Kutak_Rock_Response.pdf

REQUEST FOR

BEST AND FINAL OFFER ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

ASRS Investment Legal Consulting Services

Solicitation Code: BPM004386

Page of

4874-6530-4109.1

August 2, 2022

Pursuant to A.A.C. R2-7-C315, the Arizona State Retirement System (ASRS) hereby requests a Best and Final Offer from your company. This represents an opportunity to officially amend your original Offer with changes that would make the Offer more competitive.

1. Using Attachment A: Offer and Acceptance included in this document, indicate which services you are offering, sign and resubmit.

2. Using Attachment B: Exceptions included in this document, indicate the negotiated exceptions that will replace the language in the original Solicitation documents. ASRS requests Offeror submit only those exceptions that ASRS has indicated it can agree to consider as part of negotiation discussions.

Submissions of exceptions not agreed upon during negotiation discussions may impact evaluation of the Offer.

3. Using Attachment C: Pricing Schedule included in this document, present your company’s best and final pricing for any and all items.

4. As a follow up to the ASRS Determination on Confidential Information, when uploading your Offer documents ensure the confidential box is checked for any documents that were determined to be confidential; ensure that the confidential box is not checked for any documents that were determined not to be confidential.

5. In APP, on the Items (F) tab, a Unit price of $1.00 must be entered and saved.

6. If you wish to make any revisions to your original Offer, include the changes in your response to this request. In order to make any such changes, in the Suppliers Documents section, remove the original attachment(s) that require changes, and then add the new, revised attachment.

Your response to this request will supersede any previous Offers or discussions. If you do not respond to an item, your original Offer will be considered your final Offer.

All Offerors must select one of the following:

Offeror is not submitting any revisions. Offeror understands that the original response will be considered the final Offer.

Offeror is submitting the following revised attachment(s), in its entirety, with this form as part of the Best and Final Offer. (List all documents, identifying the revised sections, below)

Kutak Rock LLP Company Name Signature of Person Authorized to Sign

8/3/2022 Marc R. Lieberman Date Printed Name

REQUEST FOR

BEST AND FINAL OFFER ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

ASRS Investment Legal Consulting Services

Solicitation Code: BPM004386

Page

This document must be completed and submitted, along with any other Best and Final Offer documents, in APP.

In order to ensure your Best and Final Offer will be considered, it must be submitted in the APP system no later than 12:00 P.M. (MST), August 5, 2022 unless otherwise subsequently communicated by ASRS in the APP Discussion Forum. After a final Offer is received, it is extremely difficult to change it; therefore, if you need clarification on any item, please do not hesitate to send a message through the APP Discussions with Buyer tab before submitting the Offer.

**IMPORTANT NOTES AND REMINDERS REGARDING SUBMISSION IN APP

All Attachments should be uploaded in the APP system via the Your Offer Infos & Docs tab by going to the Supplier Documents section and selecting “Add Document”. Always select document type “Supplier Technical Document.”

Items that are not confidential should be uploaded and the “Confidential” box should not be checked.

On the Items (F) tab, a Unit price of $1.00 must be entered and saved.

Online tutorials and quick reference guides for using APP are accessible from the APP website at https://spo.az.gov/suppliers/app-support/quick-reference-guides , including links to “Submitting a Best and Final Offer”. For technical questions regarding the system, the APP helpdesk staff is available to assist by telephone at 602-542-7600 or by email at app@azdoa.gov. Due to a fluctuating volume of calls and emails, allow at least 24 hours to receive a response.

https://spo.az.gov/suppliers/app-support/quick-reference-guides

BEST AND FINAL OFFER

ATTACHMENT A: Offer and Acceptance ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

ASRS Investment Legal Consulting Services

Solicitation Code: BPM004386

Page

CERTIFICATION: By signature in the section above, the Offeror certifies it:

1. Will not discriminate against any employee or applicant for employment in violation of Federal Executive Order 11246, [Arizona] State Executive Order 2009-9 or A.R.S. §§ 41−1461 through 1465.

2. Has not given, offered to give, nor intends to give at any time hereafter any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant in connection with the submitted Offer. Failure to provide a valid signature affirming the stipulations required by this clause shall result in rejection of the Offer. Signing the Offer with a false statement shall void the Offer, any resulting contract and may be subject to legal remedies provided by law.

3. Is not debarred by, or otherwise prohibited from participating in any publically-funded contract awarded by any Federal, State or local jurisdiction.

4. Is lawfully authorized to conduct business in Arizona or has no impediments to conduct business in Arizona.

5. Does not participate in, and agrees not to participate in during the term of the Contract, a boycott of goods or services from the state of Israel in accordance with A.R.S. §35-393 and §35-393.01. This certification does not include boycotts prohibited by 50 United States Code Section 4842 or a regulation issued pursuant to that section in accordance with A.R.S. §35-393.03.

