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HomeMy WebLinkAboutCC AG PKT 2012-05-14 #F IrSEAr cr s% AGENDA STAFF REPORT _ \93L/FORK DATE: May 14, 2012 TO: Honorable Mayor and City Council THRU: Jill R. Ingram, City Manager FROM: Shally Lin, Interim Director of Finance/City Treasurer SUBJECT: INVESTMENT ADVISORY SERVICES SUMMARY OF REQUEST: Staff requests that the City Council adopt Resolution No. 6254 approving the agreement for investment advisory services between PFM Asset Management LLC and the City of Seal Beach, effective May 14, 2012 and authorize the City Manager to execute the agreement. BACKGROUND AND ANALYSIS: The City is currently investing in LAIF, CD's and bonds. With the current economic conditions, the City's interest rate of return on LAIF is currently .36 percent. In addition, bonds and CD's are being called prior to maturity due to the current federal low interest rate. From 2008 to June 30, 2011, interest revenue decreased by $1.6 million or 81%. Staff is seeking PFM Asset Management LLC Advisor to provide the following services: 1. Review of Investment Policy: Advisor will review the City's existing investment policy and provide recommendations regarding updating and revising the policy. 2. Development of Investment Strategy: Advisor will review the City's goals, objectives, cash flow projections, and liquidity needs. On the basis of this review and discussions with City staff, the Advisor will present recommendations regarding a strategy for the investment of the Managed Funds. 3. Supervision of Managed Funds: The Advisor will provide investment research and supervision of the City's Managed Funds investments and conduct a continuous program of investment, evaluation and, when appropriate, sale and reinvestment of the City's Managed Funds assets. Agenda Item F PFM Asset Management LLC is an SEC registered independent investment advisor. The company provides services to 37 cities in California including the California Joint Power Insurance Authority. In addition, the company manages $8 billion of public assets in California and over $40 billion nationwide. PFM's accomplishments include a consistent record of preserving principal (no clients lost money due to asset-backed investments). ENVIRONMENTAL IMPACT: There is no Environmental Impact related to this item. LEGAL ANALYSIS: The City Attorney has reviewed and approved as to form. FINANCIAL IMPACT: For services provided by the Advisor pursuant to Section 1.1.1 and 1.1.2 of the Agreement, the City will pay the Advisor a total fee of $10,000, payable upon delivery of a written report summarizing the Advisor's recommendations to the City's investment policy and strategy relating to the City's Managed Funds. Pursuant to Section 1.1.3 of the Agreement, the City shall pay the Advisor an annual fee, in monthly installments, based on the daily net assets under management at an annual rate of ten basis points (0.10%) for the amount of such net assets not exceeding $25 million and eight basis points (0.08%) for the amount of such net assets in excess of $25 million. The foregoing Sections 3.1, 3.2, and 3.3 notwithstanding, during the initial 12-month period of this Agreement, the fees charged for the services described in Sections 1.1.1, 1.1.2, and 1.1.3, or any combination thereof, shall not be less than $15,000. Thereafter, the annual fee charged for services provided in Section 1.1.3 shall not be less than $15,000. RECOMMENDATION: That the City Council adopt Resolution No. 6254 approving the agreement for investment advisory services between PFM Asset Management LLC. SUBMITTED BY: NOTED AND APPROVED: 4l2rn O Director of Finance/City Treasurer Prepared by: Alayna Hoang, Senior Accountant Page 2 RESOLUTION NUMBER 6254 A RESOLUTION OF THE SEAL BEACH CITY COUNCIL APPROVING THE AGREEMENT BETWEEN THE CITY AND PFM ASSET MANAGEMENT, L.L.C. FOR INVESTMENT ADVISORY SERVICES THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE: SECTION 1. The City Council hereby approves that certain agreement ("Agreement") between the City and PFM Asset Management, L.L.C, dated May 14, 2012,for investment advisory services. SECTION 2. The City Council hereby authorizes and directs the City Manager to execute the Agreement on behalf of the City. SECTION 3. The City Clerk shall certify to the passage and adoption of this resolution. PASSED, APPROVED and ADOPTED by the Seal Beach City Council at a regular meeting held on the 14th day of May , 2012 by the following vote: AYES: Council Members NOES: Council Members ABSENT: Council Members ABSTAIN: Council Members Mayor ATTEST: City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Linda Devine, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution Number 254 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 14th day of May , 2012. City Clerk INVESTMENT ADVISORY SERVICES AGREEMENT between -- F SEAS L••„ = o .