HomeMy WebLinkAboutTR-61-99
11' DN, TR.61.99
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THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
Meeting:
General Purpose and Administration Committee
File # Ao 1
Res. #(JPI1-'f7f-1r
Date:
October 18, 1999
Report #:
TR-61-99
FILE #: DEV
By-law #
Subject:
Segregation of Development Charges Reserve Funds
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT the Mayor and Clerk be authorized to execute the attached by-law and
Agency Agreement ("Attachment A")
2. THAT the Treasurer be authorized to execute on behalf of the Municipality of
Clarington any documents necessary to participate in the Funds provided by "ONE-
The Public Sector Group of Funds" sponsored by Municipal Finance Officers
Association and Association of Municipalities of Ontario;
3. THAT the Treasurer invest development charge reserve fund balances in the
"ONE" fund and/or any other approved investment vehicle, in order to comply
with the segregation requirements under the new Development Charges Act and
related regulations.
BACKGROUND - ONE FUND
1.0 Under the Municipality's current investment policy (revised October 5, 1998 per
TR-76-98), participation in municipal investment pools is permitted up to a
maximum of 30% of the investment portfolio. Currently the only municipal
investment pool is called "One - The Public Sector Group of Funds". This
investment pool is sponsored by both the Municipal Finance Officers Association
(MFOA) and the Association of Municipalities of Ontario (AMO).
2.0 In May of 1999 revisions were made to the Fund that necessitate a new bylaw to be
passed by the Municipality. The two modifications to the Fund are as follows:
. Improvements to the Bond Fund: Investment industry improvements to
technology and a shorter time period within which to "settle" bond security
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REPORT NO.: TR-61-99
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trades mean that the ONE-Bond Fund is now able to offer investors the ability to
place their investment instructions into the Bond Fund on any banking day and
to provide only three days advance notice for withdrawals on any banking day.
. Introduction of record keeping service provider: ONE Fund is the only
investment program for municipalities which meets the stringent requirements of
the Municipal Act. Also, ONE enables investors to place their investment
instructions at the beginning of the day and thus begin earning investment
income immediately and provides investors with investment income for the full
amount of time that an investment is in a fund. This requires unique custodial,
funds transfer and record keeping services.
3.0 Included as "Attachment "A" is a copy of the new bylaw that is required for
continued participation in the "ONE" fund. The Treasurer will also be required to
execute documents to establish banking arrangements and procedures for the
placement of investments.
DEVELOPMENT CHARGES
4.0 In the AMCTO Express issue dated July 19, 1999, several issues of concern were
raised regarding administrative requirements included in the new Development
Charges Act. Banking and investment procedures have to be revised as the
Development Charges Act specifically excludes certain permissive provisions within
the Municipal Act relating to pooling of Municipal funds for investment purposes.
These new provisions impose new administrative and management requirements on
municipal finance departments in order to comply with the legislation.
5.0 Specifically, subsections 163(3) and 167(4) ofthe Municipal Act have been
excluded for the purposes of development charges. These provisions allowed
Treasurers to consolidate their reserve funds into one account and to combine funds
from all funds for investment purposes.
6.0 A legal opinion was obtained to verify the AMCTO information. As a result, it has
been determined that all development charges funds must be specifically segregated
for investment purposes. This causes administrative complications because some
access to funds must be available in order to pay for development charges capital
projects. Also, currently development charge funds are invested jointly with other
municipal funds in order to obtain better rates of return. The funds must now be
separated out and invested independently.
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REPORT NO.: TR-61-99
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CONCLUSIONS
7.0 Due to the administrative complexity of segregating specific development charge
balances as well as ongoing collections into the reserve funds, it is recommended
that the "ONE" Fund be the primary investment tool, with the option of investing
in other approved vehicles should circumstances change. This will allow for easier
deposits as collections are received and withdrawals as capital projects are
undertaken. The segregation requirements are then met.
8.0 New by-laws are required to re-enrol in the "ONE" Fund due to changes to the
program in May 1999.
Respectfully submitted,
Reviewed by,
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C.~-o~
Franklin Wu,
Chief Administrative Officer.
arano, H.B.Sc., A.M.C.T.,
Treasurer
MM*NT*ls
Attach.
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Attachment A
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THE CORPORATION OF THE MUNICIPALITY OF ClARINGTON
BY.lAW NO. 99-
A by-law to authorize The Corporation of the Municipality of Clarington
(the "Corporation") to enter into the Agency Agreement, between CHUMS
Financing Corporation and Local Authority Services Limited, as Agent, and
Eligible Investors with respect to "ONE - The Public Sector Group of Funds"
and to authorize the Mayor and Clerk to execute the necessary documents
for that purpose.
WHEREAS the Municipal Act provides that the power of a municipality to
invest money includes the power to enter into an agreement with any other
municipality. and with any school board, college, university, hospital or such
other person or classes of them as may be prescribed by regulation for the joint
investment of money be those parties or their agents;
AND WHEREAS the Corporation proposes to enter into an Agency Agreement
dated May 31,1999 (the "Agency Agreemenf') between CHUMS Financing
Corporation, a duly incorporated wholly.owned subsidiary of the Municipal
Finance Officers' Society of Ontario, and Local Authority Services Limited. a duly
incorporated wholly-owned subsidiary of the Association of Municipalities of
Ontario, as agent, and Eligible Investors, as defined therein, to permit the
Corporation to be an investor, through "ONE - The Public Sector Group of Funds"
investment funds for joint investments as set out in schedules to the Agency
Agreement (the "Funds");
AND WHEREAS the Council of the Corporation deems it to be in the interest of
the Corporation of the Municipality of Clarington to enter into the Agency
Agreement and to enrol in the Funds;
NOW, THEREFORE, THE COUNCil OF THE CORPORATION OF THE
MUNICIPALITY OF CLARINGTON ENACTS AS FOllOWS:
1. The Mayor and Clerk are authorized to execute the Agency Agreement in the
form attached as Schedule "A" and to affix the corporate seal.
2. The Treasurer is hereby authorized and directed to enter into and execute
any other necessary documents, including without limitation enrolment
documents and documents in connection with payment services for the Fund,
and to do anything necessary or desirable, on behalf of the Corporation, to
give effect to the purpose.
READ A FIRST AND SECOND TIME THIS 25TH DAY OF OCTOBER, 1999.
READ A THIRD TIME AND FINALLY PASSED THIS 25TH DAY OF OCTOBER,
1999.
