These Fund Administration Additional Service Terms (“Fund Administration Terms”) apply only if Professional Services described as “Fund Administration Services” are included in Customer’s subscription as per the applicable Order Form. The scope and term of the subscription, as well as the billing terms applicable to the Fund Administration Services, will be set out and described in that Order Form. These Fund Administration Terms supplement the Master Terms and form a part of the Agreement between Customer and Vendor. In case of conflict or inconsistency between the Fund Administration Terms and the rest of the Agreement, the Fund Administration Terms shall control.
1. DEFINITIONS
Unless otherwise defined herein, terms defined in the Master Terms or the Order Form shall have the same meaning in these Fund Administration Terms.
a. “Fund Administration Term” means the period commencing on the applicable Order Effective Date and continuing until the expiration of the applicable Initial Term, all Renewal Term(s), if any, and the period agreed upon by the parties for termination assistance services for such Service, if any, unless earlier terminated in accordance with the terms of the Agreement. The Parties may agree to extend the initial Fund Administration Term to include a stub period from the effective date of the related Order Form to the end of the calendar quarter in which services begin. The prorated payment terms for the stub period will be documented in the related Order Form.
b. “Governmental Authority” means any federal, state, municipal, local, territorial, or other governmental department, regulatory authority, self-regulatory body, judicial or administrative body, whether domestic, foreign or international.
c. “Industry Standards” means shall mean generally accepted practices used by organizations in the United States in the performance of services of similar type, scale, and scope to the Fund Administration Services.
d. “Investor Private Information” shall mean the taxpayer identification numbers or banking information of Customer’s investors.
e. “Vendor Service Location” means any location from which Vendor or the relevant Vendor Affiliate typically provides services to its Customers.
f. “Vendor Staff” means Vendor’s and Vendor Affiliate’s employees, subcontractors, and agents.
2. SERVICE LEVEL COMMITMENTS, RESPONSIBILITIES AND REQUIREMENTS.
a. Vendor shall provide periodic reports in accordance with the timetables established in each Order Form. Fund Administration Services will be performed in accordance with generally accepted accounting principles and other applicable state and federal laws subject to the limitations in set forth herein.
b. Vendor will endeavor to draft financial statements in accordance with US generally accepted accounting principles (“US GAAP”) based on the information provided by Customer but Customer management remains responsible for assuring that financial statements are issued in accordance with US GAAP. Likewise, Vendor will endeavor to draft periodic capital account statements and capital activity notices to Customer’s investors in a manner consistent with the economic provisions of Customer’s limited partnership agreements but Customer management remains ultimately responsible for assuring that the economic provisions of its limited partnership agreements are properly interpreted and applied.
c. Customer shall provide all information requested by Vendor in a timely basis so that Vendor may perform the Fund Administration Services as required.
d. Vendor shall establish and maintain safeguards consistent with Industry Standards and requirements of the applicable law against the destruction, disclosure, loss or alteration of Customer Data in the possession of Vendor. Vendor shall maintain electronic copies of Customer records (as provided by Customer) in support of accounting entries recorded by Vendor, but it is Customer’s responsibility to retain its original executed records as deemed appropriate to backup and support Customer financial reports, tax returns, and contractual arrangements.
e. Customer agrees to provide documents containing Investor Private Information to Vendor only on an as needed basis in an encrypted file or through a secure file sharing portal with appropriate written notification that such files contain either Investor Private Information.
f. For the avoidance of doubt, Vendor has no responsibility to verify the information provided by Customer or determine the completeness, accuracy, validity, legality, or enforceability of the Customer’s investor or investment agreements provided by Customer in electronic form in support of the accounting entries to be recorded by Vendor.
g. It is understood that Customer will remain solely responsible for obtaining auditing, tax, valuation, regulatory, and legal services from third parties and no auditing, tax, valuation, regulatory, or legal services are being provided by Vendor under the terms of this Agreement. It is further understood that Customer is solely responsible for safekeeping of securities and treasury approvals.