TO THE ARIZONA STATE RETIREMENT SYSTEM (ASRS): The Undersigned hereby offers and agrees to provide investment legal consulting services in compliance with the Scope of Work, Special and Uniform Terms and Conditions, Instructions to Offerors, Attachments (Response Forms), Solicitation or Contract Amendments, and Offeror’s Best and Final Offer as accepted by ASRS, as part of the Solicitation.

The Offer and Acceptance form within the Solicitation shall be submitted with the Offer in the State’s eProcurement system and shall include a signature by a person authorized to sign the Offer. The signature shall signify the Offeror’s intent to be bound by the Offer and the terms of the Solicitation and that the information provided is true, accurate and complete. Failure to submit verifiable evidence of an intent to be bound, such as a signature, shall result in rejection of the Offer.

Kutak Rock LLP

Company Name Signature of Person Authorized to Sign Offer

8601 North Scottsdale Road, Suite 300

Marc R. Lieberman, Partner

Address Printed Name and Title

Scottsdale AZ 85253-2738

Marc R. Lieberman, Partner

City State Zip Contact Name and Title

47-0597598

480.429.7103, marc.lieberman@kutakrock.com

Federal tax identifier (EIN or SSN) Contact Phone and Email Address

ATTACHMENT A: Offer and Acceptance ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

ASRS Investment Legal Consulting Services

Solicitation Code: BPM004386

Page

ACCEPTANCE OF OFFER BY ASRS: The Offer is hereby accepted. The Offeror is now bound (as Contractor) to carry out the Work outlined in the Contract and based upon the Solicitation.

Contract No. ________________________________________________________________________

The effective date of the Contract is ____________________________________________________

Awarded this _______ day of __________ 20 ______________

ASRS Signature

ASRS Name

ASRS Title

Note: The Contractor is cautioned not to commence any billable work or to provide any service under this Contract until Contractor receives a purchase order, contract release document or written notice to proceed.

ATTACHMENT B: Exceptions ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

ASRS Investment Legal Consulting Services

Solicitation Code: BPM004386

Page

Indicate below any exceptions taken to the requirements or terms contained in this Solicitation. Provide both an explanation for the exception and Offeror’s recommended alternative language.

Certain exceptions may have a negative impact on the evaluation of the Offeror’s proposal. As indicated in the Instructions to Offerors, Section 6.4 (Consideration of Exceptions) “. . . if an Offer is conditioned on exceptions to the Scope of Work and Terms and Conditions, the Offer may be determined to be not susceptible for award and rejected . . .”

Please indicate as appropriate:

☐ TAKES NO EXCEPTIONS

☒ TAKES EXCEPTIONS TO THE FOLLOWING:

Identify the section of the Scope of Work or the Special or Uniform Terms and Conditions of the Solicitation, and any Attachments. Identify the clause name and number (where applicable), provide the reason for the exception, and propose requested alternative language by restating and redlining the clause. Copy and paste a new row for each new exception.

Section /

Paragraph or Exhibit Reference

Solicitation Language (Copy and Paste from Solicitation) Proposed Changes / Alternate Language

Special Terms & Conditions: 7.6

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.

Applicable to all insurance policies, except lawyers’ Professional Liability, 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. Contractor will inform the ASRS as soon as is reasonably possible of expiration, suspension, cancelation, or material change to lawyers’ Professional Liability policy. 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.

The firm cannot provide that its professional liability policy will include a term that will permit 30 days written notice to the client prior to any suspension, cancellation or change. We will inform ASRS as soon as is reasonably possible about any cancellation or material change to our lawyer’s professional liability policy.

Enter Solicitation Section.

Paste language here.

Enter redline.

mailto:ASRSProcurement@azasrs.gov

ATTACHMENT B: Exceptions ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

ASRS Investment Legal Consulting Services

Solicitation Code: BPM004386

Page

Explanation

Enter Solicitation Section.

Paste language here.

Enter redline.

Explanation

ATTACHMENT C: Pricing Schedule ARIZONA STATE

RETIREMENT SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

Page

The ASRS reserves the right to select the pricing method that is most advantageous to the ASRS based on the prices submitted below.

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. Failure to do this may prevent the Offer from being awarded by the ASRS through APP.

1. Hourly Fees*

State pricing below for the services described in the Scope of Work. Pricing should be provided as an hourly billable 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.

