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AG 23-121 - PFM FINANCIAL ADVISORS, LLC
RETURN TO: EXT: CITY OF FEDERAL WAY LAW DEPARTMENT ROUTING FORM l . ORIGINATING DEPT./DIV: Finance 2. ORIGINATING STAFF PERSON: Steve Groom EXT: 2520 3. DATE REQ. BY: ASAP 4. TYPE OF DOCUMENT (CHECK ONE): ❑ CONTRACTOR SELECTION DOCUMENT (E.G., RFB, RFP, RFQ) ❑ PUBLIC WORKS CONTRACT ❑ SMALL OR LIMITED PUBLIC WORKS CONTRACT A PROFESSIONAL SERVICE AGREEMENT ❑ MAINTENANCE AGREEMENT ❑ GOODS AND SERVICE AGREEMENT ❑ HUMAN SERVICES / CDBG ❑ REAL ESTATE DOCUMENT ❑ SECURITY DOCUMENT (E.G. BOND RELATED DOCUMENTS) ❑ ORDINANCE ❑ RESOLUTION ❑ CONTRACT AMENDMENT (AG#): ❑ INTERLOCAL ❑ OTHER 5. PROJECT NAME: Professional Services Agreement - Financial Advisory Services 6. NAME OF CONTRACTOR: PFM Financial Advisors I-I-C ADDRESS: 107 Spring Street, Seattle, WA 9e104 TELEPHONE (206) 264-e900 E-MAIL: BrownD@PFM.com, ToepferT@PFM.com FAX: SIGNATURE NAME: Thomas ToeDfer TITLE Managing Director 7. EXHIBITS AND ATTACHMENTS: 9 SCOPE, WORK OR SERVICES A. COMPENSATION ❑ INSURANCE REQUIREMENTS/CERTIFICATE ❑ ALL OTHER REFERENCED EXHIBITS ❑ PROOF OF AUTHORITY TO SIGN ❑ REQUIRED LICENSES ❑ PRIOR CONTRACT/AMENDMENTS 8. TERM: COMMENCEMENT DATE: in coord. w TIF and/or PW Facility financing COMPLETION DATE: Suggest 3-year term 9. TOTAL COMPENSATION $ Expect approx. $12,000 for TIF, approx 10bp on bond issue (INCLUDE EXPENSES AND SALES TAX, IF ANY) (IF CALCULATED ON HOURLY LABOR CHARGE - ATTACH SCHEDULES OF EMPLOYEES TITLES AND HOLIDAY RATES) REIMBURSABLE EXPENSE: AYES ❑ NO IF YES, MAXIMUM DOLLAR AMOUNT: $ minor incidental IS SALES TAX OWED ®YES ONO IF YES, $ PAID BY: ❑ CONTRACTOR ❑ CITY RETAINAGE: RETAINAGE AMOUNT: ❑ RETAINAGE AGREEMENT (SEE CONTRACT) OR ❑ RETAINAGE BOND PROVIDED ❑ PURCHASING: PLEASE CHARGE TO: 10. DOCUMENT/CONTRACT REVIEW WITIALIDATE RE,VIEWED INITIAL/DATE APPROVED ❑ PROJECT MANAGER 11 It DIRECTOR 'L j] Finance: SMG 2/3/2023 ❑ RISK MANAGEMENT (IF APPLICABLE) A LAW JRC 2110/2023; KVA 3/30/2023 11. COUNCIL APPROVAL (IF APPLICABLE) COMMITTEE APPROVAL DATE: COUNCIL APPROVAL DATE: 12. CONTRACT SIGNATURE ROUTING ❑ SENT TO VENDOR/CONTRACTOR DATE SENT: DATE REC'D: ❑ ATTACH: SIGNATURE AUTHORITY, INSURANCE CERTIFICATE, LICENSES, EXHIBITS ❑ CREATE ELECTRONIC REMINDER/NOTIFICATION FOR I MONTH PRIOR TO EXPIRATION DATE (Include dept. support staff if necessary and feel free to set notification more than a month in advance if council approval is needed.) INITIAL/ DATE SIGNED KAAW DEPARTMENT y0 ❑ SIGNATORY (MAYOR OR DIRECTOR) ❑ CITY CLERK ❑ ASSIGNED AG# AG# r - COMMENTS: 2P-O 17 Y OF Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway. com PROFESSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISORY SERVICES This Professional Services Agreement ("Agreement") is made between the City of Federal Way, a Washington municipal corporation ("City"), and PFM Financial Advisors LLC, a Foreign limited liability corporation ("Contractor"). The City and Contractor (together "Parties") are located and do business at the below addresses, which shall be valid for any notice required under this Agreement: PFM FINANCIAL ADVISORS LLC: Thomas Toepfer 107 Spring Street Seattle, WA 98104 (206) 264-8900 (telephone) (215) 567-4180 (facsimile) The Parties agree as follows: CITY OF FEDERAL WAY: Steve Groom, Finance Director 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-2520 (telephone) (253) 835-2509 (facsimile) Steve.Groom(iDCityOfFederal Way.com 1. TERM. The term of this Agreement shall commence upon the effective date of this Agreement, which shall be the date of mutual execution, and shall continue until the completion of the Services specified in this Agreement, but in any event no later than December 31, 2025 ("Term"). This Agreement may be extended for additional periods of time upon the mutual written agreement of the Parties. 2. SERVICES. The Contractor shall perform the services more specifically described in Exhibit A ("Services"), attached hereto and incorporated by this reference, in a manner consistent with the accepted professional practices for other similar services within the Puget Sound region in effect at the time those services are performed, performed to the City's satisfaction, within the time period prescribed by the City and pursuant to the direction of the Mayor or his or her designee. The Contractor warrants that it has the requisite training, skill, and experience necessary to provide the Services and is appropriately accredited and licensed by all applicable agencies and governmental entities, including but not limited to obtaining a City of Federal Way business registration. Services shall begin immediately upon the effective date of this Agreement. Services shall be subject, at all times, to inspection by and approval of the City, but the making (or failure or delay in making) such inspection or approval shall not relieve Contractor of responsibility for performance of the Services in accordance with this Agreement, notwithstanding the City's knowledge of defective or non -complying performance, its substantiality or the ease of its discovery. Upon the request of City, an affiliate of Contractor or a third party referred or otherwise introduced by Contractor may agree to additional services to be provided by such affiliate or third party, by a separate writing, including separate scope and compensation, between City and such affiliate or third party. For the sake of clarity, any separate agreement between City and an affiliate of Contractor or any third party referred or introduced by Contractor shall not in any way be deemed an amendment or modification of this Agreement. 3. TERMINATION. Either party may terminate this Agreement, with or without cause, upon providing the other party thirty (30) days' written notice at its address set forth above. The City may terminate this Agreement immediately if the Contractor fails to maintain required insurance policies, breaches confidentiality, or materially violates Section 12 of this Agreement. Termination for such conduct may render the Contractor ineligible for City agreements in the future. PROFESSIONAL SERVICES AGREEMENT - 1 - Rev. 7/2021 CITY OF Federal 4. COMPENSATION. CITY HALL Way Feder l Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www criyoffederalway com 4.1 Amount. In return for the Services, the City shall pay the Contractor an amount not to exceed a maximum amount and according to a rate or method as delineated in Exhibit B, attached hereto and incorporated by this reference. The Contractor agrees that any hourly or flat rate charged by it for its services contracted for herein shall remain locked at the negotiated rate(s) for the Term. Except as otherwise provided in Exhibit B, the Contractor shall be solely responsible for the payment of any taxes imposed by any lawful jurisdiction as a result of the performance of Services and payment under this Agreement. 4.2 Method of Payment. On a monthly basis, the Contractor shall submit a voucher or invoice in the form specified by the City, including a description of what Services have been performed, the name of the personnel performing such Services, and any hourly labor charge rate for such personnel. The Contractor shall also submit a final bill upon completion of all Services. Payment shall be made on a monthly basis by the City only after the Services have been performed and within thirty (30) days following receipt and approval by the appropriate City representative of the voucher or invoice. If the Services do not meet the requirements of this Agreement, the Contractor will correct or modify the work to comply with the Agreement. The City may withhold payment for such work until the work meets the requirements of the Agreement. 4.3 Non-A�ropriation of Funds of Funds. If sufficient funds are not appropriated or allocated for payment under this Agreement for any future fiscal period, the City will not be obligated to make payments for Services or amounts incurred after the end of the current fiscal period, and this Agreement will terminate upon the completion of all remaining Services for which funds are allocated. No penalty or expense shall accrue to the City in the event this provision applies. INDEMNIFICATION. 5.1 Contractor Indemnification. The Contractor agrees to release, indemnify, defend, and hold the City, its elected officials, officers, employees, agents, representatives, insurers, attorneys, and volunteers harmless from any and all claims, demands, actions, suits, causes of action, arbitrations, mediations, proceedings, judgments, awards, injuries, damages, liabilities, taxes, losses, fines, fees, penalties expenses, attorney's fees, costs, and/or litigation expenses to or by any and all persons or entities, including, without limitation, their respective agents, licensees, or representatives; arising from, resulting from, or in connection with the negligent performance of this Agreement or the negligent or intentionally wrongful acts, errors or omissions of the Contractor in performance of this Agreement, except for that portion of the claims caused by the City's sole negligence. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Contractor and the City, the Contractor's liability, including the duty and cost to defend, hereunder shall be only to the extent of the Contractor's negligence. Contractor shall ensure that each sub- contractor shall agree to defend and indemnify the City, its elected officials, officers, employees, agents, representatives, insurers, attorneys, and volunteers to the extent and on the same terms and conditions as the Contractor pursuant to this paragraph. The City's inspection or acceptance of any of Contractor's work when completed shall not be grounds to avoid any of these covenants of indemnification. 5.2 Industrial Insurance Act Waiver. It is specifically and expressly understood that the Contractor waives any immunity that may be granted to it under the Washington State industrial insurance act, Title 51 RCW, solely for the purposes of this indemnification. Contractor's indemnification shall not be limited in any way by any limitation on the amount of damages, compensation or benefits payable to or by any third party under workers' PROFESSIONAL SERVICES AGREEMENT - 2 - Rev. 7/2021 CITY OF �41% Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederatway.com compensation acts, disability benefit acts or any other benefits acts or programs. The Parties acknowledge that they have mutually negotiated this waiver. 5.3 City Indemnification. The City agrees to release, indemnify, defend and hold the Contractor, its officers, directors, shareholders, partners, employees, agents, representatives, and sub -contractors harmless from any and all claims, demands, actions, suits, causes of action, arbitrations, mediations, proceedings, judgments, awards, injuries, damages, liabilities, losses, fines, fees, penalties expenses, attorney's fees, costs, and/or litigation expenses to or by any and all persons or entities, including without limitation, their respective agents, licensees, or representatives, arising from, resulting from or connected with this Agreement to the extent solely caused by the negligent acts, errors, or omissions of the City. 5.4 Survival. The provisions of this Section shall survive the expiration or termination of this Agreement with respect to any event occurring prior to such expiration or termination. 6. INSURANCE. The Contractor agrees to carry insurance for liability which may arise from or in connection with the performance of the services or work by the Contractor, their agents, representatives, employees, or subcontractors for the duration of the Agreement and thereafter with respect to any event occurring prior to such expiration or termination as follows: 6.1. Minimum Limits. The Contractor agrees to carry as a minimum, the following insurance, in such forms and with such carriers who have a rating that is satisfactory to the City: a. Commercial general liability insurance covering liability arising from premises, operations, products -completed operations, stopgap liability, personal injury, bodily injury, death, property damage, products liability, advertising injury, and liability assumed under an insured contract with limits no less than $2,000,000 for each occurrence and $2,000,000 general aggregate. In the event the Contractor utilizes independent contractors, the Contractor must ensure that such independent contractors have general liability insurance consistent with the requirements of this section. b. Workers' compensation and employer's liability insurance in amounts sufficient pursuant to the laws of the State of Washington. C. Automobile liability insurance covering all owned, non -owned, hired, and leased vehicles with a minimum combined single limit in the minimum amounts required to drive under Washington State law per accident for bodily injury, including personal injury or death, and property damage. d. Professional liability insurance with limits no less than $2,000,000 per claim and $2,000,000 policy aggregate for damages sustained by reason of or in the course of operation under this Agreement, whether occurring by reason of acts, errors or omissions of the Contractor. 6.2. No Limit of Liability. Contractor's maintenance of insurance as required by this Agreement shall not be construed to limit the liability of the Contractor to the coverage provided by such insurance, or otherwise limit the City's recourse to any remedy available at law or in equity. The Contractor's insurance coverage shall be primary insurance with respect to the City. Any insurance, self-insurance, or insurance pool coverage maintained by the City shall be excess of the Contractor's insurance and shall not contribute with Contractor's insurance. 6.3. Additional Insured, Verification. The City shall be named as additional insured on all commercial general liability insurance policies. Concurrent with the execution of this Agreement, Contractor shall provide certificates of insurance for all commercial general liability policies attached hereto as Exhibit C and incorporated by this reference. At the City's request, Contractor shall furnish the City with copies of all insurance policies and with evidence of payment of premiums or fees of such policies. If Contractor's insurance policies are "claims made," Contractor shall be required to maintain tail coverage for a minimum period of three (3) years from the date this Agreement is terminated or upon project completion and acceptance by the City. PROFESSIONAL SERVICES AGREEMENT - 3 - Rev. 7/2021 CITY OF CITY HALL Federa Vila 33325 8th Avenue South Y (253)Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com 6.4 Survival. The provisions of this Section shall survive the expiration or termination of this Agreement. 7. CONFIDENTIALITY. All information regarding the City obtained by Contractor in performance of this Agreement shall be considered confidential and subject to applicable laws. Breach of confidentiality by the Contractor may be grounds for immediate termination. All records submitted by the City to the Contractor will be safeguarded by the Contractor. The Contractor will fully cooperate with the City in identifying, assembling, and providing records in case of any public records request. 