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FLORIDA POLYTECHNIC UNIVERSITY – INVITATION TO NEGOTIATE EMAIL ALL PROPOSAL DOCUMENTS TO: procurement@flpoly.org Direct Inquiries to: David O’Brien, Director of Procurement Phone: 863-874-8429; E-mail: procurement@flpoly.org

DATE RELEASED: September 7, 2016.

PROPOSAL DEADLINE: October 7, 2016 at 2:00 p.m. LOCAL PREVAILING TIME, and may not be withdrawn for 90 days after this date.

PRE-REPLY CONFERENCE: NONE

TITLE: ITN 016-029 INVESTMENT ADVISORY SERVICES

SPECIFICATIONS: FLORIDA POLYTECHNIC UNIVERSITY (University) is soliciting replies from qualified investment advisory firms to perform portfolio management services to supervise and direct the investments of the University.

Respondent Name: Reason for No-Bid

Mailing Address:

City-State-Zip:

Telephone Number ( ) - FAX Number ( ) - Toll-Free Number ( ) -

Email address for correspondence:

Authorized Signature:

Full Name (please print or type):

Title (please print or type):

I the above signed, as Respondent hereby declare that I have carefully read this Invitation To Negotiate and its provisions, terms, and conditions covering the equipment, materials, supplies or services as called for, and fully understand the requirements and conditions. I certify that this reply is made without prior understanding, agreement, or connection with any corporation, firm, entity, or person submitting a reply for the same goods/services (unless otherwise specifically noted), and is in all respects fair and without collusion or fraud. I agree to be bound by all of the terms and conditions of this Invitation To Negotiate and certify that I am authorized to sign this reply for the Respondent.

IT IS THE RESPONDENT'S RESPONSIBILITY TO ASSURE THAT HIS/HER PASSWORD PROTECTED REPLY IS DELIVERED BY EMAIL NO LATER THAN THE DEADLINE SHOWN ABOVE. PROPOSALS SHALL ONLY BE ACCEPTED ELECTRONICALLY VIA EMAIL. FAXES AND/OR PHYSICAL DELIVERY OF PROPOSALS SHALL NOT BE ALLOWED AND WILL NOT BE CONSIDERED. EMAIL REPLIES RECEIVED AFTER THE DATE AND TIME SPECIFIED WILL NOT BE ACCEPTED.

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FLORIDA POLYTECHNIC UNIVERSITY INVITATION TO NEGOTIATE # 016-00 INVESTMENT ADVISORY SERVICES

TABLE OF CONTENTS

PART I - GENERAL CONDITIONS PART III - SCOPE OF SERVICES

1.1 Purpose 1.2 Definitions 1.3 Development Cost 1.4 Changes, Delays, and Addenda 1.5 Pre-Reply Conferences 1.6 Rules for Replies 1.7 Oral Presentations and Negotiations 1.8 Reply Deadline for proposals 1.9 Technical Questions 1.10 Conflict of Interest 1.11 Reply Withdrawal 1.12 Public Availability of Records 1.13 Right to Accept or Reject Replies 1.14 Notice of Intended Decision 1.15 Protests 1.16 Contract Information 1.17 Indemnification 1.18 Withholding Payment 1.19 Termination 1.20 Law Compliance 1.21 Americans with Disabilities Act (ADA) 1.22 Public Entity Crimes 1.23 Discrimination 1.24 Correspondence 1.25 Purchases by Other Public Agencies 1.26 Employment Eligibility Verification

PART II - INTRODUCTION

3.1 Project Description PART IV – REPLY FORMAT

4.1 Submission Requirements

PART V – INSURANCE REQUIREMENTS

5.1 Insurance Requirements

PART VI - EVALUATION PROCEDURES

6.1 Basis of Selection 6.2 Evaluation Criteria 6.3 Negotiations 6.4 Final Selection

ATTACHMENTS

Attachment 1 University Investment Policy Link

Attachment 2 BOT Agenda Item Summary Link

Attachment 3 Sample Agreement

2.1 General Information 2.2 Background Information 2.3 Term of Contract 2.4 Reply Calendar

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PART I - GENERAL CONDITIONS

1.1 PURPOSE. The purpose of this Invitation to Negotiate (ITN) is to provide guidelines for submission of replies to implement the services described in this ITN.

1.2 DEFINITIONS. "Respondent" will mean any contractor, consultant, organization, firm, college or university, or other person submitting a response pursuant to page 1 of this ITN. "University" will mean the FLORIDA POLYTECHNIC UNIVERSITY, which is the issuing agency.

1.3 DEVELOPMENT COST. Neither the University nor its representatives will be liable for any expenses incurred in connection with preparation of a response to this ITN. All replies should be prepared simply and economically, providing a straightforward and concise description of the Respondent's ability to meet the requirements of the ITN.

1.4 CHANGES, DELAYS, AND ADDENDA. The University reserves the right to delay scheduled ITN due dates if determined to be in the best interest of the University.

University solicitations, changes, delays, addenda and questions and answers are available for review and download at https://floridapolytechnic.org/resources/ Persons/firms receiving solicitations from the University’s Internet website are responsible to recheck the website for any changes or addenda.

All interpretations and supplemental instructions will be in the form of written Addenda to the contract documents including University answers provided in response to the Technical Questions provided in Section 1.9 of this ITN. Respondents will acknowledge receipt of all Addenda in their reply.

No interpretation of the meaning of the specifications or other contract documents, nor correction of any apparent ambiguity, inconsistency or error therein, will be made to any Respondent orally. Prospective Respondents are advised that no other sources are authorized to give information concerning, explaining, or interpreting contract documents. Any information obtained from an officer, agent or employee of the University or any other person will not affect Respondent’s risks or obligations or relieve it from fulfilling any and all conditions of the contract.

1.5 PRE-REPLY CONFERENCES. NONE

1.6 RULES FOR REPLIES. Two or more firms may combine for the purpose of responding to this ITN providing that one (1) is designated as "Prime" Respondent and the other as "Sub-Respondent(s)". The signer of the reply must declare that any person or entity with any interest in the reply, as a principal, is identified therein; that the reply is made without collusion; that it is, in all respects, fair and in good faith; and that the signer of the reply has full authority to negotiate for and bind the Respondent stated on the cover page.

1.7 ORAL PRESENTATIONS AND NEGOTIATIONS. The University may request any Respondent to also make an oral presentation of their reply prior to entering into the Negotiation Phase.

During the Negotiation Phase, the University will meet with the selected Respondent(s) to negotiate terms of service.

Pursuant to Section 286.0113, Florida Statutes (F.S.), oral presentations and negotiations are exempt from Section 286.011 and Section 24(b), Article I of the State Constitution. A complete recording shall be made of any portion of an exempt meeting. No portion of the exempt meeting may be held off the record.

