Mercer_Proposal.pdf

REQUEST FOR

BEST AND FINAL OFFER 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

August 23, 2021

Scott Dunbar, Senior Investment Consultant Mercer 1166 Ave of the Americas New York, NY 10036

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 will 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)

1. Attachment A, Offer and Acceptance

2. Attachment B, Exceptions

3. Attachment C, Pricing Schedule

REQUEST FOR

BEST AND FINAL OFFER 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

Mercer Investments LLC

Company Name Signature of Person Authorized to Sign

08/26/2021 Raelan Lambert, Global Alternatives Leader

Date Printed Name

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 4:00 P.M. (PST), August 26, 2021 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 ad Acceptance 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

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.

TO THE ARIZONA STATE RETIREMENT SYSTEM (ASRS): The Undersigned hereby offers and agrees to provide investment consulting services as indicated below, 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.

An Offer has been submitted for the following services (check ALL that apply):

Service

Check if Offering

Illiquid Credit & Public Markets Investment Project Consulting Services ☒

Private Equity Investment Consulting Services ☒

Real Estate Investment Consulting Services ☐

Mercer Investments LLC

Company Name Signature of Person Authorized to Sign Offer

4370 Town Center Blvd, Suite 300

Raelan Lambert, Global Alternatives Leader

Address Printed Name and Title

El Dorado Hills CA 95762

Raelan Lambert, Global Alternatives Leader

City State Zip Contact Name and Title

30-0282430

+1 916 231-3907 Raelan.Lambert@Mercer.com

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

ATTACHMENT A: Offer ad Acceptance 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

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.

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 and 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

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

Solicitation Code: BPM003473

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

Uniform Terms and Conditions, Section 3.1

Records. Under A.R.S. § 35-214 and § 35- 215, the Contractor shall retain and shall contractually require each subcontractor to retain all data and other “records” relating to the acquisition and performance of the Contract for a period of five years after the completion of the Contract. All records shall be subject to inspection and audit by the State at reasonable times. Upon request, the Contractor shall produce a legible copy of any or all such records.

Records. Under A.R.S. § 35-214 and § 35-215, the Contractor shall retain and shall contractually require each subcontractor to retain all data and other “records” directly relating to the acquisition and performance of the Contract for a period of five years after the completion of the Contract. All records shall be subject to inspection and audit by the State at its sole expense, made upon reasonable prior written notice, during normal business hours at reasonable times, and subject to the execution of a confidentiality agreement reasonably satisfactory to Contractor. Upon request, the Contractor shall produce a legible copy of any or all such records. The inspection and audit right shall not extend to payroll or personnel records of the Contractor.

Explanation: Clarification of conditions of inspection and audit.

Uniform Terms and

3.3

Audit. Pursuant to A.R.S. § 35-214, at any time during the term of this Contract and five (5) years thereafter, the Contractor’s or any subcontractor’s books and records shall be subject to audit by the State and, where applicable, the Federal Government, to the extent that the books and records relate to the performance of the Contract or Subcontract.

Audit. Pursuant to ARS § 35-214, at any time during the term of this Contract and five (5) years thereafter, the Contractor’s or any subcontractor’s books and records shall be subject to audit by the State and, where applicable, the Federal Government, to the extent that the books and records directly relate to the performance of the Contract or Subcontract. Any such audit shall be made at the sole expense of the State and, where applicable, the Federal Government, made upon reasonable prior written notice, during normal

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 business hours, and subject to the execution of a confidentiality agreement reasonably satisfactory to Contractor. The audit right shall not extend to payroll or personnel records of the Contractor.

Explanation: Clarification of conditions of audit.

Uniform Terms and

3.4

Facilities Inspection and Materials Testing.

The Contractor agrees to permit access to its facilities, subcontractor facilities and the Contractor’s processes or services, at reasonable times for inspection of the facilities or materials covered under this Contract. The State shall also have the right to test, at its own cost, the materials to be supplied under this Contract. Neither inspection of the Contractor’s facilities nor materials testing shall constitute final acceptance of the materials or services. If the State determines non-compliance of the materials, the Contractor shall be responsible for the payment of all costs incurred by the State for testing and inspection.

