Master Services Agreement - Exult Inc. and Bank of America Corp.
MASTER SERVICES AGREEMENT
Agreement Number: 23191-001-001
Agreement Date: November 21, 2000
Initial Agreement Expiration Date: [***]*
Service Provider Name: EXULT, INC.
Service Provider Address: 4 Park Plaza, Suite 1000, Irvine CA 92614
Service Provider Telephone: 949-250-8002
This MASTER SERVICES AGREEMENT, consisting of the Core Terms and the Schedules
listed on the following table of schedules (this "Agreement"), is by and between
Exult, Inc. ("Service Provider") and Bank of America Corporation ("Customer").
WHEREAS, Customer has engaged Service Provider to provide human resources
services and accounts payable services and associated processes pursuant to this
Agreement, and Service Provider has agreed to provide such services and
processes in accordance with the terms of this Agreement for an initial term of
10 years; and
WHEREAS, the purpose of this Agreement is to establish the general terms and
conditions applicable to Service Provider's provision of such services and
processes to Customer and Customer's receipt and use of and payment for such
services and processes.
NOW, THEREFORE, for and in consideration of the agreements set forth herein,
Service Provider and Customer hereby agree to enter into this Agreement and to
be bound by the terms and conditions set forth herein.
EXULT, INC. BANK OF AMERICA CORPORATION
("SERVICE PROVIDER") ("CUSTOMER")
By: By:
--------------------------------- ---------------------------
Name: Name:
------------------------------- -------------------------
Title: Title:
------------------------------ -------------------------
Date: November 21, 2000 Date: November 21, 2000
--------------
* Confidential information has been omitted.
1
<PAGE> 2
TABLE OF CONTENTS
SECTION PAGE
NO. SECTION HEADING NO.
------- --------------- ------
1.0 DEFINITIONS; INTERPRETATION..........................................4
2.0 TERM OF AGREEMENT AND RENEWALS......................................10
3.0 TERMINATION.........................................................11
4.0 SCOPE OF AGREEMENT; CUSTOMER SERVICES...............................15
5.0 PRICING, FEES AND RELATED MATTERS...................................18
6.0 CONTRACT ADMINISTRATION.............................................20
7.0 SERVICE LEVELS......................................................21
8.0 CHANGES IN THE CUSTOMER SERVICES....................................22
9.0 TRANSITION PLAN.....................................................23
10.0 NEW SERVICES........................................................24
11.0 RESPONSIBILITIES OF THE PARTIES.....................................24
12.0 SOFTWARE AND PROPRIETARY RIGHTS.....................................25
13.0 MUTUAL REPRESENTATIONS AND WARRANTIES; DISCLAIMERS..................28
14.0 LAWS AND REGULATIONS................................................30
15.0 DATA AND REPORTS....................................................30
16.0 CONFIDENTIALITY AND SECURITY........................................31
17.0 AUDITS..............................................................33
18.0 DISPUTE RESOLUTION..................................................35
19.0 INDEMNITIES.........................................................36
20.0 DAMAGES.............................................................38
21.0 INSURANCE AND FINANCIAL ABILITY.....................................39
22.0 MISCELLANEOUS PROVISIONS............................................40
2
<PAGE> 3
TABLE OF SCHEDULES
Schedule A Description of Customer Services
Schedule B Service Levels
Schedule C Fees and Charges
Schedule D Assigned Agreements and Managed Agreements
Schedule E Service Provider Software and Service Provider Tools
Schedule F Customer Software and Customer Tools
Schedule G Transition Plan
Schedule H In-Flight Projects
Schedule I Customer Associates
Schedule J Human Resources Provisions
Schedule K Change Control Management
Schedule L Customer Machines
Schedule M Form of Confidentiality Agreement
Schedule N Key Positions
Schedule O N/A
Schedule P N/A
Schedule Q N/A
Schedule R Customer Reports
Schedule S N/A
Schedule T Termination Assistance Services
Schedule U Customer Service Locations
Schedule V N/A
Schedule W N/A
Schedule X N/A
Schedule Y N/A
Schedule Z N/A
3
<PAGE> 4
DEFINITIONS; INTERPRETATION:
1.1 Definitions: All defined terms in this Agreement not otherwise defined in
this Section 1.1 shall have the meanings assigned in the part of this
Agreement where they are defined.
1.1.1 Adjustment Period - shall have the meaning set forth in Section
5.10.
1.1.2 Agreement - shall have the meaning set forth on the signature
page.
1.1.3 Agreement Date - shall have the meaning set forth on the
signature page.
1.1.4 Approved Auditors - shall have the meaning set forth in Section
17.2.1.
1.1.5 Approved Service Provider - shall have the meaning set forth in
Section 12.4.2(b).
1.1.6 Assigned Agreements - shall have the meaning set forth in Section
6.1.
1.1.7 Assumptions - shall have the meaning set forth in Section 5.10.
1.1.8 Bankruptcy Code - shall have the meaning set forth in Section
3.3.1(b).
1.1.9 Baseline Charges - shall have the meaning set forth in Schedule
C.
1.1.10 Baseline Volumes - shall have the meaning set forth in Schedule
C.
1.1.11 Call Center Conversion - shall mean the conversion of Customer's
call center processes as described in the Transition Plan set
forth in Schedule G and, as of the Agreement Date, scheduled for
[***]*.
1.1.12 Change - shall have the meaning set forth in Section 8.1.1.
1.1.13 Change Control Management - shall mean the written description of
how Changes or other modifications to the terms and conditions of
this Agreement shall be implemented under this Agreement as set
forth in Schedule K.
1.1.14 Change of Control - shall have the meaning set forth in Section
3.2.4(b).
1.1.15 Change Order - shall mean a document agreed upon by the Parties
(a) implementing a Change or other modification to this Agreement
or (b) adding a New Service.
1.1.16 Client Executives - shall mean, collectively, the Customer Client
Executive and the Service Provider Client Executive.
1.1.17 Client Service Centers - shall mean Service Provider's locations
from which Customer Services are provided.
1.1.18 Confidential Information - shall mean, with respect to each
Party, all of such Party's technology, know-how, data and/or
other information relating to such Party's current and/or
proposed business, Customer Information, research, products,
services, compilations, techniques, development efforts,
inventions, processes, designs, drawings, marketing or finances,
whether disclosed in written or other tangible form, orally or
visually, and in the case of nontangible information, provided
such information transmitted verbally or visually by one Party to
the other is either readily ascertainable as confidential by its
nature or presentation or is identified as confidential at the
time of disclosure.
------------------
* Confidential information has been omitted.
4
<PAGE> 5
1.1.19 Consents - shall mean all use licenses, consents, authorizations
and approvals that are necessary to (a) allow Service Provider
and Service Provider Representatives to (1) use Customer's owned,
licensed and leased assets, including the Customer Software,
Customer Tools and Customer Machines and (2) manage and
administer the Managed Agreements on Customer's behalf and (b)
allow Customer to assign the Assigned Agreements to Service
Provider.
1.1.20 Control - shall mean, with respect to any entity, the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether
through the ownership of voting securities (or other ownership
interest), by contract or otherwise.
1.1.21 Core Terms - shall have the meaning set forth in Section 1.2.3.
1.1.22 Customer - shall mean Bank of America Corporation, a Delaware
corporation, having its principal place of business at 100 North
Tryon Street, Charlotte, North Carolina 28255.
1.1.23 Customer Affiliate - shall mean any entity that, directly or
indirectly, Controls, is Controlled by or is under common Control
with Customer.
1.1.24 Customer Associate Group - shall mean Customer Associates and any
other person directly or indirectly receiving the benefit of
Customer Services, including annuitants, retirees, former
Customer Associates and other persons that receive the benefit of
Customer Services through or on behalf of any such persons.
1.1.25 Customer Associates - shall mean the employees of Customer or
employees of Customer Affiliates.
1.1.26 Customer Client Executive - shall have the meaning set forth in
Section 11.1.
1.1.27 Customer Data - shall have the meaning set forth in Section 15.1.
1.1.28 Customer Information - shall mean, with respect to each Party,
information about such Party's customers and their accounts.
1.1.29 Customer Machines - shall mean the Machines owned or leased by
Customer that are listed in Schedule L, as may be modified by
agreement of the Parties from time to time during the Term.
1.1.30 Customer Network - shall mean Customer's internal computing
network.
1.1.31 Customer Proprietary Software - shall mean (a) the Software
(including modifications and derivatives thereof developed under
this Agreement) owned by Customer and used in connection with the
Customer Services and that is listed in Schedule F, as such
Schedule may be modified by agreement of the Parties from time to
time during the Term, and (b) any New Intellectual Property that
is owned by Customer in accordance with the provisions of Section
12.3 of this Agreement.
1.1.32 Customer Representatives - shall mean the Customer Affiliates and
the Subcontractors, designated suppliers and designated agents of
Customer and Customer Affiliates, excluding Service Provider.
1.1.33 Customer's Banking Regulatory Requirements - shall mean any Laws
or regulations aimed at financial institutions or the financial
industry, securities or the securities industry, brokers and
dealers, the insurance industry or any other industry with
respect to which Customer or Customer Affiliates now or in the
future provides or offers to provide goods or services, excluding
any portions thereof to the extent aimed at the Customer
Services.
1.1.34 Customer's Record Retention Policy - shall mean Customer's record
retention policy as in effect and as revised from time to time
and provided to Service Provider.
1.1.35 Customer Service Locations - shall mean the service locations set
forth in Schedule U.
5
<PAGE> 6
1.1.36 Customer Services - shall mean the Services and Processes
described in Schedule A, and any references in the Schedules to
Services shall mean the Customer Services.
1.1.37 Customer Software - shall mean the Customer Proprietary Software
and the Customer Third Party Software, collectively.
1.1.38 Customer Third Party Software - shall mean the Software licensed
or leased by Customer from a third party (including modifications
and derivatives thereof provided by such third party) that is
used in connection with the Customer Services and listed in
Schedule F, as such Schedule may be modified by agreement of the
Parties from time to time during the Term.
1.1.39 Customer Tools - shall mean (a) any and all ideas, concepts,
know-how, development tools, methodologies, processes,
procedures, technologies or algorithms that are based upon trade
secrets or proprietary information of Customer and used in
connection with the Customer Services and listed on Schedule F in
accordance with Section 5.10, as such Schedule may be modified by
agreement of the Parties from time to time during the Term, and
(b) any New Tools that are owned by Customer in accordance with
the provisions of Section 12.3 of this Agreement.
1.1.40 Direct Damages Cap - shall have the meaning set forth in Section
20.1.2.
1.1.41 Dispute Notice - shall have the meaning set forth in Section
18.1.
1.1.42 ECI - shall mean the Employee Cost Index.
1.1.43 Existing DRPs - shall have the meaning set forth in Section
4.7.1.
1.1.44 Fees - shall mean the fees paid by Customer to Service Provider
as set forth in Schedule C.
1.1.45 Fees at Risk - shall have the meaning set forth in Schedule C.
1.1.46 Force Majeure Event - shall have the meaning set forth in Section
22.8.
1.1.47 FTEs - shall have the meaning set forth in Schedule C.
1.1.48 Governmental Authority - shall mean any international, national,
state, provincial, municipal, local, territorial or other
governmental department, regulatory authority, judicial or
administrative body, domestic, international or foreign.
1.1.49 Indemnified Party - shall have the meaning set forth in Section
19.4.
1.1.50 Indemnifying Party - shall have the meaning set forth in Section
19.4.
1.1.51 In-Flight Project - shall mean those projects set forth and
described in Schedule H.
1.1.52 Initial Agreement Expiration Date - shall have the meaning set
forth on the signature page.
1.1.53 IT Migration - shall mean the migration of Customer's IT to the
environment of Service Provider's current Subcontractor providing
IT (as of the Agreement Date, [***]*) as described in Schedule G
and, as of the Agreement Date, scheduled for [***]*.
1.1.54 Key Performance Indicator - shall mean the performance level that
must be met to avoid a Customer Associate, financial or business
impact to Customer as further described in Schedule B.
------------------
* Confidential information has been omitted.
6
<PAGE> 7
1.1.55 Key Positions - shall mean the employment positions with Service
Provider listed on Schedule N and referenced in Section 4.3.2.
1.1.56 Large-Scale Conversion - shall mean a conversion [***]* that
involves at least 50,000 employees and (c) that relates to
payroll or call center processes.
1.1.57 Law - shall mean any declaration, decree, directive, legislative
enactment, order, ordinance, regulation, rule or other binding
requirement of or by any Governmental Authority.
1.1.58 Losses - shall mean any and all damages, fines, penalties,
deficiencies, losses, liabilities (including settlements and
judgments) and expenses (including interest, court costs,
reasonable fees and expenses of attorneys, accountants and other
experts or other reasonable fees and expenses of litigation or
other proceedings or of any claim, default or assessment).
1.1.59 Machines - shall mean computers and related equipment, including
central processing units and other processors, controllers,
modems, communications and telecommunications equipment (voice,
data and video), cables, storage devices, printers, terminals,
other peripherals and input and output devices, and other
tangible mechanical and electronic equipment intended for the
processing, input, output, storage, manipulation, communication,
transmission and retrieval of information and data.
1.1.60 Managed Agreements - shall have the meaning set forth in Section
6.2.
1.1.61 Minority-Owned Business Enterprise - shall mean a "for-profit"
enterprise, regardless of size, physically located in the United
States or its trust territories, which is at least fifty-one
percent (51%) owned, operated and controlled by one or more
members of a Minority Group who maintain United States
citizenship.
1.1.62 Minority Group - shall mean each of the following groups: Black
Americans, Hispanic Americans, Native Americans (American
Indians, Eskimos, Aleuts and native Hawaiians), Asian-Pacific
Americans and other minorities as recognized by the Unites States
Small Business Administration Office of Minority Small Business
and Capital Ownership Development.
1.1.63 New DRPs - shall have the meaning set forth in Section 4.7.2.
1.1.64 New Intellectual Property - shall mean any (a) Software and (b)
literary works or other works of authorship, including
documentation, reports, drawings, charts, graphics and other
written documentation, in each instance, that is/are created or
developed by or with Service Provider for or on behalf of
Customer pursuant to this Agreement in connection with In-Flight
Projects or pursuant to Change Control Management.
1.1.65 New Service(s) - shall mean (a) any service that is not expressly
included in Schedule A but that Service Provider has the
capability of performing or (b) Customer Services included in
Schedule A but that [***]*.
1.1.66 New Tools - shall mean shall mean any ideas, concepts, know-how,
development tools, methodologies, processes, procedures,
technologies or algorithms, in each case, that is/are created or
developed by or with Service Provider for or on behalf of
Customer pursuant to this Agreement.
1.1.67 Parties - shall mean Customer and Service Provider, collectively.
1.1.68 Party - shall mean either Customer or Service Provider, as the
case may be.
1.1.69 [***]* - shall mean the upgrade from [***]* to [***]* as
described in Schedule G and, as of the Agreement Date, scheduled
for [***]*.
------------------
* Confidential information has been omitted.
7
<PAGE> 8
1.1.70 Process - shall mean each of the following general functions
related to the Customer Services as described in Schedule A: (a)
"Benefits", (b) "Payroll", (c) "Customer Associate Data and
Records Management", (d) "Information Technology and Information
Services", (e) "Policy and Legal Compliance", (f) "Accounts
Payable", (g) "Travel and Expense Claim Processing" and (h)
"Asset Management Services".
1.1.71 Process Effective Date - shall mean, with respect to any Process,
the date on which Service Provider assumes management of and
becomes responsible for such Process.
1.1.72 Project FTEs - shall have the meaning set forth in Schedule C.
1.1.73 Project Staff - shall mean the employees of Service Provider and
Service Provider Representatives who provide the Customer
Services.
1.1.74 Related Documentation - shall mean, with respect to Software, all
materials, documentation, specifications, technical manuals, user
manuals, flow diagrams, file descriptions and other written
information that describes the function and use of such Software,
as applicable.
1.1.75 Renewal Period - shall have the meaning set forth in Section 2.2.
1.1.76 Reporting Service Levels - shall mean the quantitative and
qualitative performance levels used to measure Service Provider's
performance of Customer Services as further described in Schedule
B.
1.1.77 Representatives - shall mean Customer Representatives or Service
Provider Representatives, as the case may be.
1.1.78 SEC - shall have the meaning set forth in Section 16.3.
1.1.79 Service Levels - shall mean the Reporting Service Levels and the
Key Performance Indicators, collectively.
1.1.80 Service Provider - shall mean Exult, Inc., a Delaware
corporation, having its principal place of business at 4 Park
Plaza, Suite 1000, Irvine, California 92614.
1.1.81 Service Provider Affiliate - shall mean any entity that, directly
or indirectly, Controls, is Controlled by or is under common
Control with Service Provider.
1.1.82 Service Provider Client Executive - shall have the meaning set
forth in Section 4.3.1.
1.1.83 Service Provider Proprietary Software - shall mean (a) the
Software (including modifications and derivatives thereof
developed under this Agreement) owned by Service Provider and
used in connection with the Customer Services and that is listed
in Schedule E, as such Schedule may be modified by agreement of
the Parties from time to time during the Term, and (b) any New
Intellectual Property that is owned by Service Provider in
accordance with the provisions of Section 12.3 of this Agreement.
1.1.84 Service Provider Representatives - shall mean Service Provider
Affiliates and the Subcontractors, designated suppliers and
designated agents of Service Provider and Service Provider
Affiliates, excluding Customer.
1.1.85 Service Provider Software - shall mean the Service Provider
Proprietary Software and the Service Provider Third Party
Software, collectively.
1.1.86 Service Provider Third Party Software - shall mean the Software
licensed or leased by Service Provider from a third party
(including modifications and derivatives thereof provided by such
third party) that is used in connection with the Customer
Services and listed in Schedule E, as such Schedule may be
modified by agreement of the Parties from time to time during the
Term.
8
<PAGE> 9
1.1.87 Service Provider Tools - shall mean (a) any and all ideas,
concepts, know-how, development tools, methodologies, processes,
procedures, technologies or algorithms that are based upon trade
secrets or proprietary information of Service Provider and used
in connection with the Customer Services and listed on Schedule E
in accordance with Section 5.10, as such Schedule may be modified
by agreement of the Parties from time to time during the Term,
and (b) any New Tools that are owned by Service Provider in
accordance with the provisions of Section 12.3 of this Agreement.
1.1.88 Services - as used in the Schedules, shall mean the Customer
Services.
1.1.89 Software - shall mean the object and source code versions of any
applications programs, operating system software, computer
software languages, utilities, other computer programs and
Related Documentation, in whatever form or media, including the
tangible media upon which such applications programs, operating
system software, computer software languages, utilities, other
computer programs and Related Documentation are recorded or
printed.
1.1.90 Steering Committee - shall mean the committee of persons agreed
to by the Parties' respective Client Executives as described in
Section 4.6.
