Document:

Exhibit 10.1

 

 

Amended & Restated Master Services Agreement

This Amended & Restated Master Services Agreement (the “Agreement”) is entered into and effective as of March 31, 2015 (the “Effective Date”) by and among:

	1.	SS&C Technologies, Inc., a corporation incorporated under the laws of the State of Delaware (“SS&C”);

	2.	Each of the collective investment vehicles listed in Schedule C (each a “Fund” and collectively, the “Funds”); and

	3.	Ceres Managed Futures LLC, a limited liability company organized under the laws of the State of Delaware in its capacity as (a) either (i) the general partner of those Funds organized as limited partnerships or (ii) the managing member of those funds organized as limited liability companies and (b) the commodity pool operator of each Fund (“Ceres”).

The Funds and Ceres may be referred to collectively as “Client.”  SS&C and Client may be referred to individually as a “Party” or collectively as “Parties.”

1.            Definitions; Interpretation

1.1            As used in this Agreement, the following terms have the following meanings:

(a)            “Action” means any civil, criminal, regulatory or administrative lawsuit, arbitration or proceeding, in each case, made, asserted, commenced by any person (including any Government Authority), regardless of the legal, equitable or other theory.

(b)            “Affiliate” means, with respect to any person, any other person that is controlled by, controls, or is under common control with such person and “control” of a person means: (i) ownership of, or possession of the right to vote, more than 25% of the outstanding voting equity of that person or (ii) the right to control the appointment of the board of directors or analogous governing body, management or executive officers of that person.

(c)            “Business Day” means a day on which the New York Stock Exchange is open for business.

(d)            “Claim” means any Action arising out of the subject matter of, or in any way related to, this Agreement, its formation or the Services.

(e)            "Client Data" means all data of Client, including data related to securities trades and other transaction data, investment returns, issue descriptions, and the like, and all output and derivatives thereof, necessary to enable SS&C to perform the Services.

(f)            “governing documents” means the constitutional documents of an entity and, with respect to a Fund, all minutes of meetings of the board of directors or analogous governing body and of Fund investors, and any offering memorandum, subscription materials and other disclosure documents utilized by a Fund in connection with the offering of any of its securities to investors, all as amended from time to time.

(g)            “Government Authority” means any relevant administrative, judicial, executive, legislative or other governmental entity, department, agency, commission, board, bureau or court, and any other regulatory or self-regulatory organizations, in any country or jurisdiction.

(h)            “Losses” means any and all compensatory, direct, indirect, special, incidental, consequential, punitive, exemplary, enhanced or other damages, settlement payments, attorneys’ fees, costs, damages, charges, expenses, or other losses of any kind.

(i)            “person” means any natural person or corporate or unincorporated entity or organization and that person’s personal representatives, successors and permitted assigns.

(j)            “Services” means the services listed in Schedule A.

(k)            “SS&C Associates” means SS&C and each of its Affiliates, members, shareholders, directors, officers, partners, employees, agents, successors or assigns.

(l)            “SS&C Property” means all hardware, software, source code, data, report designs, spreadsheet formulas, information gathering or reporting techniques, know-how, technology and all other property commonly referred to as intellectual property used by SS&C in connection with its performance of the Services.

 

 

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1.2            Other capitalized terms used in this Agreement but not defined in this Section 1 shall have the meanings ascribed thereto.

1.3            Section and Schedule headings shall not affect the interpretation of this Agreement.

1.4            Words in the singular include the plural and words in the plural include the singular.  The words “including,” “includes,” “included” and “include”, when used, are deemed to be followed by the words “without limitation.”  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “hereof,” “herein” and “hereunder” and words of analogous import shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  “Law” includes applicable statutes, rules, regulations, interpretations and orders of any Government Authority.

1.5            The Parties’ duties and obligations are governed by and limited to the express terms and conditions of this Agreement, and shall not be modified, supplemented, amended or interpreted in accordance with, any industry custom or practice, or any internal policies or procedures of any Party.  The Parties have mutually negotiated the terms hereof and, accordingly, there shall be no presumption of law relating to the interpretation of contracts against the drafter.

2.            Services and Fees

2.1            SS&C will perform the Services in consideration of the fees, expenses and related payment terms listed in Schedule B.  SS&C shall be under no obligation or duty to perform any service or take any action unless it is specifically listed in Schedule A and no obligations or duties (including, fiduciary or analogous duties) other than those specifically provided for herein shall be implied.

2.2            In carrying out its duties pursuant to this Agreement, some or all Services may be delegated by SS&C to one or more of its Affiliates, with the prior written approval of Client.  If SS&C delegates any Services, such delegation shall not relieve SS&C of its duties and obligations hereunder and SS&C shall remain responsible to Client for the actions of such Affiliates in the course of performing any Services.

3.            Management and Client Responsibilities

3.1            The management and control of each Fund is vested exclusively with Ceres, subject to the terms and provisions of such Fund’s governing documents.  Ceres will make all decisions, perform all management functions relating to the operation of each Fund and authorize all transactions.  Without limiting the foregoing, Ceres, on behalf of each Fund shall:

(a)            Designate properly qualified individuals to oversee the record-keeping and administrative Services provided by SS&C;

(b)            Evaluate the results of the Services performed.  Review and approve all reports, analyses and books and records resulting from the Services and promptly inform SS&C of any errors it is in a position to identify;

(c)            Evaluate the accuracy of the Services; and

(d)            Provide SS&C with timely information required by SS&C in order to perform the Services and its duties hereunder.

3.2            Each Client is solely and exclusively responsible for ensuring that it complies with law and its governing documents.  SS&C is not responsible for monitoring Client’s compliance with (i) law, (ii) their respective governing documents or (iii) any investment restrictions or compliance with the investment restrictions.

3.3            Notwithstanding anything in this Agreement to the contrary, SS&C (i) shall be entitled, without further enquiry, for all purposes in relation to dealings with all persons, to rely on the authenticity and accuracy of any and all information and communications of whatever nature and howsoever received by SS&C in good faith, in connection with the performance of the Services and its duties hereunder, and (ii) shall not be responsible or liable to any person for any Losses arising by virtue of any such information or communication not being authentic and/or accurate.

3.4            Client shall promptly notify SS&C of any material Action against it.

 

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3.5            Client shall deliver, and procure that its various agents deliver, to SS&C, all Client Data and the then most current version of all Fund governing documents and any agreement between Fund and Ceres.  Client shall arrange with each such agent that SS&C will not have to enter any agreements with that person in order for SS&C to provide the Services.

4.            Term

4.1            The initial term of this Agreement will be from the Effective Date through December 31, 2016.  Thereafter, this Agreement will automatically renew for successive terms of 1 year each.  After December 31, 2016 either Party may terminate this Agreement as of a calendar quarter end upon 180 days’ written notice.    In the event of the termination of this Agreement, SS&C shall provide exit assistance by promptly supplying Client Data to the Client or any other party designated by the Client in formats already prepared in the course of providing the Services; provided that all fees and expenses have been paid.  In the event that Client wishes to retain SS&C to perform additional transition services, including providing data and reports in new formats, Client and SS&C shall agree in writing to the additional services and related fees and expenses in advance.

5.            Termination

5.1            In addition to the provisions of Section 4, either Party may, by written notice to the other Party, terminate this Agreement if any of the following events occur:

(a)            The other Party breaches any material term, condition or provision of this Agreement, which breach, if capable of being cured, is not cured within thirty (30) calendar days after the non-breaching Party gives the other Party written notice of such breach.

(b)            The other Party terminates or suspends its business.  If any such event occurs, termination will become effective immediately or on the date stated in the written notice of termination, which date shall not be greater than ninety (90) days after the event.  Termination of this Agreement for any reason shall not affect: (i) any liabilities or obligations of either Party arising before such termination (including payment of fees and expenses) or (ii) any damages or other remedies to which a Party may be entitled for breach of this Agreement or otherwise.

5.2            Sections 6, 8, 9, 10, 11, 12 and 15 of this Agreement shall survive the termination of this Agreement.  To the extent any services that are Services are performed by SS&C for Client after the termination of this Agreement all of the provisions of this Agreement except Schedule A shall survive the termination of this Agreement for so long as those services are performed.

5.3            Ceres shall notify SS&C in writing at least twenty (20) days in advance of the date that it wishes to have an additional fund join this Agreement and become a Fund hereunder.  Any such notification shall be provided as described in Schedule D.  No entity shall become a Party hereunder without the consent of SS&C, which consent shall not be unreasonably withheld or delayed (including with respect to the fees payable with respect to that entity).

6.            Limitation of Liability and Indemnification

6.1            Notwithstanding anything in this Agreement to the contrary, SS&C Associates shall not be liable to Client for any action or inaction of any SS&C Associate except to the extent of Losses resulting from the gross negligence, willful misconduct or fraud of SS&C in the performance of SS&C’s duties or obligations under this Agreement.  The maximum amount of liability of SS&C Associates to Client for Losses arising out of the subject matter of, or in any way related to, this Agreement, except to the extent of Losses resulting from the, willful misconduct or fraud of SS&C Associates in the performance of SS&C’s duties or obligations under this Agreement, shall not exceed (a) if such Losses occur in the first sixty (60) months  after the Effective Date (the “Initial Period”), an amount equal to the product of (i) the actual amount of fees paid by Client to SS&C during the Initial Period divided by the number of months that have elapsed in the Initial Period and (ii) sixty (60) and (b) if such Losses occur after the Initial Period, the fees paid by Client to SS&C under this Agreement for the most recent sixty (60) months immediately preceding the date of the event giving rise to the Claim or, if the Agreement had been effective for less than 60 months, the fees payable since the Effective Date times a number equal to 60 months divided by the months since the Effective Date..  For the avoidance of doubt, the maximum of liability of SS&C Associates for Losses arising from the willful misconduct or fraud of SS&C Associates shall be to the maximum extent permissible by law.

6.2            For the avoidance of doubt, SS&C shall not be liable for indirect, special, incidental, consequential, punitive, exemplary or enhanced or other similar damages (including lost profits and diminution of value) arising out of the subject matter of this Agreement, whether they were foreseeable, whether or not advised of their possibility and notwithstanding the failure of any agreed or other remedy of its essential purpose.  Any fines or penalties assessed on a Party by a Government Authority under applicable law arising out of the other party’s breach of this Agreement are direct damages.

 

 

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6.3            To the maximum extent permissible by law, Client shall indemnify and hold harmless the SS&C Associates from and against any third party claims, liabilities, costs and expenses (including legal fees to enforce this provision) that the SS&C Associates suffer, incur, or pay as a result of any Claim except to the extent they result from the gross negligence, willful misconduct or fraud of SS&C Associates.  SS&C will promptly notify Client of any such Claim and will reasonably cooperate with Client in the defense of such Claim, at Client’s expense.

6.4            To the maximum extent permissible by law, SS&C shall indemnify and hold harmless the Client and each of its Affiliates, members, shareholders, directors, officers, partners, employees, agents, successors or assigns from and against any third party claims, liabilities, costs and expenses (including legal fees to enforce this provision) that they suffer, incur, or pay as a result of a Claim arising out of or relating to the provision or utilization of any Services or any portion thereof that constitutes an infringement, violation, contravention or breach of any patent, copyright, trademark, license or other intellectual property right of any third party.  Client will promptly notify SS&C of any such Claim and will reasonably cooperate with SS&C in the defense of such Claim, at SS&C’s expense.

6.5            A Party indemnifying under Sections 6.3 or 6.4 will have the right to conduct the defense of any such Claim and all negotiations for its settlement or compromise except that the other Party may in its sole discretion participate in the defense of any such Claim at the indemnifying Parties’ expense.  Notwithstanding the foregoing, a Party may not, without the other Party’s prior written consent, settle, compromise or consent to the entry of any judgment in any such Claim, unless such settlement, compromise or consent: (i) includes an unconditional release of the relevant Parties that are being indemnified from all liability arising out of such Claim and (ii) is solely monetary in nature and does not include a statement as to, or an admission of fault, culpability or failure to act by or on behalf of, any Parties that is being indemnified or otherwise adversely affect any such Party.  If a Party fails to appoint an attorney within ten (10) days after the other Party has notified it of an indemnifiable Claim, or after it becomes aware of such Claim, whichever is earlier, the other Party will have the right to select and appoint an alternative attorney and the reasonable cost and expense thereof will be paid by it.

7.            Representations and Warranties

7.1            Each Party represents and warrants to each other Party that:

(a)            It is a legal entity duly created, validly existing and in good standing under the law of the jurisdiction in which it is created, and is in good standing in each other jurisdiction where the failure to be in good standing would have a material adverse effect on its business or its ability to perform its obligations under this Agreement;

(b)            It has all necessary legal power and authority to own, lease and operate its assets and to carry on its business as presently conducted and as it will be conducted pursuant to this Agreement and will comply in all material respects with all law to which it may be subject;

(c)            It has all necessary legal power and authority to enter into this Agreement and to perform its obligations hereunder, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary actions on its part, and performance hereunder does not violate the terms of any contract, covenant or agreement between it and any unrelated third party;

(d)            The person signing on its behalf has the authority to contractually bind it to the terms and conditions in this Agreement and that this Agreement constitutes a legal, valid and binding obligation of it, enforceable against it in accordance with its terms;

(e)            It is not a party to, and is not bound or affected by or subject to, any instrument, agreement, charter or by-law provision, law or judgment which would be contravened or breached as a result of the execution or performance of this Agreement; and

(f)            To the best of its knowledge and belief, it is not the subject of any Action that would prevent it from performing its obligations under this Agreement.

 

 

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7.2            The General Partner of each Fund represents and warrants to SS&C that it has actual authority to provide instructions and directions on behalf of Fund and that all such instructions and directions are consistent with the governing documents of Client and other corporate actions of Client.

