants, and agreements provided for herein and
therein, and each of the officials, officers, attorneys, or other agents or employees are hereby
authorized and directed to execute and deliver any and all papers and instruments (including
any agreements required for use of online portals related to FLSTAR) and to do and cause to be
done all acts and things necessary or proper for carrying out the activities and actions
contemplated by this Resolution and the Interlocal Agreement.
SECTION 5. INVESTMENT POLICY. With respect to the surplus funds to be
invested in FLSTAR, to the extent the written investment policies of the City adopted pursuant
to Section 218.415, Florida Statutes (the "Investment Policies"), is inconsistent with the
investment policies of FLSTAR, the City hereby amends the Investment Policies to include as an
authorized investment FLSTAR and all authorized investments set forth in the investment
policies of FLSTAR, as such investment policies may be amended from time to time in
accordance with the Interlocal Agreement.
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SECTION 6. EFFECTIVE DATE. This Resolution shall take effect immediately upon
its filing with the Clerk of the Circuit Court of Orange County, Florida.
PASSED AND ADOPTED at a meeting held on the / day of l'ptne., 2018.
CITY OF OCOEE,FLORIDA,
a Florida municipal corporation
By:
Rusty Jo .e Mayor
A )1/4.24142f
ttest:
Melanie Sibbitt, City Clerk
(Seal)
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING
HELD ON ..Ache I f , 2018,
UNDER AGENDA ITEM NO.
.� .
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA;
APPROVED AS TO FORM AND
LEGALITY this Frctay ofJ:4 2018.
SHUFFIELD LOWMAN&WILSON,P.A.
By: - - _1._-
City
D.__City o
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EXHIBIT A
FORM OF INTERLOCAL AGREEMENT
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INTERLOCAL AGREEMENT AND TRUST INSTRUMENT
FOR THE
FLORIDA SHORT TERM ASSET RESERVE
THIS INTERLOCAL AGREEMENT AND TRUST INSTRUMENT (together with any
amendments and supplements, referred to as this "Agreement") is made and entered into by
and among each of those Units of Local Government (as defined herein) initially executing this
Agreement and any other Unit of Local Government that is eligible and becomes a party hereto
(each a "Participant"and, collectively, the"Participants").
WHEREAS, Section 218.415, Florida Statutes, authorizes any governmental entity within
the State of Florida (the "State") and not part of State government, including, but not limited to,
counties, municipalities, school districts, special districts, clerks of circuit court, sheriffs,
property appraisers, tax collectors, supervisors of elections, authorities, boards, public
corporations, or any other political subdivision of the State (each a "Unit of Local Government"
and, collectively, "Units of Local Government") to invest and reinvest any Surplus Funds (as
defined herein) in their control or possession in any intergovernmental investment pool
authorized pursuant to Section 163.01, Florida Statutes; and
WHEREAS, Section 163.01, Florida Statutes, permits political subdivisions, agencies, or
officers of the State, including, but not limited to State government, counties, cities, school
districts, single and multipurpose special districts, single and multipurpose public authorities,
metropolitan or consolidated governments, separate legal entities or administrative entities
created under Section 163.01(7), Florida Statutes, or independently elected county officers (each
a "Public Agency" and, collectively, "Public Agencies"), to enter into an interlocal agreement to
jointly exercise any power, privilege, or authority which such Public Agencies share in common
and which each might exercise separately, permitting the Public Agencies to make the most
efficient use of their powers by enabling them to cooperate on a basis of mutual advantage and
thereby provide for the sharing of their powers in a manner and pursuant to forms of
governmental organization that are in the best interests of the Public Agencies; and
WHEREAS, each Participant constitutes a Unit of Local Government and a Public
Agency, and each Participant is authorized to invest and reinvest its Surplus Funds in an
intergovernmental investment pool created pursuant to Section 163.01, Florida Statutes; and
WHEREAS, the Participants desire to establish and maintain an intergovernmental
investment pool to be known as the Florida Short Term Asset Reserve ("FLSTAR"), which shall
be an intergovernmental investment pool as described in Section 218.415, Florida Statutes, and
managed, operated, and supervised by a board of trustees, which shall be a separate legal entity
and public body corporate and politic pursuant to Section 163.01(7), Florida Statutes; and
WHEREAS, establishing and maintaining FLSTAR is in the best interest of the
Participants, their officials, officers, and citizens in that FLSTAR will (a) offer diversified and
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professionally managed Portfolios (as defined herein) to meet investment needs, (b) create
greater purchasing powers through economies of scale, (c) lower the costs associated with the
investment and reinvestment of Surplus Funds; and (d) provide assistance on investment
alternatives and other investment issues of concern to the Participants; and
WHEREAS, the joint exercise of the power to invest Surplus Funds will be benefited and
made more efficient if (a) all investments acquired pursuant to this Agreement are held by the
Custodian (as defined herein), which will hold such investments for the benefit of the
Participants, and (b) the record-keeping and other administrative functions are performed by
the Co-Administrators (as defined herein); and
WHEREAS, each Participant has duly taken all official action necessary and appropriate
to become a party to this Agreement and perform hereunder, including, the passing of any
ordinances, resolutions, or taking of other actions required under Section 218.415, Florida
Statutes, and other applicable laws and regulations;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, each Participant agrees that all Surplus Funds it transfers to
FLSTAR on or after the effective date hereof shall be held and managed in trust by a board of
trustees for the benefit of the Participant, and the Participants mutually agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Except as otherwise provided in this Agreement,
the capitalized terms used herein shall have the following meanings unless the context
otherwise requires:
"Account" or"Accounts"means any account established by a Participant.
"Additional Party Agreement" means a document substantially in the form attached
hereto as Appendix A which, when attached to a copy of this Agreement and executed by an
Authorized Representative of a Unit of Local Government, constitutes a valid and binding
counterpart of this Agreement and results in the Unit of Local Governing becoming a party to
this Agreement.
"Authorized Investments" means those investments which are authorized from time to
time to be purchased, sold, and invested in under Section 218.415, Florida Statutes, or other
applicable law, and as further defined in the Investment Policies.
"Authorized Representative" means any Person authorized to execute documents and
take other necessary actions, pursuant to this Agreement, on behalf of a Participant or other
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Person, as evidenced by a duly adopted ordinance, resolution or bylaw of the governing body
of such Participant or other Person, a certified copy of which is on file with HTS.
"Board" means the governing body of FLSTAR, known as The Board of Trustees of
FLSTAR, created by this Agreement as a separate legal entity and public body corporate and
politic pursuant to Section 163.01(7), Florida Statutes.
"Bylaws" means the bylaws adopted by the Board, as the same may be amended and
supplemented from time to time, subject to the requirements of this Agreement.
"Co-Administration Agreement" means the Agreement for Investment Management
and Related Services, by and between HTS, JPMIM, and the Board, as the same may be
amended and supplemented from time to time, and successor agreement related to FLSTAR.
"Co-Administrators" mean, collectively, HTS and JPMIM, or such other Persons
appointed, employed, or contracted with by the Board pursuant to this Agreement.
"Custodian" means JPMorgan Chase Bank, N.A., a national banking association, and/or
an affiliate thereof, or such other Persons appointed, employed, or contracted with by the Board
pursuant to this Agreement.
"FLSTAR" means the Florida Short Term Asset Reserve, which is an intergovernmental
investment pool as described in Section 218.415, Florida Statutes, and an instrumentality of the
Participants, managed by the Board, and which consists of all Trust Assets of FLSTAR that are
held in trust for the benefit of the Participants.
"HTS" means Hilltop Securities Inc., a corporation organized under the laws of
Delaware.
"Information Statement" means the information statement or any other document
distributed to Participants and potential Participants to provide them with a description of the
management and operation of FLSTAR, as the same may be amended from time to time, subject
to the requirements of this Agreement.
"Initial Participants" shall mean Units of Local Government initially executing this
Agreement.
"Interlocal Act" means the Florida Interlocal Cooperation Act of 1969, Section 163.01,
Florida Statutes.
"Investment Officer" means one or more officers or employees of the Board designated
as investment officers by the Board.
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"Investment Policies" means the written investment policies adopted and approved by
the Board governing investment and management of the Trust Assets of one or more Portfolios,
as the same may be amended and supplemented from time to time, subject to the requirements
of this Agreement.
"JPMIM" means J.P. Morgan Investment Management Inc., a corporation organized
under the laws of Delaware.
"Participants" means the Units of Local Government that are the initial parties to this
Agreement and the Units of Local Government which subsequently become parties to this
Agreement.
"Person" means any county, municipal corporation, national association, district,
corporation, limited liability company, limited liability partnership, natural person, firm, joint
venture, partnership, trust, unincorporated organization, group, government, or any political
subdivision, department, board, commission, instrumentality, or agency of any governmental
entity.
"Portfolio" means a portfolio of Trust Assets in FLSTAR which is held separate from
other assets of FLSTAR and which is invested with a defined investment objective which may
be different from other Portfolios in FLSTAR, and in which a Participant may elect to invest its
Surplus Funds.
"State"means the State of Florida.
"Surplus Funds" means any funds in any general or special account or fund of a Unit of
Local Government, or funds held by an independent trustee on behalf of a Unit of Local
Government, which in reasonable contemplation will not be immediately needed for the
purposes intended.
"Trust Assets" means, as of any particular time, any and all Surplus Funds transferred,
conveyed, or paid to FLSTAR, all investments purchased with such Surplus Funds, and all
income, profits, and gains therefrom and which, at such time, is owned or held by, or for the
account of,FLSTAR.
"Trustee" or "Trustees" means the Person or Persons selected to serve on the Board
pursuant to this Agreement.
"Unit of Local Government" means any governmental entity within the State and not
part of State government, including, but not limited to, counties, municipalities, school districts,
special districts, clerks of circuit court, sheriffs, property appraisers, tax collectors, supervisors
of elections, authorities, boards, public corporations, or any other political subdivision of the
State.
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"Unitholder"means a record owner of Units in any Portfolio of FLSTAR.
"Units" means equal proportionate units of undivided beneficial interest in the Trust
Assets of any Portfolio, from time to time, including fractions of units as well as whole units.
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ARTICLE II
FLSTAR
SECTION 2.01. ESTABLISHMENT AND CREATION.
(a) The Participants hereby agree to jointly invest certain of their Surplus Funds in
an intergovernmental investment pool, to be known as the Florida Short Term Asset Reserve,
which is an intergovernmental investment pool as described in Section 218.415, Florida Statutes.
(b) FLSTAR is organized and existing as a common law trust under the laws of the
State with the Surplus Funds of the Participants deposited to FLSTAR and all other Trust Assets
held and managed in trust by the Board for the benefit of the Participants.
(c) FLSTAR is not intended to be, shall not be deemed to be, and shall not be treated
as, a general partnership, limited partnership, joint venture, corporation, investment company,
or joint stock company. The Participants shall be beneficiaries of FLSTAR, and their relationship
to the Trustees shall be solely in their capacity as Participants and beneficiaries in accordance
with the rights conferred upon them hereunder.
(d) No Participant shall be required to appropriate any funds or levy any taxes to
establish FLSTAR.
(e) FLSTAR may consist of one or more Portfolios and the Participants may select
the Portfolio or Portfolios in which they wish to deposit their Surplus Funds. A Participant's
share in a Portfolio is represented by Units.
SECTION 2.02. PURPOSE.
(a) The purpose of FLSTAR is to provide an intergovernmental investment pool in
accordance with Section 218.415, Florida Statutes, through which the Participants may invest
certain of their Surplus Funds in one or more Portfolios that best suit a Participant's investment
needs, all in accordance with the law governing the investment of the Surplus Funds of such
Participants.
(b) FLSTAR will place the highest priority on the safety of principal and liquidity of
funds, and the optimization of investment returns shall be secondary to the requirement for
safety and liquidity.
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ARTICLE III
THE BOARD
SECTION 3.01. ESTABLISHMENT AND CREATION.
(a) The Participants hereby agree to create and establish a board of trustees of
FLSTAR, known as The Board of Trustees of FLSTAR, as a separate legal entity and public body
corporate and politic pursuant to Section 163.01(7), Florida Statutes. The business and affairs of
FLSTAR shall be managed by the Board as governing body of FLSTAR.