1.1.91 Subcontractors - shall mean (a) with respect to Service Provider
and Service Provider Affiliates, any entity that is contractually
obligated to provide or assist Service Provider in the provision
of Customer Services, other than Customer and Customer
Affiliates, and (b) with respect to Customer and Customer
Affiliates, any entity that is contractually obligated to provide
or assist in the provision of any services to Customer, Customer
Affiliates or their respective customers, other than Service
Provider and Service Provider Affiliates.
1.1.92 Systems - shall mean the Software and the Machines, collectively,
used to provide the Customer Services.
1.1.93 Term - shall have the meaning set forth in Section 2.1.
1.1.94 Termination Assistance Period - shall have the meaning set forth
in Section 3.5.2.
1.1.95 Termination Assistance Plan - shall mean a mutually developed and
agreed to plan pursuant to which Service Provider shall provide
the Termination Assistance Services in accordance with Section
3.5 of this Agreement, which plan shall address (a) the
Termination Assistance Services to be provided during the
Termination Assistance Period, (b) the duration of the
Termination Assistance Period, (c) the obligations of each Party
during the Termination Assistance Period and (d) such other
matters as the Parties deem appropriate.
1.1.96 Termination Assistance Services - shall have the meaning set
forth in Section 3.5.1.
1.1.97 [***]* Conversion - shall mean the conversion of Customer's
payroll processes [***]*, as described in Schedule G and, as of
the Agreement Date, scheduled for [***]*.
1.1.98 Third Party Contracts - shall mean the Managed Agreements and the
Assigned Agreements, collectively.
1.1.99 Threshold Limits - shall mean a change in the aggregate volume of
Customer Services provided to Customer that is [***]* as
described in Schedule C.
1.1.100 Tools - shall mean each and all of the Customer Tools, Service
Provider Tools and New Tools.
------------------
* Confidential information has been omitted.
9
<PAGE> 10
1.1.101 Transition Period - shall mean the time period commencing on the
Agreement Date and ending on the scheduled date of completion of
the IT Migration [***]**, as such date may be changed by mutual
agreement of the Parties.
1.1.102 Transition Plan - shall mean the detailed description of the
obligations, activities, tasks and associated resources of each
party in respect of the transition of the Customer Services
pursuant to this Agreement as set forth in Schedule G, as such
plan may be modified by mutual agreement of the Parties during
the Transition Period.
1.1.103 Use - shall mean the right to load, execute, store, transmit,
display, copy, maintain, modify, enhance, create derivative
works, make and have made.
1.1.104 Women-Owned Business Enterprise - shall mean a "for-profit"
enterprise, regardless of size, located in the United States or
its trust territories, which is at least fifty-one percent (51%)
owned, operated and controlled by a female of United States
citizenship.
1.2 Interpretation:
1.2.1 The Schedules to this Agreement shall be incorporated into and
deemed part of this Agreement and all references to this
Agreement shall include the Schedules to this Agreement. As used
in the Schedules, the term "Services" shall mean the Customer
Services.
1.2.2 The Section headings, Table of Contents and Table of Schedules
are for reference and convenience only and shall not be
considered in the interpretation of this Agreement.
1.2.3 In the event of a conflict between the terms of Section 1.0
through Section 22.0 of this Agreement (the "Core Terms") and the
terms of a Schedule, the Core Terms shall prevail. In addition,
in the event either Party identifies a conflict between the Core
Terms and the terms of any Schedule, such Party shall notify the
other Party, and the Parties shall use Change Control Management
to address such conflict.
1.2.4 For purposes of this Agreement, (a) the terms "including" and
"e.g." shall mean "including, without limitation" and (b)
references to days or time periods shall be to calendar days or
calendar time periods unless otherwise expressly stated.
2.0 TERM OF AGREEMENT AND RENEWALS:
2.1 Term of Agreement: The term of this Agreement shall commence on the
Agreement Date and continue until the Initial Agreement Expiration
Date, and shall be renewed or expire in accordance with the provisions
of Section 2.2 or terminated pursuant to Section 3.0 (the "Term").
2.2 Renewal: Upon the Initial Agreement Expiration Date and the expiration
of each Renewal Period, this Agreement shall automatically renew for a
one-year renewal period (each a "Renewal Period") or expire in
accordance with Section 2.2.1 or Section 2.2.2, as applicable.
2.2.1 Unless this Agreement is terminated earlier, Customer shall
notify Service Provider at least [***]* prior to the Initial
Agreement Expiration Date or, if in a Renewal Period, at least
[***]* prior to the expiration date of such Renewal Period, as to
whether Customer desires not to renew this Agreement, otherwise,
this Agreement shall be automatically renewed for one Renewal
Period on and subject to the same terms and conditions set forth
herein; provided, however, unless Customer notifies Service
Provider pursuant to this Section 2.2.1 that it does not desire
to renew this Agreement, upon notice from Service Provider at
least [***]* prior to the Initial Agreement Expiration Date or
expiration of the then-current Renewal Period, as applicable, the
Parties shall meet to negotiate in good faith the terms and
conditions that shall be applicable to any upcoming Renewal
Period.
------------------
* Confidential information has been omitted.
10
<PAGE> 11
2.2.2 Unless this Agreement is terminated earlier, if Customer provides
Service Provider with notice pursuant to Section 2.2.1 at least
[***]* prior to the Initial Agreement Expiration Date or the
expiration of the then-current Renewal Period, as applicable,
that it does not desire to renew this Agreement, then this
Agreement shall expire on the Initial Agreement Expiration Date
or the expiration of such Renewal Period, as applicable, and
Service Provider shall provide the Termination Assistance
Services in accordance with the Termination Assistance Plan and
Section 3.5.
3.0 TERMINATION:
3.1 Termination By Service Provider:
3.1.1 Service Provider shall have the right to terminate this Agreement
for cause if Customer fails to pay any undisputed amounts payable
under this Agreement when due and does not cure such default
within [***]* after receipt of notice of default from Service
Provider, in which case, unless otherwise agreed by the Parties,
this Agreement shall terminate [***]* after the date of
expiration of the [***]* cure period, and Service Provider shall
provide the Termination Assistance Services pursuant to the
Termination Assistance Plan and Section 3.5.
3.1.2 Service Provider shall have the right to terminate this Agreement
for cause if Customer fails to perform any of its material
non-monetary obligations under this Agreement and does not cure
such default within [***]* after receipt of notice of default
from Service Provider; provided, however, that in the event a
default under this Section 3.1.2 cannot reasonably be cured
within such [***]* period, the time to cure the default shall
extend for up to [***]* from the date on which the notice of
default was received by Customer but only if Customer has
provided to Service Provider a mutually agreed to plan to cure
such default and promptly commences to implement such plan. In
the event Customer does not cure a default under this Section
3.1.2 within the [***]* cure period, as applicable, unless
otherwise agreed by the Parties, this Agreement shall terminate
[***]* after the date of expiration of the [***]* cure period, as
applicable, and Service Provider shall provide the Termination
Assistance Services pursuant to the Termination Assistance Plan
and Section 3.5.
3.2 Termination By Customer:
3.2.1 Termination of Agreement for Cause. In addition to any other
express provisions in this Agreement (including, if applicable,
Schedule B) pursuant to which Customer may terminate this
Agreement, Customer shall have the right to terminate this
Agreement in its entirety for cause if Service Provider
materially fails to perform any of its material obligations under
this Agreement [including its obligations to perform the Call
Center Conversion (scheduled for [***]*), the [***]* Conversion
(scheduled for [***]*), [***]* (scheduled for [***]*), and the
[***]* (scheduled for [***]*), in each case in accordance with
Schedule G and by its scheduled date, as such date may be
adjusted by mutual agreement of the Parties during the Transition
Period] and does not cure such default within [***]* after
receipt of notice of default from Customer; provided, however,
that in the event a default under this Section 3.2.1 cannot
reasonably be cured within such [***]* period, the time to cure
the default shall extend for up to [***]* from the date on which
the notice of default was received by Service Provider but only
if Service Provider has provided to Customer a mutually agreed to
plan to cure such default and promptly commences to implement
such plan. In the event Service Provider does not cure a default
under this Section 3.2.1 within the [***]* cure period, as
applicable, and Customer desires to terminate this Agreement
after the [***]* cure period, as applicable, Customer shall,
unless otherwise agreed by the Parties, provide Service Provider
with a notice of termination and this Agreement shall terminate
on the date set forth in such notice (which date shall not be
later than the date that is [***]* after the expiration of the
[***]* cure period, as applicable), and Service Provider shall
provide the Termination Assistance Services pursuant to the
Termination Assistance Plan and Section 3.5; provided, however,
if Customer provides Service Provider with notice of termination
pursuant to this Section 3.2.1 before completion of the
Transition Period, unless otherwise agreed by the Parties, this
Agreement shall terminate on the date of receipt of such notice
of termination, and Service Provider shall provide the
Termination Assistance Services pursuant to the Termination
Assistance Plan and Section 3.5.
------------------
* Confidential information has been omitted.
11
<PAGE> 12
3.2.2 Termination of a Process for Cause. In addition to any other
express provisions in this Agreement (including, if applicable,
Schedule B) pursuant to which Customer may terminate this
Agreement, Customer shall have the right to terminate a Process
for cause if Service Provider materially fails to perform its
material obligations with respect to such Process and does not
cure such default within [***]* after receipt of notice of
default from Customer; provided, however, that in the event a
default under this Section 3.2.2 cannot reasonably be cured
within such [***]* period, the time to cure the default shall
extend for up to [***]* from the date on which the notice of
default was received by Service Provider but only if Service
Provider has provided to Customer a mutually agreed to plan to
cure such default and promptly commences to implement such plan.
In the event Service Provider does not cure a default under this
Section 3.2.2 within the [***]* cure period, as applicable, and
Customer desires to terminate the Process after the [***]* cure
period, as applicable, Customer shall, unless otherwise agreed by
the Parties, provide Service Provider with a notice of
termination and such Process shall terminate on the date set
forth in such notice (which date shall not be later than the date
that is [***]* after the expiration of the [***]* cure period, as
applicable), and Service Provider shall provide the Termination
Assistance Services pursuant to the Termination Assistance Plan
and Section 3.5; provided, however, if Customer provides Service
Provider with notice of termination pursuant to this Section
3.2.2 before completion of the Transition Period, unless
otherwise agreed by the Parties, such Process shall terminate on
the date of receipt of such notice of termination, and Service
Provider shall provide the Termination Assistance Services
pursuant to the Termination Assistance Plan and Section 3.5. If
Customer terminates a Process in accordance with the provisions
of this Section 3.2.2, the Parties shall use Change Control
Management to address the impact of such termination on the other
Customer Services to be provided under this Agreement.
3.2.3 Termination for Convenience. Customer shall have the right to
terminate this Agreement for convenience any time after the date
that is [***]* after the Agreement Date by giving Service
Provider notice of the termination at least [***]* prior to the
effective date of the termination specified in such notice.
[***]*
3.3 Bankruptcy:
3.3.1 In the event that either Customer or Service Provider:
(a) shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; or
(b) shall (1) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee,
examiner or liquidator of itself or of all or a substantial
part of its property or assets, (2) make a general assignment
for the benefit of its creditors, (3) commence a voluntary
case under Title 11 of the United States Code, 11 U.S.C.
Sections 101-1330, as amended from time to time (the
"Bankruptcy Code"), (4) file a petition seeking to take
advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (5) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code
or (6) take any corporate action for the purpose of effecting
any of the foregoing;
then the other Party may, by giving notice thereof to such Party,
terminate this Agreement effective as of the date specified in such
termination notice.
------------------
* Confidential information has been omitted.
12
<PAGE> 13
3.3.2 In the event that:
(a) a proceeding or case shall be commenced, without the
application or consent of either Customer or Service
Provider, as applicable, in any court of competent
jurisdiction, seeking (1) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (2) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of such
Party or of all or any substantial part of its property or
assets or (3) similar relief in respect of such Party under
any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a
period of [***]* days; or
(b) an order for relief against such Party shall be entered in an
involuntary case under the Bankruptcy Code;
then the other Party may, in its sole discretion by giving notice thereof
to such Party, terminate this Agreement effective as of the date specified
in such termination notice.
3.4 Termination Fees:
3.4.1 Termination Fees for Convenience. In the event Customer
terminates this Agreement pursuant to Section 3.2.3 and the
effective date of the termination occurs during [***]*, Customer
shall pay the termination fees under this Agreement identified in
Section 7.1 of Schedule C. Such termination fees shall be based
on the date of termination and shall be due and payable upon the
effective date of the termination; provided, however, if Customer
requests additional Termination Assistance Services pursuant to
Section 3.5.3 because Service Provider failed to comply with its
obligations set forth in the Termination Assistance Plan, such
termination fees shall be due and payable on the last day Service
Provider provides Termination Assistance Services. Customer shall
not be obligated to pay any termination fees under this Agreement
in the event Customer terminates this Agreement pursuant to
Section 3.2.3 and the effective date of the termination occurs
during [***]*.
3.4.2 Termination Fees for Change of Control. In the event Customer
terminates this Agreement pursuant to Section 3.2.4, Customer
shall pay the termination fees under this Agreement identified in
Section 7.2 of Schedule C. Such termination fees shall be due and
payable upon the effective date of the termination; provided,
however, if Customer requests additional Termination Assistance
Services pursuant to Section 3.5.3 because Service Provider
failed to comply with its obligations set forth in the
Termination Assistance Plan, such termination fees shall be due
and payable on the last day Service Provider provides Termination
Assistance Services.
3.4.3 Termination for Cause or Bankruptcy. Customer shall not be
obligated to pay any termination fees under this Agreement in the
event Customer terminates this Agreement pursuant to Section
3.2.1, Section 3.2.2 or Section 3.3.
------------------
* Confidential information has been omitted.
13
<PAGE> 14
3.5 Termination Assistance:
3.5.1 If (a) all payments due to Service Provider under this Agreement
have been paid and (b) Customer has requested termination
assistance (1) [***]* prior to the Initial Agreement Expiration
Date or the expiration of the then current Renewal Period, as
applicable, or (2) within [***]* after receiving or giving any
notice of termination under this Agreement, the Parties shall
promptly meet after the date on which Customer requests
termination assistance to mutually develop and agree to a
Termination Assistance Plan pursuant to which Service Provider
shall provide to Customer the services set forth in Schedule T
(the "Termination Assistance Services") in accordance with this
Section 3.5.
3.5.2 Unless otherwise agreed by the Parties, Service Provider shall
provide the Termination Assistance Services for [***]* the
effective date of the termination or expiration of (a) this
Agreement, (b) any Process or (c) any Customer Service pursuant
to Section 19.1.2, and in each case as set forth in the
Termination Assistance Plan, [***]*; provided, however, in the
event of any termination of this Agreement or any Process during
the Transition Period or termination of any Customer Service
resulting from infringement claims pursuant to Section 19.1.2,
Service Provider shall provide the Termination Assistance
Services for [***]* the effective date of such termination as set
forth in the Termination Assistance Plan, [***]*; provided
further, however, that to the extent such Termination Assistance
Services cause Service Provider to use resources beyond those
otherwise then being provided by Service Provider as part of the
Customer Services or incur additional costs, such Termination
Assistance Services shall be provided [***]* as described in
Schedule C. The period during which the Termination Assistance
Services are provided shall be referred to as the "Termination
Assistance Period".
3.5.3 In addition to the Termination Assistance Services to be provided
pursuant to Section 3.5.2, above, Service Provider shall, at
Customer's request, provide the Termination Assistance Services
for [***]* the date Service Provider ceases providing Termination
Assistance Services pursuant to Section 3.5.2 in accordance with
the Termination Assistance Plan [***]*; provided, however, in the
event and to the extent Customer requests Termination Assistance
Services pursuant to this Section 3.5.3 because Service Provider
failed to comply with its obligations set forth in the
Termination Assistance Plan, such Termination Assistance Services
shall be provided [***]*.
3.5.4 Upon commencement of the Termination Assistance Period, Service
Provider shall be required to comply with the Service Levels as
may be adjusted pursuant to the mutually developed and agreed to
Termination Assistance Plan.
3.6 Exit Rights:
3.6.1 During the Termination Assistance Period:
(a) Service Provider shall provide the Termination Assistance
Services during the Termination Assistance Period in
accordance with the Termination Assistance Plan and Section
3.5; and
(b) [***]*
3.6.2 Upon expiration or termination of this Agreement:
(a) each Party shall have the rights granted to such Party in
Section 12.0; and
------------------
* Confidential information has been omitted.
14
<PAGE> 15
(b) upon Customer's request, with respect to any contracts
applicable to the Customer Services being provided to
Customer on a dedicated, full-time basis for maintenance,
disaster recovery services and other necessary third party
services being used by Service Provider to perform the
Customer Services as of the date of the expiration or
termination of this Agreement, Service Provider shall use
commercially reasonable efforts to transfer or assign such
agreements to Customer or its designee, on terms and
conditions acceptable to both Parties; provided, however,
that Customer provided Service Provider with reasonable
notice prior to entering into such contracts that Customer
may desire such transfer or assignment and Customer pays any
costs associated with such transfer or assignment.
4.0 SCOPE OF AGREEMENT; CUSTOMER SERVICES:
4.1 Generally:
4.1.1 Commencing as of the Agreement Date and continuing throughout the
Term, [***]* Customer and Customer Affiliates shall purchase from
Service Provider, the Customer Services described in Schedule A
as of the Agreement Date, all upon and subject to the terms and
conditions set forth in this Agreement. Customer may not remarket
or resell, and shall prevent Customer Affiliates from remarketing
or reselling, all or any portion of the Customer Services
provided under this Agreement or make all or any portion of the
Customer Services available to any party other than Customer and
Customer Affiliates, without Service Provider's consent.
4.1.2 The Parties acknowledge that Service Provider is not and, unless
otherwise agreed by the Parties, shall not be, the exclusive
provider of (a) any Customer Services terminated in accordance
with the provisions of this Agreement, [***]*.
4.1.3 [***]*; provided, however, in the event the such scheduled dates
for either [***]* are changed by or because of Customer, Service
Provider shall only be required to obtain Customer's approval
before performing Large-Scale Conversions during [***]*, as
applicable, and shall use commercially reasonable efforts to
otherwise accommodate Customer with respect to [***]*, as the
case may be, on the rescheduled dates.
4.2 Service Locations:
4.2.1 Service Provider may maintain Project Staff at the Customer
Service Locations.
4.2.2 Each Party, while on the other Party's premises, shall (a)
comply, and cause its respective Representatives to comply with,
the reasonable requests, standard rules and regulations of such
other Party regarding security, safety and health and personal
and professional conduct generally applicable to such premises
(and of which such Party has received prior notice) and (b)
otherwise conduct themselves in a businesslike manner.
4.3 Service Provider Employees:
4.3.1 During the Term, Service Provider shall maintain an individual
(the "Service Provider Client Executive") who shall serve as the
primary representative of Service Provider under this Agreement.