Mayor
Clerk
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Schedule "A"
AGENCY AGREEMENT
Dated as of May 31, 1999
Between
AGENT
and
ELIGIBLE INVESTORS
McMILLAN BINCH
BARRlSTERS & SOLlCITORS
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TABLE OF CONTENTS
SECTION I - INTERPRETATION..................................................... I
1.0 I Definitions.. . . . . . . . . . . . . . . . _ . . _ . . . . . . _ . _ _ . _ . . . _ . _ _ _ . . _ . _ _ . . . . . _ . _ _ _ . .. I
(a) Agent. _ . . . . . . . _ . . . _ _ . . . . . . . . . . _ . _ . . . . . . . . . . . . . . . . . . . . . . . . _ . . . .. I
(b) Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. I
(c) Banking Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . . . . . . . . . .. I
(d) CHUMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . _ . .. I
(e) Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2
(f) Eligible Investor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2
(g) Fund. . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2
(b) Fund Agreements ........................................... _ . . .. 2
(i) Fund Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2
G) Fund Schedule ............................................. _ . . .. 2
(k) Investment Account .............................................. 2
(I) Investment Counsel ...................... _ . . . . . . . . . . . . . . . . . . . . . .. 2
(m) Investor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2
(n) LAS. . . .. . . . . . . .. . . . . . . . . . . . . .. . .. . . .. . . . . . . . . . . . . . .. . . . . . . ... 2
(0) Municipal Act .................................................. 2
(P) Payment Servicer ................................................ 2
(q) Recordkeeper. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . .. 3
(r) Valuator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3
1.02 Governing Law ........................................................ 3
1.03 Headings and Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3
1.04 Number and Gender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3
1.05 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3
SECTION 2 - AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3
2.01 Appointment of Agent, etc. .................................. _ . . . . . . . . . . .. 3
2.02 Fund Committee ....................................................... 3
2.03 Resignation of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4
2.04 Automatic Termination of CHUMS or LAS as Agent .......................... 4
2.05 Successors. . . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . . . . . . . . . . . . . . . . . . . . _ . . . . . . .. 5
2.06 Termination of Agreement ............................................... 5
2.07 Obligations survive ..................................................... 5
2.08 No rights to assets ...................................................... 5
SECTION 3 - INVESTORS ........................................................... 5
3.01 Becoming an Investor ................................................... 5
3.02 No obligation to invest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6
3.03 Ceasing to be an Investor. ................................................ 6
3.04 Representations and Warranties of Investor .................................. 6
3.05 Limitation on liability ................................................... 6
3.06 Addition of parties to this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
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3.07 List ofInvestors and Investor information ....... ~ . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
SECTION 4 - THE CUSTODIAN, PAYMENT SERVICER, VALUATOR, RECORDKEEPER AND
INVESTMENT COUNSEL ..................................................... 7
4.0 I Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . .. 7
4.02 Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
4.03 Payment Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
4.04 Valuator.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
4.05 Recordkeeper.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
4.06 Investment Counsel. .................................................... 8
(a) Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
(b) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
SECTION 5 - THE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. 8
5.01 Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
5.02 Investment policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 8
5.03 Fees and expenses ...................................................... 8
5.04 Amendments.. . . .. .. .. .... ...... .. .. ... ... ..... ..... . .... ....... . . .. .. 8
5.05 Investmentandwithdrawaloffunds........................................ 8
5.06 Income on investments .................................................. 9
5.07 Default in payment ..................................................... 9
5.08 Wind-up of a Fund by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 9
SECTION 6 - GENERAL ............................................................ 10
6.01 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10
(a) Address for notices .............................................. 10
(b) Effective date .................................................. 10
6.02 No partnership or deemed agency . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10
6.03 No fiduciary duties. .................................................... II
6.04 No assignment. ....................................................... II
6.05 Further action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. II
6.06 Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11
6.07 Attornment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. II
6.08 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 11
SCHEDULE A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Al
MONEY MARKET FUND .................................................... Al
SCHEDULE B . . .. . . . . . . . .. . . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . .. .. . . . . . . . Bl
BOND FUND ............................................................... B 1
SCHEDULE C .................................................................... Cl
ISSUING INVESTMENT, WITHDRAWAL AND TRANSFER INSTRUCTIONS
TO THE RECORDKEEPER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - . . . . . . . . . . . . . . . CI
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AGENCY AGREEMENT
This agreement dated as of May 31, 1999 is between
CHUMS FINANCING CORPORATION and
LOCAL AUTHORITY SERVICES LIMITED
as Agent
and
ELIGffiLE INVESTORS
RECITALS
A. CHUMS and LAS are combining their efforts to act as agent for municipalities in connection with
joint municipal investment funds in Ontario under a single investment program called "ONE - The Public
Sector Group of Funds".
B. CHUMS, LAS and Eligible Investors are entering into this Agreement for the purpose of appointing
CHUMS and LAS as agent for Investors making investments through the Funds.
FOR VALUE RECEIVED, the parties agree as follows:
SECTION 1 - INTERPRETATION
1.01 Definitions. In this Agreement,
(a) Agent means both CHUMS and LAS acting together and any successor agent or agents appointed
under Section 2.05 or CHUMS or LAS if it is a remaining entity under Section 2.03 or 2.04;
(b) Agreement means this agreement, any Fund Schedules and any other schedules attached to the
agreement from time to time as the agreement, the Fund Schedules or any of the other schedules may be
added, amended, deleted, supplemented, restated, renewed or replaced from time to time;
(c) Banking Day means a day on which the Payment Servicer and the Custodian are open for business
in Toronto, Ontario, other than a Saturday or a Sunday or a statutory holiday in Toronto, Ontario;
(d)
CHIJMS means CHUMS Financing Corporation and its successors;
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AGREMEI5.0NE
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(e) Custodian at any time means a fmancial institution which at such time has been approved by the
Agent to provide custodial, fund accounting and other custody related services in connection with the Funds;
(t) Eligible Investor means, in respect of a Fund, a municipality, college, hospital, school board, or
university, as defmed under the Municipal Act or such other persons or classes of persons as may be
prescribed under the Municipal Act, with which an Ontario municipality is permitted to enter into an
agreement for the joint investment of money;
(g) Fund means an arrangement for joint investment carried on under the program name of "ONE - The
Public Sector Group of Funds" arranged by the Agent for use by the Investors as set out in a Fund Schedule;
(Ii) Fund Agreements means the agreements entered into, from time to time, by the Agent, as agent for
the Investors, with the Custodian, the Payment Servicer, Valuator, Recordkeeper, Investment Counsel and
such other persons as the Agent considers appropriate for the purpose of carrying out the objectives of each
Fund;
(i) Fund Committee means the committee described in Section 2.02;
(j) Fund Schedule means a schedule to this Agreement, as added, amended, deleted, supplemented,
restated, renewed or replaced from time to time, describing a particular Fund and that Fund's objectives,
eligible investments and such other information as the Agent considers necessary or desirable;
(k) Investment Account means with respect to an Investor an account maintained in the records of the
Recordkeeper evidencing the Investor's undivided percentage ownership interest in the investments of a
Fund;
(I) Investment Counsel means at any time one or more professional investment management firms
registered in Ontario as investment counsel and portfolio manager advisors, which at such time has been
approved by the Agent to provide investment management services for a Fund;
(m) Investor means an Eligible Investor which has received a duly executed notice from the
Recordkeeper under Section 3.0 I (c) advising the Eligible Investor that it is an Investor and ofits account
number(s) and authorization code(s) and which has not ceased to be an Investor under Section 2.06 or
Section 3.03;
(n) LAS means Local Authority Services Limited and its successors;
(0) Municipal Act means the Municipal Act, R.S.O. 1990, c. M.4S, as amended from time to time.
(P) Payment Servicer means at any time a Canadian financial institution which at such time has been
approved by the Agent to facilitate the transfer of assets of an Investor between an Investor's financial
institution and an Investor's Investment Account;
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(q) Recordkeeper means at any time an entity approved by the Agent from time to time to provide
recordkeeping services to a Fund including receiving and implementing Investor instructions,
keeping records of Investor holdings and providing monthly reporting to Investors.