7.3            The Fund represents and warrants to SS&C that (i) it is not registered or required to be registered as an investment company under the U.S. Investment Company Act of 1940, as amended, and (ii) if its securities are publicly registered or required to be publicly registered in the U.S. or the EU, that fact is disclosed in the Fund’s offering documents.

7.4            SS&C represents and warrants that:

(a)            All Services will be performed with reasonable care, skill and diligence in a professional and workmanlike manner using suitably qualified and experienced personnel and with the necessary number of people to meet deadlines;

(b)            None of the Services nor the provision or utilization thereof as contemplated under this Agreement, do or will infringe, violate, or in any manner contravene or breach or constitute the unauthorized use or misappropriation of any intellectual property rights of any third party;

(c)            No deliverables provided in the course of the provision of the Services will contain, and SS&C will not insert in those deliverables any computer code (i) designed to disrupt, disable, harm, or otherwise impede the operation of the software or firmware or any computer or network (referred to as “viruses” or “worms”) and/or (ii) that would disable the software or firmware or any computer or network or impair in any way their operation based on the elapsing of a period of time, the exceeding of an authorized number of copies, or the advancement to a particular date or other numeral (referred to as “time bombs”, “time locks”, or “drop dead” devices); and/or (iii) that would permit SS&C or any third party to access the software or firmware or any computer or network system (referred to as “traps”, “access codes” or “trap door” devices) of Client or its Affiliates;

(d)            It shall use reasonable efforts to provide the Services contemplated under this Agreement in compliance with applicable law; and

(e)            SS&C and SS&C's shareholders, directors, officers, and employees, and SS&C's agents or representatives, if any, will comply with applicable anti-corruption laws.

8.            Client Data

8.1            Client will provide or ensure that other persons provide all Client Data to SS&C in an electronic format that is as specified in advance by SS&C (or as otherwise agreed in writing).  SS&C shall not be responsible or liable for the accuracy, completeness, integrity or timeliness of any Client Data provided to SS&C by Client or any other person.  All Client Data shall remain the property of the applicable Client.  Client Data shall not be used or disclosed by SS&C other than in connection with providing the Services and as permitted under Section 11.4.

8.2            SS&C will provide data backup and shall maintain and store Client Data used in the accounting books and records of Fund for a rolling period of seven (7) years starting from the date the Services commenced for Client.

9.            Data Protection

9.1            From time to time SS&C may obtain access to certain personal information or sensitive personal information of Client or of Fund investors or prospective investors (“Personal Information”).  For purposes of protecting Personal Information and/or data and for compliance with (i) Title V of the Gramm-Leach-Bliley Act of 1999 or any successor federal statute to that act, and the rules and regulations thereunder, all as may be amended or supplemented from time to time, (ii) the European Union’s Data Protection Directive (95/46/EC) or Data Protection Act 1998 or any implementing or related legislation of any member state in the European Economic Area (the “EEA Data Protection Laws”), (iii) the Australia Privacy Act 1988, and (iv) any other applicable laws concerning Personal Information, in the event that SS&C has access to or acquires individually identifiable information, SS&C will comply with the terms and conditions set forth in Schedule D.

10.            SS&C Property

10.1            SS&C Property is and shall remain the property of SS&C or, when applicable, its Affiliates or suppliers.  Neither Client nor any other person shall acquire any license or right to use, sell, disclose, or otherwise exploit or benefit in any manner from, any SS&C Property.  Client shall not (unless required by law or pursuant to legal process or a request from any applicable Government Authority) either before or after the termination of this Agreement, disclose to any person not authorized by SS&C to receive the same, any information concerning the SS&C Property and shall use commercially reasonable efforts to prevent any such disclosure by Client.

 

 

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11.            Confidentiality

11.1            Each Party undertakes that it shall not at any time disclose to any person any confidential information concerning the business, affairs, customers, clients or suppliers of the other Party or its Affiliates, including any Personal Information (all such confidential information together referred to herein as the “Confidential Information”), except as permitted by this Section 11.

11.2            Each Party may disclose the other Party’s Confidential Information:

(a)            In the case of Client, to each of its Affiliates, members, shareholders, directors, officers, partners, employees and agents, and in the case of SS&C, to each other SS&C Associate, in each case who need to know such information for the purposes of carrying out the Party’s obligations under this Agreement.  Each Party shall ensure that all persons to whom the Party discloses the other Party’s Confidential Information comply with this Section 11; and

(b)            As may be required by law or pursuant to legal process; provided that the disclosing Party (i) where reasonably practicable, where required or requested by a Government Authority with jurisdiction over the Party and to the extent legally permissible, provides the other Party with prompt written notice of the required disclosure so that the other Party may seek a protective order or take other analogous action, (ii) discloses no more of the other Party’s Confidential Information than reasonably necessary and (iii) reasonably cooperates with actions of the other Party in seeking to protect its Confidential Information at that Party’s expense.

11.3            Neither Party shall use the other Party’s confidential information for any purpose other than to perform its obligations under this Agreement.  Each Party may retain a record of the other Party’s Confidential Information for the longer of seven (7) years or as required by law. Upon termination or expiration of this Agreement or upon the disclosing Party’s written request and where practicable, the receiving Party will return to the disclosing Party all copies of the disclosing Party’s Confidential Information already in the receiving Party’s possession or within its control.  Alternatively, with the disclosing Party’s prior written consent, the receiving Party may destroy such Confidential Information using means to protect against unauthorized access to or use of the information, including, where appropriate, burning, shredding, or pulverizing such information, or by taking such other means as to assure that such information may not be recoverable following its disposal. In such case, an officer of the receiving Party will certify in writing to the disclosing Party that all such Confidential Information has been so destroyed. Notwithstanding the foregoing, the receiving Party may retain copies of such Confidential Information as required by applicable law, or, to the extent such copies are electronically stored in accordance with the receiving Party's retention or back-up policies or procedures (including those regarding electronic communication), so long as such Confidential Information is kept confidential as required under this Agreement.

11.4            SS&C’s ultimate parent company is subject to U.S. federal and state securities laws and may make disclosures as necessary to comply with such laws.  Upon the prior consent of the applicable Client (which may be withheld at the Client’s absolute discretion), SS&C shall have the right to identify such Client in connection with its marketing-related activities and in its marketing materials as a client of SS&C.  Client shall have the right to properly identify SS&C and to describe the Services and the material terms of this Agreement in the offering documents of any Fund.  This Agreement shall not prohibit SS&C from using any Client data (including Client Data) in tracking and reporting on SS&C’s clients generally or making public statements about such subjects as its business or industry; provided that Client is not named in such public statements without its prior written consent.

11.5            Security Event; Security Notification.

(a)            During the term of the Agreement, SS&C will comply with its Information Security Policy, the Executive Summary of which has been provided to the Client.  SS&C shall promptly provide Client a copy thereof at any time.

(b)            In the event that SS&C learns or has reason to believe that, (i) Confidential Information has been disclosed or accessed by an unauthorized party, (ii) SS&C’s facilities associated with such Confidential Information have been accessed by an unauthorized party or (iii) Client’s Confidential Information has otherwise been lost or misplaced, SS&C will promptly give notice of such event to Client.

 

 

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(c)            In the event that SS&C learns or has reason to believe that with respect to the Services there (i) has been a breach of its security practices or systems, or (ii) is a weakness in SS&C’s security practices or systems, in each instance irrespective of cause, to the extent such breach or weakness could reasonably be expected to (y) allow unauthorized access to Confidential Information or SS&C’s facilities associated with such Confidential Information or (z) adversely impact the Services, to the extent permitted by law SS&C will promptly give notice of such event to Client.

(d)            In the event that SS&C has access to or acquires individually identifiable information in relation to this Agreement, the following shall apply: SS&C acknowledges that upon unauthorized access to or acquisition of such individually identifiable information within SS&C custody or control (a “Security Event”), the law may require that SS&C notify the individuals whose information was accessed or disclosed that a Security Event has occurred.  SS&C must notify Client promptly if SS&C learns or has reason to believe a Security Event has occurred.  Except to the extent prohibited by mandatory applicable law, SS&C agrees that it will not notify any individual until SS&C first consults with Client and Client has had an opportunity to review the notification SS&C proposes to issue to individuals and given its express consent to the same.

(e)            The notices required under (a), (b) and (c) of this Section 11.5 shall be given in accordance with Section 12.  Such notice shall contain material details of the security issue that are known at the time of notification, except to the extent prohibited by mandatory applicable law or subject to a request by law enforcement or other government agency to withhold such notice.  SS&C shall (i) promptly take appropriate steps to contain and control the security issue to prevent unauthorized access or further unauthorized access (as applicable) to or misuse of the Confidential Information; and (ii) continue to provide information relating to the investigation and resolution of the security issue until it has been resolved.  SS&C will maintain appropriate processes for evidence collection, analysis and remediation of any security related incident as well as postmortems and resulting actions taken or proposed with timelines for completion and will make such information available to Client at its reasonable request.  SS&C will cooperate fully with Client or its investigator in investigating and responding to each successful or attempted security breach including allowing prompt access to SS&C’s facility by Client or its investigator to investigate.

12.            Notices

12.1           Except as otherwise provided herein, all notices required or permitted under this Agreement or required by law shall be effective only if in writing and delivered: (i) personally, (ii) by registered mail, postage prepaid, return receipt requested, (iii) by receipted prepaid courier, (iv) by any confirmed facsimile or (v) by any electronic mail, to the relevant address or number listed below (or to such other address or number as a Party shall hereafter provide by notice to the other Parties).  Notices shall be deemed given when received by the Party to whom notice is required to be given.

	 	
If to SS&C (to each of):

	 
	 	 	 
	 	
SS&C Technologies, Inc.

	
SS&C Technologies, Inc.

	 	
80 Lamberton Road

	
80 Lamberton Road

	 	
Windsor, Connecticut  06095

	
Windsor, Connecticut  06095

	 	
Attention:  Chief Operating Officer

	
Attention:  General Counsel

	 	
Fax:  +1 860.298.4969

	
Fax:  +1 860.298.4969

	 	
E-mail:  notices@sscinc.com

	
E-mail:  SSCGlobeOpNotices@sscinc.com

	 	
If to Client (to any of):

	 
	 	 	 
	 	
Morgan Stanley – Managed Futures Fund Administration

522 Fifth Avenue, 7th Floor

New York, NY  10036

	
Morgan Stanley – Legal & Compliance

522 Fifth Avenue

New York, NY  10036

Attention: Philip Levy

	 	
Attention:  Steven Ross

	
Tel:  +1 212.296-6081

	 	
Tel:        +1 212.761.7706

	
Fax:  +1 914-750-0316

	 	
E-mail:  Steven.Ross@morganstanley.com

	
E-mail:  Philip.Levy@morganstanley.com

 

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13.            Audit

13.1            On an annual basis SS&C shall provide Client with a copy of its independent audit reports including International Standard on Assurance Engagements No. 3402 (ISAE 3402) Assurance Reports on Controls at a Service Organization or Statement on Standards for Attestation Engagements No. 16 (SSAE 16) Reporting on Controls at a Service Organization) and reviews of its data processing environment within a reasonable time after such reports are completed, and shall make all work papers regarding such audits available to the appropriate regulatory agencies, if any, having jurisdiction over SS&C’s provision of Services hereunder.  Within thirty (30) days following Client’s request, the Parties shall meet to discuss the frequency, scope and level of detail of SS&C’s internal and independent audits.  SS&C shall use commercially reasonable efforts to incorporate Client’s comments into the requirements for its next and subsequent independent audits.  With reasonable notice and during usual business hours Client may on five (5) Business Days’ notice conduct audits and reviews of relevant SS&C facilities, systems business records policies procedures, internal practices, system procedures on SS&C’s premises with respect to the Services at Client’s cost.  In addition, SS&C will provide Client with the non-confidential results of a security audit contemplated by the Information Security Policy to be performed no less than annually.  This security audit will be at no expense to Client and will test the compliance with the SS&C’s security standards and procedures with respect to Client.  Client will have the ability to bring in a third party (who may not be a competitor of SS&C), subject to such third party being subject to appropriate obligations of confidentiality in its agreement with Client, or use its own staff for an independent security audit.  If Client chooses to conduct its own security audit, it will be at Client’s expense.

14.            Intentionally Left Blank

15.            Miscellaneous

15.1            Amendment; Modification.  This Agreement may not be amended or modified except in writing signed by an authorized representative of each Party.

15.2            Assignment.   Neither party will assign its rights or obligations under this Agreement without the prior written consent of the other party and any attempt to do so without such consent will be null and void.  Notwithstanding the foregoing and anything to the contrary otherwise set forth in this Agreement, either Party may assign (or assume and assign) its rights or obligations under this Agreement, in whole or in part, to any of its Affiliates or to any entity (i) that acquires all or substantially all of the Party’s assets; (ii) that is otherwise a successor in interest to the Party (including any such assignment, or such assumption or assignment, of this Agreement by the Party and assumption of this Agreement by a trustee (or any entity or governmental authority serving a similar purpose) in connection with any bankruptcy or other insolvency proceeding with respect to the Party and/or its Affiliates); or (iii) to which Client has outsourced substantially all, or major segments of, the activities covered under this Agreement, provided that in no event shall such assignment to an outsourcer relieve a Party of its obligations under this Agreement.  Each Party hereby consents to any such assignment (or assumption, whether or not assigned) in connection with any bankruptcy or other insolvency proceeding with respect to the Party and/or its Affiliates.  This Agreement will be binding upon the parties and their respective legal successors and permitted assigns.

15.3            Choice of Law; Choice of Forum.  This Agreement shall be interpreted in accordance with and governed by the laws of the State of New York.  Each Party irrevocably agrees that the courts of the State of New York and the United States District Court for the Southern District of New York shall have exclusive jurisdiction to settle any Claim.  The Parties submit to the exclusive jurisdiction of such courts and waive to the fullest extent permitted by law all rights to a trial by jury.