Example:

RATE/POSITION/TITLE

MAX HOURLY

RATE

YEAR 1

GUARANTEE

3 YR

GUARANTEE

MAX HOURLY

RATE

5 YR

GUARANTEE

Partner $400 $400 $425

Associate $300 $300 $300

Legal Secretary $150 $150 $150

Investment Legal Consulting Fees:

RATE/POSITION/TITLE

YEAR 1

GUARANTEE

3 YR

GUARANTEE

MAX HOURLY

RATE

5 YR

GUARANTEE

Partner $450 $475 $500

Associate $350 $375 $400

Legal Secretary $150 $150 $150

*The ASRS will reimburse reasonable and allowable incidental costs (i.e. duplication/photocopy services, messenger fees) at cost. Offeror must identify all such costs separately on all invoices. Travel expenses will be reimbursed at actual amounts and according to State of Arizona travel policy. Additionally, all such travel must be approved in advance by the ASRS to be considered for reimbursement.

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

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2. Optional/Alternative Pricing

Offeror may propose alternative pricing structures, including multi-year pricing, blended hourly rates, and alternative fee arrangements, provided it has submitted pricing information under item 1 above. Offeror has full discretion in what it may propose, however, the ASRS is under no obligation to accept such proposals.

Kutak Rock offers alternative fee arrangements (“AFAs”) for transactional work to several clients. We have implemented various fixed-fee structures with some clients, including fixed fees for significant volumes of similar legal services and fixed fees on a transaction basis, all of which resulted from an analysis of the circumstances and the expectations of the participants in the transactions and are subject to change if the scope of work changes substantially.

The Institutional Investments Group offers alternative fees on a project-by-project basis. Once we become aware of the scope of work applicable to an engagement with ASRS, Kutak Rock would be willing to explore AFAs with ASRS to find an arrangement that is satisfactory to both parties. We are also willing to work on a fixed fee or capped fee basis, which is how we normally bill for our services relating to investment matters. If ASRS were to elect this alternative fee structure, the firm’s hourly rates for investment-related services would be capped as follows:

Domestic PE/Hedge/Real Estate Funds. The firm shall charge no more than $21,000 (exclusive of any authorized costs) for each transaction with a U.S.-domiciled private equity, hedge, commingled real estate fund in which the fund is not otherwise serving as a feeder, blocker or alternative investment vehicle to an internationally domiciled master fund.

International PE/Hedge/Real Estate Funds. The firm shall charge no more than $24,000 (exclusive of any authorized costs) for any private equity, hedge, commingled real estate fund transaction where the fund in which ASRS is investing serves as a feeder, blocker or alternative investment vehicle to an internationally domiciled master fund.

Scope of Services. For all private equity, hedge and commingled real estate fund transactions, except as otherwise agreed upon by the parties, the services will include:

1. Reviewing all fund documents

2. Reviewing all memoranda from ASRS’s investment consultant(s) regarding the proposed investment

3. Preparing an investment summary highlighting the key terms as set forth in the fund documents

4. Conferring as often as needed with staff and investment consultant(s)

5. Reviewing ASRS’s investment guidelines for compliance

6. Providing an initial draft of the side letter, seeking to bind the proposed investment manager/general partner to

ASRS’s investment standards

7. Completing all subscription documents

8. Negotiating the final terms of the side letter with the proposed investment manager and/or general partner and its outside counsel

9. Preparing officer authorizations

10. Preparing legal compliance letters

11. Reviewing and approving all fund legal opinions

12. Reviewing and approving all manager investigations

Occasionally, the outcome of negotiations and investigations described in items 8 and 12 above may prove difficult to conclude successfully for reasons not within our control. Therefore, if it is anticipated that the agreed-upon fee cap will be exceeded, ASRS will be advised of such circumstances in advance before additional work is incurred and can authorize further work. Should ASRS find such circumstances warrant exceeding the fee cap, our final billing would include the specific details with respect to the time incurred compared to this initial estimate, with an explanation for the additional time.

Direct Real Estate Matters. The fees and costs for real estate investments (including closely held joint ventures) are not predictable. The firm will work with ASRS to determine an appropriate estimate for our fees for particular real estate transactions as each arises or, if no such estimate is made, the firm will charge its hourly rates as listed above.

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

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IMAs. All investment management and separate account agreements shall be billed at the above hourly rates. ASRS and the firm shall prepare an initial budget for each such transaction at the outset of the engagement and attempt to stay within that budget unless an increase in the budget is warranted by unforeseen events, such as the need for separate counterparty or other third-party agreements or unusual circumstances, such as transactions in Luxembourg and other nonstandard transactions. Any increase would be sought in advance.

Post-Closing Work. All follow-up work for a completed transaction (e.g., MFN election compliance, amendment review, capital call approvals or litigation) shall be billed at the above hourly rates. The fees described above shall be the sole compensation for the provision of professional or other of the services performed by Kutak Rock personnel, including paralegal and clerical support as may be necessary to perform the services in a professional manner.

