HomeMy WebLinkAbout5.d. Approve Use of Minnesota Municipal Money Market Fund for InvestingCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: January 7, 1992
AGENDA ITEM: Approve Use of Minnesota
AGENDA SECTION:
Municipal Money Market (4M) Fund for Investing
Consent
PREPARED BY:
Jeff May, Finance Director
AGENDAEii
ATTACHMENTS:
Y:
Resolution, Information on the 4M Fund
MAPOVED
400
v
The Minnesota Municipal Money Market Fund has been in operation,
through a Joint Powers Agreement with other municipalities, since
1987. It has become increasingly popular as one method of
investing for cities because of the higher rates of return and,
slowly, its convenience in use.
I have copied information on the program to you. I am
recommending your approval for the City to enter into the Joint
Powers Agreement which allows us to utilize the program if we
choose to do so.
Adopting the resolution allowing us to utilize the program does
not require us to do so, but gives us the opportunity if we so
choose.
RECOMMENDED ACTION: To adopt A RESOLUTION AUTHORIZING ENTRY INTO A JOINT
POWERS AGREEMENT IN THE FORM OF A DECLARATION OF TRUST ESTABLISHING AN
ENTITY KNOWN AS "MINNESOTA MUNICIPAL MONEY MARKET FUND" AND AUTHORIZING
PARTICIPATION IN CERTAIN INVESTMENT PROGRAMS IN CONNECTION THEREWITH.
COUNCIL ACTION:
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 1992-
A RESOLUTION AUTHORIZING ENTRY INTO`A JOINT POWERS AGREEMENT IN THE
FORM OF A DECLARATION OF TRUST ESTABLISHING AN ENTITY KNOWN AS
"MINNESOTA MUNICIPAL MONEY MARKET FUND" AND AUTHORIZING PARTICIPATION
IN CERTAIN INVESTMENT PROGRAMS IN CONNECTION THEREWITH
WHEREAS, Minnesota Statutes Section 471.59(the Joint Powers Act) provides
among other things that governmental units, by agreement entered into
through action of their governing bodies, may jointly or cooperatively
exercise any power common to the contracting parties; and
WHEREAS, the Minnesota Municipal Money Market Fund was formed in January
1987 pursuant to the Joint Powers Act by the adoption of a joint powers
agreement in the form of a Declaration of Trust by a group of Minnesota
Municipalities acting as the Initial Participants thereof; and
WHEREAS, the Declaration of Trust has been presented to the Rosemount City
Council; and
WHEREAS, the Declaration of Trust authorizes municipalities of the State of
Minnesota to adopt and enter into the Declaration of Trust and become
Participants of the Fund. Municipality shall mean city, county, town,
public authority, public corporation, public commission, special district,
and any "instrumentality"(as that term is defined in the Joint Powers Act)
of a municipality; and
WHEREAS, the City Council of the City of Rosemount deems it to be advisable
for this municipality to adopt and enter into the Declaration of Trust and
become a Participant of the Fund for the purpose of the joint investment of
this municipality's monies with those of other municipalities so as to
enhance the investment earnings accruing to each; and
WHEREAS, the City Council of the City of Rosemount deems it to be advisable
for this municipality to make use from time to time, in the discretion of
the officials of the municipality indentified in Section 2 of the following
Resolution, of the Fixed -Rate Investment Program available to Participants
of the Fund.
NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:
Section 1. The City of Rosemount shall join with other municipalities in
accordance with the Joint Powers Act by becoming a Participant of the Fund
and adopting and entering into the Declaration of Trust, which is adopted
by reference herein with the same effect as if it had been set out verbatim
in this resolution, and a copy of the Declaration of Trust shall be filed
in the minutes of the meeting at which this Resolution was adopted. The
Mayor and the City Clerk are hereby authorized to take such actions and
execute any and all such documents as they may deem necessary and
appropriate to effectuate the entry of this municipality into the
Declaration of Trust and the adoption thereof by this municipality.
RESOLUTION 1992 -
Page 2
Section 2. The City of Rosemount is hereby authorized to invest its
available moniesfromtime to time and to withdraw such monies from time to
time in accordance with the provisions of the Declaration of Trust. The
following officers and officials of the municipality and their respective
successors in office each hereby are designated as "Authorized Officials"
with full powers and authority to effectuate the investment and withdrawal
of monies of this municipality from time to time in accordance with the
Declaration of Trust and pursuant to the Fixed -Rate Investment Service
available to Participants of the Fund:
Jeffrey A. May, Finance Director
Stephan Jilk, City Administrator
The City Clerk shall advise the Fund of any changes in Authorized Officials
in accordance with procedures established by the Fund.
Section 3. The Trustees of the Fund are hereby designated as having
official custody of this municipality's monies which are invested in
accordance with the Declaration of Trust.
Section 4. State banks, national banks, and thrift institutions located
either within or without the State of Minnesota which qualify as
depositories under Minnesota law and are included on a list approved and
maintained for such purpose by the Investment Advisor of the Fund are
hereby designated as depositories of this municipality pursuant to
Minnesota Statutes Section 118.005 and monies of this municipality may be
deposited therein, from time to time in the discretion of the Authorized
Officials, pursuant to the Fixed -Rate Investment Service available to
Participants of the Fund.
It is hereby certified that the City of Rosemount duly adopted this
Resolution at a duly convened meeting of the Rosemount City Council held on
the 7th day of January, 1992, and that such Resolution is in full force and
effect on this date, and that such Resolution has not been modified,
amended, or rescinded since its adoption.
ADOPTED this 7th day of January, 1992.
ATTEST:
Susan M. Walsh, City Clerk
Motion by:
Voted in Favor:
Voted Against:
E.B. McMenomy, Mayor
Seconded by:
Minnesota
Municipal
Money Market
fund
4M fund
A Comprehensive Financial Service for Municipalities
Sponsored by the League of Minnesota Cities
APPLICATION FORMS
HOW TO OPEN ACCOUNTS WITH THE FUND
Any Minnesota municipality may join the Fundus a participant and take advantage of its investment
program. Municipality whall mean city, county, town, public authority, public corporation, public commission,
special district, any other political subdivision, and any "instrumentality" (as that term is defined by the Joint
Powers Act) A participant does not need to maintain any minimum investment in its account and there is no
minimum initial investment.
A municipality that wishes to open one or more accounts -with the Fund and become a participant should
complete Forms A and B.
1. FORM A (Model Resolution). The governing board of the municipality must adopt a Resolution in the
model form provided. The Resolution authorizes the municipality to become a participant of the Fund
and adopts the Declaration of Trust. It also designates the officials of the municipality who are
authorized to effect transactions with the Fund. This form must be completed with the name of the
municipality, the names and titles of Authorized Officials, and the signature of the treasurer of the
municipality and must be sent to the Fund's sub -administrator, Cadre Consulting Services, Inc. along
with the Registration Form (FORM B). It is only necessary to submit Form A (Model Resolution) for
the first account opened by the municipality.
2. FORM B (Registration Form). This form must be completed for EACH account opened by the
municipality with all applicable information about the municipality, and the depository bank(s) of the
municipality and must be signed by the treasurer of the municipality. If the municipality elects to use the
optional checkwriting service, that section of this form must be completed. Upon receipt of the form,
Cadre Consulting Services Inc. will supply the municipality with certain information about its account,
such as an account number. The municipality may then make its initial investment of monies following
the "Instructions for Deposits and Withdrawals" guide.
Upon the Fund's receipt and acceptance of the forms and documents referred to above, the municipality will
be a Participant of the Fund.
A municipality that wishes to take advantage of any of the optional services offered by the Fund should
complete the applicable forms listed below, and mail them along with Forms A and B to Cadre Consulting
Services Inc.
3. FORM C (Model Automated Clearinghouse/Depository Transfer Authorization Letter). If the municipality
chooses to use this optional service, a letter in the model form provided should be typed on the
municipality's letterhead, signed by the treasurer and sent to the municipality's depository bank. A
voided blank check relating to the municipality's account at the depository and a copy of the letter must
be sent along with the Registration Form (FORM B) to Cadre Consulting Services Inca
4. FORM D (Model Fixed -Rate Investment Service Letter). If the municipality chooses to use the optional
Fixed Rate Investment Service a letter in the model form provided should be typed on the municipality's
letterhead, signed by the treasurer, and sent along with the Registration Form (FORM B) to Cadre
Consulting Services, Inc.
4. FORM E (Direct Deposit of State Payments). If the municipality chooses to use the optional lock box for
direct deposit of state payments, a letter in the model form provided should be typed on the
municipality's letterhead, signed by the appropriate official, and copied to the municipality auditor.
Please send a copy of this letter to Cadre Consulting Services, Inc.
For more information regarding the opening of an account, or the use of any of the optional services available
to participants of the Fund, please call Cadre toll-free 1-800-2214524 or Piper Capital Management toll-free at
1-800-333-6000, ext. 6423.
Note: All completed forms and documents contained in this booklet should be mailed to the Fund's Sub -
Administrator at the following address: Cadre Consulting Services, Inc., 905 Marconi Avenue, Ronkonkoma,
New York 11779.
�e
FORM A
MINNESOTA MUNICIPAL MONEY MARKET FUND ("THE 4M FUND")
MODEL RESOLUTION
A RESOLUTION AUTHORIZING ENTRY INTO A JOINT POWERS AGREEMENT IN THE FORM OF
A DECLARATION OF TRUST ESTABLISHING AN ENTITY KNOWN AS "MINNESOTA MUNICIPAIe
MONEY MARKET FUND" AND AUTHORIZING PARTICIPATION IN CERTAIN INVESTMENT
PROGRAMS IN CONNECTION THEREWITH
WHEREAS, Minnesota Statutes Section 471.59 (the Joint Powers Act) provides among other things that
governmental units, by agreement entered into through action of their governing bodies, may jointly or
cooperatively exercise any power common to the contracting parties; and
WHEREAS, the Minnesota Municipal Money Market Fund was formed in January 1987 pursuant to the Joint
Powers Act by the adoption of a joint powers agreement in the form of a Declaration of Trust by a group of
Minnesota Municipalities acting as the Initial Participants thereof, and
WHEREAS, the Declaration of Trust has been presented to this council (or board) and
WHEREAS, the Declaration of Trust authorizes municipalities of the State of Minnesota to adopt and enter
into the Declaration of Trust and become Participants of the Fund. Municipality shall mean city, county, town,
public authority, public corporation, public commission, special district, and any "instrumentality" (as that
term is defined in the Joint Powers Act) of a municipality and
WHEREAS, this council (or board) deems it to be advisable for this municipality to adopt and enter into the
Declaration of Trust and become a Participant of the Fund for the purpose of the joint investment of this
municipality's monies with those of other municipalities so as to enhance the investment earnings accruing to
each, and
WHEREAS, this board deems it to be advisable for this municipality to make use from time to time, in the
discretion of the officials of the municipality identified in Section 2 of the following Resolution, of the Fixed -
Rate Investment Program available to Participants of the Fund.
NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:
Section 1 This municipality shall join with other municipalities in accordance with the Joint Powers Act by
becoming a Participant of the Fund and adopting,and entering into the Declaration of Trust, which is adopted
by reference herein with the same effect as if it had been set out verbatim in this resolution, and a copy of the
Declaration of Trust shall be filed in the minutes of the meeting at which this Resolution was adopted. The
President (or Chair) and the clerk/treasurer of the council (or board) is hereby authorized to take such action,
and execute any and all such documents as they may deem necessary and appropriate to effectuate the entry
of this municipality into the Declaration of Trust and the adoption thereof by this municipality.
Section 2. This municipality is hereby authorized to invest its available monies from time to time and to
withdraw such monies from time to time in accordance with the provisions of the Declaration of Trust. The
following officers and officials of the municipality and their respective successors in office each hereby are
designated as "Authorized Officials" with full powers and authority to effectuate the investment and
withdrawal of monies of this municipality from time to time in accordance with the Declaration of Trust and
pursuant to the Fixed -Rate Investment Service available to Participants of the Fund:
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_(List the name(s) and title(s) of the officer(s) and official(s) who will be authorized to invest and withdraw
municipal monies in and from the Fund and pursuant to the Fixed -Rate Investment Service. You may have
any number of Authorized Officials; attach an additional list if necessary.)
Printed Name Title
Printed Name Title
Printed Name Title
Printed Name Title
The treasurer shall advise the Fund of any changes in Authorized Officials in accordance with procedures
established by the Fund.
Section 3. The Trustees of the Fund are hereby designated as having official custody of this municipality's
monies which are invested in accordance with the Declaration of Trust.
Section 4. State banks, national banks, and thrift institutions located either within or without the State of
Minnesota which qualify as depositories under Minnesota law and are included on a list approved and
maintained for such purpose by the Investment Advisor of the Fund are hereby. designated as depositories of
this municipality pursuant to Minnesota Statutes Section 118.005 and monies of this municipality may be
deposited therein, from time to time in the discretion of the Authorized Officials, pursuant to the Fixed -Rate
Investment Service available to Participants of the fund.
It is hereby certified that (insert name of municipality) duly adopted the Model Resolution at a duly convened
meeting of the council or board held on the _day of 199, and that such Resolution is in full force and
effect on this date, and that such Resolution has not been modified, amended, or rescinded since its adoption.
Signature of Clerk Date
(or Treasurer) of Municipality
Note: A copy of this Model Resolution should be completed, attached to the Registration Form (FORM B),
and mailed to the fund's Sub -Administrator, Cadre Consulting Services Inc., 905 Marconi Avenue,
Ronkonkoma, New York 11779. It is only necessary to adopt this Model Resolution for the first account
opened by the municipality.
This form may be photocopied.
_3_
FORM B
4M FUND
REGISTRATION FORM
I. BASIC INFORMATION
Name of City, County, Town, Public Authority, Public Corporation, Public Commission, Special District, or
Instrumentality (hereinafter the "municipality").
Name of Account
Name of Municipality
Address
City/Zip
Attention
Telephone Number
Federal Identification Number
IL WITHDRAWAL INFORMATION AND AUTHORIZATION
Authorization is hereby given for the Fund to honor any request, believed by it to be authentic, for the
withdrawal, in whole or in part, of the monies of the municipality from the Fund. Unless withdrawn by means
of the checkwriting privilege afforded to Participants of the Fund, monies of the municipality withdrawn from
the Fund shall be wire transferred by the Fund only to the bank account of the municipality listed below:
Bank Name
Account Number
Bank Address
III. CHECKWRITING OPTION
The municipality wishes to use the optional checkwriting Service: Yes No (circle one)
If yes, the number of Fund account checks initially required for use by the municipality is: 250 50
Other (please fill in amount.) Number of signatures required on each check is
Please check here if your municipality would like a specification sheet for computerized checks. (Please allow 2
weeks for delivery of your free checks.)
IV. INFORMATION STATEMENT AND DECLARATION OF TRUST
It is hereby certified that the municipality has received a copy of the Information Statement of the Fund and
the Declaration of Trust creating the Fund, and agrees to be bound by the terms of such documents.
- 4 -
V. EFFECTIVENESS OF REGISTRATION FORM
The information, certifications, and authorizations set forth on this Registration Form shall remain in full force
and effect until the fund receives written notification of a change.
V1. AUTHORIZED SIGNATURES
This Registration Form must be signed by the Council President (or Chair) and the Clerk/Treasurer of the
municipality in order for the municipality to become a Participant of the Fund.
Typed Name of Council President (or Chair)
Signature Date
Typed Name of Clerk/Treasurer
Signature Date
Mail this form to: Cadre Consulting Services Inc., 905 Marconi Avenue, Ronkonkoma, New York 11779.
—5—
MODEL FORM C
4M FUND
AUTOMATED CLEARING HOUSE DEPOSITORY TRANSFER
AUTHORIZATION LETTER
(Insert name and address of depository)
(Insert appropriate bank account number)
Gentlemen:
As a depository of (insert name of municipality) you are hereby authorized and directed to
honor EFT transactions for the purpose of withdrawing monies from the account designated
above as a depository transfer account of the above-named municipality. You are directed to
honor such withdrawals if they are payable to First Bank National Association for credit to the
Minnesota Muncipal Money Market Fund.
This letter shall constitute sufficient and continuing authority, until revoked in wilting, for you,
as an authorized depository of the municipality, to honor such transactions.