8. WORK PRODUCT. All originals and copies of work product, including plans, sketches, layouts, designs, design specifications, records, files, computer disks, magnetic media, or material that may be produced or modified by Contractor while performing the Services shall belong to the City upon delivery. The Contractor shall make such data, documents, and files available to the City and shall deliver all needed or contracted for work product upon the City's request. At the expiration or termination of this Agreement, all originals and copies of any such work product remaining in the possession of Contractor shall be delivered to the City. 9. BOOKS AND RECORDS. The Contractor agrees to maintain books, records, and documents which sufficiently and properly reflect all direct and indirect costs related to the performance of the Services specified in this Agreement, and maintain such accounting procedures and practices as may be deemed necessary by the City to assure proper accounting of all funds paid pursuant to this Agreement. These records shall be subject, at all reasonable times, to inspection, review, or audit by the City, its authorized representative, the State Auditor, or other governmental officials authorized by law to monitor this Agreement. 10. INDEPENDENT CONTRACTOR. The Parties intend that the Contractor shall be an independent contractor and that the Contractor has the ability to control and direct the performance and details of its work, the City being interested only in the results obtained under this Agreement. The City shall be neither liable nor obligated to pay Contractor sick leave, vacation pay, or any other benefit of employment, nor to pay any social security or other tax that may arise as an incident of this Agreement. Contractor shall take all necessary precautions and shall be responsible for the safety of its employees, agents, and subcontractors in the performance of the Services specified in this Agreement and shall utilize all protection necessary for that purpose. All work shall be done at Contractor's own risk, and Contractor shall be responsible for any loss of or damage to materials, tools, or other articles used or held for use in connection with the Services. The Contractor shall pay all income and other taxes due except as specifically provided in Section 4 of this Agreement. Industrial or any other insurance that is purchased for the benefit of the City, regardless of whether such may provide a secondary or incidental benefit to the Contractor, shall not be deemed to convert this Agreement to an employment contract. If the Contractor is a sole proprietorship or if this Agreement is with an individual, the Contractor agrees to notify the City and complete any required form if the Contractor retired under a State of Washington retirement system and agrees to indemnify any losses the City may sustain through the Contractor's failure to do so. 11. CONFLICT OF INTEREST. It is recognized that Contractor may or will be performing professional services during the Term for other entities or persons; however, such performance of other services shall not conflict with or interfere with Contractor's ability to perform the Services. Contractor agrees to resolve any such conflicts of interest in favor of the City. Contractor confirms that Contractor does not have a business interest or a close family relationship with any City officer or employee who was, is, or will be involved in the Contractor's selection, the negotiation, drafting, signing, administration of this Agreement, or the evaluation of the Contractor's performance. PROFESSIONAL SERVICES AGREEMENT - 4 - Rev. 7/2021 CITY OF CITY HALL Fe d e ra I Way Feder 8th Avenue South �� � Federal Way. WA 98003-6325 (253) 835-7000 www cityoffederalway.com 12. EQUAL OPPORTUNITY EMPLOYER. In all services, programs, activities, hiring, and employment made possible by or resulting from this Agreement or any subcontract, there shall be no discrimination by Contractor or its subcontractors of any level, or any of those entities' employees, agents, subcontractors, or representatives against any person because of sex, age (except minimum age and retirement provisions), race, color, religion, creed, national origin, marital status, honorably discharged veteran or military status, sexual orientation including gender expression or identity, or the presence of any disability, including sensory, mental or physical handicaps, unless based upon a bona fide occupational qualification in relationship to hiring and employment. This requirement shall apply, but not be limited to the following: employment, advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Contractor shall comply with and shall not violate any of the terms of Chapter 49.60 RCW, Title VI of the Civil Rights Act of 1964, the Americans With Disabilities Act, Section 504 of the Rehabilitation Act of 1973, 49 CFR Parts 21, 21.5, and 26, or any other applicable federal, state, or local law or regulation regarding non- discrimination. 13. GENERAL PROVISIONS. 13.1 Interpretation and Modification. This Agreement, together with any attached Exhibits, contains all of the agreements of the Parties with respect to any matter covered or mentioned in this Agreement and no prior statements or agreements, whether oral or written, shall be effective for any purpose. Should any language in any Exhibits to this Agreement conflict with any language in this Agreement, the terms of this Agreement shall prevail. The respective captions of the Sections of this Agreement are inserted for convenience of reference only and shall not be deemed to modify or otherwise affect any of the provisions of this Agreement. Any provision of this Agreement that is declared invalid, inoperative, null and void, or illegal shall in no way affect or invalidate any other provision hereof and such other provisions shall remain in full force and effect. Any act done by either Party prior to the effective date of the Agreement that is consistent with the authority of the Agreement and compliant with the terms of the Agreement, is hereby ratified as having been performed under the Agreement. No provision of this Agreement, including this provision, may be amended, waived, or modified except by written agreement signed by duly authorized representatives of the Parties. 13.2 Assignment and Beneficiaries. Neither the Contractor nor the City shall have the right to transfer or assign, in whole or in part, any or all of its obligations and rights hereunder without the prior written consent of the other Party. If the non -assigning party gives its consent to any assignment, the terms of this Agreement shall continue in full force and effect and no further assignment shall be made without additional written consent. Subject to the foregoing, the rights and obligations of the Parties shall inure to the benefit of and be binding upon their respective successors in interest, heirs and assigns. This Agreement is made and entered into for the sole protection and benefit of the Parties hereto. No other person or entity shall have any right of action or interest in this Agreement based on any provision set forth herein. 13.3 Compliance with Laws. The Contractor shall comply with and perform the Services in accordance with all applicable federal, state, local, and city laws including, without limitation, all City codes, ordinances, resolutions, regulations, rules, standards and policies, as now existing or hereafter amended, adopted, or made effective. If a violation of the City's Ethics Resolution No. 91-54, as amended, occurs as a result of the formation or performance of this Agreement, this Agreement may be rendered null and void, at the City's option. 13.4 Enforcement. Time is of the essence in this Agreement and each and all of its provisions in which performance is a factor. Adherence to completion dates set forth in the description of the Services is essential to the Contractor's performance of this Agreement. Any notices required to be given by the Parties shall be delivered at the addresses set forth at the beginning of this Agreement. Any notices may be delivered personally to the addressee of the notice or may be deposited in the United States mail, postage prepaid, to the address set forth PROFESSIONAL SERVICES AGREEMENT - 5 - Rev. 7/2021 CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalwoy con) above. Any notice so posted in the United States mail shall be deemed received three (3) days after the date of mailing. Any remedies provided for under the terms of this Agreement are not intended to be exclusive, but shall be cumulative with all other remedies available to the City at law, in equity, or by statute. The failure of the City to insist upon strict performance of any of the covenants and agreements contained in this Agreement, or to exercise any option conferred by this Agreement in one or more instances shall not be construed to be a waiver or relinquishment of those covenants, agreements or options, and the same shall be and remain in full force and effect. Failure or delay of the City to declare any breach or default immediately upon occurrence shall not waive such breach or default. Failure of the City to declare one breach or default does not act as a waiver of the City's right to declare another breach or default. This Agreement shall be made in, governed by, and interpreted in accordance with the laws of the State of Washington. If the Parties are unable to settle any dispute, difference or claim arising from this Agreement, the exclusive means of resolving that dispute, difference, or claim, shall be by filing suit under the venue, rules, and jurisdiction of the King County Superior Court, King County, Washington, unless the parties agree in writing to an alternative process. If the King County Superior Court does not have jurisdiction over such a suit, then suit may be filed in any other appropriate court in King County, Washington. Each party consents to the personal jurisdiction of the state and federal courts in King County, Washington and waives any objection that such courts are an inconvenient forum. If either Party brings any claim or lawsuit arising from this Agreement, each Party shall pay all its legal costs and attorney's fees and expenses incurred in defending or bringing such claim or lawsuit, including all appeals, in addition to any other recovery or award provided by law; however, nothing in this paragraph shall be construed to limit the Parties' rights to indemnification under Section 5 of this Agreement. 13.5 Execution. Each individual executing this Agreement on behalf of the City and Contractor represents and warrants that such individual is duly authorized to execute and deliver this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and with the same effect as if all Parties hereto had signed the same document. All such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof, it shall only be necessary to produce one such counterpart. The signature and acknowledgment pages from such counterparts may be assembled together to form a single instrument comprised of all pages of this Agreement and a complete set of all signature and acknowledgment pages. The date upon which the last of all of the Parties have executed a counterpart of this Agreement shall be the "date of mutual execution" hereof. 13.6 Registered Municipal Advisor; Required Disclosures. Contractor is a registered municipal advisor with the Securities and Exchange Commission (the "SEC") and the Municipal Securities Rulemaking Board (the "MSRB"), pursuant to the Securities Exchange Act of 1934 Rule 1513a1-2. If City has designated Contractor as its independent registered municipal advisor ("IRMA") for purposes of SEC Rule 1513a1-I(d)(3)(vi) (the "IRMA exemption"), then services provided pursuant to such designation shall be the services described in Exhibit A hereto, subject to any agreed upon limitations. Verification of independence (as is required under the IRMA exemption) shall be the responsibility of such third party seeking to rely on such IRMA exemption. Contractor shall have the right to review and approve in advance any representation of Contractor's role as IRMA to City. MSRB Rules require that municipal advisors make written disclosures to their clients of all material conflicts of interest, certain legal or disciplinary events and certain regulatory requirements. Such disclosures are provided in Contractor's Disclosure Statement delivered to City prior to or together with this Agreement. 13.7 Information to be Furnished to Contractor. All information, data, reports, and records in the possession of City or any third party necessary for carrying out any services to be performed under this Agreement ("Data") shall be furnished to Contractor. Contractor may rely on the Data in connection with its provision of the services under this Agreement and the provider thereof shall remain solely responsible for the adequacy, accuracy and completeness of such Data. [Signature page follows] PROFESSIONAL SERVICES AGREEMENT - 6 - Rev. 7/2021 ` CITY OF CITY HALL Fe d e ra I WayFeder l Avenue South Federal Way. WA 98003-6325 (253) 835-7000 L'VINW. Cl (VOf/P. d@f E3hNf3y COfl ) IN WITNESS, the Parties execute this Agreement below. effective the last date written below. CITY OF FEDERAL WAY: Jim Ferrell.A.aYor V DATE: PFM FINANCIAL ADVISORS LLC: Printed Name: 7%i &-%4kl loep ee- l Title: NaKa i"�.D,/`« loK DATE: Y� Z STATE OF WASHINGTON ) ss. COUNTY OF k i ) ATTEST: b,p#Eiie Courtney. CMC. 