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2018-015 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 Page 1 of 6 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. Page 2 of 6 (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. Page 3 of 6 (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. Page 4 of 6 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 Page 5 of 6 EXHIBIT A FORM OF INTERLOCAL AGREEMENT Page 6 of 6 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 1 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 2 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. 3 "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. 4 "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. [Remainder of page intentionally left blank] 5 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. 6 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. 7 (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. 8 (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 9 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: 10 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 11 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 12 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. 13 (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 14 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 15 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 16 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 17 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. [Remainder of page intentionally left blank] 18 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 19 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. 20 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. [Remainder of page intentionally left blank] 21 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. 22 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. [Remainder of page intentionally left blank] 23 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. 24 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. [Remainder of page intentionally left blank] 26 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. 27 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. [Remainder of page intentionally left blank] 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 A-1 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 A-2 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 B-1 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 B-2 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: B-3 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 B-4 (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. [Remainder of page intentionally left blank] B-5 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) B-6 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. [Remainder of page intentionally left blank] C-2 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. C-3 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 C-4 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. C-5 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 C-6 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 C-7 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). C-8 APPENDIX D FORM OF PRIME FUND INVESTMENT POLICIES D-1 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. D-3 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 D-4 . 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 D-5 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. D-6 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. D-7 (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 D-8 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. D-9 (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). D-10