15.4            Counterparts; Signatures.  This Agreement may be executed in counterparts, each of which when so executed will be deemed to be an original.  Such counterparts together will constitute one agreement.  Signatures may be exchanged via facsimile or electronic mail and shall be binding to the same extent as if original signatures were exchanged.

15.5            Entire Agreement.  This Agreement (including any schedules, attachments, amendments, and addenda hereto) contains the entire agreement of the Parties with respect to the subject matter hereof and supersedes all previous communications, representations, understandings and agreements, either oral or written, between the Parties with respect thereto.  No SS&C Associate has authority to bind SS&C in any way to any oral covenant, promise, representation or warranty concerning this Agreement, the Services or otherwise.  This Agreement amends and restates the Master Services Agreement dated March 31, 2015 between SS&C Technologies, Inc. and Ceres Managed Futures LLC, on behalf of the Funds.

 

 

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15.6            Force Majeure.  SS&C will not be responsible for any Losses of Client or Client’s property in SS&C Associates’ possession or for any failure to fulfill its duties hereunder if such Loss or failure is caused, directly or indirectly, by war, terrorist or analogous action, the act of any Government Authority or other authority, riot, civil commotion, rebellion, storm, accident, fire, lockout, strike, power failure, computer error or failure, delay or breakdown in communications or electronic transmission systems, or other analogous events.  SS&C shall use commercially reasonable efforts to minimize the effects of any such event.

15.7            Non-Exclusivity.  The duties of SS&C hereunder shall not preclude SS&C from providing services of a comparable or different nature to any other person.  Client understands that SS&C may have relationships with providers of technology, data or other services to Client and SS&C may receive economic or other benefits in connection with Client’s activities.

15.8            No Partnership.  Nothing in this Agreement is intended to, or shall be deemed to, constitute a partnership or joint venture of any kind between any of the Parties.

15.9            No Solicitation.  Client agrees that, during the term of this Agreement and for a period of twelve (12) months after termination of this Agreement, it will not directly or indirectly solicit the services of, or otherwise attempt to employ or engage any employee of SS&C or its Affiliates without the consent of SS&C; provided, however, that the foregoing shall not prevent Client from soliciting employees through general advertising not targeted specifically at any or all SS&C Associates.  If Client hires any SS&C Associate during the term of this Agreement or the period of twelve (12) months after the termination of this Agreement, Client shall be responsible for any damages or other remedies to which SS&C may be entitled, including fees and expenses (including recruiters’ fees) incurred by SS&C or its Affiliates in hiring replacement personnel.

15.10            No Warranties.  Except as expressly listed herein, SS&C makes no warranties, whether express, implied, contractual or statutory with respect to the Services.  SS&C disclaims all implied warranties of merchantability and fitness for a particular purpose with respect to the Services.  All warranties, conditions and other terms implied by law are, to the fullest extent permitted by law, excluded from this Agreement.

15.11            Severance.  If any provision (or part thereof) of this Agreement is or becomes invalid, illegal or unenforceable, the provision shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable.  If such modification is not practical, the relevant provision shall be deemed deleted.  Any such modification or deletion of a provision shall not affect the validity, legality and enforceability of the rest of this Agreement.  If a Party gives notice to another Party of the possibility that any provision of this Agreement is invalid, illegal or unenforceable, the Parties shall negotiate to amend such provision so that, as amended, it is legal, valid and enforceable and achieves the intended commercial result of the original provision.

15.12            Testimony.  If SS&C is required by a third party subpoena or otherwise, to produce documents, testify or provide other evidence regarding the Services, this Agreement or the operations of Fund in any Action to which Client is a party or otherwise related to Client, Client shall reimburse SS&C for all out of pocket costs and expenses, for legal representation, that SS&C reasonably incurs in connection therewith, except for costs and expenses resulting solely from the gross negligence, willful misconduct or fraud of SS&C Associates in the performance of SS&C’s duties or obligations under this Agreement.

15.13            Third Party Beneficiaries.  This Agreement is entered into for the sole and exclusive benefit of the Parties and will not be interpreted in such a manner as to give rise to or create any rights or benefits of or for any other person except as set forth with respect to SS&C Associates.

15.14            Waiver.  No failure or delay by a Party to exercise any right or remedy provided under this Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy.  No exercise (or partial exercise) of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.

*            *            *

Page 9 of 20

This Agreement has been entered into by the Parties as of the Effective Date.

	
SS&C Technologies, Inc.

 

	
Ceres Managed Futures LLC, on behalf of each of the Funds listed on Schedule C

 

	
By:

	
/s/ Patrick Pedonti                        

 

	
By:

	
/s/ Patrick T. Egan                           

 

	
Name:

	
Patrick Pedonti                           

 

	
Name:

	
Patrick T. Egan                                

 

	
Title:

	
Senior Vice President and CFO 

 

	
Title:

	
President and Director                     

 

	 	 	 	 

 

 

  

Page 10 of 20

Schedule A

Services

General

	1.	As used in this Schedule A, the following additional terms have the following meanings:

		(i)	“AML” means anti-money laundering and countering the financing of terrorism.

		(ii)	“investor” means an equity owner in the Fund, whether a shareholder in a company, a partner in a partnership, a unitholder in a trust or otherwise.  A “prospective investor” means an applicant to become an investor.

		(iii)	“NAV” means net asset value.

		(iv)	“OFAC” means the Office of Foreign Assets Control, an agency of the United States Department of the Treasury.

	2.	Any references to law are to be construed to the law as amended to the date of effectiveness of the relevant provision.

	3.	Client acknowledges that SS&C’s ability to perform the Services is subject to SS&C’s timely receipt of all Client Data and the then most current version of all Fund governing documents and the receipt of such information in an accurate and complete form, and in electronic file format, acceptable to SS&C.

	4.	The following Services will be performed by SS&C and, as applicable, are contingent on the performance of Client of the duties and obligations listed.

A.            Accounting – Daily Processing

	5.	Receive and import a daily trade file from Client.

	6.	On a daily basis (i) reconcile portfolio transactions, positions and cash balances to prime brokers and custodian banks, (ii) process involuntary corporate actions and income items, (iii) record income and expense accruals and applicable cash payments and (iv) process voluntary corporate action notices upon receipt of instructions from Ceres.

	7.	Provide daily profit and loss, estimated NAV and position and reconciliation reports:

		(i)	Daily reports do not include investor allocations unless specifically agreed.

		(ii)	If all required items are provided in a timely manner to SS&C, reports are to be delivered the following Business Day (T+1) as soon as reasonably practicable, but in no event later than 12:00 Noon, New York prevailing time.  Typically, the estimated NAV (price per share), daily and month-to-date rates of returns, position and trading profit & loss reports are delivered before 11:00 A.M., New York prevailing time.

		(iii)	Disseminate daily NAVs to third parties (i.e., Reuters).

	8.	Assist in establishing and operating Fund bank accounts as reasonably instructed by Ceres.

B.            Accounting -- Monthly NAV Calculation

	9.	Reconcile portfolio transactions, positions and cash balances to prime brokers/custodian banks and statements from underlying investments on a daily basis.  Maintain Fund books and records including general ledger accounts.

	10.	Calculate and accrue income, expenses, gains and loss.

	11.	Prepare financial, performance and other reporting to be distributed to Ceres and third parties (i.e., Chennai and Broadridge) as mutually agreed in writing.

	12.	Communicate with Ceres with respect to the Fund’s accounting books and records and related matters.

	13.	Calculate the NAV following each month-end and each other date as may be agreed in writing.

 

 

Page 11 of 20

 

C.            Financial Statements and Financial and Audit Support

	14.	Coordinate the annual audit between Ceres and the Fund auditor including establishing timelines for SS&C deliverables, and answering questions as appropriate.

	15.	Prepare the Fund’s draft annual financial statements and accompanying materials:

		(i)	Provide the Fund auditor with information customarily provided by SS&C to facilitate their audit.

		(ii)	Prepare the first draft of the financial statement schedules, footnotes, schedules of investments and applicable calculations and presentations of footnote disclosures.  Incorporate comments from Fund auditors as well as Fund legal counsel and coordinate with financial printers.

	16.	Client shall (i) provide information to SS&C to complete the financial statement schedules and notes to the financial statements if SS&C is preparing such notes, (for matters such as risk management disclosures, details of related party transactions, netting and collateral arrangements), (ii) assist and guide SS&C with determining industry, geographic and other descriptions and classification of assets, (iii) provide all required disclosure of regulatory status, (iv) provide such other information and assistance as SS&C may reasonably request related to the preparation and audit of the financial statements or related schedules, as appropriate, and (v) approve all information prepared on behalf of Client and provided to the Fund auditor.

	17.	With respect to the Forms 10K and 10Q that a Fund is required to file with the U.S. Securities and Exchange Commission manage the updating and production process, including: (i) provide the financial schedules and other financial data necessary to complete the Forms to Ceres in template form as agreed in writing by the Parties, (ii) respond to questions related thereto, (iii) provide back-up schedules as agreed in writing by the Parties and (iv) incorporate comments to the Forms from Client, Fund auditors and Fund legal counsel.

	18.	Notwithstanding anything in this Agreement to the contrary, Client has ultimate authority over and responsibility for its financial statements and filings (including preparing in EDGAR format) with the U.S. Securities and Exchange Commission.

D.            Form CPO-PQR (applicable to Ceres only with respect solely to the Funds as applicable)

	19.	Assist Ceres with its quarterly filings of Form CPO-PQR; the estimated first filing date shall be for the period ending September 30, 2015.

	20.	Provide Ceres password protected access to the Form CPO-PQR reporting section of SS&C’s web portal during business hours.

	21.	Enrich data stored in SS&C systems with required information for Form CPO-PQR.

	22.	Provide other implementation services as may be reasonably required to enable Client to access and use the Form CPO-PQR Services as described herein.

	23.	Assist Ceres with collecting information required to be sourced initially from the Client and develop processes to collect this information directly where practical going forward.

	24.	Maintain a history of previously filed Form CPO-PQR reports including all supporting documentation.

	25.	Provide software updates to reflect routine regulatory changes by the U.S. Commodities Futures Trading Commission or National Futures Association, as applicable.

	26.	In order for SS&C to provide Form CPO-PQR Services, Ceres shall prepare and provide in a timely manner and supply SS&C answers to questions related to aspects of the form.  With respect to collective investment vehicles for which SS&C does not maintain such entities investment records, Ceres will provide the data to SS&C in a predefined template or in an easily convertible data format as agreed in writing by the parties.  SS&C shall have no responsibility for or with respect to any such data supplied by Ceres.

	27.	Ceres has ultimate authority over and responsibility for its Form CPO-PQR filings.

E.            Tax Matters (U.S. Federal Income Tax Related)

	28.	Provide the applicable level of tax services to each Fund as listed on Schedule C.

 

 

Page 12 of 20

	29.	Level I Services:

		(i)	Work with Ceres and the Fund’s audit firm, if requested by Ceres, to calculate Fund level U.S. federal taxable income.  Client shall inform SS&C of all tax elections made or to be made on a timely basis and provide SS&C with all related correspondence with the United States Internal Revenue Service.

		(ii)	For Funds that are treated as partnerships under the U.S. Internal Revenue Code of 1986 (the “Code”), maintain tax capital accounts and tax capital roll-forwards by investment.

		(iii)	Prepare for the Fund a qualified dividend (as defined in §1 of the Code) analyses and report.

		(iv)	Prepare a wash sales (§1091 of the Code) analyses and report.  Client shall be responsible for identifying substantially identical stock or securities as requested by SS&C.  Prepare an analyses of other book to tax differences.

		(v)	Prepare mixed straddle account analyses and support (based on Temp Treas. Reg . §1.1092(b)-4T), including monthly evaluation of trades to support a timely election process.

		(vi)	Prepare computation and analyses for Funds that have made §988(c)(1)(E) of the Code Qualified Fund Elections, §988(a)(1)(b) of the Code Major Currency Forward Elections and §475(f)(1) of the Code Mark to Market Elections.

		(vii)	Prepare analyses and reports for Fund trades under §1256 of the Code.

	30.	Level II Services:

		(i)	Provide Level I Services.

		(ii)	Allocate Fund level U.S. federal taxable income to the appropriate investors.

	31.	Level III Services:

		(i)	Provide Level I and Level II Services.

		(ii)	Prepare a draft U.S. Federal income tax return for Funds that are treated as partnerships under the Code on Form 1065, together with Schedules K-1 and other relevant schedules and supporting work papers; prepare related U.S. state tax returns due to resident limited partners.

		(iii)	Provide digital Schedule K-1 packages.

		(iv)	Engage a third party public accounting firm reasonably acceptable to both SS&C and Ceres to provide tax partner review and signature on the Fund’s U.S. Federal partnership income tax return, including Schedule K-1s, and related U.S. state tax returns or filings due to resident limited partners (currently Georgia, Indiana, Missouri, New Jersey, New York, Oregon, Pennsylvania, and West Virginia).

		(v)	Calculate foreign withholding payments under the §§1441-1446 of the Code and prepare U.S. Federal income tax Form 1042/8804 as required.  File all necessary related extensions electronically or by paper as may be required.

		(vi)	With respect to those draft tax returns it prepares, prepare extension filings and procedural responses to U.S. Federal and state tax notices.

		(vii)	Prepare final tax returns and file them with the proper tax authority, electronically where available, or by paper when electronic filing is not practical.

		(viii)	Prepare and file Fund Form 1099-Misc information returns, if applicable, electronically.

		(ix)	Prepare investor letters containing taxable income estimates for those Funds that do not provide Form K1s in March of each year, if applicable, in a form agreed by the Parties in writing.