The Service Provider Client Executive shall be an employee of
Service Provider and shall (a) have overall responsibility for
managing and coordinating the performance of Service Provider's
obligations under this Agreement and (b) be authorized to act for
and on behalf of Service Provider with respect to all matters
relating to this Agreement or shall have access to and seek
authorization from another employee of Service Provider with the
proper authority to so act. In the event the Service Provider
Client Executive shall be absent or otherwise unable to perform
its duties for an extended period of time, then Service Provider
shall identify an alternate Service Provider Client Executive who
shall have the same duties and authority to act as the Service
Provider Client Executive.
------------------
* Confidential information has been omitted.
15
<PAGE> 16
4.3.2 [***]* Notwithstanding the foregoing, nothing herein shall
prevent Service Provider from [***]* as of the Agreement Date
[***]* in the event such person (a) [***]* from Service Provider,
(b) is [***]* by Service Provider [***]* (e.g., [***]*), (c)
[***]* his or her duties and responsibilities pursuant to this
Agreement as determined by Service Provider or (d) [***]*;
provided, however, Service Provider shall provide Customer notice
prior to [***]* pursuant to clause (c) of this Section 4.3.2.
4.3.3 If, in the performance of the Customer Services, Service Provider
in good faith believes that the health or safety of the Project
Staff is placed at unacceptable risk, Service Provider reserves
the right, upon prior notice to Customer, to suspend the
performance of the Customer Services (without incurring
liability) for as long as such risk continues; provided, however,
Service Provider shall not be required to provide prior notice of
such suspension of performance in the event of an emergency, as
reasonably determined by Service Provider, so long as Service
Provider provides Customer with notice of such suspension of
performance as soon as reasonably practicable and cooperates with
Customer to resolve the problem. [***]*
4.3.4 Service Provider shall appoint individuals to the Project Staff
with suitable training and skills to perform the Customer
Services.
4.3.5 In the event Customer determines that a particular member of the
Project Staff is not conducting himself or herself in accordance
with this Agreement, Customer may notify Service Provider of such
conduct. Upon receipt of such notice, Service Provider shall
promptly investigate the matter and take appropriate action which
may include (a) removing the applicable person from the Project
Staff and providing Customer with prompt notice of such removal,
and replacing the applicable person with a similarly qualified
individual or (b) taking other appropriate disciplinary action to
prevent a recurrence. In the event there are repeat violations of
these provisions by a particular member of the Project Staff,
Service Provider shall promptly remove the individual from the
Project Staff.
4.3.6 In the event Customer determines and notifies Service Provider
that, or Service Provider determines and notifies Customer that,
a particular member of the Project Staff has engaged in an act of
fraud, dishonesty or breach of trust, Service Provider shall
immediately remove such individual from Customer's premises and
account.
4.3.7 Service Provider shall notify Customer of any action taken
pursuant to Section 4.3.6 as soon as reasonably practicable.
Following such notice, at the request of Customer and to the
extent permitted by law, Service Provider shall cooperate with
investigations relating to such action conducted by or on behalf
of Customer.
4.3.8 Service Provider shall not knowingly, [***]* permit a Service
Provider Representative to have access to the Customer Service
Locations or records or data of Customer that are within Service
Provider's control if Service Provider knows such Service
Provider Representative (a) has been convicted of a crime for, or
has agreed to or entered into a pre-trial diversion or similar
program with respect to, (1) a dishonest act or breach of trust
as set forth in Section 19 of the Federal Deposit Insurance Act
(12 U.S.C. 1829(a)) or (2) a felony, or (b) uses illegal drugs.
------------------
* Confidential information has been omitted.
16
<PAGE> 17
4.4 Market Awareness: Service Provider shall periodically meet with Customer
in accordance with the procedures agreed upon by the Parties to inform
Customer of any new services related to the Customer Services that Service
Provider is developing or trends of which Service Provider becomes aware
that could reasonably be expected to have an impact on Customer's
business. The acquisition and implementation of any such new service by
Service Provider at Customer's request shall be through the process set
forth in Section 10.1.
4.5 Human Resources: The transition of the Customer Associates set forth on
Schedule I to Service Provider shall be effected in accordance with the
terms of Schedule J. Neither Party's personnel is eligible to participate
in any of the employee benefits or similar programs of the other Party.
Each Party shall inform all of its personnel, in the case of the Service
Provider providing Customer Services and in the case of Customer receiving
the Customer Services or assisting Service Provider in the delivery of the
Customer Services, that they will not be considered employees of the other
Party for any purpose, and that such other Party shall not be liable to
any of them as an employer in any amount for any claims or causes of
action arising out of or relating to their assignment in connection with
this Agreement or release therefrom.
4.6 Steering Committee Meetings: Within 60 days after the Agreement Date, the
Parties shall jointly determine a set of Steering Committee meetings to be
held between representatives of Service Provider and Customer. At a
minimum, the Steering Committee shall meet on a quarterly basis or as
otherwise agreed by the Client Executives. For each meeting the Client
Executives shall agree to and publish an agenda sufficiently in advance of
the meeting to allow meeting participants a reasonable opportunity to
prepare for the meeting. The number of members, names of initial members,
chairman, responsibilities of individual members and mission statement of
the Steering Committee shall be agreed to by the Client Executives and set
forth in the Transition Plan.
4.7 Disaster Recovery:
4.7.1 Commencing on the date Service Provider is responsible for
providing Customer Services in respect of a Process, Service
Provider shall follow Customer's existing Disaster Recovery Plans
("Existing DRPs"), to the extent relating to Customer Services,
that have been previously provided to Service Provider in
writing.
4.7.2 As part of the Transition Plan, Customer and Service Provider
agree to use Change Control Management to (a) confirm or modify
the Existing DRPs and/or (b) develop new Disaster Recovery Plans
("New DRPs"), in each case in respect of the Customer Services
and as agreed to by the Parties. Any fees applicable to any
disaster recovery services beyond commonly accepted industry
standards shall be agreed upon in accordance with Change Control
Management.
4.8 Account Management: Throughout the Term, the Parties' respective Client
Executives shall meet periodically, at such intervals as they may deem
advisable and in any event at least monthly or as otherwise agreed by the
Client Executives and set forth in the Transition Plan, to review their
respective performances under this Agreement. All such meetings shall take
place at mutually agreeable locations, or if mutually agreed, by telephone
conference call or video conference, and the results of such meetings
shall be communicated to the Steering Committee at its next meeting
following such meeting.
4.9 Notification of [***]*: Service Provider shall promptly notify Customer
upon the occurrence of a [***]*.
4.10 [***]* Operating Platform: Service Provider shall not move away from the
[***]* Operating Platform during [***]* without Customer's prior consent.
4.11 In-Flight Projects:
4.11.1 In-Flight Projects Generally. In accordance with the Fees set
forth on Schedule C, Service Provider shall provide the project
management and related services and In-Flight Project
deliverables described in Schedule H in connection with the
In-Flight Projects.
------------------
* Confidential information has been omitted.
17
<PAGE> 18
4.11.2 [***]* Conversion. To the extent the [***]* Conversion cannot be
completed pursuant to Schedule H with the Project FTEs, Service
Provider shall provide up to [***]* to work on the [***]*
Conversion, and Service Provider shall invoice Customer for any
additional costs incurred by Service Provider in connection with
completing the [***]* Conversion. In the event the value of the
FTEs required to complete the [***]* Conversion is less than
[***]*, Service Provider shall have no obligation to utilize or
otherwise apply the difference to or in connection with the
performance of the Customer Services, any In-Flight Project or
any other project.
4.12 Performance Covenant: Service Provider shall perform its obligations set
forth in Section 7.1 and agrees to perform such obligations and all other
Customer Services in a manner that meets Customer's requirements as
specifically set forth in and in accordance with the provisions of this
Agreement.
4.13 Internet Portal. Customer shall, at its expense, obtain, maintain and make
available to Service Provider, and Service Provider shall use, [***]*.
5.0 PRICING, FEES AND RELATED MATTERS:
5.1 Fees: In consideration of Service Provider providing the Customer
Services, Customer shall pay to Service Provider the Fees set forth in
Schedule C in accordance with the terms and conditions of this Agreement,
as may be adjusted from time to time pursuant to the terms of this
Agreement.
5.2 Time of Payment:
5.2.1 [***]* Invoices. Service Provider shall deliver an invoice on or
about [***]* for (a) the Customer Services to be performed during
[***]* and (b) the Customer Services performed by Service
Provider during any [***]* and for which Service Provider has not
invoiced Customer. Each such invoice submitted to Customer
pursuant to this Section 5.2.1 shall be due within [***]* of
receipt by Customer.
5.2.2 Other Invoices. Any sum due Service Provider pursuant to this
Agreement for which a time of payment is not otherwise specified
shall be due and payable [***] receipt by Customer of an invoice
from Service Provider.
5.2.3 All invoices shall be submitted in duplicate to Customer at 401
North Tryon Street, NCI-021-02-19, Charlotte, North Carolina
28255. At least [***]* the delivery of any invoice pursuant to
this Agreement, the Parties' Client Executives or their designees
shall meet to discuss any extraordinary items or adjustments
anticipated by either Party to be included in such invoice.
5.2.4 All amounts payable under this Agreement shall be paid in U.S.
dollars.
5.3 Disputed Amounts: If Customer, in good faith, disputes the accuracy of any
invoice charges, Customer shall pay the invoice in accordance with Section
5.2 of this Agreement and reserve its rights with respect to the disputed
amounts. If the Parties have not resolved the dispute within [***]* the
invoice containing the disputed amount, Service Provider shall [***]* and
either Party may pursue its rights under Section 18.0 of this Agreement.
5.4 Expenses:
5.4.1 Customer shall reimburse Service Provider, as a pass-through for
all travel expenses, living, hotel and transportation allowances
and other normally reimbursable expenses and allowances for any
member of the Project Staff, for travel outside the scope of
travel in connection with the customary and normal provision of
the Customer Services, all as reasonably incurred and in
accordance with Service Provider's generally applicable personnel
practices and procedures. All such expenses in excess of [***]*
shall be pre-approved by Customer and documented through mutually
defined account management procedures. Service Provider shall
comply with Customer's travel policies of which Service Provider
has been provided reasonable prior notice.
------------------
* Confidential information has been omitted.
18
<PAGE> 19
5.4.2 The Fees and the Service Levels each relate to normal expected
operation. Customer recognizes that in the event of a single,
short-term event caused by Customer or Customer Representatives
occurring outside of normal business hours, Service Provider may
incur additional costs and expenses to ensure continuation of the
Customer Services, including by providing the Customer Services
from the premises of a third party. If such resources or costs
are reasonable in the light of such an event, [***]*.
5.5 Proration: All periodic charges under this Agreement are to be computed on
a calendar month basis and shall be prorated on a per diem basis for any
partial month.
5.6 Extraordinary Changes in Workload: In the event that the volume of
Customer Services delivered to Customer fall outside the Threshold Limits
at any time [***]*, or Customer notifies Service Provider of any
anticipated event or events that Customer believes may result in a
sustained increase or decrease in the volume of Customer Services
delivered to Customer, the Parties shall use Change Control Management to
accommodate the extraordinary increase or decrease of resource
requirements in a cost-effective manner, which may include (a) a net
increase or decrease in Service Provider's aggregate costs of and
applicable Fees relating to performing the Customer Services that are
caused by the extraordinary change (excluding increases or decreases
attributable to Service Provider's performance); (b) acquisition or
disposition of assets and other similar costs of additions to or
reductions from Customer Services and (c) a reasonable allowance for
profit upon the net change in costs. Upon completion of Change Control
Management, the Parties shall make any applicable adjustments to the
Schedules as set forth in the Change Order signed by the Parties.
5.7 Cost of Living Adjustment: Commencing with Fees payable on [***]* and for
Fees payable thereafter, the portion of the Fees attributable to [***]*
shall be subject to a cost of living adjustment based on [***]*. Payment
of such cost of living adustment shall be allocated between the Parties in
accordance with Section 8 of Schedule C. Notwithstanding the foregoing, if
there is no increase in the ECI for any period measured, there shall be no
cost of living adjustment with respect to the Fees.
5.8 No Rights of Set-Off: Customer shall not have the right to deduct any
amounts owed by Service Provider to Customer from the Fees or the expenses
owed by Customer to Service Provider under this Agreement. Notwithstanding
the immediately preceding sentence, Customer shall have the right to
deduct from the Fees or the expenses owed by Customer to Service Provider
under this Agreement the following amounts, so long as (a) such amounts
have been finally and fully determined to be owed by Service Provider to
Customer in accordance with this Agreement and (b) Service Provider fails
to credit or refund such amounts to Customer in accordance with this
Agreement or as otherwise agreed by the Parties: (1) [***]* not properly
refunded to Customer or, if mutually agreed by the Parties, credited to
Customer, in accordance with Section 5.3; (2) amounts owed by Service
Provider to Customer as a result of the resolution of any dispute in
accordance with Section 18.0; (3) amounts owed by Service Provider to
Customer with respect to Service Provider's indemnification obligations
under Section 19.1 or Section 19.2; and (4) any damages determined to be
due to Customer in accordance with Section 20.0 of this Agreement.
5.9 Taxes:
5.9.1 The Fees paid to Service Provider are [***]*
5.9.2 Service Provider shall be responsible for the payment of all
interest and/or penalties related to any taxes assessed or levied
as contemplated by Section 5.9.1 to the extent Service Provider
fails to accurately and timely invoice Customer for such taxes
and remit such taxes directly to the applicable taxing authority;
provided, however, in no event shall Service Provider be
responsible for the payment of the underlying tax liability,
which tax liability shall always be a liability of Customer.
------------------
* Confidential information has been omitted.
19
<PAGE> 20
5.9.3 Customer and Service Provider shall each bear sole responsibility
for all taxes, assessments and other real property-related levies
on its owned or leased real property.
5.9.4 Customer and Service Provider shall cooperate to segregate the
Fees into the following separate payment streams: [***]* In
addition, each of Customer and Service Provider shall reasonably
cooperate with the other to more accurately determine a Party's
tax liability and to minimize such liability, to the extent
legally permissible. Each of Customer and Service Provider shall
provide and make available to the other any resale certificates,
information regarding out-of-state sales or use of equipment,
materials or services, and any other exemption certificates or
information requested by a Party.
5.10 Verification of Information: The Customer Services, Fees and Service
Levels are based on circumstances, estimates, metrics, principles,
financial data, standards and general information disclosed by either
Party or used by either Party as more fully described in Schedule A,
Schedule B and Schedule C, as applicable (collectively, the
"Assumptions"). Each Party shall be responsible for the accuracy of any
representation it made as part of the due diligence and negotiation
process and on which the Assumptions are based. [***]* In addition, during
the Adjustment Period the Parties shall specifically (a) identify and/or
confirm the Customer Software and Customer Tools applicable to the
Customer Services and set forth or update the description of such Customer
Software and Customer Tools on Schedule F, (b) identify and/or confirm the
Service Provider Software and Service Provider Tools applicable to the
Customer Services and set forth or update the description of such Service
Provider Software and Service Provider Tools on Schedule E, (c) identify
and/or confirm the Managed Agreements and Assigned Agreements set forth in
Schedule D, (d) document in accordance with Section 16.1.1 the information
security procedures to be followed by Service Provider, (e) mutually agree
on certain types and amounts of insurance coverage set forth in Section
20.1.1 and (f) any other items mutually agreed by the Parties.
5.11 [***]*
5.12 Record Retention:
5.12.1 Service Provider shall maintain at no additional cost to
Customer, in a reasonably accessible location, all material
records pertaining to its charges and costs paid or payable by
Customer to Service Provider under this Agreement. Throughout the
Term and thereafter for the longer of [***]* such Service
Provider records referenced above may be inspected, audited and
copied by Customer or by federal or state agencies having
jurisdiction over Customer and requesting or requiring such
access, during normal business hours and at such reasonable times
as the Parties may determine, as described in Section 17 of this
Agreement.
5.12.2 During the Transition Period and with respect to each Process,
the Parties shall determine what original documents (in written
and electronic form) as defined in Customer's Record Retention
policy are currently retained by Customer. The Parties shall then
determine whether, and to what extent, Service Provider and
Customer shall have possession of original documents following
the Process Effective Date relating to such Process. To the
extent the Parties determine that Service Provider shall have
physical originals, Service Provider shall perform in accordance
with Customer's Record Retention policy and either deliver such
documents to Customer directly or make such documents available
for pick-up by Customer's then current third party record
retention firm (e.g., Iron Mountain), as applicable.
6.0 CONTRACT ADMINISTRATION:
6.1 Assigned Agreements: Subject to Customer's obtaining, maintaining and
complying with the Consents, Customer shall assign the agreements
designated in Schedule D as Assigned Agreements (and any other agreements
mutually agreed upon by the Parties during the Adjustment Period and
during the Term) (collectively, the "Assigned Agreements") to Service
Provider and thereafter Service Provider shall [***]* under the Assigned
Agreements ([***]* within the scope of the Customer Services), and Service
Provider shall have [***]*. Service Provider shall [***]* under the
Assigned Agreements, including, with respect to each Assigned Agreement,
(a) [***]*
------------------
* Confidential information has been omitted.
20
<PAGE> 21
all related [***]* attributable to the period commencing on or after the
Process Effective Date for the Process to which such Assigned Agreement
relates and (b) [***]* under such Assigned Agreement, in each case [***]*
to Service Provider on or before such Process Effective Date through
receipt by Service Provider of a copy of the relevant documents, including
the applicable Assigned Agreement. Service Provider shall notify Customer
prior to (i) [***]* of any Assigned Agreement and (ii) [***]* Assigned
Agreement that Service Provider [***]*.
6.2 Managed Agreements: Subject to Customer's obtaining, maintaining and
complying with the Consents, Service Provider shall [***]* designated in
Schedule D as Managed Agreements (and any other agreements mutually agreed
upon by the Parties during the Adjustment Period and during the Term)
(collectively, the "Managed Agreements") and Service Provider shall [***]*
Managed Agreements during the Term. Customer shall provide Service
Provider with reasonable notice of any [***]* with respect to the Managed
Agreements. Customer shall not [***]* Managed Agreement without providing
reasonable notice to Service Provider. Any fees or charges imposed upon
Customer in connection with any [***]* Managed Agreements, shall be paid
or discharged, as applicable, by Customer.
6.3 Customer Obligations: Commencing as of the Agreement Date, Customer shall
not (a) [***]*, written or oral, affecting or impacting the Third Party
Contracts (except for Third Party Contracts with respect to which Customer
has provided Service Provider notice prior to the Agreement Date or as
otherwise mutually agreed by the Parties during the Adjustment Period) or
(b) [***]* without first using Change Control Management to assess the
impact [***]* any such Managed Agreement or Assigned Agreement on the
Customer Services. Customer shall satisfy all its obligations with respect
to each Third Party Contract accruing or attributable to periods prior to
the Process Effective Date for the Process to which such Third Party
Contract relates.
7.0 SERVICE LEVELS:
7.1 Service Levels: Service Provider shall report on and provide such data as
is necessary to support the Reporting Service Levels set forth in Schedule
B. Service Provider shall comply with the Key Performance Indicators set
forth in Schedule B. Service Provider shall report on or comply with, as
applicable, the Service Levels for which Customer is able to provide
documented and substantiated performance history confirming that Customer
had previously reported on or complied with such Service Level; provided,
however, Customer shall, wherever possible with respect to each such
Service Level, provide performance history for the most recent [***]*
7.2 Reporting: Service Provider shall provide to Customer performance reports
on a monthly basis in the format and otherwise in accordance with the
standards to be mutually agreed upon during the Transition Period and set
forth in Schedule R.