Facilities Inspection and Materials Testing. The Contractor agrees to permit access to its facilities, subcontractor facilities and the Contractor’s processes or services, at the sole expense of the State, made upon reasonable prior written notice, during normal business hours, and subject to the execution of a confidentiality agreement reasonably satisfactory to Contractor reasonable times, for inspection of the facilities or materials directly related to the performance of the covered under this Contract. The inspection right shall not extend to payroll or personnel records of the Contractor.

Explanation: Clarification of conditions of access.

3.7

Property of the State. Any materials, including reports, computer programs and other deliverables, created under this Contract are the sole property of the State.

The Contractor is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. The Contractor shall not use or release these materials without the prior written consent of the State.

Property of the State. Any materials, including reports, computer programs and other deliverables, created under this Contract specifically and exclusively for the State are the sole property of the State. The Contractor is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. The Contractor shall not use or release these materials without the prior written consent of the State.

Explanation: Clarification of the ownership of work made for hire.

3.8

Ownership of Intellectual Property. Any and all intellectual property, including but not limited to copyright, invention, trademark, trade name, service mark, and/or trade secrets created or conceived pursuant to or as a result of this Contract and any related Subcontract (“Intellectual Property”), shall be work made for hire and the State shall be considered the creator of such

Add to the end of Section 3.8:

Notwithstanding anything to the contrary in the Contract, Contractor shall retain all patent, copyright and other intellectual property rights in the methodologies, methods of analysis, ideas, concepts, know-how, models, tools, techniques, skills, knowledge and experience (collectively, “Contractor’s Intellectual Property”) owned or possessed by

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

Intellectual Property. The agency, department, division, board or commission of the State of Arizona requesting the issuance of this Contract shall own (for and on behalf of the State) the entire right, title and interest to the Intellectual Property throughout the world. Contractor shall notify the State, 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 State and shall take no affirmative actions that might have the effect of vesting all or part of the Intellectual Property in any entity other than the State.

The Intellectual Property shall not be disclosed by Contractor or its subcontractor(s) to any entity not the State without the express written authorization of the agency, department, division, board or commission of the State of Arizona requesting the issuance of this Contract.

Contractor before the commencement of, or acquired by Contractor during or after, the performance of the services. To the extent that any of Contractor’s Intellectual Property is embodied in any of the work product, Contractor will grant to the State a non-exclusive, non-transferable, royalty-free license to use the Contractor’s Intellectual Property for its internal use, but solely in connection with and to the extent necessary for use of the work product as contemplated by the Contract. Unless Contractor provides its prior written consent, the State will not use, or disclose to any third party, Contractor’s advice or work product other than as mutually contemplated by the parties when Contractor first was retained to provide such advice or work product or as required by law. The State shall be responsible for, and Contractor shall have no liability with respect to, modifications made by any person other than Contractor to the work product, Contractor’s Intellectual Property or other work product provided to the State by Contractor. The State will indemnify, defend and hold Contractor and its affiliates harmless in respect of any loss incurred by Contractor as a result of the State’s breach of this obligation or any modifications made by any person other than Contractor to the work product, Contractor’s Intellectual Property or other work product provided to the State by Contractor.

Explanation: Clarification of the ownership of Contractor’s intellectual property and proper usage of it by the State.

6.3

Indemnification - Patent and Copyright. The Contractor shall indemnify and hold harmless the State against any liability, including costs and expenses, for infringement of any patent, trademark or copyright arising out of Contract performance or use by the State of materials furnished or work performed under this Contract. The State shall reasonably notify the Contractor of any claim for which it may be liable under this paragraph. If the Contractor is insured pursuant to A.R.S. § 41-621 and § 35-154, this section shall not apply.