Sincerely,
(Signature of Authorized Official)
(Title)
(Dated)
Note: If the municipality chooses to use this service, this model letter should be completed with
information about the depository bank, typed on the municipality's letterhead, signed by one of the
Authorized Officials designated in Section 2 of the Model Resolution (FORM A), and sent to the
depository bank. Please remember to fill in the name of the municipality, the bank name and address,
and the bank account number where indicated. A copy of this letter, and a voided blank check relating
to the municipality's account at such depository bank should be attached to the completed
Registration Form (Form B) and sent to: Cadre Consulting Services Inc., 905 Marconi Avenue,
Ronkonkoma, New York 11779. (Allow 2 to 3 weeks before receiving your identification number.)
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MODEL FORM D
4M FUND
FIXED-RATE INVESTMENT SERVICE LETTER
Minnesota Municipal Money Market Fund c/o Cadre Consulting Services Inc. 905 Marconi
Avenue, Ronkonkoma, New York 11779
Gentleman:
This letter will authorize the wire transfer of monies from the Minnesota Municipal Money
Market Fund account or accounts of (insert name of municipality) to pay for certificates of
deposit purchased by the municipality to be issued in its name under the optional "Fixed -Rate
Investment Service" available to Participants of the Fund through its Administrator and Sub -
Administrator.
Sincerely,
(Signature of Authorized Official)
(Title)
(Dated)
Note: If the municipality chooses to use this service, this model letter should be typed on the
municipality's letterhead, signed by one of the Authorized Officials designated in Section 2 of the
Model Resolution (FORM A) and sent along Nvith the Registration Form (FORM B) to Cadre
Consulting Services Inc. at the above address.
MODEL FORM E
DIRECT DEPOSIT OF STATE AID PAYMENTS
To take advantage of the 4M Fund lockbox, please send the following letter to the State Revenue
Department. And, either send a copy of the letter to the municipality auditor or have the municipality
auditor co-sign the letter.
Date
Mr. Richard Gardner
Department of Revenue
Local Government Service Division
Mail Station 3340
St. Paul, MN 55146-3340
Dear Richard:
The (municipalitu name) requests that effective (date). all State of Minnesota payments
(state warrants) be mailed to our municipality directly to the following lockbox:
4M Lockbox
Lockbox/State Funds
CM -9574
St. Paul, MN 55170
It is understood that this address change rATill affect the mailing of state payments only, and
that other correspondence and materials will continue to be sent to the current address on file
for our municipality. Please acknowledge that this change has been made.
Thank you for your assistance in this matter.
Sincerely,
cc: County Auditor
(Please note highlighted portion of this letter)
-8-
S
INSTRUCTIONS FOR MAKING DEPOSITS
DETAILED INSTRUCTIONS ON HOW TO MAKE A DEPOSIT USING THE
AUTOMATED CLEARING HOUSE (ACH) DEBIT WILL BE MAILED
AFTER THE APPLICATION HAS BEEN PROCESSED.
(Interest earned the following business day)
TO MAKE A DEPOSIT BY WIRING MONIES:
(Interest earned same day)
1. Call (800) 221-4524 no later than 11:00 a.m. and a Cadre Consulting Services operator will answer.
2. Say:
a. "I am a Minnesota city wishing to wire transfer a deposit."
3. After you have reached the correct person say:
a. "This is (name of municipality), Fund account number with a wire transfer report."
b. Deposit amount is
4. The operator will verify the amount.
5. The operator will acknowledge the deposit and provide you with a three -digit verification number for your
reference.
6. Advise your local bank to wire -transfer monies to First National Bank of Minneapolis, credit account
4M Fund, bank account number 6023408260, for the benefit of (name of municipality), fund account
number (Please note that your bank may have an early afternoon cut-off time for wire
transfer.)
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INSTRUCTIONS FOR MAKING WITHDRAWALS
TO MAKE A WITHDRAWAL BY CHECK:
(Interest earned on withdrawal until check clears
First National Bank of Minneapolis)
Simply write 4M Fund check payable to your municipality
(for a local deposit), or to a vendor or other payee. There is no minimum amount required
to make a withdrawal by check.
TO MAKE A WITHDRAWAL BY WIRING MONIES: -- - .
(No interest earned on wire transferred monies on day of withdrawal)
1. Call (800) 221-4524 no later than 11:00 a.m. and a Cadre Consulting Services operator will answer.
2. Advise the operator that you area Minnesota city wanting to withdraw monies from your account.
S. After you have reached the correct person say:
a. "This is - (name of municipality), fund account number , with a request to wire transfer
dollars (no cents) to (name of bank), bank account number
INSTRUCTIONS FOR PURCHASING CERTIFICATES OF DEPOSIT
(Minimum amount $100,000; minimum time 30 days.)
1. If the necessary amount is not already available in your money market account the purchase will take
place on the following business day, after you have deposited such amounts in the 4M Fund.
(Deposits to money market fund must be made according to previous instructions no later than 11:00 a.m.)
All monies earn interest daily in the money market fund.
2. Call (800221-4524) no later than 11:00 a.m. and request Certificate of Deposit information.
3. Determine rates and, if acceptable, ask for the exact amount necessary to purchase the certificates
(principal + fee). Advise the staff of your decision to purchase.
Once you have opened one or more accounts for your municipality, you'll want to tear out this page as a handy
reference when making deposits or withdrawals.
MINNESOTA MUNICIPAL
MONEY MARKET
FUND
W FUND
A Comprehensive Financial Service for Municipalities
Sponsored by the League of Minnesota Cities
INFORMATION STATEMENT
This booklet provides detailed information about the Fund and its program
Please read it carefully and retain it for future reference.
TABLE OF CONTENTS
Page
TheFund......................................................................................................................................................1
InvestmentObjective and Policies..........................................................................................................2
Trusteesand Officers.................................................................................................................................3
TheInvestment Adviser...........................................................................................................................4
TheAdministrator ......................................................................................................................................4
TheCustodian.............................................................................................................................................4
Legal Counsel and Independent Accountants.......................................................................................4
Expensesof the Fund................................................................................................................................5
DailyIncome Allocations............................................................................................................ ..........5
Computationof Yield .................................................................................................................................G
Determination of Net Asset Value...........................................................................................................6
PortfolioTransactions............................................................................................................................ r
ReportsTo Participants .. .................................................................. ....... ................ ............ i
Taxes.................................................................................................................................................S
Declarationof Trust...................................................................... ........ ............................................5
No person or entity has been authorized to give any information or to make any representations
other than those contained in this Information Statement, and, if given or made, such information
or representations must not be relied upon as having been authorized by the Fund, its Trustees,
the Investment Adviser, the Administrator, the Sub -Administrator, or any agent of the Fund or
the Trustees.
The date of this Information Statement is January 1991
THE FUND
The Minnesota Municipal Money Market Fund (the "4M Fund") is a common law trust organized and
existing in accordance with the provisions of the Minnesota Joint Powers Act (Minnesota Statutes,
Section 471.59) (the "Joint Powers Act"). The Fund was established in January 1987 by the adoption of a
Declaration of Trust by the initial Participants. The Declaration of Trust allows municipalities, as defined
therein, to open an account and become a Participant as described in this Information Statement.
Municipality is defined as a city, county, town, public authority, public corporation, public commission,
special district, and any `Instrumentality" (as that term is defined in the Joint Powers Act) of a county.
The address of the Fund is: Minnesota Municipal Money Market Fund, c/o League of Minnesota Cities,
183 University Ave. E. St. Paul, MN 55101.
1—
INVESTMENT OBJECTIVE AND POLICIES
The general objective of the Fund is to provide a high yield for the Participants while maintaining
liquidity and preserving capital by investing only in instruments authorized by Minnesota Statutes
475.66 which governs the temporary investment of county monies.
No assurance can be given that the Fund will achieve its investment objective or that any benefits
described in this Information Statement will result from the placement of monies in the Fund.
The Fund seeks to attain its investment objective by pursuing a professionally managed investment
program consistent with the policies and restrictions described below.
Portfolio Composition. The Fund is specifically designed for Minnesota municipalities. Accordingly, its
portfolio at all times consists solely of instruments in which municipalities are permitted to temporarily
invest monies pursuant to Minnesota Statutes, Section 475.66. Such instruments are the following:
(a) Government bonds, notes, bills, mortgages and other securities which are direct obligations or are
guaranteed or insured issues of the United States, its agencies, its instrumentalities, or organizations
created by an Act of Congress;
(b) Any security which is a general obligation of the State of Minnesota or any of its municipalities;
(c) Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System;
(d) Commercial paper issued by United States corporations or their Canadian subsidiaries that is of the
highest quality and matures in 270 days or less;
(e) Deposits in a national bank or in a state bank or thrift institution insured by the Federal Deposit
Insurance Corporation, provided that any such deposit shall be insured, bonded, or collateralized in the
manner required by law and that any such bank or thrift institution shall meet criteria designated from
time to time by the Trustees;
(f) Repurchase Agreements with:
1. Broker/Dealers
a. The Fund will deal only with firms which, in the judgement of the Adviser, have
a reputation for sound management and ethical business practices.
b. Each broker/dealer must be registered with the Securities and
Exchange Commission and be a primary reporting dealer to the Federal
Reserve Bank of New York.
Broker/dealers must have at least $50 million in "Excess Capital". "Excess
Capital" is that portion of a firm's permanent capital which is in excess of the
minimum capital required under the Uniform Net Capital Pule of the Securities
and Exchange Commission. Broker/dealer subsidiaries of companies having at
least $1 billion in net worth shall also be considered creditworthy, in the event of
a lack of publicly available financial information. The Adviser will use its best
efforts to monitor the creditworthiness of broker/dealers.
d. Broker/dealers must have short-term unsecured debt ratings of
"Al" by Standard & Poor's or "Pl" by Moody's Investors Service.
2. Banks
a. The Fund will only, enter into repurchase agreements with banks whose short,
unsecured debt is rated "Al" by Standard & Poor's or"Pl" by Moody's
Investors Service.
(g) Any other investment instruments now or hereafter permitted by applicable law for the investment of
municipalities organized under the laws of the State of .Minnesota.
The investments above are referred to in this Information Statement as "Permitted Investments."
—2—
Investment Restrictions. The Fund may buy and sell, and enter into agreements to buy and sell, Permitted
Investments subject to the restrictions described below. These restrictions are considered to be fundamental
to the operation and activities of the Fund and may not be changed without the affirmative vote of a
majority of the Participants. The Fund:
(a) may not make any investment other than a Permitted Investment;
(b) may not purchase any Permitted Investment which has a maturity date more than one year from the
date of the Fund's purchase thereof, unless it is subject at the time of its purchase by the Fund to an
irrevocable agreement on the part of a responsible party to purchase it from the Fund within one year,
(c) may not purchase any Permitted Investment if the effect of such purchase by the Fund would be to make
the average dollar weighted maturity of the Fund's investment portfolio greater than ninety days (however,
in detennining the effect of a purchase on the average portfolio maturity, any Permitted Investment which is
subject to an irrevocable agreement of the nature referred to in the preceding clause (b) is deemed to mature
on the day on which the Fund is obligated to sell such Permitted Investment back to a responsible party);
(d) may not borrow money or incur indebtedness whether or not the proceeds thereof are intended to be
used to purchase Permitted Investments, except as a temporary measure to facilitate «withdrawal requests
which might otherwise require unscheduled dispositions of portfolio investments; and
(e) may not purchase securities or shares of investment companies or any entities similar to the Fund.
TRUSTEES AND OFFICERS
Subject to the power of the Participants to amend the Declaration of Trust, the Board of Directors of the
League of Minnesota Cities shall act as the initial governing body of the Fund. Appoin tments and vacancies
are filled pursuant to the by -lases of the League of Minnesota Cities. The M-ustees have full, exclusive, and
absolute control and authority over the business and affairs of the Fund and the Fund's assets, subject to the
rights of the Participants as provided in the agreement.
The 'Il ustees may perform such acts as in their sole judgement and discretion are necessary and proper for
conducting the business and affairs of the Fund or promoting the interests of the Fund. They oversee,
review, and supervise the activities of all consultants and professional advisers to the Fund.
The Trustees serve without compensation, but they are reimbursed by the Fund for reasonable travel and
other out-of-pocket expenses incurred in connection with their duties as M-ustees. The Trustees are not
required to devote their entire time to the affairs of the Fund.
The Officers of the Fund shall be the same as the officers of the Board of Directors of the League of
Minnesota Cities. The executive director of the League of Minnesota Cities shall act as secretary of the
Fund and will be an ex officio non-voting member of the Board of Trustees. The Tlrustees may elect or
appoint, such other officers or agents, who shall have such powers, duties and responsibilities as the
'I- ustees may deem to be advisable and appropriate.
The Tl•ustees are responsible for the general investment policy and program of the Fund and for the
general supervision and administration of the business and affairs of the Fund. However, the Trustees
are not required personally to conduct all of the business of the Fund and, consistent with their ultimate
responsibility, the Trustees have appointed an Administrator, an Investment Adviser, a Custodian, and a
Technical Advisory Board. The'h ustees assign such duties to the Investment Adviser and the
Administrator and the Custodian as they deem to be appropriate.
THE INVESTMENT ADVISER
Piper Capital Management, Incorporated (PCM), a wholly-owned subsidiary of Piper Jaffray
Incorporated, has been appointed by the Trustees to provide investment advice and, in general, to
supervise the investment program of the Fund. The agreement pursuant to which PCM serves as
Investment Adviser will remain in effect until December 31, 1991, and thereafter from year to year if
approved annually by the M-ustees or by a majority of the Participants. The agreement is not assignable
and may be terminated without penalty on sixty days written notice at the option of the Fund or the
Investment Adviser.
—3—
The Fund does not engage in the trading of investment instruments I-vith or through Piper Jaffray
Incorporated or any of its subsidiaries.
THE ADMINISTRATOR
The Trustees have appointed PCM as the Administrator of the Fund. In addition, Cadre Consulting
Services, Inc. of Ronkonkoma, New York,11779, serves as the Fund's Sub -Administrator. The agreement
pursuant to which PCM has been retained by the Trustees as Administrator will remain in effect until
December 31, 1991, and thereafter from year to year if approved annually by the Trustees or by a
majority of the Participants. The agreement is not assignable and may be terminated without penalty on
sixty days written notice at the option of the Fund or the Administrator.
The Administrator and Sub -Administrator service all Participant accounts in the Fund; determine and
allocate income of the Fund; provide certain written confirmation of the investment and withdrawal of
monies by Participants; provide administrative personnel and facilities to the Fund; determine the net
asset value of the Fund on a daily basis; bear certain expenses for the Fund; and perform all related
administrative services for the Fund. On a quarterly basis, the Administrator provides the Trustees xvith
a detailed evaluation of the performance of the Fund based upon a number of factors. This evaluation
includes a comparative analysis of the Fund's investment results in relation to industry standards, such
as the performance of money market mutual funds and various indices of money market securities.
THE CUSTODIAN
First Bank National Association serves as Custodian for the Fund pursuant to a Custodian Agreement.
The Custodian acts as a safekeeping agent for the Fund's investment portfolio and serves as the
depository in connection with the direct investment and withdrawal mechanisms of the Fund. The
Custodian does not participate in the Fund's investment decision making process. The Fund may invest
in obligations of the Custodian and buy and sell Permitted Investments from and to it.
TECHNICAL ADVISORY BOARD
The Trustees may appoint a Technical Advisory Board to assist and advise the Board of Trustees in
developing policies and overseeing and reviewing the activities of the 4M Fund. The Technical Advisory
Board Nvill consist of individuals skilled in the area of municipal finance and investments.
LEGAL COUNSEL AND INDEPENDENT ACCOUNTANTS
Legal Counsel of the League of Minnesota Cities serve as General Counsel to the Fund. In 1991, the
Fund's independent auditor is KPIMG Peat Marwick.
EXPENSES OF THE FUND
Under its agreement with the Fund, the investment adviser is paid a fee for its services at an annual rate
equal to 0.075% of the 4M Fund's average daily net assets. This fee is computed daily and p.rid monthly.
Under its agreement with the Fetid, the Administrator is paid a fee at an annual rate equal to 0.205% of
the 4M Fund's average daily net assets. This fee shall be computed daily and paid monthly. This fee shall
be computed daily and paid monthly. Of the amount so received, the Administrator will pay to the
League of Minnesota Cities for its services an amount equal to 0.03% of the Fund's average daily assets.
This fee shall be calculated daily and paid monthly. The Sub -administrator is compensated by the
Administrator.
