CambridgeCTR057205ContractAPP.pdf

SCOPE OF WORK

Contract No.: CTR057205 Description: Investment Consulting Services: Private Equity

Page

A. ALL SERVICES

1. Contractor shall provide consulting and advisory services for the ASRS Investment Program in accordance with the provisions and requirements as stated in the Scope of Work.

2. Services rendered under this Contract shall comply with the ASRS Strategic Plan, the ASRS Board Governance Policy Handbook, SIP006, Strategic Asset Allocation Policy (SAAP) and the ASRS Investment Policy Statement.

3. Standard of Care. The Contractor acknowledges that when providing the investment services under this Contract, it owes the State the duties an investment adviser owes to a client under the Investment Advisers Act of 1940 (as amended, the “Advisers Act”) and the rules promulgated thereunder.

B. PRIVATE EQUITY INVESTMENT CONSULTING

Contractor shall provide the following services relating to the Investment Program, including but not limited to:

1. Designate a senior private equity investment consultant with a minimum of ten (10) years’ experience related to the investments in the Investment Program to work extensively on the ASRS account. The designated senior private equity investment consultant will be expected to become thoroughly knowledgeable and up-to-date with the ASRS Investment Program, and to attend specified meetings. Consultant must be able to commit a sufficient amount of their available time to provide quality work while meeting all objectives and timelines established by ASRS staff.

2. Portfolio Strategic Advice

2.1. Provide continuing advice on strategic and tactical matters related to investments and portfolio construction.

2.2. Provide advice and assistance on identification and assessment of tactical and opportunistic themes for investment implementation.

2.3. Provide assistance in designing a framework for ongoing execution of the Investment Program, including but not limited to criteria for fund selection, methods of diligence, performance measurement, and monitoring systems.

2.4. Assist in future updates of formal strategic plans.

2.5. Perform other tasks related to portfolio strategy as may be requested from time to time by the ASRS.

3. Investment Advice and Due Diligence

3.1. All investment memoranda required in this Section shall be in a format acceptable to the ASRS.

3.2. Investment Selection - Commingled Investments

3.2.1. Identify prospective commingled fund investments.

3.2.2. Perform diligence on commingled fund investments in accordance with SIP006.

3.2.3. Present the results in an investment memorandum for decision by the Combined Asset Class Committee.

3.3. Investment Selection - Co-Investments

SCOPE OF WORK

Description: Investment Consulting Services: Private Equity

Page

3.3.1. Recommend tactical strategies in private equity related assets that may not meet the constraints of the Strategic Plan, but which nevertheless offer attractive risk adjusted returns.

3.3.2. Perform diligence on such investments in accordance with SIP006.

3.3.3. Perform company level diligence for co-investments.

3.3.4. Present the results of the diligence in an investment memorandum for decision by the ASRS Combined Asset Class Committee.

3.4. Perform other investment related activities as may be requested from time to time by the ASRS.

4. Organizational Assessment of Culture

4.1. Perform diligence on existing and prospective private equity firms’ culture.

4.2. Provide continuing advice on the organizational assessment of a private equity firm’s culture.

4.3. Provide training to ASRS staff to assess firm culture.

4.4. Provide other organizational assessment and development services as may be requested from time to time by the ASRS.

5. Valuation, Monitoring, and Compliance Services

5.1. Valuation Policy Development and Analysis

5.1.1. Assist ASRS in developing valuation policies.

5.1.2. Review the valuation policies of external managers of ASRS assets.

5.2. Fee Analysis and Monitoring

5.2.1. Review manager calculations of fees, partnership expenses, and carried interest.

5.2.2. Monitor and confirm compliance of manager calculations of fees, partnership expenses, and carried interest with appropriate documentation.

5.3. Valuation and Fee Analysis Reporting

5.3.1. Provide annual report communicating findings of compliance with ASRS investment policies.

5.4. Provide other valuation, monitoring, reporting and compliance services as may be requested from time to time by the ASRS.

6. Contractor shall provide any other private equity investment consulting services as requested by ASRS.

All terms not defined herein shall have the meaning given to them in the Uniform Terms and Conditions.

BEST AND FINAL OFFER

ATTACHMENT C: Pricing Schedule ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Consulting Services: Illiquid Credit & Public Markets Projects, Private Equity, and Real Estate Investment Consulting Services

Solicitation Code: BPM003473

Page of

The ASRS, at its discretion, may award contracts for all or any portion of the services for which an Offeror has provided a response.

Offeror must complete the Items tab in APP by entering $1 in the Unit Price field.

State pricing below for the services described in the Scope of Work. Pricing may be provided as an hourly billable rate in Section 1 and/or by task/project/retainer in Section 2.

1. PRICING BY HOURLY RATE

In addition to Offeror's key personnel assigned under a Contract, ASRS assumes a complement of Offeror staff may also be assigned to and work on a task or service requested by ASRS. Offeror should categorize staff by general titles/classifications and then provide the maximum (highest) hourly rate within that category that Offeror is proposing to invoice the ASRS. While Offeror may bill ASRS less than the max rate in any category of staff, it may not bill more than the rate listed on this Pricing Schedule.