Co-investments. In circumstances where ASRS requests that we negotiate a form of limited partnership agreement to control both the underlying investment in a commingled fund and a separate co-investment vehicle in which ASRS alone will participate with the General Partner or its affiliates in one or more co-investments, our total fee for negotiating both the underlying investment and creation of the co-investment vehicle will be our usual capped fee for the underlying vehicle plus half that fee for creating the co-investment vehicle.

The Caps for specified services will increase by 5% upon year 3 of the contract and an additional 5% by year 5 of the contract.

3. Additional Expenses (If Any)

Offeror shall include any other additional costs not previously identified above. Only reasonable and allowable costs identified on this pricing schedule will be considered for payment.

We would seek reimbursement from ASRS for reasonable and allowable incidental costs (e.g., duplication/photocopy services, messenger fees) at cost. We would request reimbursement for travel expenses at actual amounts and according to the State of Arizona travel policy. All travel would be approved in advance by ASRS to be considered for reimbursement.

4. Payment Discount Options Provide any applicable discount percentages:

If payment is made within 30 calendar days after acceptance of services, the above quoted price, shall be discounted by 3% .

ATTACHMENT D: Confidential Information Designation

ARIZONA STATE

RETIREMENT

SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

Page

4861-6377-2191.2

All materials submitted as part of a response to a Solicitation are subject to Arizona Public Records Law and will be disclosed if there is an appropriate public records request at the time of or after the award of the Contract. Recognizing there may be materials included in a Solicitation response that are proprietary or a trade secret, a process is set out in A.A.C. R2-7-103 (attached) that will allow qualifying materials to be designated as confidential and excluded from disclosure. For purposes of this process the definition of “trade secret” will be the same as that set out in A.A.C. R2-7-101(50).

This form must be completed and returned with your Offer along with supporting information to assist the ASRS in making its determination as to whether any of the materials submitted as part of your Offer should be designated confidential because the material is proprietary or a trade secret and therefore not subject to disclosure.

THE ASRS WILL NOT CONSIDER ANY MATERIAL IN YOUR OFFER “CONFIDENTIAL” UNLESS DESIGNATED ON THIS FORM.

Select one of the following – if neither is checked the ASRS will assume that as equivalent to “does not”:

☒ My response DOES NOT contain proprietary or trade secret information. I understand that my entire response will become public record in accordance with A.A.C. R2-7-C317.

☐ My response does contain trade secret information because it contains information that:

1. Is a formula, pattern, compilation, program, device, method, technique or process; AND

2. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; AND

3. Is the subject of efforts by myself or my organization that are reasonable under the circumstances to maintain its secrecy.

List and provide an explanation for all parts of Offeror’s response that are separately marked as “Confidential.”

Click here to enter list of confidential items

Follow Instructions to Offerors, Section 4.1.4 (Offeror Confidential Information) to ensure items are correctly separated, attached, and marked in the Arizona Procurement Portal (APP) as part of Offeror’s response.

Please note that failure to include an explanation may result in a determination that the information does not meet the statutory trade secret definition. All information that does not meet the definition of trade secret as defined by A.A.C. R2-7-101(50) will become public in accordance with A.A.C. R2-7-C317. The State reserves the right to make its own determination of Offeror’s trade secret materials through a written determination in accordance with A.A.C.

R2-7-103.

ATTACHMENT D: Confidential Information Designation

ARIZONA STATE

RETIREMENT

SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

Page

If the ASRS and State of Arizona agree with the Offeror’s designation of trade secret or confidentiality and the determination is challenged, the undersigned hereby agrees to cooperate and support the defense of the determination with all interested parties, including legal counsel or other necessary assistance.

By submitting this response, Offeror agrees that the entire Offer, including confidential, trade secret and proprietary information may be shared with an evaluation committee and technical advisors during the evaluation process. Offeror agrees to indemnify and hold the State, its agents and employees, harmless from any claims or causes of action relating to the State’s withholding of information based upon reliance on the above representations, including the payment of all costs and attorney fees incurred by the State in defending such an action.

Kutak Rock LLP

Company Name Signature of Person Authorized to Sign

8601 North Scottsdale Road, Suite 300 Marc R. Lieberman

Address Printed Name

Scottsdale AZ 85253-2792 Partner

City State Zip Title

R2-7-103. Confidential Information A. If a person wants to assert that a person’s offer, specification, or protest contains a trade secret or other proprietary information, a person shall include with the submission a statement supporting this assertion. A person shall clearly designate any trade secret and other proprietary information, using the term “confidential”. Contract terms and conditions, pricing, and information generally available to the public are not considered confidential information under this Section.