Under its agreement with the Fund, the Administrator or Sub -administrator is paid at an annual rate of
0.25% of the amount of each Certificate of Deposit placed in the fixed rate investment program available
—4—
to all participants. Of the amount so received, the Administrator or Sub -administrator will pay to the
League of Minnesota Cities for its services at an annual rate of 0.03% of the amount of each Certificate of
Deposit placed.
The Administrator provides adequate office space and utilities and all necessary office equipment and
related services and administrative costs of the Fund such as postage, telephone charges and computer
time. In addition the Administrator shall pay the costs of making presentations and contacts to market
the Fund and out of pocket expenses incurred by the Trustees and officers in connection with the
discharge of their duties.
Under its agreement with the Fund, the Custodian is paid based on the following schedule:
Average Market Value
First $50,000,000 .15%
Next $50,000,000 .12%
Over $100,000,000 .08%
$300.00 per month flat fee for cash management service.
The Fund pays for audit and accounting expenses and expenses of preparing tax returns, if any, and pays
legal costs (including start-up fees) of the Fund, insurance costs, and expenses of preparing and printing
promotional material including Information Statements, Application Forms, brochures, notices and
meeting material for Participants of the Fund.
DAILY INCOME ALLOCATIONS
All net income of the Fund is determined as of the close of business on each Minnesota banking day (and
at such other times as the Trustees may determine) and is credited immediately thereafter pro rata to
each Participant's account. Net income which has thus accrued to the Participants is converted as of the
close of business of each calendar month into additional shares which thereafter are held in each
Participant's Fund account. Such net income is converted into full and fractional shares at the rate of one
share for each one dollar credited. Although daily income accruals are not automatically transmitted in
cash, Participants may obtain cash by withdrawing shares at their net asset value without charge.
Net income for each income period consists of (1) all accrued interest income on Fund assets, (2) plus or
minus all realized gains or losses on Fund assets and any amortized purchase discount or premium, and
(3) less the Fund's accrued expenses (including accrued expenses and fees payable to the Investment
Adviser and the Administrator) applicable to that income period.
Since net income of the Fund (including realized gains and losses on the Fund's assets, if any) is allocated
among the Participants each time net income is determined, the net asset value per share remains at
$1.00 per share. The Fund expects to have net income each day. If for any reason there is a net loss on
any day, the Fund will reduce the number of its outstanding shares by having each Participant contribute
to the Fund its pro rata portion of the total number of shares required to be cancelled in order to
maintain the net asset value per share of the Fund at a constant value of $1.00. Each Participant will be
deemed to have agreed to such a contribution in these circumstances by its adoption of the Declaration of
'Dust and its investment of monies.
COMPUTATION OF YIELD
The "seven-day average yield" of the Fund may, from time to time, be quoted in reports, literature, and
information published by the Fund. Seven-day average yield is computed in connection with an identified
seven-day period with respect to a hypothetical Participant account having a balance of exactly $1.00 at
the beginning of the seven-day period. The unannualized seven-day period return for such period is the
change (namely accrued investment income, plus or minus any amortized purchase discount or premium
less all accrued expenses, including investment income accrued or income earned during the period but
—5—
the hypothetical account during the period divided by $1.00. The seven-day average yield is calculated by
multiplying the unannualized seven-day period return by 365 divided by 7. The Fund also may prepare
an effective annual yield computed by compounding the unannualized seven-day period return as follows:
by adding 1 to the unannualized seven-day period return, raising the sum to a power equal to 365 divided
by 7, and subtracting 1 from the result. The Fund also may quote its yield from time to time on other
bases for the information of its Participants.
The yields quoted from time to time should not be considered a representation of the yield of the Fund in
the future since the yield is not fixed. Actual yields will depend not only on the type, quality, and
maturities of the investments held by the Fund and changes in interest rates on such investments, but
also on changes in the Fund's expenses during the period.
Yield information may be useful in reviewing the performance of the Fund and for providing a basis for
comparison with other investment alternatives. However, the Fund's yield fluctuates, unlike certificates
of deposit or other investments which typically pay a fixed yield for a stated period of time.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund for the purpose of calculating the price at which shares are
issued and redeemed is determined by the Administrator as of the close of business on each Minnesota
banking day. Such determination is made by subtracting from the value of the assets of the Fund the
amount of its liabilities and dividing the remainder by the number of outstanding shares of the Fund.
The Fund determines the value of its portfolio investments by the amortized cost method. The amortized
cost method of valuation involves valuing an investment instrument at its cost at the time of purchase and
thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuating interest rates on the market value of the instrument. While this method provides
certainty in valuation, it may result in periods during which value, as determined by amortized cost, is
higher or lower than the price the Fund would receive if it sold the instrument. During such periods, the
yield to Participants may differ somewhat from that which would be obtained if the Fund used the
market value method for all its portfolio investments. For example, if the use of amortized cost resulted in
a lower (higher) aggregate portfolio value on a particular day, a prospective Participant of the Fund
would be able to obtain a somewhat higher (lower) yield than would result if the Fund used the market
value method, and existing Participants would receive less (more) investment income. The purpose of this
method of calculation is to attempt to maintain a constant net asset value per share of $1.00.
The Trustees have adopted certain procedures with respect to the Fund's use of the amortized cost
method to value its portfolio. These procedures are designed and intended (taking into account market
conditions and the Fund's investment objectives) to stabilize net asset value per share as computed for
the purpose of investment and redemption at $1.00 per share. The procedures include a periodic review
by the Trustees, in such manner as they deem appropriate and at such intervals as are reasonable in light
of current market conditions, of the relationship between net asset value per share based upon the
amortized cost value of the Fund's portfolio investments and the net asset value per share based upon
available indications of market value with respect to such portfolio investments. The Trustees will
consider what steps, if any, should be taken in the event of a difference of more than 1/2 of 1% between
the two methods of valuation. The Trustees will take such steps as they consider appropriate (such as
shortening the average portfolio maturity or realizing gains or losses) to minimize any material dilution
or other unfair results which might arise from differences between the two methods of valuation.
The Trustees intend to (i) maintain a dollar weighted average portfolio maturity (which will not be more
than ninety days) appropriate to the objective of maintaining a stable net asset value of $1.00 her share,
and (ii) not purchase any instrument with a remaining maturity of more than one year (unless such
investment is subject at the time of its purchase by the Fund to an irrevocable agreement on the part of
a responsible person to purchase such investment from the Fund within one year). Should the disposition
of a portfolio investment result in a dollar weighted average portfolio maturity of more than ninety days,
the Trustees intend to invest available cash in such a manner as to reduce sucil average portfolio
maturity to ninety days or less as soon as reasonably practicable.
—6—
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Trustees, the Investment Adviser is responsible for the
investment decisions and the placing of the orders for portfolio transactions for the Fund. The Fund's
portfolio transactions occur primarily with major dealers in money market instruments acting as
principals. Such transactions are normally on a net basis which do not involve payment of brokerage
commissions. Transactions with dealers normally reflect the spread between bid and asked prices.
The Investment Adviser places orders for all purchases and sales of portfolio securities. Although the
Fund does not ordinarily seek, but may nonetheless make profits through short-term trading, the
Investment Adviser may, on behalf of the Fund, dispose of any portfolio investment prior to its maturity
if it believes such disposition is advisable. The Fund's policy of generally investing in instruments with
maturities of less than one year will result in high portfolio turnover. However, since brokerage
commissions are not normally paid on the types of investments which the Fund may make, any turnover
resulting from such investments should not adversely affect the net asset value or net income of the
Fund.
The Investment Adviser seeks to obtain the best net price and most favorable execution of orders for the
purchase and sale of portfolio securities. Where price and execution offered by more than one dealer are
comparable, the Investment Adviser may, in its discretion, purchase and sell investments through
dealers which provide research, statistical and other information to the Investment Adviser or to the
Fund. Such supplemental information received from a dealer is in addition to the services required to be
performed by the Investment Adviser under its agreement with the Fund, and the expenses of the
Investment Adviser will not necessarily be reduced as a result of the receipt of such information.
Portfolio investments will not be purchased from or sold to the Investment Adviser or the Administrator
or any affiliate of the Investment Adviser or the Administrator.
REPORTS TO PARTICIPANTS
Participants receive transaction advices, subsequent to all investments and wire withdrawals that they
make, and separately receive cancelled checks for all %vithdrawls they make by writing checks. Each
Participant receives quarterly and annual reports providing; financial information regarding the Fund
(including a statement of net income) as well as a monthly statement of the Participant's account. The
annual report includes audited financial statements of the Fund. The Fund's fiscal year ends on
December 31 of each year. Potential Participants are advised to review the financial reports of the Fund
that are made available to them.
The Fund answers inquiries at any time during business hours from a Participant concerning; the status
of its account (number of shares, etc.) and the current yield available through the Fund's investment
prognam. Such inquiries can be made by telephoning CADRE toll-free, 1-800-2214524, or by telephoning;
Kathleen Callahan at Piper Capital Management toll-free, 1-800-333-6000, or by -%vriting; to the Fund's
sub -administrator, Cadre Consulting; Services, Inc. at 905 Marconi Avenue, Ronkonkoma, NY 11779.
TAXES
Counsel to the Fund is of the opinion that the Fund is not subject to Federal or Minnesota income tax
upon the income realized by it, and that the Participants are likewise not taxable upon distributions to
them of such income. Counsel to the Fund is further of the opinion that neither the Fund, nor the
Participants, as a result of their investment of municipal monies in the Fund, sue subject to taxation.
DECLARATION OF TRUST
Each potential Participant is given a copy of the Declaration of Trust before becoming a Participant.
Certain portions of the Declaration of Trust are summarized in this Information Statement. These
summaries are qualified in their entirety by reference to the text of the Declaration of Trust.
Description of Shares. The Declaration of Trust provides that the beneficial interests of the Participants
in the assets of the Fund and the earnings thereon are, for convenience of reference, divided into shares
which are used as units to measure the proportionate allocation of beneficial interest among the
Participants. The Declaration of Trust authorizes an unlimited number of full and fractional shares of a
single class as well as adjustments in the total number of shares outstanding from time to time without
changing their proportionate beneficial interest in the Fund in order to permit the Fund to maintain a
constant net asset value of $1.00 per share. All shares participate equally in dividend allocation and have
equal liquidation and other rights. The shares have no preference, conversion, exchange, or preemptive
rights.
For all matters requiring a vote of Participants, each Participant is entitled to one vote with respect to
each matter, without regard to the number of shares held by the Participant. It is not necessary for a
Participant to hold any minimum number of shares to be entitled to vote. Participants are not entitled to
cumulative voting.
No shares may be transferred to any person other than the Fund itself attire time of withdrawal of
monies by a Participant.
Participant Liability. The Declaration of Trust provides that Participants shall not be subject to any
individual liability for the acts or obligations of the Fund and provides that every written undertaking
made by the Fund shall contain a provision that such undertaking is not binding upon any of the
Participants individually. No individual liability will attach to the Participants under any undertaking
containing such a provision. The Trustees intend to conduct the operations of the Fund, with advice of
counsel, in such a way as to avoid ultimate liability of the Participants for liabilities of the Fund.
Responsibility of Trustees, Officers and Agents. No Trustee, officer, employee, or agent of the Fund is
individually liable to the Fund, a Participant, an officer, an employee or an agent of the Fund for any
action or failure to act unless it is taken or omitted in bad faith or constitutes willful misfeasance, reckless
disregard of duty, or gross negligence. All third parties shall look solely to the Fund property for the
satisfaction of claims arising in connection with the affairs of the Fund. The Fund will indemnify each
Trustee, officer, employee, or agent of the Fund designated by the Trustees to receive such
indemnification, to the extent permitted by law, against all claims and liabilities to which they may
become subject by reason of serving in such capacities for the Fund, except in certain circumstances set
forth in the the agreement.
Termination of the Declaration of Trust. The Fund may be terminated by the affirmative vote of a
majority of the Trustees and consented to by a majority of the Participants entitled to vote. Upon the
termination of the Fund and after paying or adequately providing for the payment of all of its liabilities,
and upon receipt of such releases, indemnities and refunding agreements as they deem necessary for
their protection, the Trustees may distribute the remaining Fund property, in cash or in kind, or partly in
cash and partly in kind, among the P.n•ticipants according to their respective proportionate beneficial
interests.
Amendment of the Declaration of Trust. The Declaration of Trust may be amended by the affirmative
vote of a majority of the Participants entitled to vote or by an instrument in writing, signed by a
majority of the Trustees and consented to by not less than a majority of the Participants entitled to vote.
The Trustees may, from time to time, by a two-thirds vote of the Trustees, and after fifteen days prior
written notice to the Participants, amend the Declaration of Trust without the vote or consent of the
Participants, to the extent they deem necessary to conform the Declaration of Trust to the requirements
of applicable laws or regulations, or any interpretation thereof by a court or other governmental agency,
but the Trustees shall not be liable for failing to do so.
NVithdrawal. A Participant may withdraw from participation in the Fund at any time in its discretion by
sending an appropriate notice to the Fund, as specified in the Declaration of Trust.
The name "Minnesota Municipal Money Market Fund" is the designation of the Fund under the
Declaration of Trust. The Declaration of Trust is filed in the Office of the Secretary of State of Minnesota,
and provides that the name of the Fund refers to the participants jointly in such capacity and not
personally or as individuals. All persons dealing with the Fund must look solely to the Fund property for
the enforcement of any claims against the Fund since neither the Trustees, officers, agents, nor
Participants assume any personal liability for obligations entered into on behalf of the Fund.
MINNESOTA MUNICIPAL
MONEY MARKET FUND
(A Minnesota entity formed
pursuant to the
Minnesota Joint Powers Act)
DECLARATION OF TRUST
(As adopted in January, 1987)
TABLE OF CONTENTS
Page
RECITALS 6
ARTICLE I
The 4M Fund
Section 1.01
Name
7
Section 1.02
Purpose; Only Certain Minnesota Municipalities to be Participants
7
Section 1.03
Location
7
Section 1.04
Nature of 4M Fund and Declaration of Trust
7
Section 1.05
Definitions
8
ARTICLE II
Powers of the Trustees
Section 2.01
General
9
Section 2.02
Permitted Investments
10
Section 2.03
Legal Title
11
Section 2.04
Disposition of Assets
11
Section 2.05
Taxes
12
Section 2.06
Rights as Holders of Fund Property
12
Section 2.07
Delegation; Committees
12
Section 2.08
Collection
12
Section 2.09
Payment of Expenses
12
Section 2.10
Borrowing and Indebtedness
13
Section 2.11
Deposits
13
Section 2.12
Valuation
13
Section 2.13
Fiscal Year; Accounts
13
Section 2.14
Concerning the Fund and Certain Affiliates
13
Section 2.15
Investment Program
14
Section 2.16
Power to Contract, Appoint, Retain and Employ
14
Section 2.17
Insurance
15
Section 2.18
Seal
15
Section 2.19
Indemnification
15
Section 2.20
Remedies
15
Section 2.21
Information Statement
15
Section 2.22
Further Powers
16
Section 2.23
Compliance With Laws
16
Section 2.24
Tax or Aid or Revenue Anticipation Borrowing
16
ARTICLE III
Technical Advisory Board. Investment Adviser. Administrator, and Custodian
Section 3.01
Appointment
16
Section 3.02
Duties of the Adviser
17
Section 3.03
Duties of the Administrator
17
Section 3.04
Duties of the Custodian
17
Section 3.05
Successors
17
Liability Insurance
ARTICLE IV
No Waiver
Investments
Section 4.01
Statement of Investment Policy and Objective
17
Section 4.02
Restrictions Fundamental to the Fund
18
Section 4.03
Amendment of Restrictions
19
ARTICLE V
Limitations of Liability
Section 5.01
Liability to Third Persons
Section 5.02
Liability to the Fund or to the Participants
Section 5.03
Indemnification
Section 5.04
Surety Bonds
Section 5.05
Apparent Authority
Section 5.06
Recitals
Section 5.07
Reliance on Experts, Etc.