��_ \��pAPORAIF�;�c311i • i RECITALS A. City has funds available for investment purposes (the "Initial Funds") for which it intends to conduct an investment program. B. City desires that its existing investment policy be reviewed and to the extent desirable, updated, and desires that an investment strategy for the Managed Funds be developed and implemented. C City 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 City, as provided herein. D Advisor is willing to provide such services on the terms and conditions hereinafter set forth; NOW THEREFORE, in consideration of the Parties' performance of the promises, covenants, and conditions stated herein, the Parties hereto agree as follows: AGREEMENT 1.0 Scope of Services 1.1. Advisor shall provide the following services ("Services"). 1.1.1. Review of Investment Policy. The City hereby engages the Advisor to review the City's existing investment policy and to provide recommendations to the City regarding updating and revising such policy. 1.1.2. Development of Investment Strategy. The City hereby engages the Advisor to review the City's goals, objectives, cash flow projections, and liquidity needs. On the basis of this review and discussions with City personnel, the Advisor will present recommendations for a strategy for the investment of the Managed Funds. 1.1.3. Supervision of Managed Funds. The City 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 City 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 City's Managed Funds investments and conduct a continuous program of investment, evaluation and, when appropriate, sale and reinvestment of the City's Managed Funds assets. The Advisor shall continuously monitor investment opportunities and evaluate investments of the City's Managed Funds. The Advisor shall furnish the City with statistical information and reports with respect to investments of the Managed Funds. The Advisor shall place all orders for the 2 of 12 purchase, sale, loan or exchange of portfolio securities for the City's account with brokers or dealers recommended by the Advisor and/or the City, and to that end the Advisor is authorized as agent of the City to give instructions to the depository designated by the City as its custodian as to deliveries of securities and payments of cash for the account of the City. In connection with the selection of such brokers and dealers and the placing of such orders, the Advisor is directed to seek for the City 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 City (the "Custodian") shall have custody of cash, assets, and securities of the City. 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 City to the Advisor. The Advisor shall be entitled to rely upon the City's written advice with respect to anticipated drawdowns of Managed Funds. The Advisor will observe the instructions of the City with respect to broker/dealers who are approved to execute transactions involving the City's Managed Funds and in the absence of such instructions will engage broker/dealers who the Advisor reasonably believes to be reputable, qualified, and financially sound. 1.2. The Advisor shall maintain appropriate records of all its activities hereunder. The Advisor shall provide the City 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 City. 1.3. Advisor shall perform all Services under this Agreement in accordance with the standard of care generally exercised by like professionals under similar circumstances and in a manner reasonably satisfactory to City. The Advisor hereby represents it is a registered investment advisor under the Investment Advisers Act of 1940. The Advisor shall immediately notify the City 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 City or the Advisor may have under any federal securities laws. The City hereby authorizes the Advisor to sign I.R.S. Form W-9 on behalf of the City 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. 1.4. In performing this Agreement, Advisor shall comply with all applicable provisions of federal, state, and local law. 3 of 12 2.0 The Advisor's Brochure The Advisor warrants that it has delivered to the City the Advisor's current Securities and Exchange Commission Form ADV, Part 2A (brochure) and Part 2B (brochure supplement). The City acknowledges receipt of such brochure and brochure supplement prior to the execution of this Agreement. 3.0 Advisor's Other Clients The City 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 City 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 City's Managed Funds accounts. The Advisor shall not have any obligation to purchase, sell, or exchange any security for the City'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 City or for itself or its own accounts. 4.0 Term & Termination 4.1 This term of this Agreement shall commence as of the Effective Date and shall continue until terminated in accordance with this Section. 4.2 This Agreement may be terminated by City, without cause, or by Advisor based on reasonable cause, upon giving the other party written notice thereof not less than 30 days prior to the date of termination. 4.3 This Agreement may be terminated by City upon 10 days' notice to Advisor if Advisor fails to provide satisfactory evidence of renewal or replacement of comprehensive general liability insurance as required by this Agreement at least 20 days before the expiration date of the previous policy. 