Any Respondent deciding to appeal any decision made by the University with respect to any matter considered at such meetings, will need a record of the proceedings, and that, for such purpose, may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based.

1.8 Recording of Responses. All responses to this solicitation shall be recorded by name, city and state reasonably following the date and at the time specified on the reply form and will be posted on https://floridapolytechnic.org/resources/. It is the Respondent's responsibility to assure that his/her reply is delivered via email before the published deadline. Replies that are not so delivered will not be considered regardless of the reason.

The University may make an award within ninety (90) days after the date of the deadline for proposals, during which period replies shall remain firm and may not be withdrawn. If award is not made within ninety (90) days, the reply will remain firm until either the University awards the Contract or the University receives from the Respondent written notice that the reply is withdrawn. Any reply that expresses a shorter duration may, in the University’s sole discretion, be accepted or rejected.

1.9 TECHNICAL QUESTIONS. All questions should be presented in writing to procurement@floridapoly.org, no later than 5 pm Eastern on September 23, 2016. Inquiries must reference the date of ITN deadline for proposals, and ITN title and number. Respondents are responsible to check the University’s web site as specified in Section 1.4 of this ITN, for the University’s responses to the questions presented.

1.10 CONFLICT OF INTEREST. The award hereunder is subject to the provisions of Chapter 112, Part III, F.S., as amended, governing conflicts of interest. All Respondents must disclose with their reply the name of any officer, director, or agent who is also a public employee. Further, all Respondents must disclose the

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name of any public employee who owns, directly or indirectly, an interest of five percent (5%) or more in the Respondent's firm or any of its branches.

1.11 REPLY WITHDRAWAL. Replies may be withdrawn by written notice signed by the same person who signed the ITN form and if received at any time prior to the deadline for proposals. Replies may be withdrawn in person by Respondent or its authorized representative, provided the authorized representative's identity is made known and a signed receipt for the reply is received. No Respondent may withdraw its reply except as described in this Section and Section 1.8.

1.12 PUBLIC AVAILABILITY OF RECORDS. Once opened, all replies will become the property of the University and, at the sole discretion of the University, may not be returned to Respondent. Any information, reports or other materials given to, prepared or submitted in response to this ITN will be subject to the provisions in Chapter 119, F.S., commonly known as the Florida Public Records Act. Any Respondent claiming that its response contains information that is exempt from the public records law must clearly segregate (separate binder and CD preferred) and mark that specific information and provide the specific statutory citation for such exemption (i.e., Section 815.04, F.S.). The Florida Public Records Act, Section 119.071(1) (b), F.S., as amended, exempts sealed replies from inspection, examination, and duplication until such time as the University issues a notice of decision or intended decision pursuant to Section 120.57(3) (a), F.S., or within thirty (30) days after the reply deadline for proposals, whichever comes first. This exemption is not waived by the public deadline for proposals of the replies.

1.13 RIGHT TO ACCEPT OR REJECT REPLIES. Replies which are incomplete, conditional, obscure, or contain additions not contemplated by the ITN or irregularities of any kind, or do not comply in every respect with the ITN may be rejected as nonresponsive at the option of the University. The University does not bind itself to accept the minimum specifications stated in this ITN, but reserves the right to accept any reply which in the judgment of the University will best serve the needs and the interests of the University. The University reserves the right to reject all replies and not grant any award resulting from the issuance of this ITN. If awarded, no contract will be formed between the Respondent and the University until the contract is executed by both parties.

1.14 NOTICE OF INTENDED DECISION. The notice of intended decision will be posted for review by interested parties on the University’s Internet web site https://floridapolytechnic.org/resources/.

1.15 PROTESTS. Any Respondent who protests the specifications, decision, or intended decision, must file with the University a notice of protest and formal protest in compliance with Chapter 28-110, Florida Administrative Code (F.A.C.), and applicable provisions in Section 120.57, F.S. Failure to file a protest within the

time prescribed in Section 120.57(3), F.S., will constitute a waiver of proceedings under Chapter 120, F.S.

1.16 CONTRACT INFORMATION. By submitting a reply, Respondent agrees to all the terms and conditions of this ITN. The contents of the reply including any subsequent negotiations with the successful Respondent will be incorporated into a written contract document in terms acceptable to the University at its absolute discretion and will be binding on all parties to the executed contract. Failure of Respondent to accept this condition will result in the cancellation of any award. The laws of the State of Florida will govern any contract resulting from this ITN and venue will lie in Polk County, Florida. The University will have the right to examine and audit the successful Respondent's work-related books, records, documents and papers during the term of the contract and for at least three (3) years following the completion date. The selected Respondent will also be required to comply with all applicable laws, rules, regulations and contract provisions or conditions necessary in the judgment of the University to constitute a sound and complete contract. A sample agreement is attached as Attachment 3.

1.17 INDEMNIFICATION. The Respondent agrees to defend, indemnify and hold harmless the University and all University agents, employees and officers from and against all liabilities, claims, damages, expenses or actions, either at law or in equity, including attorney fees and costs and attorney fees and costs on appeal, caused or incurred, in whole or in part, as a result of any act or omission by the Respondent, its agents, employees, subcontractors, assigns, heirs or anyone for whose acts or omissions any of these persons or entities may be liable during the Respondent's performance under any contract resulting from this ITN.

1.18 WITHHOLDING PAYMENT. The University may, in addition to other remedies available at law or equity, retain such monies from amounts due the Respondent under any resulting contract as may be necessary to satisfy any claim for damages, penalties, costs and the like asserted by or against the University. The University may set off any liability or other obligation of the Respondent or its affiliates to the University against any payments due the Respondent under any contract with the University.

1.19 TERMINATION. Unless otherwise agreed to by the University, any contract resulting from this ITN may be terminated by the University without cause upon ten (10) days written notice. Termination is effective upon the tenth (10th) day as counted from the date of the written notice. In the event of termination under this paragraph, the firm will be entitled to compensation for all services provided to the University up to the date of termination on a pro-rated basis and which are within the Statement of Work, are documented in the budget, and are allowed under the Agreement. The University shall honor any trades agreed to, but not settled before the date on which termination is to become effective.

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The Agreement shall automatically terminate in the event the firm’s registration as an investment adviser under the Investment Adviser's Act of 1940 is suspended or revoked, said termination to be effective with the date of such suspension or revocation.

1.20 LAW COMPLIANCE. The Respondent will abide by and assist the University in satisfying all applicable federal, state and local laws, rules, regulations and guidelines (including but not limited to the Americans with Disabilities Act) relative to performance under this ITN. The Respondent will not discriminate against any employee or applicant for employment because of race, color, religion, sex, handicap, disability, marital status or national origin. Respondent will obtain and maintain all permits and licenses necessary for its performance under this ITN.