Indemnification - Patent and Copyright. The Contractor shall indemnify and hold harmless the State against any liability, including costs and expenses, to the extent directly arising out of a claim that Contractor’s work product or services infringe or misappropriate any intellectual property of a third party for infringement of any patent, trademark or copyright arising out of Contract performance or use by the State of materials furnished or work performed under this Contract. The State shall reasonably notify the Contractor of any claim for which it may be liable under this paragraph. If the Ccontractor is insured pursuant to A.R.S. § 41-621 and § 35-154, this section shall not apply. Contractor’s indemnification obligations under this Section 6.3 shall not apply to any claim for infringement or misappropriation of intellectual property rights to the extent any such infringement or misappropriation is caused by: (i) information or materials provided by the State or a third party other than Contractor’s subcontractors, if any, (ii) modifications made by the State or a third party other

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 than Contractor’s subcontractors to Contractor’s work product or services provided to the State in connection with the Contract, or (iii) the State’s use of Contractor’s work product or services in a manner inconsistent with the terms of the Contract.

Explanation: Clarification of Contractor’s indemnification obligations with respect to third-party’s intellectual property.

7.2

Quality. Unless otherwise modified elsewhere in these terms and conditions, the Contractor warrants that, for one year after acceptance by the State of the materials, they shall be:

7.2.1. Of a quality to pass without objection

in the trade under the Contract description;

7.2.2. Fit for the intended purposes for

which the materials are used;

7.2.3. Within the variations permitted by the

Contract and are of even kind, quantity, and quality within each unit and among all units;

7.2.4. Adequately contained, packaged and

marked as the Contract may require; and

7.2.5. Conform to the written promises or

affirmations of fact made by the Contractor.

This Section 7.2 is deleted in its entirety.

Explanation: These quality warranties are not readily applicable to the professional services contemplated by the Contract.

8.5

Right of Offset. The State shall be entitled to offset against any sums due the Contractor, any expenses or costs incurred by the State, or damages assessed by the State concerning the Contractor’s non-conforming performance or failure to perform the Contract, including expenses, costs and damages described in the Uniform Terms and Conditions.

Right of Offset. The State shall be entitled to offset against any sums due the Contractor for a particular project pursuant to the Contract, any expenses or costs incurred by the State, or damages assessed by the State concerning the Contractor’s non-conforming performance or failure to perform that particular project pursuant to the Contract, including expenses, costs and damages described in the Uniform Terms and Conditions.

Explanation: The parties should rely on the dispute resolution procedures in the Contract to resolve any disputes. Neither party should be permitted to unilaterally affect the other party’s rights. However, Contractor can agree to keep this provision with the above revisions to focus the right of offset to the particular project at issue.

9.6

Continuation of Performance Through Termination. The Contractor shall continue to perform, in accordance with the requirements of the Contract, up to the date

Continuation of Performance Through Termination.

The Contractor shall continue to perform, in accordance with the requirements of the Contract, and shall be paid in accordance with the applicable pricing

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 termination, as directed in the termination notice.

schedule for all services performed, up to the date of termination, as directed in the termination notice.

Explanation: Clarification of obligation to pay for services rendered in the event of termination.

Special Terms and

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.

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, which approval shall not be unreasonably withheld or delayed.

Explanation: Approval should be reasonable and timely

4.1

Most Favored Client Pricing. Contractor represents and warrants that its fee structure under this Contract is, and at all times during the term of this Contract and any extension will remain, the equal of or less than any fee structure offered for similar services to any other of its customers. Within thirty (30) days of offering a more advantageous fee structure to any other customer, Contractor shall offer the ASRS for immediate implementation at least the same fee structure.

Client Pricing. In responding to each project request pursuant to this Contract, Contractor affirms that it will provide the ASRS with its best fee for such project.

Explanation: Contractor provides professional services to an array of clients whose needs and circumstances are not readily comparable and, therefore, Contractor is unable to differentiate client status into “most-favored” customer. Rather, Contractor addresses the business needs of each client individually and provides services at agreed upon rates. Contractor can agree to affirm that it will provide the ASRS its best fee for each project.

4.5

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

This Section 4.5 is deleted in its entirety.

Explanation: The fees for services are as clearly set forth in the Contract.

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 payment is made within the discount period.

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.

Contract Assignment. Contractor may not assign (including within the meaning of the U.S. Investment Advisers Act of 1940, as amended), transfer or convey any of its rights or obligations under this Contract without the written permission of the ASRS.