7.3 Remedies:
7.3.1 Customer agrees that the remedies available to it in the event of
a failure by Service Provider to provide the Customer Services in
accordance with the Key Performance Indicators should be
addressed to correcting problems that resulted in such failure,
[***]*.
7.3.2 If Service Provider fails to meet a Key Performance Indicator for
any Customer Service, then Service Provider shall [***]*
7.4 Exclusions: Degradations of performance shall not constitute Service
Provider's failure to meet applicable Service Levels to the extent that
any such failure is attributable to any one or more of the following
causes:
(a) Force Majeure Events;
(b) failure of another Service Level (provided, however, that Service
Provider (1) completes performance of the applicable Customer Service
and all other Customer Services as near as commercially reasonably
possible to the applicable Service Levels and (2) uses commercially
reasonable efforts to remedy the problem that caused it to fail to
meet such Service Level and other related Service Levels);
------------------
* Confidential information has been omitted.
21
<PAGE> 22
(c) Customer's acts or omissions (including violations of Law, willful
misconduct, negligent acts or breaches of this Agreement or matters
subject to indemnification hereunder);
(d) acts or omissions of Customer's Subcontractors and Customer Affiliates
(including violations of Law, willful misconduct, negligent acts or
breaches of applicable agreements or matters subject to
indemnification thereunder);
(e) infringements of third party proprietary rights by Customer,
Customer's Affiliates or Customer's Subcontractors;
(f) deficiencies in assets acquired solely from Customer, or in resources,
systems or processes provided or established solely by Customer or
Customer Representatives in connection with the Customer Services,
whether maintained by Customer or transitioned in whole or in part to
Service Provider, provided that, (1) with respect to assets acquired
from Customer, such deficiencies are identified to Customer [***]*
after all such assets are acquired by Service Provider, and (2) with
respect to resources, systems or processes, such deficiencies are
identified [***]*, or such other time period as mutually agreed by the
Parties, after such resources, systems or processes, as the case may
be, are provided to Service Provider (provided that in the event
Customer or any Customer Representative at any time modifies or
otherwise changes the resources, systems or processes provided or
established by Customer or Customer Representatives, as applicable,
Service Provider shall have an [***]* or other time period mutually
agreed to by the Parties to identify such deficiencies), and in each
case Service Provider demonstrates that such deficiencies caused such
degradation in performance;
(g) service or resource reductions requested or approved by Customer and
agreed by the Parties through the use of Change Control Management,
provided that Service Provider notified Customer of such possible
degradation of performance during Change Control Management;
(h) Customer's failure to take corrective action within Customer's
responsibility reasonably requested and identified by Service Provider
to Customer as essential to maintain Service Levels; or
(i) failures to meet Service Levels while operating under a disaster
recovery plan.
Service Provider shall take commercially reasonable efforts to mitigate
the effects of the foregoing circumstances. Notwithstanding the foregoing,
in the event Service Provider's failure to meet a Service Level results
from the occurrence of a sudden and unexpected Force Majeure Event as
described in Section 22.8 of this Agreement, Service Provider shall use
reasonable and prudent efforts to resume providing Customer Services in
accordance with the Service Levels.
8.0 CHANGES IN THE CUSTOMER SERVICES:
8.1 Right To Make Changes:
8.1.1 Service Provider reserves the right to designate and make changes
to [***]* (each, a "Change"); provided, however, that (a)
Customer shall have the right to review and approve material
Changes and (b) no Change shall (1) [***]*, (2) [***]*, (3)
[***]* or interaction with Service Provider or other third
parties or (4) [***]*.
8.1.2 Except as set forth in subsection 8.1.1, above, in the event a
Party wishes to make a Change or other modification to this
Agreement, such Party shall, in accordance with Change Control
Management, submit a proposal to the other Party describing such
desired Change. The other Party shall, in accordance with Change
Control Management, reject or accept the proposal within a
reasonable period of time, but in no event more than [***]* after
receipt of the proposal. In the event the proposal is rejected,
the rejection shall include the reason for the rejection. In the
event the proposal is accepted, the Parties shall, in accordance
with
------------------
* Confidential information has been omitted.
22
<PAGE> 23
Change Control Management, determine the additions or
modifications to be made to this Agreement (including the Fees).
Any such addition or modification shall be set forth in a Change
Order signed by the Parties. Neither Party shall be obligated to
accept a proposal submitted by the other Party pursuant to this
subsection. Service Provider shall have no obligation to provide
any service or otherwise act pursuant to any proposal submitted
by Customer pursuant to this subsection, except to the extent
such proposal is set forth in an executed Change Order.
8.2 Changes in Law:
8.2.1 Changes in Law Relating to Customer's Responsibilities:
Customer shall be responsible for promptly identifying and
notifying Service Provider of any changes in Law relating to
Customer's Banking Regulatory Requirements that may relate to
Service Provider's delivery or Customer's receipt of or use of
the Customer Services. In accordance with Change Control
Management initiated by Customer, the Parties shall work together
to identify the impact of such changes on how Customer receives
and uses, and Service Provider delivers, the Customer Services.
Customer shall be responsible for any fines and penalties arising
from any noncompliance by Customer or Service Provider with any
such changes in Law relating to the Customer Services, provided,
however, that Service Provider shall be responsible for any fines
and penalties arising from any noncompliance by Service Provider
to the extent Customer has notified Service Provider of a change
in Law and either (1) Service Provider does not comply with any
Change Order signed by the Parties or (2) if the Parties did not
have sufficient time to use Change Control Management, Service
Provider failed to comply with such change in Law even though it
had a reasonable period of time after notification from Customer
in which to comply with such change in Law. Notwithstanding the
foregoing, in addition to Service Provider's obligations set
forth in Section 8.2.2, below, Service Provider agrees to notify
Customer of any changes in Law relating to Customer's Banking
Regulatory Requirements of which Service Provider becomes aware.
8.2.2 Changes in Law Relating to Service Provider's Responsibilities:
Service Provider shall be responsible for promptly identifying
and notifying Customer of any changes in Law, other than changes
in Law relating to Customer's Banking Regulatory Requirements
(including state and federal tax and labor laws), that may relate
to Service Provider's delivery or Customer's receipt of or use of
the Customer Services. In accordance with Change Control
Management, the Parties shall work together to identify the
impact of such changes on how Customer receives and uses, and
Service Provider delivers, the Customer Services. Service
Provider shall be responsible for any fines and penalties arising
from any noncompliance by Customer or Service Provider with any
such changes in Law relating to the Customer Services, provided,
however, that Customer shall be responsible for any fines and
penalties arising from any noncompliance by Customer to the
extent Service Provider has notified Customer of a change in Law
and either (1) Customer does not comply with any Change Order
signed by the Parties or (2) if the Parties did not have
sufficient time to use Change Control Management, Customer failed
to comply with such change in Law even though it had a reasonable
period of time after notification from Service Provider in which
to comply with such change in Law. Notwithstanding the foregoing,
in addition to Customer's obligations set forth in Section 8.2.1,
above, Customer agrees to notify Service Provider of any other
changes in Law related to the Customer Services of which Customer
becomes aware.
9.0 TRANSITION PLAN:
9.1 Each of the Parties shall be responsible for the transition obligations
and milestones described in the Transition Plan as mutually agreed and as
set forth in Schedule G, as such Schedule may be modified by mutual
agreement of the Parties.
23
<PAGE> 24
10.0 NEW SERVICES:
10.1 Service Provider Opportunity: With respect to any New Service for which
Service Provider has been selected to provide to Customer, Service
Provider shall not be responsible for providing such New Service until
Service Provider and Customer have executed a Change Order. [***]*
10.2 Cooperation with Third Party Service Providers: In the event Customer
selects a third party to provide a New Service, upon Customer's request
and reasonable notice, Service Provider shall, as a New Service and in
accordance with Change Control Management, cooperate with any independent
third party service providers of Customer; provided, however, that (a)
such cooperation does not impact the Customer Services or Service
Provider's ability to meet the Service Levels and (b) Service Provider
shall not be required to disclose any of Service Provider's Confidential
Information to such third party service provider unless such third party
executes a confidentiality agreement in the form attached as Schedule M
and such third party's use of such Confidential Information is solely for
the benefit of Customer.
11. RESPONSIBILITIES OF THE PARTIES:
11.1 Customer Managers: During the Term, Customer shall maintain an individual
(the "Customer Client Executive") who shall serve as the primary Customer
representative under this Agreement. The Customer Client Executive shall
be a Customer Associate and shall (a) have overall responsibility for
managing and coordinating the performance of Customer's obligations under
this Agreement and (b) be authorized to act for and on behalf of Customer
with respect to all matters relating to this Agreement or shall have
access to and seek authorization from another Customer Associate with the
proper authority to so act. In the event the Customer Client Executive
shall be absent or otherwise unable to perform its duties for an extended
period of time, then Customer shall identify an alternate Customer Client
Executive who shall have the same duties and authority to act as the
Customer Client Executive.
11.2 Customer Responsibilities: During the Term and in connection with Service
Provider's performance of the Customer Services, Customer shall, at its
expense: (a) be responsible for the obligations and responsibilities set
forth as Customer's responsibility in Schedule A; (b) [***]*; (c) provide
to Service Provider complete and accurate information regarding Customer's
business requirements in respect of any Customer Services to be performed
by Service Provider under this Agreement; (d) [***]*; (e) provide
reasonable cooperation to Service Provider; (f) promptly notify Service
Provider of any (1) third party claims that may have an impact on this
Agreement and (2) invalid, expired or terminated licenses that may have an
impact on this Agreement; and (g) perform all other obligations of
Customer described in this Agreement. In addition to the foregoing, during
the Term and in connection with Service Provider's performance of the
Customer Services, Customer shall use commercially reasonable efforts to
obtain, maintain and comply with the Consents; provided, however, Service
Provider shall reimburse Customer for [***]*, and such amount shall be
reimbursed to Customer [***]* after receipt by Service Provider of notice
of the amount to be paid by Customer pursuant to this Section 11.2 or, if
agreed to by Customer, credited to Customer on the next quarterly invoice
to be delivered to Customer.
11.3 Resources: Commencing on the Agreement Date and continuing for so long as
either Party requires the same for the performance of the Customer
Services, each Party shall provide to the other Party, [***]* but subject
to the other Party's compliance with the provisions of Section 4.2.2 of
this Agreement:
(a) with regard to a reasonable number of members of the Project Staff or
Customer Associates, as agreed by the Parties, that are directly
related to the provision or coordination of Customer Services at the
Customer Service Locations or such other premises of either Party as
agreed by the Parties, the use of the space in the Customer Service
Locations or such other premises that either Party may require from
time to time in connection with the performance of the Customer
Services, together with office furnishings, telephone equipment and
services, janitorial services, utilities and office-related equipment,
supplies and duplicating services reasonably required in connection
with the performance of the Customer Services;
------------------
* Confidential information has been omitted.
24
<PAGE> 25
(b) as mutually agreed by the Parties, full access to, and use of, the
Machines owned or leased by either Party, the networks of either
Party, the Software owned or licensed by either Party, and the Tools
owned by either Party, in each case to the extent necessary to perform
the Customer Services in accordance with this Agreement; and
(c) such other resources specified as Customer's responsibility in
Schedule A.
12.0 SOFTWARE AND PROPRIETARY RIGHTS:
12.1 Customer Software:
12.1.1 All Customer Software shall be and shall remain the exclusive
property of Customer or its licensor, and Service Provider shall
have no rights or interests in the Customer Software except as
described in this Agreement. [***]* In addition to the
verification of the Assigned Agreements and the Managed
Agreements during the Adjustment Period, [***]* and upon mutual
agreement of the Parties to reflect this in the [***]*, as
necessary, Service Provider shall [***]* Managed Agreements.
[***]* Notwithstanding the foregoing, Customer shall use
commercially reasonable efforts to obtain the Consents with
respect to Customer Third Party Software and, to the extent
Customer is unable to obtain such Consents, the Parties shall use
Change Control Management to address the impact on Service
Provider's ability to provide the Customer Services.
12.1.2 In the event Customer does not comply with any of its obligations
set forth in this Section 12.1, Service Provider shall be excused
from its obligation to perform the Customer Services, including
Service Provider's obligation to meet the Service Levels, to the
extent that its inability to perform the Customer Services or
meet the Service Levels is caused by Customer's failure to comply
with such obligations. Service Provider hereby irrevocably
assigns to Customer any and all rights or interests in the
Customer Software. Customer makes no representations or
warranties hereby with respect to the Customer Software.
12.2 Service Provider Software:
12.2.1 All Service Provider Software shall be and shall remain the
exclusive property of Service Provider or its licensor, and
Customer shall have no rights or interests in the Service
Provider Software except as expressly set forth in this
Agreement. Customer hereby irrevocably assigns to Service
Provider any and all rights or interests in the Service Provider
Software. Service Provider makes no representations or warranties
hereby with respect to the Service Provider Software.
12.2.2 Service Provider shall (a) use commercially reasonable efforts to
include provisions in its licenses with licensors of Service
Provider Third Party Software that allow Customer to access and
Use such Service Provider Third Party Software after the
expiration or termination of this Agreement [***]* or, (b) if
Service Provider is unable to cause such a provision to be
included in the applicable licenses, Service Provider shall (1)
notify Customer and (2) use commercially reasonable efforts to
cause licensors of the applicable Service Provider Third Party
Software to negotiate directly with Customer with respect to the
terms, conditions and prices of licensing arrangements, if any,
to be entered into directly between Customer and such licensors.
12.3 New Intellectual Property and New Tools:
12.3.1 [***]*
12.3.2 If the Parties determine that Customer shall have all right,
title and interest, including worldwide rights of copyright,
patent, trade secret or other proprietary rights in and to any
New Intellectual Property or New Tools, as applicable, and, all
copies made from any such New Intellectual Property or New Tools,
then
------------------
* Confidential information has been omitted.
25
<PAGE> 26
Service Provider hereby irrevocably assigns, transfers and
conveys, and shall cause Service Provider Representatives to
assign, transfer and convey, to Customer without further
consideration all of its right, title and interest in and to such
New Intellectual Property or New Tools, as applicable, including
all worldwide rights of patent, copyright, trade secret or other
proprietary rights in such materials. Service Provider
acknowledges that Customer and its successors and permitted
assigns shall have the right to obtain and hold in their own
names any intellectual property rights in and to such New
Intellectual Property or New Tools, as applicable. Service
Provider agrees to execute any documents or take any other
actions as may reasonably be necessary, or as Customer may
reasonably request, to perfect Customer's ownership of any such
New Intellectual Property or New Tools, as applicable, and the
Parties shall update Schedule F as appropriate.
12.3.3 If the Parties determine that Service Provider shall have all
right, title and interest, including worldwide rights of
copyright, patent, trade secret or other proprietary rights in
and to any New Intellectual Property or New Tools as applicable,
and, all copies made from any such New Intellectual Property or
New Tools, then Customer hereby irrevocably assigns, transfers
and conveys, and shall cause Customer Representatives to assign,
transfer and convey, to Service Provider without further
consideration all of its right, title and interest in and to such
New Intellectual Property or New Tools, as applicable, including
all worldwide rights of patent, copyright, trade secret or other
proprietary rights in such materials. Customer acknowledges that
Service Provider and its successors and permitted assigns shall
have the right to obtain and hold in their own names any
intellectual property rights in and to such New Intellectual
Property or New Tools, as applicable. Customer agrees to execute
any documents or take any other actions as may reasonably be
necessary, or as Service Provider may reasonably request, to
perfect Service Provider's ownership of any such New Intellectual
Property or New Tools, as applicable, and the Parties shall
update Schedule E as appropriate.
12.3.4 If the Parties determine that they shall each have ownership
and/or license rights in any New Intellectual Property or New
Tools, as applicable, then the ownership and license rights with
respect to such New Intellectual Property or New Tools, as
applicable, shall be determined through the use of Change Control
Management and documented in the agreement executed by the
Parties relating to such New Intellectual Property or New Tools,
as applicable, and the Parties shall update Schedule F and
Schedule E as appropriate.
12.3.5 Notwithstanding anything in this Agreement to the contrary,
[***]*.
12.4 License Rights Upon Termination:
12.4.1 Except in the event of a termination pursuant to Section 3.1, or
as otherwise agreed by the Parties through the use of Change
Control Management with respect to New Intellectual Property and
New Tools owned by Service Provider, Service Provider hereby
grants to Customer [***]* to the extent permissible under the
applicable third party agreements, the Service Provider Third
Party Software [***]*, in each case being used to provide the
Customer Services as of the date of expiration or termination of
this Agreement and reasonably necessary for Customer to maintain
substitute services after the termination or expiration of this
Agreement.
12.4.2 Customer's Use of the Service Provider Software and Service
Provider Tools granted to Customer pursuant to Section 12.4.1,
above, shall be subject to, and Customer shall comply with, the
following terms and conditions:
(a) The licenses granted to Customer pursuant to Section 12.4.1
with respect to Service Provider Software and Service
Provider Tools are "AS IS," and Service Provider shall have
no obligation to fix, maintain, enhance or update such
Software or Tools or provide Customer with any fixes,
maintenance, enhancements or updates thereto. Such licenses
are without representations or warranties of any kind and are
subject to the disclaimer set forth in Section 13.2.
------------------
* Confidential information has been omitted.
26
<PAGE> 27
(b) Service Provider Software and Service Provider Tools shall
(1) not be operated directly or indirectly by persons other
than Customer Associates or an Approved Service Provider, (2)
only be operated on equipment (i) owned or leased by Customer
or (ii) owned or leased by an Approved Service Provider, and
(3) only be Used in connection with the internal work of
Customer and solely for the benefit of Customer. "Approved
Service Provider" shall mean a third party providing services
to Customer that (A) has entered into a confidentiality
agreement in the form attached as Schedule M and (B) does not
compete directly with Service Provider.
(c) Except as set forth in Section 12.4.2(b), above, at no time
shall Service Provider Software or Service Provider Tools or
its components or any modifications thereto be disclosed to
or used by third parties or sold, assigned, licensed, leased
or otherwise disposed of or commercially exploited or
marketed in any way, with or without charge. Except as may be
necessary for archival purposes, Customer shall not copy, and
shall not permit the copying by a third party of, such
Service Provider Software or Service Provider Tools in whole
or in part.
(d) Upon Service Provider's request, Customer shall affix to all
copies of such Service Provider Software and Service Provider
Tools in Customer's possession any form of copyright or other
proprietary notice specified by Service Provider.