1.21 AMERICANS WITH DISABILITIES ACT (ADA). The University does not discriminate on the basis of disability. This nondiscrimination policy involves every aspect of the University’s functions, including access to and participation in the University’s programs and activities. Anyone requiring reasonable accommodation as provided for in the Americans with Disabilities Act should contact the University’s Human Resources. 1.22 PUBLIC ENTITY CRIMES. Pursuant to Subsections 287.133(2) and (3), F.S., a person or affiliate who has been placed on the convicted vendor list following a conviction for a public entity crime may not submit a reply on a contract to provide any goods or services to a public entity, may not submit a reply on a contract with a public entity for the construction or repair of a public building or public work, may not submit replies on leases of real property to a public entity, may not be awarded or perform work as a contractor, supplier, subcontractor, or consultant under a contract with any public entity, and may not transact business with any public entity in excess of the threshold amount provided in Subsection 287.017, F.S., for CATEGORY TWO, for a period of thirty-six (36) months from the date of being placed on the convicted vendor list. By submitting a reply to this ITN, the Respondent certifies that it is not on the convicted vendor list.

1.23 DISCRIMINATION. Pursuant to Subsection 287.134(2)(a), F.S., an entity or affiliate who has been placed on the discriminatory vendor list may not submit a bid on a contract to provide any goods or services to a public entity, may not submit a bid on a contract with a public entity for the construction or repair of a public building or public work, may not submit bids on leases of real property to a public entity, may not be awarded or perform work as a contractor, supplier, subcontractor, or consultant under a contract with any public entity, and may not transact business with any public entity. By submitting a reply to this ITN, the Respondent certifies that it is not on the discriminatory vendor list.

1.24 CORRESPONDENCE. Unless otherwise stated or notified in writing by the University, correspondence pursuant to this ITN must be sent via email to:

procurement@flpoly.org Unless otherwise stated or notified in writing by the Respondent, correspondence pursuant to this ITN will be sent to the Respondent at the email address listed on its Reply Response form.

Except as set forth in Section 1.9, Technical Questions, Respondents are not permitted to communicate with any University employee or Governing Board member about the subject or contents of this ITN. Violation of this provision may result in rejection of the Respondent's submission.

1.25 PURCHASES BY OTHER PUBLIC AGENCIES. With the consent and agreement of the successful Respondent(s), purchases may be made under this ITN by other governmental agencies or political subdivisions within the State of Florida. Such purchases will be governed by the same terms and conditions stated herein. This agreement in no way restricts or interferes with the right of any public entity to procure any or all of these services independently.

1.26 EMPLOYMENT ELIGIBILITY VERIFICATION. The Respondent must utilize the U.S. Department of Homeland Security’s Employment Verification (E-Verify) Program to verify the employment eligibility of Respondent employees performing work directly associated with the Agreement resulting from this ITN, in accordance with the terms and conditions applicable to the E-Verify Program. If the Respondent uses subcontractors to furnish services directly associated with the Agreement, performed in the United States, in an amount greater than $3,000, the Respondent must include the requirements of this provision (appropriately modified for identification of the parties) in each subcontract. Information on registration for and use of the E-Verify Program can be obtained via the Internet at the Department of Homeland Security Web site: http://www.dhs.Gov/E-verify.

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PART II - INTRODUCTION

2.1 GENERAL INFORMATION. The FLORIDA POLYTECHNIC UNIVERSITY (University) hereby solicits offers for the services of qualified Respondents for the following purpose:

The University is soliciting replies from qualified investment advisory firms to perform portfolio management services to supervise and direct the investments of the University.

To be considered, Any and All proposals must be transmitted via email and must be received by the University's Procurement Office by 2:00 p.m., local time prevailing, on Friday, October 7, 2016.

During the evaluation process, the University reserves the right, where it may serve the University’s interest, to request additional information from Respondents for clarification purposes. At the discretion of the University, Respondents submitting replies may be requested to make oral presentations as part of the evaluation process.

The University anticipates awarding one (1) or more contracts with qualified advisory firms to perform the services set forth in this ITN. In order for a Respondent to be considered qualified, the Respondent must be registered with the Securities and Exchange Commission (SEC) under the Investor Adviser’s Act of 1940, as amended (have a minimum of $110 million in assets under management) or the Respondent is considered “exempt” from the requirement and provides sufficient evidence acceptable to the University to support the nature of the exemption, and be authorized to provide investment advisory services in the State of Florida.

2.2 BACKGROUND INFORMATION. The FLORIDA POLYTECHNIC UNIVERSITY is a public, research

institution with a mission is to educate students emphasizing Science, Technology, Engineering, and Mathematics (STEM) in an innovative, technology-rich, and interdisciplinary learning environment. The University collaborates with industry partners to offer students real-world problem-solving, work experience, applied research and business leadership opportunities. Florida Polytechnic prepares students to assume available leadership positions in the dynamic technological landscape in Florida, the nation, and the world. Florida Polytechnic University welcomed an Inaugural Class of 554 student on August 25, 2014. More information can be obtained by visiting http://floridapolytechnic.org/

. 2.3 TERM OF CONTRACT(S). The expected term of the contract(s) resulting from this ITN is three (3) years

with one (1) two (2) year extension upon mutual written agreement by both parties.

2.4 REPLY CALENDAR. The following is a list of key dates up to and including the date replies are due to be submitted:

Invitation To Negotiate issued by the University September 7, 2016

Technical questions must be submitted by email no later than September 23, 2016 by 5 pm Eastern. The University will attempt to answer all submitted questions in a timely manner by September 30, 2016, but accepts no responsibility for response delays.

All University contact must be through Procurement Services, FLORIDA POLYTECHNIC UNIVERSITY, telephone number 863-874-8429; E-mail: procurement@floridapoly.org.

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DEADLINE for Respondents to submit replies (2:00 p.m. Eastern) October 7, 2016

Evaluator's Meeting TBD Oct. 2016

Negotiation Meetings (dates will change if oral presentations are required) TBD Nov. 2016

Notice of Intended Decision, anticipated posting date TBD Dec. 2016

PART III – SCOPE OF SERVICES

3.1 PROJECT DESCRIPTION.

The University is soliciting replies from qualified investment advisory firms to perform portfolio management services to supervise and direct the investments of the University. All investment activity shall comply with the University’s Investment Policy (Attachment 1), and Section 218.415, F.S., as they may be amended from time to time. The University’s Financial Report dated 2015 is attached as Attachment 2.

The University’s primary investment objective is the safety of capital. Investments shall be undertaken in a manner that seeks the preservation of capital with the objective to mitigate credit risk and interest rate risk. The investment portfolio shall remain sufficiently liquid to meet all operating requirements. The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk and liquidity needs. Return on investment is of secondary importance compared to safety and liquidity objectives. Investments are limited to those authorized in the University’s investment policy.