	32.	SS&C will not prepare any U.S. state, withholding or non-U.S. returns, filings schedules and other schedules unless specifically agreed in writing with Client.

 

 

Page 13 of 20

F.            Miscellaneous

	33.	Notwithstanding anything to the contrary in this Agreement, SS&C:

		(i)	Does not maintain custody of any cash or securities.

		(ii)	Does not have the ability to authorize transactions.

		(iii)	Does not have the authority to enter into contracts on behalf of the Fund.

		(iv)	Is not responsible for determining the valuation of the Fund’s assets and liabilities.

		(v)	Does not perform any management functions or make any management decisions with regard to the operation of the Fund.

		(vi)	Is not responsible for effecting any U.S. federal or state regulatory filings which may be required or advisable as a result of the offering of interests in the Fund.

		(vii)	Is not the Fund’s tax advisor and does not provide any tax advice.

		(viii)	Is not obligated to perform any additional or materially different services due to changes in law or audit guidance.

	34.	It is the responsibility of Client to safeguard all passwords and any other login credentials; for all purposes of this Agreement SS&C shall be entitled to assume that any user of such credentials is an authorized representative of the Client.

	35.	Notwithstanding anything in this Agreement to the contrary, Fund has ultimate authority over and responsibility for its tax matters and financial statement tax disclosures.  All memoranda, schedules, tax forms and other work product produced by SS&C are the responsibility of the Fund and are subject to review and approval by Client and the Fund’s auditors, or tax preparers, as applicable.

	36.	Provide reasonable assistance to responding to due diligence and analogous requests for information from investors and prospective investors (or others representing them); provided, that SS&C may elect to provide these services only upon Client agreement in writing to separate fees in the event responding to such requests becomes, in SS&C’s absolute discretion, excessive.

	37.	Maintain books and records with respect to the Services.  As it pertains to books and records of the commodity pools, certify using SS&C’s standard client certification form that certain books and records required to be maintained by commodity pool operators by the U.S. Commodities Futures Trading Commission are being maintained by SS&C.

 

 

Page 14 of 20

 

Schedule B

Fees and Expenses

	1.	Fees

SS&C will provide the Services at the rates and fees agreed from time to time in writing between the Parties.

	2.	Fees for Additional Services; Expenses

Fees for conversion, customized reports and other services not listed above will be agreed between the Parties prior to any such additional services being provided.  Fees for reviews of Client records maintained by SS&C by Government Authorities in connection with those authorities oversight or regulation of Client or otherwise not caused by SS&C will be billed at SS&C’s standard rates (currently $325 per hour), if applicable; SS&C shall promptly notify Ceres of any such review or proposed review and the then current standard rate.  For Services that require information for the year 2015, such as tax and regulatory filings, Client shall provide data to SS&C in formats reasonably acceptable to SS&C in order to supply such Services.  Additional fees at SS&C’s standard rates will apply if such data is not provided.

Reasonable out-of-pocket expenses and any and all charges for Market Data will be billed to the Client separately on a monthly basis.  Out-of-pocket expenses, including expenses incurred by SS&C for shipping, duplicating, cost of data, and other direct expenses, are billed to Client, and are in addition to any fees.  Out of pocket expenses will be subject to procedures as the Parties may reasonably agree in writing; provided that SS&C shall use best efforts to comply with Ceres “Expense Reimbursement Policy for Consultants” as provided by Ceres in writing from time to time.  Any such expenses will be charged on a pass-through basis at SS&C’s cost or on an allocated basis and SS&C will provide Client with documentation evidencing all approved expenses.

 

 

 

 

Page 15 of 20

	3.	Payment and Fee Changes

Payment shall be made to SS&C or its Affiliates by wire transfer or at the address on the fee statement or invoice or at such other address as SS&C may specify.  Unless otherwise stated, fees are billed monthly in advance and are due and payable upon receipt of the invoice.  Bills for expenses and are due and payable upon receipt of SS&C’s invoice.

Each invoice, to the extent not reasonably disputed, is due and payable within 45 days after Client’s receipt of such invoice.  Client is responsible for payment for all billed and unbilled fees for the provision of Services through the date of termination of this Agreement.

Client shall reimburse SS&C for any applicable sales, use, property or other taxes and customs duties paid or payable by SS&C in connection with the Services or property (such as Market Data) delivered in connection with this Agreement.  Client shall have no liability for any taxes based upon the net income of SS&C.  All taxes owed by Client hereunder shall become due and payable when billed by SS&C to Client, or when assessed, levied or billed by the appropriate tax authority, even if such billing occurs subsequent to termination of this Agreement.  When SS&C’s contracting entity is a U.S. corporation, Client shall recognize SS&C as such for purposes of any government and double taxation convention.

All amounts payable to SS&C specified in this Agreement are in United States dollars.

SS&C reserves the right to review and increase its fees upon the prior approval by Client.  If SS&C proposes a fee amendment, the amendment will become effective as agreed in writing between the Parties.  If no agreement is reached within thirty (30) days of SS&C’s proposal, SS&C may terminate this Agreement upon ninety (90) days written notice to Client.  Such termination is effective at the end of the next calendar quarter ending not less than ninety (90) days following the date of the termination notice.

 

 

 

 

  

Page 16 of 20

 

Schedule C

Funds

	
 

Fund

	
 

Organization

	
Type of Fund

	
Tax Svc Level

	
 

Effective Date

	
CMF Campbell Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Willowbridge Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Graham Capital Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Aspect Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Altis Partners Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
CMF Winton Master L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Blackwater Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
PGR Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
JEM Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
MB Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Cambridge Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Rabar Master Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
SECOR Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Altis I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Aspect I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Augustus I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney BHM I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Boronia I, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney TT II, LLC

	
DE LLC

	 	 	
1 Feb 2015

	
PGM Master Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Charter Campbell L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Graham L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Charter WNT L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Charter Aspect L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Spectrum Currency and Commodity L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Spectrum Select L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Spectrum Strategic L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Smith Barney Spectrum Technical L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Managed Futures Premier BHM L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Managed Futures Strategic Alternatives, L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Polaris Futures Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
LV Futures Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Meritage Futures Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Morgan Stanley Managed Futures Custom Solutions Fund LP

	
DE LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Abingdon L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Tactical Diversified Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Emerging CTA Portfolio L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Energy Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Diversified 2000 Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Global Diversified Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Orion Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Energy Fund L.P.II

	
NY LP

	 	 	
1 Feb 2015

	
Managed Futures Premier Aventis II L.P.

	
NY LP

	 	 	
1 Feb 2015

 

 

  

Page 17 of 20

	
 

Fund

	
 

Organization

	
Type of Fund

	
Tax Svc Level

	
 

Effective Date

	
Potomac Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Westport Futures Fund L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Institutional Futures Portfolio L.P.

	
NY LP

	 	 	
1 Feb 2015

	
Commodity Advisors Fund L.P.

	
DE LP

	 	 	
1 Feb 2015

	
Global Futures Fund Ltd.

	
Cayman Ltd

	 	 	
1 Feb 2015

Notes:

	M:	Means a Master Fund

	F:	Means a Feeder Fund

	D:	Means a Direct Fund

	H:	Means a Hybrid Fund

	DE:	Means the State of Delaware

	LP:	Means a limited partnership

	LLC:	Means a limited liability company

	Cayman Ltd:	Means a Cayman Islands exempted company

 

 

Page 18 of 20

Schedule D

Compliance with Data Protection Laws

	A.	SS&C represents, warrants and covenants that:

		1.	it will process, use, maintain and disclose Personal Information only as necessary for the specific purpose for which this information was disclosed to it and only in accordance with the instructions of Morgan Stanley and the Agreement;

		2.	it will not disclose any Personal Information to any third party (including to the subject of such information) or any representative who does not have a need to know such Personal Information;

		3.	it will immediately notify Client in writing if it becomes aware of: (a) any disclosure or use of any Personal Information by it or any of its representatives in breach of this Schedule D; (b) any disclosure of any Persona Information to it or its representatives where the purpose of such disclosure is not known; (c) any request for disclosure or inquiry regarding Personal Information from a third party; and (d) any change in applicable law that is likely to have a substantial adverse effect on SS&C’s ability to comply with this Schedule D;

		4.	it will cooperate with Client and its relevant supervisory authority in the event of  litigation or a regulatory inquiry concerning Personal Information and shall abide by the advice of Client (including, at Client’s request, the advice of its relevant supervisory authority) with regard to the processing of such Personal Information;

		5.	it will enter into further commercially reasonable agreements as requested by Morgan Stanley to comply with law from time to time; provided that such agreements do not materially change the Services or the duties and obligations of SS&C hereunder;

		6.	it has no reason to believe that any applicable law will prevent it from fulfilling its obligations under this Schedule D;

		7.	it will comply with Section 11.3; and

		8.	it will cause its Representatives to act in accordance with this Schedule D.

	B.	For compliance with US privacy and data protection, SS&C represents, warrants and covenants that:

		1.	it will implement and maintain an appropriate written information security program, the terms of which are reasonably designed to ensure its adherence to the requirements for financial institutions under 17 CFR 248.30, and which shall include appropriate technical and organizational measures to: (a) ensure the security and confidentiality of all Confidential Information provided to it by Client; (b) protect against any threats or hazards to the security or integrity of information, including unlawful destruction or accidental loss, alteration and any other form of unlawful processing; and (c) prevent such unauthorized access to, use or disclosure of the information;

	C.	For compliance with EU Data Protection Directive:

		1.	Each of Client and SS&C warrants that it will implement and maintain appropriate written policies, the terms of which are reasonably designed to ensure its compliance with the EEA Data Protection Laws.

		2.	In respect to any Personal Information processed pursuant to this Agreement by SS&C, SS&C warrants and undertakes that it shall, and any of its subcontractors shall:

a.            put in place appropriate technical and organizational measures against accidental or unlawful destruction or accidental loss, alteration, unauthorized disclosure or access to such Personal Information as well as reasonable security programs and procedures for the purpose of ensuring that only authorized personnel have access to such Personal Information, processing equipment to be used to process such Personal Information and that any persons whom it authorizes to have access to such Personal Information will respect and maintain all due confidentiality;

b.            only carry out those actions in respect of the Personal Information processed on behalf of Client as are authorized by Client; and

c.            not cause or permit the Personal Information to be transferred or otherwise processed outside the European Economic Area without the prior written consent of Client.

 

 

 

 

 

 

Page 19 of 20

 

 

		3.	In the event that the services involve the processing of Personal Information outside the European Economic Area, the parties agree to execute the Standard Contractual Clauses for Data Processors established in Third Countries pursuant to the Commission Decision (2010/87/EU) of 5 February 2010 under the EU Directive 95/46/EC. In addition, to the extent that the Services involve processing of Personal Information transferred from Germany, the Parties agree to use commercially reasonable efforts to execute additional terms as agreed between the Parties.

		4.	Where SS&C has registered with the US Safe Harbor Scheme as a means of providing adequacy of data protection for any Personal Information processed in the United States of America, prior to processing any such information under the Agreement and upon request any time during the term of this Agreement, SS&C shall provide evidence that: (i) the registration with the US Safe Harbor Scheme has in fact been made; (ii) the registration has not been rejected by the US authorities; and (iii) the registration is current. In addition, SS&C warrants and undertakes that during the term of processing any Personal Information in the United States of America it shall:

a.            fully comply with all its obligations under the US Safe Harbor Scheme;

b.            promptly and duly execute the Standard Contractual Clauses as per paragraph 3 above if for any reason SS&C is unable to fully comply with its obligations under US Safe Harbor Scheme or is no longer subject to the adequacy protection provided by the US Safe Harbor Scheme.

		5.	Client and its nominated representatives shall have the right to audit SS&C's data processing activities under this Schedule D.

	D.	For compliance with privacy and data protection laws in the various jurisdictions in Asia:

		1.	Each of Client and SS&C warrants that it will implement and maintain appropriate written policies, the terms of which are reasonably designed to ensure its compliance with applicable privacy and data protection laws in any jurisdiction in Asia including the Australia Privacy Act 1988 (“Asia Data Protection Laws”) applicable to it.

		2.	In respect to any Personal Information processed pursuant to this Agreement by SS&C, SS&C warrants and undertakes that it shall, and any of its subcontractors shall:

a.            put in place appropriate security programs to: protect against accidental or unlawful destruction or accidental loss, alteration, unauthorized disclosure or access to such Personal Information; ensure that only authorized personnel have access to such information, processing equipment to be used to process such information; and to ensure that any persons whom it authorizes to have access to such information will respect and maintain all due confidentiality; and

b.            only carry out those actions in respect of the Personal Information processed on behalf of Client as are authorized by Client.

		3.	In the event that the services involve the processing of Personal Information which is subject to the Japan Personal Information Protection Law or other applicable Japanese data protection laws regulations and guidance then the Parties agree to use commercially reasonable efforts to execute additional terms as agreed between the Parties.

In this Schedule D, the term Personal Information means “personal data” as that term is used in, and “process” and “processed” shall have the same meaning as ascribed to them under, the applicable data protection laws.

 

 

 

 

 

Page 20 of 20EX 10.01 2015-6-30

2015 Inventory Purchase and Consignment Agreement 
(and with respect to Section 4 the Amendment to Logistics and Warehouse Agreement) 

This 2015 Inventory Purchase and Consignment Agreement (excluding Section 4, the “2015 Agreement”), and with respect to Section 4 only the Amendment to Logistics and Warehouse Agreement (the “Logistics Amendment”),  is entered into  as of April 3, 2015 (“Effective Date”), by and among  Ingram Hosting Holdings Inc., a Delaware corporation (“IHH”) Chegg, Inc., a Delaware corporation (“Chegg”), and with respect to Section 4 only, Ingram Book Group Inc., a Tennessee corporation (“IBG”).   IHH and Chegg are each a “Party” and collectively the “Parties”.

