Exhibit (g)(2)
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT dated as of September 3, 1997 between THE
PACIFIC CORPORATE GROUP PRIVATE EQUITY FUND, L.P., a Delaware business trust
(the "Fund"), and XXXXXXX FUND ADMINISTRATORS, INC., a New Jersey corporation
("PFA").
W I T N E S S E T H:
WHEREAS, the Fund desires to retain PFA to provide certain accounting and
administrative services, including, among other things, matters related to the
day-to-day administrative affairs of the Fund and the maintenance of the books
and records of the Fund and PFA desires to render such services, all upon the
terms set forth herein;
NOW, THEREFORE, in consideration of the premises and subject to the terms and
conditions set forth herein, the parties hereto agree as follows:
1. Services; Payment. In accordance with the instructions of officers of Pacific
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Corporate Group, Inc., the Adviser Trustee and management company of the Fund
(the "Manager"), PFA shall provide the following accounting and administrative
services for the Fund:
Accounting services
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o maintain the detailed books and records of the Fund in accordance with the
terms of the private placement memorandum of the Fund, its Declaration of
Trust and Generally Accepted Accounting Principals,
o compute allocations and distributions to Investors in compliance with the
Declaration of Trust,
o coordinate and supervise annual audit, including preparation of all
necessary supporting worksheets for audit review and follow-up on all
questions and requests for additional information,
o provide detailed tax schedules and coordinate and supervise independent tax
review, including preparation of detailed tax schedules and roll-up of all
tax line items,
o prepare and coordinate distribution of tax information to Investors,
including IRS K-1 Schedule and state K-1 Schedules where required,
o prepare estimated tax schedules to provide Investors with estimated tax
information by Schedule K-1 line item.
It is understood that the completion of tax estimates and final tax accounting
by PFA is dependent upon the timely receipt of information from the general
partners of each of the Fund's indirect investments. Investors of the Fund have
been notified of the probable late delivery of such tax information.
Reporting services
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o prepare and distribute quarterly and annual reports to Investors in a
format consistent with the requirements of the Fund and the Advisor
Trustee,
o prepare financial reports required to be filed by the Fund with the
Securities and Exchange Commission, including reports to be filed
semi-annually on Form N-SAR
o file federal, state and local tax returns for the Fund and the Advisor
Trustee and file foreign withholding tax returns for the Fund, if required,
o prepare all internal management reports relating to the activities of the
Fund and the Advisor Trustee as requested,
o prepare reports and analyses of Fund activity to assist Advisor Trustee
with the semi-annual valuation of portfolio investments, meetings of the
Independent Trustees of the Fund and Annual Meetings of Investors, if any,
o prepare internal rate of return analysis for realized and unrealized
investments as requested.
Administrative services
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o coordinate relationships with professionals, including such custodian and
independent certified public accountants as are approved by the Independent
Trustees of the Trust,
o coordinate cash and in-kind distributions to Investors,
o coordinate direct deposit of distributions for Investors having Xxxxxxx
Xxxxx and DLJ accounts, as requested,
o provide for the collection of withholding tax due from foreign investors,
o assist outside legal counsel with completion and filing of SEC Rule 144
Forms, Form 3, Form 4, Form 5, Schedule 13D, Schedule 13G and all other
section 16 reporting forms or schedules as required,
o maintain Investor data files necessary for distribution of reports,
preparation of tax information and payment of cash and in-kind
distributions,
o coordinate and process transfers and assignments of ownership of Investor
interest when required,
o send copies of Investor reports to each Investor's representative financial
consultant, as requested,
o provide Xxxxxxx Xxxxx and DLJ with the Fund's net asset value per share, on
a semi-annual basis, if required for customer statements,
o provide timely response to Investors' inquiries and requests for additional
information; only after review by the Advisor Trustee or the Manager, as
appropriate,
o maintain income and expense detail by investment,
The Manager will manage a portfolio of short-term securities for the Fund, for
which PFA will not have responsibility.
For the services to be provided by PFA pursuant to this Agreement, the Fund will
pay to PFA the following:
Regular Fee
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For all services as provided above - flat annual fee to be paid quarterly in
advance, on the first day of each calendar quarter as follows:
Capital Commitments Annual Fee
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up to $150 million $75,000
greater than $150 million, less than $200 million $80,000
more than $200 million $85,000
o regular fee will begin on the date on which initial capital contributions
are made to the Fund,
o regular fee will be increased 4% on each January 1 beginning January 1,
1999,
o other reasonable out-of-pocket expenses to be reimbursed quarterly
including fees and expenses for express mail, postage, messengers and other
delivery fees,
o the Fund will pay the costs of reproducing and mailing its own financial
and tax reports, letterhead, envelopes and other supplies.