(b) The Participants delegate to FLSTAR through its Board, the authority to hold
legal title to and manage all Trust Assets transferred to or acquired by FLSTAR pursuant to this
Agreement.All such Trust Assets shall be held in trust for the benefit of the Participants.
(c) The Board is authorized to adopt Bylaws which shall set forth, among other
things, the procedure for holding meetings, the election of officers, and other matters necessary
or desirable for governance by the Board.
(d) The chief administrative office of the Board shall be located in
Florida. The Board may also have offices at such other places within the State as the Board may
from time to time determine or the business of the Board may require.
SECTION 3.02. POWERS AND DUTIES.
(a) General. Subject to applicable law and the terms of this Agreement, the Board
shall have full and complete power to take all actions, do all things, and execute all instruments
as it deems necessary or desirable in order to carry out, promote, or advance the investment
objective, interests, and purposes of FLSTAR to the same extent as if the Board was the sole and
absolute owner of FLSTAR, although such actions, matters, or things are not herein specifically
mentioned. Any determination as to what is in the best interest of FLSTAR made by the Board
in good faith shall be conclusive. In construing the provisions of this Agreement, the
presumption shall be in favor of a grant of power to the Board.
(b) Establishment of Portfolios and Units.
(i) The Initial Trustees have by this Agreement created and established the
following Portfolios: the Government Fund and the Prime Fund. The Government Fund
shall be governed by the Investment Policies substantially in the form attached hereto as
Appendix C, as such Investment Policies may be amended by the Board from time to
time. The Prime Fund shall be governed by the Investment Policies substantially in the
form attached hereto as Appendix D, as such Investment Policies may be amended by
the Board from time to time.
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(ii) The Board shall have full power and authority, in their sole discretion
and without obtaining any prior authorization or vote of the Unitholders to create and
establish Portfolios and to establish Units with such preferences, voting powers, rights,
and privileges as the Board may from time to time determine; to divide or combine the
Units thereof into a greater or lesser number; to value such Units in a manner consistent
with the goals of the Portfolio; to classify or reclassify any existing Units into the
Portfolio; to charge fees and costs, including indemnity costs, against the Trust Assets of
each Portfolio in such amount as the Board determines to be equitable; and to take such
other action with respect to the Units as the Trustees may deem desirable;provided that
the Trustees may take no action pursuant to this Section 3.02(b) which would impair the
beneficial interests of Unitholders in the then-existing Trust Assets.
(c) Investments and Investment Policies. The Board shall have the power to
subscribe for, invest in, reinvest in, purchase, or otherwise acquire, hold, pledge, sell, assign,
transfer, exchange, distribute, or otherwise deal in or dispose of Authorized Investments
pursuant to the Investment Policies. The Board shall adopt and maintain such Investment
Policies, consistent with the general objective of FLSTAR, which shall provide more detailed
guidelines for investment and management of the Trust Assets.
(d) Title to Investments.
(i) Legal title to the Trust Assets shall be vested in the Board on behalf of the
Participants and shall be held by and transferred to the Board, except that the Board shall have
full and complete power to cause legal title to any of the Trust Assets to be held, if permitted by
law, in the name of any other Person as nominee, on such term, in such manner, and with such
powers as the Board may determine, so long as in the judgment of the Board the interests of the
Board and the Participants are adequately protected.
(ii) The Board shall have full and complete power to exercise all of the rights,
powers, and privileges appertaining to the ownership of the Trust Assets to the same extent that
any individual might, and, without limiting the generality of the foregoing, to vote or give any
consent, request, or notice, or waive any notice either in person or by proxy or power of
attorney, with or without the power of substitution, to one or more Persons, which proxies and
powers of attorney may be for meetings or actions generally, or for any particular meeting or
action, and may include the exercise of discretionary powers.
(e) Operating Procedures. The Board shall adopt and maintain Operating
Procedures, which shall provide more detailed information on the procedures for depositing
Surplus Funds, withdrawing funds from FLSTAR, calculation of Units, and determination of
net income and net asset value.
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(f) Information Statement. The Board shall prepare, or direct the preparation of, an
Information Statement that describes how FLSTAR will operate in accordance with the terms of
this Agreement and the Investment Policies.
(g) Expenses. The Board shall have full and complete power to use, or direct the use
of, the Trust Assets held by FLSTAR in any one or more Portfolios, as determined by the Board,
for the following purposes: (i) incur and pay any charges, fees, or expenses which, in the
opinion of the Board, are necessary or incidental to or proper for carrying out any of the
purposes of this Agreement; (ii) pay any taxes or assessments validly and lawfully imposed
upon or against the Trust Assets or any part thereof or the Board in connection with the Trust
Assets; (iii) reimburse others for the payment of such charges, fees, expenses, and taxes; (iv) pay
appropriate compensation or fees from the Trust Assets to persons with whom the Board has
contracted or transacted business; and (v) charge a Participant's Account for any special fees,
charges, or expenses related specifically to transactions in such Account.
(h) Contract, Appoint, Retain, and Employ. Subject to applicable law and the terms
of this Agreement, the Board shall have full and complete power to appoint, employ, retain, or
contract with any Person of suitable qualifications and high repute as the Board may deem
necessary or desirable for the transaction of the affairs of FLSTAR.
(i) Insurance. The Board shall have full and complete power to purchase or to cause
to be purchased and pay for, entirely out of the Trust Assets held by FLSTAR in any one or
more Portfolios, as determined by the Board, insurance policies insuring FLSTAR, the Board,
and officers, employees, and agents of FLSTAR individually against all claims and liabilities of
every nature arising by reason of holding or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by FLSTAR or any such person,
officer, employee, and agent, including any action taken or omitted that may be determined to
constitute negligence, whether or not FLSTAR would have the power to indemnify such person
against such liability.
(j) Borrowing and Indebtedness. The Board shall not borrow money or incur
indebtedness, whether or not the proceeds thereof are intended to be used to purchase
Authorized Investments or the Trust Assets, except as a temporary measure to facilitate the
transfer of funds to the Participant which might otherwise require unscheduled dispositions of
Portfolio investments, but only to the extent permitted by law. No such indebtedness shall have
a maturity later than that necessary to avoid the unscheduled disposition of Portfolio
investments.
(k) Remedies. Notwithstanding any provision of this Agreement, when the Board
deems that there is a significant risk that an obligor to FLSTAR may default or is in default
under the terms of any obligation of FLSTAR, the Board shall have full and complete power to
pursue any remedies permitted by law which, in the sole judgment of the Board, are in the
interests of FLSTAR, and the Board shall have full and complete power to enter into any
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investment, commitment, or obligation of FLSTAR resulting from the pursuit of such remedies
as are necessary or desirable to dispose of property acquired in the pursuit of such remedies.
(1) Claims. The Board shall have full power to compromise, arbitrate, or otherwise
adjust claims in favor of or against FLSTAR.
(m) Books and Records. The Board shall keep correct and complete books and
records of account, minutes of the proceedings of the Board, and a record of the Participants
(and their addresses and the number and class of the Units held by each) at its registered office
or principal place of business or at the office of a Co-Administrator or the Custodian. The record
books of FLSTAR shall be conclusive as to the Unitholders and the number of Units held from
time to time by each Unitholder.
(n) Financial Statements. The Board shall cause financial statements to be prepared
and maintained for FLSTAR and for such statements to be audited annually by an independent
certified public accounting firm.
(o) Investment Officers. The Board shall designate one or more investment officers
for FLSTAR.
(p) Educational Opportunities. The Board may provide seminars or other
information and educational opportunities to Participants on investing and on other issues in
the area of public finance.
(q) Advisory Board. The Board may appoint an advisory board (the "Advisory
Board") for FLSTAR. The Advisory Board may consist of any number of Persons designated by
the Board and may include members of the Board. All members of the Advisory Board shall be
either (i) a representative of a Participant, or (ii) a person who has no business relationship with
the Board (unless the requirements of Section 112.313(3) and (7), Florida Statutes, have been
waived by the Board pursuant to Section 112.313(12), Florida Statutes), and is qualified to
advise the Board. The Advisory Board shall have such duties as may be set forth by the Board.
The Board shall fix the terms of (and may remove) members of the Advisory Board. All
meetings of the Advisory Board are subject to and must comply with Section 286.011, Florida
Statutes.
SECTION 3.03. TRUSTEES.
(a) Initial Board.
(1) The Initial Participants have by this Agreement appointed the following
persons as the initial trustees (the "Initial Trustees") having terms ending on the
following dates, and such Initial Trustees shall constitute the initial Board:
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September 30,2019
September 30, 2020
[VACANT] September 30, 2021
(ii) No later than [one year] from the date hereof, the vacancy for the third
Initial Trustee shall be filled by a majority vote of the other Initial Trustees from
nominations provided by the Co-Administrators from Participants other than the Initial
Participants.
(b) Number and Qualification. The number of Trustees which shall constitute the
Board shall be three. The Trustees shall be officers or employees of the Participants. The Board
may expand the number of Trustees appointed to the Board and set initial terms for each such
additional Trustee;provided, however, the number of Trustees appointed to the Board shall not
be less than three nor more than 15.
(c) Terms.
(i) Following the initial term of each Initial Trustee set forth in subsection
(a), the succeeding terms of office shall commence on the October 1 following the
termination of the prior term and conclude on September 30 of the third year thereafter
(so, for instance, the term of office following the first Initial Trustee's term shall
commence on October 1, 2020 and terminate on September 30, 2022). If additional
Trustees are appointed to the Board, the term of such Trustees shall be staggered such
that the term of an approximately equal number of Trustees shall expire in any year.
(ii) A Trustee shall remain a member of the Board and serve subsequent
terms until a vacancy occurs in his or her office as provided in Section 3.03(e) of this
Agreement, or until his or her successor is duly elected pursuant to Section 3.03(d) of
this Agreement.
(iii) Any vacancy occurring in the Board between terms may be filled by a
majority of the remaining Trustees, even if they constitute less than a quorum of the
Board from nominations provided by the Co-Administrators.
(iv) Any vacancy occurring in the Board shall not operate to annul FLSTAR or
the Board or to revoke any existing agency created pursuant to the terms of this
Agreement.
(d) Participant Election. Not less than 60 days prior to the expiration of the term of a
Trustee, the Participants may nominate one or more candidates for the office by written
instrument delivered to the Board. If the Board receives one or more nominations signed by the
Participants owning at least 25% of the Units in FLSTAR as of the 30th day preceding the
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commencement of a new term of office (the "Record Date"), the Board shall promptly conduct
an election for a replacement Trustee by written ballots mailed to the Participants. The ballots
shall include the names of the incumbent Trustee (if he or she desires to be considered), any
other nominees of the Board and the candidates nominated by the Participants owning at least
25% of the Units in FLSTAR as of the Record Date. The candidate receiving the most votes on
ballots completed, signed, and returned by the Participants within 30 days after the ballots are
mailed, weighted by the Units owned by such Participants as of the Record Date, shall be
elected to the position of Trustee for the upcoming term.
(e) Vacancies. A Trustee's office and his or her position on the Board shall be
deemed vacant upon the occurrence of any one of the following events:
(i) The Trustee resigns by a written instrument signed by him or her and
delivered to the President. Such resignation shall be effective upon such delivery or at a
later date according to the terms of the notice.
(ii) The Trustee becomes disabled or dies during his or her term.
(iii) The Trustee ceases to be an elected or appointed official or employee of
the Participant he or she served at the time of appointment or such Participant
withdraws from participation in FLSTAR.
(iv) The Trustee is convicted of a felony or is the subject of an Order for Relief
entered pursuant to the United Bankruptcy Code.
(v) A court of competent jurisdiction voids the appointment or removes the
Trustee for any cause whatsoever, but only after his or her right to appeal has been
waived or otherwise exhausted.
(vi) The Trustee is removed for good cause by a two-thirds vote of the Board.
(f) Officers. The officers of the Board shall consist of a president, one or more vice
presidents, a secretary, one or more assistant secretaries, and an investment officer or officers.
Officers of the Board shall be elected by the Board. Two or more offices may be held by the
same person, except the offices of present and secretary.