Whereas, Chegg sells new and used textbooks to students and wholesalers and provides a rental platform to rent course materials including textbooks to students through its e-commerce website at www.chegg.com (the “Site”); and

Whereas, IHH desires to purchase new and used textbook inventory through Chegg, and Chegg desires to sell or procure such inventory for IHH; and 

Whereas, Chegg desires to expand its rental offering by obtaining textbooks from IHH on a consignment basis that Chegg will then rent or, if permitted, sell to its Consumers; and 

Whereas, Chegg and IBG have a mutual interest in leveraging IBG’s logistical expertise to benefit Chegg’s textbook customers; and 

Whereas, in connection with the foregoing and for the purposes of renting books to consumers pursuant to Chegg’s rental business, Chegg, IHH and IBG deem it to be in their mutual best interests to set forth certain understandings between them with respect to IHH purchasing inventory through Chegg, and consigning inventory to Chegg, and IBG expanding the management of the logistics for Chegg’s physical textbook business.
    
NOW, THEREFORE, in consideration of the premises, mutual covenants and obligations hereinafter set forth, Chegg and IHH (and with respect to Section 4 only, IBG) hereby agree as follows.

		
	1.
	Definitions.

“2014 Inventory Purchase and Consignment Agreement” refers to that certain Inventory Purchase and Consignment Agreement dated May 21, 2014 (as supplemented by that certain Supplemental Inventory Purchase and Consignment Agreement dated December 5, 2014) between Chegg and IHH, which shall remain in effect for all inventory owned by IHH or purchased by Chegg on IHH’s behalf under the 2014 Inventory Purchase and Consignment Agreement. 

“B-to-C” means Chegg’s direct to individual Consumer textbook rental business conducted through the Online Store. 

“Buying Period” shall refer to the period covered during the Term of this 2015 Agreement;  

“CDF” means orders from Chegg's website that are processed in a vendor’s distribution center and shipped to Chegg's customer’s address-as if they came directly from Chegg.

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
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“Chegg Inventory” means the new and used textbooks owned by Chegg but transferred to IBG warehouses for IBG to manage the logistics of sale and rental during the Term.  Together, the IHH Inventory and the Chegg Inventory are referred to as the “Combined Inventory.”

“Chegg Order” means any order placed by Chegg for Inventory on consignment pursuant to this 2015 Agreement, which order shall contain at least the following details:  the title, author, count and ISBN and other information reasonably required by IHH of the items requested.

“Chegg Platform" means the Chegg proprietary technology and processes (including without limitation business, technical, logistical, and supply) that enable the distribution of course materials, and services related to textbook rental, purchasing, forecasting, and inventory control.

“Consumer” means any person who places an order on the Online Store for rental or course materials through or from Chegg.

“Consumer Order” means any order placed by a Consumer on the Online Store which Chegg fulfills with Inventory.

“COGS” means the exact cost of goods for the product procured by Chegg in the JIT and Partner Buyback model

“Damaged Book” shall have the meaning set forth on Section 6 of the Confidential Appendix.

“Fee(s)” has the meaning set for in Section 6 of the Confidential Appendix.

“FMV” means fair market value for any Combined Inventory as determined by the current buyback price Chegg has set on its website for such title, provided, however if the average buyback price for any such title on third party buyback lists from [***], is greater than the Chegg price, then FMV shall be such average price.   For any title not listed on the Chegg website, FMV shall equal the average current buyback listed on those third party buyback lists.   

“Full source cost” means the exact cost of inventory purchase for a textbook (whether the textbook is intended for direct sale to student, Partner Buyback, or for inclusion in the rental catalog), as opposed to the Fair Market Value of a textbook

“IHH Inventory” means the new and used textbooks purchased by IHH during the Term of this 2015 Agreement which may be purchased directly from Chegg, through Chegg on behalf of and for the account of IHH (including, without limitation, all textbook inventory purchased under Sections 2(c) below), or through third party suppliers, or any combination thereof, such combination and final amount of which shall be as mutually agreed upon by Chegg and IHH, provided however, in no event will the amount of such purchases by IHH exceed the amount set out for each  Buying Period under  this 2015 Agreement.  If applicable, IHH will endeavor to provide Chegg with a current resale certificate acceptable to the applicable taxing authorities for purchases on behalf of and for the account of IHH and all sales by Chegg to IHH.  In the event that a resale certificate is not provided, the applicable sales taxes will be charged. 

“JIT Sale” means new or used textbooks that are procured at the “time a sale transaction occurs”, due to either Chegg or IHH not having the available inventory on hand

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
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“Logistics Agreement” refers to that certain Logistics and Warehouse Agreement, dated October 1, 2014, between Chegg and IBG, which governs IBG’s storage and delivery of Chegg owned textbooks, and which shall remain in effect.  Further, the Logistics Agreement is hereby amended to extend to include all Chegg owned textbooks provided to IBG under this 2015 Agreement.  This 2015 Agreement also amends the Logistics Agreement as provided specifically herein and in Section 4 of the Confidential Appendix.   

“Marks” has the meaning set forth in Section 8.

“Net Revenue” shall have the meaning set forth on Section 6 of the Confidential Appendix.

“Online Store” means either the Site or a permitted affiliate bookstore running on the Chegg online textbook rental platform.

“Partner Buyback” means used textbooks purchased directly from students or any other person based on commitment from a 3rd party vendor to purchase [***] at the [***] pricing within [***].

“Qualified Transaction” shall have the meaning set forth on Section 6 of the Confidential Appendix.

“Rental Agreement” means the standard terms and conditions of the rental agreement entered into by the Consumer on the Online Store.

“Standard Policies” means the Rental Agreement, Terms of Use, the Service Policy and Privacy Policy posted on the Site by Chegg, which may be updated by Chegg from time to time in its sole discretion.

		
	2.
	Obligations of the Parties Relating to Rental Catalog.  

		
	(a)
	Chegg will, at its own expense, (i) use commercially reasonable efforts generate rental transactions with all of the IHH Inventory through the Chegg Platform and marketing activities, upon the terms and conditions and at the market prices determined by Chegg, in its reasonable commercial discretion; and (ii) process and administer the rental transactions, including being merchant of record, payment processing, sales tax compliance, customer service and support (in accordance with the Standard Policies), data systems, and asset recovery and collections services; and (iii) and provide near real time information to IHH in a mutually agreeable format so that IHH may promptly fulfill customer orders for the Inventory consistent with the Guaranteed Delivery Date.

		
	(b)
	Chegg will use commercially reasonable efforts to collect from Consumers the amounts charged and due with respect to the Consumer Orders in accordance with its Standard Policies and the terms set forth on Section 6 of the Confidential Appendix.  Chegg will collect all applicable sales tax relating to the Consumer Orders and timely file all appropriate sales tax returns and timely remit all sales taxes to the proper taxing authorities.  Chegg agrees to reasonably cooperate with IHH and furnish IHH with any records or information as may be reasonably requested by IHH to account for, to provide information to applicable taxing authorities, and/or file its sales, use and property tax returns.  If at any point during the Term, if all orders processed through Chegg are fulfilled with IHH owned inventory and Chegg desires to turn over all sales tax collected on such IHH owned Inventory to IHH, and for IHH to take over responsibility of remitting sales tax to the proper taxing authorities, the 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
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Parties will work together in good faith to determine if a mutually acceptable process to transition such filing obligations to IHH can be accomplished.    

		
	(c)
	Beginning May 1, 2015, and continuing through the Term, IHH authorizes Chegg to procure textbook inventory, in accordance with the terms and conditions of this 2015 Agreement, in the amounts set out in Section 2 of the attached Confidential Appendix.    IHH will reimburse Chegg for those inventory purchases at Chegg’s acquisition cost, pursuant to the payment terms for such purchases set out in this 2015 Agreement.      

		
	(d)
	Chegg will determine, based on its analysis of market conditions, the exact amount of investment to dedicate to sourcing on IHH’s behalf (up to the applicable yearly maximum values shown in Section 1 of the Appendix ) in each period, as well as which vendors to use as sourcing partners.  Sources of books for the rental catalog will include buyback, pre-buy, CDF/JIT rental (defined as books purchased from a vendor and shipped by such vendor directly to customer), customer donations, and bulk purchases from wholesalers, distributors, and publishers, and returns from JIT sales.  All rental book sources listed above will be subject to revenue targets as set out in Section 6 of the attached Confidential Appendix.

		
	(e)
	In the event of underperformance, book investment targets will be reduced according to the existing overall revenue miss in accordance with the example set forth in Section 2 of the attached Confidential Appendix.  Underperformance is defined as failure to meet revenue targets cumulatively on all tranches sourced to date.  

		
	(f)
	During the term of this 2015 Agreement, IHH shall make available for consignment to Chegg the IHH Inventory (or inventory of like kind).  Inventory may be comprised of new or used textbooks identified and procured for IHH from third parties by Chegg on behalf of and for the account of IHH under the terms and conditions specified in this 2015 Agreement.  IHH shall retain all ownership of the IHH Inventory (unless and until any such IHH Inventory is sold as provided for herein) that it consigns to Chegg pursuant to this 2015 Agreement.  Chegg shall not acquire and shall have no right, title or interest in or claims to the IHH Inventory except as specifically set out herein.  

		
	(g)
	IHH will bear the ultimate risk of asset loss and collections related to IHH Inventory including IBG warehouse related losses, whether by virtue of shipping and handling, storage, casualty, force majeure, shrinkage, fraud, and theft.  Chegg will bear responsibility for Consumer fraud. Chegg’s terms of use will specify that students will be charged for the asset in the event of damage or non-return.  Any losses for which Chegg is responsible will not change the portfolio revenue requirements for Chegg to provide for IHH.  Any losses for which IHH is responsible will have the full source cost for these books removed from the effective book investment on which revenue targets are calculated.   

		
	(h)
	IHH will at all times insure [***] of the FMV of the Combined Inventory against loss or damage in an amount sufficient to cover the costs of repurchasing such Combined Inventory, and provide Chegg with a certificate evidencing  such insurance. In the event that greater than [***] of the Combined Inventory is damaged, lost or destroyed in an event or series of events while under IHH’s control or the control of [***], IHH authorizes Chegg to use up to the insurance recovery amount to repurchase books on IHH’s behalf for the rental catalog.  All remaining revenue targets associated with the lost inventory will be cancelled.  New 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
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revenue targets will be set based on the full source cost of the replacement inventory in accordance with Section 2.  

		
	(i)
	Revenue targets and associated risk sharing are outlined in Section 6 of the Confidential Appendix.  

3.  Obligations of the Parties Regarding Non-Rental Catalog Sourcing 

A) JIT Sale 

		
	i.
	JIT Sale units shall be included in [***] which IHH will provide for the program relationship.  IHH will handle all [***] shipping payments for JIT Sale units, and Chegg will provide revenue share to IHH according to Section 3 of the Confidential Appendix. This revenue share will be provided for every JIT Sale unit transacted and will compensate IHH both for the ownership of the JIT Sale units as well as for the management of the [***]. All JIT Sale related payments between Chegg and IHH will be subject to [***] day payment terms.

		
	ii.
	JIT Sale purchases that are returned to IHH shall enter into the rental portfolio at full source cost (and be counted against all elements of the rental catalog revenue targets and maximum allowable source costs) Process and payments related to moving this inventory to the rental catalog shall follow the table in section 3 of the Confidential Appendix

		
	iii.
	Chegg shall continue to control pricing on JIT Sale units, with revenue share defined by Section 3 of the Confidential Appendix

		
	iv.
	IHH and Chegg will jointly work to enable this JIT Sale process on or by January 1, 2016. Expected transactions are represented in the table in Section 3 of the attached Confidential Appendix.

B) Partner Buyback

		
	i.
	IHH and Chegg will jointly work to enable IHH’s ownership of Partner Buyback by May 2, 2015 for the purpose of continuing to realize full source cost reductions that are made possible through a larger buyback catalog and through migration of selected titles to the rental catalog. 

		
	ii.
	IHH will absorb ownership of Partner Buyback upon receipt of the book from students. For those books IHH does not transfer to IHH’s ongoing inventory or cherry pick for inclusion in the rental catalog, revenue share to IHH will be triggered upon liquidation of the books to 3rd Party Vendors. Revenue share will be paid as specified in Section 3 of the Confidential Appendix.

		
	iii.
	IHH grants permission to Chegg to transfer Partner Buyback inventory to the rental catalog for the purposes of improving financial returns on the rental consignment arrangement.  In the event that Partner Buyback inventory is transferred into the rental catalog for purposes of this arrangement,, the full source cost shall be counted against all elements of the rental catalog revenue targets and maximum allowable source costs, effective on the month of transfer to the rental catalog. 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
5

		
	iv.
	Payment timing and invoices associated with Partner Buyback will be dictated in accordance with the table set forth in section 3 of the Confidential Appendix.

		
	v.
	The parties will also work toward enablement of IHH’s ability to leverage the Partner Buyback catalog for inventory at the parties’ earliest convenience. In the event IHH, at its own discretion, decides to transfer Partner Buyback inventory into its own (non-rental) catalog, no revenue share shall be triggered. 

C)  Risk of loss on Non-Rental Catalog sourcing shall follow the assignment as specified in Section 2g, with IHH risk related only to the loss associated with warehouse logistics for stored inventory. 

		
	4.
	Logistics Amendment.  Chegg and IBG hereby enter this Logistics Amendment to amend the Logistics Agreement to contain the terms and conditions set forth in this Section 4.   To the extent the following are directly or by the context clearly inconsistent with similar terms and conditions contained in the Logistics Agreement, the terms and conditions of this Section 4 shall control.   