B. Until a final determination is made under subsection (C), an agency chief procurement officer shall not disclose information designated as confidential under subsection (A) except to those individuals deemed by an agency chief procurement officer to have a legitimate state interest.

C. Upon receipt of a submission, an agency chief procurement officer shall make one of the following written determinations:

1. The designated information is confidential and the agency chief procurement officer shall not disclose the information except to those individuals deemed by the agency chief procurement officer to have a legitimate state interest;

2. The designated information is not confidential; or

3. Additional information is required before a final confidentiality determination can be made.

D. If an agency chief procurement officer determines that information submitted is not confidential, a person who made the submission shall be notified in writing. The notice shall include a time period for requesting a review of the determination by the state procurement administrator.

E. An agency chief procurement officer may release information designated as confidential under subsection (A) if:

1. A request for review is not received by the state procurement administrator within the time period specified in the notice; or

2. The state procurement administrator, after review, makes a written determination that the designated information is not confidential.

R2-7-101. Definitions “Trade secret” means information, including a formula, pattern, device, compilation, program, method, technique, or process, that is the subject of reasonable efforts to maintain its secrecy and that derives independent economic value, actual or potential, as a result of not being generally known to and not being readily ascertainable by legal means.

R2-7-C317. Contract Award A. An agency chief procurement officer shall award the contract to the responsible offeror whose offer is determined to be most advantageous to the state based on the evaluation factors set forth in the solicitation. The agency chief procurement officer shall make a written determination explaining the basis for the award and place it in the procurement file.

B. The agency chief procurement officer shall notify all offerors of an award.

C. After contract award, the agency chief procurement officer shall return any offer security provided by the offeror.

D. Within 3 days after contract award the agency chief procurement officer shall make the procurement file, including all offers, available for public inspection, redacting information that is confidential under R2-7-103.

ATTACHMENT E: Questionnaire ARIZONA STATE

RETIREMENT

SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

Page

All Offerors, including any incumbent or previous service providers, must complete the Questionnaire and provide detailed responses, without assuming the ASRS is familiar with or will accept Offeror’s experience, approach, systems, or methodologies.

This Questionnaire is designed to assist the ASRS in gaining an understanding of the firm’s qualifications for consideration for this engagement. It is important to provide accurate, complete, and thorough information as requested. The ASRS may award contracts for all or any portion of the work for which an Offeror has provided a response.

Requested Supplemental documents that cannot be included or embedded within this Questionnaire itself should be clearly labeled and included as a single separate attachment entitled “Supplemental Information-Document Title.” If Offeror believes any information is confidential in its response to this Questionnaire, include that section of your response in a separate attachment entitled “Confidential Responses” and mark as “Confidential” as indicated in Sections 4 of the Instructions to Offerors.

Minimum Requirements

1. Does your company meet each minimum qualification and requirement listed in the Instructions to Offerors, Section

5.3 (Eligibility for Evaluation and Discussions)? If no, please indicate which one of requirements you do not meet and an explanation as to why.

Yes, Kutak Rock meets each of the minimum requirements. Marc Lieberman, the proposed lead attorney, has 35 years of experience representing and working on behalf of government retirement systems and/or other institutional investors in preparing, reviewing and negotiating investment-related contracts.

Three references are provided of clients with comparable-sized investment requirements in Attachment G. Our references display the necessary expertise and experience to provide investment services to the ASRS which far surpasses the minimum requirements.

2. As listed in the Instructions to Offerors Section 5.1 (Responsibility, Responsiveness and Acceptability), Please answer the following:

2.1. Has your company had a contract within the last five (5) years that was terminated for cause due to breach or similar failure to comply with the terms of the Contract?

To the best of the knowledge of Kutak Rock, the firm has not had a contract terminated for cause due to breach or similar failure to comply with the terms of the contract.

2.2. Has your company had a record of performance that includes factual evidence of failure to satisfy the terms of agreements with any party to a contract? Factual evidence may consist of documented vendor performance reports, customer complaints and/or negative references.

To the best of the knowledge of Kutak Rock, the firm has no record of performance that includes factual evidence of failure to satisfy the terms of agreements with any party to a contract.

2.3. Is your company legally qualified to contract with ASRS and financial, business, personnel, or other resources, including subcontractors? Legally qualified includes if the vendor or if key personnel have been debarred, suspended or otherwise lawfully prohibited from participating in any public procurement activity, including but not limited to, being disapproved as a subcontractor of any public procurement unit or other governmental body.

Kutak Rock is legally qualified to contract with the ASRS and financial, business, personnel, or other resources, including subcontractors. Neither Kutak Rock nor its members have been debarred, suspended or otherwise lawfully prohibited from participating in any public procurement activities. Our attorneys are licensed to practice in their respective jurisdictions of residence, including five who are members of the Arizona bar.