(r) Valuator means at any time an entity approved by the Agent from time to time to provide valuation
services to a Fund.
1.02 Governing Law. This Agreement is governed by, and is to be construed and interpreted in
accordance with, the laws of the Province of Ontario and the laws of Canada applicable in the Province of
Ontario.
1.03 Headings and Table of Contents. The division of tlris Agreement into sections, subsections,
paragraphs, subparagraphs, clauses and schedules, the insertion of headings and the provision of a table of
contents are for convenience of reference only and are not to affect the construction or interpretation of this
Agreement.
1.04 Number and Gender. Unless otherwise specified, words importing the singular include the plural
and vice versa and words importing gender include all genders.
1.05 Severability. If any provision of this Agreement is or becomes illegal, invalid or unenforceable in
any jurisdiction, the illegality, invalidity or unenforceability of that provision will not affect the legality,
validity or enforceability of the remaining provisions of this Agreement.
SECTION 2 - AGENT
. 2.01 Appointment of Agent, etc. Each Investor irrevocably appoints and authorizes the Agent to take
all action as an agent on its behalf and to exercise all powers and rights and to perform all duties and to
enable Investors to jointly invest money in accordance with the terms of this Agreement and the Fund
Agreements together with all powers reasonably incidental thereto. In addition to the foregoing, each
Investor agrees that CHUMS and LAS may enter into such agreements and arrangements and do all such
things, whether as principal or agent, as may be necessary or desirable to facilitate payments for investments,
maintenance of accounts in respect of Funds and withdrawals from or redemptions in respect of Funds.
2.02 Fund Committee. Each Investor authorizes the Agent to appoint from time to time a Fund
Committee and, subject to any provision in this Agreement, to delegate to the Fund Committee any or all
of the powers, rights and responsibilities of the Agent for all Funds under this Agreement Subject to
Sections 2.03 and 2.04, CHUMS and LAS shall each appoint an equal number of members. Each member
must be a senior officer who is employed by an Ontario municipality, college, hospital, school board or
university oc another person agreed to by each of CHUMS and LAS.
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2.03 Resignation of Agent. If either CHUMS or LAS becomes unwilling to continue to participate as
Agent, the remaining entity shall continue as Agent and shall be responsible for the appointment of all of
the members of the Fund Committee. The Agent may resign as agent at any time by giving at least 30 days
prior written notice to each Investor specifYing the date on which the resignation is to be effective and by
giving notice in accordance with Section 5.08 to wind-up all of the Funds.
2.04 Antomatic Termination of CHUMS or LAS as Agent. If:
(a) CHUMS or LAS
(1) becomes unable, or admits, in writing, its inability to pay its debts generally as they
become due,
(2) makes a general assignment for the benefit of creditors,
(3) files a notice of intention, voluntary petition in bankruptcy or a petition seeking
liquidation, reorganization or an arrangement with creditors to take advantage of
any insolvency or other law, or
(4) takes any action for the purpose of effecting any of the foregoing; or
(b) any proceedings (other than proceedings which either CHUMS or LAS demonstrates to the
satisfaction of the other to be frivolous or vexatious) are instituted by or against CHUMS
or LAS seeking to adjudicate it as bankrupt or insolvent or seeking liquidation, winding-up,
reorganization, arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
applying for, consenting to or seeking the entry of an order for relief by, the appointment
of a receiver, receiver and manager, receiver-manager, liquidator, sequestrator, custodian,
trustee or similar agent or official for all or a substantial or significant part of its assets; or
(c) any secured creditor, encumbrancer or lienor or any receiver, receiver and manager,
receiver-manager, liquidator, sequestrator, custodian, trustee or similar agent or official
appointed by or acting for any secured creditor, encumbrancer or lienor takes possession of,
or forecloses or retains, or sells or otherwise disposes of, or otherwise proceeds to enforce
security over, all or a substantial or significant part of the assets of CHUMS or LAS or gives
notice of its intention to do any of the foregoing;
that party shall on the happening of such event be automatically terminated as Agent and no notice or other
action shall be required on the part of CHUMS, LAS or any Investor to effect the termination of that party
as Agent. If either CHUMS or LAS is terminated as Agent Under this Section 2.04, the remaining entity shall
remain the Agent and shall be responsible for the appointment of all the members of the Fund Committee.
AGREME15.0NE
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2.05 Successors. The Agent may appoint a successor agent. When the successor agent accepts the
appointment as Agent, the successor agent shall succeed to and become vested with all the rights, powers
and responsibilities of the resigning agent, and the resigning agent shall be discharged from its
responsibilities and obligations under this Agreement. After any resigning agent's resignation as Agent, this
Agreement shall continue in effect for its benefit and for the benefit of the Investors in respect of any actions
taken or omitted to be taken by the resigning agent while it was acting as the Agent.
2.06 Termination of Agreement. The Agent may terminate an Investor's right to request that
investments be made and the right to maintain investments in a Fund by giving the Investor at least 30 days
prior written notice of the termination date. As of the termination date, (a) the Investor receiving the notice
may make no further investment requests and must promptly withdraw (in accordance with Section 5.05 and
Schedule C and any other provisions from time to time relating to withdrawal of funds) all funds which it
is entitled to withdraw and (b) the Investor is no longer an Investor for the purpose of this Agreement. The
termination of an Investor as an Investor shall, as of the date of termination and subject to Section 2.07,
terminate this Agreement between the Agent and the Investor. Such termination will not affect the
Agreement as between the Agent and the remaining Investors.
2.07 Obligations snrvive. All obligations (whether contingent or matured, absolute or not) existing
immediately before an Investor ceases to be an Investor under Section 3.03 or a termination under Section
2.06 shall survive such withdrawal or termination.
2.08 No rights to assets. None of the Agent, the Custodian, the Payment Servicer, the Valuator, the
Recordkeeper or Investment Counsel shall have any beneficial or personal right, title or interest in or to the
assets in any Fund, other than as specifically set out in a Fund Agreement or in the Fund Schedules.
SECTION 3 - INVESTORS
3.01 Becoming an Investor. An Eligible Investor is an Investor in respect of a Fund when:
(a) The person or persons authorized to execute this Agreement on behalf of the Eligible
Investor has duly executed a counterpart to this Agreement;
(b) The person or persons authorized to execute this Agreement on behalf of the Eligible
Investor has completed all of the other necessary documents required by the Agent to
become an Investor including, without limitation,
(I)
an information sheet on the Eligible Investor,
(2)
a certificate confirming passage and enforceability of a by-law substantially in the
form of the sample by-law provided to the Eligible Investor by the Agent on behalf
of ONE - The Public Sector Group of Funds, and designating persons who are
authorized to give investment, withdrawal or transfer instructions and confirming
831
AGREME15.0NE
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6
that all necessary actions have been taken by the Eligible Investor to authorize such
persons to give investment, withdrawal or transfer instructions,
(3) a pre-authorized debit authorization letter from the Eligible Investor to its financial
institutions and others; and
(c) The Recordkeeper has notified the Eligible Investor that it is an Investor and of its account
number(s) and authorization code(s).