Section 5.08
Liability Insurance
Section 5.09
No Waiver
ARTICLE VI
Interests of Participants
Section 6.01
General
Section 6.02
Allocation of Shares
Section 6.03
Evidence of Share Allocation
Section 6.04
Reduction in Number of Shares to Maintain Constant Net Asset Value
Section 6.05
Withdrawals
Section 6.06
Suspension of Right of Withdrawal; Postponement of Payment
Section 6.07
Minimum Withdrawal
Section 6.08
Defective Withdrawal Requests
Section 6.09
Allocation of Certain Expenses
19
19
19
20
20
21
21
21
21
21
22
22
22
22
22
23
23
23
3
ARTICLE VII
Record of Shares
Section 7.01
Share Register
23
Section 7.02
Registrar
24
Section 7.03
Owner of Record
24
Section 7.04
No Transfers of Shares
24
Section 7.05
Limitation of Fiduciary Responsibility
24
Section 7.06
Notices
24
ARTICLE VIII
Particit)ants
Section 8.01
Voting
24
Section 8.02
Right to Initiate a Vote of the Participants
25
Section 8.03
Inspection of Records
25
Section 8.04
Meetings of Participants
25
Section 8.05
Notice of Meetings and Votes
25
Section 8.06
Record Date for Meetings and Votes
25
Section 8.07
Proxies
25
Section 8.08
Number of Votes
26
Section 8.09
Reports `
26
ARTICLE IX
Trustees and Officers
Section 9.01
Number and Qualification; Non -Voting Trustees
26
Section 9.02
Meetings
26
Section 9.03
Officers
27
Section 9.04
Committees
27
Section 9.05
Reports
27
•
ARTICLE X
Determination of Net Asset Value and Net Income:
Distributions to Particit)ants
Section 10.1
Net Asset Value
28
Section 10.2
Constant Net Asset Value; Reduction of Allocated Shares
28
• Section 10.3
Supplementary Distributions to Participants
28
Section 10.4
Retained Reserves
28
ARTICLE XI
Custodian
Section 11.1
Duties
Section 11.2
Appointment
Section 11.3
Custodian Agreement
Section 11.4
Agents of Custodian
Section 11.5
Successors
Section 11.6
Custodian as Depository for Participants
ARTICLE XII
Recording of Declaration of Trust
Section 12.1 Recording
ARTICLE XIII
Amendment or Termination of Fund: Duration of Fund
Section 13.1 Amendment or Termination
Section 13.2 Power to Effect Reorganization
Section 13.3 Duration
ARTICLE XIV
Miscellaneous
Section 14.1
Governing Law
Section 14.2
Counterparts
Section 14.3
Reliance by Third Parties
Section 14.4
Provisions in Conflict with Law
Section 14.5
Gender; Section Headings
Section 14.6
Adoption by Municipalities Electing to Become Additional
Participants; Resignation of Participants
Execution
t
29
29
29
29
29
29
29
30
31
31
31
31
31
32
32
M
WITNESETH:
WHEREAS, Minnesota Statutes, Section 471.59 (the "Joint Powers Act") provides, among
other things, that governmental units (as such term is defined therein), by agreement entered into
through action of their governing bodies, may jointly or cooperatively exercise any power common
to the contracting parties; and
WHEREAS, the term "governmental unit" is defined in the Joint Powers Act to include
municipality as defined herein; and
WHEREAS, all of the Initial Participants are Municipalities of the State of Minnesota
that desire to enter into an agreement and thereby establish an entity for joint investment, under
the provisions of the aforementioned Joint Powers Act, pursuant to this Declaration of Trust for
the purpose of combining their respective available investment funds not currently needed by such
Municipalities so as to enhance the investment opportunities available to them and increase the
investment earnings accruing to them respectively; and
WHEREAS, this Declaration of Trust is intended to be an agreement entered into
pursuant to the Joint Powers Act for the purpose of better exercising the Participants' power to
invest their respective funds in accordance with the Laws of the State of Minnesota; and
WHEREAS, the Board or Council of each of the Initial Participants has duly adopted a
resolution authorizing the applicable Initial Participant to become a party to, and has approved, this
Declaration of Trust pursuant to the Joint Powers Act; and
WHEREAS, the Board or Council of each of the Initial Participants, by its aforementioned
approval of this Declaration of Trust, has authorized the investment of funds of such Initial
Participant in investments of the nature permitted by Minnesota Law, as applicable, and in the
manner contemplated by this Declaration of Trust; and
WHEREAS, it is proposed that the beneficial interest in the 4M Fund's assets shall be
divided into non -transferable shares of beneficial interest, which shall be evidenced by a share
register maintained by the 4M Fund or its agent; and
WHEREAS, the Initial Participants anticipate the other Municipalities of the State of
Minnesota may wish to become Participants by adopting this Declaration of Trust and thus becom-
ing parties to it;
NOW, THEREFORE, the Initial Participants hereby declare that all moneys, assets,
securities, funds and property now or hereafter acquired pursuant to this agreement shall be held
and managed in trust for the equal and proportionate benefit of the holders of record from time to
time of shares beneficial interest herein, without privilege, priority or distinction among such
holders, and subject to the terms, covenants, conditions, purposes and provisions hereof.
21
ARTICLE I
The 4M Fund
1.01 Name. The name of the common law trust created by this Declaration of Trust
shall be "Minnesota Municipal Money Market Fund" (the 4M Fund) and, so far as may be practica-
ble, the Trustees shall conduct the 4M Fund's activities, execute all documents and sue or be sued
under that name, which name (and the word "4M Fund" wherever used in this Declaration of Trust,
except where the context otherwise requires) shall refer to the Trustees in their capacity as
Trustees, and not individually or personally, and shall not refer to the officers, agents, employees,
counsel, advisers, consultants, accountants, or Participants of the k4M Fund or of such Trustees.
Should the Trustees determine that the use of such name is not practicable, legal or convenient,
they may use such other designation or they may adopt such other name for the 4M Fund as they
deem proper, and the 4M Fund may hold property and conduct its activities under such designation.
or name. The Trustees shall take such actions as they, acting with the advice of counsel, shall
deem necessary or appropriate to file or register such name in accordance with the Laws of the
State of Minnesota or the United States of America so as to protect and reserve the right of the
4M Fund in and to such name.
1.02 Purpose: Only Certain Minnesota Municipalities to be Participants.
(a) The purpose of the 4M Fund is to provide a means through which
Municipalities may jointly and cooperatively exercise their power to invest their respective available
funds so as to enhance their investment opportunities pursuant to an investment program conducted
in accordance with the Laws of 'the State of Minnesota, from time to time in effect, governing the
investment of the Municipal Funds. Only Municipalities organized under the Laws of the State of
Minnesota may become Participants. A Municipality may become a party to this Declaration of
Trust and may place moneys in the 4M Fund only after its Board or Council has duly adopted a
resolution, or taken other applicable official action, authorizing such Municipality to become a
Participant of the 4M Fund and adopting this Declaration of Trust.
(b) It is not necessary for a municipality to place any funds in the 4M Fund
to become a Participant, and no minimum investment balance must be maintained by a Municipality
which has become a Participant in order for such Municipality to continue to be a Participant.
1.03 Location. The 4M Fund shall maintain an office of record in the State of
Minnesota and may maintain such other offices or places of business as the Trustees may from time
to time determine. The initial office of record of the 4M Fund shall be: c/o League of Minnesota
Cities, 183 University Ave. East, St. Paul, Minnesota 55101. The office of record may be changed
from time to time by resolution of the Trustees, and notice of such change of the office of record
shall be given to each Participant.
1.04 Nature of 4M Fund and Declaration of Trust.
(a) The 4M Fund shall be a common law trust (also known as a business trust) organi-
zed and existing under the laws of the State of Minnesota. The 4M Fund is not intended to be,
shall not be deemed to be, and shall not be treated as, a general partnership, limited partnership,
7
joint venture, corporation, investment company, joint stock association or joint stock company.
The Participants shall be beneficiaries of the 4M Fund, 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.
(b) This Declaration of Trust is an agreement of indefinite -term regarding the joint or
cooperative exercise of a power common to the parties thereto within the meaning of the Joint
Powers Act.
1.05 Definitions. As used in this Declaration of Trust, the following terms shall have
the following meanings unless the context hereof otherwise requires:
"Administrator" shall mean any Person or Persons appointed, employed or contracted with
by the Trustees under the applicable provisions of Section 3.1 hereof.
"Administration Agreement" shall mean the agreement with the Administrator referred to
in Section 3.3 hereof as the same may be amended from time to time.
"Adviser" shall mean any Person or Persons appointed, employed or contracted with by.
the Trustees under the applicable provisions of Section 3.1 hereof.
"Affiliate" shall mean, with respect to any Person, another Person directly or indirectly
controlling, controlled by or under common control with such Person, or any officer, director,
partner or employee of such Person.
"Board of Trustees" or "Trustees shall mean the Board of Directors of the League of
Minnesota Cities.
"Board" or "Council" shall mean the governing body of a Minicipality as defined herein.
"Custodian" shall mean any Person or Persons appointed, employed or contracted with by
the Administrator under the applicable provisions of Section 11.2 hereof.
"Custodian Agreement shall mean the agreement with the Custodian referred to in
Section 11.1 hereof as the same may be amended from time to time.
"Declaration of Trust" shall mean this Declaration of Trust as amended, restated or
modified from time to time. References in this Declaration of Trust to 'Declaration", "hereof",
"herein", "hereby" and "hereunder" shall be deemed to refer to the Declaration of Trust and shall
not be limited to the particular text, article or section in which such words appear.
"Employee of a Municipality" or "Municipal Employee" shall mean a director of finance, a
finance official or other managerial employee of a Municipality charged with responsibility for
municipal finance.
"4M Fund" shall mean the common law trust created by this Declaration of Trust.
"4M Fund Property" shall mean, as of any particular time, any and all property, real,
personal or otherwise, tangible or intangible, which is transferred, conveyed or paid to the 4M
Fund or the Trustees and all income, profits and gains therefrom and which, at such time, is owned
or held by, or for the account of, the 4M Fund or the Trustees.
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"Information Statement" shall mean the information statement or other descriptive
document or documents adopted as such by the Trustees and distributed by the 4M Fund to
participants and potential Participants of the 4M Fund as the same may be amended by the
Trustees from time to time.
"Initial Participants" shall mean the League of Minnesota Cities and the City of
Minnetonka which Municipalities initially formed the 4M Fund by the execution and adoption of this
Declaration of Trust.
"Investment Advisory Agreement" shall mean the agreement with the Adviser referred to
in Section 3.2 hereof as the same may be amended from time to time.
"Joint Powers Act" shall mean Minnesota Statutes, Section 471.59.
"Laws" shall mean common law and all ordinances, statutes, rules, regulations, orders,
injunctions, decisions, opinions or decrees of any government or political subdivision or agency
thereof, or any court or similar entity established by any thereof.
"Municipality" shall mean county, city, town, public authority, public corporation, public.
commission, special district, any other political subdivision, or an agency of the state or its
subdivisions and any "instrumentality" (as that term is defined in the Joint Powers Act) of a
municipality.
"Participants" shall mean the Initial Participants and the Municipalities which adopt this
Declaration of Trust pursuant to Section 14.6 hereof.
"Permitted Investments" shall mean the investments referred to in Paragraph (b) or
Section 2.2 hereof.
"Person" shall mean and include individuals, corporations, limited partnerships, general
partnerships, joint stock companies or associations, joint ventures, associations, companies, trusts,
banks, trust companies, land trusts, business trusts or other entities (which or not legal entities)
and governments and agencies and political subdivisions thereof.
"Share" shall mean the unit used to denominate and measure the respective beneficial
interests of the Participants in the Fund Property as described in Article VI.
"Share Register" shall mean the register of Shares maintained pursuant to Article VII
hereof.
"Technical Advisory Board" shall mean the persons appointed by the Trustees to act as
technical advisors to the Trust.
ARTICLE II
Powers of the Trustees
2.1 General. Subject to the rights of the Participants as provided herein, the Trustees
shall have, without other or further authorization, full, exclusive and absolute power, control and
authority over the 4M Fund Property and other the affairs of the 4M Fund to the same extent as
if the Trustees were the sole and absolute owners of the 4M Fund Property in their own right, and
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with such powers of delegation as may be permitted by this Declaration of Trust. The trustees may
do acid perform such acts and things as in their sole judgment and discretion are necessary and
proper for conducting the affairs of the 4M Fund or promoting the interests of the 4M Fund and
the Participants. The enumeration of any specific power or authority herein shall not be construed
as limiting the aforesaid general power or authority or any specific power or authority. The
trustees may exercise any power authorized and granted to them by this Declaration of Trust.
Such powers of the Trustees may be exercised without the necessity of any order or, or resort to,
any court.
2.2 Permitted Investments. The Trustees shall have full and complete power, subject in
all respects to Article IV hereof,
(a) to conduct, operate and provide an investment program for the Participants;
and
(b) for such consideration as they may deem proper and as may be required by
Law, to subscribe for, invest in, reinvest in, purchase or otherwise acquire, hold,. sell, assign,
transfer, exchange, distribute or otherwise deal in or dispose of investment instruments as permit-
ted by Law (the "Permitted Investments"). Permitted Investments include, without limitation, as of
the date hereof, the following:
(i) any security which is a direct obligation of or is guaranteed as to payment
of principal and interest by the United States of America or any agency or instrumentality thereof;
(ii) shares of an investment company (1) registered under the federal invest-
ment company act of 1940, whose shares are registered under the federal securities act of 1933,
and (2) whose only investments are in securities described in the preceding clause and repurchase
agreements fully collateralized by those securities, if the repurchase agreements are entered into
only with those primary reporting dealers that report to the Federal Reserve Bank of New York
and with the 100 largest United States commercial banks;
(iii) any security which is a general obligation of the State of Minnesota or
any of its municipalities;
(iv) bankers acceptances of United States banks eligible for purchase by the
Federal Reserve System;
(v) commercial paper issued by United States corporations or their Canadian
subsidiaries that is of the highest quality and matures in 270 days or less;
(vi) deposits in a national bank or in a state bank or thrift institution
insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance
Corporation, provided that any such deposit shall be insured, bonded or collateralized in the manner
required by Law and that any such bank or thrift institution shall meet criteria designated from
time to time by the Trustees;
(vii) repurchase agreements (a) with any bank qualified as a depository of
money held in the debt service fund of a municipality of the State of Minnesota or (b) with any
national or state bank in the United States of America which is a member of the Federal Reserve
System and whose combined capital and surplus equals or exceeds $10,000,000 or (c) with a Primary
Reporting Dealer in United States Government Securities to the Federal Reserve Bank of New York
as such term is defined in Minnesota Statutes, Section 475.51, Subdivision 11 or (d) a securities
10
broker-dealer having its principal executive office in Minnesota, licensed pursuant to Chapter 80A
or an affiliate of it, regulated by the Securities and Exchange Commission and maintaining a
combined capital and surplus of $40,000,000 or more, exclusive of subordinated debt; and
(viii) such other investment instruments now or hereafter permitted by
applicable Law for the investment of moneys of Municipalities organized under the laws of the
State of Minnesota.
In the exercise of their powers, the Trustees shall not be limited, except as otherwise
provided hereunder, to investing in Permitted Investments maturing before the possible termination
of the 4M Fund. Except as otherwise provided in this Declaration of Trust, the Trustees shall not
be limited by any Law now or hereafter in effect limiting the investments which may. be held or
retained by trustees or other fiduciaries, and they shall have full authority and power to make any
and all Permitted Investments within the limitations of this Declaration of Trust, that they, in their
absolute discretion, shall determine to be advisable and appropriate. The Trustees shall have no
liability for loss with respect to Permitted Investments made within the terms of this Declaration
of Trust, even though such investments shall be of a character or in an amount not considered
proper for the investment of trust funds by .trustees or other fiduciaries. The Trustees shall be
permitted only to make Permitted Investments in accordance with Article IV of this Declaration of .
Trust.
2.3 Lepal Title.
(a) Legal title to all of the 4M Fund Property shall be vested in the Trustees on
behalf of the Participants and be held by and transferred to the Trustees, except that the Trustees
shall have full and complete power to cause legal title to any 4M Fund Property to be held, on
behalf of the Participants, by or in the name of the 4M Fund, or in the name of any other Person
as nominee, on such terms, in such manner, and with such powers as the Trustees may determine,
so long as in their judgment the interest of the 4M Fund is adequately protected.
(b) The right, title and interest of the Trustees in and to the 4M Fund Property
shall vest automatically in all persons who may hereafter become Trustees upon their election to
the Board of Directors of the League of Minnesota Cities and qualification without any further act.
Upon the expiration of term of office, resignation, disability, removal, adjudication as an
incompetent, or death of a Trustee, he (and in the event of his death, his estate) shall automa-
tically cease to have any right, title or interest in or to any of the 4M Fund Property, and the
right, title and interest of such Trustee in and to the 4M Fund Property shall vest automatically in
the remaining Trustees without any further act.