The investment portfolio shall consist of all cash, securities and other commingled assets of the University which are held in a separately designated management account by Wells Fargo Bank or its successors (the "Custodian") at the effective date of the agreement, plus any proceeds therefrom or additions thereto, and less any losses thereon or withdrawals therefrom. A successful Respondent (Adviser) shall not act as Custodian for the University’s investment portfolio or any portion thereof. All transactions will be consummated by payment to, or delivery by, the Custodian of all cash, securities and other assets due to or from the investment portfolio. The Custodian, and not an Adviser, shall be responsible for investing any daily cash balances in the investment portfolio.

Specific services, although not all-inclusive, are to be performed as follows:

3.1.1 Execute discretionary purchases and sales of securities with broker/dealers in accordance with the

laws of the State of Florida, the University’s Investment Policy and University directives. The Adviser will perform to the Prudent Expert Standard. The Prudent Expert Standard requires an Adviser to act with the care, skill, prudence, and diligence, under the circumstances then prevailing, that a prudent investment expert acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

3.1.2 Provide monthly reports on investment activities, earnings, the value of the portfolio holdings, and

projected portfolio cash flows. These reports must include a market-to-market valuation and other information needed for the University to report investment holdings in accordance with the standards set forth by the Governmental Accounting Standards Board (GASB). An Adviser must maintain accurate reports of investments including the diversity of investments and compliance with the

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University’s investment policy and the laws of the State of Florida. Investment performance reporting must comply with the CFA Institute’s Global Investment Performance Standards (GIPS®).

3.1.3 Provide quarterly and annual investment reports including, but not limited to, a description of market

conditions, investment strategies employed, performance and suggested changes to investment strategy and any other information the University may deem necessary for the investment of University’s funds. Reports on investment performance must be provided on a total return basis and compared to established benchmarks. The quarterly reports will be provided for quarters ended September 30, December 31, March 31 and June 30. Annual reports shall be based on the University’s Fiscal Year ended June 30.

3.1.4 Be available to consult, attend meetings and provide professional presentations to the University

by telephone, video conferencing or in person, as required, on portfolio status and performance.

3.1.5 Assist the University with cash flow/maturity analysis.

3.1.6 Provide credit analysis of investment instruments in portfolio.

3.1.7 Evaluate market risk and develop strategies that minimize the impact on the portfolio.

3.1.8 Establish an appropriate performance benchmark.

3.1.9 Review the University’s investment policy and recommend appropriate amendments.

3.1.10 Maintain a list of approved broker/dealers that have met the University approved criteria, and furnish evidence of compliance with those criteria to the University.

3.1.11 Currently all FL Poly funds are invested in the State SPIA account:

http://www.myfloridacfo.com/Division/Treasury/InvestmentPool/spia.htm

3.1.12 Estimate of minimum of funds required in overnight portfolio: $1M

3.1.13 Estimated minimum liquidity requirement: $2M-$5M

3.1.14 Anticipated size of mandate: $50M

PART IV – REPLY FORMAT

4.1 Submission Requirements. In order to assist the University’s review process, replies must be prepared utilizing the following format. The evaluation criteria are set forth in Part VI, Evaluation Procedures.

4.1.1 Tab A- Cover Sheet. Sign and return the Invitation To Negotiate form. The form must be signed

by an authorized agent for the Respondent.

4.1.2 Tab B- Letter of Transmittal. Provide a Letter of Transmittal that briefly states the Respondent’s understanding of the services to be provided and give the names of the individuals who will be authorized to make representations for the organization, their titles, addresses and telephone numbers.

4.1.3 Tab C- Minimum Qualifications. Respondents must be registered with the Securities and

Exchange Commission (SEC) under the Investor Adviser’s Act of 1940, as amended (have a minimum of $110 million in assets under management). Each Respondent must provide a copy of its SEC Form ADV Part I and Part II, along with documentation of its authorization to provide investment advisory services in the State of Florida. Disclose any other regulatory authorities your firm is registered with such as the Financial Industry Regulatory Authority (FINRA).

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4.1.3.1 Verify your implementation of SEC Rule 204-1, Adoption of a Code of Ethics (include a copy

of your Code of Ethics), and SEC Rule 206(4)-7, relating to adoption of internal policies and creation of a Chief Compliance Officer role.

4.1.4 Tab D- References. Provide three (3) references from comparable or most representative of

governmental clients. Florida public entities references are preferred. Include a contact name, address, telephone number, email address, identify the nature of the funds, length of service, and list the names and roles of the key investment professionals used for the referenced client that will be directly involved in the decision-making process for the University.

4.1.5 Tab E- Resumes. Provide resumes and biographical information on key investment professionals that will be directly involved in the decision-making process for the University. Include the number of years at your firm, total years of experience, professional licenses and designations and the number of accounts managed.

4.1.6 Tab F- Scope of Services. This section of the reply should explain the Respondent’s understanding of the overall investment program and the investment objectives and its unique constraints. Also provide the following information in this section.

4.1.6.1 Describe your firm’s investment management philosophy, including your approach to managing governmental portfolios. Emphasis should be given to your experience with Florida Statutes regarding qualified investments for public entities.

4.1.6.2 Describe the ongoing daily investment procedures proposed for the University, including procedures for trades, security choice, controls, etc., and how you will provide liquidity.

4.1.6.3 Describe your firm’s technical analysis, research capabilities and primary strategies for adding value to portfolios (e.g., market timing, credit research, trading).

4.1.6.4 Provide your experience regarding performance benchmarks for similar government entity portfolios. Suggest performance benchmarks for this portfolio.

4.1.6.5 Describe the format of reports required under 3.1.2 and 3.1.3 and any other reports that you would provide to the University. Attach sample reports and verify that your investment performance reporting is in compliance with GIPS®.

4.1.7 Tab G- Fees. Provide the complete fee schedule that would apply to this account for the three (3)

year term of the Agreement. Confirm that fees are charged in arrears. The following is a sample format, not a required format. Respondents may present alternative fee options.

Assets Under Management Basis % of Account Market Value $0 - $_ million dollars 0.0_% (_ basis points) Next $_ million dollars 0.0_% (_ basis points) Over $_ million dollars 0.0_% (_ basis points)

4.1.7.1 Assets invested by an Adviser under the terms of the Agreement may from time to time be invested in a money market mutual fund or local government investment pool managed by the Adviser (a “Pool”), or in individual securities. Average daily net assets subject to the fees described in this section shall not take into account any funds invested in the Pool. Expenses of the Pool, including compensation for the Adviser and the Pool custodian, are described in the relevant prospectus or information statement and are paid from the Pool.