3. Executive Summary

Provide an executive summary, not to exceed two (2) pages, that outlines the firm’s competitive advantage in providing investment legal services to the ASRS and how the firm specifically meets the minimum requirements set forth below

SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

Page and in the Special Instructions to Offerors, Section 5.3 (Eligibility for Evaluation and Discussion). See Instructions to Offerors, Sections 3.8 (Supplement Documents) and Section 4 (Submission of Offer) for instructions on uploading attachments to APP.

1. The lead attorney that Offeror assigns to the Contract will have a minimum of ten (10) years of experience representing and working on behalf of plan sponsors and/or other institutional investors, in preparing, reviewing and negotiating investment related contracts.

2. Offeror shall have comparable historical experience with references for at least three (3) clients of a comparable size and investment requirements. References are to be verifiable and the companies/entities listed as a reference should be able to comment on Offeror’s related experience and past performance.

References should be provided on Attachment G: References.

Kutak Rock is pleased to submit a proposal to provide Investment Legal Consulting Services to the ASRS. We appreciate the opportunity to be considered for the appointment.

We are a national law firm with more than 550 lawyers in 19 offices nationwide, serving local, regional and national clients in a multidisciplinary practice. Founded in 1965, the firm provides exemplary client service by being proactive and responsive, creatively solving problems and emphasizing a collaborative approach to ensure our national resources deliver successful, value-maximizing solutions for each of our clients.

One of our firm’s principal areas of concentration is representing government retirement systems in connection with their privately negotiated investments, including private equity, hedge, real estate, derivative, investment management, joint venture and venture capital transactions. In the past five years alone, the firm has negotiated more than $10 billion of such investments for government retirement systems. We regularly document $150 million to $350 million of such transactions monthly, for plans as diverse as the Arizona Public Safety Personnel Retirement System, the Texas Municipal Retirement System, the Navajo Nation Pension Systems, the Arkansas Teachers Retirement Plan, the Indiana Public Retirement System, MassPRIM, and the Los Angeles City Employees’ Retirement System, among many others.

We are a recognized leader in representing institutional investors, especially in alternative investments. As a result, Kutak Rock was one of the few firms selected to help the Institutional Limited Partners Association (“ILPA”) craft its standard templates for domestic and international limited partnership agreements, which were published in 2019 (linked here).

The firm’s Institutional Investments practice is bolstered by our work as outside general counsel to a number of institutional investors, which allows us to support more deeply our negotiation of our clients’ investments. We recognize the new challenges faced by our institutional investor clients. Over the past few years, several of our clients have been confronting issues that were not foreseen a decade ago, including increased scrutiny with respect to underfunded liabilities, management fees and valuation issues, along with the demand to do more with fewer dollars. Many plan administrators feel they are under a microscope and that every decision made by staff is subject to second-guessing by the news media and the public. We recognize the environment in which plans operate and pay attention to instances in which adverse publicity could cause significant issues. We attempt to be a part of the solution, not the problem.

When asked about their experience with our group of institutional investments lawyers, our clients sing our praises, as in this comment from a longtime client:

“When I have the most complex and most difficult assignment related to investment due diligence, I always use Kutak Rock. I have always found the work product of KR to be stellar. I am always fully informed and know all that I need to know by the KR interaction at all critical stages. KR is always timely and professional. KR is an outstanding firm that is always ready to meet whatever challenge a new legal assignment requires. I am an attorney myself and remain impressed as both the executive director of ATRS and as an attorney by the quality of KR’s work.”

—George Hopkins, Immediate Past Executive Director, Arkansas Teacher Retirement System

As discussed in the “Minimum Requirements” section above, Kutak Rock meets each of the qualifying requirements of the RFP. Marc Lieberman, the proposed lead attorney, is a Board Certified Real Estate Specialist (State Bar of Arizona) and has 35 https://ilpa.org/model-lpa/

SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

Page years of experience representing and working on behalf of government retirement systems and/or other institutional investors in preparing, reviewing and negotiating investment-related contracts. Three references are provided of clients with comparable-sized investment requirements in Attachment G.

Kutak Rock is pleased to have this opportunity to respond to your RFP and would welcome the occasion to further explore the specifics of our proposal. If you have any questions about our proposal or about the firm, please contact Marc at

480.429.7103 or marc.lieberman@kutakrock.com.

4. Other Agreements or Terms Offeror must include as an attachment any and all agreements, such as engagement letters, that Offeror will require be completed and/or signed by the ASRS prior to performance of services. Submittal of terms and conditions or agreements previously approved and accepted by another government entity if available, is preferred. See Instructions to Offerors, Sections 3.8 (Supplement Documents) and Section 4 (Submission of Offer) for instructions on uploading attachments to APP.

