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City Clerk Document No.
City Council Meeting Date: 12/9/21
CITY OF CHANDLER AGREEMENT
INVESTMENT MANAGEMENT SERVICES
AGREEMENT NO. 4399
THIS AGREEMENT (this "Agreement") is made by and between PFM Asset Management LLC,
("Manager"), a Delaware limited liability company, and the City of Chandler ("Chandler"), a municipal
corporation of the State of Arizona.
RECITALS
WHEREAS, Chandler maintains one or more custodial accounts in which Chandler has deposited some
of its assets (respectively, the "Accounts");
WHEREAS, the custodian of the Accounts shall be a financial institution ("Custodian") other than
Manager; and
WHEREAS, Chandler wishes to engage Manager, and Manager wishes to be engaged, to manage
certain assets in the Accounts (the "Managed Assets"), under the terms and conditions set forth below.
NOW, THEREFORE, Chandler and Manager agree as follows:
AGREEMENT
Section 1.
Appointment.
1.1
Scope of Appointment. Chandler hereby appoints Manager to be an investment manager for
the Accounts and Managed Assets set forth on Exhibit A, and Manager accepts such
appointment. Chandler may revise Exhibit A at any time and for any reason, such revision to
be effective as to this Agreement upon receipt by Manager.
1.2
Investment Policy. Notwithstanding any other provision or provisions of this Agreement to
the contrary, Chandler's appointment of Manager is conditioned upon Manager's compliance
with Chandler's investment policy (the "Policy"), set forth on Exhibit B. Chandler may revise its
Investment Policy at any time and for any reason, such revision to be effective as to this
Agreement upon receipt by Manager. Manager understands and agrees that for purposes of
this Agreement, any investment limitations that may be applicable to the Accounts pursuant to
Arizona law referenced in Exhibit B are hereby automatically incorporated into the Policy.
1.3
Staffing. Manager shall act under the authority and approval of Chandler's Chief Financial
Officer, who shall assist Manager with any necessary information, audit billings, and approve
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payments. Manager shall channel reports and special requests through the Chief Financial
Officer. Chandler reserves the right to review and approve any and all changes to Manager's
key staff assigned to provide services to Chandler pursuant to this Agreement.
Section 2.
Manager's Responsibilities.
2.1
Research, Supervision, Monitoring and Evaluation. Manager shall provide investment
research and supervision of the Accounts. Manager
shall
continuously
monitor
investment opportunities for the Accounts and shall continuously evaluate the investment
of the Accounts.
2.2
Investment and Reinvestment. Manager shall invest and reinvest the assets of the
Accounts at such times and in such manner as Manager believes to be in the best interest
of Chandler.
2.2.1 Manager shall ensure that the Accounts are invested in compliance with the Policy,
as determined at the time of purchase of an investment. Manager shall be
responsible for any losses incurred by Chandler arising from a violation of the
previous sentence.
2.2.2 The Manager shall receive no soft dollar benefit for any transactions placed on
behalf of the Account. Unless otherwise specified in writing by Chandler to Manager,
all orders for the purchase and sale of securities for the Account shall be placed in
such markets and through such brokers and dealers for execution, at such prices as
in the Manager's best judgment shall offer the most favorable execution of each
transaction, 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 Manager by such brokers and dealers. While the
Manager will make a good faith effort to require brokers and dealers selected to
effect Account transactions to perform their obligations, the Manager shall not be
responsible for any loss incurred by reason of any act or omission of any broker,
dealer or custodian for the Account.
2.2.3 Chandler has specified in Exhibit B the investment objectives and any specific
investment restrictions and limitations which govern the Account. It will be
Chandler's responsibility to inform the Manager in writing of any changes or
modifications in the investment objectives of the Account as well as any additional
investment restrictions and limitations applicable thereto and to give the Manager
prompt written notification if Chandler deems any investment made for the Account
to be in violation of such objectives or restrictions and limitations. The Manager
agrees to communicate its investment strategy and activity for the Account to
Chandler and to advise Chandler of any changes in the Manager's strategy at
regularly scheduled quarterly meetings. The Manager, as agent with respect to the
Account, unless otherwise instructed in writing by Chandler and consistent with the
investment objectives of Chandler as specified in Exhibit B, when it deems
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appropriate, may (i) buy, sell, exchange and otherwise trade in any authorized
investments and (ii) place orders for the execution of such securities transactions
with or through such brokers, dealers or issuers as the Manager may select.
2.2.4 Manager is authorized, as an agent of Chandler, to give instructions to Custodian as
to deliveries of securities and payments of cash for the Accounts. Manager shall not
take possession of or act as custodian for the cash, securities, or other assets in the
Accounts and shall have no custodial responsibility for such assets or Accounts.
2.2.5 Manager shall take into account, and may rely upon, Chandler's written advice
concerning anticipated need to make cash withdrawals from the Accounts.
2.2.6 With respect to the Managed Assets, Manager shall vote proxies as Manager
believes is in the best interest of Chandler as of the record date for voting such
proxies. Chandler shall take all actions necessary to effect delivery of the proxy
solicitations to Manager in a timely manner.
2.2.7 Chandler hereby authorizes Manager to sign I.R.S. Form W-9 on behalf of Chandler
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.
2.3
Prudent Investor Standard Applies. In investing and managing the Managed Assets,
Manager shall exercise the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent investment expert, would use in the conduct of an enterprise
of like character and with like aims. Manager agrees that it is obligated to exercise good
faith and candor in the performance of its duties under this Agreement. The federal
securities laws impose liabilities under certain circumstances on persons who act in good
faith. Nothing herein shall in any way constitute a waiver or limitation of any rights which
Chandler may have under any federal securities laws. Except as otherwise provided in this
Agreement, or as agreed to in writing between Manager and Chandler, Manager shall:
2.3.1 Refrain from self-dealing or other acts which might benefit it at the expense of
Chandler; and
2.3.2 Subject to Section 4.2 of this Agreement, not engage in any actions or transactions
that would violate its duty of loyalty or fiduciary duty to Chandler or, other than such
conflicts disclosed in Manager's Form ADV, create a conflict of interest between
Chandler on the one hand and Manager on the other hand.
2.4
Books, Records, Reporting, and Certification.
2.4.1 Manager shall keep accurate books and records relating to transactions made with
respect to the Accounts.