(i) President. The president shall preside at all meetings of the Board and
shall have such other powers and duties as may from time to time be prescribed by the
Board.
(ii) Vice President. During the absence or disability of the president, the vice
presidents in the order of their seniority, unless otherwise determined by the Board,
shall perform the duties and may exercise the powers of the president. The vice
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presidents shall also perform such other duties and have such other authority and
powers as the Board may from time to time prescribe.
(iii) Secretary. The secretary shall attend all meetings of the Board, record (or
cause to be recorded) all of the proceedings of the meetings in a minute book to be kept
for that purpose, and perform like duties for the standing committees when required.
The secretary shall give, or cause to be given, notice of all meetings of the Board and
shall perform such other duties and have such other powers as may be prescribed by the
Board or, consistent with this Agreement, the president. The secretary shall keep in safe
custody the seal of the Board, if any, and, when authorized by the Board, shall affix the
same to any instrument requiring it and, when so affixed, attest the same by his or her
signature.
(iv) Assistant Secretaries. During the absence or disability of the secretary, the
assistant secretaries in the order of their seniority, unless otherwise determined by the
Board, shall perform the duties and may exercise the powers of the secretary. They shall
also perform such other duties and have such other powers as the Board may from time
to time prescribe.
(v) Investment Officer. The investment officer shall perform such duties and
have such powers as the Board may from time to time prescribe or as may otherwise be
established by applicable law.
(g) Meetings. All meetings of the Board are subject to and must comply with Section
286.011, Florida Statutes.
(i) Regular Meetings. Regular meetings of the Board may be held at such time
and at such place as shall from time to time be determined by the Board, subject to
applicable law. The Board shall meet at least once annually within 180 days after
completion of each fiscal year of FLSTAR. At such meeting, the Board shall, among other
things, appoint the Trustees, elect officers, and set the calendar for regular meetings and
other organizational matters.
(ii) Special Meetings. Special meetings of the Board may be called by the
president and shall be called by the secretary on the written request of two Trustees.
Either the president or the secretary may call an emergency meeting of the Board in a
situation which meets the requirements of the Section 286.011,Florida Statutes.
(iii) Location. Meetings of the Board, regular or special, shall be held within
the State. To the extent permitted by Section 286.011, Florida Statutes, telephonic regular
or special meetings by conference call or other method of electronic voice transmission
which permits each participant to hear every other participant and join in the discussion
are specifically authorized.
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(iv) Quorum. A quorum of the Board exists when a majority of the Trustees is
present and may be made of Trustees who are voting or abstaining from voting. As long
as a quorum is present, the act of a majority of the Trustees voting shall be the act of the
Board, unless a supermajority is required by this Agreement or by law.
(v) Public Notice. Section 286.011(1), Florida Statutes, requires that the Board
or Advisory Board provide reasonable notice to the general public of all meetings.
Notices to any meetings of the Board or the Advisory Board shall: (1) contain the time
and place of the meeting and, if available, an agenda, or if no agenda is available, a
statement of the general subject matter to be considered; (2)be prominently displayed in
the area in FLSTAR's offices set aside for that purpose and on FLSTAR's website, if any;
(3) be provided at least seven days prior to a regular meeting; (4) be provided at least
three days prior to a special meeting; and (5) in the case of an emergency meeting, be
provided in a manner that is appropriate and effective under the circumstances.
(vi) Trustee Notice. The notice described in Section 3.03(h)(v) of this
Agreement shall be delivered personally, or mailed by United States mail postage
prepaid, express delivery service, or electronic transmission to the Trustees at their
respective addresses provided to HTS. Attendance of a Trustee at any meeting shall
constitute a waiver of the notice required by this Section 3.03(h)(vi), except where the
Trustee attends for the express purpose of objecting to the transaction of any business on
the ground that the meeting is not lawfully called or convened.
(vii) Expenses. The Trustees shall receive no compensation, but shall be paid
their reasonable expenses, if any, of attendance at each meeting of the Board in
accordance with the law. Per diems and expenses paid to any Trustee by a Participant
for such Trustee's service on the Board shall be considered an expense of the Board and
shall be paid from the Trust Asset's earnings upon proper invoice.
(h) Limitation on Liability.
(i) The Trustees and officers of the Board that are officers or employees of
the Participants are governmental officials and shall enjoy all of the privileges and
immunities from liability; exemptions from laws, ordinances, and rules; and pensions
and relief, disability, workers' compensation, and other benefits which apply to the
activity of officers, agents, or employees of any Participant when performing their
respective functions within the territorial limits for their respective agencies to the same
degree and extent to the performance of such functions and duties of such officers,
agents, or employees under the provisions of this Agreement.
(ii) If the Trustees and officers of the Board have acted in good faith under
the belief that their actions are in the best interest of FLSTAR, such Trustees and officers
of the Board shall not be responsible for or liable in any event for neglect or wrongdoing
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by them or any officer, agent, employee, or investment advisor of FLSTAR, but nothing
contained herein shall protect any Trustee or officer against any liability to which he or
she would otherwise be subject by reason of fraud, willful misfeasance, or bad faith.
(iii) Each Trustee and officer of the Board shall, in the performance of his or
her duties, be fully and completely justified and protected with regard to any act or any
failure to act resulting from reliance in good faith upon the books of account or other
official records of FLSTAR, upon an opinion of counsel, or upon official reports made to
FLSTAR by any of its officers or employees or by JPMIM, HTS, the Custodian,
accountants, appraisers, or other experts or consultants selected with reasonable care by
the Board or the officers of the Board.
(iv) To the fullest extent permitted by law, any obligation of FLSTAR shall be
payable solely from the Trust Assets held by FLSTAR in any one or more Portfolios by
FLSTAR, and none of the Participants, whether past, present, or future, shall be liable
therefor.
(v) Article X, Section 13 of the Florida Constitution and the laws of the State
provide sovereign immunity to certain Units of Local Government. Nothing contained
in this Agreement, whether by action or provisions hereof, shall constitute a waiver by a
Participant of any of the benefits of sovereign immunity. The participation of a
Participant(or any Participant's officer, employee, agent, or representative) on the Board
or in any action, determination, or vote under this Agreement, shall not affect a waiver
of any of the benefits of sovereign immunity.
(i) Conflicts of Interest.
(i) No Trustee shall vote upon any measure which would insure to his or her
special private gain or loss (as such phrase is defined in Section 112.3143(1)(d), Florida
Statutes); which he or she knows would inure to the special private gain or loss of any
principal by whom he or she is retained or to the parent organization or subsidiary of a
corporate principal by which he or she is retained, other than an agency (as such term is
defined in Section 112.312(2), Florida Statutes); or which he or she knows would inure to
the special private gain or loss of a relative or business associate of the Trustee. Such
Trustee shall, prior to the vote being taken, publicly state to the Board the nature of the
Trustee's interest in the matter from which he or she is abstaining from voting and,
within 15 days after the vote occurs, disclose the nature of his or her interest as a public
record in a memorandum filed with the Secretary of the Board for recording the minutes
of the meeting, who shall incorporate the memorandum in the minutes.
(ii) No Trustee shall participate (as such term is defined in Section
112.312(4)(c), Florida Statutes) in any matter which would inure to the Trustee's special
private gain or loss; which the Trustee knows would inure to the special private gain or
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loss of any principal by whom he or she is retained or to the parent organization or
subsidiary of a corporate principal by which he or she is retained; or which he or she
knows would inure to the special private gain or loss of a relative or business associate
of the Trustee, without first disclosing the nature of his or her interest in the matter in
accordance with Section 112.312(4), Florida Statutes.
(j) Code of Ethics. The Trustees are public officers (as such term is defined in
Section 112.313(1), Florida Statutes) subject to the standards of conduct set forth in Section
112.313, Florida Statutes.
(k) Standard of Care. The Trustees shall use ordinary care and reasonable diligence
in the administration of FLSTAR. Nothing contained in this Agreement, either expressly or by
• implication, shall be deemed to impose any duties or responsibilities on the Trustees other than
those expressly set forth in this Agreement.
SECTION 3.04. NO LIABILITY.
(a) Neither the Board, the Trustees, nor any officers, employees, nor board members
of any of the forgoing shall be held liable for any action or omission to act on behalf of FLSTAR
or the Participants unless caused by such person's fraud, willful misfeasance, or bad faith. As
described in Section 3.05 of this Agreement, FLSTAR shall indemnify and hold harmless (either
directly or through insurance) any Person referred to in this Section 3.04(a), to the extent
permitted by law, for any and all litigation, claims, or other proceedings, including but not
limited to reasonable attorney fees, costs,judgments, settlement payments, and penalties arising
out of the management and operation of FLSTAR, unless the litigation, claim, or other
proceeding resulted from the fraud, willful misfeasance, or bad faith of such Person.
(b) Neither the Co-Administrators, the Custodian, nor their affiliates, officers,
employees, or board members shall be held liable for any action or omission to act on behalf of
FLSTAR or the Participants unless such person failed to meet the standard of care required
under its agreement relating to FLSTAR or acted with willful misconduct. As described in
Section 3.05 of this Agreement, FLSTAR shall indemnify and hold harmless (either directly or
through insurance) any Person referred to in this Section 3.04(b), to the extent permitted by law,
for any and all litigation, claims, or other proceedings, including but not limited to reasonable
attorney fees, costs, judgments, settlement payments, and penalties arising out of the
management and operation of FLSTAR, unless the litigation, claim, or other proceeding is
adjudicated to have resulted from such Person's failure to meet the standard of care required
under its agreement relating to FLSTAR or its willful misconduct.
(c) To the fullest extent permitted by law, any obligation of FLSTAR shall be payable
solely from the Trust Assets held by FLSTAR in any one or more Portfolios, as determined by
the Board, and none of the Participants, whether past, present, or future, shall be liable therefor.
All Persons shall look solely to such Trust Assets for satisfaction of claims of any nature arising
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in connection with the affairs of FLSTAR. No member or officer of the Board who is made a
party to any suit or proceeding to enforce any such liability shall on account thereof be held to
any personal liability.
SECTION 3.05. INDEMNIFICATION.
(a) Definitions. As used in this Section 3.05, the words "claim," "action," "suit," and
"proceeding" shall apply to all claims, actions, suits, or proceedings (civil, criminal, or other,
including appeals), actual or threatened, while in office or thereafter, and the words "liability"
and "expenses" shall include, without limitation, attorneys' fees, costs,judgments, amounts paid
in settlement, fines,penalties, and other liabilities.
(b) Indemnification. Subject to the exceptions and limitations contained in Section
3.05(c) of this Agreement, every person who is, or has been, a Trustee or officer of the Board
(hereinafter referred to as a "Covered Person"), whether or not the Covered Person has been
alleged to have been negligent in the exercise of the duties of his or her office, shall be
indemnified to the fullest extent permitted by law against liability and against all expenses
reasonably incurred or paid by the Covered Person in connection with any claim, action, suit, or
proceeding in which he or she becomes involved as a party or otherwise by virtue of being or
having been a Trustee or officer and against amounts paid or incurred by the Covered Person in
the settlement thereof.
(c) Limitations. No indemnification shall be provided hereunder to a Covered
Person (i) who shall have been adjudicated by a court or body before which the proceeding was
brought to be liable to the Board, FLSTAR, or the Participants by reason of fraud, willful
misfeasance, or bad faith; or (ii) in the event of a settlement, unless there has been a
determination that the Covered Person did not engage in fraud, willful misfeasance, or bad
faith, (1) by a court or other body approving the settlement, (2) by at least a majority of the
Trustees who are not parties to the matter, based upon review of readily available facts (as
opposed to full trial-type inquiry), or (3) by written opinion of independent legal counsel based
upon a review of readily available facts(as opposed to a full trial-type inquiry).
(d) Miscellaneous. The rights of indemnification herein provided may be insured
against by policies maintained by the Board, shall be severable, shall not be exclusive of or affect
any other rights to which any Covered Person may now or hereafter be entitled, shall continue
as to a Covered Person who has ceased to be a Trustee or officer, and shall inure to the benefit
of the heirs, executors, and administrators of the Covered Person. Nothing contained herein
shall affect any rights to indemnification to which FLSTAR personnel, other than Trustees and
officers, and other Persons may be entitled by contract or otherwise under law.