5.0 Advisor's Compensation 5.1. For services provided by the Advisor pursuant to Section 1.1.1 of this Agreement, the City will pay the Advisor a fee of $5,000, payable upon delivery of a written report summarizing the Advisor's recommendations to the City's investment policy. 5.2. For services provided by the Advisor pursuant to Section 1.1.2 of this Agreement, the City will pay the Advisor a fee of $5,000, payable upon delivery of a written report summarizing the Advisor's recommendations for the investment strategy relating to the City's Managed Funds. 5.3. For services provided by the Advisor pursuant to Section 1.1.3 of this Agreement, the City shall pay the Advisor an annual fee, in monthly installments, based 4 of 12 on the daily net assets under management at an annual rate of ten basis points (0.10%) for the amount of such net assets not exceeding $25 million and eight basis points (0.08%) for the amount of such net assets in excess of$25 million. 5.4. The foregoing Sections 5.1, 5.2, and 5.3 notwithstanding, during the initial 12-month period of this Agreement, the fees charged for the services described in Sections 1.1.1, 1.1.2, and 1.1.3, or any combination thereof, shall not be less than $15,000. Thereafter, the annual fee charged for services provided in Section 1.1.3 shall not be less than $15,000. 5.5. Assets invested by the Advisor under the terms of this Agreement may from time to time be invested in a money market mutual fund or local government investment pool managed by the Advisor (either, a "Pool"), or in individual securities. Average daily net assets subject to the fees described in this section shall not take into account any funds invested in the Pool. Expenses of the Pool, including compensation for the Advisor and the Pool custodian, are described in the relevant prospectus or information statement and are paid from the Pool. 5.6. If and to the extent that the City 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 City. Advisor will not be compensated for any work performed not included in the Services unless the City authorizes such work in advance and in writing. The City Manager may authorize payment for such work up to a cumulative maximum of $10,000. Payment for additional work in excess of $10,000 requires prior City Council authorization. 6.0 Expenses 6.1. 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. 6.2. Except as expressly provided otherwise herein, the City shall pay all of its own expenses including, without limitation, taxes, commissions, fees and expenses of the City'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. 7.0 Method of Payment 7.1. Advisor shall submit to City monthly invoices for all services rendered pursuant to this Agreement. Such invoices shall be submitted within 15 days of the end of the month during which the services were rendered and shall describe in detail the services rendered during the period. City will pay Advisor within 30 days of receiving 5 of 12 Advisor's invoice. City will not withhold any applicable federal or state payroll and other required taxes, or other authorized deductions from payments made to Advisor. 7.2. Upon 24-hour notice from City, Advisor shall allow City or City's agents or representatives to inspect at Advisor's offices during reasonable business hours all records, invoices, time cards, cost control sheets and other records maintained by Advisor in connection with this Agreement. City's rights under this Section 7.2 shall survive for two years following the termination of this Agreement. 8.0 Party Representatives 8.1. The City Manager is the City's representative for purposes of this Agreement. 8.2. Nancy Jones is the Advisor's primary representative for purposes of this Agreement. 9.0 Notices 9.1. All notices permitted or required under this Agreement shall be deemed made when personally delivered or when mailed 48 hours after deposit in the United States Mail, first class postage prepaid and addressed to the party at the following addresses: To City: City of Seal Beach 211-8th Street Seal Beach, California 90740 Attn: City Manager To Advisor: PFM Asset Management LLC 50 California Street, Suite 2300 San Francisco, CA 94111 Attn: Nancy Jones With a Copy to: PFM Asset Management LLC Two Logan Square, Suite 1600 18th &Arch Streets Philadelphia, PA 19103-2770 Attn: Controller 9.2. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service. 10.0 Independent Contractor 10.1. Advisor is an independent contractor and not an employee of the City. All services provided pursuant to this Agreement shall be performed by Advisor or under its supervision. Advisor will determine the means, methods, and details of performing the 6 of 12 services. Any additional personnel performing services under this Agreement on behalf of Advisor shall also not be employees of City and shall at all times be under Advisor's exclusive direction and control. Advisor shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of services under this Agreement and as required by law. Advisor shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. 