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HomeMy WebLinkAboutPFM Asset Management, LLC Investment Advisory Agreement -2009 02 03INVESTMENT ADVISORY AGREEMENT THIS AGREEMENT, entered into as of the .~ ~ day of February in the year of 2009, by and between the City of Winter Springs, a Florida public agency (hereinafter the "Client"), and PFM ASSET MANAGEMENT LLC, a Delaware limited liability company with an office in Orlando, Florida (hereinafter the "Advisor") WITNESSETH WHEREAS, the Client has funds available for investment purposes (the "Initial Funds") for which it intends to conduct an investment program; and WHEREAS, the Client desires to avail itself of the experience, sources of information, advice, assistance and facilities available to the Advisor; to have the Advisor undertake certain duties and responsibilities; and to perform certain services as investment advisor on behalf of the Client, as provided herein; and WHEREAS, the Advisor is willing to provide such services on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto, intending to be legally bound, agreed as follows: 1. SERVICES OF ADVISOR. The Client hereby engages the Advisor to serve as investment advisor under the terms of this Agreement with respect to the Initial Funds and such other funds as the Client may from time to time assign by written notice to the Advisor (collectively the "Managed Funds"), and the Advisor accepts such engagement. In connection therewith, the Advisor will provide investment research and supervision of the Client's Managed Funds investments and conduct a continuous program of investment, evaluation and, when appropriate, sale and reinvestment of the Client's Managed Funds assets. The Advisor shall continuously monitor investment opportunities and evaluate investments of the Client's Funds. The Advisor shall furnish the Client with statistical information, reports, and such other information with respect to investments of the Managed Funds, in order to keep the client properly informed of developments in connection with the Advisor's performance of its duties hereunder. The Advisor shall place all orders for the purchase, sale, loan or exchange of portfolio securities for the Client's account with brokers or dealers recommended by the Advisor and/or the Client, and to that end the Advisor is authorized as agent of the Client to give instructions to the depository designated by the Clients as its custodian as to deliveries of securities and payments of cash for the account of the Client. In connection with the selection of such brokers and dealers and the placing of such orders, the Advisor is directed to seek for the Client the most favorable execution and price, the determination of which may take into account, subject to any applicable laws, rules and regulations, whether statistical, research and other information or services have been or will be furnished to the Advisor by such brokers and dealers. The depository designated by the Client (the "Custodian") shall have custody of cash, assets and securities of the Client. The Advisor shall not take possession of or act as custodian for the cash, securities or other assets in the Managed Funds and shall have no responsibility in connection therewith. Authorized investments shall include only those investments which are currently authorized by the state investment statutes and the bond covenants and as supplemented by such other written instructions as may from time to time be provided by the Client to the Advisor. The Advisor shall be entitled to rely upon the Client's written advice with respect to anticipated drawdowns of Managed Funds. The Advisor will observe the instructions of the Client with respect to broker/dealers who are approved to execute transactions involving the Client's Managed Funds and in the absence of such instructions will engage broker/dealers which the Advisor reasonably believes to be reputable, qualified and financially sound. The Advisor shall counsel and advise the Client in connection with the formulation of investment programs designed to accomplish the Client's investment objectives. Further, Advisor covenants and agrees that the investment planning, investment advice and management that it furnishes to the Client will be in accordance with the general investment policies set forth in the Advisor's Uniform Application for Investment Advisor Registration or any other registration statements filed with the United States Securities and Exchange Commission. Advisor acknowledges and agrees that from time to time, the services provided hereunder may require that the Advisor attend one or more City Commission meetings in order to advise the City Commission regarding the services provided hereunder. The Advisor agrees to familiarize itself with the written investment policies and decisions that are approved and adopted by the City Commission from time to time and acknowledges and agrees that any investment made hereunder shall be consistent with said policies and decisions. The Client agrees to notify the Advisor in writing from time to time of any changes or amendments to said policies and decisions. 