4.1.7.2 What additional expenses not covered through the fee structure will be expected in order to implement your investment advisory services?

4.1.7.3 Confirm that any travel expenses that may be authorized under the Agreement will be paid in accordance with Section 112.061, F.S., and University Regulation, as both may be amended from time to time.

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4.1.8 Tab H- Exceptions to Agreement Terms. Please note any/all exceptions taken to the attached Sample Agreement Terms & Conditions you believe are pertinent for consideration. Please also state no exceptions taken if that is the case.

PART V – INSURANCE REQUIREMENTS

5.1 INSURANCE REQUIREMENTS. Any contract resulting from this ITN will require the Adviser to maintain, during the entire term of the contract, insurance in the following kinds and amounts or limits with a company or companies authorized to do business in the State of Florida and will not commence work under the contract until the University has received an acceptable certificate or certificates of insurance showing evidence of such coverage: 5.1.1 Liability insurance on forms no more restrictive than the latest edition of the Commercial General

Liability policy (CG 00 01) of the Insurance Services Office without restrictive endorsements, or equivalent, with the following minimum limits and coverage:

Minimum Limits….....................................$1,000,000 per occurrence

5.1.2 Vehicle liability insurance, including owned, non-owned and hired autos with the following minimum limits and coverage:

Bodily Injury Liability per Person …...................................... $100,000 Bodily Injury Liability per Occurrence …............................... $300,000 Property Damage Liability …................................................ $100,000

- Or – Combined Single Limit …..................................................... $500,000

5.1.3 The University and its employees, agents, and officers must be named as additional insureds on

the general liability policy to the extent of the University’s interests arising from the contract.

5.1.4 Adviser must carry workers’ compensation insurance in accordance with Chapter 440, F.S. If Adviser does not carry workers’ compensation coverage, Adviser must submit to the University both an affidavit stating that the Adviser meets the requirements of an independent contractor as stated in Chapter 440, F.S., and a certificate of exemption from workers’ compensation coverage.

5.1.5 Professional liability (Investment Advisor’s and Consultant’s Errors & Omissions) insurance in a minimum amount of $5,000,000.

5.1.6 Fiduciary Insurance with minimum limit of $1,000,000 per occurrence.

5.1.7 Adviser must obtain certificates of insurance from any subcontractor otherwise the Adviser must

provide evidence satisfactory to the University that coverage is afforded to the subcontractor by the Adviser insurance policies.

5.1.8 Adviser must notify the University in writing of the cancellation or material change to any insurance coverage required by the Agreement resulting from this ITN. Such notification must be provided to the University within five (5) business days of the Adviser notice of such cancellation or change from its insurance carrier.

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PART VI – EVALUATION PROCEDURES

6.1 BASIS OF SELECTION. It is the intention of the Evaluation Committee, if it accepts a proposal, to accept the proposal that it considers to be in the best interest of the University. While cost is a consideration in selecting a Consultant to provide these services, the Evaluation Committee will consider all information made available to the Evaluation Committee. Such information will include, without limitation, the Consultant’s knowledge, expertise, professional reputation and responsiveness to this Invitation to Negotiate. The Evaluation Committee will evaluate all such information in an effort to determine which, if any, of the proposals serve the University’s needs and objectives. The Evaluation Committee may request that Consultants participate in an oral interview as part of the selection process and may request that one or more Consultants appear at the University to make oral presentations. The University has the right to enter into negotiations with one or more Consultants whose proposals appear to be in the best interest of the University. Negotiations could include but are not limited to price and the terms and conditions of this Invitation to Negotiate. The University reserves the right to terminate negotiations, to reject the proposal(s) and to continue negotiations with other responsive Consultants that may lead to a final agreement. The selection will be based on the “best value” proposal, not strictly on the lowest cost proposal. The Evaluation Committee will determine the specific methodology and criteria by which submitted proposals will be evaluated. Selection of finalists and determinations of compliance with minimum qualifications is solely and exclusively within the judgment of the Evaluation Committee and may be made solely on the basis of the Evaluation Committee’s evaluation of a candidate’s suitability.

6.2 EVALUATION CRITERIA. The following is a summary of the general considerations that will be used to

determine the Proposers that will be selected as Finalists:

Understanding of the overall investment program and the investment objectives and its unique constraints and acceptance of Agreement terms.

Experience, resources, and qualifications of the firm and individuals assigned to this account,

including your firm’s experience with Florida Statutes; technical analysis, research capabilities and primary strategies for adding value to portfolios; and experience regarding performance benchmarks for similar governmental entities.

Experience of the firm in managing state/local government portfolios

Investment management philosophy and recommended approach to management of the

portfolio, including ongoing daily investment procedures proposed for the University, and proposed performance benchmarks for the portfolio.

Analytical tools, research and process

Fees

6.3 NEGOTIATIONS. Upon selection by the Evaluation Committee, the Negotiation Phase will begin and the

University will meet with the selected Finalist(s) to negotiate terms of service. At the conclusion of negotiations, the Finalist(s) shall provide the University with its best and final offer (BAFO). One (or more) of the BAFOs that is determined to be the best value to the University will be recommended for approval.

6.4 FINAL SELECTION. The NOTICE OF INTENDED DECISION will be posted on the University’s Internet

web site http://www.floridapoly.org/resources

FLORIDA POLYTECHNIC UNIVERSITY/ITN 016-029 8/30/2016 12

ATTACHMENTS 1 & 2 ATTACHMENT NO. 1 University Investment Policy Link

https://floridapolytechnic.org/wp-content/uploads/Investment-Policy-9.9.15.pdf

ATTACHMENT NO. 2 Board of Trustees Agenda Item Summary Link

https://floridapolytechnic.org/wp-content/uploads/Board-action-item-Investment-Policy-Agenda-Item-VIII-D-FINAL.pdf

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SAMPLE AGREEMENT ATTACHMENT NO. 3

INVESTMENT MANAGEMENT & ADVISORY SERVICES AGREEMENT THIS AGREEMENT, entered into as of the XX day of XXX, 2016, by and between THE FLORIDA POLYTECHNIC UNIVERSITY BOARD OF TRUSTEES, a Florida public body corporate (hereinafter the "Client") on behalf of The FLORIDA POLYTECHNIC UNIVERSITY, and ADVISOR, a XXXXX company with an office in XXXX (hereinafter the "Advisor").