'i _ Clerk APPROVED AS TO FORM: @JRan Call.WCityttorn—ey On this day personally appoared before me -R 'be- to me known to be the kAaG+Ioqof ` r W that executed the foregoing instrument. and acknowledged the said instrument to be the free and voluntary act and deed of said limited liability company, for the uses and purposes therein mentioned. and on oath stated that he/she was authorized to execute said instrument. GIVEN my hand and official seal this Co day of red Notary's signature 7.7 Notary's printed name C' �"5� Notary Public in and for the State n ashin rton. T sv My comnmissioexpires PROFESSIONAL SERVICES AGREEMENT - 7 - Rev. 7112021 CITY OF CITY HALL ,%S Fe d e ra I lllla Feder 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www crryoffederahvay com EXHIBIT A FINANCIAL ADVISORY SERVICES The primary role of the financial advisor under this contract is to support the financial analysis that contemplates potential debt issuance activity of the City by evaluating the reasonableness of the assumptions, completeness and accuracy of financial calculations, and quality of the support analysis documents. The Contractor shall do or provide the following: A) Generally: • Represent City's financial interests, coordinating and communicating with City Staff, Bond Counsel, Underwriter, and/or other members of the finance team, as applicable • Provide process knowledge, experience and expertise to supplement City staff in an advisory capacity • Providing advice on proposed capital financing processes and tax increment project financing • As requested by the City, review revenue projections and identify potential risks, risk mitigation strategies, considerations, and opportunities associated with such projections (without opining as to their accuracy or likelihood of being realized) ■ Assist in the development of prudent solutions to the City's funding requirements in order to achieve the most advantageous financing terms B) Issuer Financial Condition Review • As requested by the City: i) Evaluate participant credit quality and financial strength using typical industry standards and rating agency criteria ii) Review, evaluate and comment on reasonableness of financial forecast studies iii) Periodically review the City's outstanding debt profile for potential risks and refunding opportunities iv) Review, analyze, and provide guidance related to state and federal legislation pertaining and affecting the City's debt position and financing needs. v) Prepare preliminary bond structuring and sizing analysis for potential future debt issues vi) Prepare written report to the City regarding a proposed plan of finance, including analysis of risks, opportunities, and potential alternatives C) Financing Structure and Issuance Assistance As requested by the City: i) Evaluate possible financing options for the City for identified needs, ii) Evaluating proposals and advise as advocate for city's interests iii) Act as the City's IRMA in connection with the Municipal Advisor Rule, and review proposals/analyses provided by underwriters/banks. D) Bond Issuance Support • Make recommendations on the timing, sizing, maturity schedules, call provisions and other details of bond issues • Provide input regarding outstanding and proposed debt and debt structure • Attend meetings related to bond financing as advocate for City's financial interests • Coordinate with bond counsel in regard to legal documentation for any financing and provide review and input as appropriate PROFESSIONAL SERVICES AGREEMENT - 8 - Rev. 7/2021 CITY OF CITY HALL Fe d e ra I Wa Feder 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com • Review and provide input on Preliminary Official Statements and Final Official Statements prepared on behalf of the City for use in marketing any bonds and meeting regulatory requirements. (PFM is not responsible for the inclusion or omission of any material in published offering documents.) ■ Evaluate, advise and consult with City staff, Bond Counsel and Underwriter (if applicable) to make recommendations regarding financial and non -financial bond covenants • Assist in furnishing materials and data to rating agencies and coordinate the rating review process (in coordination with other finance team members, if applicable) ■ Assist in structuring bond transaction for competitively -sold bond issues E) Pricing of Bond • Make a recommendation to the City as to the method of bond sale Competitive Sale i) Coordinate pre -sale publicity, call for bids, evaluation of bids, recommendations to the City regarding accuracy and conformance of bids, and awarding of bonds Negotiated Sale i) As requested, assist in a Request for Proposal (RFP) or other competitive process to select one or more underwriters ii) Recommend composition and structure of underwriting teams (i.e. co -managers, selling group, syndicate, etc.) iii) Recommend timing of bond pricing iv) Coordinate pricing meetings and offerings of negotiated issues v) Review, monitor and advise City regarding proposed negotiated interest rates and spreads Direct Bank Placement i) As requested, assist in an RFP or other competitive process to select a direct bank purchaser ii) Review bank term sheets and make recommendations to the City regarding the most preferable option(s) iii) Make recommendations in any negotiations between the City and the selected lender F) Recommendations to City Prepare oral and/or written recommendations to the City for each bond issue regarding financial feasibility, bond covenants and pricing of the bonds G) Bond Closing • Prepare bond closing memorandum detailing all closing activities and flow of funds and transfers H) Special Meetings of City • Attend City Council or City Council's Financial Advisory Committee meetings, and any special meetings as needed with bond counsel, underwriter and/or other members of the finance team (including rating agencies) as City agrees is necessary for the successful completion of the transaction I) Post -Issuance Support • Advise the City on post -issuance matters which bear on debt management (compliance, ratings, bond market conditions) Provide assistance in advisory capacity for prudent compliance planning J) Program Development • Assist staff in the evaluation of program proposals or changes in policy PROFESSIONAL SERVICES AGREEMENT - 9 - Rev. 7/2021 CITY OF Federal Way EXHIBIT B COMPENSATION Method of Compensation: Hourlyrate. CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www.cityoffed01aMv V com In consideration of the Contractor performing the Services, the City agrees to pay the Contractor an amount calculated on the basis of the hourly labor charge rate schedule for Contractor's personnel as shown below, not to exceed One Hundred Thousand and no/100 Dollars ($100,000.00): For work unrelated to an active debt transaction (i.e. Tax Increment Financing consultation prior to a bond kickoff call with city staff and bond counsel specific to a debt issue timeline) Personnel 11mij-h- Rate ManagingManagiEg Director $350.00 Director $325.00 Sr. Managing Consultant $300.00 Sr. Analyst $260.00 Analyst $210.00 Associate Administrative $195.00 Debt Transactions. For debt transactions, fees for financing services will be based on a rate per $1,000 of financing, which fees will be paid from proceeds of bond sale as follows: Financing up to $20 million $1.50 per $1,000, minimum $25,000 Financing > $20 but < $75 million $30,000 plus $0.75 per $1,000 over $20 million Financing over $75 million $75,000 plus $0.25 per $1,000 over $75 million PROFESSIONAL SERVICES AGREEMENT - 10 - Rev. 7/2021 DISCLOSURE OF CONFLICTS OF INTEREST AND OTHER IMPORTANT MUNICIPAL ADVISORY INFORMATION PFM Financial Advisors LLC / PFM Swap Advisors LLC 1. Introduction PFM Financial Advisors LLC and PFM Swap Advisors LLC (hereinafter, referred to as "We," "Us," or "Our") are registered municipal advisors with the Securities and Exchange Commission (the "SEC") and the Municipal Securities Rulemaking Board (the "MSRB"), pursuant to the Securities Exchange Act of 1934 Rule 15Bal-2. In accordance with MSRB rules, this disclosure statement is provided by Us to each client prior to the execution of its advisory agreement with written disclosures of all material conflicts of interests and legal or disciplinary events that are required to be disclosed with respect to providing financial advisory services pursuant to MSRB Rule G-42(b) and (c) (ii). We employ a number of resources to identify and subsequently manage actual or potential conflicts of interest in addition to disclosing actual and potential conflicts of interest provided herein. How We Identify and Manage Conflicts of Interest Code of Ethics. The Code requires that all employees conduct all aspects of Our business with the highest standards of integrity, honesty and fair dealing. All employees are required to avoid even the appearance of misconduct or impropriety and avoid actual or apparent conflicts of interest between personal and professional relationships that would or could interfere with an employee's independent exercise of judgment in performing the obligations and responsibilities owed to a municipal advisor and Our clients. Policies and Procedures. We have adopted policies and procedures that include specific rules and standards for conduct. Some of these policies and procedures provide guidance and reporting requirements about matters that allows Us to monitor behavior that might give rise to a conflict of interest. These include policies concerning the making of gifts and charitable contributions, entertaining clients, and engaging in outside activities, all of which may involve relationships with clients and others that are important to Our analysis of potential conflicts of interest. Supervisory Structure. We have both a compliance and supervisory structure in place that enables Us to identify and monitor employees' activities, both on a transaction and Firm -wide basis, to ensure compliance with appropriate standards. Prior to undertaking any engagement with a new client or an additional engagement with an existing client, appropriate municipal advisory personnel will review the possible intersection of the client's interests, the proposed engagement, Our engagement personnel, experience and existing obligations to other clients and related parties. This review, together with employing the resources described above, allows Us to evaluate any situations that may be an actual or potential conflict of interest. Disclosures. We will disclose to clients those situations that We believe would create a material conflict of interest, such as: 1) any advice, service or product that any affiliate may provide to a client that is directly related to the municipal advisory work We perform for such client; 2) any payment made to obtain or retain a municipal advisory engagement with a client; 3) any fee -splitting arrangement with any provider of an investment or services to a client; 4) any conflict that may arise from the type of compensation arrangement We may have with a client; and 5) any other actual or potential situation that We are or become aware of that might constitute a material conflict of interest that could reasonably expect to impair Our ability to provide advice to or on behalf of clients consistent with regulatory requirements. If We identify such situations or circumstances, We will prepare meaningful disclosure that will describe the implications of the situation and haw We intend to manage the situation. We will also disclose any legal or disciplinary events that are material to a client's evaluation or the integrity of Our management or advisory personnel. We will provide this disclosure (or a means to access this information) in writing prior to starting Our proposed engagement, and will provide such additional information or clarification as the client may request. We will also advise Our clients in writing of any subsequent material conflict of interest that may arise, as well as the related implications, Our plan to manage that situation, and any additional information such client may require. I1. General Conflict of Interest Disclosures Disclosure of Conflicts Concerning the Firm's Affiliates Our affiliates offer a wide variety of financial services, and Our clients may be interested in pursuing services separately provided by an affiliate. The affiliate's business with the client could create an incentive for Us to recommend a course of action designed to increase the level of the client's business activities with the affiliate or to recommend against a course of Revised 12/1/2022 Page 1 action that would reduce the client's business activities with the affiliate. In either instance, We may be perceived as recommending services for a client that are not in the best interests of Our clients, but rather are in Our interests or the interests of Our affiliates. Accordingly, We mitigate any perceived conflict of interest that may arise in this situation by disclosing it to the client, and by requiring that there be a review of the municipal securities transaction or municipal financial product to ensure that it is suitable for the client in light of various factors, after reasonable inquiry, including the client's needs, objectives and financial circumstances. Further, We receive no compensation from Our affiliates with respect to a client introduction or referral. If a client chooses to work with an affiliate, We require that the client consult and enter into a separate agreement for services, so that the client can make an independent, informed, evaluation of the services offered. Disclosure of Conflicts Related to the Firm's Compensation From time to time, We may be compensated by a municipal advisory fee that is or will be set forth in an agreement with the client to be, or that has been, negotiated and entered into in connection with a municipal advisory service. Payment of such fee may be contingent on the closing of the transaction and the amount of the fee may be based, in whole or in part, on a percentage of the principal or par amount of municipal securities or municipal financial product. While this form of compensation is customary in the municipal securities market, it may be deemed to present a conflict of interest since We may appear to have an incentive to recommend to the client a transaction that is larger in size than is necessary. Further, We may also receive compensation in the form of a fixed fee arrangement. While this form of compensation is customary, it may also present a potential conflict of interest, if the transaction requires more work than contemplated and We are perceived as recommending a less time consuming alternative contrary to the client's best interest so as not to sustain a loss. Finally, We may contract with clients on an hourly fee bases. If We do not agree on a maximum amount of hours at the outset of the engagement, this arrangement may pose a conflict of interest as We would not have a financial incentive to recommend an alternative that would result in fewer hours. We manage and mitigate all of these types of conflicts by disclosing the fee structure to the client, and by requiring that there be a review of the municipal securities transaction or municipal financial product to ensure that it is suitable for the client in light of various factors, after reasonable inquiry, including the client's needs, objectives and financial circumstances. Disclosure of Conflicts Related to the Firm's Compensation Structure for Our Registered Advisors. Pursuant to various employee compensation structures, from time to time We offer certain of Our registered municipal advisors ("Registered Advisors") financial benefits based on his or her business plan, client base, performance, and/or transactions closed. This provides an incentive for such Registered Advisors to seek to retain additional clients and/or transactions or services from clients. While this form of compensation may be customary in some segments of the municipal advisory market, provision of such financial benefits may be deemed to present a conflict of interest. We manage and mitigate these types of conflicts by Registered Advisor's adherence to Our Code of Ethics and Policies and Procedures, and by requiring that there be a review of the municipal securities transaction or municipal financial product to ensure that it is suitable for the client in light of various factors, after reasonable inquiry, including the client's needs, objectives and financial circumstances. Disclosure Concerning Provision of Services to State and Local Government, and Non -Profit Clients We regularly provide financial advisory services to state and local governments, their agencies, and instrumentalities, and non- profit clients. While Our clients have expressed that this experience in providing services to a wide variety of clients generally provides great benefit for all of Our clients, there may be or may have been clients with interests that are different from (and adverse to) other clients. If for some reason any client sees Our engagement with any other particular client as a conflict, We will mitigate this conflict by engaging in a broad