10.2. Advisor shall indemnify and hold harmless City and its elected officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from any and all liability, damages, claims, costs, and expenses of any nature to the extent arising from Advisor's personnel practices. City shall have the right to offset against the amount of any fees due to Advisor under this Agreement any amount due to City from Advisor as a result of Advisor's failure to promptly pay to City any reimbursement or indemnification arising under this Section. 11.0 Subcontractors No portion of this Agreement shall be subcontracted without the prior written approval of the City. Advisor is fully responsible to City for the performance of any and all subcontractors. 12.0 Assignment Advisor shall not assign or transfer any interest in this Agreement whether by assignment or novation, without the prior written consent of City. Any purported assignment without such consent shall be void and without effect. 13.0 Insurance 13.1. Advisor shall not commence work under this Agreement until it has provided evidence satisfactory to the City that Advisor has secured all insurance required under this Section. Advisor shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements shall be received and approved by the City before work commences. 13.2. Advisor shall, at its expense, procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of this Agreement. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the City. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); 7 of 12 (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and, if required by the City, (3) Professional Liability. Advisor shall maintain limits no less than: (1) General Liability: $2,000,000 per occurrence for bodily injury, personal injury and property damage and if Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; and (3) Professional Liability: $1,000,000 per claim/aggregate. The City reserves the right to require complete, certified copies of all required insurance policies, at any time. Advisor shall not reduce any coverages below the limits required by this Section during the term of this Agreement. 13.3. The insurance policies shall contain the following provisions, or Advisor shall provide endorsements on forms supplied or approved by the City to state: (1) coverage shall not be suspended, voided or canceled except after 30 days prior written notice by certified mail, return receipt requested, has been given to the City; (2) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, (3) coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Advisor's scheduled underlying coverage and that any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, agents and volunteers shall be excess of the Advisor's insurance and shall not be called upon to contribute with it; (4) for general liability insurance, that the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the services or operations performed by or on behalf of the Advisor, including materials, parts or equipment furnished in connection with such work; and (5) for automobile liability, that the City, its directors, officials, officers, employees, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Advisor or for which the Advisor is responsible. 13.4. All insurance required by this Section shall contain standard separation of insureds provisions and shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents, and volunteers. 13.5. Any deductibles or self-insured retentions shall be declared to and approved by the City. Advisor guarantees that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents, and volunteers; or (2) the Advisor shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. 8 of 12 14.0 Indemnification, Hold Harmless, and Duty to Defend Advisor shall defend, indemnify, and hold the City, its officials, officers, employees, volunteers and agents serving as independent contractors in the role of city officials (collectively "Indemnities") free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any acts or omissions of Advisor, its employees, or its agents in connection with its negligent or intentionally wrongful performance of this Agreement, including without limitation the payment of all consequential damages and attorneys' fees and other related costs and expenses, except for such loss or damage arising from the sole negligence or willful misconduct of the City. With respect to any and all such aforesaid suits, actions, or other legal proceedings of every kind that may be brought or instituted against Indemnitees, Advisor shall defend Indemnitees, at Advisor's own cost, expense, and risk, and shall pay and satisfy any judgment, award, or decree that may be rendered against Indemnitees. Advisor shall reimburse City and its directors, officials, officers, employees, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. Advisor's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Advisor, the City, its directors, officials, officers, employees, agents or volunteers. All duties of Advisor under this Section shall survive termination of this Agreement. 