N.Y. Tobacco Settlement Financing Corporation Act § 3: Definitions

§ 3. Definitions. 1. "Ancillary bond facility" means any interest rate

exchange or similar agreement or any bond insurance policy, letter of

credit or other credit enhancement facility, liquidity facility,

guaranteed investment or reinvestment agreement, or other similar

agreement, arrangement or contract.

2. "Authority" means the state of New York municipal bond bank agency

established in section 2433 of the public authorities law.

3. "Benefited party" means any person, firm or corporation that enters

into an ancillary bond facility with the corporation according to the

provisions of this act.

4. "Board" means the members of the corporation.

5. "Bonds" means any bonds, notes, certificates of participation and

other evidence of indebtedness issued by the corporation pursuant to

section six of this act.

6. "Code" means the United States Internal Revenue Code of 1986, as

amended.

7. "Complementary legislation" means sections 480-b, paragraph (c) of

subdivision 1 of section 481 and subdivision (a-1) of section 1846 of

the tax law.

8. "Consent decree" means the consent decree and final judgment of the

supreme court of the state of New York, county of New York, dated

December 23, 1998, as the same has been and may be corrected, amended or

modified, in the action entitled State of New York, et al. v. Philip

Morris Incorporated, et al. (Index No. 400361/97).

9. "Contingent contractual obligation" means a contract under which

the obligation of the state is a contingent contractual obligation as

such term is used in section 67-a of the state finance law.

10. "Costs of issuance" means any item of expense directly or

indirectly payable or reimbursable by the corporation and related to the

authorization, sale, or issuance of bonds, including, but not limited

to, underwriting fees and fees and expenses of professional consultants

and fiduciaries.

11. "Director of the budget" means the director of the budget of the

state of New York.

12. "Financing costs" means all costs of issuance, capitalized

interest, capitalized operating expenses and debt service reserves,

fees, cost of any ancillary bond facility, and any other fees,

discounts, expenses and costs related to issuing, securing and marketing

the bonds including, without limitation, any net original issue

discount.

13. "Investment securities" means, subject to or, as otherwise

provided in, the provisions of any contract with bondholders of the

corporation, (i) general obligations of, or obligations guaranteed by,

any state of the United States of America or political subdivision

thereof, or the District of Columbia or any agency or instrumentality of

any of them, receiving one of the three highest long-term unsecured debt

rating categories available for such securities of at least one

independent rating agency, or (ii) certificates of deposit, savings

accounts, time deposits or other obligations or accounts of banks or

trust companies in the state, secured, if the corporation shall so

require, in such manner as the corporation may so determine, or (iii)

otherwise, in the discretion of the corporation, obligations in which

the comptroller is authorized to invest, pursuant to either section 98

or 98-a of the state finance law.

14. "Interest rate exchange or similar agreement" means a written

contract entered into in connection with the issuance of bonds or with

such bonds outstanding with a counterparty to provide for an exchange or

swap of payments based upon fixed and/or variable interest rates, and

shall be for exchanges in currency of the United States of America only.

15. "Master settlement agreement" means the master settlement

agreement, dated November 23, 1998, among the attorneys general of 46

states, including the state, the District of Columbia, the Commonwealth

of Puerto Rico, Guam, the United States Virgin Islands, American Samoa

and the Territory of the Northern Mariana Islands, on the one hand, and

certain tobacco manufacturers, on the other hand, and the subject of the

consent decree.

16. "Member" means any director of the authority including each person

that has been duly appointed to represent such director at meetings of

the authority from which such director may be absent.

17. "Net proceeds" means the amount of proceeds remaining following

each sale of bonds which are not required by the corporation to pay or

provide for the financing costs.

18. "Operating expenses" means the reasonable or necessary operating

expenses of the corporation, including, without limitation,

administrative expenses of the corporation or authority, the cost of

preparation of accounting and other reports, costs of maintenance of the

ratings on the bonds, funding of any operating expense reserve fund, if

any, insurance premiums, costs of any ancillary bond facilities, and

costs of annual meetings or other required activities of the

corporation, and fees and expenses incurred for professional consultants

and fiduciaries.

19. "Other assets" means assets and/or revenues, constituting a

portion of the state's share, other than the pledged tobacco revenues,

that are purchased pursuant to the sale agreement and pledged by the

corporation for the payment of bonds or an ancillary bond facility.

20. "Other participating jurisdictions" means the fifty-seven (57)

counties of the state and the city of New York, which together with the

state, are entitled to receive settlement payments under the consent

decree.

21. "Outstanding", when used with respect to bonds, shall exclude

bonds that shall have been paid in full at maturity, or shall have

otherwise been refunded, redeemed, defeased or discharged, or that may

be deemed not outstanding pursuant to agreements with the holders

thereof.

22. "Participating manufacturer" means a tobacco product manufacturer

that is or becomes a signatory to the master settlement agreement.

23. "Pledged tobacco revenues" means each such portion of the state's

share constituting tobacco settlement payments sold to the corporation

pursuant to section four of this act and pledged by the corporation for

the payment of bonds or an ancillary bond facility.

24. "Qualifying statute" has the meaning given that term in the master

settlement agreement, constituting article 13-G of the public health law

of the state.

25. "Residual interests" means the income of the corporation, and bond

proceeds, if any, or reserves not previously paid to the state, that are

in excess of the corporation's requirements to pay its operating

expenses, debt service, sinking fund or other redemption requirements,

reserve fund, and any other contractual obligations under any resolution

or any ancillary bond facility or that may be incurred in connection

with the issuance of the bonds.

26. "Sale agreement" means any agreement authorized pursuant to this

section in which the state provides for the sale of all or a portion of

the state's share to the corporation.

27. "State" means the state of New York.

28. "State representative" means the governor of the state acting

through the director of the budget.

29. "State's share" means all tobacco settlement payments received by

the state on and after January 1, 2004 and required to be made, pursuant

to the terms of the master settlement agreement, by participating

manufacturers to the state which have not otherwise been allocated to

any other participating jurisdictions pursuant to the terms of the

consent decree, and the state's rights to receive such tobacco

settlement payments and other assets of the state and other payments

received by the state on and after January 1, 2004 and the state's right

to receive such payments, under any other agreement, contract, statute

or other provision available for sale or authorized to be sold, and

determined by the state representative to be included in the sale

agreement.

30. "Tobacco settlement financing corporation" or "the corporation"

means the corporation created by section two of this act.