range of conduct, if and as applicable. Such conduct may include one or any combination of the following: 1) disclosing the conflict to the client; 2) requiring that there be a review of the municipal securities transaction or municipal financial product to ensure that it is suitable for the client in light of various factors, including the client's needs, objectives and financial circumstances; 3) implementing procedures that establishes an "Informational Bubble" that creates physical, technological and procedural barriers and/or separations to ensure that non-public information is isolated to particular area such that certain governmental transaction team members and supporting functions operate separately during the course of work performed; and 4) in the rare event that a conflict cannot be resolved, We will withdraw from the engagement. Disclosure Related to Legal and Disciplinary Events As registered municipal advisors with the Securities and Exchange Commission (the "SEC") and the Municipal Securities Rulemaking Board (the "MSRB"), pursuant to the Securities Exchange Act of 1934 Rule 15[3a1-2, Our legal, disciplinary and judicial events are required to be disclosed on Our forms MA and MA -I filed with the SEC, in `item 9 Disclosure Information' of form MA, `Item b Disclosure Information' of form MA -I, and if applicable, the corresponding disclosure reporting page(s) ("DRP"). To review the foregoing disclosure items and material change(s) or amendment(s), if any, clients may electronically Revised 12/1/2022 Page 2 access PFM Financial Advisors LLC filed forms MA and MA -I on the SEC's Electronic Data Gathering, Analysis, and Retrieval system, listed by date of filing starting with the most recently fled, at: PFM Financial Advisors LLC — hu://www sec gov/cgi-bin/browse-edeae?coninanv=PFM+Financial&owner=-�:xcludc&aetion=gctoompa;)Y. III. Snecitic Conflicts of Interest Disclosures —City of Federal Way, Washington To Our knowledge, following reasonable inquiry, We make the additional disclosure(s) of actual or potential conflicts of interest cited below in connection with the municipal advisory services currently being contemplated for client. Disclosure Related to the State of Washington From time to time We assist the State of Washington with reviewing Tax Increment Financing reports submitted to the Office of the State Treasurer (OST) by municipalities located in the State. This situation may present a potential conflict of interest where a municipality submitting a Tax Incremental Financing report to the OST is also our client. We mitigate these perceived conflicts of interest by disclosing them to Our clients, and not undertaking such review for OST of our clients' proposed Tax Increment Financing reports submitted to OST. IV. Municipal Advisory Complaint and Client Education Disclosure The MSRB protects state and local governments and other municipal entities and the public interest by promoting fair and efficient municipal securities markets. To that end, MSRB rules are designed to govern the professional conduct of brokers, dealers, municipal securities dealers and municipal advisors. Accordingly, if you as municipal advisory customer have a complaint about any of these financial professionals, please contact the MSRB's website at www.msrb.or , and consult the MSRB's Municipal Advisory Client brochure. The MSRB's Municipal Advisory Client brochure describes the protections available to municipal advisory clients under MSRB rules, and describes the process for filing a complaint with the appropriate regulatory authority. PFM's Financial Advisory services are provided by PFM Financial Advisors LLC. PFM's Swap Advisory services are provided by PFM Swap Advisors LLC. Both entities are registered municipal advisors with the MSRB and SEC under the Dodd Frank Act of 2010. Revised 12/1/2022 Page 3 January 2, 2023 Steve Groom, Finance Director City of Federal Way 33325 81h Avenue S Federal Way, WA 98003 RE: Financial Advisory Services Dear Steve: PfM On behalf of PFM Financial Advisors LLC ("PFM"), we are pleased to present our qualifications to provide Financial Advisory Services to the City of Federal Way (the "City"). With eight public finance professionals and support staff serving the Northwest 107 Spring Street from Seattle and Portland, and 340' employees nationwide, we believe PFM has Seattle, WA 98104 resources and expertise on par with the largest investment banks, coupled with the (206) 264-8900 independence of a firm focused solely on the advisory needs of our clients. pfm.com The following attributes help to distinguish PFM from other financial advisory firms: The Nation's Leading Financial Advisor. For 27 years, PFM has been the #1 financial advisory firm in the United States in terms overall par amount of transactions.z In 2021, we served as advisor on more transactions for a larger par amount than the leading investment banks (in their capacity as senior managing underwriters).3 Consequently, we have a significant market presence and proficiency that we leverage on behalf of our clients, both in the negotiation of bond pricings and/or in the identification of innovative financing solutions. • Our Local Experience. Our team serves nearly 100 financial advisory clients in the Pacific Northwest, including over 50 clients in Washington.' We believe the breadth of our experience in Washington provides us with knowledge of local and statewide issues that may affect the City's funding options and financing plans. Additionally, PFM has advised or is currently advising several Washington clients on the process of implementing tax increment areas (TIAs) since such TIAs were authorized in the 2021 legislative session. • Our Strong Local Engagement. PFM is an active member and sponsor of numerous local municipal finance organizations, including the Washington Finance Officers Association (WFOA), Puget Sound Finance Officers Association (PSFOA), Women in Public Finance (Pacific Northwest Chapter), and Washington Public Treasurers Association (WPTA). Our proposed City team regularly speaks at annual conferences for these organizations; we also provide additional CPE-accredited trainings to clients on a regular basis. ' Source: PFM intemal records as of September 30, 2022. 2 Source: Ipreo MunilC for the years 1995 through 2021. 'Source: Refinitiv as of December 31, 2021. January 2, 2023 Page 2 Our Independence. As a municipal advisor registered with both the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB), PFM provides independent financial advice, always putting your interests first and serving in a fiduciary capacity. Unlike broker -dealers that also provide advisory services, PFM's sole role is as a trusted advisor — we do not have to "switch hats" between investment banking and financial advisory roles. • Our Extensive Resources. Unique among independent financial advisors, PFM's financial advisory practice includes specialty groups focused on bond pricing, government relations, rating agency research, and quantitative model development. Additionally, PFM affiliates offer a broad set of services, including management and budget consulting (including our Center for Budget Equity and Innovation), swap/derivative advisory services, treasury consulting, and modeling platforms to facilitate strategic planning.4 We appreciate the City's consideration of our qualifications and look forward to the opportunity to provide financial advisory services. Sincerely, Thomas Toepfer Duncan Brown Matt Schoenfeld Managing Director Director Senior Managing Consultant 206.858.5370 206.858.5367 206.858.5365 toepfert@pfm.com brownd@pfm.com schoenfeldm@pfm.com 4 Such services are provided under separate agreement and scope of services with each affiliate. Firm Information Overview of PFM PFM's original practice was founded in 19755 with the objective of providing sound independent and fiduciary financial advice to governmental and not -for -profit entities. With 340 employees in 31 locations throughout the United States, PFM continues to be the nation's leading provider of independent financial advisory services to public agencies and not -for -profit organizations.6 PFM's financial advisory services to municipalities and not -for -profit organizations in the Pacific Northwest are provided primarily from our offices in Seattle and Portland. PFM and its affiliates (described below) are indirect wholly owned subsidiaries of a holding company known as PFM II, LLC. This holding company is 100% owned by its 49 Managing Directors, who set the firm's strategic direction. No PFM affiliate is a broker dealer. PFM Financial Advisors LLC advises on debt management and portfolio optimization, transaction structuring and execution, capital and financial planning, credit analysis, and policy development, among other services. PFM Financial Advisors LLC is a registered municipal advisor with the SEC and MSRB. Financial advisory services to the City will be provided by PFM Financial Advisors LLC. Services provided by PFM affiliates are offered pursuant to separate agreements with each affiliate. PFM Swap Advisors LLC ("PFMSA") advises clients on obtaining interest rate swaps, caps, and collars to help manage exposure to interest rates. PFMSA is registered as a municipal advisor with both the MSRB and SEC under the Dodd -Frank Act of 2010, and as a commodity trading advisor with the Commodity Futures Trading Commission. PFM Group Consulting LLC's Management and Budget Consulting practice ("MBC") provides a broad range of services, including multi -year financial planning, consolidating and shared -services analysis, operational and program analysis, revenue maximization, fleet management, workforce analysis, and pension and other post -employment benefits (OPEB) review and strategies. PFM Solutions LLC offers Synario®, a flexible financial modeling platform designed to produce dynamic, multi -year financial projections to facilitate strategic planning for various industry sectors. e Public Financial Management, Inc (PFM, Inc), former affiliate, was founded in 1975 on the principle of providing sound independent and fiduciary advice to public entities, and as of June 1, 2016, the registered municipal advisory services historically offered through PFM, Inc. are now offered through PFM Financial Advisors LLC ("PFMFA') 6 Sources: PFM intemal records; Ipreo Muni1C as of September 30, 2022 PFM Statement of Qualifications I Financial Advisory Services Page 1 PFM's Pacific Northwest Practice The team serving the City will be led by Duncan Brown, Director, in PFM's Portland and Seattle offices. Duncan serves local government clients throughout Washington and Oregon. Duncan will be the primary day-to-day contact for the City and will be responsible for coordinating the efforts of other members of the assigned team. Duncan will be supported primarily by Matt Schoenfeld, Senior Managing Consultant, who recently joined PFM's Northwest team and brings additional experience through his prior work at the Washington State Treasurer's Office (including reviews of tax increment areas). Thomas Toepfer, Managing Director, leads our Northwest practice, with overall responsibility to ensure that appropriate resources are assigned and available to provide high quality and timely services to the City. Other senior members of PFM's Northwest team may be called upon as needed to serve the City. Fred Eoff, Director, has expertise in housing finance and works with a variety of suburban cities in the Puget Sound region. Maggie Marshall, Senior Managing Consultant, joined PFM in June 2018 and works with a variety of local governments in Washington and Oregon. The team will be supported by two dedicated, Ben Kelly and Elli Halperin, who will provide analytical and bond sizing services. Andi Beebe, Senior Associate, will provide support with respect to contracts, billing, and compliance with legal and regulatory matters. Thomas, Duncan, Fred, Maggie, Matt, and Ben are Municipal Advisor Representatives (Series 50). Thomas is also a Municipal Advisor Principal (Series 54). (Resumes for senior members of the team can be found on the following pages.) As mentioned above, PFM is the nation's largest independent financial advisory firm, with substantial resources beyond our local offices. PFM's local team members may call upon specialized support groups if necessary to best serve the City's needs. Examples of these support groups include our Pricing Group, Quantitative Strategies Group, and Research Group PFM's in-house bond Pricing Group may join the core finance team to support any bond sale (particularly a negotiated sale). We believe our Pricing Group is involved in more bond pricings annually than most major investment banking firms and as such is very much in tune with current market conditions and investor expectations. To the best of our knowledge, PFM is the only independent advisory firm with a dedicated team with access to all the same information and resources as the largest investment banks. PFM also has a Quantitative Strategies Group (QSG) whose mission is to develop proactive strategies and tools for all of PFM's clients and services. The QSG administers the firm's extensive three-month municipal finance training program for new and lateral hires; it also hosts what we believe is a popular and highly rated Client Training program. These trainings - available only to clients - became a series of virtual webinars in 2020 because of the pandemic, allowing clients to select topics a la carte and earn CPE credit. Lastly, we have a dedicated Research Group with access to various subscription services such as Thomson Reuters Municipal Market Monitor and Bloomberg Terminal. We also have access to all rating reports for entities and sector reports from Moody's Investors Services, S&P Global Ratings, Fitch Ratings, and Kroll Ratings which discuss trends and rating criteria for the City's bonds. Additionally, PFM subscribes to Moody's Financial Ratio Analysis (MFRA), providing us with substantial detail on all Moody's- rated credits and sectors, including those relevant to the City. PFM Statement of Qualifications I Financial Advisory Services Page 2 01 Specialized .: . Quantitative ' Pricing Pricing Strategies Group Group Group ` These staff members are Municipal Advisor Representatives (Series 50) Resumes of Key Personnel Duncan Brown, Director Duncan started his career at PFM in 2006 and is based in PFM's Portland and Seattle offices. He advises clients on debt transactions under many different structures and security types, including voted and non -voted general obligation bonds, full faith & credit obligations, port revenue bonds, essential service utility revenue bonds, sales and special tax bonds, 501(c)(3) conduit transactions, tax incrementiurban renewal financings, and special assessment bonds. Additionally, his experience includes non - transactional projects such as funding studies, credit ratio analysis, and capital planning. He has worked with a wide range of clients in Oregon, Washington, and Idaho, including cities, counties, port districts, school districts, hospital districts, other special districts, and not -for -profit institutions. His city clients include Richland, Ridgefield, Tukwila, and Oak Harbor in Washington; Ashland, Beaverton, Bend, Central Point, Coquille, Eugene, Lake