One-Time Set-Up Fee
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The one-time set-up fee will cover the following:
o development of the Investor data base,
o data collection and data input,
o coordination of subscription approval process and payment of initial
capital contribution into escrow,
o calculation of escrow interest amounts to Investors,
o coordination of payment of escrow interest by outside custodian,
o track sales by state for Blue Sky compliance,
o all other ministerial functions required in connection with the
subscription process.
The minimum set-up fee is payable on the first day of the month following the
date on which initial capital contributions are made to the Fund as follows:
Number of Investors Set-Up Fee
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up to 400 Investors $20,000
greater than 400 Investors, less than 600 Investors $25,000
more than 600 Investors $30,000
The remaining set-up fee, if any, is payable upon the final closing of the
Fund's subscription period.
2. Information. In its performance of the services set forth in Section 1 above,
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PFA will be entitled to rely on information provided by the officers of the
Manager. PFA shall have no duty to provide such information or to make an
independent investigation as to any information so provided to determine the
facts necessary for the provision of such services, including without
limitation, information with regard to financial activities, valuations of
venture capital and other investments and all other underlying facts as may be
required for the preparation of reports.
PFA shall deliver to the Fund and its counsel and auditors, for their review and
approval and, if applicable, signature, copies of all quarterly reports, all
annual reports, all tax returns and all tax information of the Fund. The Manager
acknowledges that such materials are based on information to be furnished to PFA
by the Manager, and the timing of the receipt of this information by PFA, and
the completeness of such information will determine when PFA can deliver such
materials to the Fund.
The Manager shall use its best efforts to deliver to PFA, on a timely basis, all
information reasonably necessary to enable PFA to provide the services
contemplated to be performed by it under this Agreement on a timely and
efficient basis. All of the books and records maintained by PFA pursuant to this
Agreement shall be the property of the Fund. PFA shall maintain a magnetic disk
containing a backup copy of all accounting records of the Fund at an off site
location. Such disk will be updated on a quarterly basis. A copy of such backup
disk will be provided to the Fund at any time upon request.
Any information relating to, or derived from the Manager, the Fund or any
portfolio company of the Fund including, without limitation, methods, computer
or data systems, financial data, clients, and business operations, shall be
treated as confidential and shall not be disclosed by PFA, except as may be
required by its duties hereunder or as may be required by law; provided that
PFA's duty of confidentiality will not apply to information that becomes part of
the public domain through no fault of PFA or that PFA received from a person
unrelated to the Fund or any of its portfolio companies or for which PFA
provides services and who does not violate a duty to the Manager or the Fund or
a portfolio company of the Fund in disclosing such information. All materials
supplied to PFA by the Manager, the Fund or any portfolio company of the Fund,
or obtained by PFA from the Manager, the Fund or any portfolio company of the
Fund, will remain the property of the Fund while in PFA's possession (which PFA
will hold for safe-keeping) and will be returned to the Fund, together with all
copies thereof, upon request or upon the termination of this Agreement,
whichever occurs sooner.
The Manager will provide, on a timely basis, the following information with
regard to the Fund to PFA:
o copies of all cash disbursements made including check and vendor invoice,
o copies of all cash receipts collected including check and supporting
documentation,
o copies of all bank statements to be sent to PFA directly from bank or faxed
by Manager,
o copies of trade tickets for all purchases and sales of short-term
investments or investments in public securities,
o copies of supporting documentation related to purchase of private
investments including copies of share certificates, bridge loan agreements,
warrant agreements, promissory and demand notes and a term sheet or
appropriate pages of purchase agreement indicating the financial terms of
the transaction,
o Manager's letter to Investors and portfolio company current status report,
for inclusion with the quarterly and annual financial reports to Investors,
o recommended portfolio valuation changes for each accounting period
required.
3. Indemnity.
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a) The Fund by its signature at the bottom of this Agreement hereby
indemnifies and holds harmless PFA, its officers, directors and shareholders
(the "Indemnified Persons"), against all losses, damages and out-of-pocket third
party expenses, including reasonable attorneys' fees, incurred as a result of or
related to the breach of the Fund's obligations hereunder and/or related to
claims of third persons against the Indemnified Persons concerning the services
rendered by PFA hereunder, except for claims resulting from the negligence or
misconduct of PFA; provided, however, nothing herein (i) shall limit the right
of the Fund to claim remedy from PFA in connection with any breach of PFA's
obligations hereunder, or (ii) shall require the Fund to indemnify or hold
harmless any Indemnified Person with respect to any claims resulting from the
negligence or misconduct of PFA.
b) Whenever any claim shall arise for indemnification hereunder, PFA
shall promptly notify the Manager of the claim and, when known, the facts
constituting the basis for such claim. The notice to the Manager shall specify,
if known, the amount or an estimate of the amount of the liability arising
therefrom. The Indemnified Persons shall not settle or compromise any claim by a
third party for which they are entitled to indemnification hereunder without the
prior written consent of the Manager, which shall not be unreasonably withheld
or delayed by the Manager, unless suit shall have been instituted against the
Indemnified Persons and the Manager shall not have taken control of the defense
of such suit after notification thereof, as provided below.
c) In connection with any claim for indemnity hereunder resulting from
or arising out of any claim or proceeding by a person who is not a party to this
Agreement, the Fund or the Manager, at its sole cost and expense may, upon
written notice to PFA, assume the defense of such claim or proceeding with
counsel reasonably satisfactory to PFA. The Indemnified Persons shall be
entitled to participate in (but not control) the defense of such claim or
proceeding with their counsel and at their own expense.