2.4.2 No less than monthly, Manager shall provide Chandler with written appraisals of the
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Accounts valued as of the last business day of the month, together with performance
tabulations and a summary of purchases and sales.
2.4.3 Manager shall furnish such additional information to Chandler about the Accounts as
Chandler may reasonably request in writing from time to time.
2.4.4 To the extent necessary to ensure the accuracy of the accounting and investing of
the Managed Assets, Manager shall permit Chandler to inspect Manager's books and
records during regular business hours relating to the Account upon advance written
notice of at least 10 business days.
2.5
Audit. During the term of this Agreement and for 5 years thereafter, and upon reasonable
prior notice by Chandler, Manager shall make its books and records relating to the
Managed Assets available during regular business hours to Chandler for review and
audit at Manager's offices. Manager acknowledges that such books and records may be
subject to examination and audit by Chandler's external auditors, and, to the extent it has
the requisite jurisdiction and authority, the Auditor General of the State of Arizona, during
the term of this Agreement and for some years thereafter. Any examination or audit of
Manager performed by Chandler or its external auditors, or the Arizona Auditor General
shall be confined to those matters solely relating to Manager's performance of its
obligations under this Agreement. Manager shall reasonably cooperate with Chandler's
examiners or auditors or their representatives in connection with any audit under this
subsection.
2.6
Attendance at Meetings. Upon reasonable request, Manager shall attend meetings with
Chandler and related entities (i.e., Industrial Development Authority, Health Care Benefits
Trust, Chandler Cultural Foundation).
2.7
Specialized Services. Manager shall provide Chandler with specialized services
concerning the foregoing, including but not limited to conducting research or writing
papers relating to investment strategies or philosophies, new investment vehicles or
structures, economic conditions, portfolio management issues pertaining to an investment
style or product, conducting educational presentations to Chandler, and providing general
investment literature.
2.8
Disaster Recovery Program. Manager shall maintain a disaster recovery program
designed to mitigate the impact of natural disasters and other acts, events or
circumstances that may prevent it from complying with its other obligations under this
Agreement.
2.9
Notice. Manager shall promptly notify Chandler of any of the following:
2.9.1 The institution of any litigation or government proceeding against Manager that may
reasonably be expected to have a material adverse effect on Manager's ability to
perform its duties under this Agreement, the Accounts, or the Managed Assets, and
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the basis of the claims made in such litigation or proceeding;
2.9.2 Any settlement, decree, judgment, award, or other material development relating to
litigation against Manager of the type or nature contemplated by Section 2.9.1;
2.9.3 The incapacity of Manager or any development concerning Manager that is likely to
result in a material, adverse change in the Managed Assets or in Manager's ability to
conduct business;
2.9.4 Any breach or failure by Manager to perform its material obligations that might have
a material adverse effect on the Managed Assets or on Manager's ability to conduct
business;
2.9.5 Any breach of any representation or warranty relating to Manager set forth in this
Agreement; or
Section 3.
Chandler's Responsibilities.
3.1
Direction to Custodian. Chandler shall provide such direction to Custodian as may be
necessary to allow Manager to fulfill its responsibilities under this Agreement.
3.2
Availability of Funds for the Next Fiscal Year. Funds may not presently be available under
this Agreement beyond the current fiscal year. No legal liability on the part of Chandler may
arise under this Agreement beyond the current fiscal year until funds are made available for
performance of this Agreement. Chandler may reduce services or terminate this Agreement
without further recourse, obligation, or penalty in the event that insufficient funds are
appropriated. In the event of such non-appropriation, Chandler shall promptly notify Manager
in writing. Chandler's City Manager shall have the sole and unfettered discretion to determine
the availability of funds.
Section 4.
Compensation.
4.1
Fee Schedule. For services rendered under this Agreement, Manager shall be compensated m
accordance with the fee schedule set forth on Exhibit C (the "Fee Schedule").
4.2
Pool Compensation. From time to time, Manager may invest Managed Assets in a money
market mutual fund or local government investment pool managed by Manager (either,
individually, a "Pool") or in individual securities. Average daily net assets subject to the Fee
Schedule include any assets invested in the Pool. Expenses of the Pool, including compensation
for Manager and the Pool custodian, are described in the relevant prospectus or information
statement and are paid from the Pool.
4.3
Other Compensation. If and to the extent Chandler asks Manager to render services other
than those to be rendered by Manager under this Agreement, such additional services shall be
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compensated separately on terms to be agreed upon between Manager and Chandler.
4.4
Expenses To Be Paid by Manager. At its own expense, Manager shall furnish 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 Assets.
4.5
Expenses To Be Paid by Chandler. Except as expressly provided otherwise in this Agreement,
Chandler shall pay all of its own expenses, including but not limited to taxes, commissions, fees,
and expenses of Chandler's independent auditors and legal counsel, if any, brokerage and other
expenses connected with the execution of portfolio security transactions, insurance premiums,
and fees and expenses of Custodian, including safekeeping of funds and securities and the
keeping of books and accounts.
Section 5.
Representations and Warranties.
5.1
By Manager. By entering into this Agreement, Manager represents and warrants that:
5.1.1 It has full power and authority to enter into this Agreement, and that the undersigned
has full power and authority to execute this Agreement on Manager's behalf.
5.1.2 It is an investment adviser registered under the Investment Advisers Act of 1940.
5.1.3 This Agreement has been duly authorized, executed, and delivered by Manager and
constitutes its valid and binding obligation, enforceable against such Manager in
accordance with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of creditors'
rights generally or by general principles of equity.
5.1.4 Manager has obtained or will obtain all governmental authorizations, approvals,
consents, licenses, or filings required in connection with the execution, delivery, or
performance of its duties to Chandler under this Agreement.
5.1.5 Manager has the power and authority under applicable law and the documents or
instruments governing Manager to hold, manage, and invest the Managed Assets as well
as the expertise, support staff, and facilities necessary to provide the services described
in this Agreement and shall allocate such personnel and devote such efforts as are
necessary for it to carry out its duties under this Agreement.
5.1.6 Except as expressly provided in this Agreement, as disclosed to Chandler in writing, or
as otherwise agreed to from time to time between Manager and Chandler in writing,
Manager does not have knowledge of any actual interests adverse to Chandler.