2.4 Disposition of Assets. Subject in all respects to Article IV hereof and to the Laws
from time to time applicable to Municipalities of the State of Minnesota, the Trustees shall have
full and complete power to sell, exchange or otherwise dispose of any and all 4M Fund Property
free and clear of any and all trusts and restrictions, at public or private sale, for cash or on
terms, with or without advertisement, and subject to such restrictions, stipulations, agreements and
reservations as they shall deem proper, and to execute and deliver any deed, power, assignment, bill
of sale, or other instrument in connection with the foregoing. The Trustees shall also have full
and complete power, subject in all respects to Article IV hereof, and in furtherance of the affairs
and purposes of the 4M Fund, to give consents and make contracts relating to 4M Fund Property
or its use.
2.5 Taxes. The Trustees shall have full and complete power: (i) to pay all taxes or
assessments, of whatever kind or nature, validly and lawfully imposed upon or against the 4M Fund
or the Trustees in connection with the 4M Fund Property or upon or against the 4M Fund Property
or income or any part thereof; (ii) to, settle and compromise disputed tax liabilities; and (iii) for
the foregoing purposes to make such returns and do all such other acts and things as may be
deemed by the Trustees to be necessary or desirable.
2.6 Rights as Holders of 4M Fund Property. The Trustees shall have full and complete
power to exercise on behalf of the Participants all of the rights, powers and privileges appertaining
to the ownership of all or any Permitted Investments or other property forming part of the 4M
Fund Property 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.
2.7 Delegation: Committees. The Trustees shall have full and complete power (consistent
with their continuing exclusive authority over the management of the 4M Fund, the conduct of its
affairs, their duties and obligations as Trustees, and the management and disposition of 4M Fund
Property), to delegate from time to time to such one or more of their number (who may be
designated as constituting a committee of the Trustees as provided in Section 9.9 hereof) or to.
officers, employees or agents of the 4M Fund (including, without limitation, the Administrator, the
Adviser and the Custodian) the doing of such acts and things and the execution of such instruments
either in the name of the 4M Fund, or the names of the Trustees or as their attorney or attorneys,
or otherwise as the Trustees may from time to time deem expedient and appropriate in the further-
ance of the business affairs and purposes of the 4M Fund.
2.8 Collection. The Trustees shall have full and complete power: (i) to collect, sue for,
receive and receipt for all sums of money or other property due to the 4M Fund; (ii) to consent to
extensions of the time for payment, or to the renewal of any securities, investments or obligations; •
(iii) to engage or intervene in, prosecute, defend, compromise, abandon or adjust by arbitration or
otherwise any actions, suits, proceedings, disputes, claims, demands or things relating to the 4M
Fund Property; (iv) to foreclose any collateral, security or instrument securing any investments,
notes, bills, bonds, obligations or contracts by virtue of which any sums of money are owed to the
4M Fund; (v) to exercise any power of sale held by them, and to convey good title hereunder free
of any and all trusts, and in connection with any such foreclosure or sale, to purchase or otherwise
acquire title to any property; (vi) to be parties to reorganization and to transfer to and deposit
with any corporation, committee, voting trustee or other Person any securities, investments or
obligations of any person which form a part of the 4M Fund Property, for the purpose of such
reorganization or otherwise; (vii) to participate in any arrangement for enforcing or protecting the
interests of the Trustees as the owners or holders of such securities, investments or obligations and
to pay any assessment levied in connection with such reorganization or arrangement; (viii) to
extend the time (with or without security) for the payment or delivery of any debts or property
and to execute and enter into releases, agreements and other instruments, and (ix) to pay or satisfy
any debts or claims upon any evidence that the Trustees shall deem sufficient.
2.9 Payment of Expenses. The Trustees shall have full and complete power: (i) to
incur and pay any charges or expenses which in the opinion of the Trustees are necessary or
incidental to or proper for carrying out any of the purposes of this Declaration of Trust; (ii) to
reimburse others for the payment therefor; and (iii) to pay appropriate compensation or fees from
the funds of the 4M Fund to Persons with whom the 4M Fund has contracted or transacted
business. The Trustees shall fix the compensation, if any, of all officers and employees of the 4M
Fund. The Trustees shall not be paid compensation for their general services as Trustees here-
under. The Trustees may pay themselves or any one or more of themselves reimbursement for
12
expenses reasonably incurred by themselves or any one or more of themselves on behalf of the 4M
Fund.
2.10 Borrowing and Indebtedness. The Trustees shall not have the power to borrow
money or incur indebtedness on behalf of the 4M Fund, or authorize the Fund to borrow money or
incur indebtedness, except as provided in clause (iv) of Section 4.2 of this Declaration of Trust, but
only if and to the extent permitted by Law. '
2.11 Deposits. The Trustees shall have full and complete power to deposit, in such
manner as may now or hereafter be permitted by Law, any moneys or funds, included in the 4M
Fund Property, and intended to be used for the payment of expenses of the 4M Fund or the
Trustees, with one or more banks, or thrift institutions meeting the requirements of Section
2.2(b)(vi) hereof. Such deposits are to be subject to withdrawal in such manner as the Trustees
may determine, and the Trustees shall have no responsibility for any loss which may occur by
reason of the failure of the bank or thrift institution with which the moneys, investments, or
securities have been deposited. Each such bank or thrift institution shall comply, with respect to
such deposits, with all applicable requirements of all applicable Laws, including, but not limited to,
Laws of the State of Minnesota relating to Municipalities.
2.12 Valuation. The Trustees shall have full and complete power to determine in good
faith conclusively the value of any of the 4M Fund Property and to revalue the 4M Fund Property.
2.13 Fiscal Year: Accounts. The Trustees shall have full and complete power to
determine the fiscal year of the 4M Fund and the method or form in which its accounts shall be
kept and from time to time to change the fiscal year or method or form of accounts. Unless
otherwise determined by the Trustees pursuant to this Section 2.13, the fiscal year of the 4M Fund
shall terminate on June 30 and commence on July 1 of each calendar year.
2.14 Concerning the 4M Fund and Certain Affiliates.
(a) The 4M Fund may enter into transactions with any Affiliate of the 4M Fund or
of the Adviser, the Administrator, or the Custodian or of any Trustee, officer, director of employee
of the 4M Fund or with any Affiliate of an agent of the 4M Fund or of the Adviser, the Adminis-
trator, or the Custodian if (i) each such transaction (or type of transaction) had, after disclosure
of such affiliation, been approved or ratified by the affirmative vote of a majority of the Trustees,
including a majority of the Trustees who are not Affiliates of any Person (other than the 4M Fund)
who is a party to the transaction or transactions with the 4M Fund and (ii) such transaction (or
type of transaction) is, in the opinion of the Trustees, on terms fair and reasonable to the 4M
Fund and the Participants and at least as favorable to them as similar arrangements for comparable
transactions (of which the Trustees have knowledge) with organizations unaffiliated with the 4M
Fund or with the Person who is a party to the transaction or transactions with the 4M Fund.
(b) Except as otherwise provided in this Declaration of Trust or in the Laws of
the State of Minnesota, in the absence of fraud, a contract, act or other transaction between the
4M Fund and any other Person, or in which the 4M Fund is interested, is valid and no Trustee,
officer, employee or agent of the 4M Fund shall have any liability as a result of entering into any
such contract, act or transaction even though (i) one or more of the Trustees, officers, employees
or agents of such other Person, or (ii) one or more of the Trustees, officers, employees, or agents
of the 4M Fund, individually or jointly with or affiliated with, such contract, act or transaction,
provided that (i) such interest or affiliation is disclosed to the Trustees and the Trustees authorize
such contract, act or other transaction by a vote of a majority of the unaffiliated Trustees, or (ii)
such interest or affiliation is disclosed to the Participants, and such contract, act or transaction is
13
approved by a majority of the Participants.
(c) Any Trustee or officer, employee, or agent of the 4M Fund may, in his
personal capacity, or in a capacity as trustee, officer, director, stockholder, partner, member,
agent, adviser or employee of any Person, have business interests and engage in business activities
in addition to those relating to the 4M Fund, which interests and activities may be similar to those
of the 4M Fund and include the acquisition, syndication, holding, management, operation or
disposition of securities, investments and funds, for his own account or for the account of such
Person. Each Trustee, officer, employee and agent of the 4M Fund shall be free of any obligation
to present to the 4M Fund any investment opportunity which comes to him in any capacity other
than solely as Trustee, officer, employee or agent of the 4M Fund, even if such opportunity is of a
character which, if presented to the 4M Fund, could be taken by the 4M Fund.
(d) Subject to the provisions of Article III hereof, any Trustee or officer, employee
or agent of the 4M Fund may be interested as trustee, officer, director, stockholder, partner,
member, agent, adviser or employee of, or otherwise have a direct or indirect interest in, any
Person who may be engaged to render advice' or services to the 4M Fund, and may receive compen-
sation from such Person as well as compensation as Trustee, officer, employee or agent of the Fund
or otherwise hereunder. None of the activities and interests referred to in this paragraph (d) shall:
be deemed to conflict with his duties and powers as Trustee, officer, employee or agent of the 4M
Fund.
(e) To the extent that any other provision of this Declaration of Trust conflicts
with, or is otherwise contrary to the provisions of, this Section 2.14, the provisions of this Section
2.14 shall be deemed controlling.
(f) Notwithstanding the foregoing provisions of this Section 2.14, the Trustees shall
not have the power to engage in any transaction with any Affiliate that would be inconsistent with
the Laws of the State of Minnesota concerning conflicts of interest, including, but not limited to,
Minnesota Statutes, Sections 471.87 and 471.88, or any other Law limiting the Participants' power to
enter into such transaction, and the By -Laws of the 4M Fund may contain provisions more restric-
tive than those set forth in this Section 2.14.
2.15 Investment Program. The Trustees shall use their best efforts to obtain through
the Adviser or other qualified Persons a continuing and suitable investment program, consistent
with the investment policies and objectives of the 4M Fund set forth in Article IV of this Declara-
tion of Trust, and the Trustees shall be responsible for reviewing and approving or rejecting the
investment program presented by the Adviser or such other Persons. Subject to the provisions of
Section 2.7 and Section 3.1 hereof, the Trustees may delegate functions arising under this Section
2.15 to one or more of their number or to the Adviser.
2.16 Power to Contract. Appoint. Retain and Emolov.
(a) Subject to the provisions of Section 2.7 and Section 3.1 hereof with respect to
delegation of authority by the Trustees, the Trustees shall have full and complete power to appoint,
employ, retain, or contract with any Person of suitable qualifications and high repute (including one
or more of themselves and any corporation, partnership, trust or other entity of which one or more
of them may be an Affiliate, subject to the applicable requirements of Section 2.14 hereof) as the
Trustees may deem necessary, or desirable for the transaction of the affairs of the 4M Fund,
including any Person or Persons who, under the supervision of the Trustees, may, among other
things: (i) serve as the 4M Fund's investment adviser and consultant in connection with policy
decisions made by the Trustees; (ii) serve as the 4M Fund's administrator or co -administrators; (iii)
14
furnish reports to the Trustees and provide research, economic and statistical data in connection
with the 4M Fund's investments; (iv) act as consultants, accountants, technical advisers, attorneys,
brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians or agents for
collection, insurers or insurance agents, registrars for Shares or in any other capacity deemed by
the Trustees to be necessary or desirable; (v) investigate, select, and, on behalf of the 4M Fund,
conduct relations with Persons acting in such capacities and pay appropriate fees to, and enter into
appropriate contracts with, or employ, or retain services performed or to be performed by, any of
them in connection with the investments acquired, sold, or otherwise disposed of, or committed,
negotiated, or contemplated to be acquired, sold or otherwise disposed of; (vi) substitute any other
Person for any such Person, (vii) act as attorney-in-fact of agent in the purchase or sale or other
disposition of investments, and in the handling, prosecuting or other enforcement of any lien or
security securing investments; and (viii) assist in the performance of such ministerial functions
necessary in the management of the 4M Fund as may be agreed upon with the Trustees.
(b) The manner of employing, engaging, compensating, transferring, or discharging
any Person as an employee of the 4M Fund shall be subject to Minnesota Law. For purposes of
the preceding sentence, "employee of the 4M Fund" shall not include independent contractors such
as the Adviser, the Administrator, the Custodian, counsel or independent accountants and their
respective employees.
2.17 Insurance. The Trustees shall have full and complete power to purchase and pay
for, entirely out of 4M Fund Property, insurance policies insuring the 4M Fund and the Trustees,
officers, employees and agents of the 4M Fund 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 the 4M Fund or any such Person as Trustee,
officer, employee and agent, including any action taken or omitted that may be determined to
constitute negligence, whether or not the 4M Fund would have the power to indemnify such Person
against such liability.
2.18 Seal. The Trustees shall have full and complete power to adopt and use a seal for
the 4M Fund, but, unless otherwise required by the Trustees, it shall not be necessary for the seal
to be placed on, and its absence shall not impair the validity of, any document, instrument or other
paper executed and delivered by or on behalf of the 4M Fund.
2.19 Indemnification. In addition to the mandatory. indemnification provided for in
Section 5.3 hereof, the Trustees shall have full and complete power, to the extent permitted by
applicable Laws, to indemnify or enter into agreements with respect to indemnification with any
Person with whom the 4M Fund has dealings, including, without limitation, the Adviser, the
Administrator, and the Custodian, to such extent as the Trustees shall determine.
2.20 Remedies. Notwithstanding any provision in this Declaration of Trust, when the
Trustees deem that there is a significant risk that an obligor to the 4M Fund may default or is in
default under the terms of any obligation to the 4M Fund, the Trustees shall have full and
complete power to pursue any remedies permitted by Law which, in their sole judgment, are in the
interests of the 4M Fund, and the Trustees shall have full and complete power to enter into any
investment, commitment or obligation of the 4M Fund resulting from the pursuit of such remedies
as are necessary or desirable to dispose of property acquired in the pursuit of such remedies.
2.21 Information Statement. The Trustees shall have full and complete power to
prepare, publish and distribute an Information Statement regarding the 4M Fund and to amend or
supplement the same from time to time.
15
2.22 Further Powers. The Trustees shall have full and complete power to take all such
actions, do all such matters and things and execute all such instruments as they deem necessary,
proper or desirable in order to carry out, promote or advance the interests and purposes of the 4M
Fund although such actions, matters or things are not herein specifically mentioned. Any determin-
ation as to what is in the best interests of the 4M Fund made by the Trustees in good faith shall
be conclusive. In construing the provisions of this Declaration of Trust, the presumption shall be
in favor of a grant of power to the Trustees. The Trustees shall not be required to obtain any
court order to deal with the 4M Fund Property.
2.23 Compliance with Laws., The Trustees shall at all times exercise all powers granted
hereunder in compliance with, and the operations of the 4M Fund shall at all times be conducted in
accordance with, the applicable Laws of the State of Minnesota.
2.24 Tax or Aid or Revenue Anticipation Borrowing. Notwithstanding the provisions of
Section 2.10 or 4.2 or any other provision of this Declaration, the Trustees shall have full and
complete power to borrow money or incur indebtedness as a part of a program of tax or aid or
revenue anticipation borrowing by Participant Municipalities. They shall have the power to issue
such obligations on behalf of the Participants, coordinate the issuance of such obligations by the
Participants, to become members of joint powers entities authorized to issue or coordinate the.
issuance of such obligations, or to enter into contracts or agreements of any nature authorized by
law related to the issuance of such obligations. The assets of the 4M Fund itself shall not be
pledged by the Trustees to the repayment of any portion of such borrowing and any obligations
issued shall not constitute a debt of the 4M Fund, shall not be payable from or be a charge upon
any assets of the 4M Fund, shall not give rise to any pecuniary liability of the 4M Fund, and shall
not be enforceable against any property of the 4M Fund, other than amounts received from
participating Municipalities inn connection with that anticipation borrowing program which are
pledged to the repayment of the borrowing or obligations. The Trustees shall have such powers as
necessary to conduct or participate in such anticipation borrowing programs as approved by the
Trustees, including a program of investment of obligation proceeds.