All pricing must be inclusive of travel.

Example:

Indicate “N/A” below if not bidding on a particular Scope of Work Service.

Service Max Hourly

Rate Year 1 Rate

Max Hourly Rate

3 Year Rate Guarantee

Max Hourly Rate

5 Year Rate Guarantee

Illiquid Credit & Public Markets Investment Project Consulting Services

Rate 1 (title or classification):

Rate 2 ( title or classification ):

Service Hourly Rate Year 1 Rate

Hourly Rate 3 Year Rate Guarantee

Hourly Rate 5 Year Rate Guarantee

Illiquid Credit & Public Markets Investment Project Consulting Services

Rate 1 (title or classification):______________ N/A N/A N/A

Rate 2 ( title or classification ):_____________ N/A N/A N/A

Rate 3 ( title or classification ):_____________ N/A N/A N/A

Rate 4 ( title or classification ):_____________ N/A N/A N/A

Private Equity Investment Consulting Services

Rate 1 (title or classification):______________

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Consulting Services: Illiquid Credit & Public Markets Projects, Private Equity, and Real Estate Investment Consulting Services

Solicitation Code: BPM003473

Page of

Additional Comments:

2. PRICING BY TASK/PROJECT OR FLAT FEE1

If the firm’s pricing structure is organized by task/project or any other fixed fee method it should be included in this section. If the task or project is billed based on hourly rates, provide those rates below a shown in Section 1 of this Pricing Schedule. If the hourly rates are the same as in Section 1, indicate as such in lieu of duplicating the rates below. ASRS reserves the right to award a contract based on any pricing structure submitted as part of the offer.

We are proposing a comprehensive annual fixed fee of $1.5M. This fixed fee includes all services covered in the Statement of Work, except for services which CA does not offer or would have to work with a partner to provide. This flat fee assumes a maximum of 4 co-investment deals per annum beyond which an additional fee will be applied per co-investment. ASRS will be served by a dedicated private equity team led by Phil Fiske and Aarish Patel. We have provided our standard billing terms for fixed fee arrangements below.

CA Standard Fixed Fee Billing Terms:

a) Annual Fee. As full compensation for all services rendered and expenses assumed by the Adviser in this Agreement, except for additional expenses described in this Exhibit or as otherwise provided for in this Agreement, the Client will pay an annual fee (the “Annual Fee”) equal to $1.5M.

b) Billing and Payment. 25% of the Annual Fee as determined above will be billed and payable as of the beginning of each calendar quarter. The Adviser will invoice the Client for the first installment of the Annual Fee as of the Effective Date, adjusted on a pro rata basis. The Adviser or its designated agent will send an invoice to the Client, and the Client will pay such fee directly to the Adviser. Unless the Client objects to the amount owed or the manner in which the Annual Fee was calculated within 30 days of receipt of the invoice, the fees will be deemed to have been accurately determined and the Client will have waived its right to subsequently dispute such fees.

c) Additional Expenses. The Adviser will not be responsible for paying any custody, brokerage, exchange fees and any other transaction costs, taxes, fiscal or governmental charges or duties in respect of, or in connection with, the acquisition, holding or disposal of any of the Investment Assets or

1 This fee is valid for 90 days following the date of this proposal.

Rate 2 ( title or classification ):_____________ Please see sections 2 & 3 below.

Rate 3 ( title or classification ):_____________

Rate 4 ( title or classification ):_____________

Real Estate Investment Consulting Services

Rate 1 (title or classification):______________ N/A N/A N/A

Rate 2 ( title or classification ):_____________ N/A N/A N/A

Rate 3 ( title or classification ):_____________ N/A N/A N/A

Rate 4 ( title or classification ):_____________ N/A N/A N/A

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Consulting Services: Illiquid Credit & Public Markets Projects, Private Equity, and Real Estate Investment Consulting Services

Solicitation Code: BPM003473

Page otherwise in connection with the Client’s business, other than as specifically provided in this Exhibit. All such fees and costs will be paid or reimbursed by the Client.

3. OPTIONAL/ALTERNATIVE PRICING2

The Offeror may propose alternative pricing structures, including multi-year pricing, or fees organized in a different way that has been requested above provided that pricing in Section 1 or 2 above has been provided. The Offeror has full discretion in what it may propose, however, the ASRS is under no obligation to accept such proposals.

In addition to the comprehensive advisory service priced in Section 2, we are submitting a proposal for a private equity staff extension arrangement with a modified statement of work which is detailed below. This staff extension arrangement will be priced on a fixed fee basis that will step-in over 3 years, as is also depicted below. With the exception of the annual dollar amount, our billing language would be identical to the language provided in Section 2.

Staff Extension Statement of Work:

• Support from a senior dedicated private equity specialist, Aarish Patel (Item 1 in ASRS’s original Statement of Work)

• Access to CA’s Optica Research and Optica Benchmarks tools

• Support with all elements of strategic planning for the private equity program (Item 2 in ASRS’s original Statement of Work)

• CA will source and underwrite private equity primary funds for ASRS, capped at 10 CA sourced ideas per year (Items 3 and 4 in ASRS’s original Statement of Work). Co-Investments would be excluded from this mandate.