5.1.7 To the extent permitted by applicable law, Manager shall use all reasonable efforts to
notify Chandler in writing as soon as reasonably practicable if (i) an investigation of
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Manager is commenced by any federal or state governmental or regulatory agency or (ii)
a sanction is taken against Manager by any federal or state governmental or regulatory
agency, provided that such investigation or sanction is out of the ordinary course and
materially adversely affects Manager's ability to perform its duties under this
Agreement.
5.1.8 The execution, delivery, and performance of this Agreement by Manager will not violate
any provisions governing Manager and will not violate or result in any default under any
material contract or other agreement to which Manager is a party or by which Manager
or its assets may be bound or any applicable statute or any rule, regulation, or order of
any government agency or body.
5.1.9 Manager has not violated any statute, regulation, law, order, or decree to which it is
subject which would adversely affect its business or financial condition or impair its
ability to carry out its obligations under this Agreement.
5.1.10 Except as otherwise disclosed to Chandler, there is no legal action, suit, or arbitration or
other legal or administrative investigation, proceeding, or inquiry pending against
Manager in a principal capacity regarding Manager's investment management or
fiduciary activities.
5.1.11 Manager shall bear all taxes and payroll expenses of any kind and description resulting
from its receipt of any sums or compensation from its management of the Accounts or
otherwise received from Chandler.
5.1.12 Upon request by Chandler, Manager shall make its most current policies concerning
insider trading, ethics, and compliance available for Chandler's review.
5.1.13 Manager has not entered into any contingent fee arrangement with any firm or person
concerning this Agreement, nor has Manager received any incentive or special payment
from Chandler (or any other person in connection with this Agreement) apart from the
consideration specified in this Agreement.
5.1.14 Manager shall notify Chandler promptly if any of its representations or warranties ceases to
be true.
5.1.15 To the best of Manager's knowledge, all representations made by Manager in any written
materials provided by Manager to Chandler are accurate in all material respects, subject
to any disclaimers or other disclosures included in such written materials or provided in
future disclosures that supersede prior disclosures. For the avoidance of doubt, any
information provided by Manager to Chandler which originates from third-party sources
shall not constitute representations for the purposes of this subsection 5.1.15.
5.1.16. Manager has not employed or retained any person to solicit or secure this Agreement
upon an agreement or understanding for a commission, percentage, brokerage, or
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contingent fee. This Agreement is subject to Arizona Revised Statutes Section 38-511
which provides for cancellation of any Agreement within three years of its execution,
without penalty or further obligation, made by a political subdivision of the State if any
person significantly involved in initiating, negotiating, securing, drafting or creating the
contract on behalf of the political subdivision is, at any time while the contract or any
extension of the contract is in effect, an employee or agent of any other party to the
contract in any capacity or a consultant to any other party of the contract with respect
to the subject matter of the contract.
5.2
By Chandler. By entering into this Agreement, Chandler represents and warrants that:
5.2.1 It has full power and authority to enter into this Agreement and that the undersigned
has full power and authority to execute this Agreement on Chandler's behalf.
5.2.2 Except as otherwise specified by Chandler's Chief Financial Officer, all Managed
Assets are the sole property of Chandler and are free from any charge or
encumbrance.
5.2.3 It shall not remove assets from the Account without first giving reasonable written
notice to Manager or terminating this Agreement.
5.2.4 It has received a copy of Part 2A and 2B of Manager's Form ADV (the "ADV").
Section 6.
Custody of Assets.
6.1
Manager Not to Take Custody of Managed Assets. Nothing contained herein shall be
deemed to authorize Manager to take or receive physical possession of any Managed
Assets, it being intended that sole responsibility for safekeeping of the Managed Assets (in
such investments as Manager may direct) and the consummation of all purchases, sales,
deliveries, and investments made pursuant to Manager's direction shall rest upon
Custodian. Neither Chandler nor Manager shall have any liability with respect to the
custody arrangements or the acts or omissions of Custodian.
6.2
Instructions to Custodian. Chandler shall instruct Custodian to furnish such information
about the Account and the Managed Assets to Manager as Manager may reasonably
request in connection with the performance of its duties under this Agreement. Chandler
acknowledges that Manager shall be relying on Custodian's identification of any assets
contributed or liabilities allocated to the Accounts, as well as the availability of Managed
Assets for sale. Manager may reasonably rely without further inquiry upon any information
furnished to it by Custodian, and Manager shall not be responsible for any errors or
omissions arising from any inaccuracies in such information.
Section 7.
Not an Exclusive Contract.
7.1
Not Exclusive on the Part of Chandler. Manager understands and acknowledges that this
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Agreement is nonexclusive and for the sole convenience of Chandler, which reserves the
right to obtain like services from other sources for any reason.
7.2
Not Exclusive on the Part of Manager. Manager acts as adviser to other clients and may
give advice, and take action, with respect to any such client which may differ from the
advice given, or the timing or nature of action taken, with respect to the Accounts. Chandler
acknowledges that:
7.2.1 Manager shall have no obligation to purchase or sell for the Accounts, or to
recommend for purchase or sale by the Accounts, any security which Manager, its
principals, affiliates or employees may purchase or sell for themselves or for any
other clients.
7.2.2 There may be occasions when portfolio transactions are executed as part of
concurrent authorizations by Manager to purchase or sell the same security for
other client accounts served by Manager. Although such concurrent authorizations
potentially could be either advantageous or disadvantageous to Manager's clients'
accounts, they are effected only when Manager believes that to do so is in the interest
of its respective clients' accounts. When such concurrent authorizations occur, the
executions shall be allocated in an equitable manner among each of Manager's clients'
accounts.
7.2.3 Transactions in a specific security may not be accomplished for all Manager's clients'
accounts at the same time or at the same price.
7.2.4 Notwithstanding the foregoing and for the avoidance of doubt, Manager may not engage
in transactions hereunder with its affiliates except to the extent permitted by law.
Section 8.
Notices.