Oswego, Portland, Tigard, and Wilsonville in Oregon; and the City of Boise, Idaho. A native of western Washington, Duncan graduated with a B.A. in Politics from Pomona College PFM Statement of Qualifications I Financial Advisory Services Page 3 NJ in Claremont, California. He is a regular speaker at industry conferences and a Municipal Advisor Representative (Series 50). Matt Schoenfeld, Senior Managing Consultant Matt Schoenfeld joined PFM's Seattle office in 2022 after spending the past five years at the Washington State Treasurer's Office debt management team. He most recently managed the State's Certificates of Participation (COP) program, where during his tenure he led the issuance of over $524 million on behalf of State agencies and local governments. At PFM, he works with states, cities, counties, ports, and higher education clients in Alaska, Nevada, Oregon, and Washington. His areas of focus include pooled bond programs, credit and debt capacity analysis, cash flow modeling, and the structuring, sizing, and pricing of new money and refunding municipal bond transactions. Matt has graduated twice from the University of Washington, where he earned a double B.A. in political science and law, societies and justice, and a MPA with a focus in public financial management. He is an active member of the Alaska Government Finance Officers Association, Washington Finance Officers Association, and the Washington Public Treasurers Association, for which he has held various leadership positions. He is a Municipal Advisor Representative (Series 50). Thomas Toepfer, Managing Director Thomas Toepfer joined PFM in 2009 and provides financial advisory services to states, cities, counties, water and sewer utilities, ports, public and private universities, and other _ municipalities located in the West and Northwest. Thomas advises his clients on a broad range of capital markets related services such as capital structure evaluation, risk assessment and management, debt capacity analysis, operating pro -forma analysis, rating agency strategy, and evaluating public -private partnerships. He advises on negotiated and competitive bond transactions, and direct bank loans for various types of fixed and variable rate debt. His client base includes cities of Bothell, Lynnwood, Marysville, Issaquah and Snoqualmie, the State of Washington, State of Nevada, Clark County (Nevada), Kitsap County, and environmental utilities such as Clark County Water Reclamation District (Nevada) and the Las Vegas Valley Water District. He also works with higher education institutions such as Washington State University, Oregon State University and University of Southern California. Thomas is a graduate of Humboldt -University of Berlin School of Business and Economics, where he earned the German Diplom- Kaufmann (MBA). He also studied abroad at the University of Washington completing several MBA finance courses. He is a Municipal Advisor Representative (Series 50) and Principal (Series 54). Fred Eoff, Director Fred Eoff joined PFM in 2013 when PFM acquired SDM Advisors (another independent _ financial advisory firm). Fred has 45 years of experience in the field of public finance as a financial advisor and investment banker. During his career, he has served as financial advisor or underwriter to state agencies, authorities, municipalities, and special purpose ti districts as well as non-profit and for -profit project developers. Fred's representative clients include the cities of Auburn, Everett, Kirkland, Redmond, and Shoreline, as well as state agencies such as the Washington State Convention Center and the Washington State Housing Finance Commission. Fred was a Senior Advisor with SDM Advisors for three years prior to PFM Statement of Qualifications I Financial Advisory Services Page 4 joining PFM, preceded by eight years as an investment banker and Senior Vice President with D.A. Davidson & Company and 13 years as Senior Vice President with Piper Jaffray & Co. Fred holds a B.A. in Finance from the University of Washington and an MBA from Oklahoma City University. He is a Municipal Advisor Representative (Series 50). Maggie Marshall, Senior Managing Consultant Maggie Marshall joined PFM's Seattle office in June 2018, after previously spending two years on the debt management team at the Washington State Treasurer's Office. She provides technical and analytical support for numerous cities in Washington and Oregon, including Everett, Issaquah, Redmond, Kirkland, and Shoreline (Washington) and Ashland, Bend, Beaverton, Eugene, Springfield, and Portland (Oregon). Maggie holds a master's degree in Public Administration from the University of Washington's Evans School of Public Policy and Governance, and a Bachelor of Science in Business Administration from the University of Colorado. She is a Municipal Advisor Representative (Series 50). Relevant Experience Municipal Debt Experience Over our 47-year history,5 PFM has built a leading presence in the municipal marketplace. PFM works with local and state governments 2022 Overall Long Term Municipal New Issues as Well as not -for -profit Ir1StItUtIOr1S. Municipal Financial Advisory Ranldng - Full Credit to Each Financial Advisor Nationwide, we have been the Source:lpreo number -one ranked financial #issues $inmllons PFM 521 {� advisor — both in number of public Resources 116 transactions and total par amount Hilltop Securities 523 23,227 —every year since 1995.2 Frasca&Associates 39 17936 Estrada Hinojosa 47 10 134 In 2021 alone, PFM advised on Acacia Fin Group 84 9,564 more than 930 bond transactions Piper Sandler 162 7,912 for our clients with a total volume of Backstrom McCarley 21 7,251 Montague DeRose 24 6,874 more than $69.7 billion. PFM's Ponder 24 4,728 leadership through September 2022 is illustrated in the chart to the right.' Washington City Experience PFM has provided financial advisory services to municipal clients in Washington from our Seattle office since 2001 . From 2017 to 2021, PFM advised on 1266 transactions for $6.0 billion in par value in the state of Washington. The table below lists Washington city clients served by members of the local PFM team: 7 Client lists as of December 21, 202Z are for informational purposes only and do not represent an endorsement or testimonial by clients of PFM's financial advisory services PFM Statement of Qualifications I Financial Advisory Services Page 5 L _ 43,388 38,259 ns, • Aberdeen Kirkland Ridgefield • Auburn Lynnwood Sedro-Woolley • Bothell Marysville Shoreline • Ellensburg Oak Harbor Snoqualmie • Everett Redmond Tukwila • Issaquah Richland The graphic below indicates public sector entities within Washington served by PFM's Pacific Northwest practice.' Clark Krtsap Kittitas Klickitat Aberdeen Son Juan Anacortes Skagit Auburn Spokane Bothell Thurston Ellensburg Yakima Everett Issaquah Anacortes Kirkland Longview Lynnwood Skagit Marysville Tacoma Oak Harbor Vancouver Redmond Richland Ridgefield Clark Regional Wastewater District Sedro-Woolley Discovery Clean Water Alliance Shoreline East Columbia Basin Irrigation District Snoqualmie Tukwila Fort Vancouver Regional Library District King County Library System Tax Increment Area Experience EvergreenHeafth Kirkland (King County Public Hospital District No. 2) EvergreenHeafth Monroe (Snohomish County Public Hospital District No. 1) Valley Medical Center (King County Public Hospital District No. 1) Washington State Higher Education Facilities Authority Washington State Housing Finance Commission Washington State Tobacco Settlement Authority Washington State Treasurers Office Bastyr University Central Washington University Eastern Washington University Pacific Northwest University of Health Sciences Seattle Pacific University Washington State University Western Washington University Whitworth University Community Transit Skagit Regional Public Facilities District Seattle (Washington State) Convention Center In its 2021 regular session, the Washington State Legislature adopted legislation (ESHB 1189) authorizing a city, county, or port district to create a "tax increment area" (TIA) — joining the 48 other states that allow tax increment financing (TIF) in one form or another. TIF is a familiar concept to PFM employees in other parts of the country; additionally, PFM's Northwest team (particularly Duncan Brown) has worked with local governments in Oregon on TIF borrowings and planning for many years. Since the adoption of ESHB 1189, PFM's Northwest team has worked or is currently working with three Washington clients to implement or seriously evaluate the creation of a TIA. (Also, during his time at the Washington State Treasurer's Office, Matt Schoenfeld served on the STO team that reviewed TIA proposals, as required by statute.) PFM Statement of Qualifications I Financial Advisory Services Page 6 RPM 1. Port of Vancouver. A PFM team led by Duncan Brown assisted the Port in the creation of a TIA encompassing the Port's "Terminal 1" waterfront development. PFM evaluated projected tax increment revenues (prepared by Tiberius Consulting) to create a financing plan for the development. This included sensitivity analysis (i.e., what happens if tax increment revenues come in lower or higher than anticipated over the life of the TIA). Proceeds of the bonds are anticipated to fund public improvements in the waterfront development, including renovation to a pier and construction of a public marketplace. The Port Commission adopted a resolution creating the TIA in spring 2022. We believe that the Port's TIA was the second area established under the new legislation. 2. City of Kirkland. A PFM team led by Fred Eoff and Maggie Marshall is currently working with the City of Kirkland to evaluate a proposed TIA. The proposed area would be large and designed to enhance and accelerate redevelopment of a central part of Kirkland. 3. City of Ridgefield. A PFM team led by Duncan Brown and Matt Schoenfeld is currently assisting the City of Ridgefield to evaluate debt capacity and upside/downside risk in connection wtih a proposed TIA. The proposed area would encompass undeveloped and underdeveloped parcels adjacent to 1-5; tax increment revenues and/or bond proceeds would be used to fund infrastructure improvements (e.g., road widening) in order to facilitate new development. Depending on the results of this analysis, the City Council may take action in spring 2023. PFM's Northwest team also provides ad -hoc advice and education to other Washington clients regarding hypothetical or potential tax increment areas. Fee Proposal Our team aims to provide a high level of service at fees that represent a fair value to the City. For work unrelated to an active debt transaction — including work related to the evaluation and possible creation of a TIA — PFM proposes hourly fees as follows: Managing Director $350 Director $325 Sr. Managing Consultant $300 Sr. Analyst $260 Analyst $210 Associate (Administrative) $195 For debt transactions, most typically we charge fees for financing services based on a rate per $1,000 of financing, which fees are paid from proceeds of bond sales. PFM proposes transactional fees using a sliding fee schedule, as follows: For financings up to $20 million 1 $1.50 per $1,000, with a $25,000 minimum For financings between $20 and $75 million $30,000 plus $0.75 per $1,000 over $20 million For financinqs over $75 million $75,000 plus $0.25 per $1.000 over $75 million PFM Statement of Qualifications I Financial Advisory Services Page 7 ImM Note that this fee schedule would generally apply to all financings regardless of purposes (new money or refunding), security (LTGO, UTGO, revenue, etc.), or method of sale (competitive, negotiated, or bank placement). For multiple financings completed under a common financing plan, we may negotiate a reduced fee, depending on the amount of time between financings. For unusually complex financings, we may negotiate an increased fee. For interim financing, we would anticipate a reduced fee, depending on the nature and structure of the financing, and therefore the time involved. Additionally, for any transaction not completed, PFM would be compensated on an hourly basis, at the rates set forth above, which will in no case exceed the transactional fee that would have otherwise applied. We believe PFM has the resources, experience, and personnel to best serve as the City's financial advisor. We appreciate the opportunity to provide our qualifications and are happy to answer any questions you may have. PFM Statement of Qualifications I Financial Advisory Services Page 8 218/23, 10:21 AM Washington State Department of Revenue 'WashinrAon State De na,- rTiLnt of H.evenUe < Business Lookup License Information: Entity name: PFM FINANCIAL ADVISORS LLC Business PFM FINANCIAL ADVISORS LLC name: Entity type: Limited Liability Company UBI #: 604-011-230 Business ID: 001 Location ID: 0001 Location: Active Location address: 1200 5TH AVE SEATTLE WA 98101-3132 Mailing address: 1735 MARKET ST FL 43 PHILADELPHIA PA 19103-7502 Excise tax and reseller permit status: Click here Secretary of State status: Click here New search Back to results Governing People May include governing people not registered with Secretary of State Governing people Title https://secure.dor,wa.gov/gteunauth/_/#2 1/2 2/8/23, 10:21 AM Washington State Department of Revenue Governing people DANIEL, LISA DOYLE, JAMIE HARTMAN, DANIEL MADDOX, CH ERYL MITCHELL, JESSICA CAMERON PFM I, LLC Title View Additional Locations The Business Lookup information is updated nightly. Search date and time: 2/8/2023 10:21.:45 AM Contact us How are we doing? Take our survey! Don't see what you expected? Check if your browser is supported https://secure.dor.wa.gov/gteunauth/,/#2 212 2/8/23, 10:21 AM Corporations and Charities System BUSINESS INFORMATION Business Name: PFM FINANCIAL ADVISORS LLC UBI Number: 604 011 230 Business Type: FOREIGN LIMITED LIABILITY COMPANY Business Status: ACTIVE Principal Office Street Address: 1735 MARKET ST FL 43, PHILADELPHIA, PA,19103-7502, UNITED STATES Principal Office Mailing Address: 1735 MARKET ST FL 43, PHILADELPHIA, PA, 19103-7502, UNITED STATES Expiration Date: 06/30/2023 Jurisdiction: UNITED STATES, DELAWARE Formation/ Registration Date: 06/21/2016 Period of Duration: PERPETUAL Inactive Date: Nature of Business: FINANCIAL ADVISORY SERVICES REGISTERED AGENT INFORMATION Registered Agent Name: REGISTERED AGENT SOLUTIONS, INC. Street Address: 3400 CAPITOL BLVD. SE, SUITE 101, TUMWATER, WA, 98501, UNITED STATES Mailing Address: P.O. BOX 1368, OLYMPIA, WA, 98507, UNITED STATES GOVERNORS Title Governors Type Entity Name First Name Last Name GOVERNOR INDIVIDUAL DANIEL HARTMAN GOVERNOR INDIVIDUAL CHERYL MADDOX GOVERNOR ENTITY PFM I, LLC GOVERNOR INDIVIDUAL LISA DANIEL GOVERNOR INDIVIDUAL JAMIE DOYLE GOVERNOR INDIVIDUAL JESSICA CAMERON MITCHELL https://ccfs.sos.wa.gov/#/BusinessSearch/Businesslnformation 1/1 2/8/23, 10:49 AM Business Orders I Pennsylvania An Off icizll PennSylyania Government Website pennsylvania DEPARTMENT OF STATE j Home Business Orders Q Search Entity Details 14 Request Details Forms Processing Fee ? Help Submit Entity Details Users may order records without creating a Business Filing Services account. Orders placed without an account will be fulfilled once and cannot be recovered or resent. Orders placed