12.4.3 The licenses granted to Customer and Service Provider pursuant to
this Section 12.0 in respect of a component of Service Provider
Software, Service Provider Tools, Customer Software and Customer
Tools, as applicable, shall terminate (a) with respect to
Customer, if Customer breaches the terms of such licenses or an
Approved Service Provider breaches the terms of such license or
the confidentiality agreement in the form of Schedule M executed
by such Approved Service Provider pursuant to Section 12.4.2(b),
and (b) with respect to Service Provider, if Service Provider or
Service Provider Representatives breaches the terms of such
licenses. Upon request after termination of such licenses, the
Party whose licenses were terminated shall (1) deliver to the
other Party a current copy of such component in the form in use
as of such date and (2) destroy or erase all other copies of such
component in such Party's possession.
12.5 Service Provider Tools: All Service Provider Tools shall be and shall
remain the exclusive property of Service Provider, and Customer shall have
no rights or interests in the Service Provider Tools except as expressly
set forth in this Agreement. Customer hereby irrevocably assigns to
Service Provider any and all rights or interests in the Service Provider
Tools. Service Provider makes no representations or warranties hereby with
respect to the Service Provider Tools. Nothing contained in this Agreement
shall restrict Service Provider from the use of any Tools that Service
Provider owns, develops for Customer or has access to under this
Agreement.
1.56 Customer Tools:
12.6.1 Notwithstanding anything to the contrary in this Agreement,
Customer shall retain all right, title and interest in and to any
and all Customer Tools. Nothing contained in this Agreement shall
restrict Customer from the use of any Customer Tools.
12.6.2 All Customer Tools shall be and shall remain the exclusive
property of Customer, and Service Provider shall have no rights
or interests in the Customer Tools except as described in this
Agreement. Customer hereby grants to Service Provider, at no cost
to Service Provider, a nonexclusive right to access and Use
solely in connection with the provision of the Customer Services
the Customer Tools. Notwithstanding the foregoing, Service
Provider shall use Change Control Management to make any material
changes to Customer Tools.
12.6.3 In the event Customer does not comply with any of its obligations
set forth in this Section 12.6, Service Provider shall be excused
from its obligation to perform the Customer Services, including
Service Provider's obligation to meet the Service Levels, to the
extent that its inability to perform the Customer Services or
meet the Service Levels is caused by Customer's failure to comply
with such obligations. Service Provider hereby irrevocably
assigns to Customer any and all rights or interests in the
Customer Tools.
27
<PAGE> 28
12.7 Rights in Residuals: Nothing contained in this Agreement shall restrict
either Party from the use of any ideas, concepts, know-how, methodologies,
processes, technologies, algorithms or techniques relating to the Customer
Services that such Party, individually or jointly, owns prior to the
Agreement Date, or develops or discloses under this Agreement, or develops
or obtains independently during the Term, provided that in doing so such
Party does not breach its obligations of confidentiality or infringe the
intellectual property rights of the other Party or third parties who have
licensed or provided materials to the other Party. Except for the license
rights contained in this Section 12.0, neither this Agreement nor any
disclosure made hereunder grants any license to either Party under any
patents or copyrights of the other Party. Each Party reserves all rights
in its ideas, concepts, know-how, methodologies, processes, technologies,
algorithms, techniques and other intellectual property of every kind and
description (except as otherwise expressly agreed) and no provision of
this Agreement shall be construed to transfer any of such Party's rights
in such intellectual property.
12.8 License to Service Provider for Customer Proprietary Software and Customer
Tools:
12.8.1 In addition to Service Provider's rights under Section 12.1.1,
Customer hereby grants to Service Provider [***]* (either now or
in the future), including the provision of services to any
customer of Customer and any other use or commercialization.
Service Provider shall only transfer the license referred to in
this Section 12.8 to the following transferees: (a) any Service
Provider Affiliate, (b) [***]* and (e) any entity to which any of
the licenses to the Customer Proprietary Software, Customer Tools
or New Intellectual Property owned by Customer is transferred in
connection with a business relationship between Service Provider
and such transferee that will survive the transfer, provided that
the license granted by this Section 12.8 will terminate with
respect to any Customer Proprietary Software, Customer Tools or
New Intellectual Property owned by Customer that is transferred
to a transferee that satisfies only the requirements of this
clause (e) at the time the business relationship between Service
Provider and such transferee terminates. To the extent Customer
cannot grant a [***]* as provided above, the Parties will use
Change Control Management to address acquiring such a [***]* for
Service Provider.
12.8.2 During the Term, neither Customer nor Customer Affiliates shall:
(a) access or Use the Customer Proprietary Software, the Customer
Tools or New Intellectual Property owned by Customer, except
as may be necessary to perform its internal processes or
functions;
(b) [***]*
(c) [***]*
13.0 MUTUAL REPRESENTATIONS AND WARRANTIES; DISCLAIMERS:
13.1 Mutual Representations and Warranties: Each Party hereby represents and
warrants that:
(a) it has all requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby;
(b) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby by
the Party (1) have been duly authorized by all requisite corporate
action on the part of such Party and (2) do not violate the terms of
any law, regulation, or court order to which such Party is subject or
the terms of any material agreement to which the Party or any of its
assets may be subject;
(c) this Agreement has been duly executed and delivered by such Party and
(assuming the due authorization, execution and delivery hereof by the
other Party) is a valid and binding obligation of such Party,
enforceable against it in accordance with its terms;
------------------
* Confidential information has been omitted.
28
<PAGE> 29
(d) it shall perform its responsibilities under this Agreement in a manner
that does not, to the knowledge of the applicable Party, infringe, or
constitute an infringement or misappropriation of, any patent, trade
secret, copyright or other intellectual property right of any third
party;
(e) it shall engage in business continuity planning with the other Party
to, and use reasonable efforts to, avoid disruptions to each Party's
respective business;
(f) it is not subject to any pending or threatened litigation or
governmental action which could interfere with such Party's
performance of its obligations hereunder;
(g) it is in good standing under the laws of its state of formation, and
is, or will be, qualified to do business as a foreign corporation in
each other states where such qualification is necessary in order for
it to comply with its obligations under this Agreement;
(h) it is either the owner of its Machines, its Software and its Tools, or
is authorized by the owner to include such Machines, Software and
Tools under this Agreement, subject to obtaining the Consents; and
(i) it is authorized to permit the other Party to access and use the
locations used in connection with performing the Customer Services.
13.2 Disclaimers:
13.2.1 Service Provider Disclaimers: SERVICE PROVIDER DOES NOT WARRANT
THE ACCURACY OF ANY ADVICE, REPORT, DATA OR OTHER PRODUCT
DELIVERED TO CUSTOMER THAT IS PRODUCED WITH OR FROM CUSTOMER DATA
OR SOFTWARE PROVIDED BY CUSTOMER; SUCH PRODUCTS ARE DELIVERED "AS
IS", AND SERVICE PROVIDER SHALL NOT BE LIABLE FOR ANY INACCURACY
THEREOF IN EACH CASE EXCEPT FOR ANY INACCURACIES CAUSED BY
SERVICE PROVIDER OR SERVICE PROVIDER REPRESENTATIVES. EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 13.1, SERVICE PROVIDER DOES NOT
MAKE ANY OTHER WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE
CUSTOMER SERVICES OR MATERIAL LICENSED BY SERVICE PROVIDER TO
CUSTOMER AND EXPRESSLY DISCLAIMS ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A SPECIFIC PURPOSE. SERVICE
PROVIDER DOES NOT WARRANT THAT PERFORMANCE OF THE CUSTOMER
SERVICES OR THE MATERIAL LICENSED BY SERVICE PROVIDER TO CUSTOMER
SHALL BE UNINTERRUPTED OR ERROR-FREE, OR THAT ALL ERRORS IN THE
CUSTOMER SERVICES SHALL BE CORRECTED. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, SERVICE PROVIDER IS NOT ASSUMING ANY
OBLIGATIONS OR LIABILITIES, INCLUDING ANY OBLIGATION OR LIABILITY
FOR ANY FIDUCIARY RESPONSIBILITIES OR LENDER LIABILITIES.
NOTWITHSTANDING THE FOREGOING, TO THE EXTENT SERVICE PROVIDER
MANAGES THIRD PARTY CONTRACTS THAT ADMINISTER CUSTOMER'S LENDING
POLICIES AND PROCEDURES, SERVICE PROVIDER SHALL MANAGE EACH SUCH
THIRD PARTY CONTRACT IN ACCORDANCE WITH THE SERVICE REQUIREMENTS
OF SUCH THIRD PARTY CONTRACT. FAILURES BY SERVICE PROVIDER TO
MANAGE THIRD PARTY CONTRACTS IN ACCORDANCE WITH THE PRECEDING
SENTENCE SHALL BE CONSIDERED VENDOR MANAGEMENT PERFORMANCE
FAILURES IN ACCORDANCE WITH SCHEDULE B.
13.2.2 Customer Disclaimers: CUSTOMER DOES NOT WARRANT THE ACCURACY OF
ANY ADVICE, REPORT, DATA OR OTHER PRODUCT DELIVERED TO SERVICE
PROVIDER THAT IS PRODUCED WITH OR FROM SOFTWARE PROVIDED BY
SERVICE PROVIDER; SUCH PRODUCTS ARE DELIVERED "AS IS", AND
CUSTOMER SHALL NOT BE LIABLE FOR ANY INACCURACY THEREOF IN EACH
CASE EXCEPT FOR ANY INACCURACIES CAUSED BY CUSTOMER OR CUSTOMER
REPRESENTATIVES; PROVIDED, HOWEVER, TO THE EXTENT OF ANY FAILURES
OR INACCURACIES OF THE FOREGOING, SERVICE PROVIDER SHALL BE
RELIEVED OF ITS OBLIGATIONS UNDER THIS AGREEMENT. EXCEPT AS
EXPRESSLY SET FORTH IN SECTION 13.1, CUSTOMER DOES NOT MAKE ANY
OTHER WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE MATERIAL
LICENSED BY CUSTOMER TO SERVICE PROVIDER AND EXPRESSLY DISCLAIMS
ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A SPECIFIC PURPOSE.
29
<PAGE> 30
14.0 LAWS AND REGULATIONS:
14.1 Each Party shall obtain, maintain and comply with all consents,
permissions, permits, approvals and assurances of whatever nature,
including governmental approvals, applicable in the case of Service
Provider to the performance of, and, in the case of Customer, the receipt
and use, of the Customer Services and such Party's payment obligations.
14.2 Each Party covenants and agrees that it shall comply with all Laws
applicable to such Party.
15.0 DATA AND REPORTS:
15.1 Provision of Data: Customer shall supply to Service Provider, in
connection with the Customer Services, required data in the form and on
such time schedules as may be agreed upon by Service Provider and Customer
("Customer Data") in order to permit Service Provider to perform the
Customer Services in accordance with the terms of this Agreement,
including the Service Levels. All Customer Data is, or shall be, and shall
remain the property of Customer.
15.2 Production of Reports:
15.2.1 Production of Reports During and After the Transition Period.
With respect to each Process and commencing on the related
Process Effective Date, Service Provider shall provide to
Customer the same reports being generated by Customer immediately
prior to such Process Effective Date. During the Transition
Period, the Parties shall use Change Control Management to
mutually agree to any adjustments with respect to such reports or
to add any additional reports, and shall document such
adjustments and additions in Schedule R, including the content,
frequency and delivery dates for such reports. Failure by Service
Provider to deliver all reports mutually agreed upon pursuant to
the Transition Plan, but in no event later than [***]*, shall be
considered a failure to meet the Key Performance Indicator
relating to reports as set forth on Schedule B, with applicable
Fees at Risk.
15.2.2 Production of Reports Generally. Service Provider shall produce
reports in accordance with Schedule R that are substantially
accurate and substantially free of errors and omissions, to the
extent the Customer Data and other information used to produce
such reports was substantially accurate and substantially free of
errors and omissions. Unless specified otherwise in Schedule R,
any reports listed in Schedule R shall be due no later than ten
business days after the end of the reporting period.
15.3 Inspection of Reports:
15.3.1 Operational Reports. Customer shall use reasonable efforts to
inspect and review the operational reports produced by Service
Provider and supplied to Customer pursuant to Section 15.2, and
shall provide Service Provider with notice of any errors or
inaccuracies (a) in daily or weekly reports, [***]* of receipt of
such reports, and (b) in monthly or other reports, [***]* after
receipt of such reports. Service Provider shall provide Customer
with such documentation and information as may be requested by
Customer in order to verify the accuracy of the reports. If
Customer fails to reject any such report within the applicable
period, Customer shall be deemed to have accepted such reports.
15.3.2 Performance Reports. In addition to the foregoing, the Service
Provider Client Executive shall notify Customer through the
account management procedures of any single material performance
deviation or performance deviation trend documented in a
performance report that is provided to Customer pursuant to
Section 15.2 and of which the Service Provider Client Executive
is aware.
------------------
* Confidential information has been omitted.
30
<PAGE> 31
15.4 Correction of Errors:
15.4.1 Service Provider shall work with Customer to, and Service
Provider shall use commercially reasonable efforts to, promptly
correct any material errors or inaccuracies in Customer Data and
reports prepared by Service Provider as part of the Customer
Services that have material impact, including fiduciary, Customer
Associate or supplier impact. The Party responsible for any such
errors shall pay for all mutually agreed upon costs associated
with such correction.
15.4.2 Upon request from Customer, Service Provider shall work with
Customer to correct any errors or inaccuracies in Customer Data
and reports prepared by Service Provider as part of the Customer
Services that are not subject to Section 15.4.1. The Party
responsible for any such errors shall pay for all mutually agreed
upon costs associated with such correction.
15.5 Use of Reports: Subject to the terms of this Agreement (including Section
16.0) and solely for Customer's uses, Customer may reproduce any
documentation and reports prepared by Service Provider as part of the
Customer Services.
16.0 CONFIDENTIALITY AND SECURITY:
16.1 General Obligations:
16.1.1 To the extent applicable, commencing as of the Agreement Date,
Service Provider shall comply with such information security and
privacy standards and guidelines as being complied with by
Customer as of the Agreement Date. In addition, prior to the
first Process Effective Date, the Parties shall mutually agree to
and document (not through Change Control Management) the detailed
standards and guidelines (no less stringent than those in place
as of the Agreement Date) with which Service Provider shall
comply. Any changes from Customer practices as of the Agreement
Date shall be addressed through Change Control Management.
16.1.2 All Confidential Information relating to or obtained from
Customer or Service Provider shall be held in confidence by the
recipient to the same extent and in at least the same manner as
the recipient protects its own confidential or proprietary
information.
16.1.3 Neither Customer nor Service Provider shall, and Customer and
Service Provider shall cause their respective Representatives not
to, Use, disclose, publish, release, transfer or otherwise make
available Confidential Information of, or obtained from, the
other in any form to, or for the use or benefit of, any person or
entity without the disclosing Party's consent. In addition,
Service Provider agrees to comply with and support enforcement of
Customer's security standards governing information security of
which Service Provider has notice. Subject to the provisions of
Section 16.2, each of Customer and Service Provider shall,
however, be permitted to disclose relevant aspects of the other's
Confidential Information to its officers, directors, employees
and Representatives, to the extent that such disclosure is not
restricted under this Agreement, or any governmental approvals
and only to the extent that such disclosure is reasonably
necessary for the performance of its duties and obligations under
this Agreement; provided, however, that the recipient shall be
responsible for ensuring that such officers, directors, employees
and Representatives abide by the provisions of this Agreement.
16.1.4 Each Party acknowledges and agrees that title to and ownership of
Confidential Information shall remain with the Party who
disclosed such information, and that the Confidential Information
disclosed pursuant to this Agreement is confidential and
proprietary and constitutes valuable trade secret information of
the disclosing Party. Upon the termination or expiration of this
Agreement, or at any time upon the request of either Party
(subject to the other Party being relieved of any of its
obligations affected thereby), the other Party shall return all
Confidential Information in its possession that exists in
tangible form to the requesting Party or its Representatives.
16.2 Customer Information: Service Provider acknowledges that Customer has a
responsibility to its customers to keep its Customer Information strictly
confidential. Service Provider and Service Provider Representatives shall
keep strictly confidential any customer records that Customer discloses or
of which Service Provider or Service Provider
31
<PAGE> 32
Representatives become aware. In addition to the other requirements set
forth in this Agreement regarding Confidential Information, Customer's
Customer Information shall also be subject to the additional restrictions
set forth in this Section 16.2.
16.2.1 Neither Service Provider nor Service Provider's Representatives
shall disclose or use Customer's Customer Information other than
to carry out the purposes for which Customer or any Customer
Affiliate disclosed such Customer Information to Service
Provider.
16.2.2 Neither Service Provider nor Service Provider's Representatives
shall disclose any of Customer's Customer Information other than
on a "need to know" basis and then only:
(a) to Customer Affiliates;
(b) to the Project Staff, provided that any member of the Project
Staff that is a nonaffiliated third party shall be subject to
(d) below;
(c) to Service Provider Affiliates, provided that such Affiliates
shall be restricted in use and re-disclosure of such Customer
Information to the same extent as Service Proivider;
(d) to Subcontractors of Service Provider, provided that such
Subcontractors shall have entered into a confidentiality
agreement in the form attached hereto as Schedule M;
(e) to independent contractors, agents, and consultants
designated by Customer; or
(f) pursuant to the exceptions set forth in 15 U.S.C. 6802(e) and
accompanying regulations, which disclosures are made in the
ordinary course of business.
16.3 Exclusions: The obligations in Section 16.1 and Section 16.2 shall not
restrict any disclosure pursuant to any applicable Law or by order of any
court or Governmental Authority (provided that the recipient shall (a)
notify the disclosing Party of any, actual or threatened disclosure of
which it has knowledge of legal compulsion of disclosure, and any actual
legal obligation of disclosure immediately upon becoming so obligated and
(b) cooperate with the disclosing Party's reasonable, lawful efforts to
resist, limit or delay disclosure at the disclosing Party's expense) and,
except to the extent that applicable Law provides otherwise, shall not
apply with respect to information that (1) is independently developed by
the recipient without violating the disclosing Party's proprietary rights
as shown by the recipient's written records, (2) is or becomes publicly
known (other than through unauthorized disclosure), (3) is disclosed (i)
by the owner of such information to a third party free of any obligation
of confidentiality or (ii) is disclosed to the receiving party without
restriction on disclosure by a third party who has the lawful right to
make such disclosure, (4) is already known by the recipient at the time of
disclosure, as shown by the recipient's written records, and the recipient
has no obligation of confidentiality other than pursuant to this Agreement
or any confidentiality agreements entered into before the Agreement Date
between Customer and Service Provider or (5) is rightfully received by a
Party free of any obligation of confidentiality. [***]*
16.4 Independent Development and Acquisition: This Section 16.0 shall not be
construed to limit either Party's right to independently develop or
acquire products without use of the other Party's Confidential
Information. The disclosing Party acknowledges that the receiving Party
may currently or in the future be developing information internally, or
receiving information from other parties, that is similar to the
Confidential Information provided by the disclosing Party. Accordingly,
nothing in this Section 16.0 will be construed as a representation or
agreement that the receiving Party will not develop or have developed
products, concepts, systems or techniques that are similar to or compete
with the products, concepts, systems or techniques contemplated by or
embodied in the Confidential Information of the disclosing Party, provided
that the receiving Party does not violate any of its obligations under
this Section 16.0 in connection with such development.