8.1
To One Party by the Other. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered in person or by any other method in which evidence of
receipt is obtained, including registered mail, facsimile transmission, or reputable messenger
or overnight delivery service, to the parties at the following addresses or facsimile numbers (or
at such other address or number as each respective party may specify in the future):
8.1.1 If to Chandler: Deputy City Manager |CFO
City of Chandler
P.O. Box 4008
Chandler, AZ 85244-4008
8.1.2 If to Manager: PFM Asset Management, LLC
Attn: Paulina Woo, Managing Director
1820 East Ray Road
Chandler, AZ 85225
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415-470-7815
woop@pfmam.com
8.2
Effectiveness. Each such notice or other communication shall be effective (i) if given by
facsimile or e-mail, when such is transmitted to the number specified in this section and the
appropriate confirmation is received, and (ii) if given by any other means, when delivered at the
address specified in this section.
Section 9.
Term, Amendment, and Termination.
9.1
Term. This Agreement shall become effective on January 1, 2022 and shall continue thereafter
for an initial term of one year ending on December 31, 2022. During this term, this Agreement
may be terminated as described herein. The City and the Contractor may mutually agree to
extend the Agreement for up to four additional terms of one year each, or portions thereof.
The City reserves the right, at its sole discretion, to extend the Agreement for up to 60 days
beyond the expiration of any extension term.
9.2
Amendment. Any amendment to this Agreement shall be written and signed by both parties.
9.3
Termination by Chandler for Convenience. Chandler may terminate this Agreement upon
30 days' prior written notice. In the event of such termination, Manager shall immediately stop
all work under this Agreement and shall immediately cause any of its subcontractors to cease
such work. As compensation in full for services performed to the date of such termination,
Manager shall receive a fee for the percentage of services actually performed. This fee shall be
in the amount to be mutually agreed upon by Manager and Chandler. If there is no mutual
agreement, the Chief Financial Officer shall determine the percentage of work performed for
each task detailed in this Agreement. Manager's compensation shall be based upon such
determination and the Fee Schedule.
9.4
Termination by Chandler for Cause. Chandler may terminate this Agreement for cause
immediately upon the occurrence of any one or more of the following events:
9.4.1
If Manager is adjudged bankrupt or insolvent.
9.4.2
If Manager makes a general assignment for the benefit of creditors.
9.4.3
If a trustee or receiver is appointed for Manager or for any of Manager's property.
9.4.4
If Manager files a petition to take advantage of any debtor's act or to reorganize under
the bankruptcy or similar laws.
9.4.5
If Manager disregards laws, ordinances, rules, regulations or orders relating to the
performance of this Agreement of any public body having jurisdiction over Manager.
Where this agreement has been so terminated by Chandler, the termination shall not
affect any rights of Chandler against Manager then existing or which may thereafter
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accrue.
9.5
Cancellation by Chandler for Improper Influence. Pursuant to Arizona Statutes §38-511,
Chandler may cancel this Agreement at any time within 3 years after this Agreement's
execution, without penalty or further obligation, if any person significantly involved in initiating,
negotiating, securing, drafting, or creating this Agreement on Chandler's behalf is or becomes
at any time while this Agreement (or any extension thereof) is in effect, an employee, agent, or
consultant to Manager with respect to the subject matter of this Agreement. The cancellation
shall be effective when Manager receives written notice of the cancellation, unless the notice
specifies a later time.
9.6
Termination by Manager. Manager may terminate this Agreement immediately upon material
breach of its terms by Chandler, or at any time upon 30 days' prior written notice to Chandler.
There shall be no penalty for such termination, and the fee for the final period shall be adjusted
proportionately.
9.7
Manager Cooperation Following Termination. Following termination of this Agreement,
Manager shall take such action as may be necessary to provide Chandler with full control over
the Managed Assets and to enable the Managed Assets to be preserved to the fullest extent
possible.
Section 10. Indemnification and Insurance.
10.1
Indemnification. Manager agrees to indemnify, defend, and save harmless Chandler, its Mayor
and Council, appointed boards and commissions, officials, officers, and employees, individually
and collectively, from all losses, claims, suits, actions, payments and judgments, demands,
expenses, reasonable attorneys' fees and defense costs, or actions of any kind and nature
resulting from personal injury to any person, including employees of Manager or of any
subcontractor engaged or employed by Manager (including bodily injury and death) or damages
to any property, to the extent arising or alleged to have arisen out of the negligent acts, errors,
mistakes or omissions, or the willful or intentional misconduct, of Manager under this
Agreement or breach by the Manager of the standard of care set forth in Section 2.3 of this
Agreement. The amount and type of insurance coverage requirements set forth below shall not
be construed as limiting the scope of the indemnity in this paragraph.
10.2
Insurance. Manager shall provide and maintain the insurance coverage set forth on Exhibit D.
10.3
For the avoidance of doubt, in the event of a breach of the Agreement or a violation of the
Policy by the Manager, the parties acknowledge that in no event shall Manager be liable to
Chandler for any lost investment opportunity profits or earnings.
Section 11. Disclosure.
11.1
Periodic Disclosure by Chandler. Chandler may disclose the following information concerning
the Accounts and the Managed Assets to the general public: (i) the name of any such
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investments; (ii) the date of Chandler's initial investment; (iii) the amount of any such
investment; (iv) the fees paid by Chandler to Manager; and (v) the market value of such
investments, including the net rate of return to Chandler from such investments, and the
investment multiple of such investments. Manager consents in advance to such disclosures and
agrees that such disclosures shall not constitute a breach of this Agreement.
11.2
Disclosures by Chandler to General Public as Required by Law. Manager acknowledges that
Chandler may be required to disclose information to the general public pursuant to state or
local law or regulation, specifically, the Arizona Public Records Law, Arizona Revised Statutes,
A.R.S. sections 39-121 to 39-121.03. Manager may mark information that it provides to Chandler
as "confidential." If material marked "Confidential" is the subject of a Public Records request,
Chandler shall notify Manager of the disclosure as soon as reasonably practicable, provided
that such notice is not restricted or prohibited by applicable law, and Manager shall be allowed
five (5) working days to obtain injunctive relief in Maricopa County Superior Court, or Chandler
will release the requested documents. Manager is completely responsible for challenging any
applicable Public Records request. Chandler shall have no responsibility to challenge a Public
Records request relating to any documents or any other information relating to this Agreement.
11.3
Disclosures by Chandler to Authorities. Chandler may be subject to investigation and audit
by various regulatory agencies and other governmental authorities, including but not limited
to the Arizona Attorney General and the Arizona Auditor General's Office (collectively,
"Authorities"). Such investigations or audits may, under applicable law or regulation, require
access to confidential information provided by Manager to Chandler. Manager agrees that,
upon five (5) working days advance notice to Manager (provided that such notice is reasonably
practicable and not restricted or prohibited by applicable law), Chandler may provide such
information to the Authorities.