• Additional CA sourced managers beyond the 10 per year would be priced at $20K per fund

• Custom due diligence on non-CA sourced managers would be priced at $40K per fund

• Items 5 and 6 in ASRS’s original Statement of Work would be excluded from this mandate.

Staff Extension Pricing:

Year 1 Fixed Fe $550K

Year 2 Fixed Fee $600K

Year 3 Fixed Fee $650K

4. OTHER FEES

Provide pricing for any and all other fees that are not included in the rates above. The Offeror should also disclose any additional fees associated with subcontractor arrangements that involve the services provided to ASRS and are not included in attachments.

5. PAYMENT DISCOUNT OPTIONS

2 This fee is valid for 90 days following the date of this proposal.

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Consulting Services: Illiquid Credit & Public Markets Projects, Private Equity, and Real Estate Investment Consulting Services

Solicitation Code: BPM003473

Page

For the services specified herein, the following discounts apply:

SPECIAL TERMS AND CONDITIONS

Description: Investment Consulting Services: Private Equity

The Special Terms and Conditions modify the Uniform Terms and Conditions. It can modify them by replacing, deleting, appending to, or revising the text of an existing provision or by inserting a new paragraph into an existing article. No other document modifies or adds to the Uniform Terms and Conditions, except as may subsequently be otherwise and expressly agreed and incorporated by Contract Amendment.

1. DEFINITION OF TERMS

All other terms not defined herein shall have the meaning given to them in the Uniform Terms and Conditions.

1.1. “Acceptance of Offer” means the Attachment labeled “Offer and Acceptance” bearing the State contract number once the Procurement Officer has signed it to signify the (1) formal acceptance of the Offer and (2) the formation of the Contract. For clarity of intent, the foregoing is not to be confused with the term ‘acceptance’ used throughout the Contract in the context of delivery, inspection, etc., with respect to Materials or Services.

1.2. “Order” means the instrument by which ASRS authorizes Contractor to perform some or all of the Work. Whether the Contract will have one Order or many Orders depends on the scope of the Contract and how the ASRS will use it. Any of the following is to be construed as being an “Order”:

1.2.1. A purchase order;

1.2.2. A task order or service order;

1.2.3. Written correspondence or instruction.

1.3. “Subcontractor” has the meaning given in A.R.S. § 41-2503(38), which, for convenience of reference only, is “… a person who contracts to perform work or render service to … [C]ontractor or to another [S]ubcontractor as a part of a contract with a state governmental unit. . . .” The Contract is to be construed as “a contract with a state governmental unit” for purposes of the definition. For clarity of intent, a person carrying out any element of the Work is a Subcontractor from the moment they first carry out that element of the Work regardless of whether or not a Subcontract exists then or subsequently.

1.4. “Work” means the totality of the materials and the Services and all the acts of administration, creation, production, and performance necessary to fulfill and incidental to fulfilling all of Contractor's obligations and duties under the Contract in conformance with the Contract and applicable laws.

2. CONTRACT INTERPRETATION

2.1. Usage. Where the Contract:

2.1.1. assigns obligations to Contractor, any reference to “Contractor” is to be construed to be a reference to Contractor and all Subcontractors, whether they are first-tier subcontractors, sub-subcontractors, suppliers, sub-suppliers, consultants, or sub-consultants, as well as all of Contractor’s and the Subcontractors’ respective agents, representatives, and employees in every instance unless the context plainly requires that it is be a reference only to Contractor as apart from Subcontractors;

2.1.2. uses the permissive “may” with respect to a party’s actions, determinations, etc., the term is to be interpreted as in A.A.C. R2-7-101(31) [Definitions]. For clarity of intent, any right given to ASRS using “ASRS may” or a like construction denotes discretion and freedom to act so far as any regulatory or operative constraints permit in the relevant circumstances, provided that: (a) where written “may, at its discretion,” the discretion extends to whatever is most advantageous to ASRS; and (b) where written only as “may,” the discretion is constrained by what is fair, reasonable, and as accommodating of the respective best interests of both parties as practicable under the circumstances;

2.1.3. uses the imperative “shall” with respect to a party’s actions, duties, etc., the term is to be interpreted as in A.A.C. R2-7-101(43) [Definitions]. Conversely, the phrase “shall not” is to be interpreted as an imperative prohibition.

Description: Investment Consulting Services: Private Equity

2.1.4. uses the term “must” with respect to a requirement, criterion, etc., the term is to be interpreted as conveying compulsion or strict necessity, and is to be read as though written “must, if [the subject] is to be entitled to have [the object] considered or credited as being compliant with, conforming to, or satisfying [the requirement, criterion, constraint, etc.], otherwise, [the object] will be considered or debited as being non-compliant, non-conforming, or unsatisfactory for its Contract-related purposes” in every instance;

2.1.5. uses the term “might” with respect to an event, outcome, action, etc., the term is to be interpreted as conveying contingency or non-discretionary conditionality; and

2.1.6. uses the term “will” or the phrases “is to be” or “are to be” with respect to an event, outcome, action, etc., the term or phrase is to be interpreted as conveying such certainty or imperativeness that “shall” is either unnecessary or irrelevant in that instance.