Explanation: Adding clarification as required by the Advisers Act.

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.

6.5.2. The ASRS does not expect the

Contractor to release any proprietary or trade secret information to the Replacement Contractor.

Add to the end as new Section 6.5.3:

Notwithstanding anything to the contrary in this Contract, Contractor may (i) retain copies of Data that is required to be retained by law or regulation, (ii) retain copies of Contractor’s work product that contain Data for archival purposes or to defend Contractor’s work product, and (iii) in accordance with legal, disaster recovery and records retention requirements, store such copies and derivative works in an archival format (e.g., tape backups), which may not be returned or destroyed.

Explanation: Adding clarification that Contractor is required to retain certain Data in the event of the expiration, termination or non-renewal of the Contract.

7.2

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 expenses (including 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

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 expenses (including 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 in the performance of services under the Contract. This indemnity includes any claim or amount arising out of, or recovered under, the Workers’ Compensation Law or arising out of the

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 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 claims. It is agreed that Contractor will be responsible for 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.

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 claims. It is agreed that Contractor will be responsible for 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. In no event shall the Contractor be liable in connection with the services or the Contract for any losses resulting from: (i) acts or omissions by any investment manager, custodian or other third party unaffiliated with the Contractor, (ii) any inaccuracy or incompleteness of the data to be provided by the ASRS or its representatives, or (iii) indirect, special, punitive, consequential or incidental damages.

Explanation: Clarification of the indemnification obligations.

7.3

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 three time(s) the maximum-not-to-exceed amount of this Contract. The foregoing limitation of liability shall not apply to: (i) liability, including indemnification obligations, for third party claims, including but not limited to, infringement of third party intellectual property rights; (ii) claims covered by any specific provision of the Contract calling for liquidated damages or other amounts, including but not limited to, performance requirements; or (iii) costs or attorneys' fees that the ASRS is entitled to recover as a prevailing party in any action.

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 three time(s) the maximum-not-to-exceed amount of this Contract. The foregoing limitation of liability shall not apply to: (i) liability, including indemnification obligations, for third party claims, including but not limited to, infringement of third party intellectual property rights; (ii) claims covered by any specific provision of the Contract calling for liquidated damages or other amounts, including but not limited to, performance requirements; or (iii) costs or attorneys' fees that the ASRS is entitled to recover as a prevailing party in any action.

a. Contractor shall not be liable for Losses (defined below) sustained by the ASRS in connection with the services, this Contract or the acts or omissions of any third party (other than Contractor’s subcontractors) unless such Losses have been finally

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 determined to have directly resulted from the gross negligence, fraud, or bad faith conduct by Contractor or any officer, director or employee of Contractor’s or its affiliates (“Contractor Party”) in connection with Contractor’s performance of the services.

b. In no event shall either party or its affiliates be liable in connection with this Contract or the services to the other party, its affiliates or any third party for any loss of profit or incidental, consequential, special, indirect, punitive or similar damages. The provisions of this section shall apply to the fullest extent permitted by law. Nothing in this section limiting the liability of a party shall apply to (i) any liability that has been finally determined by a court to have been caused by the fraud of such party or (ii) the extent such limitation of liability is not permissible under applicable law, including laws that may hold parties liable for certain acts of good faith.

c. For purposes of this Contract, “Loss” means damages, claims, liabilities, losses, awards, judgments, penalties, third party claims, interest, costs and expenses, including reasonable attorneys’ fees, whether arising under any legal theory including, but not limited to claims sounding in tort (such as for negligence, misrepresentation or otherwise), contract (whether express or implied), by statute, or otherwise, claims seeking any kind of damages and claims seeking to apply any standard of liability such as negligence, statutory violation or otherwise. For the avoidance of doubt, multiple claims arising out of or based upon the same act, error or omission, or series of continuous, interrelated or repeated acts, errors or omissions shall be considered a single Loss.

d. Each of the parties acknowledges that the compensation for the services to be provided under this Contract reflects the allocation of risk set forth in this section.