11.4
Disclosure by Manager of Confidential Documents Provided by Chandler. Manager shall
maintain in strict confidence and shall use and disclose only as authorized by Chandler, all
information of a competitively sensitive or proprietary nature that it receives in connection with
the work performed for Chandler hereunder. Manager shall require its personnel and any
subcontractor to agree to do likewise. Chandler shall take reasonable steps to identify for the
benefit of Manager, its personnel and any subcontractor, any information Chandler considers
to be competitively sensitive or proprietary nature, including by using confidentiality notices in
written material where appropriate. These restrictions shall not be construed to apply to (a)
information generally available to the public; (b) information released by Chandler generally
without restriction; (c) information independently developed or acquired by Manager, its
personnel or any subcontractor without reliance in any way on other protected information of
Chandler; or (d) information approved for the use and disclosure of Manager, its personnel or
any subcontractor without restriction. Notwithstanding the foregoing restrictions, Manager, its
employees and any subcontractor may use and disclose any information (i) to the extent
required by an order of any court or other governmental authority, or (ii) as necessary for it or
them to protect their interest under this Agreement, but in each case only after Chandler has
been so notified (provided that such notice is reasonably practicable and not restricted or
prohibited by applicable law) and has had the opportunity, if possible, to obtain reasonable
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protection for such information in connection with such disclosure. All reports and other
written products provided to Manager in connection with work performed under this
Agreement shall be considered confidential.
Section 12.
State and Federal Law.
12.1
Immigration Warranty.
12.1.1 Pursuant to A.R.S. § 41-4401, Manager hereby warrants that Manager and each of its
subcontractors who perform service under this Agreement ("Subcontractors") shall
comply with all federal immigration laws and regulations that relate to the immigration
status of their employees and the requirement to use E-Verify set forth in A.R.S. § 23-
214(A) (the "Contractor Immigration Warranty").
12.1.2 A breach of the Contractor Immigration Warranty shall constitute a material breach of
this Agreement that is subject to penalties up to and including termination of this
Agreement.
12.1.3 Chandler retains the legal right to inspect the papers of any employee of Manager
or of Subcontractors who works on this Agreement to ensure that Manager and its
Subcontractors are complying with the Contractor Immigration Warranty. Manager
agrees to assist Chandler in the conduct of any such inspections.
12.1.4 Chandler may, at its sole discretion, conduct random verifications of the employment
records of Manager and its Subcontractors to ensure compliance with the Contractor
Immigration Warranty. Manager agrees to assist Chandler in performing any such
random verifications.
12.1.5 The provisions of this subsection must be included in any contract Manager enters
into with any and all of its Subcontractors. "Services" are defined as furnishing labor,
time, or effort in the State of Arizona by a contractor or subcontractor. Services
include construction or maintenance of any structure, building, or transportation
facility or improvement to real property.
12.2
Iran. In accordance with A.RS. § 35-393.06, Manager hereby certifies that it does not have
scrutinized business operations in Iran.
12.3
Sudan. In accordance with A.R.S. § 35-391.06, Manager hereby certifies that it does not
have scrutinized business operations in Sudan.
12.4
Nondiscrimination. Neither Manager nor any officer, agent, employee, servant or
subagent of Manager shall discriminate in the treatment or employment of any individual
or groups of individuals on the grounds of race, color, religion, national origin, age, or sex,
either directly, indirectly, or through contractual or other arrangements. This Agreement is
subject to A.RS. § 41-4401, which is incorporated by this reference, with the obligations of
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the "State Contractor" or "Contractor" as set forth therein respectively applying to
Manager.
12.5
Corrupt Practices Act. During the term of this Agreement, Manager shall not make any
payment to any person that, to Manager's knowledge, is in violation of the United States
Foreign Corrupt Practices Act, as amended.
12.6
AML Laws. Manager acknowledges that to the extent that it is subject to and (to its
knowledge) is in compliance with all applicable United States laws and regulations relating
to anti-money laundering, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "Patriot
Act") and the Bank Secrecy Act, as amended by the Patriot Act (the "BSA") (collectively, the
"U.S. AML Laws and Regulations"). Manager represents and warrants that in order to
facilitate compliance with the U.S. AML Laws and Regulations, it has developed and shall
maintain a written anti-money-laundering prevention program reasonably designed to
comply with the requirements of the U.S. AML Laws and Regulations.
12.7
SEC Rule 206(4)-5. In the event Manager is an investment adviser registered under (or is
otherwise subject to) the Investment Advisers Act of 1940 [15 U.S.C. §§ 80(b) et seq.] (the
"Act"), Manager certifies its compliance with Securities and Exchange Commission ("SEC")
Rule 206(4)-5 [17 C.F.R. 275.206(4)-5] and the amendments to SEC Rules 204-2 [17 C.F.R.
275.204-2] and 206(4)-3 [17 C.F.R. 275.206(4)-3] of the Act with respect to Chandler's
investments.
12.8
Immunities and Defenses. Chandler reserves all immunities, defenses, rights, or actions
arising out of its sovereign status, including those under the Eleventh Amendment to the United
States Constitution. No provision of this Agreement shall be construed as a waiver or limitation
of the immunities, defenses, rights, or actions described in the previous sentence. Chandler
acknowledges that this paragraph in no way limits its obligation to make any payments or return
any amounts required to be paid or returned under this Agreement.
Section 13.
Dispute Resolution.
13.1
Arizona Law. This Agreement shall be governed and interpreted according to the laws of the
State of Arizona.
13.2
Alternative Dispute Resolution. The parties hereby agree there shall be a 60-day moratorium
on litigation commencing on the day that a claim is filed by Manager pursuant to A.RS. § 12-
821.01, during which time the parties shall negotiate in good faith to resolve the dispute and
evaluate the viability of pursuing alternative dispute resolution procedures such as mediation
and arbitration.
13.3
Jurisdiction and Venue. Any lawsuits between the parties arising out of this Agreement shall
be brought and concluded in the courts of Maricopa County in the State of Arizona, which shall
have exclusive jurisdiction over such lawsuits.