ARTICLE III
Technical Advisory Board, Investment Adviser, Administrator, and Custodian
3.1 Appointment. The Trustees are responsible for the general investment policy and
program of the 4M Fund and for the general supervision and administration of the business and
affairs of the 4M Fund conducted by the officers, agents, employees, investment advisers, adminis-
trators, or independent contractors of the 4M Fund. The Trustees are not required personally to
conduct all of the routine business of the 4M Fund and, consistent with their ultimate
responsibility as stated herein, the Trustees may appoint, employ or contract with an Adviser as an
investment adviser to the Trustees, an Administrator as an administrator for the 4M Fund and a
Custodian. The trustees may grant or delegate such authority to the Adviser and the Administrator
(pursuant to the terms of Section 2.16 hereof) or to any other Person the services of whom are
obtained by the Adviser or the Administrator, as the Trustees may, in their sole discretion, deem to
be necessary or desirable, for the efficient management of the 4M Fund, without regard to whether
such authority is normally granted or delegated by trustees or other fiduciaries. The Trustees may
appoint one or more persons to serve jointly as Co -Advisers and one or more persons to serve
jointly as Co -Administrators. The same person may serve simultaneously as the Administrator and
as the Adviser, but no person serving as the Administrator or as the Adviser may serve as the
Custodian. Piper Capital Management, Inc., a subsidiary of Piper Jaffray, Inc., a corporation
organized and existing under the Laws of the State of Delaware, is appointed as the initial
16
Administrator and Adviser for the 4M Fund. Marquette Bank Minneapolis is appointed as the
initial Custodian for the 4M Fund. The Trustees shall appoint a Technical Advisory Board to assist
the Trustees in the development of policies and the overseeing and reviewing of the activities of
the 4M Fund. The Technical Advisory Board shall be made up of such individuals as the Trustees
deem advantageous to the Fund. The composition of the Technical Advisory Board may be changed
from time to time in the discretion of the Trustees.
3.2 Duties of the Adviser. The duties of the Adviser shall be those set forth in the
Investment Advisory Agreement to be entered into between the 4M Fund and the Adviser. Such
duties may be modified by the Trustees, from time to time, by the amendment of the Investment
Advisory Agreement. Subject to Article IV hereof, the Trustees may authorize the Adviser to effect
purchases, sales, or exchanges of 4M Fund Property on behalf of the Trustees or may authorize any
officer, employee, agent or Trustee to effect such purchases, sales: or exchanges pursuant to
recommendations of the Adviser, all without further action by the Trustees. Any and all of such
purchases, sales, and exchanges shall be deemed to be authorized by all the Trustees. The Invest-
ment Advisory Agreement may authorize the Adviser to employ other persons to assist it in the
performance of its duties. The Investment Advisory Agreement shall provide that it may be
terminated at any time without cause and without the payment of any penalty by the 4M Fund on
sixty (60) days written notice to the Adviser.
3.3 Duties of the Administrator. The duties of the Administrator shall be those set
forth in the Administration Agreement to be entered into between the 4NI Fund and the Adminis-
trator. Such duties may be modified by the Trustees, from time to time, by the amendment of the
Administration Agreement. The Administration Agreement may authorize the. Administrator to
employ other persons to assist it in the performance of its duties. The Administration Agreement
shall provide that it may be terminated at any time without cause and without the payment of any
penalty by the 4M Fund on sixty (60) days written notice to the Administrator.
3.4 Duties of Custodian. The duties and qualifications of the Custodian shall be those
set forth in Article 11 herein.
3.5 Successors. In the event that, at any time, the position of Adviser, Administrator,
or Custodian shall become vacant for any reason, the Trustees may appoint, employ or contract
with a successor Adviser, Administrator, or Custodian. A predecessor shall assist and cooperate
with the 4M Fund in the smooth and orderly transition in the event a successor Adviser,
Administrator, or Custodian is appointed for any reason.
ARTICLE IV
Investments
4.1 Statement of Tnvestment Policy -and Obiective. Subject to the prohibitions and
restrictions contained in Section 4.2 hereof, the general investment policy and objective of the
Trustees shall be to provide to the Participants of the 4M Fund the highest possible investment
yield, while maintaining liquidity and preserving capital by investing in Permitted Investments in -
accordance with applicable provisions of Law, as may be set forth more fully in the 4M Fund's
Information Statement, as the same may be amended from time to time.
4.2 Restrictions Fundament:►! to the 4M .Fund. Notwithstanding anything in this
Declaration of Trust which may be deemed to authorize the contrary, the 4M Fund:
17
(i) May not make any investment other than investments authorized by the provi-
sions 'of Law applicable to the investment of funds by the Participants, as the same may be
amended from time to time;
(ii) May not purchase any Permitted Investment which has a maturity date more
than one year from the date of the 4M Fund's purchase thereof, unless subject, at the time of such
purchase by the 4M Fund, to an irrevocable agreement on the part of a Responsible Person to
purchase such Permitted Investment from the 4M Fund within one (1) year;
(iii) May not purchase any Permitted Investment if the effect of such purchase by
the 4M Fund would be to make the average dollar weighted maturity of the 4M Fund's investment
portfolio greater than ninety (90) days, provided, however, that in making such determination any
Permitted Investment which is subject to an irrevocable agreement of the nature referred to in the
preceding clause (ii) shall be deemed to mature on the day on which the 4M Fund is obligated to
sell such Permitted Investment back to a Responsible Person or the day on which the 4M Fund may
exercise its rights under such agreement to require the purchase of such Permitted Investment by a
Responsible Person;
(iv) May not borrow money or incur indebtedness except to facilitate as a tempor-
ary measure:
(a) withdrawal requests which might otherwise require unscheduled dispositions
of portfolio investments;
(b) for a period not to exceed one business day, withdrawal requests pending
receipt of collected funds from investments sold on the date of the withdrawal requests or with-
drawal requests from Participants who have notified the 4M Fund of their intention to deposit
funds in their accounts on the date of the withdrawal requests; or
(c) for a period not to exceed one business day, the purchase of Permitted
Investments pending receipt of collected funds from Participants who have notified the 4M Fund of
their intention to deposit funds in their accounts on the date of the purchase of the Permitted
Investments;
(v) May not make loans, provided that the 4M Fund may make Permitted Invest-
ments;
(vi) May not hold or provide for the custody of any 4M Fund Property in a manner
not authorized by Law or by any institution or Person not authorized by Law;
(vii) Except as permitted by Section 2.2(b)(ii) hereof, may not purchase securities or
shares of investment companies or any entities similar to the 4M Fund; and
(viii) May not pledge assets except to secure indebtedness permitted by (iv) of this
Section 4.2; however in the case of indebtedness secured under Section 4.2(iv)(b) or (c) hereof, it
may pledge assets only to the extent of the actual funds in the account of a participant on whose
behalf the permitted indebtedness was incurred plus an amount equal to that amount which that
Participant has notified the- 4M Fund that it intends to deposit in its account on that date.
For the purposes of this Section 4.2, the phrase "Responsible Person" shall mean• a
person with which the 4M Fund is authorized to enter into agreements pursuant to Section
2.2(b)(vii) hereof.
18
4.3 Amendment of Restrictions. The restrictions set forth in Section 4.2 hereof are
fundamental to the operation and activities of the 4M Fund and may not be changed without the
affirmative vote of a majority of the Participants entitled to vote, except that such restrictions
may be changed by the Trustees so as to make them more restrictive when necessary to conform
the investment program and activities of the 4M Fund to the Laws of the State of Minnesota and
the United States of America as they may from time to time be amended.
ARTICLE V
Limitations of Liability
5.1 Liabilitv to Third Persons. No Participant shall be subject to any personal liability
whatsoever, in tort, contract or otherwise to any other Person or Persons in connection with 4M
Fund Property or the affairs of the 4M Fund; and no Trustee, officer, employee or agent (including,
without limitation, the Adviser, the Administrator and the Custodian) of the 4M Fund shall be
subject to any personal liability whatsoever in tort, contract or otherwise, to any other Person or
Persons in connection with 4M Fund Property or the affairs of the 4M Fund, except that each shall.
be personally liable for his bad faith, willful misconduct, gross negligence or reckless disregard of
his duties or for his failure to act in good faith in the reasonable belief that his action was in the
best interests of the 4M Fund and except that the Investment Advisory Agreement and the Admin-
istration Agreement shall provide for the personal liability of the Adviser or the Administrator, as
the case may be, for its willful or negligent failure to take reasonable measures to restrict
investments of 4M Fund Property to those permitted by Law and this Declaration of Trust.
5.2 Liability to the 4M Fund or to the Participants. No Trustee, officer, employee or
agent (including, without limitation, the Adviser, the Administrator and the Custodian) of the 4M
Fund shall be liable to the 4M Fund or to any Participant, Trustee, officer, employee or agent
(including, without limitation, the Adviser, the Administrator and the Custodian) of the 4M Fund
for any action or failure to act (including, without limitation, the failure to compel in any way any
former or acting Trustee to redress any breach of trust) except for his own bad faith, willful
misfeasance, gross negligence or reckless disregard of his duties and except that the Investment
Advisory Agreement and the Administration Agreement shall provide for the personal liability of the
Adviser or the Administrator, as the case may be, for its willful or negligent failure to take
reasonable measures to restrict investments of 4M Fund Property to those permitted by Law and
this Declaration of Trust; provided, however, that the provisions of this Section 5..2 shall not limit
the liability of any agent (including, without limitation, the Adviser, the Administrator and the
Custodian) of the 4M Fund with respect to breaches by it of a contract between it and the 4M
Fund.
5.3 Indemnification.
(a) The 4M Fund shall indemnify and hold each Participant harmless from and
against all claims and liabilities, whether they proceed to judgment or are settled or otherwise
brought to a conclusion, to which such Participant may become subject by reason of its being or
having been a Participant, and shall reimburse such Participant for all legal and other expenses
reasonably incurred by it in connection with any such claim or liability. The rights accruing to a
Participant under this Section 5.3 shall not exclude any other right to which such Participant may
be lawfully entitled, nor shall anything herein contained restrict the right of the 4M Fund to
indemnify or reimburse a Participant in any appropriate situation even though not specifically
provided herein.
19
(b) The 4M Fund shall indemnify each of its Trustees and officers, and employees
and agents (including, without limitation, the Adviser, the Administrator and the Custodian)
designated by the Board of Trustees to receive such indemnification, against all liabilities and
expenses (including, without limitation, amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and counsel fees) reasonably incurred by him in connection with the defense
or disposition of any action, suit or other proceeding by the 4M Fund or any other Person, whether
civil or criminal, in which he may be involved or with which he may be threatened, while in office
or thereafter, by reason of his being or having been such a Trustee, officer, employee or agent
(including, without limitation, the Adviser, the Administrator and the Custodian), except as to any
matter as to which he acted in bad faith or with willful misfeasance or reckless disregard of, his
duties or gross negligence; in addition, in the case of the Adviser, Administrator, or the Custodian
in willful or negligent violation of the restrictions on investments of the 4M Fund Property;
provided, however, that the provisions of this Section 5.3 shall not be construed to permit the
indemnification of any agent (including, without limitation, the Adviser, the Administrator and the
Custodian) of the 4M Fund with respect to breaches by it of a contract between it and the 4M
Fund; and further provided, however, that as to any matter disposed of by a compromise payment
by such Trustee, officer, employee or agent (including the Adviser, Administrator or the Custodian),
pursuant to a consent decree or otherwise, no indemnification either for said payment or for any.
other expenses shall be provided unless: 1) The 4M Fund receives a written opinion from
independent counsel approved by the Trustees to the effect that if the matter had been
adjudicated, the defenses that could have been presented on behalf of such Trustee, officer,
employee or agent (including the' Adviser, the Administrator or the Custodian), were meritorious;
and 2) If in the opinion of the Board of Trustees, the Trustee, officer, employee or agent
(including the Adviser, the Administrator of the Custodian) were not acting in bad faith or with
willful misfeasance or reckless disregard of their duties or gross negligence. The rights accruing to
any Trustee, officer, employee or agent (including, without limitation, the Adviser, the
Administrator and the Custodian) under the provisions of this paragraph (b) of this Section 5.3
shall not exclude any other right to which he may be lawfully entitled; provided, however, that no
Trustee, officer, employee or agent may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the 4M Fund Property, and no
Participant shall be personally liable to any Person with respect to any claim for indemnity or
reimbursement or otherwise. The Trustees may make advance payments in connection with
indemnification under this paragraph (b) of this Section 5.3, provided that the indemnified Trustee,
officer, employee or agent (including, without limitation, the Adviser, the Administrator and the
Custodian) shall have given a written undertaking to reimburse the 4M Fund in the event that it is
subsequently determined that he is not entitled to such indemnification.
(c) Any action taken by, or conduct on the part of, the Adviser, the Administra-
tor, a Trustee, an officer, an employee or an agent (including, without limitation, the Adviser, the
Administrator and the Custodian) of the 4M Fund in conformity with, or in good faith reliance
upon, the provisions of Section 2.14 or Section 5.7 hereof shall not, for the purpose of this
Declaration of Trust (including, without limitation, Sections 5.1 and 5.2 and this Section 5.3)
constitute bad faith, willful misfeasance, gross negligence or reckless disregard of his duties.
5.4 Surety Bonds. No Trustee shall, as such, be obligated to give any bond or surety or
other security for the performance of any of his duties.
5.5 Apparent Authority. No purchaser, seller, transfer agent or other Person dealing
with the Trustees or any officer, employee or agent of the 4M Fund shall be bound to make any
inquiry concerning the validity of any transaction purporting to be made by the Trustees or by
such officer, employee or agent or make inquiry concerning or be liable for the application of
20
money or property paid, transferred or delivered to or on the order of the Trustees or of such
officer, employee or agent.
5.6 Recitals. Any written instrument creating an obligation of the 4M Fund shall be
conclusively taken to have been executed by a Trustee or an officer, employee or agent of the 4M
Fund only in his capacity as a Trustee under this Declaration of Trust or in his capacity as an
officer, employee or agent of the 4M Fund. Any written instrument creating an obligation of the
4M Fund shall refer to this Declaration of Trust and contain a recital to the effect that the
obligations thereunder are not personally binding upon, nor shall resort be had to the property of,
any of the Trustees, Participants, officers, employees or agents of the 4M Fund, and that only the
4M Fund Property or a specific portion thereof shall be bound, and such written instrument may
contain any further similar recital which may be deemed appropriate; provided, however, that the
omission of any recital pursuant to this Section 5.6 shall not operate to impose personal liability on
any of the Trustees, Participants, officers, employees or agents of the 4M Fund.
5.7 Reliance on Experts. Etc. Each Trustee and each officer of the 4M Fund shall, in
the performance of his 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
records of the 4M Fund, upon an opinion of counsel or upon reports made to the 4M Fund by any
of its officers or employees or by the Adviser, the Administrator, the Custodian, accountants,
appraisers or other experts or consultants selected with reasonable care by the Trustees or officers
of the 4M Fund.
5.8 Liability Insurance. • The Trustees shall maintain insurance for the protection of the
4M Fund Property and the Trustees, Participants, officers, employees and agents (not including
Advisor, Administrator, or Custodian) of the 4M Fund in such amount as the Trustees shall deem
adequate to cover all foreseeable tort and contract liability to the extent available at reasonable
rates.
5.9 No Waiver. Nothing in this Declaration of Trust shall be construed as constituting
the waiver of any immunity from liability available to the 4M Fund or the Trustees, Participants,
officers, employees or agents of the 4M Fund pursuant to any applicable provision of Law.
ARTICLE VI
Interests of Participants
6.1 General. The beneficial interest of the Participants hereunder in the 4M Fund
Property and the earnings thereon shall, for convenience of reference, be divided into Shares,
which shall be used as units to measure the proportionate allocation to the respective Participants
of the beneficial interest hereunder. The number of Shares that may be used to measure and
represent the proportionate allocation of beneficial interest among the Participants is unlimited.