3.02 No obligation to invest. An Investor has no obligation to invest in any Fund.
3.03 Ceasing to be an Investor. At any time at which an Investor has no investments outstanding in any
Fund and has given no investment instructions it may by notice to the Agent cease to be an Investor.
3.04 Representations and Warranties oflnvestor. Each Investorrepresents and warrants to the Agent
that,
(a) the Investor has taken all actions necessary to authorize it to enter into this Agreement,
(b) the Investor is authorized to make investments through any of the Funds which it has
designated to either the Agent or the Recordkeeper as being Funds through which it is
authorized to invest, and any money which the Investor invests through a Fund designated
by it is money which the Investor may invest through that Fund, and
(c) the Investor has adopted a statement of its investment policies and goals in accordance with
the applicable legislation and such policies and goals permit the Investor to invest in all
investments which are eligible investments for municipalities under the Municipal Act.
The Investor shall be deemed to have repeated the representation and warranty in Section 3.04(a), (b) and
(c) each time it issues investment instructions relating to any Fund. The Agent shall have no obligation to
make any inquiry to confirm the truth or accuracy of any representation or warranty. The Agent shall not
be liable for any loss or damages suffered by the Investor or any other person claiming through the Investor
or any other Investor as a result of any act, including without limitation, the execution of this Agreement by
a person purporting to have authority to act on the Investor's behalf.
3.05 Limitation on liability. The Agent, the Custodian, the Payment Servicer, the Valuator, the
Recordkeeper and the Investment Counsel may, in their discretion, honour instructions purporting to be
issued by an Investor given by telephone, facsimile or other electronic transmission, without the necessity
of any verification or enquiry. None of the Agent, the Custodian, the Payment Servicer, the Valuator, the
Recordkeeper or the Investment Counsel shall incur any liability to an Investor by reason of acting or not
acting on or any error in such instructions, and the Investor shall indemnify and hold harmless each of the
832
.4GREME/5.0NE
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Agent, the Custodian, the Payment Servicer, the Valuator, the Recordkeeper and the Investment Counsel
from any loss, cost, damage, or expense that any of them may suffer or incur by relying on such instructions.
3.06 Addition of parties to this Agreement. Eligible Investors may be added as parties to this
Agreement from time to time after the date of this Agreement. Each of the Agent and the Investor agrees
that this Agreement is binding on it regardless of when it became a party to this Agreement and the addition
of other Eligible Investors as parties to this Agreement. Upon becoming an Investor, the Investor shall
become a party to and shall be bound by this Agreement as if it had been an original party to this Agreement.
3.07 List of Investors and Investor information. The Agent will keep an up-to-date list of the names
of Investors and may make the list available to Eligible Investors and other persons. The Agent shall ensure,
to the best of its ability, the confidentiality of all other information pertaining to an Investor and the
Investor's investments through any Fund whether the Investor continues to be an Investor or the Investor has
ceased to be an Investor. This does not apply to information which is otherwise available to the public or
to information which the Agent is required by law to disclose.
SECTION 4 _ THE CUSTODIAN, PAYMENT SERVICER, VALUATOR, RECORDKEEPER AND
INVESTMENT COUNSEL
4.01 Authority. Each Investor authorizes the Agent to enter into Fund Agreements, from time to time,
as agent of the Investor.
4.02 Custodian. The Agent will not enter into a Fund Agreement with a Custodian unless at the time of
entering into the Fund Agreement the Custodian is a Canadian chartered Schedule I bank or trust company
registered nnder the laws of Ontario.
4.03 Payment Servicer. The Agent will not enter into a Fund Agreement with a Payment Servicernnless
the Payment Servicer is a Canadian chartered Schedule I bank or other regulated Canadian [mancial
institution.
4.04 Valuator. The Agent will not enter into a Fund Agreement with a Valuator unless the Valuator has
satisfied the Agent of the ability of the Valuator to provide and maintain accurate valuation services for the
Funds.
4.05 Recordkeeper. The Agent will not enter into a Fund Agreement with a Recordkeeper unless the
Recordkeeper has satisfied the Agent of the ability ofthe Recordkeeper to provide and maintain accurate
recordkeeping and instruction services.
833
AGREMEl5.0NE
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4.06 Investment Counsel
(a) Registration. The Agent will not enter into a Fund Agreement with an Investment Counsel unless
the Fund Agreement requires the Investment Counsel to maintain at all times its status in Ontario as a
registered investment counsel and portfolio manager while it is Investment Counsel for any Fund.
(b) Insurance. The Agent will not enter into a Fund Agreement with any Investment Counsel unless
the Fund Agreement requires the Investment Counsel to maintain, in full force and effect, bonding or
insurance in such amounts and of such types as are required from time to time by appropriate regulatory
authorities.
SECTION 5 - THE FUNDS
5.0 I Funds. The Investor agrees with the Agent and all other Investors that each Fund is an aggregation
of assets. At any time, each Investor who has made investments through a specific Fund has at that time,
subject to Section 5.07, an undivided percentage ownership interest in all investments made through that
Fund at that time proportional to the amount of investments made through that Fund by the Investor at that
time. Each Investor agrees that investments of a Fund will be valued as set out in the Fund Schedule. No
Investor has the right to require distribution of any specific investment.
5.02 Investment policy. The investment policy of a Fund will be set out in the Fund Schedule for that
Fund. The policy may be subject to further restrictions approved from time to time by the Agent. A copy
of the investment policy, as amended from time to time, will be made available to the Investors. Any
agreement with the Investment Counsel will permit Investment Counsel to make investments based only on
the investment policy. None of the Agent, the Custodian, the Payment Servicer, the Valuator or the
Recordkeeper is responsible for investment decisions.
5.03 Fees and expenses. For each Fund, the Agent shall establish and disclose in the Fund Schedule for
that Fund, the maximum aggregate fees and expenses payable, out of the investments made through that
Fund, to the Custodian, the Payment Servicer, the Valuator, the Recordkeeper, the Investment Counsel and
the Agent. The Agent may change the maximum aggregate fees and expenses stated in a Fund Schedule
upon providing such prior notice to all Investors as is set out in the Fund Schedule.
5.04 Amendments. The Agent may from time to time, upon providing 30 days prior written notice to
all Investors, amend the Agreement by adding schedules and amend, delete, supplement, restate, renew and
replace schedules to this Agreement.
5.05 Investment and withdrawal of funds. Each Investor shall abide by the procedures for issuing
investment, withdrawal and transfer instructions set out in a Fund's Fund Schedule and in Schedule C.
Before an Investor provides investment instructions and arranges for any transfer from its account at its
834
AGREMEI5.0NE
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9
financial institution to a Fund, the Investor shall ensure that sufficient funds are then available to cover the
amount of such investment.
5.06 Income on investments. Subject to Section 5.07, at any time each Investor has an undivided
percentage ownership interest in the income on all investments made through a Fund proportional to the
Investor's undivided percentage ownership interest in the aggregate investments made through that Fund at
that time. Income on investments will be automatically re-invested through the Fund on the same basis as
investments.