		
	(a)
	The term of this Logistics Agreement is amended to expire or terminate on the same date as that certain 2015 Inventory Purchase and Consignment Agreement (the “2015 Agreement”), dated as of April 3, 2015, by and among Ingram Hosting Holdings Inc., a Delaware corporation (“IHH”) and Chegg expires or is terminated, except as provided for otherwise in connection an early termination provision of the 2015 Agreement as set out in Section 10 thereof.  Unless otherwise defined in this Logistics Agreement, capitalized terms used in this Logistics Amendment shall have the meaning as ascribed to such term in the 2015 Agreement. 

 
		
	(b)
	IBG will package the Combined Inventory in Chegg branded boxes provided by Chegg to protect against damage during shipment.  IBG will be responsible for the cost of the packing services and materials at its facility with respect to the Combined Inventory, excluding the cost of Chegg supplied boxes.

		
	(c)
	IBG will ship the Combined Inventory contained in the Chegg Order to the Consumer. The determination of shipping upgrade offers that would materially change the cost of goods sold will be made by Chegg in its reasonable discretion, but must be approved by IBG.  Chegg agrees that it will pass through all fees collected from Consumers for shipping in accordance with revenue sharing as specified in Section 6 of the Confidential Appendix. When the Combined Inventory has been shipped from IBG to Consumer, IBG will notify Chegg electronically and in near real time of how long it took IBG to ship the Combined Inventory, the date and time of shipment, and any assigned tracking number.  IBG’s shipping time will meet the requirements set out in Section 1 of the 2015 Agreement Confidential Appendix.  

		
	(d)
	IBG will be prepared to receive up to [***] units  of  inbound Chegg Inventory  (aka Consumer  rentals)  by May 2, 2015  to support the May/June 2015 inbound textbook season, and Chegg will receive the remainder of  approximately [***] units of the May/June inbound textbook season into the Chegg warehouse. Such remaining [***] units will then move from the Chegg warehouse to the IBG warehouse by the end of June 2015 without incurring an IBG handling cost.  All Chegg Inventory other than the approximately [***] units described above transferred from the Chegg warehouse to the 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
6

IBG warehouse will incur a bulk handling fee of [***] per unit.  Chegg shall be responsible for all cost of freight for transport of Chegg Inventory from the Chegg warehouse to the IBG warehouse and retain full risk of loss for all such Chegg Inventory until delivered to the IBG warehouse.      

		
	(e)
	IBG will be prepared to receive one hundred (100%) of inbound Chegg Inventory (to include 100% of summer student rentals and 100% of sourcing purchases (bulk and pre-buy/ buyback)) by [***] to support [***] textbook season.  As amended hereby, the Logistics Agreement will apply to Chegg Inventory stored in IBG’s warehouses under the 2015 Agreement.  

		
	(f)
	IBG will take over one hundred percent (100%) of outbound textbook shipping for Chegg Inventory by [***], and be prepared to receive all remaining Chegg Inventory by [***], to support the [***] textbook rush period.

		
	(g)
	Aligned to the above, by [***], all Chegg Inventory will move through IBG’s logistics operations for inbound and outbound handling for the duration of the Logistics Agreement. 

		
	(h)
	IBG and Chegg will work together to enable consistent performance improvement in providing rapid shipping to students, with targets as set out in Section 1 of the 2015 Agreement Confidential Appendix.    

		
	(i)
	IBG will fulfill Insert and other Brand Partnership add-ons to Textbook Orders [need definitions of all at Chegg’s direction, and aligned to the shipping parameters and rate provisions set forth in Section 10 of the 2015 Agreement Confidential Appendix. These add-ons shall include targeted and national inserts (both in individual inserts and packages of multiple inserts), stickers, and branded boxes.

		
	(j)
	If IBG is unable to fulfill an order in a timely manner, the value of the orders cancelled as a result of such failure will count toward the revenue targets specified herein.  Additionally, if such failures total more than $[***] in Net Revenue (as defined in the Section 6 of the 2015 Agreement Confidential Appendix) in any quarter, IBG shall pay Chegg its commission on such Net Revenue, as if such Net Revenue were fulfilled, as specified in Section 6 of the 2015 Agreement Confidential Appendix.  

		
	(k)
	If IBG misses their guaranteed delivery date for reasons not directly related to weather or [***] (or other third party shipping service) performance in more than [***] of orders in any rush period, a rush period defined as the months of December/January and August/September, Chegg will bill IBG back for refunds and customer contact costs (at a rate of $[***] per contact)that relate to the delivery issues and the textbook that is the subject of such refund shall be returned to IBG and become part of the IHH Inventory (as defined in the 2015 Agreement).  Refunds under this section shall count toward applicable revenue targets in Section 6 of the 2015 Agreement Confidential Appendix.  IBG may, in its discretion, use a different third party shipping provider to fulfill Chegg orders other than [***], so long as any new shipping provider meets the same guaranteed delivery date schedule.

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
7

		
	(l)
	Logistics fees shall be governed by Section 4 of the 2015 Agreement Confidential Appendix. Any logistics fees not covered by the 2015 Agreement shall continue to be governed by the Logistics Agreement.  

		
	(m)
	Chegg will pay IBG a startup fee of [***] for building preparation and setup of the new IBG warehouse.  Provided that the Logistics Agreement is still in full force and effect, on or before April 1, 2017, IBG will refund [***] of the startup fee to Chegg. 

		
	(n)
	All customer information provided to IBG by Chegg, including but not limited to Chegg customer contact information, is Chegg’s confidential information, and is being provided to IBG solely for the purpose of fulfilling textbook orders under the  Logistics Agreement, which purpose shall include the use of such customer information by IBG to evaluate and promote warehousing and freight efficiencies.  Upon termination of this Logistics Agreement, IBG shall delete all Chegg customer information, and provide Chegg with written confirmation of such deletion except for any such information it is required by law to retain.

		
	(o)
	A material breach by IHH of the 2015 Agreement shall constitute a breach by IBG of the Logistics Agreement.    

		
	(p)
	IBG Accounting and Reports.  IBG shall keep accurate records regarding all Chegg transaction and shall provide the following records to Chegg for accounting purposes:   

		
	•
	SKU-level reporting on inserts added into orders fulfilled with Chegg or IBG textbooks  

		
	•
	Chegg-owned units handled and shipped (inbound and outbound) tied to invoices for logistics fees

		
	•
	Daily outbound reporting and real-time inbound reporting enablement through the configuration of the Chegg [***] feed with IBG inbound and outbound [***]

		
	•
	Inventory status reports (for purpose of tracking books lost or damaged in warehouse, for all Chegg and IHH-consigned inventory), including inventory disposition (shipped, liquidated, or transferred to IHH inventory)

		
	•
	Invoice (automated or manual) data for inventory purchased from IHH for JIT Sale or CDF Rental purposes (title, ISBN, quantity, price)

Chegg and IBG will work to ensure mutually agreeable format for the IBG reporting requirements.
		
	(q)
	EXCEPT FOR A BREACH OF CONFIDENTIALITY SECTION 14 (a) OF THE 2015 AGREEMENT INVOLVING IBG’S INTENTIONAL AND WILLFUL DISCLOSURE OF CHEGG CUSTOMER NAMES AND/OR CHEGG CUSTOMER CONTACT INFORMATION TO A THIRD PARTY FOR MATERIAL FINANCIAL GAIN, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR THE OTHER FOR ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES WHATSOEVER (INCLUDING, WITHOUT LIMITATION, SPECIAL, PUNITIVE, OR EXEMPLARY DAMAGE); AND NEITHER PARTY’S CUMULATIVE LIABILITY FOR DIRECT DAMAGES RELATED TO ANY CLAIMS ARISING FROM OR RELATING TO THIS LOGISTICS AGREEMENT, REGARDLESS OF THE NATURE OF THE CLAIM, EXCEED THE AMOUNT OF FEES PAID OR PAYABLE UNDER THIS LOGISTICS AGREEMENT FOR ONE YEAR. 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
8

		
	(r)
	IBG and Chegg agree that the terms and conditions of Confidentiality Section 14(a) of the 2015 Agreement shall apply to Confidential Information shared by the parties under this Logistics Agreement. 

Except for the amendments expressly provided for in this Section 4, no amendments to the Logistics Agreement shall be implied or deemed made.  Except as expressly amended and/or modified by this Section 4, the Logistics Agreement is in all respects ratified and confirmed and all the terms, provisions and conditions thereof shall be and remain in full force and effect. 
		
	5.
	 Payments/Reporting.  

		
	(a)
	Rental Revenue Payments.  During the term of this 2015 Agreement, Chegg shall provide IHH with a preliminary monthly report within three (3) business days of IHH’s fiscal month end, and a final detailed statement as of IHH’s fiscal month end as set forth in Section 5(b) below within (10) ten business days of Chegg’s fiscal (calendar) month end, outlining all amounts owed to IHH for IHH’s fiscal month.  The total payments owed from Chegg and IHH to the other party will be paid by Chegg and IHH within thirty (30) days from each calendar month end, unless extended payment terms are otherwise specified herein 

		
	(b)
	Inventory Sourcing Reimbursement.   During the term of this Agreement, Chegg shall provide IHH with a report of books sourced on IHH’s behalf each month, including the price paid for the book and identifying information such as the ISBN, as specified as Section 5(c).  Chegg shall cause the sourced books to be delivered to the appropriate location, either the Consumer, the Chegg warehouse, or one of the IBG warehouses.   The price which IHH is invoiced for these books shall reflect the full source cost of the inventory.  IHH shall pay Chegg for the full source cost of the books on the schedule set out in Section 8 of the attached Confidential Appendix. 

		
	(c)
	Chegg Accounting and Reports.  Chegg shall keep complete and accurate records of all matters relating to this 2015 Agreement.  The accounting statements shall be provided to IHH in Spreadsheet format, within one spreadsheet each for rental transactions, liquidation transactions, JIT Sales transactions and Partner Buyback transactions.  Each transaction shall be separately accounted within the records.     

		
	•
	ISBN

		
	•
	Title

		
	•
	Sourcing month (to trigger revenue targets and risk sharing payments)

		
	•
	Rental price or Liquidation Price, as the case may be, and the applicable fees

		
	•
	Units of the Title sold

		
	•
	Unique Book ID shared between Chegg systems and IHH systems

		
	•
	Transaction Type

		
	•
	Rental Period

		
	•
	Order ID

		
	•
	Consumer ID

		
	•
	Ship-to Address

If known, reporting by ISBN shall also include:
		
	•
	Higher education institution name, campus address, and zip code.

		
	•
	Territory Sold (might be needed if sold outside U.S.) 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
9

The accounting statements shall be sent in electronic form via email or ftp, on a monthly basis.  Payments will be made by wire or ACH transfer.  

		
	6.
	Audit.  

		
	(a)
	 Each Party will cooperate with the another Party’s reasonable requests by email or other agreed upon electronic means, for financial and accounting related documents which directly relate to the transactions in this 2015 Agreement.  

		
	(b)
	In the event that IHH desires a more thorough audit, it may appoint at its own expense initially, its independent public accounting firm to examine Chegg’s  books, records and systems at the audited party’s offices relating to the subject matter of this 2015 Agreement, provided that any such audit is no more often than once per calendar year.   Such audits shall be scheduled within [***] following delivery of notice and shall be conducted during normal business hours in a manner that does not interfere unreasonably with the audited party’s business operations.  If such audit reveals that Chegg has underpaid IHH by more than [***] of the amount due, the reasonable cost of the audit shall be paid by Chegg, in addition to the amount of the underpayment.  If the audit reveals an overpayment by Chegg, IHH shall promptly pay the amount of the overage to Chegg. 

		
	(c)
	Within [***] of written notice, once per fiscal year basis, for the purpose of confirming IHH’s compliance with its obligations under this 2015 Agreement, Chegg may at its election request IHH’s Internal Audit department or IHH’s independent public accounting firm to perform specified procedures related to book purchase or shipping cost information provided to Chegg by IHH under this 2015 Agreement. If Chegg elects to use IHH’s independent public accounting firm Chegg shall be responsible for any costs of the independent public accounting firm provided that if the independent accounting firm determines that there has been an over payment by Chegg of more than [***] of the total amounts due to IHH for the previous [***] period IHH shall pay the reasonable costs of such audit (up to the amount of the over payment) in addition to promptly refunding all overpaid amounts.  If the audit reveals an underpayment by Chegg, Chegg shall promptly pay IHH the amount of the underpayment.

		
	7.
	No Exclusivity.  The services and obligations of the parties hereunder are on a non-exclusive basis.  IHH and Chegg acknowledge that Chegg obtains inventory from third parties, and IHH provides inventory to third parties and IBG provides fulfillment, warehouse, logistical and other services to third parties.  None of the Parties has any duty nor obligation to deal exclusively with the other, and none of the Parties shall be restricted from conducting its own book rental business without the participation or involvement of the any other Party.  

		
	8.
	Marks.  Neither Chegg nor IHH shall have the right to use the other Party’s trademarks, service marks or logos (collectively called the “Marks”) except as permitted by the owner of the respective Marks.  All parties acknowledge that Chegg and IHH are the exclusive owners of their respective Marks (and all goodwill associated therewith will inure solely to each owner’s benefit).

		
	9.
	Chegg Network Liquidation of Inventory.  IHH grants permission to Chegg to, from time to time, liquidate portions of the IHH inventory for the purposes of maximizing the financial return of the consigned books.  In such event, Chegg agrees to liquidate such IHH Inventory reasonably consistent 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
10

with its past practices.  Liquidation as a percentage of total IHH Inventory will be monitored on a monthly basis as part of reporting as specified in Section 5(c).   For any IHH Inventory liquidated by Chegg hereunder, Chegg agrees to collect all applicable sales tax and timely file all appropriate sales tax returns and timely remit all sales taxes to the proper taxing authorities or collect the appropriate resale certificates.  