15.0 Disciplinary Actions The Advisor shall promptly give notice to the City 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. 16.0 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. 17.0 Equal Opportunity Advisor affirmatively represents that it is an equal opportunity employer. Advisor shall not discriminate against any subcontractor, employee, or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, sexual orientation, or age. Such non-discrimination includes, but is not limited to, all activities 9 of 12 related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, or termination. 18.0 Labor Certification By its signature hereunder, Advisor certifies that it is aware of the provisions of Section 3700 of the California Labor Code that require every employer to be insured against liability for Workers' Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services. 19.0 Entire Agreement This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings, or agreements. This Agreement may only be modified by a writing signed by both parties. 20.0 Severability The invalidity in whole or in part of any provisions of this Agreement shall not void or affect the validity of the other provisions of this Agreement. 21.0 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of California. 22.0 No Third Party Rights No third party shall be deemed to have any rights hereunder against either party as a result of this Agreement. 23.0 Waiver No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a party shall give the other party any contractual rights by custom, estoppel, or otherwise. 24.0 Prohibited Interests; Conflict of Interest 24.1. Advisor covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which may be affected by the Services, or which would conflict in any manner with the performance of the Services. Advisor further covenants that, in performance of this Agreement, no person having any such interest shall be employed by it. Furthermore, Advisor shall avoid the appearance of having any interest, which would conflict in any manner with the performance of the Services. Advisor shall not accept any employment or representation during the term of this Agreement which 10 of 12 is or may likely make Advisor "financially interested" (as provided in California Government Code §§1090 and 87100) in any decision made by City on any matter in connection with which Advisor has been retained. 24.2. Advisor further warrants and maintains that it has not employed or retained any person or entity, other than a bona fide employee working exclusively for Advisor, to solicit or obtain this Agreement. Nor has Advisor paid or agreed to pay any person or entity, other than a bona fide employee working exclusively for Advisor, any fee, commission, gift, percentage, or any other consideration contingent upon the execution of this Agreement. Upon any breach or violation of this warranty, City shall have the right, at its sole and absolute discretion, to terminate this Agreement without further liability, or to deduct from any sums payable to Advisor hereunder the full amount or value of any such fee, commission, percentage, or gift. 24.3. Advisor warrants and maintains that it has no knowledge that any officer or employee of City has any interest, whether contractual, noncontractual, financial, proprietary, or otherwise, in this transaction or in the business of Advisor, and that if any such interest comes to the knowledge of Advisor at any time during the term of this Agreement, Advisor shall immediately make a complete, written disclosure of such interest to City, even if such interest would not be deemed a prohibited "conflict of interest" under applicable laws as described in this subsection. 25.0 Attorneys' Fees If either party commences any legal, administrative, or other action against the other party arising out of or in connection with this Agreement, the prevailing party in such action shall be entitled to have and recover from the losing party all of its attorneys' fees and other costs incurred in connection therewith. 26.0 Exhibits All exhibits referenced in this Agreement are hereby incorporated into the Agreement as if set forth in full herein. In the event of any material discrepancy between the terms of any exhibit so incorporated and the terms of this Agreement, the terms of this Agreement shall control. 27.0 Corporate Authority The person executing this Agreement on behalf of Advisor warrants that he or she is duly authorized to execute this Agreement on behalf of said Party and that by his or her execution, the Advisor is formally bound to the provisions of this Agreement. 11 of 12 IN WITNESS WHEREOF, the Parties hereto, through their respective authorized representatives have executed this Agreement as of the date and year first above written. CITY OF SEAL BEACH PMT ASSET MANAGEMENT L.L.C. By: By: 11 )(1.,u Jill R. Ingram, City Manager Name:Nancy Jones Attest: t Its: IAA rt.( riW By: Linda Devine, City Clerk Approved as to Form: By: Quinn Barrow, City Attorney 12 of 12 Error! Unknown document property name.