15
13.4
Fees and Costs. Except as otherwise agreed by the parties, the prevailing party in any
adjudicated dispute relating to this Agreement is entitled to an award of reasonable attorneys'
fees and costs, including expert witness fees and costs and arbitrator fees and costs; provided,
however, that no award of attorneys' fees shall exceed ten percent (10%) of the damages
awarded the prevailing party unless the non-prevailing party has been determined to have
acted in bad faith or in a frivolous manner during the adjudication.
Section 14.
Miscellaneous.
14.1
Cooperative Use of Contract. With the approval of Manager, this Agreement may be extended
for use by other municipalities, school districts, and government agencies of the State of
Arizona. Any such usage by other entities must be in accordance with the ordinance, charter
and/or procurement rules and regulations of the political entity.
14.2
Good Faith by Chandler. Chandler shall have no liability to Manager for any action or omission
occurring in the good-faith and in accordance within their legal authority under this Agreement
and applicable laws. This Section shall survive termination of this Agreement.
14.3
Non-assignability. Neither Chandler nor Manager may assign this Agreement without the
prior written consent of the other. This Agreement shall be binding upon, and shall inure to the
benefit of, the permitted successors and assigns of Manager.
14.4
Force Majeure. Neither party shall be liable for any failure, delay, or interruption in the
performance of its obligations under this Agreement, if such failure, delay, or interruption results
from the occurrence of any acts, events, or circumstances beyond that party's reasonable
control. In such case, the terms of this Agreement shall continue in full force and effect and the
party's obligations shall be performed or carried out as soon as legally and practicably possible
after the cessation of such acts, events, or circumstances.
14.5
Waiver. No waiver of any provision of this Agreement shall be effective unless it is in writing
and signed by the party waiving its rights. Such a waiver shall be effective only in the specific
instance and for the specific purpose for which it is given. A party's failure to exercise or delay
in exercising any right, remedy, power, or privilege under this Agreement shall not operate as a
waiver. Nothing in this Agreement shall constitute a waiver or limitation of any right that
Chandler may have under any federal or state securities laws or other applicable law.
14.6
Independent Contractor. In the performance of all services under this Agreement, Manager
shall be an independent contractor and not an agent or employee of Chandler. Manager has
and retains the right to exercise full supervision and control of the manner and methods of
providing all services to Chandler under this Agreement. Manager retains full supervision and
control over the employment, direction, compensation, and discharge of all persons assisting it
in the provision of services under this Agreement. With respect to Manager's employees,
Manager shall be solely responsible for payment of wages, benefits, and other compensation,
compliance with all occupational safety, welfare, and civil rights laws, tax, withholding, and
16
payment of employee taxes of whatever nature, and compliance with any other laws regulating
employment.
14.7
Limitation to Manager's Authority. Except as otherwise authorized herein or pursuant
hereto, it is understood that in Manager's performance of any and all duties and services under
this Agreement, Manager has no authority to bind Chandler to any contracts or undertakings.
14.8
Non-collusion Covenant. Chandler and Manager each represent and agree that they have not
entered into any contingent fee arrangement with any firm or person concerning this
Agreement. Chandler and Manager each represent and agree that Manager has not received
any incentive or special payment from Chandler or any other person apart from the
consideration specified in this Agreement or any other written agreements between the
parties.
14.9
Remedies. No right or remedy conferred on or reserved to Chandler or Manager by this
Agreement is exclusive of any other right or remedy under this Agreement, at law, or in equity.
Each right and remedy available to the parties shall be cumulative of every other right or remedy
and may be enforced concurrently or from time to time.
14.10 Ownership of Documents. All documents (including but not limited to data compilations,
reports and materials, whether in written, analog, digital, film, or electronic form) that relate
directly and exclusively to Chandler, are prepared by Manager pursuant to this Agreement, and
are delivered to Chandler shall be the property of Chandler, unless the parties otherwise agree
in writing. All documents (including but not limited to data compilations, reports and materials,
whether in written, analog, digital, film, or electronic form) and other information that are
delivered by Manager to Chandler shall be the property of Chandler, unless the parties
otherwise agree in writing. Chandler shall have no obligation to return the originals or copies
of the foregoing items to Manager upon termination of this Agreement.
14.11 Necessary Parties. All of the understandings, agreements, representations, and warranties
contained herein are solely for the benefit of Chandler and Manager, and there are no other
parties who are intended to be benefited in any way whatsoever by this Agreement.
14.12 Power of Attorney. Any power of attorney granted by Chandler to Manager shall automatically
be revoked if it files a petition in bankruptcy, is dissolved, or is no longer Manager pursuant to
this Agreement, in each case upon the occurrence of any such event.
14.13 Severability. Should any part, term, portion, or provision of this Agreement be decided finally
to be in conflict with any law of the United States or the State of Arizona, or otherwise be
unenforceable or ineffectual, the validity of the remaining parts, terms, portions, or provisions
shall be deemed severable and shall not be affected thereby, provided that such remaining
portions or provisions can be construed in substance to constitute the agreement which the
parties intended to enter into in the first instance.
14.14 Headings and Recitals. Section headings in this Agreement are used solely for convenience
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and shall be wholly disregarded in the construction of this Agreement. No provision of this
Agreement shall be interpreted for or against a party hereto because that party or its legal
representative drafted such provision, and this Agreement shall be construed as if jointly
prepared by the parties. The Recitals set forth in this Agreement are hereby incorporated into
and made part of this Agreement.
14.15 Entire Agreement. This Agreement, including its Exhibits, represents the entire understanding
of the parties hereto and supersedes all prior written or oral agreements with respect to the
subject matter hereof.