without an account will not be available in "My Work Queue" for subsequent viewing and printing. Entity Name PFM PINArJCIAL ADVISORS LLC Entity No. 0006421 E File Date 06/21/2016 Entity Type Foreign Limited Liability Company 1 Entity Status Active 9 Sip to main content https://fi le.dos.pa.gov/forms/new/8322?type=business&source N um=0006421607 Login 112 CITY OF Federal Way TO: Jim Ferrell, Mayor Brian Davis, City Administrator Ryan Call, City Attorney FROM: Steve Groom, Finance Director DATE: April 19, 2023 RE: Financial Advisor Professional Services Agreement FINANCE This is to articulate the rationale for engaging an Independent Registered Municipal Advisor (IRMA) for the City. The essential function to be provided is a knowledgeable, experienced, objective and informed review of all financial aspects of capital and debt planning. The role of a Financial Advisor is principally for debt issuance and debt planning, working in concert with bond counsel, underwriters and city staff. Any given city issues debt rarely, so when assembling a team of professionals, the value to the City is primarily in adding expertise and experience the City staff is less experienced and perhaps less current on regulations or practices. Financial advisors are regulated subject to FINRA (Financial Industry Regulatory Authority) and MSRB (Municipal Securities Rulemaking Board) oversight. Cities typically retain a financial advisor well before debt issuance, and include them in capital improvement planning to assist in identifying financing alternatives, planning the city's overall debt program and determining appropriate methods of sale for the specific circumstances. Financial advisors' roles in debt issuance depend on the method of sale. ® In a competitive sale, the financial advisor works with the issuer to determine the structure and timing of the issue, to prepare bond documents and rating agency presentations, to evaluate and select the best bid, and to close the transaction. • In a negotiated sale, the financial advisor's role is to ensure the issuer's goals and interests are represented and protected when structuring the transaction and establishing the borrowing rates/yields on the bonds. Selection. Specific to the selection of PFM, the City only considers financial advisors with a known track record with other cities known to be financially reputable. City of Kirkland has had the same financial advisor for 40 years, Fred Eoff. I have known Thomas Toepfer and Duncan Brown from my work at City of Yakima. I have known Matt Schoenfeld, who just joined their team, as the State Treasurer's administrator of the LOCAL debt program and he served on the board I am on with the Washington Public Treasurers Association. He was also one of the initial reviewers at State Treasurer of TIF applications. PFM submitted their Statement of Qualifications. Scope of Work. City of Kirkland's PSA with PFM was our starting point for our Scope of Work which we modified to include TIF-related work. Per MSRB Rule G-42, if something isn't covered 4/19/2023 1 of 2 Cover Memo - Financial Advisor PSA 02-2-2023 CITY OF Federal Way FINANCE by the scope of services in their contract, they cannot perform the service. I am quite comfortable doing rating agency presentations, and underwriters typically will work perfectly well with bond counsel to prepare bond documents and schedules, however by putting these in the scope of work, we gain the experience and knowledge of their review and input and they are further invested in the outcome. Compensation. The fee schedule which PFM proposed is exactly that *of Kirkland's. In speaking with Port of Vancouver on their TIF financing, POV indicated that they spent $11,000 on PFM's financial advisory contract at the hourly rate. PFM independently City of Federal Way offered the same information when I asked them to estimate their PFM professional services agreement workload requirement for our TIF project. Their interest is more on Sample Fee Schedule -examples only the long-term relationship and debt issuance. Still, pertaining to debt issuance, the proposed fee schedule, which would be charged Issue Fee E, $ 10,000,000 $ zs,000 0.25% entirelyto the bond as bond counsel and underwriter fees are, would $ 15,000,000 $25,000 0.17% amount to the following table, depending on the debt issue: $ 20,000,000 $30,000 0.15% $ 25,000,000 $ 33,750 0.14% $ 30,000,000 $ 37,500 0.13% Reference emails on file: $ 35,000,000 $41,250 0.12% Michael Olson Cityof Kirkland $ $48,750 0.11% � 45,000,000 $ 45,000,000 $ 48,750 0.11% Scott Goodrich, Port of Vancouver $ 50,000,000 $52,500 0.11% $ 55,000,000 $ 56,250 0.10% $ 60,000,000 $ 60,000 0.10% Attachments: $ 65,000,000 $63,750 0.10% Professional Services Agreement $ 70,000,000 $67,500 0.10% $ 75,000,000 $ 71,250 0.10% Statement of Qualifications $ 80,000,000 $76,250 0.10% City of Kirkland's PSA 2019 amendment $ 85,000,000 $77,500 0.09% $ 90,000,000 $ 78,750 0.09% $ 95,000,000 $ 80,000 0.08% $100,000,000 $ 81,250 0.08% 4/19/2023 2 of 2 Cover Memo - Financial Advisor PSA 02-2-2023 PFMIILL-01 JBOLAND2 DATE iMMIDDIYYYY) ,4�ofzo' CERTIFICATE OF LIABILITY INSURANCE 4/2112023 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER, THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). _ PRODUCER License # SR-1359321 c NTAc r Janice Boland Alliant Insurance Services, Inc PHONE FAX 32 Old Slip 29th FI a Via, E ct : (212) 603-0202 (,VC, No): New York, NY 10005 Jatilee.Boland@alliant.com INSURER A INSURED INSURER B PFM Financial Advisors, LLC INS RERC: 1735 Market Street, 42nd Floor INSURER D Philadelphia, PA 19103 INSURER E' INSURER F : OVERAGES CERTIFICATE UMBER: REVISION NUMkJhR: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. 9 TYPE OF INSURANCE A X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE ❑X OCCUR L AGGREGATE LIMITAPPLIES PER: POLICY ❑X PRO l X LOC JECT B AUTOMOBILE LIABILITY ANY AUTO AOWNED I UTEOS ONLY A(U7T�O�}SyULEEDp X AUTOS ONLY X Ai7T05 DMLY B X I UMBRELLA LIAB X OCCUR EXCESS LIAB CLAIMS -MADE DID X RETENTIONS 0 POLICY NUMBER X I X 17018019790 I 12/7/2022 112/7/2023 WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y 1 N ANY PROPRIETOR/PARTNER/EXECUTIVE ❑ N / A ��F[CERIMEMBER EXCLUDED? [Mandatory in NH) If Ves, describe under 8019806 + 12/7/2022 1 12/7/2023 8019840 1 12/7/2022 1 12/7/2023 LIMITS DESCRIPTION OF OPERATIONS I LOCATIONS / VEHICLES (ACORD Tdi, Addltlonal Remarks Schedule, maybe attached Ir more space Is required) General Liability - Additional Insured, Primary and Non -Contributory, Waiver of Subrogation included perwritten contract or agreement City of Federal Way 33325 8th Ave South Federal Way, WA 98003-6325 ACORD 25 (2016/03) I CANCIFULATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE ©1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD 0 CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement It is understood and agreed that this endorsement amends the COMMERCIAL GENERAL LIABILITY COVERAGE PART as follows. If any other endorsement attached to this policy amends any provision also amended by this endorsement, then that other endorsement controls with respect to such provision, and the changes made by this endorsement with respect to such provision do not apply. TABLE OF CONTENTS 1. Additional Insureds 2. Additional Insured - Primary And Non -Contributory To Additional Insured's Insurance 3. Bodily Injury — Expanded Definition 4. Broad Knowledge of Occurrence/ Notice of Occurrence 5. Broad Named Insured 6. Estates, Legal Representatives and Spouses 7.. Expected Or Intended Injury — Exception for Reasonable Force 8. In Rem Actions 9. Incidental Health Care Malpractice Coverage 10. Joint Ventures/Partnership/Limited Liability Companies 11. Legal Liability — Damage To Premises 12. Medical Payments 13. Non -owned Aircraft Coverage 14. Non -owned Watercraft 15. Personal And Advertising Injury — Discrimination or Humiliation 16. Personal And Advertising Injury - Limited Contractual Liability 17. Property Damage - Elevators 18. Supplementary Payments 19. Unintentional Failure To Disclose Hazards 20. Waiver of Subrogation — Blanket CNA75102XX (1-15) Page 1 of 14 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM I I , LLC Policy No: 7018019790 Endorsement No: 11 Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA 1. ADDITIONAL INSUREDS CNA PARAMOUNT Financial Services - General Liability Extension Endorsement a. WHO IS AN INSURED is amended to include as an Insured any person or organization described in paragraphs A. through K. below whom a Named Insured is required to add as an additional insured on this Coverage Part under a written contract or written agreement, provided such contract or agreement: (1) is currently in effect or becomes effective during the term of this Coverage Part; and (2) was executed prior to: (a) the bodily injury or property damage; or (b) the offense that caused the personal and advertising injury, for which such additional insured seeks coverage. b. However, subject always to the terms and conditions of this policy, including the limits of insurance, the Insurer will not provide such additional insured with: (1) a higher limit of insurance than required by such contract or agreement; or (2) coverage broader than required by such contract or agreement, and in no event broader than that described by the applicable paragraph A. through K. below Any coverage granted by this endorsement shall apply only to the extent permissible by law. A. Controlling Interest Any person or organization with a controlling interest in a Named Insured, but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury arising out of: 1. such person or organization's financial control of a Named Insured; or 2. premises such person or organization owns, maintains or controls while a Named Insured leases or occupies such premises; provided that the coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of, or for such additional insured. B. Co-owner of Insured Premises A co-owner of a premises co -owned by a Named Insured and covered under this insurance but only with respect to such co -owner's liability for bodily injury, property damage or personal and advertising injury as co-owner of such premises. C. Grantor of Franchise Any person or organization that has granted a franchise to a Named Insured, but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury as grantor of a franchise to the Named Insured. D. Lessor of Equipment Any person or organization from whom a Named Insured leases equipment, but only with respect to liability for bodily injury, property damage or personal and advertising injury caused, in whole or in part, by the Named Insured's maintenance, operation or use of such equipment, provided that the occurrence giving rise to such bodily injury, property damage or the offense giving rise to such personal and advertising injury takes place prior to the termination of such lease. CNA75102XX (1-15) Page 2 of 14 VALLEY FORGE INSURANCE COMPANY Policy No: 7018019790 Endorsement No: 11 Insured Name: PFM I I , LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. I CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement E. Lessor of Land Any person or organization from whom a Named Insured leases land but only with respect to liability for bodily injury, property damage or personal and advertising injury arising out of the ownership, maintenance or use of such land, provided that the occurrence giving rise to such bodily injury, property damage or the offense giving rise to such personal and advertising injury takes place prior to the termination of such lease. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of, or for such additional insured. F. Lessor of Premises An owner or lessor of premises leased to the Named Insured, or such owner or lessor's real estate manager, but only with respect to liability for bodily injury, property damage or personal and advertising injury arising out of the ownership, maintenance or use of such part of the premises leased to the Named Insured, and provided that the occurrence giving rise to such bodily injury or property damage, or the offense giving rise to such personal and advertising injury, takes place prior to the termination of such lease. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of, or for such additional insured. G. Mortgagee, Assignee or Receiver A mortgagee, assignee or receiver of premises but only with respect to such mortgagee, assignee or receiver's liability for bodily injury, property damage or personal and advertising injury arising out of the Named Insured's ownership, maintenance or use of a premises by a Named Insured. The coverage granted by this paragraph does not apply to structural alterations, new construction or demolition operations performed by, on behalf of, or for such additional insured. H. State or Governmental Agency or Subdivision or Political Subdivisions — Permits A state or governmental agency or subdivision or political subdivision that has issued a permit or authorization but only with respect to such state or governmental agency or subdivision or political subdivision's liability for bodily injury, property damage or personal and advertising injury arising out of: 1. the following hazards in connection with premises a Named Insured owns, rents, or controls and to which s this insurance applies: a. the existence, maintenance, repair, construction. erection, or removal of advertising signs, awnings, s canopies, cellar entrances, coal holes, driveways, manholes, marquees, hoistaway openings, sidewalk 0 vaults, street banners, or decorations and similar exposures; or b. the construction, erection, or removal of elevators; or c. the ownership, maintenance or use of any elevators covered by this insurance; or 2. the permitted or authorized operations performed by a Named Insured or on a Named Insured's behalf. The coverage granted by this paragraph does not apply to: a. Bodily injury, property damage or personal and advertising injury arising out of operations performed for the state or governmental agency or subdivision or political subdivision; or b. Bodily injury or property damage included within the products -completed operations hazard. With respect to this provision's requirement that additional insured status must be requested under a written contract or agreement, the Insurer will treat as a written contract any governmental permit that requires the Named Insured to add the governmental entity as an additional insured. CNA75102XX (1-15) Policy No: 7018019790 Page 3 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM II, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc , with its permission CNA I I. Trade Show Event Lessor CNA PARAMOUNT Financial Services - General Liability Extension Endorsement 1. With respect to a Named Insured's participation in a trade show event as an exhibitor, presenter or displayer, any person or organization whom the Named Insured is required to include as an additional insured, but only with respect to such person or organization's liability for bodily injury, property damage or personal and advertising injury caused by: a. the Named Insured's acts or omissions; or b. the acts or omissions of those acting on the Named Insured's behalf, in the performance of the Named Insured's ongoing operations at the trade show event premises during the trade show event. 