4. Term and Termination. This agreement will become effective upon the date
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first herein written and will continue in effect until terminated by the Fund
with 90 days written notice and will automatically terminate upon the
termination of the management agreements between the Manager and the Fund (if
the Manager receives such notice from the Fund, the Manager shall immediately
notify PFA of the same). This agreement can be terminated by PFA for failure by
the Manager to make a payment hereunder to PFA for a period of 30 days after the
same is due and payable. Upon termination, amounts prepaid, if any, from the
date of termination to the end of the prepaid period, will be reimbursed from
PFA to the Manager or the Fund.
5. General.
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Governing Law. This Agreement shall be deemed to have been made in the
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State of New York, and its enforcement, execution, validity, construction,
performance and effect shall be determined in accordance with the laws of the
State of New York without regard to conflicts of law provisions.
Disputes. Any dispute hereunder shall be heard only in the Federal and
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State courts sitting in the City, County and State of New York. Each party
submits itself to the personal jurisdiction of such courts. Service of process
shall be made by personal delivery to a party and to its counsel at their
respective addresses, marked to the attention of the persons designated, for
such party as set forth below with respect to the giving of notice under this
Agreement. The party prevailing in such dispute shall be entitled to be
reimbursed for its reasonable legal fees and expenses by the party not
prevailing.
Assignment. This Agreement shall be binding upon and inure to the benefit
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of the parties, their legal representatives and permitted assigns. Neither the
Fund nor PFA shall assign this Agreement to any person, except that PFA may
assign this Agreement to the successor to all or the substantial part of its
business.
Force Majeure. If the performance of any part of this Agreement by either
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party, or of any obligation under this Agreement (except an obligation to make a
payment) is prevented, restricted, interfered with or delayed by reason of any
cause beyond the reasonable control of the party liable to perform, such as from
fire, earthquake, insurrection or riot, the party so affected shall, upon giving
notice to the other party, not be deemed to be in breach of such performance or
obligation to the extent of such prevention, restriction, interference or delay,
provided that the affected party shall continue to use its reasonable best
efforts to avoid or remove such causes of nonperformance and shall continue
performance with the utmost dispatch whenever such causes are removed.
Notice. Any notice required or permitted under this Agreement shall be
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given in writing and shall be deemed given upon delivery to a party, or on the
first attempted date of delivery to a party after being sent by express carrier
to the following addresses of the parties:
If to PFA: Xxxxxxx Fund Administrators, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, President
with a copy to: Xxxxxxxxxx Xxxxx Xxxxxxx Xxxx Xxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
If to the Fund: The Pacific Corporate Group Private Equity Fund
c/o Pacific Corporate Advisors, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. XxXxxxx
with copies to: Xxxxx & Xxxx LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. XxxXxxxxx, Esq.
Any party may change the address to which notice is to be given to it by giving
notice hereunder of such other address.
Non-Waiver. Any failure by either party to enforce any term or condition of
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this Agreement shall not constitute a waiver by such party of the particular
term or condition. Such a failure to enforce a term or condition shall not
affect or impair the right of such party to enforce the particular term or
condition at any other time.
Representations. Each party represents and warrants that it has the right
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to enter into this Agreement and to perform all of its obligations hereunder and
that the execution of this Agreement and the performance by it of its
obligations hereunder will not result in any breach, violation or default under
any indenture, lease, license, mortgage, loan, or any other agreement,
instrument or understanding, law, governmental rule or regulation, court order
or decree of any kind, to which it, or any of its property, is or may be
subject.
Independent Contractors. Each party is an independent contractor as to the
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other party. Neither party shall be the agent of the other party for any purpose
whatsoever, and shall not have any right or authority to make or underwrite any
promise, warranty or representation, to execute any contract or otherwise to
assume any obligation or responsibility in the name of or on behalf of the other
party.
Headings. All section and sub-section headings contained in this Agreement
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are for convenience of reference only, do not form a party of this Agreement and
shall not effect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties by their duly empowered officers, have
executed this Agreement as of the day and the year first above written.
Xxxxxxx Fund Administrators, Inc. Private Equity Fund
By: Pacific Corporate Group,
Inc., Adviser Trustee
By:______________________________ By:___________________________
Xxxxx X. Xxxxxxx Xxxxxxxxxxx X. Xxxxx
President President