2.2. Independent Contractor. Contractor is an independent contractor and shall act in an independent capacity in performance under the Contract. Neither party is or is to be construed as being to be the employee or agent of the other party, and no action, inaction, event, or circumstance will be grounds for deeming it to be so.

2.3. Complete Integration. The Contract, including any documents incorporated into the Contract by reference, is intended by the parties as a final and complete expression of their agreement. There are no prior, contemporaneous, or additional agreements, either oral or in writing, pertaining to the Contract.

3. CONTRACT ADMINISTRATION AND OPERATION

3.1. Authority to Contract. This Contract activity is issued under the authority of the State Procurement Administrator, through the Arizona State Retirement System (“ASRS”). No alteration of any portion of the Contract, any services awarded, or any other agreement that is based upon this Contract may be made without express written approval of the ASRS Chief Procurement Officer or other personnel delegated authority in the form of an official Contract Amendment. Any such action is subject to the legal and contractual remedies available to the State inclusive of, but not limited to, Contract termination, cancellation, suspension, and/or debarment of the Contractor.

3.2. Contract Applicability. Any Contract resulting from this Solicitation shall be for the exclusive use of the ASRS.

3.3. Term of Contract. The term of the Contract shall commence on the effective date indicated in the “Acceptance of Offer” and shall remain in effect for a period of twelve (12) months thereafter unless terminated, canceled or extended as otherwise provided herein.

3.4. Contract Usage. Contractor shall understand and agree that no quantity of service is guaranteed under the Contract and that ASRS does not guarantee that Contractor’s services will be utilized to any degree. ASRS reserves the right to contract for the services as a whole, or any of the various parts/scenarios listed separately.

3.5. Contract Extensions. The Contract shall not bind nor purport to bind the ASRS for any contractual commitment in excess of the original Contract term. The ASRS shall have the right, as its sole option, to extend the Contract for one or more months, provided that the maximum aggregate term of the Contract including extensions cannot exceed five (5) years. If the ASRS exercises such rights, all terms, conditions, and provisions of the original Contract shall remain the same and apply during an extension period.

3.5.1. The Contractor shall provide the ASRS with notice of any requests for program/operation changes or modifications of any type, including those on price, at least ninety (90) days prior to the effective date for each extension period. Any such request shall be accompanied by supporting documentation.

3.6. Notices. All notices, requests, demands, consents, approvals, and other communications which may or are required to be served or given hereunder (collectively, “Notices”):

3.6.1. If intended for the ASRS, shall be hand-delivered, emailed to ASRSProcurement@azasrs.gov or sent by registered or certified United States mail, return receipt requested, postage prepaid, and addressed to the mailto:ASRSProcurement@azasrs.gov

Description: Investment Consulting Services: Private Equity

ASRS as indicated on the Offer and Acceptance document of this Contract or to such other address as may from time be furnished in writing to the Contractor.

3.6.2. If intended for the Contractor, such Notice shall be given to the person named in the Offer and Acceptance document of this Contract or to such other person as the Contractor may from time to time furnish in writing to the ASRS.

3.6.3. Any Notice so given shall be deemed to have been given as of the date such Notice is received as shown on the return receipt or on the date such Notice is personally delivered to the other party.

3.7. Key Personnel. It is essential that the Contractor provide an adequate staff of experienced personnel capable of and devoted to the successful accomplishment of work to be performed under this Contract. The Contractor must assign specific individuals. Once key personnel are assigned to work under the Contract, the ASRS shall have the opportunity to review the qualifications and approve the assignment of additional or replacement key personnel.

3.8. Intellectual Property

3.8.1. Ownership of lntellectual Property. Any and all intellectual property, including but not limited to copyright, invention, trademark, trade name, service mark, or trade secrets created or conceived solely pursuant to or as a result of this Contract and any related subcontract (collectively, the "Intellectual Property"), shall be work made for hire and the ASRS shall be the owner of such Intellectual Property. The ASRS shall own (for and on behalf of the State) the entire right, title and interest to the Intellectual Property throughout the world.

Software and other Materials developed or otherwise obtained by or for Contractor or its affiliates independently of this Contract ("Independent Materials") do not constitute Intellectual Property. If Contractor creates derivative works of Independent Materials, then the elements of such derivative works created pursuant to this Contract shall constitute Intellectual Property owned by the ASRS. Contractor shall notify the ASRS, within thirty (30) days, of the creation of any Intellectual Property by it or its subcontractor(s).

Contractor, on behalf of itself and any subcontractor(s), agrees to execute any and all document(s) necessary to assure ownership of the Intellectual Property vests in the ASRS and shall take no affirmat ive actions that might have the effect of vesting all or part of the Intellectual Property in any entity other than the ASRS. The Intellectual Property shall not be disclosed by Contractor or its subcontractor(s) to any entity not the ASRS without the express written authorization of the ASRS.

Notwithstanding the foregoing, if the ASRS elects, in its sole and absolute discretion, to relinquish its ownership interest in any or all of the Intellectual Property, the ASRS shall have the rights to use, modify, reproduce, release, perform, display, sublicense or disclose such Intellectual Property within State government and operations without restriction for any activity in which the ASRS is a party (collectively, "Government Purpose Rights").