14.16 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
FOR THE CITY
FOR THE CONTRACTOR
By: _________________________________________
By: _________________________________________
Its: _______________Mayor____________________
Its: _________________________________________
APPROVED AS TO FORM:
By: _________________________________________
City Attorney
ATTEST:
By: _________________________________________
City Clerk
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EXHIBIT A
ACCOUNTS
PFM Asset Management LLC Accounts:
City of Chandler Core Portfolio
xxxx0100
City of Chandler PFM Prime
x5194
City of Chandler, 2017 GO Bonds
xxxx0105
City of Chandler, 2017 ETRO Bonds
xxxx0106
City of Chandler, 2019 GO Bonds
xxxx0107
City of Chandler, 2019 ETRO Bonds
xxxx0108
Chandler Health Care Benefits Trust
xxxx0103
Chandler Health Care Benefits Trust PFM Prime
xx5230
Chandler Worker’s Comp & Employer Trust
xxxx0104
Chandler Worker’s Comp & Employer Trust PFM Prime
xx5325
Industrial Development Authority
xxxx0300
Chandler Cultural Foundation
xxxx0200
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EXHIBIT B
INVESTMENT POLICY
The City of Chandler Investment Policy can be found at the following website:
https://www.chandleraz.gov/sites/default/files/documents/imported/Budget_Investment_Jan16.pdf
DEFINITIONS:
Agency - A debt security issued by a government-sponsored enterprise (GSE). While not explicitly
guaranteed by the government, GSEs are generally traded with an "implied" guarantee. An example
of a GSE is the Federal National Mortgage Association (FNMA).
Commercial Paper - An unsecured short-term promissory note issued by corporations, with maturities
ranging from 2 to 270 days.
Credit Quality - The measurement of the financial strength of a bond issuer. This measurement helps
an investor to understand an issuer's ability to make timely interest payments and repay the loan
principal upon maturity. Generally, the higher the credit quality of a bond issuer, the lower the interest
rate paid by the issuer because the risk of default is lower. Credit quality ratings are provided by
nationally recognized rating agencies.
Current Yield Current Return - A yield calculation determined by dividing the annual interest
received on a security by the current market price of that security.
Delivery Versus Payment (DVP) - A type of securities transaction in which the purchaser pays for
the securities when they are delivered to the purchaser or the custodian.
Discount - The amount by which the par value of a security exceeds the price paid for the security.
Diversification - A process of investing assets among a range of security types by sector, maturity,
and quality rating.
Duration - A measure of the timing of the cash flows, such as the interest payments and the
principal repayment, to be received from a given fixed-income security.
Fair Value - The amount at which an investment could be exchanged m a current transaction
between willing parties, other than in a forced or liquidation sale.
Government Securities -An obligation of the U.S. government, backed by the full faith and credit of
the government. These securities are regarded as the highest quality of investment securities
available in the U.S. securities market. See "Treasury Bills, Notes, and Bonds".
Investment Policy - A concise and clear statement of the objectives and parameters formulated
20
by an investor or investment manager for a portfolio of investment securities.
Local Government Investment Pool (LGIP) -An investment by local governments m which their
money is pooled as a method for managing local funds.
Par - Face value or principal value of a bond, typically $1,000 per bond.
Premium - The amount by which the price paid for a security exceeds the security's par value
Principal - The face value or par value of a debt instrument. Also may refer to the amount of capital
invested in a given security.
Prudent Person Rule - An investment standard outlining the fiduciary responsibilities of public
funds investors relating to investment practices.
Total Return - The sum of the portfolio interest earnings plus amortization/accretion plus realized
gains plus unrealized gains minus fees divided by the average portfolio value during the period.
Treasury Bills - Short-term U.S. government non-interest bearing debt securities with maturities of
no longer than one year and issued in minimum denominations of $10,000.
Treasury Notes - Intermediate U.S. government debt securities with maturities of one to ten years
and issued in denominations ranging from $1,000 to $1 million or more.
Treasury Bonds - Long-term U.S. government debt securities with maturities often years or longer
and issued in minimum denominations of $1,000.
Yield - The current rate of return on an investment security generally expressed as a percentage of
the security's current price.
21
EXHIBIT C
FEE SCHEDULE
For services provided by Manager pursuant to this Agreement, Chandler shall pay Manager an
annual fee, in monthly installments, based on the daily net assets of the Managed Assets, at the
following annual rates:
Portfolio Assets Under Management
Annual Fee Rate (100 bps = 1%)
First $100 million
9 bps (0.09%)
Next $100 million
6 bps (0.06%)
Next $100 million
4 bps (0.04%)
Assets in excess of $300 million
3 bps (0.03%)
Minimum annual fee of $25,000.
Fees are calculated based on average daily balance of assets under management for the month.
Manager will bill Chandler monthly for service performed under this Agreement, said bill to
include a statement indicating the basis upon which the fee was calculated.
Chandler authorizes Manager to present invoices for such fees to Custodian for payment. Chandler
hereby instructs Custodian to disburse funds from such account for the payment of fees to Manager.
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EXHIBIT D
INSURANCE
1. Manager, at its own expense, shall purchase and maintain insurance or reinsurance of the types and
amounts required in this section, with companies possessing a current A.M. Best, Inc. rating of B++6,
or better and legally authorized or permitted to do business in the State of Arizona with policies and
forms satisfactory to Chandler.
2. Policies written on a "Claims made" basis are not acceptable without written permission from
Chandler's Risk Management Department. Provided, however, the City hereby provides pre- approval
for Manager to maintain any professional liability policies on a "claims made" basis during the life of this
Agreement.
3. All insurance required herein shall be maintained in full force and effect until all work or services
required to be performed under the terms of this agreement is satisfactorily completed and formally
accepted. Failure to do so may, at the sole discretion of Chandler, constitute a material breach of this
agreement and may result in termination of this agreement.
4.
If any of the insurance policies are not renewed prior to expiration, payments to Manager may be
withheld until these requirements have been met.
5. All insurance policies, except Workers' Compensation, Professional Liability, and Financial Institution
Bond required by this Agreement, and self-insured retention or deductible portions, shall name, to
the fullest extent permitted by law for claims arising out of the performance of this agreement, the
City of Chandler, its agents, representatives, officers, directors, officials and employees as Additional
Insureds.
6. Manager's insurance shall be primary insurance over any insurance available to Chandler and as to
any claims resulting from this agreement, it being the intention of the parties that the insurance
policies so effected shall protect both parties and be primary coverage for any and all losses covered
by the described insurance.
7. The insurance policies, except Workers' Compensation, Professional Liability, and Financial Institution
Bond, shall contain a waiver of transfer rights of recovery (subrogation) against Chandler, its agents,
representatives, officers, directors, officials and employees for any claims arising out of Manager's
acts, errors, mistakes, omissions, work or service.