(e) Expenses of Defense. Expenses in connection with the preparation and
presentation of a defense to any claim, action, suit, or proceeding of the character described in
Section 3.05(b) of this Agreement may be paid as an expense of the applicable Portfolio from
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time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf of
the Covered Person that such amount will be paid over by him or her to the applicable Portfolio
if it is ultimately determined that he is not entitled to indemnification under this Section 3.05;
provided, however, that either (i) the Covered Person shall have provided appropriate security
for such undertaking, (ii) the Board is insured against losses arising out of any such advance
payments, or (iii) either a majority of the Trustees who are not parties to the matter, or
independent legal counsel in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a trial-type inquiry or full investigation), that there is
reason to believe that the Covered Person will be found entitled to indemnification under this
Section 3.05.
(f) Right to Defend. Subject to applicable law, the Board may, and if requested in
writing by a Covered Person shall, undertake the defense of any claim, action, or proceeding in
connection with the matters set forth in Section 3.05(b)-(e) for which the Covered Person is
indemnified under this Section 3.05, and thereafter the Board shall not be liable to the Covered
Person for any costs of counsel or other expenses other than reasonable costs subsequently
incurred by the Covered Person at the request of the Board in connection with the defense
thereof, unless (i) the employment of such counsel has been specifically authorized in writing
by the Board, (ii) the Board has failed after request to assume the defense and to employ
counsel, or (iii) the named parties to any such action(including impleaded parties) include both
a Covered Person and the Board and the Covered Person shall have been advised by counsel
that there may be one or more legal defenses available to it which are different from or
additional to those available to the Board (in which case, if the Covered Person notifies the
Board in writing that it elects to employ separate counsel at the expense of the Board, the Board
shall not have the right to assume the defense of the action on behalf of the Covered Person;
provided that if the Board has insured against losses pursuant to Section 3.05(e) and the insurer
proceeds to defend the Covered Person pursuant to the policy of insurance, then the Board shall
have no further duty to indemnify costs of defense or defend the Covered Person pursuant to
this Section 3.05.
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ARTICLE IV
PARTICIPATION IN TRUST
SECTION 4.01. ELIGIBILITY. In order for a Unit of Local Government to become
a Participant and transfer Surplus Funds into FLSTAR, each of the following conditions must be
satisfied:
(a) The Unit of Local Government must enact an ordinance or adopt a resolution
substantially in the form attached hereto as Appendix B to this Agreement. Such ordinance or
resolution shall (i) authorize the Unit of Local Government to become a Participant and approve
this Agreement, (ii) acknowledge the Board's power to supervise FLSTAR and agree that the
Surplus Funds it transfers to FLSTAR shall be held and managed in trust by the Board for the
Unit of Local Government's benefit, (iii) designate Authorized Representatives of the
Participant, and (iv) consent to the terms and conditions specified on the website in order to use
the online transaction system;and
(b) The Unit of Local Government must become a party to this Agreement by
executing an Additional Party Agreement and delivering the same to FLSTAR, together with a
certified copy of the ordinance or resolution referred to in Section 4.01(a) of this Agreement, an
application in form and substance satisfactory to the Board, and such other information as may
be required by the Board.
(c) No entity except a Unit of Local Government may be a Participant. The Board
shall have the sole discretion to determine whether a Unit of Local Government is eligible under
law to be a Participant and to designate categories of Units of Local Government eligible to be
Participants in any Portfolio of FLSTAR.
SECTION 4.02. REPRESENTATIONS AND WARRANTIES. 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 ordinances and resolutions in order to
execute and deliver this Agreement and to perform its obligations hereunder, including,
without limitation, the appointment of its Authorized Representative;
(b) the execution, delivery, and performance of this Agreement by the Participant
are within the power and authority of the Participant and do not violate the laws, rules, or
regulations of the State applicable to the Participant or the Participant's charter or its
organizational statute, instrument, or documents or any other applicable federal, State, or local
law;and
(c) the resolution, ordinance, and/or certificates delivered heretofore or hereafter by
the Participant pursuant to this Agreement, as of the date specified therein, are true and
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complete and contain no material misstatements of fact or omissions that render them
misleading.
SECTION 4.03. COVENANTS. Each Participant hereby covenants that it shall:
(a) invest only the Surplus Funds that are permitted to be invested by it pursuant to
the laws of the State and any charter, instrument, organizational document, and any federal,
State, or local rule, ordinance,resolution, or regulation applicable to such Participant, and that it
will perform all actions required by the laws of the State and any charter, instrument, or
organizational document, and any federal, state, or local rule, ordinance, resolution, or
regulation applicable to such Participant to be done prior to such investment;and
(b) use reasonable efforts to withdraw from this Agreement prior to the time any of
the representations and warranties made by it in Section 4.02 of this Agreement ceases to be
true.
SECTION 4.04. PARTICIPANT ACCOUNTS.
(a) In order to accomplish FLSTAR's purpose, each Participant agrees that the
Surplus Funds transferred to a Portfolio within FLSTAR will be commingled with other Surplus
Funds transferred to the Portfolio by other Participants for the purpose of making Authorized
Investments, subject to the terms of this Agreement, the Investment Policies, and applicable
law, thereby taking advantage of investment opportunities and cost benefits available to larger
investors.
(b) While available Surplus Funds of the Participants may be commingled for
purposes of common investment and operational efficiency, one or more separate Accounts for
each Participant in each Portfolio in FLSTAR designated by the Participant will be established in
accordance with the Participant's application to join FLSTAR and will be maintained by
FLSTAR.
(c) Each Participant shall own an undivided beneficial interest in the Trust Assets in
the Portfolios in which it invests represented by Units, as further described in the Investment
Policies and Operating Policies.
(d) The Participant agrees that all FLSTAR fees payable by a Participant shall be
directly and automatically assessed and charged against the Participant's Account. The basic
services fee shall be calculated as a reduction in the daily income earned and only the net
income shall be credited to the Participant's Account. Fees for special services shall be charged
to each Participant's Account as they are incurred or performed. Use of the Trust Assets for fees
shall be made from current revenues available to the Participant.
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SECTION 4.05. REPORTS. FLSTAR shall submit a written report a least once per
month to each Participant. Such report will indicate: (a) the balance in each Account of a
Participant as of the date of such report, (b) yield information, and (c) all account activity since
the previous report.
SECTION 4.06. PARTICIPANT TERMINATION.
(a) A Participant may withdraw all Surplus Funds from an Account in accordance
with the Investment Policies and Operating Procedures. A Participant may cease to be a
Participant under this Agreement, with or without cause, by providing written notice to
FLSTAR at least 10 days prior to such termination.
(b) The Board may terminate a Participant's participation in this Agreement upon at
least 30 days' notice if the applicable federal, state, or local law, rule, ordinance, resolution, or
regulation changes so that such Participant is no longer entitled to join in an eligible
intergovernmental investment pool under Section 218.415, Florida Statutes, the Interlocal Act,
or other applicable law.
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ARTICLE V
THE CO-ADMINISTRATORS
SECTION 5.01. PROFESSIONAL MANAGEMENT. Pursuant to its powers
under Section 3.06 of this Agreement, the Board shall appoint co-administrators consisting of:
(a) an investment advisor registered under the Investment Advisors Act of 1940, and (b) a
broker-dealer and municipal advisor registered under the Securities Exchange Act of 1934, to
provide services to FLSTAR. The Initial Trustees have by this Agreement appointed HTS and
JPMIM to serve as Co-Administrators. The Board will take such actions (including, without
limitation, negotiation of the Co-Administration Agreement) and will execute and deliver the
Co-Administration Agreement and any other agreements, certificates, instruments, and
documents as shall be necessary or desirable to appoint HTS and JPMIM.
SECTION 5.02. THE CO-ADMINISTRATORS. Pursuant to the initial Co-
Administration Agreement, JPMIM shall provide investment advice to FLSTAR and HTS shall
provide distribution, Participant, and marketing services to FLSTAR. Pursuant to its overall
investment management responsibilities, JPMIM will appoint JPMorgan Chase Bank, N.A. to
provide certain custodian and accounting services to FLSTAR. The Co-Administrators shall
jointly provide transfer agency services through contracting with DST Asset Manager Solutions,
Inc., or such other contractor they may select.
SECTION 5.03. SUBCONTRACTS. Each Co-Administrator may subcontract with
its affiliates and others to perform the functions described in the Co-Administration Agreement
and such subcontractors may subcontract with their respective affiliates and others to perform
the functions assigned to them. To the extent that a Co-Administrator subcontracts all or a part
of its responsibilities under the Co-Administration Agreement, the Co-Administrator will be
responsible for compliance with the terms of the Co-Administration Agreement to the same
extent as if such Co-Administrator itself had acted or failed to act instead of the subcontractor.
SECTION 5.04. BOARD POLICIES. The Board is responsible for the Investment
Policies, the Operating Policies, and the general investment program of FLSTAR and for the
general supervision and administration of the business and affairs of FLSTAR. The Co-
Administrators have agreed to perform their duties under the Co-Administration Agreement in
a manner which is consistent with such Investment Policies and the Operating Policies.
SECTION 5.05. INTELLECTUAL PROPERTY. The parties acknowledge that
pursuant to the Co-Administration Agreement, the Co-Administrators may develop various
types of intellectual property (the "Intellectual Property"), including, but not limited to,
trademarks and copyrights. With regard to any and all Intellectual Property created by the Co-
Administrators for use in FLSTAR, the Co-Administrators shall have all right, title, and interest
to the Intellectual Property. No Participant shall make any claim of ownership to the Intellectual
Property and shall have no rights to the Intellectual Property.
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SECTION 5.06. SUCCESSOR CO-ADMINISTRATORS.
(a) Each Co-Administrator may assign its rights and duties under the Co-
Administration Agreement in whole, or in part, to an affiliate; provided, however, if such
assignment is considered an "assignment" under the Investment Advisors Act of 1940, then the
prior written consent of the other parties to the Co-Administration Agreement, including
FLSTAR, is required.
(b) The Co-Administrators or either of them may resign pursuant to the terms of the
Co-Administration Agreement.
(c) The Board may, upon a unanimous vote of the Board, terminate one or both Co-
Administrators pursuant to the terms of the Co-Administration Agreement;provided,however,
the Board's action shall not become effective until it is approved by the Participants holding at
least 75% of the Units in FLSTAR.
(d) Successor Co-Administrators shall meet the requirements set forth in Section 5.01
of this Agreement and their appointment by the Board shall be ratified by the Participants
holding at least 75% of the Units in FLSTAR.
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ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. AMENDMENT.
(a) Unless explicitly set forth otherwise herein, this Agreement may be amended
only by a majority of the Board. Any amendment that impacts the duties, obligations, or rights
of the Co-Administrators shall be reduced to writing and agreed to by the affected party.
(b) This Agreement may not be amended to (i) change the purpose of FLSTAR as set
forth herein; (ii) permit the diversion or application of any Trust Assets for any purpose other
than those specified herein; (iii) change any rights with respect to any Units by reducing the
amount payable thereon upon liquidation of FLSTAR; or (iv) impair the exemptions contained
herein from personal liability of the Participants, the Trustees, officers, employees, and agents of
FLSTAR.
(c) Any amendment executed pursuant to Section 6.01(a) hereof will be effective 30
days after notice is mailed or otherwise delivered, including but not limited to delivery by
electronic means, to all existing Participants setting forth the substance of such amendment and
permitting each Participant to terminate its participation and request payment of its balance on
the terms set out in the Operating Procedures.
(d) Notwithstanding the foregoing, subject to the terms of this Agreement, the Board
has the authority to amend any term or provision of the Bylaws, provided that notice is sent to
each Participant at least 30 days prior to the effective date of any change which, in the opinion
of the Board, is a material change to the Bylaws.
(e) Notwithstanding the foregoing, subject to the terms of this Agreement, the Board
has the authority to amend any term or provision of the Investment Policies, provided that
notice is sent to each Participant at least 30 days prior to the effective date of any change which,
in the opinion of the Board, will have a material effect on the Participants' investments in
FLSTAR.