W I T N E S S E T H WHEREAS, the Client has funds available for investment purposes (the "Initial Funds") for which it intends to conduct an investment program; and WHEREAS, the Client desires to avail itself of the experience, sources of information, advice, assistance and facilities available to the Advisor; to have the Advisor undertake certain duties and responsibilities; and to perform certain services as investment advisor on behalf of the Client, as provided herein; and WHEREAS, the Advisor is willing to provide such services on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto, intending to be legally bound, agreed as follows:

1. SERVICES OF ADVISOR. The Client hereby engages the Advisor to serve as investment advisor under the terms of this Agreement with respect to the Initial Funds and such other funds as the Client may from time to time assign by written notice to the Advisor (collectively the "Managed Funds"), and the Advisor accepts such engagement. In connection therewith, the Advisor will provide investment research and supervision of the Managed Funds investments and conduct a continuous program of investment, evaluation and, when appropriate, sale and reinvestment of the Managed Funds assets. The Advisor shall continuously monitor investment opportunities and evaluate investments of the Managed Funds. The Advisor shall furnish the Client with statistical information and reports with respect to investments of the Managed Funds. The Advisor shall place all orders for the purchase, sale, loan or exchange of portfolio securities for the Client's account with brokers or dealers recommended by the Advisor and/or the Client, and to that end the Advisor is authorized as agent of the Client to give instructions to the deposito1y designated by the Client as its custodian as to deliveries of securities and payments of cash for the account of the Client. In connection with the selection of such brokers and dealers and the placing of such orders, the Advisor is directed to seek for the Client the most favorable execution and price, the determination of which may take into account, subject to any applicable laws, rules and regulations, whether statistical, research and other information or services have been or will be furnished to the Advisor by such brokers and dealers. The depository designated by the Client (the "Custodian' shall have custody of cash, assets and securities of the Client. The Advisor shall not take possession of or act as custodian for the cash, securities or other assets in the Managed Funds and shall have no responsibility in connection therewith. Authorized investments shall include only those investments which are currently authorized by the state investment statutes and the bond covenants and as supplemented by such other written instructions as may from time to time be provided by the Client to the Advisor. The Advisor

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shall be entitled to rely upon the Client's written advice with respect to anticipated drawdowns of Managed Funds. The Advisor will observe the instructions of the Client with respect to broker/dealers who are approved to execute transactions involving the Managed Funds and in the absence of such instructions will engage broker/dealers which the Advisor reasonably believes to be reputable, qualified and financially sound. Advisor agrees to provide its services in compliance with Client's investment objectives and restrictions attached hereto as Exhibit 1.

2. COMPENSATION. (a) For services provided by the Advisor pursuant to this Agreement, the Client shall

pay the Advisor an annual fee, in quarterly installments, based on the daily net assets under management at an annual rate using the following billing schedule, which are guaranteed for the first five years of the term of this Agreement and any renewals thereof:

Portfolio Value Assets Under management Basis% of Acct. Market Value Core Assets $0 - $25 million 0.xx% (x.x basis points) $25 million - $50 million 0.xx% (x.x basis points)

$50 million - $125 million 0.xx% (xx basis points)

(b) The Advisor will bill the Client quarterly in arrears for service performed under this Agreement, said bill to include a statement indicating the basis upon which the fee was calculated. The Client shall pay to the Advisor the runout payable pursuant to this Agreement not later than on the 15th day of the month following the month during which the Advisor's statement was rendered.

(c) Assets invested by the Advisor under the terms of this Agreement may from time to time be invested in a money market mutual fund or local government investment pool managed by the Advisor (either, a "Pool"), or in individual securities. Average daily net assets subject to the fees described in this section shall not take into account any funds invested in the Pool. Expenses of the Pool, including compensation for the Advisor and the Pool custodian, are described in the relevant prospectus or information statement and are paid from the Pool.

(d) If and to the extent that the Client shall request the Advisor to render services other than those to be rendered by the Advisor hereunder, such additional services shall be compensated separately on terms to be agreed upon between the Advisor and the Client.

3. EXPENSES.

1. The Advisor shall furnish at its own expense all necessary administrative services, office space, equipment, clerical personnel, telephone and other communication facilities, investment advisory facilities, and executive and supervisory personnel for managing the Managed Funds.

2. Except as expressly provided otherwise herein, the Client shall pay all of its own

expenses including, without limitation, taxes, commissions, fees and expenses of the Client's independent auditors and legal counsel, if any, brokerage and other expenses connected with the execution of portfolio security transactions, insurance premiums, fees and expenses of the Custodian of the Managed Funds including safekeeping of funds and securities and the keeping of books and accounts.

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4. REGISTERED ADVISOR; DUTY OF CARE.

The Advisor hereby represents it is a registered investment advisor under the Investment Advisers Act of 1940. The Advisor shall immediately notify the Client if at any time during the term of this Agreement it is not so registered or if its registration is suspended. The Advisor agrees to perform its duties and responsibilities under this Agreement with reasonable care, provided that Advisor's standard of care shall not be less than that required by Florida Statutes Section 1010.10, the Florida Uniform Management of Institutional Funds Act. Additionally, in performance of this Agreement, the Advisor shall comply with all applicable law, rule and regulation. The federal securities laws impose penalties under certain circumstances on persons who are required to act in good faith. Nothing herein shall in any way constitute a waiver or limitation of any rights which the Client or the Advisor may have under any federal securities laws. The Client hereby authorizes the Advisor to sign LR.S. Form W-9 on behalf of the Client and to deliver such form to broker-dealers or others from time to time as required in connection with securities transactions pursuant to this Agreement.

5. ADVISOR'S OTHER CLIENTS. The Client understands that the Advisor performs investment advisory services for various other clients which may include investment companies, commingled trust funds and/or individual portfolios. The Client agrees that the Advisor, in the exercise of its professional judgment, may give advice or take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Managed Funds accounts. The Advisor shall not have any obligation to purchase, sell or exchange any security for the Managed Funds solely by reason of the fact that the Advisor, its principals, affiliates, or employees may purchase, sell or exchange such security for the account of any other client or for itself or its own accounts.

6. TERM. This Agreement may be terminated by the Client in the event of any material breach of its terms immediately upon notice by certified mail, return receipt requested. This Agreement may be terminated by the Client at any time, on not less than ten (10) days written notice to the Advisor. The Advisor may terminate this Agreement immediately upon any material breach of its terms by the Client, or at any time after one year upon ten (I0) days written notice.

7. FORCE MAJEURE. The Advisor shall have no liability for any losses arising out of the delays in performing or inability to perform the services which it renders under this Agreement which result from events beyond its control, including interruption of the business activities of the Advisor or other financial institutions due to acts of God, acts of governmental authority, acts of war, terrorism, civil insurrection, riots, labor difficulties, or any action or inaction of any carrier or utility, or mechanical or other malfunction.

8. DISCIPLINARY ACTIONS. The Advisor shall promptly give notice to the Client if the Advisor shall have been found to have violated any state or federal securities law or regulation in any criminal action or civil suit in any state or federal court or in any disciplinary proceeding before the Securities and Exchange Commission or any other agency or department of the United States, any registered securities exchange, FINRA, or any regulatory authority of any State based upon the performance of services as an investment advisor.