		
	10.
	Term and Termination.  

		
	(a)
	Term.  The term of this Agreement shall commence on May 1, 2015 and expire May 20, 2020 (the “Term”).  

		
	(b)
	Early Termination:  Early termination of this 2015 Agreement shall be possible at any time, by a Party owed money from the other Party, if the Party owing money has materially failed to meet timely payment obligations to the other Party as set out in the Payment Section of this 2015 Agreement.  This termination clause may only be exercised after written notice to the Party owing money, and failure to fully cure by that Party within 60 days.  

		
	(c)
	Early termination of this 2015 Agreement shall be possible by either Party by giving written notice to the other Party between [***] and [***] (“Early Termination Window”), specifying either (i) ongoing uncured material breaches of this 2015 Agreement by the other Party,  (ii) [***] a demonstrated capital constraint due to (A) a change in law materially affecting the industries in which [***] operate, (B) domestic, foreign or international market or economic events that, in totality, are materially adverse to the industries in which [***] operate; or (C) a material adverse change in the financial, banking or security markets that is materially adverse to the industries in which [***] operate, or (iii) [***].  The filing of such a notice by one Party during the Early Termination Window shall automatically extend the window to [***].  If the other Party has not demonstrated that it has remedied the breaches described in (c)(i) (or that such breaches did not occur or were not material) or IHH has demonstrated that the conditions of (c)(ii) or (c)(iii) have been met, by [***], and the notice has not been withdrawn, this 2015 Agreement will terminate on [***].  The Parties may follow a similar procedure for early termination in 2018-19.

		
	(d)
	In case of any early termination of this 2015 Agreement, the following shall apply: If [***] terminates under the [***] above, or [***] initiates the termination due to a failure [***] under the payments or ongoing material breach early termination clauses [***], Chegg shall have an option to [***] for up to [***] following such termination  on the same terms and conditions as then in effect.  If [***] terminates under the [***] clause, in addition to the other provisions of this section, [***] agrees that it will [***].  

		
	(e)
	Effect of Termination.  If this 2015 Agreement is terminated for any reason, Chegg shall cease generating Consumer Orders with IHH Inventory.  This 2015 Agreement shall survive with respect to any IHH Inventory then in the hands of Consumers pursuant to active Rental Agreements, and Chegg will (at IHH’s expense) facilitate the return of such IHH Inventory in the ordinary course of operations consistent with the Service Policies applicable to such outstanding IHH Inventory.  In the event of early termination Chegg will either liquidate or buy back the IHH Inventory at its option.  The minimum amount due to IHH as a result of such buyback or liquidation will be subject to a floor as outlined in Section 5 of the Confidential Appendix.  To the extent that proceeds from liquidation exceed the floor, Chegg 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
11

will participate in the [***] upside over and above the floor.  To the extent that Chegg chooses to buy back the IHH Inventory, said buyback will be at FMV, subject to the floor as outlined in Section 5 of the Confidential Appendix.  The cash amount due IHH for any such buyback or liquidation will be remitted to IHH within [***] following the effective date of the termination.    

		
	(f)
	 If the Logistics Agreement or the 2015 Agreement is terminated by Chegg prior to May 20, 2020, Chegg shall pay to IHH an amount equal to (i) the remaining rental payments owned by IHH under the lease entered into on March 10, 2015 by IHH for the new warehouse (the “New Warehouse”) to receive and hold the Chegg Inventory under this 2015 Agreement plus (ii) the applicable portion of the unamortized capital investment made by IHH related to the equipping and set up of the New Warehouse, as shown in the table set forth in Section 9 of the attached Confidential Appendix.  Chegg will not be required to make a payment under this subsection if the termination is based on a section 10(b) or (c) breach by IHH under this 2015 Agreement.

		
	11.
	Events of Default.  A Party shall be deemed to have defaulted under this 2015 Agreement, and the non-defaulting Party shall be entitled to the remedies set forth in Section 17 hereof, upon the occurrence of any of the following events of default (an “Event of Default”): 

		
	(a)
	A Party shall be in breach of this 2015 Agreement and such breach shall continue for a period of fifteen (15) calendar days after the date of receipt of written notice from the non-defaulting Party specifying such breach, if the breach is not cured during the 15 day notice period;  

		
	(b)
	A Party shall make an assignment for the benefit of creditors, file a petition under any federal or state bankruptcy or insolvency code, law, or statute, be adjudicated insolvent or bankrupt or petition for an order for similar relief, petition or apply to any tribunal for the appointment of any receiver or any trustee or as a debtor in possession of such Party or any part of its property or shall commence any proceeding related to such Party under any reorganization, arrangement, readjustment of debt, dissolution or liquidation act, code, law, or statute of any jurisdiction, whether nor or hereafter in effect, or there shall be commenced against such Party any of the foregoing proceedings; or

		
	(c)
	A material breach by IBG under the Logistics Agreement constitutes a default of this 2015 Agreement by IHH.    

		
	12.
	Limitation on Liability.   EXCEPT FOR A BREACH OF CONFIDENTIALITY SECTION 14 INVOLVING IHH’S INTENTIONAL AND WILLFUL DISCLOSURE OF CHEGG CUSTOMER NAMES AND/OR CHEGG CUSTOMER CONTACT INFORMATION TO A THIRD PARTY FOR MATERIAL FINANCIAL GAIN, IN NO EVENT WILL ANY PARTY OR THEIR RESPECTIVE AFFILIATES,SUPPLIERS OR LICENSORS BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS 2015 AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL OR CONSQUENTIAL DAMAGES, EVEN IF FORESEEABLE.

		
	13.
	Disclaimers.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT IN SECTION 19(d), EACH PARTY AND ITS RESPECTIVE AGENTS AND LICENSORS HEREBY DISCLAIM ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY SUBJECT MATTER OF TIS AGREEMENT, 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
12

INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

		
	14.
	Confidentiality.   (a) During the term of this 2015 Agreement, each Party (a “Disclosing Party”) may provide the other Party (a “Receiving Party”) with Confidential Information.  For purposes of this Agreement, “Confidential Information” shall mean the terms of this 2015 Agreement, the financial and transaction data arising from a Qualifying Transaction, the details of the Chegg Order, inventory data, business and marketing plans and business processes, customer contact information, and any other information which under the circumstances, a person exercising reasonable business judgment would understand to be confidential or proprietary.  “Confidential Information” shall not include information (i) which is or becomes publicly available without fault by the Receiving Party, (ii) was or is rightfully acquired by the Receiving Party from a source other than the Disclosing Party, (iii) that is independently developed by Receiving Party without reference to the Disclosing Party’s Confidential Information, or (iv) was known to the Receiving Party prior to the date of the disclosure by the Disclosing Party.  Receiving Party shall only use the Confidential Information for the purposes contemplated hereunder.  Receiving Party will not disclose such information to any third party without the prior written consent of Disclosing Party.  Each Party will take the same precautions it takes to protect the confidentiality of such information as are employed to protect its own confidential information of a similar nature, but in no case shall such protections be less than the standard of reasonable care for such information in the industry.  At termination of this Agreement, upon Disclosing Party’s request, Receiving Party shall return to Disclosing Party all Disclosing Party’s Confidential Information in its possession, including, without limitation, all copies and extracts thereof, or shall purge any Confidential Information in its data base maintained for this Agreement except as may be reasonably necessary for historical record keeping purposes.  Notwithstanding the foregoing, Receiving Party may disclose Confidential Information  (i) to any third-party to the limited extent necessary to exercise its rights or obligations of confidentiality and non-use at least as restricted as the duties applicable to the Receiving Party hereunder, (ii) as may be required by the Securities and Exchange Commission (“SEC”) provided however, that in such event the parties agree that Chegg shall file a confidential treatment request with respect thereto and that IHH shall have the right to participate in the drafting of, and any discussions or meetings with the SEC with respect to, any such request, (iii) as required by law or any judicial or governmental rule, regulation or requirement, provided that the Receiving Party will, unless prohibited by law or court order, provide Disclosing Party with notice of such disclosure or (iv) to the limited extent necessary to carry out its obligations under this 2015 Agreement.  

(b) All customer information provided to IHH by Chegg, including but not limited to Chegg customer contact information, is Chegg’s confidential information, and is being provided to IHH solely for the purpose of fulfilling its obligations under this 2015 Agreement which purpose shall include the use of such customer information by IHH to evaluate and promote efficiencies under the Logistics Agreement.  Upon termination of the 2015 Agreement, IHH shall delete all Chegg customer information, and provide Chegg with written confirmation of such deletion, except for any such information it is required by law to retain.  
 
		
	15.
	Independent Contractors.  For purposes of this Agreement, Chegg shall be considered an independent contractor of IHH with respect to renting the IHH Inventory.  Unless otherwise permitted in writing, neither Party is authorized to, and neither Party shall make, any representations, warranties or guarantees to customers or potential customers regarding the other Party’s services or products in a manner that states or implies that such representation, warranty or guarantee is being made on behalf of the other Party.

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
13

		
	16.
	Remedies.  Upon the occurrence of any Event of Default, all undisputed sums due under this Agreement at the time of the Event of Default shall be due and payable, and the parties shall be entitled to the additional remedies set forth below:

		
	(a)
	The parties acknowledge that if either Party fails, or threatens to fail, to comply with its obligations under Section 14 of this 2015 Agreement, the other Party may suffer irreparable harm for which there may be no adequate remedy at law.  Accordingly, if either Party fails to comply with such obligations, then, in addition to its other remedies, the other Party shall be entitled immediately to seek injunctive relief or any other appropriate equitable remedy.

		
	(b)
	The rights, powers, and remedies under this 2015 Agreement shall be in addition to all rights, powers and remedies by virtue of any statute or rule of law, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently.  Any waiver, forbearance or failure or delay in exercising any right, power, or remedy shall not preclude the further exercise thereof, and every right, power, or remedy of the non-defaulting Party shall continue in full force and effect.

		
	17.
	Indemnification.  Notwithstanding any other terms of this 2015 Agreement, each Party agrees to defend, indemnify and hold the other Party harmless from and against all third party claims (and all damages awarded to third parties, third party liabilities, costs and expenses, including, without limitation, reasonable attorneys’ fees) arising from or related to: (i) its breach of this 2015 Agreement, (ii) its violation of any applicable law or regulation, or (iii) its negligence.  The Indemnifying Party agrees to use counsel reasonably satisfactory to the Indemnified Party to defend each indemnified claim.  A Party’s obligation to indemnify the other under this paragraph shall arise only if the Indemnified Party provides the Indemnifying Party prompt notice of any claim that might lead to a claim for indemnification and the indemnified Party provides at its own expense all reasonable assistance for the defense of any claim.  The Indemnified Party may engage its own counsel at its own expense with respect to any indemnified matter.  The Indemnifying Party may not consent to the entry of any judgment or enter into any settlement of a claim without either (i) the prior written consent of the Indemnified Party, which may not be unreasonably withheld, or (ii) tendering to the Indemnified Party the amount that would have been paid for such judgment or settlement in exchange for a release from the Indemnified Party with respect to the claim so the Indemnified Party may conduct its defense on its own terms.  For the avoidance of doubt, notwithstanding any provision in this 2015 Agreement to the contrary, Chegg’s failure to collect, file returns and remit sales taxes as provided herein will be deemed an Event of Default subject to indemnification of IHH under this Section which indemnified amount shall include any related interest and penalties.

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
14

		
	18.
	     Assignment/UCC filing.   

		
	(a)
	In the event that Chegg is unable to collect or recover the costs of damaged or non-returned IHH Inventory from its Consumers, Chegg agrees to assign all rights of collection and recovery it has under the Rental Agreement to IHH and provide any information reasonably requested by IHH to enable IHH to pursue recovery of such costs and/or Inventory. 

  
		
	(b)
	To the extent Chegg acquires, or is deemed to have, any interest in and to the IHH Inventory, Chegg hereby grants to IHH a security interest in and to all IHH Inventory and IHH shall have the right to file the UCC financing statement set forth in Exhibit A with the appropriate offices or agencies of the applicable states.  IHH will reasonably cooperate with Chegg in good faith with any intercreditor agreements/acknowledgements reasonably requested by Chegg and/or its future secured lenders, provided such do not diminish IHH’s right, title, or interest in the IHH Inventory. 

		
	19.
	Miscellaneous.

		
	(a)
	All notices, requests, consent and other communications under this 2015 Agreement shall be sent to the address identified on the execution page.  Such notices shall be deemed to have been given:  (a)  when delivered if delivered personally or by messenger; (b) on the day after mailing if sent by pre-paid overnight delivery service which maintains records of the time, place and recipient of the delivery; (c) on the third day after mailing, when mailed by registered or certified United States mail, postage prepaid, return receipt requested; or (d) upon receipt of a confirmed transmission, including PDF, if sent via email, in all cases addressed to the Party for whom it is intended at the address set forth below or to such other address as a Party shall have designated by notice in writing to the other Party in the manner provided by this Section 19(a).

		
	(b)
	Neither Party shall have any right or ability to assign, transfer, or sublicense any obligations or benefit under this 2015 Agreement without the written consent of the other Party (and any such attempt shall be void), provided, however, IHH shall have the right to assign this 2015 Agreement to one of its affiliates without any such consent.  This 2015 Agreement will be binding on and inure to the benefit of Chegg and IHH and their respective permitted successors and permitted assigns.

		
	(c)
	The parties further agree that if any portion of this 2015 Agreement is illegal or unenforceable, such portion(s) shall be limited or excluded from this 2015 Agreement to the minimum extent required and the balance of this 2015 Agreement shall remain in full force and effect and enforceable.

		
	(d)
	Each Party represents and warrants that it is (i) duly organized, validly existing and in good standing, (ii) it has the requisite right, power and authority to enter into this 2015 Agreement, (iii) it has all the necessary right and licenses to perform the obligations contained herein, and (iv) that it and its suppliers and agents, will comply with all applicable laws and regulations.  