8. The insurance policies may provide coverage, which contain deductibles or self-insured retentions.
Such deductible and/or self-insured retentions shall be assumed by and be for the account of, and at
the sole risk of Manager. Manager shall be solely responsible for the deductible and/or self-insured
retention.
9. Manager shall provide Chandler with no less than thirty (30) days written notice prior to any
cancellation or expiration of any policy that results in non-compliance with the insurance
requirements outlined herein. Manager agrees that during the term of this agreement, Manager shall
23
not reduce any coverage amount below the limits specified in this agreement.
10. Information concerning reduction of coverage on account of revised limits or claims paid under the
General Aggregate, or both, shall be furnished by Manager with reasonable promptness in
accordance with Manager's information and belief if the action results in non- compliance with the
insurance requirement outlined herein.
11. In the event that claims in excess of the insured amounts provided herein, are filed by reason of any
operations under this agreement, the amount of excess of such claims, or any portion thereof, may
be withheld from payment due or to become due Manager until such time as Manager shall furnish
such additional security covering such claims as may be determined by Chandler.
D.1
PROOF OF INSURANCE - CERTIFICATES OF INSURANCE
1. Prior to commencing work or services under this agreement, Manager shall furnish to
Chandler Certificates of Insurance, issued by Manager's insurer(s), as evidence that policies
providing the required coverages, conditions and limits required by this agreement are in full
force and effect and obtain from Chandler's Risk Management Division approval of such
Certificates.
2. If a policy does expire during the life of this agreement, a renewal certificate must be sent to
Chandler five (5) days after the expiration date.
3. All Certificates of Insurance shall identify the policies in effect on behalf of Manager, their policy
period(s), and limits of liability. Each Certificate shall include the job site and project number
and title. Coverage shown on the Certificate of Insurance must coincide with the requirements
in the text of the agreement documents. Information required to be on the Certificate of
Insurance may be typed on the reverse of the Certificate and countersigned by an authorized
representative of the insurance company.
4. In the event of a claim arising out of the performance of the contracted services under this
agreement and which names Chandler or its agents, representatives, officers, directors,
officials or employees as a codefendant, Manager agrees to make the applicable insurance
policy available for review in a secured format.
D.2
REQUIRED COVERAGE
1. Such insurance shall protect Manager from claims set forth below which may arise out of or
result from the operations of Manager under this agreement and for which Manager may be
legally liable, whether such operations be by Manager or by a subcontractor or by anyone
directly or indirectly employed by any of them, or by anyone for whose acts any of them may
be liable. Coverage under the policy will be at least as broad as Insurance Services Office, Inc.,
policy form CG000l 1093 or equivalent thereof, including but not limited to severability of
interest and waiver of subrogation clauses.
24
2. Claims under workers' compensation, disability benefit and other similar employee benefit
acts which are applicable to the work to be performed;
3. Claims for damages because of bodily injury, occupational sickness or disease, or death of
Manager's employees;
4.
Claims for damages because of bodily injury, sickness or disease, or death of any person other
than Manager's employees;
5.
Claims for damages insured by usual personal injury liability coverage;
6. Claims for damages, other than to work itself, because of injury to or destruction of tangible
property, including loss of use resulting therefrom;
7. Claims for damages because of bodily injury, death of a person or property damage arising
out of ownership, maintenance or use of a motor vehicle. Coverage will be at least as broad as
Insurance Service Office, Inc., coverage Code “8” “hired” and Code “9” “non-owned” Code "I"
"any auto" policy form CA000I 1293 or equivalent thereof.
8.
Claims for bodily injury or property damage arising out of completed operations;
9.
Claims involving contractual liability insurance applicable to Manager's obligations under the
Indemnification Agreement;
10. Claims for injury or damages in connection with one's professional services;
D.2.1 Commercial General Liability - Minimum Coverage Limits
The Commercial General Liability insurance required herein shall be written for not less than
$2,000,000 limits of liability or ten percent (10%) of the agreement price, whichever coverage is
greater. Any combination between general liability and excess general liability alone amounting
to a minimum of $2,000,000 per occurrence (or 10% per occurrence) and an aggregate of
$4,000,000 (or 20% whichever is greater) in coverage will be acceptable. The Commercial General
Liability additional insured endorsement shall be as broad as the Insurance Services, Inc's (ISO)
Additional Insured, Form B, CG 20IOI001, and shall include coverage for Manager's operations and
products, and completed operations.
D.2.2 General Liability - Minimum Coverage Limits
The General Liability insurance required herein, including, Comprehensive Form, Premises-
Operations, Explosion and Collapse, Underground Hazard, Products/Completed Operations,
Contractual Insurance, Broad Form Property Damage, and Personal Injury shall be written for
Bodily Injury and Property Damage Combined shall be written for not less than $2,000,000 or
10%ofthe agreement cost and with a $4,000,000 aggregate.
25
D.2.3 Automobile Liability
Manager shall maintain Commercial/Business Automobile Liability insurance with a
combined single limit for bodily injury and property damage of not less than $1,000,000 each
occurrence with respect to any owned, hired, and non-owned vehicles assigned to or used in
performance of Manager's work. Coverage shall be at least as broad as coverage code 8,
“hired” and code 9, “non-owned” code 1, "any auto", (Insurance Service Office, Inc. Policy Form
CA 00011293, or any replacements thereof).
D.2.4 Worker's Compensation and Employer's Liability
Manager shall maintain Workers' Compensation insurance to cover obligations imposed by
federal and state statutes having jurisdiction over Manager's employees engaged in the
performance of the work or services; and, Employer's Liability insurance of not less than
$1,000,000 for each accident, $1,000,000 disease coverage for each employee, and
$1,000,000 disease policy limit.
In case any work is subcontracted, Manager will require the Subcontractor to provide
Workers' Compensation and Employer's Liability to at least the same extent as required of
Manager.
D.2.5 Professional Liability
Manager shall maintain Professional Liability insurance covering acts, errors, mistakes and
omissions arising out of the work or services performed by Manager, or any person employed
by Manager, with a claims made policy limit of not less than $1,000,000.
D.2.6 Financial Institution Bonds
Manager shall maintain Financial Institution coverage, including but not limited to, Computer
Crime, Employee Dishonesty and Theft, Robbery and Burglary On and Off Premises
coverage. Limits of Liability shall be at least Ten Million Dollars ($10,000,000) per
occurrence.