Experience, Qualifications, and Reliability

1. Give a brief history of your firm, including the year the firm began providing investment related legal services. Give specific details with regard to the nature of services provided, highlighting specific experience with investment related legal services for public pension plans.

Brief History of the Firm

Founded as a three-lawyer practice in 1965, the firm today has more than 550 lawyers (supported by 400+ staff members) who practice in 19 offices from coast to coast. Kutak Rock maintains expertise in the areas of pension plans and employee benefits, institutional investments, public finance, general corporate law, corporate finance, litigation, real estate, labor and employment law, insurance, healthcare law, securitization, tax, tax credits, banking, intellectual property, technology law, bankruptcy, antitrust, environmental law, international trade and government relations, serving clients at local, regional and national levels.

The Public Pension/Institutional Investments Group was formed in 2006 and originated in the firm’s Scottsdale office. The Group consists of lawyers located primarily in Scottsdale, but draws on the expertise of lawyers resident in several other offices of Kutak Rock. The Group is headed by Marc Lieberman, who is recognized as an expert in real estate and private equity law by Super Lawyers® and The Best Lawyers in America©.

We advise governmental pension funds and public and private employers on a wide variety of issues related to the design, preparation, communication, administration and operation of all forms of employee benefit plans and executive compensation programs, as well as the compliance of such plans with applicable ERISA, tax and securities laws. We currently represent over 35 government retirement systems.

Marc, the lead attorney for this engagement, is a Board Certified Real Estate Specialist (State Bar of Arizona) and is regularly rated as one of the top real estate, securities and alternative investment attorneys in Arizona. Marc regularly speaks and publishes on fiduciary and investment-related issues and is a regular contributor to the NAPPA Report and Law360.

2. Describe in detail your firm’s experience working with public sector defined benefit retirement plans. Also describe your firm’s knowledge of and experience with Arizona state law in general, and specifically the Arizona Revised Statutes, Title 38, Chapter 5, Article 2.

Kutak Rock has exhaustive experience representing qualified plans in general, and defined benefit public pension plans in particular, in virtually all of their investment transactions. For more than 35 years, Marc Lieberman, Chair of the firm’s Institutional Investment Group, has served as outside investment counsel for the PSPRS, EORP and CORP. Kutak Rock’s Institutional Investment Group has been responsible for documenting most of the investments, as well as the investment policies, of these systems. The firm has also represented the City of Phoenix Employees’ Retirement System and represented several Arizona cities in connection with their supplemental benefit plans. Kutak Rock’s Institutional Investment Group also regularly documents alternative investments for government plans in Massachusetts, Nebraska, Indiana, Illinois, Colorado, Arkansas, Texas, and California.

mailto:marc.lieberman@kutakrock.com

SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

Page

Our work for various Arizona plans has included (i) documenting the creation of the Arizona PSPRS Trust and transfer of more than $6 billion in assets of three discrete systems into that Trust, and (ii) the creation of all templates used to facilitate plan investments, in whatever form. We also prepared all of the documents required to qualify the PSPRS and its associated plans under the Internal Revenue Code; the firm has an entire department devoted to addressing the unique tax and compliance concerns of public plans. The firm is well-versed in which portions of ERISA and the Internal Revenue Code apply (or often do not apply) to governmental defined benefit public pension systems, and the firm has issued numerous opinions to its public system clients on such issues. We are unaware of any law firm in the State of Arizona which matches our expertise representing government retirement systems in connection with their alternative investment transactions.

Marc Lieberman has read the ASRS enabling legislation in its entirety, and the investment provisions set forth in A.R.S. §§ 38- 718 to -719 particularly closely. He has interpreted many ASRS provisions for his other governmental clients, and Kutak Rock has assisted some of his clients to adapt portions of the ASRS enabling legislation (in particular, A.R.S. § 38-718). Further, the ASRS has adopted some investment provisions, in particular A.R.S. § 38-718(H), adapted from legislation originally drafted by Mr. Lieberman and now found in A.R.S. § 38-848(U).

3. Provide specific information with regard to your firm’s understanding, knowledge of, and experience in the specific areas of expertise solicited, as described in the Scope of Work.

Statement of Understanding

Our understanding of this engagement is that the ASRS intends to make a number of highly diversified global, private and public real estate debt and equity investments, whether through commingled funds, funds of funds or separate accounts with various managers. We have repeatedly and successfully represented other public pension systems, including Arizona public pension systems, in connection with like investments. The firm’s Public Pension/Institutional Investments Group is expert in such transactions, and peculiarly sensitive to public pension plan concerns in connection with such matters.