2. The coverage granted by this paragraph does not apply to bodily injury or property damage included within the products -completed operations hazard. J. Vendor Any person or organization but only with respect to such person or organization's liability for bodily injury or property damage arising out of your products which are distributed or sold in the regular course of such person or organization's business, provided that: The coverage granted by this paragraph does not apply to: a. bodily injury or property damage for which such person or organization is obligated to pay damages by reason of the assumption of liability in a contract or agreement unless such liability exists in the absence of the contract or agreement; b. any express warranty unauthorized by the Named Insured; c. any physical or chemical change in any product made intentionally by such person or organization; d. repackaging, except when unpacked solely for the purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; e. anv failure to make any inspections, adjustments, tests or servicing that such person or organization has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products; If. demonstration, installation, servicing or repair operations, except such operations performed at such person or organization's premises in connection with the sale of a product; g. products which, after distribution or sale by the Named Insured, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for such person or organization; or h. bodily injury or property damage arising out of the sole negligence of such person or organization for its own acts or omissions or those of its employees or anyone else acting on its behalf. However, this exclusion does not apply to: (1) the exceptions contained in Subparagraphs d. or If. above; or (2) such inspections, adjustments, tests or servicing as such person or organization has agreed with the Named Insured to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. CNA75102XX (1-15) Policy No: 7018019790 Page 4 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM II, LLC Copyright CNA All Rights Reserved Includes copyrighted material of Insurance Services Office, Inc., with its permission CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement 2. This Paragraph J. does not apply to any insured person or organization, from whom the Named Insured has acquired such products, nor to any ingredient, part or container, entering into, accompanying or containing such products. 3. This Paragraph J. also does not apply: a. to any vendor specifically scheduled as an additional insured by endorsement to this Coverage Part; b. to any of your products for which coverage is excluded by endorsement to this Coverage Part; nor c. if bodily injury or property damage included within the products -completed operations hazard is excluded by endorsement to this Coverage Part. K. Other Person Or Organization Any person or organization who is not an additional insured under Paragraphs A. through J. above. Such additional insured is an Insured solely for bodily injury, property damage or personal and advertising injury for which such additional insured is liable because of the Named Insured's acts or omissions. The coverage granted by this paragraph does not apply to any person or organization: 1. for bodily injury, property damage, or personal and advertising injury arising out of the rendering or failure to render any professional service; 2. for bodily injury or property damage included within the products -completed operations hazard; nor 3. who is specifically scheduled as an additional insured on another endorsement to this Coverage Part. 2. ADDITIONAL INSURED - PRIMARY AND NON-CONTRIBUTORY TO ADDITIONAL INSURED'S INSURANCE A. The Other Insurance Condition in the COMMERCIAL GENERAL LIABILITY CONDITIONS Section is amended to add the following paragraph: If the Named Insured has agreed in writing in a contract or agreement that this insurance is primary and non- contributory relative to an additional insured's own insurance, then this insurance is primary, and the Insurer will not seek contribution from that other insurance. For the purpose of this Provision 2., the additional insured's own insurance means insurance on which the additional insured is a named insured. B. With respect to persons or organizations that qualify as additional insureds pursuant to paragraph 1.K. of this m endorsement, the following sentence is added to the paragraph above: Otherwise, and notwithstanding anything to the contrary elsewhere in this Condition, the insurance provided to N such person or organization is excess of any other insurance available to such person or organization. 0 3. BODILY INJURY — EXPANDED DEFINITION Under DEFINITIONS, the definition of bodily injury is deleted and replaced by the following: Bodily injury means physical injury, sickness or disease sustained by a person, including death, humiliation, shock, mental anguish or mental injury sustained by that person at any time which results as a consequence of the physical injury, sickness or disease. 4. BROAD KNOWLEDGE OF OCCURRENCE/ NOTICE OF OCCURRENCE Under CONDITIONS, the condition entitled Duties in The Event of Occurrence, Offense, Claim or Suit is amended to add the following provisions: A. BROAD KNOWLEDGE OF OCCURRENCE The Named Insured must give the Insurer or the Insurer's authorized representative notice of an occurrence, offense or claim only when the occurrence, offense or claim is known to a natural person Named Insured, to a CNA75102XX (1-15) Policy No: 7018019790 Page 5 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM II, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement partner, executive officer, manager or member of a Named Insured, or to an employee designated by any of the above to give such notice. B. NOTICE OF OCCURRENCE The Named Insured's rights under this Coverage Part will not be prejudiced if the Named Insured fails to give the Insurer notice of an occurrence, offense or claim and that failure is solely due to the Named Insured's reasonable belief that the bodily injury or property damage is not covered under this Coverage Part. However, the Named Insured shall give written notice of such occurrence, offense or claim to the Insurer as soon as the Named Insured is aware that this insurance may apply to such occurrence, offense or claim. 5. BROAD NAMED INSURED WHO IS AN INSURED is amended to delete its Paragraph 3. in its entirety and replace it with the following: 3. Pursuant to the limitations described in Paragraph 4. below, any organization in which the First Named Insured has management control directly or indirectly: a. on the effective date of this Coverage Part; or b. by reason of a Named Insured creating or acquiring the organization during the policy period, qualifies as a Named Insured, provided that there is no other similar liability insurance, whether primary, contributory, excess, contingent or otherwise, which provides coverage to such organization, or which would have provided coverage but for the exhaustion of its limit, and without regard to whether its coverage is broader or narrower than that provided by this insurance. But this BROAD NAMED INSURED provision does not apply to any organization for which coverage is excluded by another endorsement attached to this Coverage Part. For the purpose of this provision, and of this endorsement's JOINT VENTURES I PARTNERSHIP I LIMITED LIABILITY COMPANIES provision, management control means owning interests representing more than 50% of the voting, appointment or designation power for the selection of a majority of: the Board of Directors of a corporation; the management committee members of a joint venture; the management board of a limited liability company; the general partners of a limited partnership; or the partnership managers of a general partnership. 4. With respect to organizations which qualify as Named Insureds by virtue of Paragraph 3. above, this insurance does not apply to: a. bodily injury or property damage that first occurred prior to the -date of management control, or that first occurs after management control ceases; nor b. personal or advertising injury caused by an offense that first occurred prior to the date of management control or that first occurs after management control ceases. 5. The insurance provided by this Coverage Part applies to Named Insureds when trading under their own names or under such other trading names or doing -business -as names (dba) as any Named Insured should choose to employ. 6. ESTATES, LEGAL REPRESENTATIVES, AND SPOUSES The estates, heirs, legal representatives and spouses of any natural person Insured shall also be insured under this policy; provided, however, coverage is afforded to such estates, heirs, legal representatives, and spouses only for claims arising solely out of their capacity or status as such and, in the case of a spouse, where such claim seeks damages from marital community property, jointly held property or property transferred from such natural person Insured to such spouse. No coverage is provided for any act, error or omission of an estate, heir, legal representative, or spouse outside the scope of such person's capacity or status as such, provided however that the spouse of a natural person Named Insured and the spouses of members or partners of joint venture or partnership CNA75102XX (1-15) Policy No: 7018019790 Page 6 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM II, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement Named Insureds are Insureds with respect to such spouses' acts, errors or omissions in the conduct of the Named Insured's business. 7. EXPECTED OR INTENDED INJURY — EXCEPTION FOR REASONABLE FORCE Under COVERAGES, Coverage A — Bodily Injury And Property Damage Liability, the paragraph entitled Exclusions is amended to delete the exclusion entitled Expected or Intended Injury and replace it with the following: This insurance does not apply to: Expected or Intended Injury Bodily injury or property damage expected or intended from the standpoint of the Insured. This exclusion does not apply to bodily injury or property damage resulting from the use of reasonable force to protect persons or property. 8. IN REM ACTIONS A quasi in rem action against any vessel owned or operated by or for the Named Insured, or chartered by or for the Named Insured, will be treated in the same manner as though the action were in personam against the Named Insured. 9. INCIDENTAL HEALTH CARE MALPRACTICE COVERAGE Solely with respect to bodily injury that arises out of a health care incident: A. Under COVERAGES, Coverage A — Bodily Injury And Property Damage Liability, the Insuring Agreement is amended to replace Paragraphs 1.b.(1) and 1.b.(2) with the following: b. This insurance applies to bodily injury provided that the professional health care services are incidental to the Named Insured's primary business purpose, and only if: (1) such bodily injury is caused by an occurrence that takes place in the coverage territory. (2) the bodily injury first occurs during the policy period. All bodily injury arising from an occurrence will be deemed to have occurred at the time of the first act, error, or omission that is part of the occurrence; and B. Under COVERAGES, Coverage A — Bodily Injury And Property Damage Liability, the paragraph entitled Exclusions is amended to: s i. add the following to the Employers Liability exclusion: This exclusion applies only if the bodily injury arising from a health care incident is covered by other liability insurance available to the Insured (or which would have been available but for exhaustion of its limits). ii. delete the exclusion entitled Contractual Liability and replace it with the following: This insurance does not apply to: Contractual Liability the Insured's actual or alleged liability under any oral or written contract or agreement, including but not limited to express warranties or guarantees. iii. add the following additional exclusions. This insurance does not apply to: CNA75102XX (1 - 15) Policy No: 7018019790 Page 7 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM II, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. DNA I� Discrimination CNA PARAMOUNT Financial Services - General Liability Extension Endorsement any actual or alleged discrimination, humiliation or harassment, that includes but shall not be limited to claims based on an individual's race, creed, color, age, gender, national origin, religion, disability, marital status or sexual orientation. Dishonesty or Crime Any actual or alleged dishonest, criminal or malicious act, error or omission. Medicare/Medicaid Fraud any actual or alleged violation of law with respect to Medicare, Medicaid, Tricare or any similar federal, state or local governmental program. Services Excluded by Endorsement Any health care incident for which coverage is excluded by endorsement. C. DEFINITIONS is amended to: I. add the following definitions: Health care incident means an act, error or omission by the Named Insured's employees or volunteer workers in the rendering of: a. professional health care services on behalf of the Named Insured or b. Good Samaritan services rendered in an emergency and for which no payment is demanded or received. Professional health care services means any health care services or the related furnishing of food, beverages, medical supplies or appliances by the following providers in their capacity as such but solely to the extent they are duly licensed as required: a. Physician; b. Nurse;, c. Nurse practitioner; d.. Emergency medical technician; e. Paramedic; f. Dentist; g. Physical therapist; h. Psychologist; i. Speech therapist; j. Other allied health professional; or Professional health care services does not include any services rendered in connection with human clinical trials or product testing. ii. delete the definition of occurrence and replace it with the following: Occurrence means a health care incident. All acts, errors or omissions that are logically connected by any common fact, circumstance, situation, transaction, event, advice or decision will be considered to constitute a single occurrence; CNA75102XX (1-15) Policy No: 7018019790 Page 8 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM I I , LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. A iii. amend the definition of Insured to: a. add the following: CNA PARAMOUNT Financial Services - General Liability Extension Endorsement a Named Insured's employees are Insureds with respect to: (1) bodily injury to a co -employee while in the course of the co -employee's employment by the Named Insured or while performing duties related to the conduct of the Named Insured's business; and (2) bodily injury to a volunteer worker while performing duties related to the conduct of the Named Insured's business; when such bodily injury arises out of a health care incident. • the Named Insured's volunteer workers are Insureds with respect to: (1) bodily injury to a co -volunteer worker while performing duties related to the conduct of the Named Insured's business; and (2) bodily injury to an employee while in the course of the employee's employment by the Named Insured or while performing duties related to the conduct of the Named Insured's business; when such bodily injury arises out of a health care incident. b. delete Subparagraphs (a), (b), (c) and (d) of Paragraph 2.a.