For the avoidance of doubt, any and all intellectual property, including but not limited to copyright, invention, trademark, trade name, service mark, or trade secrets created or conceived by Contractor prior to the effective date indicated in the “Acceptance of Offer” Contract shall be exclusively owned by Contractor (collectively, the "Contractor Intellectual Property"). The parties acknowledge and agree that Contractor shall retain all rights, title and interest in the Contractor Intellectual Property and that this Contract shall in no way assign Contractor Intellectual Property to ASRS.

3.8.2. Pre-Existing Material. All pre-existing software and other materials developed or otherwise obtained by or for Contractor or its affiliates independently of the Contract or applicable Purchase Orders are not part of the work product to which rights are granted State under subparagraph 3.9.1 above, and will remain the exclusive property of Contractor, provided that:

3.8.2.1. any derivative works of such pre-existing material or elements thereof that are created pursuant to the Contract are part of that work product;

3.8.2.2. any elements of derivative work of such pre-existing material that was not created pursuant to the Contract are not part of that work product; and

3.8.2.3. except as expressly stated otherwise, nothing in the Contract is to be construed to interfere or diminish Contractor’s or its affiliates’ ownership of such pre-existing materials.

Description: Investment Consulting Services: Private Equity

3.9. Warranty

Unless otherwise modified elsewhere in the terms and conditions, the Contractor warrants that, for one year after acceptance by the ASRS, the Materials shall be fully compatible with the ASRS's computer hardware and software environment. Contractor represents and warrants to the ASRS that Contractor has the skill and knowledge possessed by members of its trade or profession and Contractor will apply that skill and knowledge with care and diligence so Contactor and Contractor's employees and any authorized subcontractors shall perform the Services described in this Contract in accordance with the Statement of Work.

Contractor represents and warrants that Contractor has used commercially reasonable means to ensure that the Materials provided through this Contract and Scope of Work shall be free of viruses, backdoors, worms, spyware, malware and other malicious code that will hamper performance of the Materials, collect unlawful personally identifiable information on users or prevent the Materials from performing as required under the terms and conditions of this Contract.

3.10. ASRS Representations and Warranties

The State represents and warrants that (i) it has received a copy of Part 2 of CA’s Form ADV and authorizes electronic delivery of any Form ADV updates (ii) it is an “accredited investor” under Rule 501 of Regulation D of the Securities Act of 1933 (as amended, the “Securities Act”), and (iii) a “qualified client” under Rule 205-3 of the Advisers Act, and a “qualified purchaser” under Section 2(a)(51)(A) of the Investment Company Act of 1940 (as amended, the “Company Act”).

The State represents and warrants that either (a) it is registered with the Commodity Futures Trading Commission (the “CFTC” or the “Commission”) and its NFA identification number is indicated on the signature page hereto, or

(b) it is not required to register with the CFTC. The State acknowledges and agrees that the Contractor is relying on this representation to meet its obligations under NFA By-Law 1101, and agrees that it will promptly notify the Contractor of any changes to the State’s registration or registration exemption applicability.

3.11. Offers of Employment

The Contractor shall comply with A.R.S. § 41-2517, as it relates to a person, firm or lobbyist making an offer of employment to an employee having a significant procurement role, as defined in A.R.S. § 41-741 and A.R.S. § 41- 2503.

3.12. Performance in Public Health Emergency. The Contractor warrants that it will:

3.12.1. Have in effect promptly after commencement a plan for continuing performance in the event of a declared public health emergency that addresses, at a minimum: (a) identification of response personnel by name;

(b) key succession and performance responses in the event of sudden and significant decrease in workforce; and (c) alternative avenues to keep sufficient product on hand or in the supply chain; and

3.12.2. Provide a copy of its current plan to the ASRS within three (3) business days after the ASRS’s written request. If Contractor claims relief under paragraph 6.4 (Force Majeure) of the Uniform Terms and Conditions for an occurrence of force majeure that is a declared public health emergency, then that relief will be conditioned on Contractor having first implemented its plan and exhausted all reasonable opportunity for that plan implementation to overcome the effects of that occurrence, or mitigate those effects to the extent that overcoming entirely is not practicable.

For clarification of intent, being obliged to implement the plan is not of itself an occurrence of force majeure, and Contractor will not be entitled to any additional compensation or extension of time by virtue of having to implement it. Furthermore, failure to have or implement an appropriate plan will be a material breach of contract.

4. PRICING AND PAYMENTS

4.1. Price Adjustments

Description: Investment Consulting Services: Private Equity

4.1.1. The Contractor shall agree that the prices stated in the original Contract shall not be increased unless otherwise negotiated.

4.1.2. A price increase adjustment shall only be considered at the time of a contract extension and shall be a factor in the extension review process. The ASRS shall determine whether the requested price increase or an alternate option is in the best interest of the ASRS.

4.1.3. Price reduction may be offered at any time during the term of the Contract and shall become effective upon acceptance by the ASRS.