------------------
* Confidential information has been omitted.
32
<PAGE> 33
16.5 Unauthorized Acts: Without limiting either Party's rights in respect of a
breach of this Section 16.0, each Party shall:
(a) promptly notify the other Party of any unauthorized possession, use or
knowledge, or attempt thereof, of the other Party's Confidential
Information by any person or entity that may become known to such
Party, including any incidents involving a breach of security and any
incidents that might indicate or lead to a threat to, or weakness in,
security and any attempt to make unauthorized use of the Customer
Services or the Systems;
(b) promptly furnish to the other Party full details of the unauthorized
possession, use or knowledge, or attempt thereof, and assist the other
Party in investigating or preventing the recurrence of any
unauthorized possession, use or knowledge, or attempt thereof, of
Confidential Information;
(c) cooperate with the other Party in any litigation and investigation
against third parties deemed necessary by the other Party to protect
its proprietary rights at the other Party's expense; and
(d) promptly use commercially reasonable efforts to prevent a recurrence
of any such unauthorized possession, use or knowledge, or attempt
thereof, of Confidential Information.
[***]*
16.6 Injunctive Relief: Each Party recognizes that its inappropriate disclosure
or use of Confidential Information of the other Party may give rise to
irreparable injury to such Party and acknowledges that remedies other than
injunctive relief may not be adequate. Accordingly, each Party has the
right to equitable and injunctive relief to prevent the unauthorized
possession, use, disclosure or knowledge of any Confidential Information,
as well as to such damages or other relief as is occasioned by such
unauthorized possession, use, disclosure or knowledge.
16.7 Data Protection: In addition to any requirements set forth in this
Agreement, in the event the Customer Services require the access to or use
of personal data, each Party shall be responsible for taking all necessary
steps required by applicable Law to ensure the protection of the privacy
of such personal data to be accessed or used. In the event that applicable
Law requires registration with or consents of a Governmental Authority,
Customer shall register, or cause such registration, with such
Governmental Authority, or obtain such consents, unless applicable Law
otherwise requires
16.8 Publicity: [***]* neither Party shall use the other Party's logo,
trademarks, name or refer to the other Party directly or indirectly,
without such Party's consent in any media release, public announcement or
public disclosure, except that such consent shall not be required for the
listing of a Party's name in promotional or marketing materials, customer
lists or business presentations and except for any disclosure required by
Law.
17.0 AUDITS:
17.1 Audits Generally: Service Provider shall assist Customer in meeting its
audit and regulatory requirements, as they relate to Service Provider and
the Customer Services, to enable Customer, Government Authorities and
Customer's Approved Auditors to conduct appropriate audits under this
Agreement.
17.2 Audit Procedures:
17.2.1 Upon request, at reasonable times during business hours, and upon
at least five business days' prior notice to Service Provider,
Customer and its external auditors that execute confidentiality
agreements in the form of Schedule M ("Approved Auditors") shall
have access to Customer's data and records, and to Service
Provider records, in order to audit the accuracy of Service
Provider's invoices and Service Provider's Systems, internal
controls, security and Service Level performance. Customer and
its Approved Auditors shall have no access to other Service
Provider data and Systems, data of other
------------------
* Confidential information has been omitted.
33
<PAGE> 34
Service Provider customers, or Service Provider internal or third
party costs or cost structure (except to the extent necessary to
audit the mutually agreed upon savings to Customer described in
Schedule C). Approved Auditors shall observe such procedures as
Service Provider may reasonably require to protect Service
Provider Confidential Information, and that of its customers.
Customer agrees that Approved Auditors shall perform entry and
exit interviews, and Customer agrees to provide Service Provider
with copies of applicable portions of audit reports. If requested
by either Party, the Parties shall discuss the results of any
audit performed pursuant to this Agreement and, if mutually
agreed by the Parties use Change Control Management to address
any Changes to the Customer Services. Notwithstanding the
foregoing, (a) if Customer seeks to exercise its audit rights in
the case of malfeasance, Customer shall immediately notify the
Service Provider Client Executive who shall arrange for immediate
access for Customer, Governmental Authorities and Customer's
Approved Auditors, and (b) in the case of an audit to be
performed by a Governmental Authority, Service Provider shall
provide such Governmental Authority with access to all records
and data required by Law, with or without prior notice, and such
Governmental Authority shall not be required to execute a
confidentiality agreement pursuant to this Agreement, but shall
be bound by any confidentiality obligations imposed by Law. The
Customer shall provide prior notice of audits by any Governmental
Authority whenever and to the extent possible.
17.2.2 Service Provider shall provide Customer and its Approved Auditors
access to portions of Service Provider third party contracts that
are directly related to the Customer Services (to the extent that
such access is not prohibited under the applicable third party
contract and provided that Service Provider may redact all
financial information and any other information not directly
related to the Customer Services, except to the extent necessary
to audit the mutually agreed upon savings to Customer described
in Schedule C). In addition, Customer and its Approved Auditors
may request Service Provider to provide access to Service
Provider Representatives, and, to the extent mutually agreed by
Parties, such access shall be provided to the extent agreed to by
such Service Provider Representatives, except as required by Law.
17.2.3 Service Provider shall provide Customer with a copy of the
portions of any SAS 70 audit of Service Provider as such audits
are implemented in accordance with the Transition Plan and to the
extent such portions are directly related to the Customer
Services (provided Service Provider may redact all financial
information and any other information not directly related to the
Customer Services, except to the extent necessary to audit the
mutually agreed upon savings to Customer described in Schedule
C).
17.3 Audit Costs: If Service Provider's provision of services related to an
audit or other review under this Section 17.0 requires use of additional
resources which Service Provider would not otherwise use in the
performance of the Customer Services (including support of audits of
Customer's Services and third party benefit plans) then the Parties shall
use Change Control Management to address any additional resources needed
by Service Provider.
17.4 Financial Information: Service Provider shall, promptly upon Customer's
request, furnish its publicly disclosed financial statements as required
to be prepared by or for Service Provider in the ordinary course of its
business for the purpose of determining Service Provider's ability to
perform its duties hereunder. Furthermore, to the extent required by Law
as indicated to Service Provider by Customer (and as not prohibited by SEC
regulations) Service Provider shall notify Customer immediately [***]*,
and Customer agrees not to acquire or dispose of (or otherwise take
actions regarding) securities of Service Provider while in possession of
such information, unless such information has been publicly disclosed.
17.5 Survival of Audit Rights: Customer's audit rights shall survive expiration
or termination of this Agreement for the longer of (a) a period of [***]*
and (b) the period required by applicable Law.
------------------
* Confidential information has been omitted.
34
<PAGE> 35
18.0 DISPUTE RESOLUTION:
18.1 Disputes: Any dispute arising under this Agreement shall be considered by
[***]* of receipt of a notice from either Party specifying the nature of
the dispute (a "Dispute Notice"); provided, however, it is not mandatory
that a dispute relating to Section 16.0 be resolved in accordance with
this Section.
18.2 Executive Review: Any dispute arising under this Agreement that cannot be
resolved in accordance with Section 18.1 shall be considered in person or
by telephone by the executives of each Party specified in the immediately
succeeding sentence [***]* of receipt of Dispute Notice from either Party
pursuant to Section 18.1; provided, however, it is not mandatory that a
dispute relating to Section 16.0 be resolved in accordance with this
Section. The executives considering any dispute pursuant to this Section
18.2 shall be (a) with respect to Customer, (1) [***]* and (2) [***]* and
(b) with respect to Service Provider, [***]*. Unless such executives of
the Parties otherwise agree, either Party may pursue its rights and
remedies under Section 18.3 after the occurrence of such meeting or
telephone conversation or the passage of [***]* after the receipt of a
Dispute Notice from either Party (as confirmed by the Party that sent such
Dispute Notice).
18.3 Mediation: If the Parties are unable to resolve a dispute pursuant to
Section 18.1 or Section 18.2, then either Party may refer the dispute to
non-binding mediation before a mediator reasonably acceptable to both
sides; provided, however, it is not mandatory that a dispute relating to
Section 16.0 be resolved in accordance with this Section. Unless the
Parties otherwise agree, either Party may pursue its rights and remedies
under Section 18.4 if any dispute subject to mediation in accordance with
this Section 18.3 is not resolved after the passage of [***]* after the
receipt of a Dispute Notice from either Party (as confirmed by the Party
that sent such Dispute Notice).
18.4 Arbitration: Any dispute not resolved pursuant to Section 18.1, Section
18.2 or Section 18.3 shall be finally and exclusively resolved through
binding arbitration; provided, however, it is not mandatory that a dispute
relating solely to Section 16.0 be resolved in accordance with this
Section 18.4. Unless otherwise agreed by the Parties, a dispute submitted
to binding arbitration pursuant to this Section 18.4 shall be resolved
using the following procedure:
(a) the arbitration shall be conducted in accordance with [***]* and
judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof;
(b) the arbitration shall be conducted in [***]*;
(c) the arbitrator shall have a background in, and knowledge of, the
information technology services industry and shall be an appropriate
person based on the nature of the dispute;
(d) each Party shall appoint [***]* perform the arbitration and resolve
the dispute; and
(e) [***]*
18.5 Equitable Relief: Notwithstanding anything to the contrary in this
Agreement, but subject to the provisions of Section 22.6 and Section 22.7,
either Party may, without inconsistency with this Agreement, seek from a
court any interim or provisional relief that may be necessary to protect
the rights or property of that Party pending the resolution of the claim.
------------------
* Confidential information has been omitted.
35
<PAGE> 36
19.0 INDEMNITIES:
19.1 Indemnification for Infringement by Service Provider:
19.1.1 Except for Customer's responsibilities under Section 19.3,
Service Provider agrees to indemnify, defend and hold Customer
harmless from and against any and all Losses incurred by Customer
arising from any third party claim of United States, trade
secret, copyright or patent infringement asserted against
Customer and caused by Customer's use of the Service Provider
Proprietary Software, Service Provider Tools or the New
Intellectual Property. Service Provider shall have no liability
for any claim of infringement that results from or relates to (a)
any modification or enhancement to the Service Provider
Proprietary Software, Service Provider Tools or the New
Intellectual Property by Customer or any third party by or
through Customer unless such modification or enhancement was
specifically directed by or specifically approved by Service
Provider, (b) any failure by Customer to implement or install the
Service Provider Proprietary Software, Service Provider Tools or
the New Intellectual Property as directed by Service Provider, or
(c) the combination, operation or use of the Service Provider
Proprietary Software, Service Provider Tools or New Intellectual
Property with any other Software, Machines, materials, items,
services or resources that the Service Provider Proprietary
Software, Service Provider Tools or New Intellectual Property
were not designed or intended to be used in combination with
(unless such combination, operation or use was specifically
directed by or specifically approved by Service Provider), if
such actual or alleged infringement would not have arisen absent
such combination, operation or use. Service Provider shall also
pass through to Customer all warranties that Service Provider is
entitled to pass through in respect of Service Provider Third
Party Software.
19.1.2 During the Term, in the event the Service Provider Software, the
Service Provider Tools or the New Intellectual Property, in
Service Provider's opinion, are likely to or do become the
subject of a claim of infringement, Service Provider shall, as
applicable and as agreed by the Parties, (a) modify, to the
extent allowed, the Service Provider Software, the Service
Provider Tools or the New Intellectual Property to be
non-infringing and/or (b) obtain for Customer a license to
continue using Service Provider Software, the Service Provider
Tools or the New Intellectual Property. Notwithstanding the
foregoing, but during the Term, in the event Service Provider is
unable to effectuate the solutions referred to in clauses (a) and
(b) of this Section 19.1.2 in a commercially reasonable manner,
and Customer and Service Provider, after input from and
discussion with Customer, are unable to agree on a commercially
reasonable workaround, then Service Provider shall have the right
at its sole option, and upon notice to Customer, to terminate any
Customer Services that Service Provider cannot reasonably perform
without using the Service Provider Software, the Service Provider
Tools or the New Intellectual Property that Service Provider has
determined is or is likely to be the subject of a claim of
infringement. In the event any Customer Service is terminated
pursuant to this Section 19.1.2, (1) the license granted pursuant
to this Agreement with respect to the Service Provider Software,
the Service Provider Tools or the New Intellectual Property that
Service Provider has determined is or is likely to be the subject
of a claim of infringement shall terminate, (2) Customer shall
return such Service Provider Software, the Service Provider Tools
or New Intellectual Property to Service Provider and (3) Service
Provider shall refund to Customer a pro rata portion of the fee
paid to Service Provider hereunder for such Service Provider
Software, the Service Provider Tools or New Intellectual Property
based on a straight line depreciation over a five-year term
beginning on the delivery of such Service Provider Software, the
Service Provider Tools or New Intellectual Property to Customer.
In addition, in connection with any termination of Customer
Services pursuant to this Section 19.1.2, (i) the Parties shall
use Change Control Management to assess the overall impact on the
Parties' respective obligations under this Agreement resulting
from such termination, (ii) Service Provider shall provide
Termination Assistance Services pursuant to Section 3.5 with
respect to such Customer Services and to the extent such
Termination Assistance Services can be provided without
infringement (iii) Service Provider shall cooperate with (A)
Customer, if Customer shall perform such terminated Customer
Service, or (B) any new provider of such terminated Customer
Service that executes a confidentiality agreement in the form
attached hereto as Schedule M.
19.2 Other Indemnification By Service Provider: Service Provider agrees to
indemnify, defend and hold Customer and Customer Representatives harmless,
from and against any and all Losses solely to the extent arising from any
third party claim (a) for bodily injuries to, including fatal injury or
disease to, Service Provider employees, (b) for damage to tangible real or
personal property of Service Provider and Service Provider employees
arising from or in connection with this Agreement, (c) for any products or
services provided by Service Provider to third parties,
36
<PAGE> 37
(d) for any breach or default by Service Provider in the performance of
Service Provider's obligations under agreements with third parties, (e)
for any interest and penalties resulting from a breach by Service Provider
of [***]* and (f) resulting from the acts or omissions of Service Provider
in fulfilling its obligations under this Agreement.
19.3 Indemnification By Customer: Customer agrees to indemnify, defend and hold
Service Provider and Service Provider Representatives harmless, from and
against any and all Losses solely to the extent arising from any third
party claim (a) for bodily injuries to, including fatal injury or disease
to, Customer Associates, (b) for damage to tangible real or personal
property of Customer and Customer Associates arising from or in connection
with this Agreement, (c) of United States trade secret, copyright or
patent infringement asserted against Service Provider caused by Service
Provider's Use of the Customer Proprietary Software (excluding any
modifications or derivative works or New Intellectual Property developed
by Service Provider under this Agreement, except to the extent based on
specific specifications or resources provided by or specifically directed
by Customer or Customer Representatives), the Customer Machines and any
other resources or items provided to Service Provider or Service Provider
Representatives by Customer or Customer Representatives, (d) for any
amounts, including taxes, interest and penalties resulting from a breach
by Customer of [***]*, (e) for any products or services provided by
Customer or Customer Representatives to third parties, (f) any breach or
default by Customer in the performance of Customer's obligations under
agreements with third parties and (g) resulting from the acts or omissions
of Customer in fulfilling its obligations under this Agreement.
19.4 Indemnification Procedures: Subject to the provisions of Section 19.5,
below, if any third party claim is commenced against a Party entitled to
indemnification under Section 19.1, Section 19.2 or Section 19.3 (the
"Indemnified Party"), notice thereof shall be given to the Party that is
obligated to provide indemnification (the "Indemnifying Party") as
promptly as practicable. If, after such notice, the Indemnifying Party
shall acknowledge that this Section applies with respect to such claim,
then the Indemnifying Party shall be entitled, if it so elects, in a
notice promptly delivered to the Indemnified Party, to immediately take
control of the defense and investigation of such claim and to employ and
engage attorneys reasonably acceptable to the Indemnified Party to handle
and defend the same, at the Indemnifying Party's sole cost and expense.
The Indemnified Party shall cooperate, at the cost of the Indemnifying
Party, in all reasonable respects with the Indemnifying Party and its
attorneys in the investigation, trial and defense of such claim and any
appeal arising therefrom; provided, however, that the Indemnified Party
may, at its own cost and expense, participate, through its attorneys or
otherwise, in such investigation, trial and defense of such claim and any
appeal arising therefrom. No settlement of a claim pursuant to this
Section that involves a remedy other than the payment of money by the
Indemnifying Party shall be entered into without the consent of the
Indemnified Party. After notice by the Indemnifying Party to the
Indemnified Party of its election to assume full control of the defense of
any such claim, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses incurred thereafter by such
Indemnified Party in connection with the defense of that claim. If the
Indemnifying Party does not assume full control over the defense of a
claim subject to such defense as provided in this Section, the
Indemnifying Party may participate in such defense, at its sole cost and
expense, and the Indemnified Party shall have the right to defend the
claim in such manner as it may deem appropriate, at the cost and expense
of the Indemnifying Party.
19.5 Subrogation: With respect to any claim for which a Party is entitled to
indemnification from the other Party pursuant to Section 19.1, Section
19.2 or Section 19.3 (such Parties being the Indemnified Party and the
Indemnifying Party, as set forth in Section 19.4), the Indemnified Party
shall only be entitled to seek, or actually seek, indemnification from the
Indemnified Party if, prior to seeking such indemnification, the
Indemnified Party agrees that the Indemnifying Party shall be subrogated
to the rights of the Indemnified Party with respect to the claims and
defenses to which such indemnification relates.
19.6 Exclusive Remedy: THE INDEMNIFICATION RIGHTS OF EACH PARTY PURSUANT TO
SECTION 19.1, SECTION 19.2 AND SECTION 19.3, INCLUDING INDEMNIFICATION
WITH RESPECT TO ANY INFRINGEMENT OR CLAIMS OF INFRINGEMENT, SHALL BE THE
SOLE AND EXCLUSIVE REMEDY OF SUCH INDEMNIFIED PARTY WITH RESPECT TO THE
CLAIMS TO WHICH SUCH INDEMNIFICATION RELATES.
------------------
* Confidential information has been omitted.
37
<PAGE> 38
20.0 DAMAGES:
20.1 Direct Damages:
20.1.1 Assertion of Claims. ALL CLAIMS AND ACTIONS BETWEEN THE PARTIES
RELATING TO, DIRECTLY OR INDIRECTLY, OR ARISING FROM THIS
AGREEMENT (INCLUDING THE CUSTOMER SERVICES), HOWEVER CAUSED,
REGARDLESS OF THE FORM OF ACTION AND ON ANY THEORY OF LIABILITY,
INCLUDING CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER TORT,
SHALL BE BROUGHT UNDER THIS AGREEMENT AND SHALL BE SUBJECT TO THE
TERMS OF THIS AGREEMENT.