(1) of WHO IS AN INSURED. c. add the following: Insured does not include any physician while acting in his or her capacity as such. D. The Other Insurance condition is amended to delete Paragraph b.(1) in its entirety and replace it with the following: Other Insurance b. Excess Insurance (1) To the extent this insurance applies, it is excess over any other insurance, self insurance or risk transfer instrument, whether primary, excess, contingent or on any other basis, except for insurance purchased specifically by the Named Insured to be excess of this coverage. 0 10. JOINT VENTURES / PARTNERSHIP / LIMITED LIABILITY COMPANIES 0 WHO IS AN INSURED is amended to delete its last paragraph and replace it with the following: No person or organization is an Insured with respect to the conduct of any current or past partnership, joint venture or limited liability company in which a Named Insured's interest does/did not rise to the level of management control, except that if the Named Insured was a joint venturer, partner, or member of such an entity, and such entity terminated prior to or during the policy period, then such Named Insured is an Insured with respect to its interest in such joint venture, partnership or limited liability company but only to the extent that: -� a. any offense giving rise to personal and advertising injury occurred prior to such termination date, and the personal and advertising injury arising out of such offense first occurred after such termination date; b. the bodily injury or property damage first occurred after such termination date; and c. there is no other valid and collectible insurance purchased specifically to insure the partnership, joint venture or limited liability company. CNA75102XX (1-15) Policy No: 7018019790 Page 9 of 14 Endorsement No: li VALLEY FORGE INSURANCE COMPANY Insured Name: PFM I I , LLC Copyright CNA All Rights Reserved Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA 11. LEGAL LIABILITY —DAMAGE TO PREMISES CNA PARAMOUNT Financial Services - General Liability Extension Endorsement A. Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended to delete the first paragraph immediately following subparagraph (6) of the Damage to Property exclusion and replace it with the following: Paragraphs (1), (3) and (4) of this exclusion do not apply to property damage (other than damage by fire) to premises rented to the Named Insured or temporarily occupied by the Named Insured with the permission of the owner, nor to the contents of premises rented to the Named Insured for a period of 7 or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in LIMITS OF INSURANCE. B. Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended to delete its last paragraph and replaced it with the following: Exclusions c. through n. do not apply to damage by fire to premises while rented to a Named Insured or temporarily ocCUpied by a Named Insured with permission of the owner, nor to damage to the contents of premises rented to a Named Insured for a period of 7 or fewer consecutive days. A separate limit of insurance applies to this coverage as described in the LIMITS OF INSURANCE Section. C. LIMITS OF INSURANCE is amended to delete Paragraph 6. (the Damage To Premises Rented To You Limit) and replace it with the following: 6. Subject to Paragraph 5. above, (the Each Occurrence Limit), the Damage To Premises Rented To You Limit is the most the Insurer will pay under COVERAGE A for damages because of property damage to: a. any one premises while rented to a Named Insured or temporarily occupied by a Named Insured with the permission of the owner; and b. contents of such premises if the premises is rented to the Named Insured for a period of 7 or fewer consecutive days. The Damage To Premises Rented To You Limit is $1,000,000. unless a higher Damage to Premises Rented to You Limit is shown in the Declarations. D. The Other Insurance Condition is amended to delete Paragraph b.(1)(a)(ii), and replace it with the following: (ii) That is property insurance for premises rented to a Named Insured, for premises temporarily occupied by the Named Insured with the permission of the owner; or for personal property of others in the Named Insured's care, custody or control; E. This Provision 11. does not apply if liability for damage to premises rented to a Named Insured is excluded by another endorsement attached to this Coverage Pant. 12. MEDICAL PAYMENTS A. LIMITS OF INSURANCE is amended to delete Paragraph 7. (the Medical Expense Limit) and replace it with the following: 7. Subject to Paragraph 5. above (the Each Occurrence Limit), the Medical Expense Limit is the most the Insurer will pay under Coverage C — Medical Payments for all medical expenses because of bodily injury sustained by any one person. The Medical Expense Limit is the greater of: (1) $15,000 unless a different amount is shown here: or (2) the amount shown in the Declarations for Medical Expense Limit. CNA75102XX (1 Policy No: 7018019790 Page 10 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM II, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement B. Under COVERAGES, the Insuring Agreement of Coverage C — Medical Payments is amended to replace Paragraph 1.a,(3)(b) with the following: (b) The expenses are incurred and reported to the Insurer within three years of the date of the accident; and 13. NON -OWNED AIRCRAFT Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended as follows: The exclusion entitled Aircraft, Auto or Watercraft is amended to add the following: This exclusion does not apply to an aircraft not owned by any Named Insured, provided that: 1. the pilot in command holds a currently effective certificate issued by the duly constituted authority of the United States of America or Canada, designating that person as a commercial or airline transport pilot; 2. the aircraft is rented with a trained, paid crew to the Named Insured; and 3. the aircraft is not being used to carry persons or property for a charge. 14. NON -OWNED WATERCRAFT Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended to delete subparagraph (2) of the exclusion entitled Aircraft, Auto or Watercraft, and replace it with the following. This exclusion does not apply to: (2) a watercraft that is not owned by any Named Insured, provided the watercraft is: (a) less than 75 feet long; and (b) not being used to carry persons or property for a charge. 15. PERSONAL AND ADVERTISING INJURY —DISCRIMINATION OR HUMILIATION A. Under DEFINITIONS, the definition of personal and advertising injury is amended to add the following tort: q Discrimination or humiliation that results in injury to the feelings or reputation of a natural person. B. Under COVERAGES, Coverage B — Personal and Advertising Injury Liability, the paragraph entitled Exclusions is amended to: 1. delete the Exclusion entitled Knowing Violation Of Rights Of Another and replace it with the following: This insurance does not apply to: Knowing Violation of Rights of Another Personal and advertising injury caused by or at the direction of the Insured with the knowledge that the act would violate the rights of another and would inflict personal and advertising injury. This exclusion shall not apply to discrimination or humiliation that results in injury to the feelings or reputation of a natural person, but only if such discrimination or humiliation is not done intentionally by or at the direction of: (a) the Named Insured; or (b) any executive officer, director, stockholder, partner, member or manager (if the Named Insured is a limited liability company) of the Named Insured, CNA75102XX (1-15) Policy No: 7018019790 Page 11 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM II, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement 2. add the following exclusions: This insurance does not apply to: Employment Related Discrimination Discrimination or humiliation directly or indirectly related to the employment, prospective employment, past employment or termination of employment of any person by any Insured. Premises Related Discrimination discrimination or humiliation arising out of the sale, rental, lease or sub -lease or prospective sale, rental, lease or sub -lease of any room, dwelling or premises by or at the direction of any Insured. Notwithstanding the above, there is no coverage for fines or penalties levied or imposed by a governmental entity because of discrimination. The coverage provided by this PERSONAL AND ADVERTISING INJURY —DISCRIMINATION OR HUMILIATION Provision does not apply to any person or organization whose status as an Insured derives solely from • Provision 1. ADDITIONAL INSUREDS of this endorsement; or • attachment of an additional insured endorsement to this Coverage Part. 16. PERSONAL AND ADVERTISING INJURY - LIMITED CONTRACTUAL LIABILITY A. Under COVERAGES, Coverage B —Personal and Advertising Injury Liability, the paragraph entitled Exclusions is amended to delete the exclusion entitled Contractual Liability and replace it with the following: This insurance does not apply to: Contractual Liability Personal and advertising injury for which the Insured has assumed liability in a contract or agreement. This exclusion does not apply to liability for damages: (1) that the Insured would have in the absence of the contract or agreement; or (2) assumed in a contract or agreement that is an insured contract provided the offense that caused such personal or advertising injury first occurred subsequent to the execution of such insured contract. Solely for the purpose of liability assumed in an insured contract, reasonable attorney fees and necessary litigation expenses incurred by or for a party other than an Insured are deemed to be damages because of personal and advertising injury provided: (a) liability to such party for, or for the cost of, that party's defense has also been assumed in such insured contract; and (b) such attorney fees and litigation expenses are for defense of such party against a civil or alternative dispute resolution proceeding in which covered damages are alleged. B. Solely for the purpose of the coverage provided by this paragraph, DEFINITIONS is amended to delete the definition of insured contract in its entirety, and replace it with the following: Insured contract means that part of a written contract or written agreement pertaining to the Named Insured's business under which the Named Insured assumes the tort liability of another party to pay for personal or advertising injury arising out of the offense of false arrest, detention or imprisonment. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. CNA75102XX (1-15) Policy No: 7018019790 Page 12 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM I I , LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc, with its permission. CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement C. Solely for the purpose of the coverage provided by this paragraph, the following changes are made to the Section entitled SUPPLEMENTARY PAYMENTS — COVERAGES A AND B: 1. Paragraph 2.d. is replaced by the following: d. The allegations in the suit and the information the Insurer knows about the offense alleged in such suit are such that no conflict appears to exist between the interests of the Insured and the interests of the indemnitee; 2. The first unnumbered paragraph beneath Paragraph 2.f.(2)(b) is deleted and replaced by the following: So long as the above conditions are met, attorneys fees incurred by the Insurer in the defense of that indemnitee, necessary litigation expenses incurred by the Insurer, and necessary litigation expenses incurred by the indemnitee at the Insurers request will be paid as defense costs. Notwithstanding the provisions of Paragraph e.(2) of the Contractual Liability exclusion (as amended by this Endorsement), such payments will not be deemed to be damages for personal and advertising injury and will not reduce the limits of insurance. D. This PERSONAL AND ADVERTISING INJURY - LIMITED CONTRACTUAL LIABILITY Provision does not apply if Coverage B —Personal and Advertising Injury Liability is excluded by another endorsement attached to this Coverage Part. 17. PROPERTY DAMAGE — ELEVATORS A. Under COVERAGES, Coverage A — Bodily Injury and Property Damage Liability, the paragraph entitled Exclusions is amended such that the Damage to Your Product Exclusion and subparagraphs (3), (4) and (6) of the Damage to Property Exclusion do not apply to property damage that results from the use of elevators. B. Solely for the purpose of the coverage provided by this PROPERTY DAMAGE — ELEVATORS Provision, the Other Insurance conditions is amended to add the following paragraph: This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis that is Property insurance covering property of others damaged from the use of elevators. 18. SUPPLEMENTARY PAYMENTS 0 The section entitled SUPPLEMENTARY PAYMENTS — COVERAGES A AND B is amended as follows: m A. Paragraph 1.b. is amended to delete the $250 limit shown for the cost of bail bonds and replace it with a $5,000. s limit; and N B. Paragraph 1.d. is amended to delete the limit of $250 shown for daily loss of earnings and replace it with a $1,000. limit. 19. UNINTENTIONAL FAILURE TO DISCLOSE HAZARDS If the Named Insured unintentionally fails to disclose all existing hazards at the inception date of the Named Insured's Coverage Part, the Insurer will not deny coverage under this Coverage Part because of such failure. 20. WAIVER OF SUBROGATION - BLANKET Under CONDITIONS, the condition entitled Transfer Of Rights Of Recovery Against Others To Us is amended to add the following: The Insurer waives any right of recovery the Insurer may have against any person or organization because of payments the Insurer makes for injury or damage arising out of: 1. the Named Insured's ongoing operations; or 2. your work included in the products -completed operations hazard CNA75102XX (1-15) Policy No: 7018019790 Page 13 of 14 Endorsement No: 11 VALLEY FORGE INSURANCE COMPANY Insured Name: PFM II, LLC Copyright CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission. CNA CNA PARAMOUNT Financial Services - General Liability Extension Endorsement However, this waiver applies only when the Named Insured has agreed in writing to waive such rights of recovery in a written contract or written agreement, and only if such contract or agreement: 1. is in effect or becomes effective during the term of this Coverage Part; and 2. was executed prior to the bodily injury, property damage or personal and advertising injury giving rise to the claim. All other terms and conditions of the Policy remain unchanged. This endorsement, which forms a part of and is for attachment to the Policy issued by the designated Insurers, takes effect on the effective date of said Policy at the hour stated in said Policy, unless another effective date is shown below, and expires concurrently with said Policy. CNA75102XX (1-15) Page 14 of 14 VALLEY FORGE INSURANCE COMPANY Policy No: 7018019790 Endorsement No: 11 Insured Name: PFM I I , LLC Copyright CNA All Rights Reserved Includes copyrighted material of Insurance Services Office, Inc., with its permission.