2 2. COMPENSATION. (a) For services provided by the Advisor pursuant to this Agreement, the Client shall pay the Advisor an annual fee of $17,500 paid in monthly installments. (b) The Advisor will bill the Client monthly for service performed under this Agreement, said bill to include a statement indicating the basis upon which the fee was calculated. The Client shall pay to the Advisor the amount payable pursuant to this Agreement not later than on the 15th day of the month following the month during which the Advisor's statement was rendered. (c) If and to the extent that the Client shall request the Advisor to render services other than those to be rendered by the Advisor hereunder, such additional services shall be compensated separately on terms to be agreed upon between the Advisor and the Client. 3. EXPENSES. (a) The Advisor shall furnish at its own expense all necessary administrative services, office space, equipment, clerical personnel, telephone and other communication facilities, investment advisory facilities, and executive and supervisory personnel for managing the Managed Funds. (b) Except as expressly provided otherwise herein, the Client shall pay all of its own expenses including, without limitation, taxes, commissions, fees and expenses of the Client's independent auditors and legal counsel, if any, brokerage and other expenses connected with the execution of portfolio security transactions, insurance premiums, fees and expenses of the Custodian of the Managed Funds including safekeeping of funds and securities and the keeping of books and accounts. 4. REGISTERED ADVISOR; DUTY OF CARE. The Advisor hereby represents it is a registered investment advisor under the Investment Advisers Act of 1940. The Advisor shall immediately notify the Client if at any time during the term of this Agreement it is not so registered or if its registration is suspended. The Advisor agrees to perform its duties and responsibilities under this Agreement with reasonable care. The federal securities laws impose penalties under certain circumstances on persons who are required to act in good faith. Nothing herein shall in any way constitute a waiver or limitation of any rights which the Client or the Advisor may have under any federal securities laws. The Client hereby authorizes the Advisor to sign LR.S. Form W-9 on behalf of the Client and to deliver such form to broker-dealers or others from time to time as required in connection with securities transactions pursuant to this Agreement. 3 5. ADVISOR'S OTHER CLIENTS. The Client understands that the Advisor performs investment advisory services for various other clients which may include investment companies, commingled trust funds and/or individual portfolios. The Client agrees that the Advisor, in the exercise of its professional judgment, may give advice or take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Client's Managed Funds accounts. The Advisor shall not have any obligation to purchase, sell or exchange any security for the Client's Managed Funds solely by reason of the fact that the Advisor, its principals, affiliates, or employees may purchase, sell or exchange such security for the account of any other client or for itself or its own accounts. 6. TERM. This Agreement may be terminated by the Client in the event of any material breach of its terms immediately upon notice by certified mail, return receipt requested. This Agreement may be terminated by the Client at any time, on not less than thirty (30) days written notice to the Advisor. The Advisor may terminate this Agreement immediately upon any material breach of its terms by the Client, or at any time after one year upon thirty (30) days written notice. This Agreement shall automatically terminate in the event of its assignment without prior written consent of the other party. Termination in any manner shall not affect the rights of the parties which have accrued prior to the termination. If any fees have been paid in advance, the Advisor will refund the Client a prorate share of the fee for such fraction of the time period (in which payment was made in advance) remaining after termination. 7. FORCE MAJEURE. The Advisor shall have no liability for any losses arising out of the delays in performing or inability to perform the services which it renders under this Agreement which result from events beyond its control, including interruption of the business activities of the Advisor or other financial institutions due to acts of God, acts of governmental authority, acts of war, terrorism, civil insurrection, riots, labor difficulties, or any action or inaction of any carrier or utility, or mechanical or other malfunction. 8. DISCIPLINARY ACTIONS. The Advisor shall promptly give notice to the Client if the Advisor shall have been found to have violated any state or federal securities law or regulation in any criminal action or civil suit in any state or federal court or in any disciplinary proceeding before the Securities and Exchange Commission or any other agency or department of the United States, any registered securities exchange, FINRA, or any regulatory authority of any State based upon the performance of services as an investment advisor. 