(f) Notwithstanding the foregoing, subject to the terms of this Agreement, the Board
has the authority to amend any term or provision of the Operating Procedures provided that
notice is sent to each Participant at least 30 days prior to the effective date of any change which,
in the opinion of the Board, will have a material effect on such Participant's investment in
FLSTAR.
(g) Notwithstanding the foregoing, subject to the terms of this Agreement and the
Investment Policies,the Information Statement may be amended or supplemented.
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SECTION 6.02. TERMINATION.
(a) This Agreement shall continue in full force and effect unless terminated as set
forth in this Section 6.02.
(b) The Board may dissolve FLSTAR in whole and terminate this Agreement upon a
unanimous vote of the Board; provided, however, the Board's action shall not become effective
until ratified by the Participants holding at least 75% of the Units in FLSTAR and the Board
shall have made provision for all liabilities and obligations of the Board and FLSTAR.
(c) The Board may dissolve any Portfolio upon not less than 30 days' notice to the
Participants, provided that the board makes provision for all liabilities and obligations of such
Portfolio. Upon the termination of any Portfolio, after making provision for all liabilities and
obligation of such Portfolio, the Board shall disburse all of the Trust Assets in such Portfolio to
the Participants in proportion to their Units in such Portfolio. After giving notice of termination
of any Portfolio, the Board may withhold distributions of earnings from such Portfolio in such
amounts as it deems advisable to make provision for the Portfolio's liabilities and obligations.
(d) Upon the dissolution of FLSTAR and termination of this Agreement pursuant to
Section 6.02(a) of this Agreement:
(i) the Board and its contractors and agents shall carry on no business in
connection with FLSTAR except for the purposes of satisfying the liabilities of FLSTAR
and winding up their affairs in connection with the Trust Assets;
(ii) all of the powers of the Board and the Co-Administrators under this
Agreement and the Co-Administration Agreement, shall continue until the affairs of
FLSTAR shall have been wound up, including, but not limited to, the power to collect
amounts owed, sell, convey, assign, exchange, transfer, or otherwise dispose of all or
any part of the remaining Trust Assets, and do all other acts appropriate to liquidate the
affairs in connection with FLSTAR; and
(iii) after paying or adequately providing for the payment of all liabilities of
FLSTAR, and upon receipt of such releases, indemnities, and refunding agreements as
each of the Board and the Co-Administrators deem necessary for their protection, the
Board shall disburse all of the Trust Assets of FLSTAR to the Participants in proportion
to their Units in FLSTAR. After giving notice of dissolution of FLSTAR, the Board may
withhold distributions of earnings from FLSTAR in such amounts as it deems advisable
to make provision for FLSTAR's liabilities and obligations.
(e) Upon termination of this Agreement and distribution to the Participants as
herein provided, the Board shall direct the Co-Administrators to execute and log among the
records maintained in connection with this Agreement an instrument in writing setting forth
25
the fact of such termination, and the Board and the Participants shall thereupon be discharged
from all further liabilities and duties hereunder, and the rights and benefits of all the
Participants hereunder shall cease and be cancelled and discharged.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01. SEVERABILITY.
(a) If any provision of this Agreement shall be held or deemed to be illegal,
inoperative, or unenforceable, the same shall not affect any other provisions contained herein or
render the same invalid, inoperative, or unenforceable to any extent whatsoever.
(b) Any participation in this Agreement or transfer of assets to FLSTAR that is not
qualified for any reason shall not terminate this Agreement or the participation of other
Participants or otherwise adversely affect FLSTAR.
SECTION 7.02. LIMITATION OF RIGHTS. This Agreement does not create any
right, title, or interest for any Person other than the Participants and any Person who has a
contract to provide services to FLSTAR, and nothing in or to be implied from this Agreement is
intended or shall be construed to give any other Person any legal or equitable right, remedy, or
claim under this Agreement.
SECTION 7.03. EXECUTION OF COUNTERPARTS. This Agreement may be
executed in several separate counterparts, including by Additional Party Agreement, each of
which shall be an original and all of which shall constitute one and the same instrument.
SECTION 7.04. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State.
SECTION 7.05. EFFECTIVE DATE. Pursuant to section 163.01(11), Florida
Statutes, this Agreement shall become effective upon filing with the Clerk of the Circuit Court
in the county where the Board maintains its chief administrative office as set forth in Section
3.01(d) of this Agreement(the"Effective Date").
SECTION 7.06. TERM. This Agreement shall have an initial term beginning with
the Effective Date and shall be automatically renewed for one year on such date and each
anniversary of such date, except with respect to any Unit of Local Government that may have
terminated itself as a Participant or as otherwise provided in Section 4.06 of this Agreement.
SECTION 7.07. NOTICES. Any notices or other information required or
permitted to be given hereunder shall be sent by written notice delivered by electronic mail: (a)
to FLSTAR at the address set forth in the Information Statement, and (b) to a Participant at the
email address of the Authorized Representatives as set forth in the Participant's application to
become a Participant or as otherwise provided by written notice to HTS.
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SECTION 7.08. PARTICIPANT RIGHTS. The Participants shall be beneficiaries
in FLSTAR, and their relationship to the Board shall be solely in their capacity as Participants in
accordance with the rights conferred upon them hereunder.
SECTION 7.09. ENTIRE AGREEMENT. This Agreement represents the entire
agreement and understanding of the Participants.
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28
IN WITNESS WHEREOF, the parties have cause this Agreement to be executed in their
names and on their behalf as of the date first written above.
, FLORIDA
(SEAL)
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
Notice Address:
S-1
IN WITNESS WHEREOF, the parties have cause this Agreement to be executed in their
names and on their behalf as of the date first written above.
•
,FLORIDA
(SEAL)
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
Notice Address:
S-2
APPENDIX A
ADDITIONAL PARTY AGREEMENT
of that certain
INTERLOCAL AGREEMENT AND TRUST INSTRUMENT
for the
FLORIDA SHORT TERM ASSET RESERVE
This Additional Party Agreement (this "Agreement") is executed as of the day of
, 20 ,by and on behalf of , Florida (the "Participant").
The , Florida and the , Florida
(collectively, the "Initial Members") entered into that certain Interlocal Agreement and Trust
Instrument, dated as of , 2017 (the "Interlocal Agreement"), in order to establish and
maintain an intergovernmental investment pool as described in Section 218.415, Florida
Statutes. All capitalized undefined terms used herein shall have the meanings set forth in the
Interlocal Agreement.
The Initial Members through due execution and delivery of the Interlocal Agreement
have thereby created the Florida Short Term Asset Reserve ("FLSTAR"), an intergovernmental
investment pool as described in Section 218.415, Florida Statutes, which is managed, operated,
and supervised the Board, a separate legal entity and public body corporate and politic
pursuant to Section 163.01(7), Florida Statutes.
The Participant hereby represents and warrants that (a) prior to the Participant's
execution of this Agreement, the Participant has received and reviewed the Interlocal
Agreement and finds it proper to invest all or a portion of its Surplus Funds in one or more
Portfolios of FLSTAR in accordance with the terms of the Interlocal Agreement; (b) the
Participant is a Unit of Local Government and Public Agency; (c) the Person executing this
Agreement on behalf of the Participant is an officer of the Unit of Local Government who is
properly authorized to invest the Surplus Funds of the Participant and execute this Agreement;
(d) the Participant (i) has taken all required official action to adopt and authorize the execution
of the Interlocal Agreement including, without limitation, adopting or enacting a resolution or
ordinance, or taking any other action necessary to authorize participation and investment in
FLSTAR (for example, adopting written investment policies or amending or modifying any
existing written investment policies to authorize the investment in intergovernmental
investment pools), and (ii)has furnished to the Board evidence satisfactory to FLSTAR that such
official action has been taken; and (e) the Participant has tendered or has agreed to tender to the
Custodian Surplus Funds for investment under the Interlocal Agreement.
By executing this Instrument, the Participant agrees that (a) it will be a Participant in
FLSTAR and may appoint an officer or employee to serve as a Trustee as described in the
Interlocal Agreement; and (b) it will become a party to the Interlocal Agreement to which this
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Agreement is attached, and thereby will be bound by all terms and conditions of the Interlocal
Agreement, as amended from time to time, including without limitation that it will maintain
written investment policies consistent with the provisions of the Investment Policies, as the
same may be amended from time to time.
IN WITNESS WHEREOF, the undersigned has executed and sealed this Agreement as of
the day first above written.
Name of Unit of Local Government:
OFFICIAL SEAL OF UNIT OF LOCAL GOVERNMENT By:
Required Below Authorized Representative
Printed Name and Title
Attest:
Authorized Representative
Printed Name and Title
Approved and accepted:
FLORIDA SHORT TERM ASSET RESERVE
By: Hilltop Securities Inc., as Co-Administrator
By: Date:
Authorized Signer
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APPENDIX B
FORM OF [RESOLUTION] [ORDINANCE]
A[N] [RESOLUTION][ORDINANCE] OF THE [GOVERNING
BODY] OF THE [UNIT OF LOCAL GOVERNMENT]
AUTHORIZING THE EXECUTION AND DELIVERY OF AN
INTERLOCAL AGREEMENT FOR THE PURPOSE OF
JOINTLY EXERCISING ITS POWER TO INVEST SURPLUS
FUNDS IN AN INTERGOVERNMENTAL INVESTMENT
POOL PURSUANT TO SECTION 218.415, FLORIDA
STATUTES, AND SECTION 163.01, FLORIDA STATUTES;
APPROVING THE INVESTMENT OF CERTAIN SURPLUS
FUNDS OF [THE UNIT OF LOCAL GOVERNMENT] IN THE
FLORIDA SHORT TERM ASSET RESERVE;APPOINTING AN
AUTHORIZED REPRESENTATIVE; AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS,Section 218.415, Florida Statutes, authorizes any governmental entity within
the State of Florida (the "State") and not part of State government, including, but not limited to,
counties, municipalities, school districts, special districts, clerks of circuit court, sheriffs,
property appraisers, tax collectors, supervisors of elections, authorities, boards, public
corporations, or any other political subdivision of the State (each a "Unit of Local Government"
and, collectively, "Units of Local Government") to invest and reinvest any surplus funds in their
control or possession in any intergovernmental investment pool authorized pursuant to Section
163.01, Florida Statutes; and
WHEREAS, Section 163.01, Florida Statutes, permits political subdivisions, agencies, or
officers of the State, including, but not limited to State government, counties, cities, school
districts, single and multipurpose special districts, single and multipurpose public authorities,
metropolitan or consolidated governments, separate legal entities or administrative entities
created under Section 163.01(7), Florida Statutes, or independently elected county officers (each
a "Public Agency" and, collectively, "Public Agencies"), to enter into an interlocal agreement to
jointly exercise any power, privilege, or authority which such Public Agencies share in common
and which each might exercise separately, permitting the Public Agencies to make the most
efficient use of their powers by enabling them to cooperate on a basis of mutual advantage and
thereby provide for the sharing of their powers in a manner and pursuant to forms of
governmental organization that are in the best interests of the Public Agencies;and
WHEREAS, the [Unit of Local Government] is a Unit of Local Government and Public
Agency, and is authorized pursuant to Section 218.415 of the Florida Statutes, and its own local
laws to invest certain of its surplus funds in statutorily permitted investments, including, but
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not limited to, any intergovernmental investment pool authorized pursuant to Section 163.01,
Florida Statutes; and
WHEREAS, , Florida and
Florida, entered into that certain Interlocal Agreement, dated as of , 2017 (the
"Interlocal Agreement"), in order to provide the Participants (as defined in the Interlocal
Agreement), a substantial benefit by establishing the intergovernmental investment pool to be
known as the Florida Short Term Asset Reserve ("FLSTAR"), which is an intergovernmental
investment pool as described in Section 218.415, Florida Statutes, and managed, operated, and
supervised by a board of trustees, which is a separate legal entity and public body corporate
and politic pursuant to Section 163.01(7), Florida Statutes;and
WHEREAS,the [Unit of Local Government] desires to join the Interlocal Agreement and
execute and deliver the Additional Party Agreement, in order to jointly exercise its investment
power and invest its surplus funds in concert with the other Participants pursuant to the
Interlocal Agreement in order (a) participate in diversified and professionally managed
Portfolios (as defined in the Interlocal Agreement) to meet its investment needs, (b) create
greater purchasing powers through economies of scale, (c) lower the costs associated with the
investment and reinvestment of its surplus funds; and (d) be provided assistance on investment
alternatives and other investment issues of concern; and
WHEREAS, the [Unit of Local Government] further desires to invest and reinvest a
portion of its surplus funds in FLSTAR; and
WHEREAS, the [Unit of Local Government] has adopted written investment policies
authorizing investment in intergovernmental investment pools authorized pursuant to Section
163.01, Florda Statutes, and with respect to the funds to be invested in such intergovernmental
investment pools, all authorized investments set forth in the investment policies of such
intergovernmental investment pools.