All Shares shall be of one class representing equal distribution, liquidation and other rights. The
beneficial interest hereunder measured by the Shares shall not entitle a Participant to preference,
preemptive, appraisal, conversion, or exchange rights of any kind with respect to the 4M Fund or
the 4M Fund Property. Title to the 4M Fund Property of every description and the right to
conduct any affairs hereinbefore described are vested in the Trustees on behalf and for the
beneficial interest, of the Participants, and the Participants shall have no interest therein other
than the beneficial interest conferred hereby and measured by their Shares, and they shall have no
right to call for any partition or division of any property, profits, rights, or interests of the 4M
Fund nor can they be called upon to share or assume any losses of the 4M Fund or suffer an
21
assessment of any kind by virtue of the allocation of Shares to them, except as provided in Section
10.2 Hereof.
6.2 Allocation of Shares
(a) The Trustees shall credit a Participant with additional Shares upon receipt of
funds (including, without limitation, income from the investment of 4M Fund Property) for the
account of such Participant, based on the net asset value per Share as determined pursuant to
Section 10.1 hereof. In connection with any allocation of Shares, the Trustees may allocate
fractional Shares. The Trustees may from time to time adjust the total number of Shares allocated
without thereby changing the proportionate beneficial interests in the 4M Fund. Reductions or
increases in the number of allocated Shares may be made in order to maintain a constant net asset
value per Share as set forth in Section 10.2 hereof. Shares shall be allocated and reduced in
numbers as whole Shares and/or one hundredths (1/100ths) of a Share or multiples thereof.
(b) Shares may be allocated only to a Municipality which has become a Participant
of the 4M Fund in accordance with Section 1.2 hereof. Each Participant may establish more than
one account within the 4M Fund for such Participant's convenience.
(c) The minimum amount of funds which may be placed in the 4M Fund by a
Participant at any one time shall be as determined by the Trustees from time to time. Unless
otherwise determined by the Trustees pursuant to this paragraph (c) of this Section 6.2, the
minimum amount of funds which may be placed in the 4M Fund by a Participant at any one time
shall be One Dollar ($1.00).
6.3 Evidence of Share Allocation. Evidence of Share allocation shall be reflected in the
Share Register maintained by or on behalf of the 4M Fund pursuant to Section 7.1 hereof, and the
4M Fund shall not be required to issue certificates as evidence of Share allocation.
6.4 Reduction in Number of Shares to Maintain Constant Net Asset Value. The Shares
of the 4M Fund shall be subject to reduction in number pursuant to the procedure for reduction of
outstanding Shares set forth in Section 10.2 hereof in order to maintain the constant net asset
value per Share.
6.5 Withdrawals. Funds may be withdrawn from the 4M Fund at the option of a
Participant, upon and subject to the terms and conditions provided in this Declaration of Trust.
The 4M Fund shall, upon application of any Participant, promptly pay to such Participant the
amount requested and shall reduce the number of Shares allocated to such Participant to the
number of Shares which shall reflect such Participant's proportionate interest in the net assets of
the 4M Fund after such withdrawal of funds. The procedures for effecting a withdrawal shall be as
adopted by the Trustees 'and as set forth in the Information Statement of the 4M Fund, as the
same may be amended from time to time; provided, however, that such procedures shall not be
structured so as to substantially and materially restrict the ability of the Participants to withdraw
funds from the 4M Fund.
6.6 Suspension of Right of Withdrawal; Postoonement of Payment. Each Participant, by
its adoption of this Declaration of Trust, agrees that the Trustees may, without the necessity of a
formal meeting of the Trustees, temporarily suspend the right of withdrawal or postpone the date
of payment pursuant to withdrawal requests for the whole or any part of any period (i) during
which there shall have occurred any state of war, national emergency, banking moratorium or
suspension of payments by banks in the State of Minnesota or any general suspension of trading or
limitation of prices on the New York or American Stock Exchange (other than customary week -end
22
and holiday closing) or (ii) during which any financial emergency situation exists as a result of
whicli disposal by the 4M Fund of 4M Fund Property is not reasonably practicable because of the
substantial losses which might be incurred or it is not reasonably practicable for the 4M Fund
fairly to determine the value of its net assets. Such suspension or postponement shall not alter or
affect a Participant's beneficial interest hereunder as measured by its Shares or the accrued
interest and earnings thereon. Such suspension or payment shall take effect at such time as the
Trustees shall specify but not later than the close of business on the business day next following
the declaration of suspension, and thereafter there shall be no right of withdrawal or payment until
the Trustees shall declare the suspension or postponement at an end, except that the suspension or
postponement shall terminate in any event on the first day on which the period specified in clause
(i) or (ii) above shall have expired (as to which, the determination of the Trustees shall be
conclusive). In the case of a suspension of the right of withdrawal or a postponement of payment
pursuant to withdrawal requests, a Participant may either (i) withdraw its request for withdrawal or
(ii) receive payment based on the net asset value existing after the termination of the suspension.
6.7 Minimum Withdrawal. There shall be no minimum amount which may be withdrawn
from the 4M Fund at any one time at the option of a Participant; provided, however, that no
request by a Participant for the withdrawal of less than one dollar ($1.00) need be honored.
6.8 Defective Withdrawal Requests. In the event that a Participant shall submit a
request for the withdrawal of a greater amount than is then credited to the account of such
Participant, such request shall not be honored, and each Participant, by its adoption of this
Declaration of Trust, agrees that the Trustees shall have full and complete power to withdraw
funds from the account of a Participant, and to reduce proportionately the number of Shares
allocated to such Participant in accordance with Section 6.5 hereof, in an amount sufficient to
reimburse the 4M Fund for any fees, expenses, costs or penalties actually incurred by the 4M Fund
as a result of such defective withdrawal request.
6.9 Allocation of Certain Exnenses. Each Participant will, at the discretion of the 4M
Fund, indemnify the 4M Fund against all expenses and losses resulting from indebtedness incurred
on that Participant's behalf under Section 4.2(iv)(b) or (c) hereof. Each Participant authorizes the
Trustees to reduce its Shares to the number of Shares which reflects that Participant's proportion-
ate interest in the net assets of the 4M Fund after allocation of those expenses and losses to it.
ARTICLE VII
Record of Shares
7.1 Share Register. The Share Register shall be kept by or on behalf of the Trustees,
under the direction of the Trustees, and shall contain (i) the names and addresses of the Partici-
pants, (ii) the number of Shares representing their respective beneficial interests hereunder and (iii)
a record of all allocations and reductions thereof. Such Share Register shall be conclusive as to
the identity of the Participants to which the Shares are allocated. Only Participants whose
allocation of Shares is recorded on such Share Register shall be entitled to receive distributions
with respect to Shares or otherwise to exercise or enjoy the rights and benefits related to the
beneficial interest hereunder represented by the Shares. No Participant shall be entitled to receive
any distribution, nor to have notices given to it as herein provided, until it has given its appro-
priate address to such officer or agent of the Fund as shall keep the Share Register for entry
23
thereon.
7.2 Registrar. The Trustees shall have full and complete power to employ a registrar.
Unless otherwise determined by the Trustees, the Share Register shall be kept by the Administrator
which shall serve as the registrar for the 4M Fund. The registrar shall record the original
allocations of Shares in the Share Register. Such registrar shall perform the duties usually
performed by registrars of certificates and shares of stock in a corporation, except as such duties
may be modified by the Trustees.
7.3 Owner of Record. No Person becoming entitled to any Shares in consequence of the
merger, reorganization, consolidation, bankruptcy or insolvency of any Participant or otherwise, by
operation of Law, shall be recorded as the Participant to which such Shares are allocated and shall
only be entitled to receive for such Shares the amount credited to the account of the Participant
whose beneficial interest in the 4M Fund is represented by such Shares. Until the Person becoming
entitled to receive such amount shall apply for the payment thereof and present any proof of such
entitlement as the Trustees may in their sole discretion deem appropriate, the Participant of record
to which such Shares are allocated shall be deemed to be the Participant to which such Shares are
allocated for all purposes hereof, and neither the Trustees nor the registrar nor any officer or
agent of the 4M Fund shall be affected by any notice of such merger, reorganization, consolidation,.
bankruptcy, insolvency or other event.
7.4 No Transfers of Shares. The beneficial interests measured by the Shares shall not
be transferrable, in whole or in part, other than to the 4M Fund itself for purposes of effectuating
a withdrawal of funds.
7.5 Limitation of Fiduciary Resoonsibility. The Trustees shall not, nor shall the
Participants or any officer, registrar or other agent of the 4M Fund, be bound to see to the
execution of any trust, express, implied or constructive, or of any charge, pledge or equity to
which any of the Shares or any interest therein are subject, or to ascertain or inquire whether any
withdrawal of funds by any Participant or its representatives is authorized by such trust, charge,
pledge or equity, or to recognize any Person as having any interest .therein except the Participant
recorded as the Participant to which such Shares are allocated. The receipt of the Participant in
whose name any Share is recorded or of the duly authorized agent of such Participant shall be a
sufficient discharge for all moneys payable or deliverable in respect of such Shares and from all
liability to see to the proper application thereof.
7.6 Notices. Any and all notices to which Participants hereunder may be entitled and
any and all communications shall be deemed duly served or given if mailed, postage pre -paid,
addressed to Participants of record at their last known post office addresses as recorded on the
Share Register provided for in Section 7.1 hereof.
ARTICLE VIII
Participants
8.1 Voting. Each Participant shall be entitled to one vote as a matter of right with
respect to the following matters: (i) amendment of this Declaration of Trust or termination of the
4M Fund as provided in Section 4.3 and Section 13.1 hereof; and (ii) reorganization of the 4M Fund
as provided in Section 13.2 hereof. It shall not be necessary for any minimum number of Shares to
be allocated to a Participant for the Participant to be entitled to vote. Participants shall not be
entitled to cumulative voting with respect to any matter.
24
8.2 Right to Initiate a Vote of the Participants. The Participants shall, by an instru-
ment or concurrent instruments in writing delivered to the Board of Trustees signed by at least ten
percent (10%) of the Participants, have the right to initiate a vote of the Participants as to any
matter described in clause (i) or clause (ii) of Section 8.1 hereof. Within twenty (20) days of
receipt of such instrument or instruments, the Board of Trustees shall cause a ballot to be sent to
each Participant, setting forth the matter to be voted on and the manner in which such ballots
should be executed and delivered.
8.3 Inspection of Records. The records of the 4M Fund shall be open to inspection at
all reasonable times pursuant to Minnesota Statutes, Chapter 13.
8.4 Meetings of Participants.
(a) Meetings of the Participants may be called at any time by a majority of the ,
Trustees and shall be called by any Trustee upon written request of not less than ten percent (10%)
of the Participants, such request specifying the purpose or purposes for which such meeting is to
be called. Any such meeting shall be held within the State of Minnesota at such place, on such
day and at such time as the Trustees shall designate.
(b) A majority of the Participants entitled to vote at such meeting present in
person (including, if permitted by applicable Law, participation by conference telephone or similar
communications equipment by means of which all: Persons participating in the meeting can hear each
other) or by proxy shall constitute a quorum at any meeting of Participants.
8.5 Notice of Meetinpas and Votes. Notice of all meetings of the Participants, stating
the time, place and purposes of the meeting, and notice of any vote without a meeting, stating the
purpose and method thereof shall be given by the Trustees by mail to each Participant at its
registered address, mailed at least ten (10) days and not more than thirty (30) days before the
meeting or the day by which votes must be cast. Only the business stated in the notice of a
meeting shall be considered at such meeting. Any adjourned meeting may be held as adjourned
without further notice. Any notice required by any 'open meeting", "sunshine" or similar law,
whether now or hereafter in effect, shall also be given.
8.6 Record Date for Meetings and Votes. For the purposes of determining the Partici-
pants that are entitled to vote or act at any meeting or any adjournment thereof, or who are
entitled to participate in any vote, or for the purpose of any other action, the Trustees may from
time to time fix a date not more than thirty (30) days prior to the date of any meeting or vote of
Participants or other action as a record date for the determination of Participants entitled to vote
at such meeting or any adjournment thereof or to cast a ballot in such vote or to be treated as
Participants of record for purposes of such other action. Any Participant which was a Participant
at the time so fixed shall be entitled to vote at such meeting or any adjournment thereof, or to
cast a ballot in such vote, even though it then had no Shares allocated to it or has since that date
redeemed its Shares. No Participant becoming such after that date shall be so entitled to vote at
such meeting or any adjournment thereof or to cast a ballot in such vote or to be treated as a
Participant of record for purposes of such other action.
8.7 Proxies. At any meeting of Participants, if permitted by applicable Law, any
Participant entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at
any meeting unless it shall have been placed on file with the Secretary of the, 4M Fund, or with
such other officer or agent of the 4M Fund as the Secretary of the 4M Fund may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a resolution of a
25
majority of the Trustees, proxies may be solicited in the name of one or more of the officers of
the 4M Fund. All proxies shall be revocable at the option of the Participant.
8.8 Number of Votes. Only Participants of record shall be entitled to vote and each
Participant shall be entitled to one vote without regard to the number of Shares allocated to it, if
any. A proxy purporting to be executed by or on behalf of a Participant shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the
challenger.
8.10 Reports. The Trustees shall cause to be prepared at least annually (i) a report of
operations containing a statement of assets and liabilities and statements of operations and of
changes in net assets of the 4M Fund prepared in conformity with generally accepted accounting
principals and (ii) an opinion of an independent certified public accountant on such financial
statements based on an examination of the books and records of the 4M Fund made in accordance
with generally accepted auditing standards. A signed copy of such report and opinion shall be filed
with the Trustees within ninety (90) days after the close of the period covered thereby. Copies of
such reports shall be mailed to all Participants of record within a reasonable period preceding the
annual meeting or vote of the Participants. The Trustees shall, in addition, furnish to the Partici-
pants, at least quarterly, an interim report containing an unaudited balance sheet of the Fund as at-
the
t.the end of such quarterly period and statements of operations and changes in net assets for the
period from the beginning of the then current fiscal year to the end of such quarterly period.
ARTICLE IX
Trustees and Officers
9.1 Number and Qualification.
(a) Subject to the power of the Participants to amend this Declaration of Trust,
the Board of Directors of the League of Minnesota Cities shall act as the initial governing body of
the 4M Fund and shall be the Board of Trustees. The by-laws and constitution of the League of
Minnesota Cities shall govern the operation and make-up of the Trustees and Officers of the 4M
Fund. ,
(b) The Trustees, in their capacity as Trustees, shall not be required to devote
their entire time to the business and affairs of the 4M Fund.
(c) The Executive Director of the League of Minnesota Cities may be an ex officio
non-voting member of the Board of Trustees.
9.2 Meetinpas.
(a) Meetings of the Trustees shall be held from time to time upon the call of the
Chairman, the Vice Chairman, the Secretary or any two trustees. Regular meetings of the Trustees
may be held without call or notice at a time and place fixed by the By -Laws or by resolution of
the Trustees. Notice of any other meeting shall be mailed or otherwise given not less than 48
hours before the meeting but may be waived in writing by any Trustee either before or after such
meeting. Any notice required by any 'open meeting", "sunshine" or similar Law, whether now or
hereafter in effect, shall also be given. The attendance of a Trustee at a meeting shall constitute
a waiver of notice of such meeting except where a Trustee attends a meeting for the express
purpose of objecting to the transaction of any business on the ground that the meeting has not
26
been lawfully called or convened. The Trustees may act with or, if permitted by applicable Law,
without a meeting. A quorum for all meetings of the Trustees shall be a majority of the Trustees.
Subject to Section 2.14 hereof and unless specifically provided otherwise in this Declaration of
Trust, any action of the Trustees may be taken at a meeting by vote of a majority of the Trustees
present (a quorum being present) or, if permitted by applicable Law, without a meeting, by written
consents of a majority of the Trustees. Any agreement or other instrument or writing executed by
one or more of the Trustees or by any authorized Person shall be valid and binding upon the
Trustees and upon the 4M Fund when authorized or ratified by action of the Trustees as provided
in this Declaration of Trust.
(b) Any committee of the Trustees may act with or without a meeting. A quorum
for all meetings of any such committee shall be a majority of the members thereof. Notice of such
meeting, including such notice as may be required by an 'open meeting", "sunshine" or similar Law,
shall be given as provided in Section 9.2(a). Unless otherwise specifically provided in this
Declaration of Trust, any action of any such committee may be taken at a meeting by vote of a
majority of the members present (a quorum being present) or, without a meeting, by written
consent of a majority of the members.
(c) With respect to actions of the Trustees and any committee thereof, Trustees.
who are affiliated within the meaning of Section 2.14 hereof or otherwise interested in any action
to be taken may be counted for quorum purposes under this Section 9.2 and shall be entitled to
vote.
(d) All or any one or more Trustees may, if permitted by applicable Law, partici-
pate in a meeting of the Trustees or any committee thereof by utilizing conference telephone or
similar communications equipment by means of which all persons participating in the meeting,
including members of the public, can hear each other and participate in a meeting pursuant to such
communications shall constitute presence in personal at such meeting. The minutes of any meeting
of Trustees held by utilizing such communications equipment shall be prepared in the same manner
as those of a meeting of Trustees held in person.