5.07 Default in payment. If an Investor requests that an investment be made and
(a) there are insufficient funds in the Investor's account at its financial institution to pay
when due for the investment placed by the Investor through a Fund, or
(b) the Investor's financial institution is insolvent or for any other reason the Investor
provides no or insufficient funds to pay when due for the investment placed by the
Investor through the Fund,
then the Investor, with respect to that investment, has no interest in the Fund or income relating thereto or
proceeds thereof. The Investor agrees to indemnify the Agent, the Custodian, the Valuator, the Payment
Servicer, the Recordkeeper and the Investment Counsel, and to hold the Agent, the Custodian, the Valuator,
the Payment Servicer, the Recordkeeper and the Investment Counsel harmless from all losses and expenses
(including interest, charges and any loss in value of the investment) incurred by the Agent, on its own
account or on behalf of the Investor, the Custodian, the Valuator, the Payment Servicer, the Recordkeeper
or the Investment Counsel resulting from default or delay in payment. The Agent may assign its rights under
this indemnity to any person. In addition, the Investor agrees to pay the Agent a fee in an amount set by the
Agent from time to time as a fee payable in respect of any delay or default in payment for an investment
whether as a result of Section 5.07(a) or Section 5.07(b). The Agent may authorize the debiting of the credit
balance in an Investor's Investment Account for any Fund and apply the amounts so debited toward the
payment of amounts (whether absolute, contingent, matured or not) payable by the Investor under this
Section 5.07.
5.08 Wind-up of a Fund by Agent. The Agent may, on at least 30 days prior written notice to all
Investors that it intends to wind-up a Fund, wind-up a Fund on the date set out in the notice. The Agent shall
within five days of the date of winding-up distribute the proceeds of the sale of the investments made
through that Fund to those Investors with investments through the Fund to the extent of each Investor's
undivided percentage ownership interest at the time of winding-up in the investments made through that
Fund.
835
AGREMEl5.0NE
10
SECTION 6 - GENERAL
6.01 Notice.
(a) Address for notices. Any notice or other communication required or permitted to be given under
this Agreement shall be in writing and shall be delivered or sent by registered mail, postage prepaid or
facsimile (with follow-up mailed copy unless otherwise specified in this Agreement or in a Fund Schedule)
to the addresses or facsimile numbers set out in the information sheets in respect of each Investor kept by
the Agent and in the case of the Agent to:
ONE - The Public Sector Group of Funds
c/o CHUMS Financing Corporation,
121 John Street, Main Floor
Toronto, Ontario M5V 2E2
Attention: Executive Vice-President, CHUMS
Facsimile: (416) 979-1060
Changes to the addresses and facsimile numbers may be made in the manner set out in this Section 6.01.
(b) Effective date. Any such notice or other communication shall be deemed to have been given and
received, if delivered, on the day of delivery (or, if the day is not a Banking Day, on the next following
Banking Day) or, if mailed, on the second Banking Day following the day in which it is mailed. If a strike
or lockout of postal employees is in effect or generally known to be impending on the date of mailing, any
such notice or other communication shall be delivered and not sent by mail. If sent by facsimile before 5 :00
p.m. Toronto, Ontario time on a Banking Day, the notice or other communication shall be deemed to have
been received on that day, and if sent after 5:00 p.m. Toronto, Ontario time on a Banking Day, it shall be
deemed to have been received on the Banking Day next following the date of transmission.
6.02 No partnership or deemed agency. The execution ofthis Agreement and the other arrangements
with respect to a Fund are not intended to create and shall not be treated as having created a general or
limited partnership, joint venture, corporation, joint stock company, investment trust or mutual fund, nor
shall:
(a) the Agent, the Custodian, the Payment Servicer, the Valuator, the Recordkeeper nor
Investment Counsel, or their respective agents and employees, except as provided in this
Agreement, or
(b) any other lI1vestor
under any circumstances be deemed the agent or representative of, or have the right to enter into any contract
or commitment on behalf of, an Investor.
AGREMEI5.0NE
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. ,
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6,03 No fiduciary duties. The Agent shall not by reason of this Agreement or any of the discussions
leading to or in connection with this Agreement have a fiduciary or trust relationship with the Investors, or
any other person, or any other obligation other than as specifically stated in this Agreement.
6.04 No assignment. No party may dispose of the whole or any part of its rights or obligations under this
Agreement without the express written consent of the Agent except as may otherwise be provided for in this
Agreement.
6.05 Further action. Each party shall at all times promptly execute and deliver and cause to be executed
and delivered such documents and take and cause to be taken such action as may be necessary or appropriate
to give effect to the provisions of this Agreement.
6.06 Benefit. This Agreement shall enure to the benefit of and be binding upon each party and their
respective successors and permitted assigns.
6.07 Attornment. Each party irrevocably attoms and submits to the non-exclusive jurisdiction of the
courts of the Province of Ontario.
6.08 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall
be deemed to be an original and all of which together shall constitute one Agreement.
AGREMEJ5.0NE
837
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The parties have executed this Agreement.
CHUMS FINANCING CORPORATION
//j~---~ofl~
BY:
LOCAL AUTHORITY SERVICES LIMITED
Heather Bell, Executive Vice-President
By:~?Lh~~
~Sharad Kerur, President
COUNTERPART OF THE AGENCY AGREEMENT
DATED AS OFMAY31, 1999
BETWEEN
CHUMS FINANCING CORPORATION AND LOCAL AUTHORITY SERVICES LIMITED
-AND-
ELIGIBLE INVESTORS (AS DEFINED IN THE AGREEMENT)
BY:
PRINT NAME:
PRINT TITLE:
ORGANIZATION:
K:\RE\JIW\ONE\lXlC\ENROL\REVlSED\AGREMEI5_0NE
AGREME15.0NE
838
\ ,
SCHEDULE A
MONEY MARKET FUND
1. Definitions. In this Schedule
(a) Agreement means the agency agreement dated as of May 31,1999 between CHUMS Financing
Corporation, Local Authority Services Limited and the Eligible Investors, as defined in that
agreement, and any schedules attached to it from time to time as that agreement or the schedules
may be added, amended, deleted, supplemented, restated, renewed or replaced from time to time;
and
(b) Bank Account means the bank account at the Investor's financial institution authorized by the
Investor and accepted by the Agent for use by the Investor in the transfer of funds 'to and from the
Money Market Fund.
All other capitalized terms used in this Schedule have the meanings given to them in the Agreement.
2.
Objective. The principal objective of the Money Market Fund is to provide Investors with
investments in highly-rated money market instruments permitted under the Municipal Act with
maturities of 365 days or less.
3.
Permissible Securities for Investments. Investments will be made only in those securities which
are permitted under the Municipal Act and which are securities that are exempt from the registration
and prospectus requirements under Section 35(2) of the Securities Act (Ontario) or an equivalent
pronslOn.
4.
Valnation. Valuations of the assets of this Fund will be performed on a market value basis net of
accrued fees and expenses.
5.
Time of Valuation. The value of the assets of this Fund will be calculated by the Valuator at 4.00
p.m. Toronto time or such other time as the Valuator may in its discretion determine from time to
time on each Banking Day.
6.
Minimum Investment. The minimum amount for each investment is $10,000.
7.
Minimum Withdrawal. The minimum amount for each withdrawal is $10,000 or, where the
balance is less than $10,000, all remaining funds in the Investor's Investment Account from which
the withdrawal is being made including any accrued earnings.