h. Between Vendor and Customer, the latter shall be deemed to own all Customer Data. Vendor (respectively, its Affiliates or licensors) shall retain ownership in all pre-existing or independently developed Intellectual Property used in relation to the Fund Administration Services, including Vendor’s Dynamo™ software, PEView™ software, tools, methodologies, and standard reports. Likewise, any derivative works created by Vendor on behalf of Customer (other than derivative works which incorporate Customer Data) shall become Vendor’s Intellectual Property, unless otherwise specifically agreed in writing in advance
i. EXCEPT AS PROVIDED IN THIS SECTION 2, VENDOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, REGARDING ITS SERVICES OR PRODUCTS WHICH ARE THE SUBJECT OF THESE FUND ADMINISTRATION TERMS, AND VENDOR SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
3. COMPENSATION.
a. Unless otherwise provided in an Order Form, the method of payment to Vendor and contract type for performing Fund Administration Services under an Order Form shall be specified as an annual retainer (billed quarterly). Charges for all Fund Administration Services performed on a quarterly retainer basis have been determined based on the expected complexity of the transactions, the expected processing time, and the expected transaction volumes. Annual retainers shall be subject to review annually based on variances in these parameters. The agreed upon annual retainer amount shall be payable quarterly in advance on the 1st day of each calendar quarter. Unless otherwise provided in the relevant Order Form, the retainer amount for the initial calendar quarter shall be prorated based on the number of remaining weeks in the quarterly period and shall be due upon the effective date of the related Order Form.
Neither Customer nor Vendor anticipates that local or non-local travel expenses will be necessary for the fulfillment of the services required under the Agreement. If non-local travel is required in the performance of the Fund Administration Services, Vendor will request advance approval from Customer to incur travel-related expenses; approved travel expenses will be billed separately to Customer as incurred.
If the parties agree in writing that certain Fund Administration Services or related Services will be provided on a Time and Materials (“T&M”) basis, Vendor shall use best efforts to accomplish the agreed results within the agreed rates and hours. Charges for all Services performed on a T&M basis will be invoiced and payable monthly based on actual labor hours expended at the rates set forth in the applicable Statement of Work. All hours worked will be billed at the stated category rates whether or not such hours qualify as overtime in the location or jurisdiction where the hours are worked.
b. Vendor will submit invoices to the individual and at the Customer’s address designated in the Order Form. Invoices for each quarterly payment of the annual retainer shall be issued at the beginning of the quarter and shall be due upon receipt.
c. Customer agrees to pay each undisputed invoice within fifteen (15) days after Customer receives the invoice. Interest, due and payable with an invoice, will accrue at the then-prevailing three month LIBOR rate on undisputed amounts outstanding greater than 30 days. In the event that Customer disputes in good faith an invoice in whole or in part, Customer will provide notice to Vendor within five (5) business days after Customer’s receipt of the invoice (“Dispute Notice”). The Dispute Notice will specify the extent to which and the reasons why Customer disputes the invoice. The Parties shall resolve all invoice disputes in accordance with this Section. Any disputed amounts withheld will be paid within fifteen (15) calendar days after resolution of the dispute.
4. DATA BREACH SPECIAL PROVISION.
In the event Vendor or its personnel discovers or is notified of a breach or potential breach of security relating to Customer Data, Vendor shall promptly (a) notify Customer of such breach or potential breach; and (b) if the applicable Customer Data was in the possession of Vendor or Vendor Staff at a Vendor Service Location at the time of such breach or potential breach, Vendor shall (x) investigate and remediate the effects of the breach or potential breach at Vendor’s Service Location and (y) provide Customer with assurance satisfactory to Customer that such breach or potential breach shall not recur at Vendor’s Service Location.