Explanation: As requested, we moved this additional limitation of liability language from the Additional Terms section to here.

7.4.1

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

This Section 7.4.1 is deleted in its entirety.

Explanation: This same provision is already set forth in Section 6.5.1.

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Replacement Contractor and that will ensure no loss of crucial data is incurred and no Services are interrupted.

7.4.2

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.

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.

Explanation: Clarification to be consistent with Contractor’s existing insurance policies.

Conditions, Sections

7.4 through 7.10

Contractor is covered under a comprehensive insurance program designed by Marsh & McLennan Companies, Inc. (“MMC”), its ultimate parent company. The insurance program provides limits of coverage that meet or exceed usual and customary standards of insurance for similar firms insuring similar risks. Should Contractor be awarded the work pursuant to this RFP, the specific insurance requirements in connection with this engagement will be subject to review by MMC’s Risk Management department.

Explanation

7.9

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.

Add the phrase: “Solely to the extent that Contractor uses subcontractors in connection with the Contract,” at the beginning of this Section.

Explanation: Mercer does not intend to use subcontractors, however we agree to this term in the event we do.

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8.2.2

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

The definition includes but is not limited to types of activities that are widely recognized as being in violation of policy:

8.2.2.1. Attempts (either failed or

successful) to gain unauthorized access to a system or it’s data/information;

8.2.2.2. Unwanted disruption or denial of

service;

8.2.2.3. The unauthorized use of a system

for the processing or storage of data;

8.2.2.4. Changes to system hardware, firmware, or software characteristics without the owner’s knowledge, instruction or consent; and

8.2.2.5. Unauthorized access, alteration, disclosure, loss, theft or acquisition of non-electronic confidential information.

Replace with: “Incident” means the (a) actual unauthorized access to or use of CI, or (b) unauthorized disclosure, loss, theft or manipulation of unencrypted CI (or encrypted CI where unauthorized decryption has or is likely to occur) that has the potential to cause identity theft or financial harm to ASRS’ employees or plan participants.

Explanation: This definition of “Incident” reflects the structure of Contractor’s information security and data privacy program.

8.2.3

“Personal Information” (A.R.S. § 18- 551(7(a)(b))) means

8.2.3.1. Any of the following: An

individual’s first name or first initial and last name in combination with one or more specified data elements.

8.2.3.2. An individual’s user name or e-

mail address, in combination with a password or security question and answer, that allows access to an online account.

8.2.3.3. Does not include publicly available

information that is lawfully made available to the general public from federal, state or local government records or widely distributed media.

This Section 8.2.3 is deleted in its entirety.

Explanation: No Personal Information is required for the services so ASRS should not provide and Contractor will not accept any such information.

8.2.4

“Personally Identifiable Information” (PII) means any information about an individual maintained by an agency, including (1) any information that can be used to distinguish or trace an individual’s identity, such as name, social security number, date and place of birth, mother’s maiden name, or biometric records; and (2) any other information that is linked or linkable to an individual, such as medical, educational, financial, and employment information.

This Section 8.2.4 is deleted in its entirety.

Explanation: No Personally Identifiable Information is required for the services so ASRS should not provide and Contractor will not accept any such information.

8.2.5

“Sensitive Data” means data that is private, personal, or proprietary and must be protected from unauthorized access. This

This Section 8.2.5 is deleted in its entirety.

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Explanation: No Sensitive Data is required for the services so ASRS should not provide and Contractor will not accept any such information.

8.3

8.3. Contractor’s Obligation Regarding

Information Security and Data Privacy

8.3.1. Contractor shall establish and

maintain procedures and controls acceptable to the ASRS for the purpose of ensuring that the ASRS’s proprietary information or any PI, CI, or Sensitive Data in Contractor’s possession and contained in its records is protected from unauthorized access and is accessed, viewed, used, disclosed, retained or disposed of by its agents, subcontractors, officers or employees only as intended or approved in writing by the ASRS and consistent with applicable law.

8.3.1.1. Contractor shall abide by and

secure data related to the performance of this Contract in a manner substantially similar to the State of Arizona’s policy or its corresponding standards for data classification (https://aset.az.gov/resources/psp).