		
	(e)
	The Parties agree that this 2015 Agreement shall be governed by the laws of the State of Delaware without regard to the conflict of the law’s provisions thereof.  Each Party shall comply with all laws, rules and regulations applicable to the performance of its obligations 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
15

hereunder, and to promptly correct any noncompliance with codes and other laws if such noncompliance materially interferes with performance of the services.

		
	(f)
	No Party shall be liable for delay in performance of nonperformance of any term or condition of this 2015 Agreement directly or indirectly resulting from a force majeure event, including, without limitation, fire, explosion, accident, flood, labor trouble or stoppage, terrorism, civil unrest, war or military hostilities, criminal acts of third parties, or acts of God, and any delivery date shall be extended to the extent of any delay resulting from any force majeure event, provided that an event of force majeure shall not delay or relieve a Party of its payment obligations hereunder.

		
	(g)
	No delay or omission by any Party to exercise any right or power occurring upon any noncompliance or default by any  other Party with respect to any of the terms of this 2015 Agreement shall impair any such right or power or be construed to be a waiver thereof.  A waiver by any of the Parties hereto of any of the covenants, conditions, or agreements to be performed by any other Party shall not be construed to be a waiver of any succeeding breach thereof or of any covenant, condition, or agreement herein contained.

		
	(h)
	This 2015 Agreement, the 2014 Logistics Agreement (as amended herein), and the Confidential Appendix attached hereto constitute the entire agreement between the parties and supersedes any and all purchase orders, prior agreements, arrangements or understandings related to the subject matter hereof and can only be modified or waived by a subsequent written agreement signed by the appropriate  Parties.

		
	(i)
	This 2015 Agreement and the Logistics Amendment may be executed in counterparts and/or by electronic signature (including in pdf form) and if so executed shall be equally binding as an original copy of this Agreement executed in ink by the Parties.

[Signatures appear on the following page

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
16

	
			
	ACCEPTED AND AGREED:
	 
	 

	 
	 
	 

	CHEGG, INC.
	 
	INGRAM HOSTING HOLDINGS INC.

	 
	 
	 

	By: /s/ Andrew J. Brown
	 
	By: /s/ Brian K. Dauphin

	Name:    Andrew J. Brown
	 
	Name:  Brian K. Dauphin

	Title:    CFO
	 
	Title:    Senior Vice President, Finance

	 
	 
	

	 
	 
	 

	Address:
	 
	Address:

	3990 Freedom Cir.
	 
	14 Ingram Boulevard

	Santa Clara, CA  95054
	 
	La Vergne, TN 37086

	Attn: Legal Dept.
	 
	Attn: Brian Dauphin, Sr. Vice President, Finance

	 
	 
	 

	 
	 
	 

	 
	 
	With respect to Section 4 only:

	 
	 
	 

	 
	 
	INGRAM BOOK GROUP INC.

	 
	 
	 

	 
	 
	By: /s/ Brian K. Dauphin

	 
	 
	Name:  Brian K. Dauphin

	 
	 
	Title:    Chief Financial Officer

	 
	 
	 

	 
	 
	 

	 
	 
	Address:

	 
	 
	14 Ingram Boulevard

	 
	 
	La Vergne, TN 37086

	 
	 
	Attn: Brian Dauphin, Chief Financial Officer 

Signature Page to 2015 Inventory Purchase and Consignment Agreement
Dated April 3, 2015

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
17

CONFIDENTIAL APPENDIX:
 APPENDIX OF COMPETITIVE SENSITIVE NONPUBLIC INFORMATION

		
	1.
	 Logistics Section, Target for Shipping:  a target of delivering [***] on-time delivery to students each term, with 2-day ground shipping possible for [***] of students and within [***] for [***] of students.  Rental Catalog Sourcing, Amounts to be sourced by Chegg and reimbursed by IHH:  up to [***] of textbook inventory from May-December 2015, up to [***] in inventory in 2016, up to [***] in inventory in 2017, up to [***] of inventory in 2018, and up to [***] of inventory in 2019 for the rental catalog of the relationship.

2.

	
			
	 
	Target Investment
	Evaluated on

	2016
	[***]
	All Tranche Performance through 2015

	2017
	[***]
	All Tranche Performance through 2016

	2018
	[***]
	All Tranche Performance through 2017

	2019
	[***]
	All Tranche Performance through 2018

	
		
	Example book investment calculation

	Target revenue through 2015
	[***]

	Actual Performance through 2015
	[***]

	Variance
	[***]

	2016 Book Investment target
	[***]

	Adjusted 2016 Investment cap
	[***]

		
	3.
	The revenue share and payment structure for JIT Sale and Partner Buyback are as follows:

Immediate payment structure to IHH (example):
	
				
	JIT Sale Revenue Share Payment
	Example 1
	Example 2
	Example 3

	Cost of Book Sourced
	[***]
	[***]
	[***]

	Invoice to Ingram for Book Cost
	[***]
	[***]
	[***]

	Sale Price Charged to Student
	[***]
	[***]
	[***]

	Ingram Revenue Share
	[***]
	[***]
	[***]

JIT Sale Revenue Share = Cost of Inventory + [***] for Outbound Freight [***]+[***] for overhead management [***].  Triggered upon sale transaction with student.

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
18

	
				
	Partner Buyback Revenue Share Payment
	Example 1
	Example 2
	Example 3

	Cost of Book Sourced
	[***]
	[***]
	[***]

	Invoice to Ingram for Book Cost
	[***]
	[***]
	[***]

	Sale Price Charged to Vendor
	[***]
	[***]
	[***]

	Ingram Revenue Share
	[***]
	[***]
	[***]

Partner Buyback Revenue Share. For Partner Buyback “bulk” shipments (note all Partner Buyback liquidations will be in bulk at the end of the month), the Partner Buyback Revenue Share = Cost of Inventory + [***] for inbound freight and handling [***] + [***] for outbound handling [***].  “Bulk” shipment shall mean a shipment of an order containing [***] units.  Triggered upon liquidation of book to vendor.

Payment terms for Partner Buyback are detailed in the table below. Chegg will monitor the inventory value of books that are sourced in one month and cherry picked in the following month (where IHH payment terms remain at [***]). In the event that annual value of these books exceeds [***], Chegg and IHH will adjust overall payment terms to ensure no impact to IHH Net Working Capital. 
	
				
	Example of Partner Buyback flow of funds
	 

	 
	 
	 
	 

	Transaction Date
	Reporting Date
(Month end)
	Event
	Payment terms

	7/1/2015
	7/31/2015
	Procure partner buyback books
	 

	7/8/2011
	7/31/2015
	Ingram receives books
	 

	7/15/2015
	7/31/2015
	Cherry-pick some books
	 

	7/22/2015
	7/31/2015
	Vendor liquidations
	 

	7/31/2015
	7/31/2015
	Invoice to Ingram for Cherry-pick books
	[***]

	7/31/2015
	7/31/2015
	Invoice to Ingram for cost of partner buybacks books received by Ingram but not Cherry-picked during the month
	[***]

	7/31/2015
	7/31/2015
	Rev Share (as defined In Section 3 of the appendix) to Ingram for vendor liquidation
	[***]

	8/5/2015
	8/31/2015
	Cherry-pick some books
	 

	 
	 
	 
	 

	NOTE:
l  All books cherry picked during the month of procurement are [***]

l  For books cherry picked beyond the month of procurement, Ingram will pay the Invoice according to [***] and the book will be placed into the rental catalog.
l  Chegg will monitor the inventory value of books that are sourced in one month and cherry picked in the following month (where Ingram payment terms remain at [***]).  

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
19

		
	4.
	Logistics and Warehouse Services Fees :

Logistics and Service Fees when Chegg books are handled by IBG and shipping fees are paid through IBG’s [***] account:  
Inbound Ops Fee         [***]
Inbound Freight Fee                    [***]
[NOTE: While using Chegg’s [***] account for inbound no Inbound Freight Fee will be charged.]
Outbound Ops Fee        [***]
Outbound Freight Fee        [***]
	
			
	Service
	% of total units
	% of total shipments

	1 Day Air
	[***]
	[***]

	2 Day Air
	[***]
	[***]

	3 Day Air
	[***]
	[***]

	Ground
	[***]
	[***]

	 
	[***]
	[***]

For JIT Sale, [***] (Ops) fee will be charged as the books are shipped directly from a vendor. Chegg will pay IBG [***] the Outbound Freight Fee as part of revenue sharing for JIT Sale.
For Partner Buyback “bulk” shipments, the Outbound Ops Fee will be [***].  “Bulk” shipment shall mean a shipment of an order containing [***] units.
Logistics Fees for Chegg handling of IHH inventory from the Chegg warehouse will continue to be governed by the 2014 Inventory Consignment Agreement.  
 Outbound shipping fee as provided for in the Logistics Agreement will be reduced by [***]
		
	5.
	In the event of early termination [***]

	
						
	 
	Present Value of Remaining Non-Investment Cash Flows [***]

	 
	6 months
	12 Months
	18 months
	24 months
	30 months

	May/June 2015
	[***]
	[***]
	[***]
	[***]
	[***]

	2015-2H
	[***]
	[***]
	[***]
	[***]
	[***]

	2016-1H
	[***]
	[***]
	[***]
	[***]
	[***]

	2016-2H
	[***]
	[***]
	[***]
	[***]
	[***]

	2017-1H
	[***]
	[***]
	[***]
	[***]
	[***]

	2017-2H
	[***]
	[***]
	[***]
	[***]
	[***]

	2018-1H
	[***]
	[***]
	[***]
	[***]
	[***]

	2018-2H
	[***]
	[***]
	[***]
	[***]
	[***]

	2019-1H
	[***]
	[***]
	[***]
	[***]
	[***]

	2019-2H
	[***]
	[***]
	[***]
	[***]
	[***]

6.[***]
7.[***]

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
20

8.   Payment Terms:
	
			
	Purchase Date 
	Payment Structure
	Payment Terms

	May 1 - Dec. 31, 2015
	[***]
	[***]

	Jan 1. - Dec. 31, 2016
	[***]
	[***]

	Jan 1. - Dec. 31, 2017
	[***]
	[***]

	Jan 1., 2018 onward
	[***]
	[***]

 
9. Break-up Fee Table
	
		
	New Warehouse Break-up fee for early termination:

	End of:
	Balance

	May-2018
	[***]

	Jun-2018
	[***]

	Jul-2018
	[***]

	Aug-2018
	[***]

	Sep-2018
	[***]

	Oct-2018
	[***]

	Nov-2018
	[***]

	Dec-2018
	[***]

	Jan-2019
	[***]

	Feb-2019
	[***]

	Mar-2019
	[***]

	Apr-2019
	[***]

	May-2019
	[***]

	Jun-2019
	[***]

	Jul-2019
	[***]

	Aug-2019
	[***]

	Sep-2019
	[***]

	Oct-2019
	[***]

	Nov-2019
	[***]

	Dec-2019
	[***]

	Jan-2020
	[***]

	Feb-2020
	[***]

	Mar-2020
	[***]

	Apr-2020
	[***]

	May-2020
	[***]

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
21

10. Valued Added Services/ Insert Parameters

Additional value-added services will be billed on a monthly basis, according to the following schedule: 
	
				
	Description
	Unit of Measure
	Fee Per Unit of Measure
	How Billed

	[***] boxes
	[***]
	[***]
	[***]

	[***] boxes
[***]
	[***]
	[***]
	[***]

	Inserts [***]*
	[***]
	[***]
	[***]

	Inserts [***]*
(less than 0.5 lb.)
	[***]
	[***]
	[***]

	Inserts [***]*
(0.5 to 0.99 lb.)**
	[***]
	[***]
	[***]

	Inserts [***]*
(1.0 to 1.5 lb.)
	[***]
	[***]
	[***]

	Inserts [***]
(> 1.5 lb.)
	[***]
	[***]
	[***]

	Kitting 
[***]
	[***]
	[***]
	[***]

	Kitting 
[***]
	[***]
	[***]
	[***]

	Disassembling kits
	[***]
	[***]
	[***]

	Insert Preparation 
(if required)
	[***]
	[***]
	[***]

	Other Special Projects
(as quoted)
	[***]
	[***]
	[***]

*See insert parameters below
** NOTE: Exception for [***] promotion (or other insert of same weight and dimensions subject insert parameters below)     
IBG Insert Parameters
		
	•
	Total volume of inserts cannot exceed [***]W x [***]L x [***]H footprint.

		
	•
	The following items cannot be shipped: 

		
	◦
	Aerosols

		
	◦
	Alcohol

		
	◦
	Cigarettes/Smokeless tobacco products

		
	◦
	Fresh food or perishables

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
22

		
	◦
	Glass or fragile items.

		
	◦
	Nail polish

		
	◦
	Perfume

		
	•
	Liquids must be protected from leakage during transit. 

		
	•
	Must be able to withstand extreme temperatures.

		
	•
	Each insert should have a unique scan-able (and compliant) barcode on the outside of the package.

		
	•
	Must be delivered in bulk quantities that can be easily distributed to packing stations, with minimal effort to break down to the individual items.  (Any additional preparation required will be billed on a workorder at the [***] rate.)

		
	•
	Maximum of [***] active insert items at each IBG facility.  (Note that kits are considered as a single item, regardless of the number of items contained in the kit.)

		
	•
	Inserts must be setup a minimum of [***] prior to [***] peak periods.  (Items requiring additional preparation may require a longer lead time.)

IBG and Chegg will work together to ensure that the level of insert activity does not disrupt IBG’s ability to meet GDD requirements on peak days.  [***] 
(IBG would prefer no more than [***] active insert items during peak days.)

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.
23

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