NOW, THEREFORE, BE IT [RESOLVED][ENACTED] by the [Governing Body] of the
[Unit of Local Government] as follows:
SECTION 1. AUTHORITY. This [Resolution][Ordinance] of the [Unit of Local
Government] (the " ") is adopted pursuant to the provisions of Section 163.01, Florida
Statutes (the "Interlocal Act"), Section 218.415, Florida Statutes (the "Local Government
Investment Act"), [Chapter 166, Part II, Florida Statutes,][Chapter 125, Florida Statutes,] and
other applicable provisions of law(collectively,the "Act").
SECTION 2. INTERLOCAL AGREEMENT.
(a) Pursuant to Article VI of the Interlocal Agreement, the [Unit of Local
Government] hereby approves and joins the Interlocal Agreement, a copy of which is attached
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hereto as Exhibit A and incorporated herein by reference, as a Participant and agrees to be
bound by all of the terms and provisions thereof.
(b) The [Chairperson][Mayor], as attested by the [County][City] Clerk, or in each
case their duly authorized designee, are hereby authorized and directed to execute and deliver
the Additional Party Agreement, which is in substantially the form attached hereto as Exhibit B
with such changes, amendments, modifications, deletions, and additions as may be approved
by the [Chairperson][Mayor] or his or her duly authorized designee, the execution thereof being
conclusive evidence of such approval.
(c) The Interlocal Agreement constitutes a joint exercise of power, privilege, or
authority by and between the Participants thereunder and is deemed to be an "interlocal
agreement" within the meaning of the Interlocal Act. The [Unit of Local Government] shall file
the Interlocal Agreement with the Clerk of the Circuit Court of , Florida as provided
in Section 163.01(11), Florida Statutes.
SECTION 3. INVESTMENT IN FLSTAR; APPOINTMENT OF AUTHORIZED
REPRESENTATIVE; TAX PAYER IDENTIFICATION NUMBER; CONTACT
INFORMATION.
(a) The [Unit of Local Government] is hereby authorized to invest and reinvest a
portion of its surplus funds in one or more Portfolios of FLSTAR. The [Unit of Local
Government] hereby acknowledges the board of trustees' power to supervise FLSTAR and
hereby agrees the surplus funds transferred to FLSTAR shall be held and managed in trust by
the board of trustees for the [Unit of Local Government]'s benefit.
(b) The following officers, officials, or employees of the [Unit of Local Government]
are hereby designated as "Authorized Representatives" within the meaning of the Interlocal
Agreement, with full power and authority to, among other things, execute the Interlocal
Agreement, an application to join FLSTAR, and any other documents required to become a
Participant; deposit money to and withdraw money from the [Unit of Local Government]'s
FLSTAR account from time to time in accordance with the Interlocal Agreement and the
Information Statement; to agree to the terms for the use of the website for online transactions;
and take all other actions deemed necessary or appropriate for the investment of funds of the
[Unit of Local Government]:
1. Name: Title:
Signature: Phone:
Email:
2. Name: Title:
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Signature: Phone:
Email:
3. Name: Title:
Signature: Phone:
Email:
4. Name: Title:
Signature: Phone:
Email:
In accordance with FLSTAR's procedures, an Authorized Representative shall promptly notify
FLSTAR in writing of any changes in who is serving as Authorized Representatives.
(c) The name of the Authorized Representative listed above that will be designated
as the primary contact and will receive all FLSTAR correspondence, including transaction
conformations and monthly statements, is:
Name:
(d) [The following additional [Unit of Local Government] representative (not listed
above) is designated as an inquiry only representative authorized to obtain account
information:
Name: Title:
Signature: Phone:
Email: ]
(e) The [Unit of Local Government] may designate other Authorized
Representatives by written instrument signed by an existing Authorized Representative or the
[Unit of Local Government]'s chief executive officer.
(f) The taxpayer identification number for the [Unit of Local Government] is
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(g) The contact information for the [Unit of Local Government] is:
Primary mailing address:
Physical address(if different):
Main phone number:
Main fax number:
SECTION 4. DIRECTION AND AUTHORITY. The officials, officers, attorneys, and
other agents or employees of the [Unit of Local Government] are directed and authorized to do
all acts and things required of them by this [Resolution][Ordinance] and the Interlocal
Agreement for the full, punctual, and complete performance of all the terms, covenants, and
agreements provided for herein and therein, and each of the officials, officers, attorneys, or
other agents or employees are hereby authorized and directed to execute and deliver any and
all papers and instruments (including any agreements required for use of online portals related
to FLSTAR) and to do and cause to be done all acts and things necessary or proper for carrying
out the activities and actions contemplated by this [Resolution][Ordinance] and the Interlocal
Agreement.
SECTION 5. INVESTMENT POLICIES. With respect to the surplus funds to be
invested in FLSTAR, to the extent the written investment policies of the [Unit of Local
Government] adopted pursuant to Section 218.415, Florida Statutes (the "Investment Policies"),
is inconsistent with the investment policies of FLSTAR, the [Unit of Local Government] hereby
amends the Investment Policies to include as an authorized investment FLSTAR and all
authorized investments set forth in the investment policies of FLSTAR, as such investment
policies may be amended from time to time in accordance with the Interlocal Agreement.
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SECTION 6. EFFECTIVE DATE. This [Resolution][Ordinance] shall take effect
immediately upon its filing with the Clerk of the Circuit Court of ,Florida.
PASSED AND [ADOPTED][ENACTED] at a meeting held on the day of
, 20_.
[UNIT OF LOCAL GOVERNMENT]
By:
Name:
Title:
ATTEST:
By:
Name:
Title:
(SEAL)
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APPENDIX C
FORM OF GOVERNMENT FUND INVESTMENT POLICIES
B-7
FLSTAR
INVESTMENT POLICIES
GOVERNMENT FUND
ARTICLE I
STATEMENT OF PURPOSE AND OBJECTIVE
SECTION 1.01. ORGANIZATION.
(a) The Florida Short Term Asset Reserve ("FLSTAR") is an intergovernmental
investment pool organized under the authority of Section 218.415, Florida Statutes, and Section
163.01, Florida Statutes. FLSTAR was created by the Interlocal Agreement and Trust Instrument
(the "Interlocal Agreement"), among its participating Units of Local Government. FLSTAR is
governed by a board of trustees, a separate legal entity and public body corporate and politic
created pursuant to Section 163.01(7), Florida Statutes (the "Board"). Any capitalized undefined
terms used herein and not otherwise defined shall have the meanings set forth in the Interlocal
Agreement.
(b) The Board may establish separate Portfolios within FLSTAR from time to time.
The Board has created a Portfolio within FLSTAR to be called the "Government Fund." These
Investment Policies pertain to the Government Fund.
SECTION 1.02. SERVICE PROVIDERS. J.P. Morgan Investment Management
Inc., a corporation organized under the laws of Delaware ("JPMIM" or the "Investment
Manager"), and Hilltop Securities Inc., a corporation organized under the laws of Delaware
("HTS"), serve as Co-Administrators for FLSTAR under the Agreement for Investment
Management and Related Services, among FLSTAR acting through the Board,JPMIM, and HTS
(the "Co-Administration Agreement"). Pursuant to the Co-Administration Agreement, (a) JPMIM
provides investment management services, and (b) HTS provides participant and marketing
services. Custodial, fund accounting and depository services are provided by JPMorgan Chase
Bank, N.A. (the "Custodian"). Transfer agency services are provided by DST Asset Manager
Solutions, Inc. ("DST"). Each of JPMIM, HTS, JPMorgan Chase Bank, N.A., and DST may
provide certain services, including those described herein through the use of subcontractors or
delegates.
SECTION 1.03. INVESTMENT OBJECTIVES.
(a) The investment objectives of the Government Fund in order of importance are:
safety of capital,liquidity of funds, and investment income.
(b) These Investment Policies establish investment strategies, policies, and
procedures intended to assure that these objectives are met.
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ARTICLE II
STANDARD OF CARE
SECTION 2.01. STANDARD OF CARE.
(a) FLSTAR shall be designed and managed in accordance with the following
prudent person standard of care (the "Prudent Person Rule"):
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 the probable safety of their capital as well as the probable income
to be derived from the investment.
(b) This Prudent Person Rule shall apply to the management of the Government
Fund.
ARTICLE III
GENERAL POLICIES
SECTION 3.01. AUTHORIZED INSTITUTIONS AND DEALERS. The securities
dealers, issuers, and banks from whom the Government Fund may purchase securities shall be
those approved by the Board. The Investment Manager shall maintain a list of such authorized
securities dealers, issuers, and banks from whom the Government Fund may purchase
securities.
SECTION 3.02. THIRD PARTY CUSTODIAL AGREEMENTS.
(a) All Government Fund securities shall be held with a third party; and all
securities purchased by, and all collateral obtained by, the Government Fund shall be properly
designated as an asset of the Government Fund. No withdrawal of securities, in whole or in
part, shall be made from safekeeping, except by an authorized representative of FLSTAR.
(b) Securities transactions between a broker-dealer and the Custodian involving
purchase or sale of securities by transfer of money or securities will be made on a "delivery vs.
payment" basis, if applicable, to ensure that the Custodian will have the security or money, as
appropriate, in hand at the conclusion of the transaction.
SECTION 3.03. BID REQUIREMENT. When feasible and appropriate, the
Investment Manager shall competitively bid investments. Except as otherwise required by law,
the bid deemed to best meet the investment objectives stated herein shall be selected.
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SECTION 3.04. MASTER REPURCHASE AGREEMENT. All institutions and
dealers approved by the Board to transact in repurchase agreements with the Government Fund
shall execute a Master Repurchase Agreement in the form provided by the Securities Industry
and Financial Markets Association and shall perform as stated in the Master Repurchase
Agreement. All repurchase agreement transactions shall adhere to the requirements of the
Master Repurchase Agreement.
SECTION 3.05. DOCUMENTATION. Reasonable documentation and a thorough
audit trail shall be maintained for all investment transactions consistent with Board policy.
SECTION 3.06. RISK AND DIVERSIFICATION. Investments shall be
diversified to the extent practicable to control the risk of loss resulting from overconcentration
of assets in a specific maturity, issuer, instrument, dealer, or bank through which financial
instruments are bought and sold. Diversification strategies shall be reviewed and revised
periodically, as deemed necessary by the Investment Manager.
SECTION 3.07. MATURITY AND LIQUIDITY REQUIREMENTS. The
Government Fund shall be structured in such a manner as to provide sufficient liquidity to the
Participants. To the extent possible, an attempt shall be made to match investment maturities
with known cash needs and anticipated cash-flow requirements.
SECTION 3.08. TEMPORARY CASH HOLDINGS. To respond to unusual
market conditions in a prudent manner, the Government Fund may be required to hold all or
most of its total assets in cash, including for the purpose of assuring sufficient liquidity or due
to the lack of eligible securities, among other circumstances. This may result in a lower yield
and prevent the Government Fund from meeting all its investment objectives.
SECTION 3.09. DISTRIBUTION OF GAINS AND LOSSES. So long as the
Government Fund continues to utilize amortized accounting, all gains or losses from the sale of,
and all other income received from, securities held in the Government Fund shall be distributed
among its Participants in proportion to their day-weighted Units in the Government Fund and
generally are amortized over a period of up to thirty (30) days from the date on which the gain,
loss, or income is realized or received.
SECTION 3.10. STABLE VALUE.