8.3.2. Contractor acknowledges that all

information disclosed to it concerning the ASRS’s operations during performance of the Contract and after the full term of the Contract shall not be disclosed to other parties except as determined necessary by the ASRS and only with the ASRS’s prior written consent.

8.3.3. The ASRS shall have the right to

assess, inspect, review, monitor and validate compliance with information and data requirements of the Contract. The ASRS’s right to inspect shall apply to all physical locations where performance of this Contract occurs, to personnel performing work authorized by this Contract, to any records (as defined by A.R.S. §41-151.18) or devices used in performance of this Contract, and to documented policies and procedures,

8.3. Contractor’s Obligation Regarding Information

Security and Data Privacy

8.3.1. Contractor shall establish and maintain

procedures and controls acceptable to the ASRS for the purpose of ensuring that the ASRS’s proprietary information or any PI, CI, or Sensitive Data in Contractor’s possession and contained in its records is protected from unauthorized access and is accessed, viewed, used, disclosed, retained or disposed of by its agents, subcontractors, officers or employees only as intended or approved in writing by the ASRS and consistent with applicable law.

8.3.1.1. Contractor shall abide by and secure data

related to the performance of this Contract in a manner substantially similar to the State of Arizona’s policy or its corresponding standards for data classification (https://aset.az.gov/resources/psp).

8.3.2. Contractor acknowledges that all information

disclosed to it concerning the ASRS’s operations during performance of the Contract and after the full term of the Contract shall not be disclosed to other parties except as determined necessary by the ASRS and only with the ASRS’s prior written consent or except as required pursuant to applicable law or regulations.

8.3.3. During the term of the Contract and for an 18-

month period thereafter, Tthe ASRS shall have the right to assess, inspect, review, monitor and validate compliance with information and data requirements of the Contract upon reasonable prior written notice, during normal business hours, conducted at ASRS’ sole expense, and shall be subject to the execution of a confidentiality agreement reasonably satisfactory to Contractor. The ASRS’s right to inspect shall apply to all physical locations where performance of this Contract occurs, to personnel performing work authorized by this Contract, to any records (as defined by A.R.S. §41-151.18) or devices directly used in performance of this Contract, and to documented policies and procedures, including but not limited to information security and privacy controls.

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Explanation: Contractor has robust policy that reflects applicable laws and regulations and as such cannot agree to an external party’s own policy. Contractor needs the ability to retain such information as required.

8.4

Information Security and Data Privacy Incident Reporting To comply with 8.3, unless authorized by law or in writing by the ASRS, Contractor shall report any unauthorized use or disclose of CI or Sensitive Data. Contractor shall make the report to the ASRS’s Privacy or Information Security Officer within 24 hours after the Contractor learns of the unauthorized access, use or disclosure. In its report, the Contractor shall, at a minimum:

Information Security and Data Privacy Incident Reporting To comply with 8.3, unless authorized by law or in writing by the ASRS, Contractor shall report any unauthorized use or disclose of CI or Sensitive Data Incident. Contractor shall use commercially reasonable efforts to make the report to the ASRS’s Privacy or Information Security Officer as soon as possible but in no event any later than within three (3) business days 24 hours after the Contractor learns of the unauthorized access, use or disclosure Incident. In its report, the Contractor shall, at a minimum:

Explanation: Tie in the defined term “Incident” and suggesting a more reasonable time frame. Contractor is a part of a global organization and the timing of reporting an Incident may depend on many factors that are beyond Contractor’s control. As such, Contractor can agree to use its commercially reasonable efforts to make the report as soon as possible but in no event later than three business days.

8.6.2

Upon termination of the Contract, all goods, materials, documents, data and reports prepared by the Contractor under the Contract shall become the property of and be delivered to the ASRS upon request.

The Contractor must ensure that all digital storage devices containing ASRS data, including data storage at the native file level, are sanitized, and electronic media have been cleared, purged, or destroyed consistent with NIST Special Publication 800–88, Guidelines for Media Sanitization, 6 such that the information or data cannot be…