A.
The County of Suffolk is entitled to receive payments under the Master
Settlement Agreement entered into on November 23, 1998, among the
Attorneys General of 46 states and six other United States jurisdictions
and the four largest United States tobacco manufacturers (hereinafter,
the "MSA") and the Consent Decree and Final Judgment of the Supreme
Court of the State of New York, County of New York, dated December
23, 1998 (hereinafter, as the same may be amended or modified, the
"decree") in the class action entitled "State of New York et al v.
Philip Morris Incorporated et al" (Index No. 400361/97).
B.
In order to secure to present generations a portion of the benefits
intended to be conferred by the MSA and the decree, and thereby provide
a source of funding to the County to reduce debt obligations and to
further certain other County purposes, it is necessary or desirable
for the County to sell its rights, title and interest in and to all
of the monies to become payable to the County under the MSA and the
decree (the "Tobacco Asset") in order to facilitate the securitization
of the Tobacco Asset.
C.
In order to provide the financing structure for such securitization
and a source of funding to the County to reduce debt obligations and
other present and future County purposes, while protecting the County's
existing credit ratings, it is necessary or desirable for the County
to sell such rights, title and interest to a local development corporation
to be created by the County pursuant to the New York Not-For-Profit
Corporation Law (the "Suffolk Tobacco Asset Securitization Corporation"
or "STASC"), with the powers to acquire such rights, title and interest;
to issue bonds, notes and other evidence of indebtedness and incur
other obligations; to create a business trust under the laws of the
State of Delaware (the "residual trust") and assign and deliver to
the residual trust the monies to become payable to the County under
the MSA and the decree in excess of the amounts necessary to pay debt
service on such bonds, notes and other evidence of indebtedness, the
expenses of STASC, the expenses of the trustee which is a party to
the indenture of trust with STASC authorizing the issuance of such
bonds, notes and other evidence of indebtedness (the "indenture"),
any amounts necessary to maintain the reserve funds required by the
indenture to be maintained, and certain other ancillary pecuniary
obligations; and to take all other actions as may be necessary, convenient
or desirable in furtherance of its powers, in exchange for the net
proceeds of the securitization of the Tobacco Asset and certain residual
rights, including the right to receive the net proceeds of future
securitizations, if any, of the Tobacco Asset.
A.
The County
Executive and/or his designee(s) are hereby authorized, empowered
and directed to take all actions necessary to create the STASC pursuant
to § 1411 of the New York Not-For-Profit Corporation Law.
B.
The STASC shall be created for the purposes and shall exercise and perform the powers described in § 155-21 hereof, in accordance with the provisions of the Certificate of Incorporation of the STASC.
C.
There
shall be three Directors of the Corporation. One Director shall be
appointed by the Presiding Officer of the Legislature. Two Directors
shall be appointed by the County Executive, at least one of whom shall
be an individual who:
(1)
Is
not, and in the past two years has not been, employed by the County;
(2)
Is
not, and in the past two years has not been, employed by an entity
that received remuneration valued at more than $15,000 for goods and
services provided to the County or received any other form of financial
assistance valued at more than $15,000 from the County;
(3)
Is
not a relative of an employee of the County; and
(4)
Is
not, and in the past two years has not been, a lobbyist registered
under a state or local law and paid by a client to influence the management
decisions, contract awards, rate determinations or any other similar
actions of the County.
The sale by the County to the STASC of the County's rights,
title and interest in and to all of the Tobacco Asset, without recourse,
is hereby authorized in exchange for the delivery to, or upon the
order of, the County of:
A.
the net
proceeds of the initial issuance of bonds by the STASC contemporaneously
with such sale (the "STASC bonds") after:
(1)
Payment
of all costs, fees, credit and liquidity enhancements, costs of issuance,
and other expenses of the STASC; and
(2)
The
funding of all reserve funds, debt service accounts for the payment
of capitalized interest, and other pledged funds which may be necessary
or desirable in connection with the issuance of the STASC bonds; and
B.
The undivided
beneficial interest in the residual trust, and upon such other terms
and conditions as set forth in a purchase and sale agreement approved
by the County Legislature at a future date between the STASC, as purchaser,
and the County, as seller ("sale agreement").
Upon legislative approval at a future date of the sale agreement:
A.
The County Executive and/or his designee(s) are hereby granted authority
and are empowered and directed to execute and deliver on behalf of
the County such approved sale agreement, with such changes therein
as the County Executive and/or his designee(s) may approve, and the
execution and delivery of such agreement shall be conclusive; and
B.
The County Executive and/or his designee(s) are hereby further authorized,
empowered and directed to execute and deliver, on behalf of the County,
such other agreements, instruments or authorizations, and to perform
all acts as may be contemplated, necessary or advisable to consummate,
or otherwise give full effect to, the approved sale agreement and
this article or any agreement, instrument or authorization approved,
contemplated or authorized hereby; and
C.
The County pledges to and agrees with the STASC and the holders of
any bonds, notes and other obligations of the STASC (hereinafter the
"obligations"), including without limitation the STASC bonds, that
the County will not alter, limit or impair the rights of the STASC
to fulfill the terms of its agreements with such holders, or in any
way impair the rights and remedies of such holders or the security
for the obligations, until the obligations, together with the interest
thereon, and all costs and expenses in connection with any action
or proceeding by or on behalf of such holders, are fully met and discharged
and such agreements are fully performed on the part of the STASC.
The Legislature hereby further delegates to the County Executive and/or
his designee(s) the power to make, ratify and confirm such pledge
to and agreement with the STASC and the holders of its obligations
and to take any and all actions necessary or desirable to cause such
pledge to and agreement with the STASC and the holders of its obligations
to be made or enforced. The STASC is hereby authorized to include
in any agreement with or for the benefit of the holders of its obligations
the pledges and agreements made by the Legislature and by the County
Executive and/or his designee(s) on behalf of the County pursuant
to this section. The County agrees that as a member of the class of
releasing parties under the decree it is bound by the terms and conditions
of the MSA and the decree and will not take any action inconsistent
therewith.
This article shall apply to any actions occurring on or after
the effective date of this article.