20.1.2 Aggregate Limitation of Liability. EXCEPT AS SET FORTH IN SECTION
20.3.1, SECTION 20.3.2 AND SECTION 20.3.3, THE ENTIRE LIABILITY
OF A PARTY TO THE OTHER, IN EACH CASE ARISING FROM OR IN
CONNECTION WITH THIS AGREEMENT, HOWEVER CAUSED, REGARDLESS OF THE
FORM OF ACTION AND ON ANY THEORY OF LIABILITY, INCLUDING
CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER TORT, SHALL BE
LIMITED TO DIRECT DAMAGES NOT TO EXCEED, IN THE AGGREGATE FOR ALL
CLAIMS AND ACTIONS AGAINST A PARTY, [***]* (WITH RESPECT TO EACH
PARTY AND SUBJECT TO INCREASE PURSUANT TO THE NEXT SENTENCE, A
PARTY'S "DIRECT DAMAGES CAP"). FOR EACH RENEWAL PERIOD, BUT ONLY
IN THE EVENT A PARTY'S DIRECT DAMAGES CAP HAS BEEN REDUCED BY A
CLAIM, SUCH PARTY'S DIRECT DAMAGES CAP SHALL BE [***]*; PROVIDED,
HOWEVER, IN NO EVENT SHALL A PARTY'S DIRECT DAMAGES CAP EXCEED
THE AMOUNT [***]*
20.1.3 Claim Minimums. NOTWITHSTANDING SECTION 20.1.1, SECTION 20.1.2 OR
ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY SHALL BE
LIABLE FOR OR SEEK RECOVERY FOR ANY DAMAGES FROM THE OTHER PARTY,
ARISING FROM OR IN CONNECTION WITH ANY PARTICULAR CLAIM UNDER
THIS AGREEMENT, TO THE EXTENT SUCH DAMAGES ARE LESS THAN [***]*;
PROVIDED, THAT ONCE THE AMOUNT OF ALL SUCH CLAIMS OF ANY PARTY
EXCEEDS [***]* IN ANY CALENDAR YEAR, THEN SUCH PARTY MAY SEEK
RECOVERY FOR DAMAGES IN ACCORDANCE WITH THIS AGREEMENT AND THE
OTHER PARTY SHALL BE LIABLE THEREFOR. THE PARTIES SHALL USE
CHANGE CONTROL MANAGEMENT TO ADDRESS THE UNDERLYING CAUSES, IN
THE EVENT (1) A SINGLE CLAIM FOR SUCH DAMAGES IS EQUAL TO OR
GREATER THAN [***]* OR (2) THE AGGREGATE AMOUNT OF ALL CLAIMS FOR
SUCH DAMAGES IS EQUAL TO OR GREATER THAN [***]* DURING ANY
CALENDAR YEAR. IN CONNECTION WITH THE USE OF CHANGE CONTROL
MANAGEMENT IN ACCORDANCE WITH THIS SECTION 20.1.3, THE PARTIES
SHALL DISCUSS THE UNDERLYING CAUSES OF SUCH CLAIMS AND CONSIDER
ANY APPROPRIATE MEASURES THAT CAN BE TAKEN TO MINIMIZE FUTURE
CLAIMS.
20.2 Exclusion of Consequential Damages: EXCEPT AS SET FORTH IN SECTION 20.3.1,
SECTION 20.3.2 AND SECTION 20.3.3, IN NO EVENT SHALL EITHER PARTY HAVE ANY
LIABILITY, REGARDLESS OF THE FORM OF ACTION AND ON ANY THEORY OF
LIABILITY, INCLUDING CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER TORT,
FOR ANY LOSS OF INTEREST, PROFIT OR REVENUE BY THE OTHER PARTY OR FOR ANY
CONSEQUENTIAL, INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR EXEMPLARY
DAMAGES SUFFERED BY THE OTHER PARTY, ARISING FROM OR RELATED TO THIS
AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
LOSSES OR DAMAGES.
------------------
* Confidential information has been omitted.
38
<PAGE> 39
20.3 Exclusions to Limitations:
20.3.1 Uncapped Claims: THE LIMITATIONS AND EXCLUSIONS OF LIABILITY SET
FORTH IN SECTION 20.1.2 AND SECTION 20.2 ARE NOT APPLICABLE TO
THIRD PARTY CLAIMS TO THE EXTENT A PARTY IS ENTITLED TO
INDEMNIFICATION UNDER (A) SECTIONS 19.1 AND SECTION 19.2, BUT,
WITH RESPECT TO 19.2(F), ONLY TO THE EXTENT ARISING FROM SERVICE
PROVIDER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AND (B)
SECTION 19.3, BUT, WITH RESPECT TO 19.3(G), ONLY TO THE EXTENT
ARISING FROM CUSTOMER'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
20.3.2 Certain Third Party Claims Subject to Double Cap: TO THE EXTENT A
PARTY IS ENTITLED TO INDEMNIFICATION FOR A THIRD PARTY CLAIM
UNDER SECTION 19.2(F) OR 19.3(G) NOT COVERED BY SECTION 20.3.1
[***]*.
20.3.3 Claims of [***]*: NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT, TO THE EXTENT CUSTOMER IS ENTITLED TO
INDEMNIFICATION UNDER THIS AGREEMENT RELATING TO A THIRD PARTY
CLAIM BY [***]*, THE LIMITATIONS AND EXCLUSIONS SET FORTH IN
SECTION 20.1.2 AND SECTION 20.2 SHALL NOT APPLY, BUT CUSTOMER
SHALL ONLY BE ENTITLED TO RECOVER, IN THE AGGREGATE, DIRECT
DAMAGES AND CONSEQUENTIAL DAMAGES UP TO [***]*.
20.3.4 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO
EVENT SHALL ONE PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
DAMAGES IF, AND TO THE EXTENT, CAUSED BY THE FIRST PARTY'S
FAILURE TO PERFORM ITS RESPONSIBILITIES, AS SET FORTH IN THIS
AGREEMENT. SUBJECT TO SECTION 20.3.1, SECTION 20.3.2 AND SECTION
20.3.3, THE LIMITATIONS, IF ANY, AND EXCLUSIONS, IF ANY, SET
FORTH IN THIS AGREEMENT APPLY TO EACH PARTY AND ITS
REPRESENTATIVES AND REPRESENT THE MAXIMUM, IF ANY, AGGREGATE
AMOUNT FOR WHICH EACH PARTY AND ITS REPRESENTATIVES ARE
COLLECTIVELY RESPONSIBLE, AND ALL REFERENCES IN THIS SECTION 20.0
SHALL INCLUDE SUCH PARTY'S REPRESENTATIVES.
20.3.5 Except as set forth in Section 15.4, in no event shall Service
Provider or Service Provider Representatives be responsible or
liable for (a) any corruption, damage, loss or mistransmission of
data, (b) the security of data during transmission via public
telecommunications facilities or (c) the content of any data
provided by Customer or Customer Representatives.
20.4 Acknowledgment: Service Provider and Customer each acknowledge that the
limitations and exclusions set forth in this Agreement have been the
subject of active and complete negotiations between the Parties and
represent the Parties' agreement based upon the level of risk to Service
Provider and Customer associated with their respective obligations under
this Agreement and the payments made to Service Provider pursuant to this
Agreement.
21.0 INSURANCE AND FINANCIAL ABILITY:
21.1 Service Provider Insurance: Service Provider shall at its own expense
secure and maintain throughout the Term, the following insurance with
companies satisfactory and acceptable to Customer acting reasonably and
shall furnish to Customer certificates evidencing such insurance on or
prior to the first Process Effective Date and naming Customer as an
additional insured on the policies. Said certificates shall contain a
provision whereby the policy and/or policies shall not be canceled or
altered without at least 30 days prior notice to Customer. The insurance
coverages and limits required to be maintained by Service Provider shall
be primary to insurance coverage, if any, maintained by Customer.
------------------
* Confidential information has been omitted.
39
<PAGE> 40
(a) Worker's Compensation Insurance which shall fully comply with the
statutory requirements of all applicable state and federal laws and
Employers' Liability Insurance which limit shall be [***]* per
accident for Bodily Injury and [***]* per employee/aggregate for
disease. Service Provider and its underwriter shall waive subrogation
against Customer.
(b) Commercial General Liability Insurance with a minimum combined single
limit of liability of [***]* per occurrence per location and [***]*
aggregate for bodily injury and/or death and/or property damage and/or
personal injury. This shall include products/completed operations
coverage and shall also include Broad Form Contractual coverage
specifically for this Agreement.
(c) Business Automobile Liability Insurance covering all owned, hired and
non-owned vehicles and equipment used by Service Provider with a
minimum combined single limit of liability of [***]* for injury and/or
death and/or property damage.
(d) Excess coverage with respect to the coverages referred to in clauses
(a), (b) and (c) of this Section 21.1 with a minimum combined single
limit of [***]* per occurrence. Notwithstanding the foregoing, Service
Provider and Customer shall mutually agree on the type and amount of
insurance coverage during the Adjustment Period.
(e) Service Provider shall be responsible for Losses to Customer property
and property of Customer's customers, directly or indirectly, and
shall maintain Fidelity Bond coverage for the dishonest acts of its
employees(1) in a minimum amount of [***]* during years one through
three of the Term and (2) in a minimum amount of [***]* during years
four through the remainder of the Term. Customer shall be named as
"Loss Payee, As Their Interest May Appear," on such Fidelity Bond.
Notwithstanding the foregoing, Service Provider and Customer shall
mutually agree on the type and amount of insurance coverage during the
Adjustment Period.
(f) Errors and Omissions insurance covering Losses due to errors and
omission of the Project Staff (1) in a minimum amount of [***]* in
aggregate during years one through three of the Term and (2) in a
minimum amount of [***]* in aggregate during years four through the
remainder of the Term. Notwithstanding the foregoing, Service Provider
and Customer shall mutually agree on the type and amount of insurance
coverage during the Adjustment Period.
21.2 Financial Ability: Customer shall provide Service Provider access to a
copy of the Annual Report provided to its stockholders [***]*.
21.3 Insurance Documentation: To the extent Service Provider obtains or
maintains third party insurance pursuant to Section 21.1, Service Provider
shall, furnish to Customer certificates of insurance or other appropriate
documentation (including evidence of renewal of insurance) evidencing all
coverages referenced in Section 21.1.
22.0 MISCELLANEOUS PROVISIONS:
22.1 Notices: Except as otherwise specified in this Agreement, all notices,
requests, consents, approvals, agreements, authorizations,
acknowledgements, waivers, proposals, amendments and other communications
required or permitted under this Agreement shall be in writing and shall
be deemed given when sent by facsimile to the facsimile numbers specified
below and receipt is verified, or delivered by hand to the addresses
specified below. A copy of any such notice sent by facsimile shall also be
sent by express air mail on the date such notice is transmitted by
facsimile to the addresses specified below. Either Party may change its
address or facsimile number for notification purposes by giving the other
Party 10 days' notice of the new address or facsimile number and the date
upon which it shall become effective.
------------------
* Confidential information has been omitted.
40
<PAGE> 41
Address for Notices: Service Provider Address for Notices: Customer
Exult, Inc. Bank of America Procurement
401 North Tryon Street Services
Charlotte, North Carolina 28255 _______________________________
[***]* _______________________________
Telephone:_________________________ ATTN: _________________________
Facsimile:_________________________ Agreement No.: 23191-001-001
Telephone:_____________________
Facsimile:_____________________
With a copy to: With a copy to:
Exult, Inc. [CUSTOMER CLIENT EXECUTIVE]
4 Park Plaza, Suite 1000 _______________________________
Irvine, California 92614 _______________________________
[***]* _______________________________
[***]* ATTN: _________________________
[***]* Telephone:_____________________
Facsimile:_____________________
22.2 Assignment and Third Party Beneficiaries: Neither Party may, without the
consent of the other, assign this Agreement or any of its rights under
this Agreement, in whole or in part, and may not delegate its obligations
under this Agreement. Any such purported assignment or delegation in
contravention of this Section shall be null and void. [***]* (c) assign
its right to receive Fees under this Agreement as security or collateral
for its obligations or the obligations of its affiliates and provide
Customer with notice thereof. Each Party intends that this Agreement shall
not benefit, or create any right or cause of action in or on behalf of,
any person or entity other than the Parties.
22.3 Relationship: The Parties intend to create an independent contractor
relationship and nothing contained in this Agreement shall be construed to
make either Customer or Service Provider (or their respective
Representatives) partners, joint venturers, principals, Representatives or
employees of the other. No officer, director, employee or Service Provider
Representative retained by Service Provider to perform work on Customer's
behalf under this Agreement shall be deemed to be an employee of Customer
or a Customer Representative. Neither Party shall have any right, power or
authority, express or implied, to bind the other. Service Provider shall
have the sole right to supervise, manage, contract, direct, procure,
perform or cause to be performed, all work to be performed by Service
Provider under this Agreement.
22.4 Severability and Waivers: If any provision of this Agreement is held by a
court of competent jurisdiction to be contrary to Law, then the remaining
provisions of this Agreement, if capable of substantial performance, shall
remain in full force and effect. No delay or omission by either Party to
exercise any right or power it has under this Agreement shall impair or be
construed as a waiver of such right or power. A waiver by any Party of any
breach or covenant shall not be construed to be a waiver of any succeeding
breach or any other covenant. All waivers must be signed by the Party
waiving its rights.
22.5 Survival: The terms of Section 3.4, Section 3.5, Section 3.6, Section 4.7,
Section 5.1 through Section 5.5, Section 5.7 through Section 5.9, Section
5.12, Section 11.3, Section 12.0, Section 13.2, Section 16.0, Section
17.0, Section 18.0, Section 19.0, Section 20.0, Section 22.6, Section
22.7, Section 22.9 and Section 22.13, and such other provisions that by
their nature are necessary, shall survive the expiration or termination of
this Agreement.
22.6 Governing Law: This Agreement and the rights and obligations of the
Parties under this Agreement shall be governed by and construed in
accordance with the Laws of California, without giving effect to the
principles thereof relating to the conflicts of Laws.
------------------
* Confidential information has been omitted.
41
<PAGE> 42
22.7 Sole and Exclusive Venue: Subject to the provisions of Section 16.0 and
Section 18.0, each Party irrevocably agrees that any legal action, suit or
proceeding brought by it in any way arising out of this Agreement must be
brought solely and exclusively in United States District Court for the
Central District of California or in the state courts of the State of
California and irrevocably accepts and submits to the sole and exclusive
jurisdiction of each of the aforesaid courts in personam, generally and
unconditionally with respect to any action, suit or proceeding brought by
it or against it by the other Party; provided, however, that this Section
shall not prevent a Party against whom any legal action, suit or
proceeding is brought by the other Party from seeking to remove such legal
action, suit or proceeding, pursuant to applicable federal law, to the
district court of the United States of America for the district and
division embracing the place where the action is pending in the state
courts of California, and in the event an action is so removed each Party
irrevocably accepts and submits to the jurisdiction of the aforesaid
district court. Each Party hereto further irrevocably consents to the
service of process from any of the aforesaid courts by mailing copies
thereof by registered or certified mail, postage prepaid, to such Party at
its address designated pursuant to Section 22.1 of this Agreement, with
such service of process to become effective 30 days after receipt of such
mailing.
22.8 Force Majeure: If and to the extent that a Party's performance of any of
its obligations pursuant to this Agreement is prevented, hindered or
delayed by fire, flood, earthquake, elements of nature or acts of God,
acts of war, terrorism, riots, civil disorders, rebellions, action or
inaction of any governmental entity, revolutions, strikes, labor disputes,
any acts or omissions by a third party, any third party products or any
other cause beyond the reasonable control and without negligence of such
Party, including material failures or fluctuations in electrical power,
heat, light, air conditioning, telecommunications equipment, data
processing systems, or ACH or other systems maintained by third parties or
Governmental Authorities and utilized in the performance of the Customer
Services, (each, a "Force Majeure Event"), then the non-performing,
hindered or delayed Party shall be excused for such non-performance,
hindrance or delay, as applicable, of those obligations affected by the
Force Majeure Event for as long as such Force Majeure Event continues and
such Party continues to use commercially reasonable efforts to recommence
performance whenever and to whatever extent possible without delay,
including through the use of alternate sources, workaround plans or other
means. Upon the occurrence of a Force Majeure Event, each Party shall
comply with its obligations under the Existing DRPs or any New DRPs, as
applicable. The Party whose performance is prevented, hindered or delayed
by a Force Majeure Event shall immediately notify the other Party of the
occurrence of the Force Majeure Event and describe in reasonable detail
the nature of the Force Majeure Event and discuss with the other Party the
availability and feasibility of alternate sources, workaround plans and
other means of restoring the affected Customer Services. If any Force
Majeure Event prevents, hinders or delays performance of the Customer
Services (even after resorting to the Existing DRPs or New DRPs, as
applicable) for more than [***]*, Customer may procure such Customer
Services from an alternate source agreed upon by the Parties, and,
commencing on the [***]* after the commencement of a Force Majeure Event,
Service Provider shall reimburse Customer for the costs and expenses
incurred by Customer in procuring such alternate services, to the extent
that those costs and expenses exceed the Fees for such Customer Services.
If after [***]* after the commencement of a Force Majeure Event, Service
Provider is not able to perform the Customer Services in accordance with
this Agreement (including performance of its obligations under Section
7.1) without material increased cost to Customer, then Customer may
terminate the affected Process for cause and the Parties shall use Change
Control Management to address the impact of such termination on the other
Customer Services and the Fees covered under this Agreement.
22.9 Nonperformance: In the event either Party's performance of its obligations
under this Agreement requires or is contingent upon the other Party's
performance of an obligation under this Agreement, and such other Party,
after receiving notice that it has not performed such obligation, delays
or withholds such performance beyond the agreed-upon time period (or
beyond [***]*, if a time period is not specified), the time for the
performance of the notifying Party's obligations shall be extended for the
period of such delay in, or withholding of, performance.
22.10 Environmental Initiative: Service Provider acknowledges that Customer
encourages each vendor with which it enters into an agreement for the
provision of goods or services to use, consistent with the efficient
performance of such agreements, recycled paper goods and to implement and
adhere to other environmentally beneficial policies and practices.
------------------
* Confidential information has been omitted.
42
<PAGE> 43
22.11 Minority Business Development Initiative:
22.11.1 Service Provider recognizes Customer's Business Development
Initiative supporting Minority-Owned Business Enterprises and
Women-Owned Business Enterprises and is committed to
participation of Minority-Owned Business Enterprises and
Women-Owned Business Enterprises in its procurement and
professional services programs.
22.11.2 To qualify as a Minority-Owned Business Enterprise or a
Woman-Owned Business Enterprise under this Agreement, such
business enterprise must be certified by an agency acceptable to
Customer.
22.11.3 Service Provider is not a Minority-Owned Business Enterprise or a
Woman-Owned Business Enterprise. Within 90 days after the
Agreement Date, the Parties shall meet to discuss a plan pursuant
to which the Parties will work together to enable Service
Provider to contribute to Customer's Minority Development
Initiative in accordance with this Section 22.11.