9.3 Officers. The Officers of the 4M Fund shall be the same as the officers of the
Board of Directors of the League of Minnesota Cities. The executive director of the League of
Minnesota Cities shall act as secretary of the 4M Fund. The Trustees may elect or appoint, such
other officers or agents, who shall have such powers, duties and responsibilities as the Trustees
may deem to be advisable and appropriate.
9.4 Committees. The Trustees may elect from time to time from their own number
committees consisting of one or more persons, the number composing such committees and the
powers conferred upon the same to be determined by vote of the Trustees.
9.5 Reports. The Trustees shall cause to be prepared at least annually (i) a report of
operations containing a statement of assets and liabilities and statements of operations and of
changes in net assets of the 4M Fund prepared in conformity with generally accepted accounting
principles and (ii) an opinion of an independent certified public accountant on such financial
statements based on an examination of the books and records of the 4M Fund made in accordance
with generally accepted auditing standards. A signed copy of such report and opinion shall be filed
with the Trustees within ninety (90) days after the close of the period covered thereby. Copies of
such reports shall be mailed to all Participants of record within a reasonable period preceding the
annual election of Trustees. The Trustees shall, in addition, furnish to the \participants, at least
quarterly, an interim report containing an unaudited balance sheet of the 4M Fund as at the end of
such quarterly period and statements of operations and changes in net assets for the period from
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the beginning of the then current fiscal year to the end of such quarterly period.
ARTICLE X
Determination of Net Asset Value and Net Income;
Distributions to Participants
10.1 Net Asset Value. The net asset value of each allocated Share of the 4M Fund shall
be determined once on each business day at such time as the Trustees by resolution may determine.
The method of determining net asset value shall be established by the Trustees and shall be set
forth in the Information Statement as the same may be amended from time to time. The duty to
make the daily calculations may be delegated by the Trustees to the Adviser, the Administrator, the
Custodian or such other Person as the Trustees by resolution may designate.
10.2 Constant Net Asset Value: Reduction of Allocated Shares.
(a) The Trustees shall have full and complete power to determine the net income
(including unrealized gains and losses on the portfolio assets) of the 4M Fund once on each
business day as provided in Section 10.1 hereof and, upon each such determination such net income.
shall be credited proportionately to the accounts of the Participants in such a manner,and with the
result, that the net asset value per Share of the 4M Fund shall remain at a constant dollar value.
The accounting method used for the determination of the net income of the 4M Fund and the
crediting thereof proportionately to the respective accounts of the Participants shall be determined
by the Trustees and shall be set forth in the Information Statement as the same may be amended
from time to time. The duty to make the daily calculations may be delegated by the Trustees to
the Adviser, the Administrator, the Custodian or such other Person as the Trustees by resolution
may designate. Fluctuations in value will be reflected in the number of Shares allocated to each
Participant. If there is a net loss, the Trustees shall first offset such. amount against income
accrued to each Participant. To the extent that such a net loss exceeds such accrued income, the
Trustees shall reduce the aggregate number of the 4M Fund's allocated Shares in an amount equal
to the amount required in order to permit the net asset value per Share of the 4M Fund to be
maintained at a constant dollar value by having each Participant contribute to the 4M Fund its gro
rata portion of such number of Shares. Each Participant will be deemed to have agreed to such
reduction in such circumstances by its investment in the 4MFund and its adoption of this
Declaration of Trust. The purpose of the foregoing procedure is to permit the net asset value per
Share of the 4M Fund to be maintained at a constant dollar value per Share.
(b) The Trustees may discontinue or amend the practice of attempting to maintain
the net asset value per Share at a constant dollar amount at any time and such modification shall
be evidenced by appropriate changes in the Information Statement as the same may be amended
from time to time.
10.3 Suaolementary Distributions to Participants. In addition to withdrawals made at the
request of individual Participants pursuant to Section 6.5 hereof, the Trustees may from time to
time also declare and make to the Participants, in proportion to their respective allocation of
Shares, out of the earnings, profits or assets in the hands of the Trustees, such supplementary
distributions and the determination of earnings, profits, and other funds and assets available for
supplemental distributions and other purposes shall lie wholly in the discretion of the Trustees and
may be made at such time and in such manner as the Trustees may in their sole discretion from
time to time determine. Any or all such supplementary distributions may be made among the
Participants of record at the time of declaring a distribution or among the Participants of record at
such other date as the Trustees shall determine.
28
Y
10.4 Retained Reserves. The Trustees may retain from the gross income of the 4M Fund
such amount as they may deem necessary to pay the debts and expenses of the 4M Fund and to
meet other obligations of the 4M Fund, and the Trustees shall also have the power to establish
such reasonable reserves as they believe may be required.
ARTICLE XI
Custodian
11.1 Duties. The Trustees shall employ a bank or trust company organized under the
Laws of the United States of America or the State of Minnesota having an office in the State of
Minnesota and having a capital and surplus aggregating at least twenty-five million dollars
($25,000,000) as Custodian with authority as its agent, but subject to such restrictions, limitations
and other requirements, if any, as may be contained in the By -Laws of the 4M Fund to perform the
duties set forth in the Custodian Agreement to be entered into between the 4M Fund and the
Custodian, or as may be imposed by Law.
11.2 Appointment. The Trustees shall have the power to select and appoint the Custo-
dian for the 4M Fund. The Custodian Agreement shall provide that it may be terminated at any
time without cause and without the payment of any penalty by the 4M Fund on sixty (60) days'
written notice to the Custodian.
11.3 Custodian Agreement. In addition to containing such other provisions as the
Trustees may deem appropriate, the Custodian Agreement shall provide that all investments
constituting 4M Fund Property shall be held in safekeeping in the manner required by Law,
including, without limitation, Minnesota Statutes, Section 475.66, Subdivision 2.
11.4 Agents of Custodian. The Trustees may also authorize the Custodian to employ one
or more agents from time to time to perform such of the acts and services of the Custodian and
upon such terms and conditions, as may be agreed upon between the Custodian and such agent and
approved by the Trustees; provided, however, that, in every case, such agent shall be a bank or
trust company organized under the Laws of the United States of America or one of the States
thereof having capital and surplus aggregating at least twenty-five million dollars ($25,000,000).
11.5 Successors. In the event that, at any time, the Custodian shall resign or shall be
terminated pursuant too the provisions of the Custodian Agreement, the Trustees shall appoint a
successor thereto.
11.6 Custodian as Depository for Participants. Each Participant hereby designates the
Custodian as a depository for funds of the Participant.
ARTICLE XII
Recording of Declaration of Trust
12.1 Recording. This Declaration of Trust and any amendment hereto shall be filed,
29
1( s
recorded or lodged as a document of public record in such place or places and with such official or
officials as may be required by Law or as the Trustees may deem desirable. Each amendment so
filed, recorded or lodged shall be accompanied by a certificate signed and acknowledged by a
Trustee stating that such action was duly taken in the manner provided for herein; and unless such
amendment or such certificate sets forth some earlier or later time for the effectiveness of such
amendment, such amendment shall be effective upon its filing. An amended Declaration of Trust,
containing or restating the original Declaration and all amendments theretofore made, may be
executed any time or from time to time by a majority of the Trustees and shall, upon filing,
recording or lodging in the manner contemplated hereby, be conclusive evidence of all amendments
contained therein and may thereafter be referred to in lieu of the original Declaration of Trust and
the various amendments thereto. Notwithstanding the foregoing provisions of this Section 12.1, no
filing or recordation pursuant to the terms of this Section 12.1 shall be a condition precedent to
the effectiveness of this Declaration of Trust or any amendment hereto.
ARTICLE XIII
Amendment or Termination of 4M Fund;
Duration of Fund
13.1 Amendment or Termination.
(a) The provisions of this Declaration of Trust may be amended or altered (except
as to the limitations on personal liability of the Participants and Trustees and the prohibition of
assessments upon Participants), or the 4M Fund may be terminated, at any meeting of the
Participants or pursuant to any vote of the Participants called for that purpose, by the affirmative
vote of a majority of the Participants entitled to vote, or if permitted applicable Law, by an
instrument or instruments in writing, without a meeting, signed by a majority of the Trustees and a
majority of the Participants; provided, however, that the Trustees may, from time to time by a
two-thirds vote of the Trustees, and after fifteen (15) days' prior written notice_ to the
Participants, amend or alter the provisions of this Declaration of Trust, without the vote or assent
of the Participants, amend or alter the provisions of this Declaration of Trust, without the vote or
assent of the Participants, to the extent deemed by the Trustees in good faith to be necessary to
conform this Declaration to the requirements of applicable Laws or regulations or any interpretation
thereof by a court or other governmental agency or competent jurisdiction, but the Trustees shall
not be liable for failing to do so. Notwithstanding the foregoing, (i) no amendment may be made
pursuant to this Section 13.1 which would change any rights with respect to any allocated Shares
of the 4M Fund by reducing the amount payable thereon upon liquidation of the 4M Fund or which
would diminish or eliminate any voting rights of the Participants, except with the vote or written
consent of two-thirds of the Participants entitled to vote thereon; and (ii) no amendment may be
made which would cause any of the investment restrictions contained in Section 4.2 hereof to be
less restrictive without the affirmative vote of a majority of the Participants entitled to vote
thereon.
(b) Upon the termination of the 4M Fund pursuant to this Section 13.1:
(i) The 4M Fund shall carry on no business except for the purpose of winding
up its affairs;
(ii) The Trustees shall proceed to wind up the affairs of the 4M Fund and all
of the powers of the Trustees under this Declaration of Trust shall continue until the affairs of
the 4M Fund shall have been wound up, including, without limitation, the power to fulfill or
discharge the contracts of the 4M Fund, collect its assets, sell, convey, assign, exchange, transfer
or otherwise dispose of all or any part of the remaining 4M Fund Property to one or more persons
30
at public or private sale for consideration which may consist in whole or in part of cash, securities
or th6 property of any kind, discharge or pay its liabilities, and do all other acts appropriate to
liquidate its affairs; provided, however, that any position of all or substantially all of the 4M Fund
Property shall require approval of the principal terms of the transaction and the nature and amount
of the consideration by affirmative vote of not less than a majority of the Participants entitled to
vote thereon; and
(iii) After paying or adequately providing for the payment of all liabilities,
and upon receipt of such releases, indemnities and refunding agreements, as they deem necessary
for their protection, the Trustees may distribute the remaining 4M Fund Property, in cash or in
kind or partly in each, among the Participants according to their respective proportionate allocation
of Shares.
(c) Upon termination of the 4MFund and distribution to the Participants as herein
provided, a majority of the Trustees shall execute and lodge among the records of the 4M Fund an
instrument in writing setting forth the fact of such termination, and the Trustees shall thereupon
be discharged from all further liabilities and duties hereunder, and the right, title and interest of
all Participants shall cease and be cancelled and discharged.
(d) A certification in recordable form signed by a majority of the Trustees setting.
forth an amendment and reciting that it was duly adopted by the Participants or by the Trustees as
aforesaid or a copy of the Declaration, as amended, in recordable form, and executed by a majority
of the Trustees, shall be conclusive evidence of such amendment.
13.2 Power to Effect Reorganization. If permitted by applicable Law, the Trustees, by
vote or written approval of a majority of the Trustees, may select, or direct the organization of, a
corporation, association, trust or other Person with which the 4M Fund may merge, or which shall
take over the 4M Fund Property and carry on the affairs of the 4M Fund, and after receiving an
affirmative vote of not less than a majority of the Participants entitled to vote at any meeting of
the Participants, the notice for which includes a statement of such proposed action, the Trustees
may effect such merger or may sell, convey and transfer the 4M Fund Property to any such
corporation, association, trust or other Person in exchange for cash . or shares or securities thereof,
or beneficial interest therein with the assumption by such transferee of the liabilities of the 4M
Fund; and thereupon the Trustees shall terminate the 4M Fund and deliver such cash, shares,
securities or beneficial interest ratably among the participants of this 4M Fund.
13.3 Duration. The 4M Fund shall continue in existence in perpetuity, subject in all
respects to the provisions of the Article XIII.
ARTICLE XIV
Miscellaneous
14.1 Governing Law. This Declaration of Trust is executed by the Initial Participants
and delivered in the State of Minnesota and with reference to the Laws thereof, and the rights of
all parties and the validity, construction and effect of every provision hereof shall be subject to
and construed according to the Laws of said State of Minnesota.
14.2 Counterparts. This Declaration of Trust may be executed in several counterparts,
each of which when so executed shall be deemed to be an original, and such counterparts, together,
shall constitute but one and the same instrument, which shall be sufficiently evidenced by any such
original counterpart.
31
14.3 Reliance by Third Parties. Any certificate executed by an individual who, according
to the records of the 4M Fund, or of any official or public body or office in which this
Declaration of Trust may be recorded, appears to be a Trustee hereunder or the Secretary or the
Treasurer of the 4M Fund, certifying to: (i) the number or identity of Trustees or Participants; (ii)
the due authorization of the execution of any instrument or writing; (iii) the form of any vote
passed at a meeting of Trustees or Participants or taken pursuant to a vote of Participants; (iv)
the fact that the number of Trustees or Participants present at any meeting or executing any
written instrument satisfies the requirements of this Declaration of Trust; (v) the form of any By -
Law adopted by or the identity of any officers elected by the Trustees; or (vi) the existence of any
fact or facts which in any manner relate to the affairs of the 4M Fund, shall be conclusive
evidence as to the matters so certified in favor of any Person dealing with the Trustees or any of
them or the 4M Fund and the successors of such Person.
14.4 Provisions in Conflict with Law. The provisions of this Declaration of Trust are
severable, and if the Trustees shall determine, with the advice of counsel, that any one of more of
such provisions (the "Conflicting Provisions") are in conflict with applicable federal or Minnesota
Laws, the Conflicting Provisions shall be deemed never to have constituted a part of this
Declaration of Trust; provided, however, that such determination by the Trustees shall not affect or.
impair any of the remaining provisions of this Declaration of Trust or render invalid or improper
any action taken or omitted (including, but not limited to, the election of Trustees) prior to such
determination.
14.5 Gender: Section Headings.
(a) Words of the masculine gender shall mean and include correlative words of the
feminine and neuter genders and words importing the singular number shall mean and include the
plural number and vice versa.
(b) Any headings preceding the texts of the several Articles and Sections of this
Declaration of Trust and any table of contents or marginal notes appended to copies hereof, shall
be solely for convenience of references and shall neither constitute a part of this Declaration of
Trust nor affect its meaning, construction or effect.
14.6 Adoption by Municipalities Electing to Become Additional Participants: Resignation of
Participants.
(a) Any Municipality meeting the requirements of Section 1.2 hereof, may become
an additional Participant of this 4M Fund by (i) taking any appropriate official action to adopt this
Declaration of Trust, (ii) furnishing the Trustees with satisfactory evidence that such official action
has been taken, and (iii) if requested by the Trustees, providing the Trustees with an opinion of
counsel to the effect that such party desiring to become a Participant of the 4M Fund is a
Municipality as defined herein. A copy of this Declaration of Trust may be adopted by executing a
written instrument of adoption in such form as may be prescribed by the Trustees. Delivering an
acknowledged copy of such instrument shall constitute satisfactory evidence of the adoption
contemplated by this Section 14.6.
(b) Any Participant may resign and withdraw from the 4M Fund by sending a
written notice to such effect to the Chairman of the 4M Fund and the Administrator and by
requesting the withdrawal of all funds then credited to its account within the 4M Fund. The
written notice shall be in the form of a certified resolution of the Municipality Board or Council of
the Participant, stating the Municipality Board or Council's intention to resign from the 4M Fund.
32
Such resignation and withdrawal shall become effective upon the receipt thereof by the Chairman of
the 4M Fund and the Administrator. No resignation and withdrawal by a Participant shall operate
to annul this Declaration of Trust or terminate the existence of the 4M Fund.
IN WITNESS WHEREOF, the undersigned Municipalities of the State of Minnesota, acting
in the capacity of Initial Participants of the Minnesota Municipal Money Market Fund and pursuant
to the authority granted by the Joint Powers Act, have executed this Declaration of Trust as of
the day of , 19 , as of which date this Declaration of Trust shall take,
and come into, full force and effect.
By
Its
and
Its
By
Its
and
Its
By
Its
and _
Its
33