8.
Minimum Transfer. The minimum amount for each transfer is $10,000 or, where the balance is
less than $10,000, all remaining funds in the Investor's Investment Account from which the transfer
is being made including any accrued earnings.
AGREME/5.0NE
839
9.
(a)
(b)
II.
(a)
(b)
(c)
12.
"
A2
Earnings Allocation and Distribution. Subject to Section 5.07 of the Agreement, income on an
investment made by an Investor accrues beginning on and including the first day on which the
Investor's investment is credited to the Money Market Fund and ending on and including the day
immediately before the day on which invested funds are returned to the Investor. The calculation
of investment income of the investments through the Fund and of each Investor's proportional
interest in such income will take place after the close of business on each Banking Day. Income will
be credited to each Investor's Investment Account effective on the last calendar day of each month.
Income credited to an Investor's Investment Account remains in the Fund as part of the Investor's
investment until all of the Investor's investment is withdrawn. If the Investor is withdrawing all of
the remaining funds in the Investor's Investment Account, income will be credited on the Banking
Day before the day on which invested funds are returned to the Investor.
10.
Fees and Expenses.
Amount of Fees. The maximum aggregate fees and expenses payable out of the investments made
through the Money Market Fund to the Custodian, Valuator, Payment Servicer, Recordkeeper,
Investment Counsel and Agent will not exceed 0.19 of one percent, on an annual basis, of the daily
investment balance of the Fund. Other than those fees and expenses and any amounts payable in the
event of default or delay in payment under Section 5.07 of the Agreement, no fees and expenses will
be charged by the Custodian, Valuator, Payment Servicer, Recordkeeper, Investment Counsel, or
Agent. The fees and expenses referred to in this Section lO(a) do not include any fees and expenses
charged to the Investor by the Investor's financial institution. .
Changes to Fees. The Agent may change the maximum aggregate fees and expenses payable to the
Custodian, Valuator, Payment Servicer, Recordkeeper, Investment Counsel and Agent at any time
on providing 30 days notice of the effective date of such change to all Investors.
Reporting, Each Investor having investments in the Money Market Fund will receive:
a confirmation of each transaction initiated by the Investor, which will be faxed by the Recordkeeper
to the Investor on the same Banking Day that the telephone call in which instructions were issued
took place;
a monthly history statement from the Recordkeeper for that Investor's Investment Account which
will be mailed within three Banking Days of the end of the month, showing the Investor's opening
and closing positions, all transactions made by the Investor during the month and any earnings
credited to it for that month; and
a monthly report from the Agent showing the performance of the Money Market Fnnd and such
other information about the Fund that the Agent deems appropriate for all Investors.
Making an Investment.
AGREMEI5.0NE
84U
"
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(a) Instructions irrevocable. Investment instructions made by the Investor are irrevocable and must
be issued by the Investor in accordance with the procedure set out in Schedule C.
(b) Time for Instructions. Where investment instructions are issued by the Investor between 8:00 a.m.
(Toronto time) and 10:00 a.m. (Toronto time) on any Banking Day, the Recordkeeper will instruct
the Payment Servicer to facilitate the transfer of the funds so instructed by the Investor from the
Investor's Bank Account to be credited to the Money Market Fund on that same Banking Day.
Where investment instructions are issued by the Investor after 10:00 am. (Toronto time) and by 5 :00
p.m. (Toronto time) on any Banking Day, the Recordkeeper will instruct the Payment Servicer to
facilitate the transfer of the funds so instructed by the Investor from the Investor's Bank Account to
be credited to the Money Market Fund on the next Banking Day. The availability offunds for credit
to the Money Market Fund is subject to the clearing requirements and practices of the Investor's
financial institution and the Payment Servicer.
13. Making a Withdrawal.
(a) Instructions irrevocable. Withdrawal instructions made by the Investor are irrevocable and must
be issued in accordance with the procedure set out in Schedule C.
(b) Time of instructions. Where withdrawal instructions are issued by the Investor between 8: 00 a.m.
(Toronto time) and 10:00 a.m. (Toronto time) on any Banking Day, the Recordkeeper will instruct
the Custodian to effect the transfer of the funds so instructed by the Investor from the Money Market
Fund to be credited to the Investor's Bank Account on the next Banking Day. Where investment
instructions are issued by the Investor after 10:00 a.m. (Toronto time) and by 5:00 p.m. (Toronto
time) on any Banking Day, the Recordkeeper will instruct the Custodian to effect the transfer of the
funds so instructed by the Investor from the Money Market Fund to be credited to the Investor's
Bank Account on the second Banking Day immediately following the day on which instructions
were issued by the Investor. The availability of funds for credit to Investor's Bank Account is
subject to the clearing requirements and practices of the Investor's financial institution and the
Payment Servicer.
(c) Clearance offunds. An Investor may not withdraw funds invested by it which have not been
cleared. For fund clearance purposes, the following time restrictions apply to withdrawals made by
the Investor:
(1) if the Investor's financial institution (as designated on the pre-authorized debit
authorization) is anyone of the Bank of Montreal, Royal Bank of Canada, Canadian
Imperial Bank of Commerce, The Bank of Nova Scotia, The Toronto-Dominion Bank,
National Bank of Canada, or any other financial institution approved by the Payment
Servicer and the Agent from time to time, the Investor may not withdraw any amount
invested by it through the Fund within eight calendar days after making such investment.
841
A.. ."-rEI 5. ONE
.'
A4
(2) if the Investor's financial institution (as designated on the pre-authorized debit
authorization) is a financial institution not listed in or approved as set out in (a) above, the
investor may not withdraw any amounts invested by it through the Fund within 14 calendar
days after making such investment.
(d) Limits on Right to make Withdrawals. Despite any other provision in the Agreement or this
Schedule, the Agent may require an Investor to provide three Banking Days notice to withdraw
Funds.
14. Making a Transfer to Another Fund or to Another Investor.
(a) Instructions irrevocable. Instructions made by the Investor for transfers to another Fund or to
another Investor are irrevocable and must be issued by the Investor in accordance with the procedure
set out in Schedule C.
(b) Transfers to another Fund. If the Investor has issued instructions to transfer funds from the
Investor's Investment Account to another Fund, such transfer shall be made in accordance with the
time resttictions for making withdrawals under this Fund Schedule and the time restrictions for
making investments under the Fund Schedule for the other Fund. The Recordkeeper, in executing
such transfer instructions, will cause such transfers to occur directly between the Investor's
Investment Accounts and not by way of the Payment Servicer and the Investor's Bank Account(s).
(c) Transfers to another Investor. Transfers by an Investor from the Investor's account within the
Money Market Fund to another Investor are permissible only to the other Investor's account within
the Money Market Fund. Where the Investor has issued instructions to transfer funds from the
Investor's Investment Account to another Investor's Investment Account within this Fund, before
10:00 a.m. on any Banking Day, such transfer shall be made on the next Banking Day. If transfer
instructions are issued to the Recordkeeper after 10:00 a.m. on any Banking Day, the transfer shall
be made on the second Banking Day immediately following the day on which transfer instructions
were issued by the Investor. The Recordkeeper, in executing such transfer instructions, will cause
such transfers to occur directly between the Investor's Investment Account and the other Investor's
Investment Account and not by way of the Payment Servicer and the Investor's Bank Account or the
other Investor's Bank Account.