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9. INDEPENDENT CONTRACTOR. Neither the Advisor nor the Client, their employees, officers and representatives, shall be deemed to be employees, agents (except as to the purchase or sale of securities described in Section 1), partners, servants, and/or joint ventures of the other by virtue of this Agreement or any actions or services rendered under this Agreement.

10. BOOKS. The Advisor shall maintain required and otherwise appropriate records of all its activities hereunder. The Advisor shall provide the Client with a monthly statement showing deposits, withdrawals, purchases and sales (or maturities) of investments, earnings received, and the value of assets held on the last business day of the month. The statement shall be in the format and manner that is mutually agreed upon by the Advisor and the Client.

11. THE ADVISOR'S DISCLOSURE STATEMENT.

The Advisor warrants that it has delivered to the Client, at least five business days prior to the execution of this Agreement, the Advisor's current Securities and Exchange Commission Form ADV, Part II (disclosure statement). The Client acknowledges receipt of such disclosure statement at least five business days prior to the execution of this Agreement.

12. MODIFICATION. This Agreement shall not be changed, modified, terminated or discharged in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assigns.

13. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding on the Advisor and its respective successors and assigns, provided, however, that the rights and obligations of the Advisor may not be assigned without the prior written consent of the Client.

14. NOTICE. Written notices required under this Agreement shall be sent by regular mail, certified mail, overnight delivery or courier, and shall be deemed given when received at the parties' respective addresses shown below. Either party must notify the other party in writing of a change in address. Client's Address With copy to:

FLORIDA POLYTECHNIC UNIVERSITY UNIVERSITY GENERAL COUNSEL 4700 RESEARCH WAY SAME ADDRESS LAKELAND, FL 33805-8531 ATT: CHIEF FINANCIAL OFFICER ADVISOR With a copy to: Advisor's Address Attn:

15. APPLICABLE LAW. This Agreement shall be construed, enforced, and administered according to the laws of the State of Florida. The Advisor and the Client agree that, should a disagreement arise as to the terms or enforcement of any provision of this Agreement, each party will in good faith

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attempt to resolve said disagreement prior to further action. Any snit, action or proceeding arising in connection with this Agreement shall be brought in the Circuit Court for Polk County, Florida, provided that disputes, claims, questions or disagreements involving monetary claims of $200,000 or less shall be conducted pursuant to, and under, the Administrative Procedures Act, Chapter 120 Florida Statutes.

16. EXECUTION AND SEVERABILITY. Each party to this Agreement represents and warrants that the person or persons signing this Agreement on behalf of such party is authorized and empowered to sign and deliver this Agreement for such party. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision.

17. STATE UNIVERSITY.

The FLORIDA POLYTECHNIC UNIVERSITY is a constituent member of the Florida state university system established under the Constitution of Florida administered by the Client. Notwithstanding anything to the contrary contained herein: (a) Nothing contained in this Agreement shall be construed or interpreted as (1) denying to

either party any remedy or defense available to such party under the laws of the State of Florida; (2) the consent of the State of Florida or its agencies, agents or public bodies corporate to be sued; or (3) a waiver of sovereign immunity of the State of Florida, its agencies, agents and public bodies corporate beyond the waiver provided in § 768.28, Florida Statutes.

(b) The parties shall allow public access to all documents, papers, letters, or other material subject to the provisions of Chapter 119, Florida Statutes, and made or received in conjunction with this Agreement. Any failure to so allow shall constitute grounds for the Client's termination of this Agreement.

(c) Travel expenses of the Advisor are not reimbursable. (d) Obligations of the Client are subject to the availability of funds lawfully appropriated

annually for its purposes by the Florida Legislature. (e) Except as expressly stated in this Agreement, the Advisor shall not use the name of the

FLORIDA POLYTECHNIC UNIVERSITY in media or print advertising without the prior written consent of the Client.

(f) Client represents (1) that it has established equal opportunity practices which conform to both the spirit and the letter of all laws against discrimination and prohibits discrimination based on race, creed, color, sex, age, national origin, marital status or religion; (2) it has not been placed on the convicted vendor list by the Department of Management Services, State of Florida, (3) neither it nor any subcontractor or other person, firm or business entity with whom it is engaged in a combined effort to perform this Agreement has hired any person who is an officer or employee of the Florida Polytechnic and (4) that it will comply with all laws, statutes, rules and regulations which apply to the Client's vendors or contractors.

(g) Any provisions contained in this Agreement in conflict with the laws, statutes and regulations of the State of Florida are void and of no effect.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized representatives as of the date set forth in the first paragraph of this Agreement.

COMPANY NAME

BY: ____________________________________

NAME: ________________________________

TITLE: ___________________________________

THE FLORIDA POLYTECHNIC UNIVERSITY BOARD OF TRUSTEES By: ____________________________________ NAME: __________________________________ TITLE: _________________________________

APPROVED AS TO FORM AND LEGALITY BY: _________________________________ FPU OFFICE OF GENERAL COUNSEL

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EXHIBIT 1

Investment Objectives and Restrictions

FLORIDA POLYTECHNIC UNIVERSITY

1. Purpose and Scope

A. Purpose - The purpose of this guidance in Exhibit 1 is to govern the investment of funds in accordance with sections 1011.42(5) and 218.415, Florida Statutes.

B. Scope - This investment policy applies to funds in excess of those required to meet current

expenses for the benefit of the FLORIDA POLYTECHNIC UNIVERSITY (University).

2. Investment Objectives

The primary objective is to place the highest priority on the safety of principal and liquidity of funds. The optimization of investment income shall be secondary to the requirements for safety and liquidity.

A secondary objective is to maximize income (book yield) while providing minimal risk of market value volatility and adequate short-term liquidity to meet any cash flow demands. As a tertiary objective, the portfolio seeks to outperform its benchmark on a total return basis.

3. Performance Measurement

A. The State Treasury Investment Pool will be used as a benchmark for the current operating

funds (short term portfolio.)

B. For funds with a longer-term investment horizon (long term portfolio) the State Treasury Investment Pool will also be used as well as an index with similar maturity characteristics; specifically defined relative to the specific longer-term funds at the time they are invested.

4. Prudence and Ethical Standards

Investments shall be made in accordance with the "Prudent Person" rule which states the following:

Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived from the investment. Employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. Also, employees involved in the investment process shall disclose to the University any material financial interests in financial institutions that conduct business with the University, and they shall further disclose any material personal financial/investment positions that could be related to the performance of the University's investment program.