5. INDEMNITY OBLIGATIONS.
In addition to any indemnification obligations in the Master Terms:
a. Vendor agrees to indemnify, defend and hold harmless Customer and each of its directors, officers, employees, and agents, from and against any and all losses, liabilities, costs (including reasonable attorneys’ fees) or damages resulting from a third party claim based on Vendor’s gross negligence or willful misconduct, provided that Customer will have the right, at its option, to defend itself against any such claim or to participate in the defense thereof by counsel of its own choice.
b. Customer agrees to hold, harmless, indemnify, and, at Vendor’s option, defend Vendor, and each of its directors, officers, employees, and agents, from and against any losses, liabilities, costs (including reasonable attorneys’ fees) or damages resulting from a) Vendor’s performance of the Fund Administration Services, provided however, that the foregoing indemnity shall not apply to the extent that such damages arose out of willful misconduct of Vendor in the performance of the Fund Administration Services or the failure of Vendor to comply with its obligations under these Fund Administration Terms or b) Customer’s gross negligence or willful misconduct, provided that Vendor will have the right, at its option, to defend itself against any such claim or to participate in the defense thereof by counsel of its own choice.
The indemnification obligations under this Section shall survive any termination of the Agreement.
c. In the event any claim is asserted which is subject to these Fund Administration Terms for bodily injury or property damage, Customer and Vendor agree to cooperate with each other, and to require their respective insurers and contractors to cooperate in order that such claims are resolved in a manner consistent with the allocation of risks provided herein.
d. The foregoing indemnities shall be contingent upon the following: The party seeking indemnity shall (1) give prompt notice to the other party of any claim, demand, or action for which indemnity is sought; (2) fully cooperate in the defense or settlement of any such claim, demand or action; and (3) obtain a prior written agreement with the indemnifying party to submit a settlement or offer of settlement (which agreement shall not be unreasonably withheld).
6. AUDIT
a. Upon notice from Customer, Vendor and its personnel shall provide Customer, Customer’s personnel, or representatives of a Governmental Authority or third party offering audit services (the “Customer Auditors”) with reasonable access to and any assistance that they may require for the purpose of performing audits or inspections of documents and records regarding Fund Administration Services and the business of Customer relating to the Fund Administration Services, including access to the Customer Data. Vendor may require that Customer Auditors execute reasonable non-disclosure agreements with respect to any Vendor confidential information before being required to provide access to any documents, records or other information to any Customer Auditor. All audit shall be conducted solely at Customer’s expense and may not occur more frequently than once each calendar year.
b. If any audit by a Customer Auditor results in Vendor being notified that Vendor or Vendor’s personnel are not in compliance with any applicable law or audit requirement, Vendor shall, and shall cause Vendor’s Staff to, promptly take actions to comply with such law or audit requirement. Vendor shall bear the expense of any such response that is necessary due to Vendor’s noncompliance with the applicable law.
7. TERM AND TERMINATION.
a. The Fund Administration Services will begin on the date set out in the applicable Order Form and will end on the termination of the Agreement or of these Fund Administration Terms in accordance with the Agreement.
b. Unless otherwise provided in the Order Form, Customer agrees that an Order Form for Fund Administration Services under an annual retainer arrangement shall automatically renew for one full year at the end (i) of the Initial Term and (ii) of each Fund Administration Term thereafter, unless Customer provides written notice of cancellation to Vendor at least sixty (60) days in advance of each annual renewal date. The retainer arrangement will be reviewed on an annual basis. If Vendor does not initiate such annual review, the retainer arrangement will remain the same as in the previous annual period.
c. In addition to any other termination rights available to the parties under the Agreement, Customer may terminate these Fund Administration Terms at any time by providing Vendor with ninety (90) calendar days prior written notice, subject to the payment provisions included in this Section. However, if Customer terminates the agreed Fund Administration Services, for any reason other than breach on the part of Vendor, during any Fund Administration Term outside of the cancellation notice period specified in the preceding Section 7b, Customer shall be obligated to pay Vendor a termination fee equivalent to twenty- five percent (25%) of the annual retainer amount then in effect, which the Parties agree and acknowledge are a reasonable estimation of the very difficult to predict harm to Vendor that might arise from such a termination and constitute compensation and not a penalty. For the avoidance of doubt, the payment of the termination fee does not relieve Vendor from the obligation to give a timely termination notice as per the first sentence of this paragraph and failure to comply with such obligation will result in a penalty equal to the prorated portion of the annual retainer corresponding to the days between the actual termination date and the date when the 90 days’ termination notice period would have expired.