(d) Deemed Investment by Transferee. Each Investor agrees that any transfer to that Investor's
Investment Account will be treated as an investment by that Investor.
AGREMEl5.0NE
842
SCHEDULE B
BOND FUND
I. Definitions. In this Schedule,
(a) Agreement means the agency agreement dated as of May 31,1999 between CHUMS Financing
Corporation, Local Authority Services Limited and the Eligible Investors, as defined in that
agreement, and any schedules attached to it from time to time as that agreement or the schedules
may be added, amended, deleted, supplemented, restated, renewed or replaced from time to time;
and
(b) Bank Account means the bank account at the Investor's financial institution authorized by the
Investor and accepted by the Agent for use by the Investor in the transfer of funds to and from the
Bond Fund.
All other capitalized terms used in this Schedule have the meanings given to them in the Agreement.
2. Objective. The principal objective for the Bond Fund is to provide Investors with investments in
highly-rated fixed income and money market securities permitted under the Municipal Act with
maturities of greater than one year and less than or equal to five years.
3. Permissible Securities for Investments. Investments will be made only in those securities which
are permitted under the Municipal Act and which are securities that are exempt from the registration
and prospectus requirements under Section 35(2) of the Securities Act (Ontario) or an equivalent
pronSlOn.
4. . Valnation. Valuations of the assets of this Fund will be performed on a market value basis net of
accrued fees and expenses.
5. Time of Valuation. The value of the assets ofthis Fund will be calculated by the Valuator at 4:00
p.m. Toronto time or such other time as the Valuator may in its discretion determine from time to
time on each Banking Day.
6. Minimum Investment. The minimum amount for each investment is $10,000.
7. Minimum Withdrawal. The minimum amount for each withdrawal is $10,000 or, where the
balance is less than $10,000, all remaining funds in the Investor's Investment Account from which
the withdrawal is being made including any accrued earnings.
8. Minimum Transfer. The minimum arnount for each transfer is $10,000 or, where the balance is
less than $10,000, all remaining funds in the Investor's Investment Account from which the transfer
is being made including any accrued earnings.
AGREME/5.0NE
843
B2
9. Earnings Allocation and Distribution. Subject to Section 5.07 of the Agreement, income on an
investment made by an Investor accrues beginning on and including the first day on which the
Investor's investment is credited to the Bond Fund and ending on and including the day immediately
before the day on which invested funds are returned to the Investor. The calculation of investment
income of the investments through the Fund and of each Investor's proportional interest in such
income will take place after the close of business on each Banking Day. Income will be credited to
each Investor's Investment Account effective on the last calendar day of each month. Income
credited to an Investor's Investment Account remains in the Fund as part of the Investor's investment
until all of the Investor's investment is withdrawn. If the Investor is withdrawing all of the
remaining funds in the Investor's Investment Account, income will be credited on the Banking Day
before the day on which invested funds are returned to the Investor.
10. Fees and Expenses.
(a) Amount of Fees. The maximum aggregate fees and expenses payable out of the investments made
through the Bond Fund to the Custodian, Valuator, Payment Servicer, Recordkeeper, Investment
Counsel and Agent will not exceed 0.4 of one percent, on an annual basis, of the daily investment
balance of the Fund. Other than those fees and expenses and any amounts payable in the event of
default or delay in payment under Section 5.07 of the Agreement, no fees and expenses will be
charged by the Custodian, Valuator, Payment Servicer, Recordkeeper, Investment Counselor
Agent. The fees and expenses referred to in this Section lOCal do not include any fees and expenses
charged to the Investor by the Investor's financial institution.
(b) Changes to Fees. The Agent may change the maximum aggregate fees and expenses payable to the
Custodian, Valuator, Payment Servicer, Recordkeeper, Investment Counsel and Agent at any time
upon providing 30 days notice of the effective date of such change to all Investors.
II. Reporting. Each Investor having investments in the Bond Fund will receive:
(a) a confirmation of each transaction initiated by the Investor, which will be faxed by the Recordkeeper
to the Investor on the same Banking Day that the telephone call in which instructions were issued
took place;
(b) a monthly history statement from the Recordkeeper for that Investor's Investment Account which
will be mailed within three Banking Days of the end of the month, showing the Investor's opening
and closing positions, all transactions made by the Investor during the month and any earnings
credited to it for that month; and
(c) a monthly report from the Agent showing the performance of the Bond Fund and such other
information about the fund that the Agent deems appropriate for all Investors.
AGREMEJ5.0NE
844
B3
12. Making an Investment.
(a) Instructions irrevocable. Investment instructions made by the Investor are irrevocable and must
be issued by the Investor in accordance with the procedure set out in Schedule C.
(b) Time of Instructions. Where investment instructions are issued by the Investor between 8:00 a.m.
(Toronto time) and 10:00 a.m. (Toronto time) on any Banking Day, the Recordkeeper will instruct
the Payment Servicer to facilitate the transfer of the funds so instructed by the Investor from the
Investor's Bank Account to be credited to the Bond Fund on that same Banking Day. Where
investment instructions are issued by the Investor after 10:00 a.m. (Toronto time) and by 5 :00 p.m.
(Toronto time) on any Banking Day, the Recordkeeper will instruct the Payment Servicer to
facilitate the transfer of the funds so instructed by the Investor from the Investor's Bank Account to
be credited to the Bond Fund on the next Banking Day. The availability of funds for credit to the
Bond Fund is subject to the clearing requirements and practices of the Investor's financial institution
and the Payment Servicer.
13. Making a Withdrawal.
(a) Instructions irrevocable. Withdrawal instructions made by the Investor are irrevocable and must
be issued in accordance with the procedure set out in Schedule C.
(b) Time of instructions. Where withdrawal instructions are issued by the Investor between 8:00 a.m.
(Toronto time) and 10:00 a.m. (Toronto time) on any Banking Day, the Recordkeeper will instruct
the Custodian to effect the transfer of the funds so instructed by the Investor from the Bond Fund
to be credited to the Investor's Bank Account on the third Banking Day following the Banking Day
on which withdrawal instructions were issued by the Investor. If investment instructions are issued
by the Investor after 10:00 a.m. (Toronto time) and by 5:00 p.m. (Toronto time) on any Banking
Day, the Recordkeeper will instruct the Custodian to effect the transfer of the funds so instructed by
the Investor from the Bond Fund to be credited to the Investor's Bank Account on the next Banking
Day and credited to the Investor's Bank Account on the fourth Banking Day following the Banking
Day on which withdrawal instructions were issued by the Investor. The availability of funds for
credit to Investor's Bank Account is subject to the clearing requirements and practices of the
Investor's financial institution and the Payment Servicer.
(c) Clearance offunds. An Investor may not withdraw funds invested by it which have not been
cleared. For fund clearance purposes, the following time restrictions apply to withdrawals made by
the Investor:
(1) if the Investor's financial institution (as designated on the pre-authorized debit
authorization) is anyone of the Bank of Montreal, Royal Bank of Canada, Canadian
Imperial Bank of Commerce, The Bank of Nova Scotia, The Toronto-Dominion Bank,
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National Bank of Canada, or any other fmancial institution approved by the Payment
Servicer and the Agent from time to time, the Investor may not withdraw any amount
invested by it through the Fund within eight calendar days of making such investment.