4.1.4. The Contractor understands and agrees the needs of the ASRS may change during the life of the Contract and the ASRS may propose changes to any part of this Contract with a commensurate, fair, and equitable adjustment in price. Any such changes shall be made in accordance with Article 5.1 (Amendments) of the Uniform Terms and Conditions of this Contract.

4.2. Billing

4.2.1. All billing notices should be identified by Contractor’s name, list the Contract number, and clearly identify the line item, if applicable. Billing notices or invoices must be submitted by email to: asrsap@azasrs.gov.

4.2.2. Without prejudice to its other rights under the Contract or further obligation to Contractor, the ASRS may, at its discretion, reject any material defective invoice if it is determined that the invoice is materially defective.

4.2.3. If ASRS determines that an over-payment has been made to Contractor on any prior invoice, ASRS may deduct the over-paid amount from amounts then or thereafter due to Contractor.

4.3. Travel. In accordance the Pricing Schedule, travel must be inclusive of all fee. ASRS will not reimburse travel expenses unless ASRS requests travel not related to services contemplated within the Contract. In the case of ASRS approved travel expense reimbursement, Contractor may be reimbursed travel expenses in accordance with the published rates specified in the State of Arizona Travel Policy, located at https://gao.az.gov/travel/welcome-gao-travel, and incorporated herein.

4.4. Discounts. Contractor will apply discounts in accordance with the Pricing Schedule or subsequent Contract Amendment. Payment discount periods shall be computed from the date of receipt of services or correct invoice, whichever is later, to the date the ASRS makes payment. Unless charges are itemized, any discount provided shall be taken on full amount of the invoice. The ASRS shall be entitled to take advantage of any payment discount offered by Contractor provided payment is made within the discount period.

5. CONTRACT CHANGES

5.1. Contract Amendments. The Contract may be modified only through a Contract Amendment within the scope of the Contract. Changes to the Contract, including the addition of Work or Materials, the revision of payment terms, or the substitution of Work or Materials, directed by a person who is not specifically authorized by the Procurement Officer in writing or made unilaterally by Contractor are violations of the Contract and of applicable law. Such changes, including unauthorized written Contract Amendments shall be void and without effect, and Contractor shall not be entitled to any claim under this Contract based on those changes.

5.1.1. Signing of Contract Amendments. Both ASRS and Contractor signatures are required to give effect to a Contract Amendment, except that Contractor’s countersignature – or “approval” in the Arizona Procurement Portal (APP) – is not required to give effect if the Contract Amendment only covers either:

5.1.1.1. extension of the term of the Contract within the maximum aggregate term; or

5.1.1.2. modifications of a clerical nature that have no effect on terms, conditions, price, scope, or other material aspect of the Contract.

https://gao.az.gov/travel/welcome-gao-travel

Description: Investment Consulting Services: Private Equity

5.2. Contract Assignment. Contractor may not assign, transfer or convey any of its rights or obligations under this Contract without the written permission of the ASRS.

6. CONTRACT TERMINATION

6.1. Termination for Default

6.1.1. The ASRS reserves the right to terminate the whole or any part of this Contract due to failure of Contractor to carry out any obligation, term, or condition of the Contract, subject to sections 6.2 and 6.3 below.

6.1.1.1. The ASRS will issue a written ten (10) day notice of default to the Contractor for acting or failing to act, including in doing the following:

6.1.1.2. The Contractor fails to adequately perform the services set forth in the Scope of Work of the Contract;

6.1.1.3. The Contractor fails to complete the work required within the time stipulated in the Contract;

6.1.1.4. The Contractor attempts to impose on the ASRS, personnel which are of an unacceptable quality;

6.1.1.5. The Contractor fails to make progress in the performance of the Contract and/or gives the ASRS reason to believe the Contractor will not or cannot perform to the requirements of the Contract.

6.1.2. If the Contractor does not correct the above problem(s) within ten (10) days after receiving the notice of default, the ASRS may terminate the Contract after thirty (30) business days from the date of the notice above. If the ASRS terminates the Contract pursuant to this clause, the ASRS reserves all rights or claims to damage for breach of contract.

6.1.3. The ASRS may recover reasonable excess costs from the Contractor by:

6.1.3.1. Deduction from an unpaid balance;

6.1.3.2. Collection against the offer and/or performance bond; or

6.1.3.3. Any combination of the above or any other remedies as provided by law.

6.2. Termination for Convenience. The Contract is for the convenience of the ASRS and as such may be terminated without default by the ASRS when in the best interest of the ASRS by providing a written ninety (90) day notice of termination to Contractor.

6.3. Performance of Contract Following Termination or Expiration

6.4. In the event the Contract expires or is terminated for any reason or cause, Contractor agrees to continue performance of its duties, if so requested by the ASRS, as though no expiration or termination had occurred for a period not to exceed six (6) months from the first day of the month following termination. Contractor shall reasonably cooperate with a replacement service contractor (“Replacement Contractor”) who assumes the Services under the Contract. In such event, Contractor shall continue to receive compensation set forth in the Contract unless modified by Contract Amendment to address unforeseen transition costs.