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5. Authorized Investments

Investments shall be limited to fixed income securities selected from the following types:

A. U.S. Treasury Bills, Notes, Bonds, and other obligations whose principal and interest is fully guaranteed by the United States of America or any of its agencies or instrumentalities

B. Government Sponsored Enterprises: Federal Farm Credit Bank (FFCB), Federal National

Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal Home Loan Bank (FHLB), Student Loan Marketing Association (SLMA), Financing Corporation (FICO), The Resolution Funding Corporation (REFCO), Farm Credit System Financial Assistance Corporation, the Federal Housing Finance Board and all other government sponsored agencies and enterprises

C. Repurchase Agreements: collateralized at 102% by U.S. Treasuries

D. Certificates of Deposit in state-certified qualified public depositories

E. Mortgage-Backed Pass Through guaranteed by the U.S. Government or a Federal agency,

including securities collateralized by the same

F. Asset-Backed Securities: rated "AAA" by either Standard & Poor's or Moody's at the time of purchase. Thereafter, any security downgraded below AAA will be sold at the earliest beneficial opportunity.

G. Money Market Instruments: securities rated "Al/Pl" or the equivalent as a minimum as

defined by Standard & Poor's and/or Moody's and all other nationally recognized credit rating organizations (Tier 1 as defined by 2(a) 7 money market funds) at the time of purchase. Included but not limited to commercial paper, time deposits and banker's acceptances.

H. Corporate Notes rated single A and higher by either Standard & Poor's and Moody's at the

time of purchase. Thereafter, any security downgraded below single A by either rating agency will be sold at the earliest beneficial opportunity.

I. Money Market Funds registered with the SEC and only invested in securities as allowed by

this policy

J. State Treasury Investment Pool (e.g. SPIA)

K. State Board of Administration Local Government Surplus Fund Trust Fund (SBA Pool) It should be recognized that certain securities may meet the above definition of an Authorized Investment but their risk characteristics, as created by their structure, may be such that a prudent investor would deem them inappropriate for the University. Securities of this type which are prohibited:

A. Reverse repurchase agreement

B. Floating rate securities whose coupon floats inversely to an index or whose coupon is determined based upon more than one index

C. Tranches of Collateralized Mortgage Obligations (CMO) which receive only the interest or principal

from the underlying mortgage securities; commonly referred to as "!O's" and "PO's"

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D. Securities whose future coupon may be suspended because of the movement of

interest rates or an index

6. Maturity and Liquidity Requirements The investment portfolio shall be constructed in such manner as to provide sufficient liquidity to pay obligations as they come due. To the extent possible, an attempt will be made to match investment maturities with known cash needs and anticipated cash-flow requirements.

7. Portfolio Composition Recognizing that market value volatility is a function of maturity, the portfolio shall be maintained as a short-term maturity portfolio. Additionally, it is recognized that proper diversification is considered a prudent investment approach. Specifically, the following restrictions apply in the management and investment of the University Portfolio:

A. The maturity of debt obligations with a call and/or put option(s) shall be considered the

date on which it can be reasonably expected that the bond will be called, put or mature.

B. The maturity of mortgage/asset-backed securities shall be considered the date corresponding to its average life. This date reflects the point at which an investor will have received back half of the original principal (face) amount. The average life may be different from the stated legal maturity included in a security’s description.

C. The effective maturity of floating rate securities shall be considered the time until the next full reset of the coupon. The maximum effective duration of a floating rate security shall be five (5) years from the date of purchase.

D. The maximum effective duration of an individual security shall be five (5) years from the

date of purchase.

E. To limit principal fluctuation, no more than 400/o shall have an effective duration greater than three (3) years.

F. In order to provide sufficient liquidity and stability of principal, at least 10% of the Fund

shall have an effective duration of one year or less.

G. A maximum of 5°/o of the Fund may be invested in securities of any single issuer. U.S. Government, Government Agency and GSE government investment pool securities are not subject to any limitations.

H. Investments in Collateralized Mortgage Obligations (CMOs) shall be limited to 25% of

the market value of the total fixed income portfolio and shall be restricted to:

1. Those issues backed by the full faith of the U. S. Government, an Agency thereof, or that are rated AAA by a major rating service.

2. PAC (planned amortization class), NAC (non-accelerated securities), or VADM (very accurately defined maturity) securities.

I. The Fund must maintain a total average quality rating of “AA" or higher.

8. Risk and Diversification Investments held shall be diversified, in accordance with the guidelines set above, to the extent practicable to control the risk of loss resulting from overconcentration of assets in a

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specific maturity, issuer, instrument, dealer or bank through which financial instruments are bought and sold. Diversification strategies within these guidelines shall be reviewed and revised periodically, as deemed necessary by the management staff.

9. Authorized Investment Institutions and Dealers The University CFO will maintain an approved list of investment institutions and/or dealers for the purchase and sale of securities.

10. Third-Party Custodial Agreements All securities purchased by the University or by its approved Investment Manager(s) under this Policy shall be properly designated as an asset of the University and held in safe keeping by a third party custodial bank or other third party custodial institution. If a bank or trust company serves in the capacity of Investment Manager said bank or trust company could also perform required custodial and reporting services.

No withdrawal of securities, in whole or in part, shall be made from safekeeping except by those designated within the Investment Management and Custodial Agreement between the Custodian and the University.

11. Master Repurchase Agreement The Investment Manager will maintain a master repurchase agreement and require all approved institutions and dealers transacting repurchase agreements to adhere to the requirements of the master repurchase agreement.

12. Internal Controls The University CFO will establish a system of internal controls and operational procedures, which will be documented in writing. The internal controls will be reviewed by the appropriate committee and/or individual(s). The controls will be designed to prevent losses of public funds arising from fraud, employee error, and misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of entity.

13. Continuing Education University staff involved with investments must have education and/or experience related to investment practices and products.

14. Reporting Unless otherwise indicated, the following are the responsibilities expected of the University:

A. Monthly reporting of holdings and transactions occurring in the portfolio. This report is to include at least (1) all assets held by the University by class/type, book value, approximate market value, income earned, accrued income and (2) all transactions occurring in the portfolio during the month.

B. Quarterly reporting of the portfolio's performance. The University will report the portfolio's

total rate of return, which reflects the true earnings of the portfolio and incorporates cash flows, changes in market value and income earned. Calculation of the portfolio's total rate of return will comply with the performance measurement standards as defined by the Association of Investment Management and Research (AIMR).

15. Periodic Review It is the intention of the Board of Trustees to review these objectives and restrictions from time to time in order to develop and amend the University’s Investment Policy and its addenda periodically and to amend it to reflect any changes in philosophy or objectives. However, if at any time the investment managers believe that the specific objectives defined herein cannot be met or that these guidelines unnecessarily constrict performance, the Trustees shall be so notified in writing.