(2) if the Investor's financial institution (as designated on the pre-authorized debit
authorization) is a financial institution not listed in or approved as set out in (a) above, the
investor may not withdraw any amounts invested by it through the Fund within 14 calendar
days of making such investment.
(d) Limits on right to make withdrawals. Despite any other provision in the Agreement or this
Schedule, if an Investor has made or makes a withdrawal or transfer request which would be
effective on the third Banking Day following the Banking Day on which withdrawal instructions
were issued by the Investor, the Agent may delay any such withdrawal or transfer to the next
following Banking Ilay.
14. Making a Transfer to Another Fund or to Another Investor.
(a) Instructions irrevocable. Instructions made by an Investor for transfers to another Fund or to
another Investor are irrevocable and must be issued by the Investor in accordance with the procedure
set out in Schedule C.
(b) Transfers to another Fund. If the Investor has issued instructions to transfer funds from the
Investor's Investment Account to another Fund, such transfer shall be made in accordance with the
time restrictions for making withdrawals under this Fund Schedule and the time restrictions for
making investments under the Fund Schedule for the other Fund. The Recordkeeper, in executing
such transfer instructions, will cause such transfers to occur directly between the Investor's
Investment Accounts and not by way of the Payment Servicer and the Investor's Bank Account(s).
(c) TrlUlSfers to another Investor. Transfers by an Investor from the Investor's account within the Bond
Fund to another Investor are permissible only to the other Investor's account within the Bond Fund.
Where the Investor has issued instructions to transfer funds from the Investor's Investment Account
to another Investor's Investment Account within this Fund, before 10:00 a.m. on any Banking Day,
such transfer shall be made on the next Banking Day. If transfer instructions are issued to the
Recordkeeper after 10:00 a.m. on any Banking Day, the transfer shall be made on the second
Banking Day immediately following the day on which transfer instructions were issued by the
Investor. The Recordkeeper, in executing such transfer instructions, will cause such transfers to
occur directly between the Investor's Investment Account and the other Investor's Investment
Account and not by way of the Payment Servicer and the Investor's Bank Account or the other
Investor's Bank Account.
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(d) Deemed investment by transferee. Each Investor agrees that any transfer to that Investor's
Investment Account will be treated as an investment by that Investor.
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(a)
(b)
2,
3,
4.
5.
6.
(a)
(b)
(e)
SCHEDULE C
ISSUING INVESTMENT, WITHDRAWAL AND TRANSFER INSTRUCTIONS
TO THE RECORDKEEPER
Instrnctions. An Investor may issue investment, withdrawal and transfer~ instructions:
by telephone by calling the Recordkeeper' live operator (the "Recordkeeper Operator") at a toll-free
telephone number between the hours of 8:00 a.m. (Toronto time) and 5:00 p.m. (Toronto time), or
by such other means as the Agent may prescribe from time to time.
Instructions to Recordkeeper. All investment, withdrawal and transfer instructions issued by an
Investor to the Recordkeeper under Section lea) or (b) are irrevocable. For security purposes, all
investment instructions issued to the Recordkeeper under Section I ( a) will be tape recorded by the
Recordkeeper.
Execution by Recordkeeper. Telephone instructions issued to the Recordkeeper will be executed
without prior confirmation by the Recordkeeper and the Investor accepts responsibility for all
telephone instructions which purport to have been given by the Investor whether or not such
instructions were authorized,
Instructions to Payment Semcer. All telephone instructions from Investors received by the
Recordkeeper involving investments or withdrawals will be communicated by the Recordkeeper to
the Payment Servicer for proper execution as may be required by the Payment Servicer in order to
transfer the funds in accordance with the investment or withdrawal instructions of the Investors.
Confirmation of lustructions. All telephone instructions received by the Recordkeeper during a
Banking Day will be confirmed back to the Investor by facsimile on the same Banking Day. The
Investor accepts responsibility to correct any incorrect instructions and shall make all such
corrections and inform the Recordkeeper of such corrections by facsimile before the end of the next
Banking Day after having received the original facsimile confirmation from the Recordkeeper.
Procedure for Issuing Instructions to Recordkeeper. On calling the Recordkeeper Operator, the
Recordkeeper Operator will ask the representative of the Investor for the following investor
information ("Investor Information"):
the name of the individual making the call as registered by the Investor and accepted by the Agent,
the name of the Investor's organization as registered by the Investor and approved by the Agent,
the authorization code as assigned by the Recordkeeper corresponding to the Investor's account as
registered by the Investor.
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Failure by the representative of the Investor to provide the Recordkeeper Operator with the
correct Investor Information will terminate the call and render any instructions given to the
Recordkeeper Operator by the representative of the Investor null and void,
7. Transaction Information. Where the Investor Information provided by the representative of the
Investor to the Recordkeeper Operator has been verified by the Recordkeeper Operator as being
correct, the Recordkeeper Operator will ask the Investor to identify the type of transaction (i.e. "an
investment" or "a withdrawal" or "a transfer to another fund" or "a transfer to another Investor").
If the instructions are for:
(a) an investment, the Recordkeeper Operator will ask for
(i) the dollar amount of the investment,
(ii) the investment account name into which the investment will be made,
(iii) the authorization code relating to that investment account;
(b) a withdrawal, the Recordkeeper Operator will ask for
(i) the dollar amount of the withdrawal or "ALL" if the instruction pertains to all monies
belonging to the Investor in the Fund including any accrued earnings,
(ii) the investment account name from which the withdrawal is to be made,
(iii) the authorization code relating to that investment account;
(c) a transfer to another Fund by the same Investor, the Recordkeeper Operator will ask for
(i) the dollar amount of the transfer or "ALL" ifthe instruction pertains to all monies belonging
to the Investor in a Fund including any accrued eamings,
(ii) the investment account name from which the transfer is to be made,
(iii) the authorization code relating to that investment account,
(iv) the investment account name to which the transfer will be made,
(v) the authorization code relating to that investment account;
(d) a transfer to another Investor, the Recordkeeper Operator will ask for
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(i) the dollar amount of the transfer or "ALL" if the instruction pertains to all monies belonging
to the Investor in a Fund including any accrued earnings,
(ii) the investment account name from which the transfer is to be made,
(iii) the authorization code relating to that investment account,
(iv) the name of the other Investor to which the transfer will be made,
(v) the investment account name of the other Investor in the same Fund to which the transfer
will be made,
(vi) the authorization code relating to that investment account of the other Investor.
8. Investor's Responsibility. Before issuing instructions to have fimds transferred to another Investor,
the Investor accepts responsibility to ensure that such other Investor continues to be an Investor and
is authorized to have investments through the Fund designated by the Investor initiating such
transfer.
9. Deemed Receipt by Recordkeeper. Instructions issued by an Investor to the Recordkeeper shall
be deemed to have been received by the Recordkeeper as soon as the Investor issuing the
instructions has provided the Recordkeeper with all of the information set out in Section 7 above.
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