6.5. Data Relating to Contract

6.5.1. In the event of the expiration, termination or non-renewal of the Contract, Contractor, at its own expense, is obligated to return all data and records relating to the acquisition and performance of the Contract (“Data”) to the ASRS and to provide such Data to the Replacement Contractor in a format acceptable to the Replacement Contractor and that will ensure no loss of crucial data is incurred and no Services are interrupted.

Description: Investment Consulting Services: Private Equity

6.5.2. The ASRS does not expect the Contractor to release any proprietary or trade secret information to the Replacement Contractor.

7. RISK AND LIABILITY

7.1. Indemnification Clause

To the fullest extent permitted by law, Contractor shall defend, indemnify, and hold harmless the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees (hereinafter referred to as “Indemnitee”) from and against any and all claims, actions, liabilities, damages, losses, or reasonable expenses (including reasonable court costs, attorneys’ fees, and costs of claim processing, investigation and litigation) (hereinafter referred to as “Claims”) for bodily injury or personal injury (including death), or loss or damage to tangible or intangible property caused, or alleged to be caused, in whole or in part, by the negligent or willful acts or omissions of Contractor or any of its owners, officers, directors, agents, employees or subcontractors. This indemnity includes any claim or amount arising out of, or recovered under, the Workers’ Compensation Law or arising out of the failure of such Contractor to conform to any federal, state, or local law, statute, ordinance, rule, regulation, or court decree. It is the specific intention of the parties that the Indemnitee shall, in all instances, except for Claims arising solely from the negligent or willful acts or omissions of the Indemnitee, be indemnified by Contractor from and against any and all direct claims arising out of the performance of this Contract. It is agreed that Contractor will be responsible for reasonable primary loss investigation, defense, and judgment costs where this indemnification is applicable. In consideration of the award of this contract, the Contractor agrees to waive all rights of subrogation against the State of Arizona, its officers, officials, agents, and employees for losses arising from the work performed by the Contractor for the State of Arizona. This indemnity shall not apply if the contractor or sub-contractor(s) is/are an agency, board, commission or university of the State of Arizona.

7.2. Limitation of Liability

First Party Limitation of Liability

Contractor's liability for first party damages to the ASRS arising from this Contract shall be limited to two time(s) the maximum-not-to-exceed amount of this Contract.

7.3. Contractor Insurance

7.3.1. In the event of the expiration, termination or non-renewal of the Contract by either party, Contractor, at its own expense, is obligated to return all data and records relating to the acquisition and performance of the Contract (“Data”) to the ASRS and to provide such Data to the Replacement Contractor in a format acceptable to the Replacement Contractor and that will ensure no loss of crucial data is incurred and no Services are interrupted.

7.3.2. The Insurance Requirements herein are minimum requirements for this Contract and in no way limit the indemnity covenants contained in this Contract. The State of Arizona in no way warrants that the minimum limits contained herein are sufficient to protect the Contractor from liabilities that arise out of the performance of the work under this Contract by the Contractor, its agents, representatives, employees or subcontractors, and the Contractor is free to purchase additional insurance.

MINIMUM SCOPE AND LIMITS OF INSURANCE

Contractor shall provide coverage with limits of liability not less than those stated below.

1. Commercial General Liability (CGL) – Occurrence Form Policy shall include bodily injury, property damage, and broad from contractual liability coverage.

• General Aggregate $2,000,000

Description: Investment Consulting Services: Private Equity

• Products – Completed Operations Aggregate $1,000,000

• Personal and Advertising Injury $1,000,000

• Damage to Rented Premises $50,000

• Each Occurrence $1,000,000

a. The policy shall be endorsed, as required by this written agreement, to include the State of

Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by or on behalf of the Contractor.

b. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement , in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

2. Business Automobile Liability

Bodily Injury and Property Damage for any owned, hired, and/or non- owned automobiles used in the performance of this Contract.

• Combined Single Limit (CSL) $1,000,000

a. Policy shall be endorsed, as required by this written agreement, to include the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees as additional insureds with respect to liability arising out of the activities performed by, or on behalf of, the Contractor involving automobiles owned, hired and/or non-owned by the Contractor.

b. Policy shall contain a waiver of subrogation endorsement as required by this written agreement in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

3. Workers’ Compensation and Employers' Liability

• Workers' Compensation Statutory

• Employers' Liability

Each Accident $1,000,000 Disease – Each Employee $1,000,000 Disease – Policy Limit $1,000,000

a. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement , in favor of the State of Arizona, and its departments, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

b. This requirement shall not apply to each Contractor or subcontractor that is exempt under A.R.S.

§ 23-901, and when such Contractor or subcontractor executes the appropriate waiver form (Sole Proprietor or Independent Contractor).

4. Professional Liability (Errors and Omissions Liability)

• Each Claim $2,000,000

• Annual Aggregate $2,000,000

a. In the event that the Professional Liability insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained, or an extended discovery period will be exercised, for a period of two (2) years beginning at the time work under this Contract is completed.

b. The policy shall cover professional misconduct or negligent acts for those positions defined in the Scope of Work of this contract.