(a) The Government Fund seeks to maintain a stable value of $1.00 per unit
(rounded to the nearest whole cent). The $1.00 per unit value is not guaranteed or insured by
FLSTAR or the Co-Administrators. There can be no assurance that the Government Fund will
maintain a stable net asset value of$1.00.
(b) Although all securities in the Government Fund are marked to market daily
using the fair value method, amortized cost, which generally approximates the market value of
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securities, is utilized. The Board, in its discretion, may elect to cease utilizing amortized
accounting and to commence utilizing the fair value method at any time. To the extent that the
Board elects to utilize a net asset value per share determined by using available market
quotations in lieu of amortized accounting, the Government Fund will reflect market
fluctuations and any unrealized gains and losses resulting from those fluctuations on a daily
basis.
(c) If, upon a daily calculation, the Investment Manager finds that the deviation
between the amortized cost and market-determined values or the deviation between market-
determined values and $1.00 per unit of the Government Fund's assets exceeds $0.0040, the
Board shall direct the Investment Manager to take such action, if any, as it determines is
necessary to eliminate or reduce to the extent reasonably practicable of any dilution or unfair
results to existing Participants.
SECTION 3.11. MONITORING MARKET PRICE. Through one or both of the
Co-Administrators, the Government Fund shall account for all transactions and shall mark to
market the Government Fund's holdings on a daily basis through the use of independent or
affiliated commercial pricing services or third party broker-dealers. The market prices shall be
checked daily for current data and validity of information. In addition, a reasonability test shall
be performed in order to determine if the prices received are within a set tolerance range. In the
event that any of the prices fall outside of the set tolerance range, such prices shall be
investigated.
SECTION 3.12. INTERNAL CONTROLS. FLSTAR shall have a system of internal
controls which shall be included in the Operating Procedures. The internal controls shall be
designed to prevent losses of funds which might arise from fraud, employee error,
misrepresentation by third parties, or imprudent actions by personnel. As part of the FLSTAR
financial audit, its independent auditors shall review such internal controls.
SECTION 3.13. REPORTING.
(a) Each Participant must obtain and should review the Information Statement
before investing. FLSTAR will furnish investment confirmations and a monthly report
disclosing certain information to the Participants. Additional information is available on the
FLSTAR web site.
(b) The Co-Administrators shall prepare for the Board's approval and submission to
the Participants an annual report which shall include securities in the Government Fund by
class or type, book value, income earned, and market value as of the report date. Such reports
shall be available to the public.
SECTION 3.14. PERFORMANCE MEASUREMENT. FLSTAR will use
iMoneyNet Institutional Government Money Fund index as a benchmark of performance.
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SECTION 3.15. CONTINUING EDUCATION. The FLSTAR trustee designated
as its investment officer shall annually complete at least eight(8) hours of continuing education
in subjects or courses of study related to investment practices and products.
ARTICLE IV
AUTHORIZED INVESTMENTS
SECTION 4.01. AUTHORIZED INVESTMENTS. The following are the types of
investment in which the Government Fund may invest:
(a) Obligations of the United States Government, its Agencies, and
Instrumentalities.
(i) Bills, notes, and bonds issued by the U.S. Treasury and backed by the full
faith and credit of the United States.
(ii) Obligations of any agency or instrumentality of the United States,
including but not limited to, obligations of The Federal Farm Credit Bank, the Federal Land
Bank, a Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, the Federal
National Mortgage Association, and the Government National Mortgage Association.
(iii) Obligations issued by entities with liquidity support from the U.S.
Government, or its agencies or instrumentalities (government sponsored enterprises). These
support arrangements provide that the U.S. Government or its agencies or instrumentalities will
advance funds to the entity to pay the obligations of the entity to the extent it has insufficient
funds to pay amounts due on its obligations.
(iv) Obligations of the United States Government, its agencies and
instrumentalities may include obligations with interest rates that adjust on set dates and are
reasonably expected to have a market value that approximates amortized cost on such dates
("variable rate notes" or "VRN") or obligations with interest rates that adjust whenever a
benchmark rate or index changes and are reasonably expected to have a market value that
approximates amortized cost ('floating rate securities"). These obligations may have demand
features which give the Government Fund the right to demand repayment of principal on
specified dates or after giving a specified notice. Such securities may be deemed to have
maturities shorter than their stated maturity dates.
(b) Repurchase Agreements. Repurchase agreements with a termination date of 364
days or less collateralized by U.S. Treasury obligations, federal agency securities, and federal
instrumentality securities listed in Section 4.01(a) hereof. The purchased securities shall have a
minimum market value including accrued interest of 102 percent (102%) of the dollar value of
the transaction. Collateral shall be held by the Custodian or a sub-custodian, and market value
of the collateral securities shall be marked-to-the market daily. Repurchase agreement
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counterparties, if rated, shall have a short-term credit rating of at least 'A-1' or the equivalent
and a long-term rating of at least 'A' or the equivalent by S&P Global Ratings, a business unit of
Standard & Poor's Financial Services LLC ("S&P"), Moody's Investors Service, Inc. ("Moody's"),
or another nationally recognized statistical rating organization(collectively, "NRSRO").
(c) Money Market Funds. No-load money market mutual funds that (i) are
registered with and regulated by the U.S. Securities and Exchange Commission; (ii) include in
their investment objectives the maintenance of a stable net asset value of $1.00; (iii) are rated
'AAAm' or equivalent by at least one NRSRO; and (iv) invest only in obligations of the United
States, its agencies and/or instrumentalities, or repurchase agreements collateralized by
obligations of the United States, its agencies and/or instrumentalities.
(d) The Government Fund may not be invested in commercial paper, certificates of
deposit, or any other investments that are not listed above.
SECTION 4.02. PORTFOLIO STRUCTURE. The Government Fund shall be
designed and managed to ensure that it will meet all the requirements necessary to maintain a
'AAAm' rating (or the equivalent) by at least one NRSRO. The weighted average maturity of
the Government Fund shall be limited to: (a) a maximum sixty (60) days when calculated
utilizing the period remaining until the date on which, in accordance with the terms of each
security, the principal amount must unconditionally be paid, or m the case of a security called
for redemption, the date on which the redemption payment must be made, and may utilize the
interest rate reset date for variable rate notes or floating rate securities; and (b) a maximum of
one hundred twenty (120) days as calculated taking into account the period remaining until the
date on which, in accordance with the terms of each security, the principal amount must
unconditionally be paid, or in the case of a security called for redemption, the date on which
the redemption payment must be made. Specific portfolio composition and maturity limitation
guidelines shall be guided by the following general parameters.
(a) Portfolio Composition. The composition of the Government Fund shall be
limited as follows. Limitations shall be applied by comparing the amortized cost of the
Government Fund's investments at the time of purchase.
(i) United States Government Securities, Agencies, and Instrumentalities. Up to
one hundred percent (100%) of the Government Fund may be invested in obligations of,
unconditionally guaranteed or insured by, or backed by the full faith and credit of the United
States, its agencies, or instrumentalities, including government sponsored enterprises.
(ii) Repurchase Agreements. Up to one hundred percent (100%) of the
Government Fund may be invested in repurchase agreements.
(iii) Money Market Mutual Funds. Up to a maximum of ten percent(10%) of the
Government Fund may be invested in any one money market mutual fund, and the
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Government Fund's investment in any one money market mutual fund may not exceed ten
percent(10%) of the total assets of that money market mutual fund.
(b) Maturity Limitations.
(i) Government Securities, Agencies and Instrumentalities. The maximum final
maturity for any securities that are obligations of or guaranteed or insured by the United States
government, its agencies, or instrumentalities shall be limited to 397 days for fixed rate
securities, 397 days for floating rate securities rated below "AA-" by at least one NRSRO, two
years (762 days) for floating rate securities rated "AA-" or higher by at least one NRSRO, and
two years (762 days) for variable rate notes.
(ii) Repurchase Agreements. The maturity of repurchase agreements shall not
exceed 364 days unless the repurchase agreements have a put option that allows the fund to
liquidate the position at par (principal plus accrued interest).
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APPENDIX D
FORM OF PRIME FUND INVESTMENT POLICIES
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FLSTAR
INVESTMENT POLICIES
PRIME FUND
ARTICLE I
STATEMENT OF PURPOSE AND OBJECTIVE
SECTION 1.01. ORGANIZATION.
(a) The Florida Short Term Asset Reserve ("FLSTAR") is an intergovernmental
investment pool organized under the authority of Section 218.415, Florida Statutes, and Section
163.01, Florida Statutes. FLSTAR was created by the Interlocal Agreement and Trust
Instrument (the "Interlocal Agreement"), among its participating Units of Local Government.
FLSTAR is governed by a board of trustees, a separate legal entity and public body corporate
and politic created pursuant to Section 163.01(7), Florida Statutes (the "Board"). Any capitalized
undefined terms used herein and not otherwise defined shall have the meanings set forth in the
Interlocal Agreement.
(b) The Board may establish separate Portfolios within FLSTAR from time to time.
The Board has created a Portfolio within FLSTAR to be called the "Prime Fund." These
Investment Policies pertain to the Prime Fund.
SECTION 1.02. SERVICE PROVIDERS. J.P. Morgan Investment Management
Inc., a corporation organized under the laws of Delaware ("JPMIM" or the "Investment
Manager"), and Hilltop Securities Inc., a corporation organized under the laws of Delaware
("HTS"), serve as Co-Administrators for FLSTAR under the Agreement for Investment
Management and Related Services among FLSTAR acting through the Board, JPMIM, and HTS
(the "Co-Administration Agreement"). Pursuant to the Co-Administration Agreement, (a) JPMIM
provides investment management services, and (b) HTS provides participant and marketing
services. Custodial, fund accounting and depository services are provided by JPMorgan Chase
Bank, N.A. (the "Custodian"). Transfer agency services are provided by DST Asset Manager
Solutions, Inc. ("DST"). Each of JPMIM, HTS, JPMorgan Chase Bank, N.A., and DST may
provide certain services, including those described herein through the use of subcontractors or
delegates.
SECTION 1.03. INVESTMENT OBJECTIVES.
(a) The investment objectives of the Prime Fund in order of importance are: safety
of capital, liquidity of funds, and investment income.
(b) These Investment Policies establish investment strategies, policies, and
procedures intended to assure that these objectives are met.
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ARTICLE II
STANDARD OF CARE
SECTION 2.01. STANDARD OF CARE.
(a) FLSTAR shall be designed and managed in accordance with the following
prudent person standard of care (the "Prudent Person Rule"):
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 the probable safety of their capital as well as the probable income
to be derived from the investment.
(b) This Prudent Person Rule shall apply to the management of the Prime Fund.
ARTICLE III
GENERAL POLICIES
SECTION 3.01. AUTHORIZED INSTITUTIONS AND DEALERS. The securities
dealers, issuers, and banks from whom the Prime Fund may purchase securities shall be those
approved by the Board. The Investment Manager shall maintain a list of such authorized
securities dealers, issuers, and banks from whom the Prime Fund may purchase securities.
SECTION 3.02. THIRD PARTY CUSTODIAL AGREEMENTS.
(a) All Prime Fund securities shall be held with a third party; and all securities
purchased by, and all collateral obtained by, the Prime Fund shall be properly designated as an
asset of the Prime Fund. No withdrawal of securities, in whole or in part, shall be made from
safekeeping, except by an authorized representative of FLSTAR.
(b) Securities transactions between a broker-dealer and the Custodian involving
purchase or sale of securities by transfer of money or securities will be made on a "delivery vs.
payment" basis, if applicable, to ensure that the Custodian will have the security or money, as
appropriate,in hand at the conclusion of the transaction.
SECTION 3.03. BID REQUIREMENT. When feasible and appropriate, the
Investment Manager shall competitively bid investments. Except as otherwise required by law,
the bid deemed to best meet the investment objectives stated herein shall be selected.
SECTION 3.04. MASTER REPURCHASE AGREEMENT. All institutions and
dealers approved by the Board to transact in repurchase agreements with the Prime Fund shall
execute a Master Repurchase Agreement in the form provided by the Securities Industry and
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.
Financial Markets Association and shall perform as stated in the Master Repurchase Agreement.
All repurchase agreement transactions shall adhere to the requirements of the Master
Repurchase Agreement.