No other firm in Arizona is likely to have the breadth of knowledge and experience in Arizona public pension investments. We have successfully negotiated and documented nearly every kind of real estate investment for our public pension clients, and have worked cooperatively with the officers, analysts, lawyers and trustees of the plans in the process. A list of recent alternative investments we have documented for public pension systems is contained in the Supplemental Information document uploaded with this proposal.

Finally, we understand that the ASRS may need assistance negotiating, documenting or merely reviewing agreements and associated annex documentation, futures agreements, custodial banking contracts, and investment consulting and research agreements. The firm regularly represents public pension systems in connection with such matters, and has negotiated with many counterparties to such contracts, including State Street Global Advisors, Northern Trust Bank, UBS, Credit Suisse, Deutsche Bank and Morgan Stanley, to name just a few

Public Pension/Alternative Investments Practice

Kutak Rock’s Institutional Investments Group provides services related to fund real estate, private equity, hedge fund and other “alternative” investment matters. We document around $2 billion of alternative investments annually for government retirement systems.

The firm currently represents more than 35 governmental and 35 Taft-Hartley plans with assets under management ranging from several hundred million dollars to well in excess of $300 billion dollars. The breadth and depth of legal experience with our existing clients qualifies us to respond efficiently and thoughtfully to investment matters that the ASRS would place in our care.

SYSTEM

3300 N Central Ave

14th Floor Phoenix, AZ 85012

Investment Legal Consulting Services Solicitation Code: BPM004386 Part 3 of 3 – Offer Forms

Page

Our representation of pension systems typically includes undertaking legal due diligence. This normally includes an in-depth review of transaction documents and providing a general explanation of the deal, which may include the legal structure of the investment vehicle, investment restrictions, management fees, offsets, expenses, carried interest, clawbacks and incentive allocations. We also identify specific material deal terms that we deem important or aberrant.

While we custom tailor our process to suit specific client needs, our transaction review process in alternative investment deals often includes the following efforts and may vary depending on client staffing:

Investigation of Advisor and Sponsor Management. Many of our clients now conduct investigations of the management of investment advisory firms and fund sponsors before investing money with them. The arrest of the former director of fixed income at the New York State Common Retirement Fund, who had promised to undertake such investigations (but did not do so with respect to some brokers in order to shield their conflicts of interest from scrutiny) is an example of why manager investigations are critical (see here). At the client’s behest, the firm typically retains an outside investigation firm to investigate investment management. The investigation firm delivers its investigation report and advises the client whether there are any concerns about investment management. If no concerns arise, the firm proceeds to the next step, though often our review and negotiation of the governing documents proceeds concurrently with investigation of investment management.

Review of Governing Instruments and DDQ. In order to kick off our review and negotiation of the deal, we normally ask that the plan’s internal investment counsel or staff provide contact information for the investment manager and fund counsel and, to the extent possible, a term sheet setting forth the most important deal terms (e.g., commitment amount, deal type, anticipated distribution waterfall, fee and carry provisions, target closing date and such other important terms that investment staff has negotiated). We then contact the investment manager and/or fund investment counsel, providing a list of documents we would like to review.

Our document review generally consists of reviewing (i) the investment’s governing documents (typically, its subscription agreement, private placement memorandum, limited partnership agreement, limited liability company operating agreement, instrument of adherence or other governing instrument), (ii) any investment management agreement and the manager’s ADV Part 2, as well as (iii) investment management’s responses to our client’s due diligence questionnaires and any marketing material provided by investment management, to determine what changes, if any, need to be made. If the transaction is not a commingled vehicle, but instead involves negotiation of an investment management agreement for a separate account, we will commence a draft of same or review and revise forms of the IMA provided to us by investment management.

Preparation of Investment Summary. For many of our clients, as part of our due diligence process we provide a summary of the transaction, including an explanation of the types of investments being made, investment restrictions, the use of leverage, (and for private equity funds) the length of the investment period, the aggregate amount of the offering, a description of the distribution waterfall, management fees, offsets and expenses and clawback provisions. Particular attention to those characteristics endemic to the long-term nature of a private equity investment are also addressed in our summary, such as the fund term and early termination provisions, exclusivity restrictions and allocation of investment opportunities with successor funds, recycling capital commitments, key-man provisions, advisory board duties, general partner termination, fund liquidation and in-kind distributions. This step is often useful to busy internal investment counsel and investment staff and serves as a springboard for discussions over salient deal points.

Negotiation of Operative Agreements. We next proceed to negotiate any changes to the governing documents to reflect our client’s intentions in connection with the investment and comply with our client’s statutory requirements.