Description: Investment Consulting Services: Private Equity

5. Network Security (Cyber) and Privacy Liability

• Each Claim $2,000,000

• Annual Aggregate $2,000,000

a. Such insurance shall include, but not be limited to, coverage for third party claims and losses with respect to network risks (such as data breaches, unauthorized access or use, ID theft, theft of data) and invasion of privacy regardless of the type of media involved in the loss of private information, crisis management and identity theft response costs. This should also include breach notification costs, credit remediation and credit monitoring, defense and claims expenses, regulatory defense costs plus fines and penalties, cyber extortion, computer program and electronic data restoration expenses coverage (data asset protection), network business interruption, computer fraud coverage, and funds transfer loss.

b. In the event that the Network Security and Privacy Liability insurance required by this Contract is written on a claims-made basis, Contractor warrants that any retroactive date under the policy shall precede the effective date of this Contract and, either continuous coverage will be maintained, or an extended discovery period will be exercised for a period of two (2) years beginning at the time work under this Contract is completed.

c. Policy shall contain a waiver of subrogation endorsement, as required by this written agreement, in favor of the State of Arizona, and its department, agencies, boards, commissions, universities, officers, officials, agents, and employees for losses arising from work performed by or on behalf of the Contractor.

7.4. Additional Insurance Requirements

The policies shall include, or be endorsed to include, as required by this Contract, the following provisions:

7.4.1. The Contractor's policies, as applicable, shall stipulate that the insurance afforded the Contractor shall be primary and that any insurance carried by the ASRS, its agents, officials, employees or the State of Arizona shall be excess and not contributory insurance, as provided by A.R.S. § 41-621 (E).

7.4.2. Insurance provided by the Contractor shall not limit the Contractor’s liability assumed under the indemnification provisions of this Contract.

7.5. Notice of Cancellation

Applicable to all insurance policies required within the Insurance Requirements of this Contract, Contractor’s insurance shall not be permitted to expire, be suspended, be canceled, or be materially changed for any reason without thirty (30) days prior written notice to the ASRS. Within two (2) business days of receipt, Contractor must provide notice to the ASRS if they receive notice of a policy that has been or will be suspended, canceled, materially changed for any reason, has expired, or will be expiring.

Such notice shall be sent directly to the ASRS and shall be emailed to ASRSProcurement@azasrs.gov. .

7.6. Acceptability of Insurers

Contractor’s insurance shall be placed with companies licensed in the State of Arizona or hold approved non-admitted status on the Arizona Department of Insurance List of Qualified Unauthorized Insurers .

Insurers shall have an “A.M. Best” rating of not less than A- VII. The ASRS in no way warrants that the above-required minimum insurer rating is sufficient to protect the Contractor from potential insurer insolvency.

7.7. Verification of Coverage

Contractor shall furnish the ASRS with certificates of insurance (valid ACORD form or equivalent) evidencing that Contractor has the insurance as required by this Contract. An authorized representat ive of the insurer shall sign the certificates.

Description: Investment Consulting Services: Private Equity

7.7.1. All such certificates of insurance and policy endorsements must be received by the ASRS before work commences. The ASRS’s receipt of any certificates of insurance or policy endorsements that do not comply with this written agreement shall not waive or otherwise affect the requirements of this Contract.

7.7.2. Each insurance policy required by this Contract must be in effect at, or prior to, commencement of work under this Contract. Failure to maintain the insurance policies as required by this Contract, or to provide evidence of renewal, is a material breach of contract.

7.7.3. All certificates required by this Contract shall be sent directly to the ASRS by email to ASRSProcurement@azasrs.gov. The ASRS Contract number and project description should be noted on the certificate of insurance. The State of Arizona reserves the right to require complete copies of all insurance policies required by this Contract at any time.

7.8. Subcontractors

Contractor’s certificate(s) shall include all subcontractors as insureds under its policies or Contractor shall be responsible for ensuring and/or verifying that all subcontractors have valid and collectable insurance as evidenced by the certificates of insurance and endorsements for each subcontractor. All coverages for subcontractors shall be subject to the minimum Insurance Requirements identified above. The ASRS reserves the right to require, at any time throughout the life of this contract, proof from the Contractor that its subcontractors have the required coverage.

7.9. Approval and Modifications

The ASRS, in consultation with ADOA-Risk Management Division, reserves the right to review or make modifications to the insurance limits, required coverages, or endorsements throughout the life of this contract, as deemed necessary. Such action will not require a formal Contract amendment but may be made by administrative action.

8. INFORMATION SECURITY AND DATA PRIVACY

8.1. Applicability. Article 8 applies to the extent the Work includes handling of any (1) ASRS proprietary and sensitive data or (2) confidential or access-restricted information obtained from the ASRS or from others at ASRS’s behest.

8.2. Definitions. For the purposes of this Article:

8.2.1. “Confidential Information” (CI) means any and all information disclosed by the State or Contractor or obtained by the State or Contractor (including but not limited to any information relating to the existence and terms of this Contract) in connection with the Contract (whether before, on or after the date of this Contract, whether verbally, in writing, electronically or by any other means, whether directly or indirectly and whether or not marked "Confidential").

8.2.2. “Incident” means an act of violating an explicit or implied security or privacy policy.