4 9. INDEPENDENT CONTRACTOR. The Advisor, its employees, officers and representatives, shall be deemed independent contractors under this Agreement and shall not be deemed to be employees, agents (except as to the purchase or sale of securities described in Section 1), partners, servants, and/or joint ventures of the Client by virtue of this Agreement or any actions or services rendered under this Agreement. Except as provided under this Agreement, Advisor shall have no authority to act for or represent the Client. 10. BOOKS. The Advisor shall maintain appropriate records of all its activities hereunder and shall permit the Client to inspect and copy such records upon request of the Client. The Advisor shall provide the Client with a monthly statement showing deposits, withdrawals, purchases and sales (or maturities) of investments, earnings received, and the value of assets held on the last business day of the month. The statement shall be in the format and manner that is mutually agreed upon by the Advisor and the Client. 11. THE ADVISOR'S DISCLOSURE STATEMENT. The Advisor warrants that it has delivered to the Client, at least five business days prior to the execution of this Agreement, the Advisor's current Securities and Exchange Commission Form ADV, Part II (disclosure statement). The Client acknowledges receipt of such disclosure statement at least five business days prior to the execution of this Agreement. 12. MODIFICATION. This Agreement shall not be changed, modified, terminated or discharged in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assigns. 13. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding on the Advisor and its respective successors and assigns, provided, however, that the rights and obligations of the Advisor may not be assigned without the prior written consent of the Client. 5 14. NOTICE. Written notices required under this Agreement shall be sent by regular mail, certified mail, overnight delivery or courier, and shall be deemed given when received at the parties' respective addresses shown below. Either party must notify the other party in writing of a change in address. Client's Address City of Winter Springs 1126 East State Road 434 Winter Springs, FL 32708 Attn: Mr. Kevin Smith, Acting City Manager/General Services Director Advisor's Address PFM Asset Management LLC 300 South Orange Avenue Suite 1170 Orlando, FL 32801 Attn: Steven Alexander, Managing Director With copy to: PFM Asset Management LLC Two Logan Square, Suite 1600 18`~ & Arch Streets Philadelphia, PA 19103-2770 Attn: Controller 15. APPLICABLE LAW; VENUE. This Agreement shall be construed, enforced, and administered according to the laws of the State of Florida The Advisor and the Client agree that, should a disagreement arise as to the terms or enforcement of any provision of this Agreement, each party will in good faith attempt to resolve said disagreement prior to filing a lawsuit. The parties agree that venue shall be exclusively in Seminole County, Florida, for all state disputes or actions which arise out of or are based upon the Agreement, and in Orlando, Florida, for all federal disputes or actions which arise out of or are based upon this Agreement. 16. EXECUTION AND SEVERABILITY. This Agreement shall constitute the entire agreement between the parties regarding the subject matter herein. Each party to this Agreement represents and warrants that the person or persons signing this Agreement on behalf of such party is authorized and empowered to sign and deliver this Agreement for such party. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision. 17. LIMITATION OF LIABILITY The Advisor will not be liable for any error in judgment or any acts or omissions to act except those resulting from the Advisor's negligence, misconduct, misfeasance, bad faith, or disregard of its duties and 6 obligations under this Agreement. In which case, Advisor agrees to indemnify and hold harmless the Client from any liability or damages (including reasonable attorney's fees and costs) resulting from such negligence, misconduct, misfeasance, bad faith or disregard of its duties and obligations under this Agreement. Nothing herein shall in any way constitute a waiver or limitation of any right of the Client or any person under the federal and state securities laws. 18. SOVEREIGN IMMUNITY Notwithstanding any other provision set forth in the Agreement, nothing contained in this Agreement shall be construed as a waiver of the Client's right to sovereign immunity under Section 768.28, or other limitations imposed on the Client's potential liability under state or federal law. As such, the Client shall not be liable under this Agreement for punitive damages or interest for the period before judgment. Further, the Client shall not be liable for any claim or judgment, or portion thereof, to any one person for more than one hundred thousand dollars ($100,000.00), or any claim or judgment, or portion thereof, which, when totaled with all other claims or judgments paid by the State or its agencies and subdivisions arising out of the same incident or occurrence, exceeds the sum of two hundred thousand dollars ($200,000.00). IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized representatives as of the date set forth in the first paragraph of this Agreement. PFM ASSET MANAGEMENT LLC By: Name: Steven lexander Title: Managing Director CITY OF WINTER SYRINLfS, FLORIDA By: Na e: Kevin L Srnith Title: ActingCity Manager, __ 7