SECTION 3.05. DOCUMENTATION. Reasonable documentation and a thorough
audit trail shall be maintained for all investment transactions consistent with Board policy.
SECTION 3.06. RISK AND DIVERSIFICATION. Investments shall be
diversified to the extent practicable to control the risk of loss resulting from overconcentration
of assets in a specific maturity, issuer, instrument, dealer, or bank through which financial
instruments are bought and sold. Diversification strategies shall be reviewed and revised
periodically, as deemed necessary by the Investment Manager.
SECTION 3.07. MATURITY AND LIQUIDITY REQUIREMENTS. The Prime
Fund shall be structured in such a manner as to provide sufficient liquidity to the Participants.
To the extent possible, an attempt shall be made to match investment maturities with known
cash needs and anticipated cash-flow requirements.
SECTION 3.08. TEMPORARY CASH HOLDINGS. To respond to unusual
market conditions in a prudent manner, the Prime Fund may be required to hold all or most of
its total assets in cash, including for the purpose of assuring sufficient liquidity or due to the
lack of eligible securities, among other circumstances. This may result in a lower yield and
prevent the Prime Fund from meeting all its investment objectives.
SECTION 3.09. DISTRIBUTION OF GAINS AND LOSSES. So long as the Prime
Fund continues to utilize amortized accounting, all gains or losses from the sale of, and all other
income received from, securities held in the Prime Fund shall be distributed among its
Participants in proportion to their day-weighted Units in the Prime Fund and generally are
amortized over a period of up to thirty (30) days from the date on which the gain, loss, or
income is realized or received.
SECTION 3.10. STABLE VALUE.
(a) The Prime Fund seeks to maintain a stable value of$1.00 per unit(rounded to the
nearest whole cent). The $1.00 per unit value is not guaranteed or insured by FLSTAR or the
Co-Administrators. There can be no assurance that the Prime Fund will maintain a stable net
asset value of$1.00.
(b) Although all securities in the Prime Fund are marked to market daily using the
fair value method, amortized cost, which generally approximates the market value of securities,
is utilized. The Board, in its discretion, may elect to cease utilizing amortized accounting and to
commence utilizing the fair value method at any time. To the extent that the Board elects to
utilize a net asset value per unit determined by using available market quotations in lieu of
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amortized accounting, the Prime Fund will reflect market fluctuations and any unrealized gains
and losses resulting from those fluctuations on a daily basis.
(c) The Investment Manager will make a daily calculation to determine whether the
Prime Fund's net asset value calculated by using available market quotations deviates from
$1.00 per unit based on amortized cost. If the deviation exceeds $0.0040, the Investment
Manager shall advise the Board, which may direct the Investment Manager to take such action,
if any, as it determines is necessary to eliminate or reduce to the extent reasonably practicable
any dilution or unfair results to existing Participants.
SECTION 3.11. MONITORING MARKET PRICE. Through one or both of the
Co-Administrators, the Prime Fund shall account for all transactions and shall mark to market
the Prime Fund's holdings on a daily basis through the use of independent or affiliated
commercial pricing services or third party broker-dealers. The market prices shall be checked
daily for current data and validity of information. In addition, a reasonability test shall be
performed in order to determine if the prices received are within a set tolerance range. In the
event that any of the prices fall outside of the set tolerance range, such prices shall be
investigated.
SECTION 3.12. INTERNAL CONTROLS. FLSTAR shall have a system of internal
controls which shall be included in the Operating Procedures. The internal controls shall be
designed to prevent losses of funds which might arise from fraud, employee error,
misrepresentation by third parties, or imprudent actions by personnel. As part of the FLSTAR
financial audit, its independent auditors shall review such internal controls.
SECTION 3.13. REPORTING.
(a) Each Participant must obtain and should review the Information Statement
before investing. FLSTAR will furnish investment confirmations and a monthly report
disclosing certain information to the Participants. Additional information is available on the
FLSTAR web site.
(b) The Co-Administrators shall prepare for the Board's approval and submission to
the Participants an annual report which shall include securities in the Prime Fund by class or
type, book value, income earned, and market value as of the report date. Such reports shall be
available to the public.
SECTION 3.14. PERFORMANCE MEASUREMENT. FLSTAR will use iMoneynet
First Tier Institutional Index as a benchmark of performance.
SECTION 3.15. CONTINUING EDUCATION. The FLSTAR trustee designated
as its investment officer shall annually complete at least eight (8) hours of continuing education
in subjects or courses of study related to investment practices and products.
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ARTICLE IV
AUTHORIZED INVESTMENTS
SECTION 4.01. AUTHORIZED INVESTMENTS. The following are the types of
investment in which the Prime Fund may invest:
(a) Obligations of the United States Government, its Agencies, and
Instrumentalities.
(i) Bills, notes, and bonds issued by the U.S. Treasury and backed by the full
faith and credit of the United States.
(ii) Obligations of any agency or instrumentality of the United States,
including but not limited to, obligations of The Federal Farm Credit Bank, the Federal Land
Bank, a Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, the Federal
National Mortgage Association, the Government National Mortgage Association, and the
Tennessee Valley Authority.
(iii) Obligations issued by entities with liquidity support from the U.S.
Government, or its agencies or instrumentalities (government sponsored enterprises). These
support arrangements provide that the U.S. Government or its agencies or instrumentalities will
advance funds to the entity to pay the obligations of the entity to the extent it has insufficient
funds to pay amounts due on its obligations.
(b) Repurchase Agreements. Repurchase agreements with a termination date of 364
days or less collateralized by U.S. Treasury obligations, federal agency securities, and federal
instrumentality securities described in Section 4.01(a) hereof with a minimum market value
including accrued interest of 102 percent (102%) of the dollar value of the transaction or by cash
equal to 100 percent (100%) of the dollar value of the transaction or by a combination of such
securities and cash. Collateral shall be held by the Custodian or a sub-custodian, and market
value of the collateral securities shall be marked-to-the market daily. Repurchase agreement
counterparties shall be rated in one of the two highest short-term rating categories by a
nationally recognized statistical rating organization ("NRSRO").
(c) Commercial Paper. The Prime Fund may invest in "prime quality" commercial
paper of corporations, including paper issued by bank holding companies and high-quality
asset-backed securities, with a maturity of 397 days or less. "Prime quality" commercial paper
must be rated in one of the two highest short-term rating categories of a NRSRO.
(d) Corporate Notes and Bonds. The Prime Fund may invest in bonds, notes and
other evidences of indebtedness or obligations issued by corporations having a remaining
maturity less than or equal to 397 days. All such debt obligations shall be rated in one of the
two highest short-term rating categories by a NRSRO.
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(e) Obligations of Banks. The Prime Fund may purchase bankers' acceptances,
certificates of deposit, time deposits and negotiable bank deposit notes issued by domestic
banks and foreign banks. Yankee instruments are denominated in U.S. dollars and issued by
U.S. branches of foreign banks. Eurodollar instruments are denominated in U.S. dollars and
issued by non-U.S. branches of U.S. or foreign banks. The Prime Fund may invest in Bank
obligations with maturities of 397 days or less if rated in one of the two highest short-term
rating categories of a NRSRO. The Prime Fund will not invest in any bank obligation with a
remaining maturity greater than 397 days.
(f) Asset Backed Securities. The Prime Fund may invest in asset backed securities.
Asset backed securities are payable from pools of obligations, many of which involve consumer
or commercial debt. Asset backed securities take the form of commercial paper, notes or pass-
through certificates.
(g) Foreign Securities. The Prime Fund may invest in foreign securities issued in
U.S. dollars by issuers based outside the United States, so long as they are eligible investments
under the foregoing categories.
(h) Floating-Rate and Variable-Rate Obligations. The Prime Fund may purchase
obligations that have interest rates that adjust on set dates and are reasonably expected to have
a market value that approximates amortized cost on such dates (variable rate obligations or
"VRN") or obligations that have interest rates that adjust whenever a benchmark rate or index
changes and are reasonably expected to have a market value that approximates amortized cost
(floating rate obligations). These obligations may have demand features which give the Prime
Fund the right to demand repayment of principal on specified dates or after giving a specified
notice. Such securities may be deemed to have maturities shorter than their stated maturity
dates.
(i) Money Market Funds. The Prime Fund may invest in no-load money market
mutual funds that (i) are registered with and regulated by the U.S. Securities and Exchange
Commission; (ii) include in their investment objectives the maintenance of a stable net asset
value of$1.00; and (iii) are rated 'AAAm' or equivalent by a NRSRO.
(j) The Prime Fund may not engage or invest in short sales, margin transactions,
commodity or future contracts, venture capital, or initial public offerings, option trading and
derivative transactions.
(k) The Prime Fund may not be invested in asset backed commercial paper securities
that are classified as structures investment vehicles (SIV), collateralized debt obligations
(CDO), structured arbitrage vehicles (SAV) or extendible commercial paper. The Prime Fund
may not invest in obligations whose payment represents the coupon payments on the
outstanding principal balance of the underlying mortgage-backed security collateral and pays
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no principal, obligations whose payment represents the principal stream of cash flow from the
underlying mortgage-backed security collateral and bears no interest, collateralized mortgage
obligations and derivatives.
SECTION 4.02. PORTFOLIO STRUCTURE. The Prime Fund shall be designed
and managed to ensure that it will meet all the requirements necessary to maintain a 'AAAm'
rating (or the equivalent) by at least one NRSRO. The weighted average maturity of the Prime
Fund shall be limited to: (a) a maximum sixty (60) days when calculated utilizing the period
remaining until the date on which, in accordance with the terms of each security, the principal
amount must unconditionally be paid, or in the case of a security called for redemption, the
date on which the redemption payment must be made, and may utilize the interest rate reset
date for variable rate notes or floating rate securities; and (b) a maximum of one hundred
twenty (120) days as calculated taking into account the period remaining until the date on
which, in accordance with the terms of each security, the principal amount must
unconditionally be paid, or in the case of a security called for redemption, the date on which
the redemption payment must be made. Specific portfolio composition and maturity limitation
guidelines shall be guided by the following general parameters.
(a) Portfolio Composition. The composition of the Prime Fund shall be limited as
follows. Limitations shall be applied by comparing amortized cost of the Prime Fund's
investments at the time of purchase.
(i) United States Government Securities, Agencies, and Instrumentalities. Up to
one hundred percent (100%) of the Prime Fund may be invested in obligations of,
unconditionally guaranteed or insured by, or backed by the full faith and credit of the United
States, its agencies, or instrumentalities, including government sponsored enterprises.
(ii) Repurchase Agreements. Up to one hundred percent (100%) of the Prime
Fund may be invested in repurchase agreements.
(iii) Commercial Paper. No more than 5% of the Prime Fund may be invested
in the commercial paper of any single entity(including affiliates).
(iv) Corporate Notes and Bonds. No more than 5% of the Prime Fund may be
invested in corporate notes and bonds of any single entity(including affiliates).
(v) Money Market Mutual Funds. Up to a maximum of ten percent(10%) of the
Prime Fund may be invested in any one money market mutual fund, and the Prime Fund's
investment in any one money market mutual fund may not exceed ten percent(10%) of the total
assets of that money market mutual fund.
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(vi) Industry. No more than 25% of the assets of the Prime Fund may be
invested in a single industry or business sector; provided that this limitation does not apply to
securities issued or guaranteed by companies in the financial services or banking industries.
(b) Maturity Limitations.
(i) Government Securities, Agencies and Instrumentalities. The maximum final
maturity for any securities that are obligations of or guaranteed or insured by the United States
government, its agencies, or instrumentalities shall be limited to 397 days for fixed rate
securities and two years (762 days) for variable rate notes.
(ii) Repurchase Agreements. The maturity of repurchase agreements shall not
exceed 364 days unless the repurchase agreements have a put option that allows the fund to
liquidate the position at par (principal plus accrued interest).
(iii) Based on Ratings. The maximum final maturity for a fixed-rate
investment, a non-sovereign government floating rate investment, and a sovereign floating rate
investment rated below "AA-" or equivalent rating by at least one NRSRO is 397 days. The
maximum final maturity for a sovereign government (including sovereign government
related/guaranteed) floating rate security rated at least "AA-" or an equivalent rating by at least
one NRSRO is two years(762 days).
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