22.11.4 As part of the plan referred to in Section 22.11.3, as mutually
agreed by the Parties, Service Provider shall either (a) use
Minority-Owned Business Enterprises in connection with its
provisions of the Customer Services in an amount to be mutually
agreed upon by the Parties; (b) use Women-Owned Business
Enterprises in connection with its provision of the Customer
Services in an amount to be mutually agreed upon by the Parties;
or (c) undertake such other activities as mutually agreed by the
Parties that will enable Service Provider to contribute to
Customer's Minority Development Initiative.
22.12 Right to Provide Customer Services: Except as provided in Section 4.1.3
and Section 4.3.2, each Party recognizes that Service Provider personnel
providing services to Customer under this Agreement, including the Project
Staff, may perform similar services for others, and this Agreement shall
not prevent Service Provider from using such personnel and any equipment
used to provide Customer Services to Customer under this Agreement for
such purposes.
22.13 Right to Subcontract:
22.13.1 Each Party recognizes that Service Provider may subcontract, in
its sole discretion, any of its obligations or responsibilities
under this Agreement; provided, however, with respect to any
subcontract (other than the Assigned Agreements) that [***]*,
Service Provider shall obtain Customer's consent prior to
subcontracting such Customer Services. Notwithstanding the
immediately preceding sentence and except for the Subcontractors
already being used by Service Provider as of the Agreement Date,
Service Provider shall not permit any Subcontractor of Service
Provider to perform any Customer Services unless and until
Service Provider has entered into a subcontract with such
Subcontractor containing provisions at least as favorable to
Customer as those in this Agreement with respect to security,
transitional assistance services, Confidential Information,
Customer Data, intellectual property and other proprietary
rights, and audit/inspection rights.
22.13.2 Unless and to the extent otherwise agreed by the Parties, Service
Provider shall be responsible for any failure by any
Subcontractor of Service Provider or personnel of such
Subcontractor to perform Customer Services in accordance with
this Agreement or to comply with any duties or obligations
imposed on Service Provider under this Agreement to the same
extent as if such failure to perform or comply was committed by
Service Provider.
22.13.3 Service Provider shall comply with and shall cause all Service
Provider Representatives to comply with all personnel, facility,
safety and security rules and regulations and other reasonable
instructions of Customer of which Service Provider has been given
notice by Customer, when performing work at a Customer Service
Location, and shall perform the Customer Services at the Customer
Service Locations in such a manner as to avoid endangering the
safety, or materially interfering with the convenience of,
Customer, Customer Representatives and their respective
customers.
------------------
* Confidential information has been omitted.
43
<PAGE> 44
22.13.4 Customer shall provide Service Provider with copies of such
applicable safety and security rules and regulations as such
safety and security rules and regulations are revised. Service
Provider understands that Customer operates under various Laws
that are unique to the security-sensitive banking industry. As
such, persons engaged by Service Provider to provide Customer
Services under this Agreement are held to a higher standard of
conduct and scrutiny than in other industries or business
enterprises. Service Provider understands and acknowledges that
the Service Provider Representatives shall possess appropriate
character, disposition and honesty conducive to the environment
where Services are provided under this Agreement. Service
Provider shall, to the extent permitted by Law, exercise
reasonable and prudent efforts to comply with the security
provisions of this Agreement.
22.14 Further Assurances: Each of the Parties acknowledges and agrees that,
subsequent to the execution and delivery of this Agreement and without any
additional consideration, each of the Parties shall execute and deliver
any further legal instruments and perform any actions which are or may
become necessary to effectuate the purposes of this Agreement.
22.15 Solicitation: Except as otherwise provided in Section 2.8 of Schedule T
and in Schedule J, during the Term and for [***]* after the expiration or
termination of this Agreement, neither Party shall directly solicit any
employees of the other Party without such Party's consent; this shall not
preclude the indirect solicitation of employees through general
advertisements or recruiting efforts intended for the general public.
22.16 Negotiated Terms: The Parties agree that the terms and conditions of this
Agreement are the result of negotiations between the Parties and that this
Agreement shall not be construed in favor of or against any Party by
reason of the extent to which any Party or its professional advisors
participated in the preparation of this Agreement.
22.17 Consents, Approvals and Requests: Except as specifically set forth in this
Agreement, all consents, approvals, notices, requests and similar actions
to be given by either Party under this Agreement shall not be unreasonably
withheld or delayed and each party shall make only reasonable requests
under this Agreement.
22.18 Entire Agreement; Amendments; Counterparts: This Agreement represents the
entire agreement between the Parties with respect to their subject matter,
and there are no other representations, understandings or agreements
between the Parties relative to such subject matter. No amendment to, or
change, waiver or discharge of, any provision of this Agreement shall be
valid unless signed by an authorized representative of each of the
Parties. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which taken together
shall constitute one single agreement between the Parties.
------------------
* Confidential information has been omitted.
44
<PAGE> 45
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE A
DESCRIPTION OF SERVICES
FINAL
<PAGE> 46
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 INTRODUCTION.............................................................1
2 HUMAN RESOURCES SERVICES.................................................2
2.1 TOTAL COMPENSATION...................................................2
2.1.1 Benefits......................................................2
2.1.2 Payroll.......................................................2
2.2 CUSTOMER ASSOCIATE DATA MANAGEMENT...................................2
2.2.1 Customer Associate Data and Records Management................2
2.2.2 Information Technology and Information Services ("IT")........3
2.3 ORGANIZATION AND PEOPLE DEVELOPMENT..................................3
2.3.1 Policy and Legal Compliance....................................3
3 FINANCE AND ACCOUNTING SERVICES..........................................3
3.1 TRANSACTION PROCESSING...............................................3
3.1.1 Accounts Payable ("AP").......................................3
3.1.2 Travel and Expense (T&E) Claim Processing.....................4
3.1.3 Asset Management Services.....................................4
i
<PAGE> 47
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE A
DESCRIPTION OF SERVICES
1 INTRODUCTION
This Schedule describes certain duties, obligations and responsibilities of
Service Provider and of Customer in performing the Services.
Except where specifically set out in the Transition Plan, from the
applicable Process Effective Date, Service Provider shall provide each
Process included in the Services, (defined as Benefits, Payroll, Customer
Associate Data and Records Management, Information Technology and
Information Services, Policy and Legal Compliance, Accounts Payable, Travel
and Expense Claim Processing and Asset Management Services) [***]*.
1.1 "Client Service Centers" or "CSC" - as used in the Schedules, Client
Service Centers means Service Providers locations from which Customer
Services are provided.
1.2 "Customer IT Domain" - shall mean the data processing infrastructure,
servers, data communications equipment, local area networks, desktop
equipment and support, common office environment, and wide area network
facilities (including the link between the Service Provider IT Domain and
the Customer IT Domain) operated and maintained by Customer and/or operated
and maintained by third parties under third party contracts managed by
Customer.
1.3 "Service Provider IT Domain" - shall mean the CSC infrastructure, data
processing infrastructure, servers, data communications equipment, local
area networks, desktop equipment and support, common office environment, and
wide area network facilities, operated and maintained by Service Provider
and/or operated and maintained by Service Provider Subcontractors.
Service Provider shall assume responsibility for each of the Processes set
out in this Schedule on the applicable Process Effective Date. The following
legend applies for all tables in this Schedule A.
Table Legend
X Performs Responsibility
A Approves
----------------
* Confidential information has been omitted.
1
<PAGE> 48
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
2 HUMAN RESOURCES SERVICES
Service Provider and Customer will perform the Human Resources (HR) services
as described in this Section 2.
2.1 TOTAL COMPENSATION
2.1.1 Benefits
Benefits include [***]* and [***]* to Customer Associates. The
function determines the appropriate competitive level and mix of
benefits for Customer, including [***]*.
[***]*
[***]*
2.1.2 Payroll
Payroll processes include the collection of time and attendance
data, management of Customer Associate earning and deductions,
calculation of gross and net pay, processing Customer Associate
payments, and responding to and resolving Customer Associate
payroll issues and inquiries. Additionally, the payroll function
will compute and file payroll related taxes, manage mandated
deductions and perform the accounting transactions necessary to
accumulate labor expenses at the detailed level including all
general ledger interfaces.
[***]*
[***]*
2.2 CUSTOMER ASSOCIATE DATA MANAGEMENT
2.2.1 Customer Associate Data and Records Management
Customer Associate Data and Records Management responsibilities
include all activities necessary to capture, track, modify and
report Customer Associate related electronic and physical data.
Customer Associate Data includes data on active Customer
Associates, inactive Customer Associates such as terminated, term
vested, deceased, and annuitants, and appropriate non-Customer
Associate populations.
[***]*
[***]*
----------------
* Confidential information has been omitted.
2
<PAGE> 49
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
2.2.2 Information Technology and Information Services (IT)
IT refers to the information technology environment within which
the Processes operate. This section specifically refers to the
hardware, software, and networks that enable the Processes
addressed elsewhere within this document.
[***]*
[***]*
2.3 ORGANIZATION AND PEOPLE DEVELOPMENT
2.3.1 Policy and Legal Compliance
Policy and Legal Compliance is the management of Customer's legal
requirements and internal business policies across all HR
processes.
[***]*
[***]*
3 FINANCE AND ACCOUNTING SERVICES
3.1 TRANSACTION PROCESSING
3.1.1 Accounts Payable (AP)
Accounts Payable responsibilities include the set of activities
that must be performed to ensure that Customer's legitimate
financial obligations to its suppliers and vendors are fulfilled
in a timely and accurate manner.
[***]*
[***]*
----------------
* Confidential information has been omitted.
3
<PAGE> 50
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
3.1.2 Travel and Expense (T&E) Claim Processing
Travel and Expense Claim responsibilities include the set of
activities that must be performed to ensure that Customer's
legitimate financial obligations to reimburse its Customer
Associates for business expenses incurred are fulfilled in a
timely and accurate manner.
[***]*
[***]*
3.1.3 Asset Management Services
Asset management responsibilities include the set of activities
that must be performed to ensure that Customer's assets are
accurately reflected in the assets register and on the balance
sheet, and that information regarding those assets is accurate and
accessible to support decision making.
[***]*
[***]*
----------------
* Confidential information has been omitted.
4
<PAGE> 51
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE B
SERVICE LEVELS
FINAL
<PAGE> 52
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 INTRODUCTION.............................................................1
2 PRINCIPLES GOVERNING SERVICE LEVELS......................................1
3 PROCESS..................................................................1
4 FEES AT RISKS............................................................2
i
<PAGE> 53
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE B
SERVICE LEVELS
1 INTRODUCTION
This Schedule describes the principles and parameters governing the Service
Levels that will be measured. This Schedule also describes how such Service
Levels shall be established.
There are two types of Service Levels that shall be defined, measured and
reported:
1.1 Key Performance Indicators (KPIs) - Service Levels that must be met to
avoid a significant financial or business impact to Customer; and
1.2 Reporting Service Levels (RSLs) - These measure Service Provider's
performance of the Services using a range of quantitative and
qualitative Service Levels.
The process for initially establishing these Service Levels is described in
Section 3 of this Schedule.
2 PRINCIPLES GOVERNING SERVICE LEVELS
2.1 Service Levels shall be used to measure Service Provider's performance
of the Services set out in Schedule A of this Agreement.
2.2 Service Levels shall be based on objective and clearly defined
measurable criteria.
2.3 A limited number of Service Levels shall be designated as KPIs as
mutually agreed by the Parties.
2.4 Service Levels are designed to measure quality and cost issues that are
clearly identifiable by Customer business users.
2.5 Service Provider's performance of the Services at the Service Levels is
subject to Customer performing its obligations and responsibilities
under this Agreement.
3 PROCESS
Prior to the Agreement Date, the parties have agreed on the KPI Service
Level measurements, target metrics and process weightings, as well as a
representative list of RSL measurements identified below. Service Level
metrics shall be determined following the Agreement Date in accordance with
the process identified below.
3.1 KPIs
3.1.1 [***]*
----------------
* Confidential information has been omitted.
1
<PAGE> 54
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
3.1.2 KPI Process Weightings
Customer shall assign each KPI a weighting of no less than [***]*
and no greater than [***]*. The total KPI process weighting for
all KPI Service Levels shall equal [***]*.
3.1.3 Key Performance Indicator Table
[***]*
Service Provider shall have no liability [***]* those systems,
hardware or other technical infrastructure supplied or controlled
by Service Provider under this Agreement.
3.2 RSLs
Below is a representative list of RSLs that will be adjusted and agreed
between the Parties during the [***]* validation period following each
Process Effective Date. After the [***]* validation period, the revised
RSL measurements and metrics shall be implemented and reported on an
on-going basis.
[***]*
3.2.1 Reporting Service Level Table
Any requests for additional RSLs following the [***]* validation period
shall be subject to Change Control Management and the Parties recognize
that an appropriate equitable adjustment to the Fees may be necessary to
implement such RSLs.
3.3 ANNUAL SERVICE LEVELS REVIEW
The steering committee (1) shall review the Service Levels annually, (2)
use Change Control with respect to any Service Levels that require
periodic adjustment pursuant to this Agreement or are no longer
appropriate because of an increase, decrease or change to the Services,
shall adjust the Service Levels and (3) with respect to all other
Service Levels, may adjust the Service Levels for the subsequent
contract year. In addition, either Party may, at any time upon notice to
the other Party, initiate negotiations to review and, upon agreement,
adjust any Service Level which such Party in good faith believes is
inappropriate. [***]*
4 FEES AT RISK
4.1 RSLs shall not be subject to Fees At Risks.
4.2 [***]* the applicable Fees At Risks as set out in Schedule C or [***]*
available as outlined in Section 7.3.1.
4.3 Failure by Service Provider to meet the KPIs resulting from a single
event shall constitute a single failure by Service Provider to meet the
KPIs. If a single event causes multiple failures to meet the KPIs,
Service Provider's liability [***]* for a single failure by Service
Provider to meet the KPIs [***]* as outlined in Section 7.4.(b) of the
Agreement.
4.4 Applicable Fees At Risks for missed KPIs, except for Vendor Management
KPIs, shall be calculated on a [***]* and [***]*. Applicable Fees At
Risks for the Vendor Management KPI shall be calculated on an [***]*.
4.5 Service Provider shall be allowed [***]* KPI within each [***]*
reconciliation period.
----------------
* Confidential information has been omitted.
2
<PAGE> 55
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE C
FINAL
FEES AND CHARGES
<PAGE> 56
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
1. INTRODUCTION.............................................................1
2. DEFINITIONS..............................................................1
3. CUSTOMER BASELINE SPEND VERIFICATION.....................................2
4. CHARGING METHODOLOGY.....................................................3
4.1 BASELINE CHARGES..................................................3
4.2 ARCS/RRCS.........................................................5
4.3 FEES AT RISK......................................................6
5. PASS THROUGH EXPENSES AND OTHER CHARGES..................................7
5.1 PASS THROUGH EXPENSES.............................................7
6. INVOICING................................................................7
7. TERMINATION..............................................................8
7.1 TERMINATION FOR CONVENIENCE.......................................8
7.2 TERMINATION FOR CHANGE OF CONTROL.................................8
7.3 TERMINATION FOR CAUSE.............................................8
7.4 OTHER TERMINATION FEES............................................8
8. COST OF LIVING ADJUSTMENT................................................8
9. CONTRACT MINIMUMS........................................................8
10. NON-LABOR RELATED SYSTEMS AND OTHER CHARGES..............................8
10.1 NON-LABOR RELATED SYSTEMS AND OTHER CHARGES TO SERVICE PROVIDER.....9
11. ASSUMPTIONS..............................................................9
-i-
<PAGE> 57
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
1. INTRODUCTION
This Schedule describes the methodology for determining the charges to be paid
by Customer to Service Provider for the performance by Service Provider of its
obligations under this Agreement as well as the associated processes for
invoicing Customer for such charges. In addition, this Schedule identifies
charges to be paid by Service Provider for other services provided by Customer
in support of the Services.
2. DEFINITIONS
Unless otherwise specified, any capitalized terms that are not defined in this
Schedule shall have the meanings assigned to them in this Agreement. The
following terms shall have the meanings set out below:
"Actual Resource Units" means the actual volumes of Services delivered with
respect to a Resource Unit Category, calculated in accordance with Section
4.2.1. of this Schedule.
"Additional Resource Charge" or "ARC" means the incremental charges payable by
Customer in addition to the Baseline Charges when Service Provider delivers
volumes Services with respect to Resource Unit Categories that exceeds the upper
limit for the applicable Baseline Volumes.
"Associates Served" means any Customer Associates(or, where appropriate, retiree
or temporaryemployee) supported by Service Provider or eligible to receive
Services from Service Provider, measured monthly on the last business day of the
month from the applicable database.
"Band" means, with respect to each Resource Unit Category, the range of volumes
of Service that Service Provider will deliver that are greater than or less than
the Baseline Volume related to such Resource Unit Category as set forth Table
4.2.1 of this Schedule and subject to adjustment by verification.
"Baseline Charges" means the amounts, [***]* to Service Provider, consisting of
the sum of [***]*, plus [***]*, in each case determined for each Process as of
the Process Effective Date related to such Process and subject to adjustment by
verification.
"Baseline Volume" means with respect to [***]* and (b) for all other Resource
Unit Categories, the [***]*, as set forth in Table 4.2.1.1 of this Schedule and
subject to adjustment by verification.
"Contract Year" means each 12-month period commencing on the Agreement Date and
each anniversary of the Agreement Date.
"Customer Baseline Spend" means [***]*.
"Electronic Invoices" means Associates Served electronically processed invoices
including recurring invoices and automated travel and expense reports.
"Fees at Risk" means an amount to be credited or paid to Customer, at the
Customer's option, in the event of an unexcused failure by Service Provider to
achieve a Key Performance Indicator as specified in Schedule B.
"Full-Time Equivalent" or "FTE" means [***]*.
"HR, AP, and IT Costs" means [***]*.
------------------------
* Confidential information has been omitted.
-1-
<PAGE> 58
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
"HR, AP, and IT Labor Costs" means [***]* as identified in Table 4.1.1.1.
"HR, AP and IT Other Costs" means [***]* as identified in Table 4.1.3.1 ("HR, AP
and IT Non-Labor-Related Other Costs").
"IT" means the Information Technology and Information Services specified in
Section [2.2.2] of Schedule A of this Agreement.
"Manual Checks" means payment requests requiring special processing, handling,
and payments sent by couriers.
"Major Enhancement" means application changes with an estimated effort of more
than [***]*.
"Minimum Payment" means the minimum annual payments described by Section 9 of
this Schedule.
"Minor Enhancement" means application changes with an estimated effort of
[***]*."Payroll Advises" means any paycheck, direct deposit and other electronic
form of payment caused to be issued by Service Provider in the performance of
its payroll responsibilities as defined in Section 2.1.2 of Schedule A.
"Person-Day" means [***]*.
"Payroll Advises" means any paycheck, direct deposit and other electronic form
of payment caused to be issued by Service Provider in the performance of its
payroll responsibilities as defined in Section 2.1.2 of Schedule A.
"Process Effective Date" means, with respect to any Process, the date on which
Service Provider assumes management of and becomes responsible for such Process.
"Project FTEs" means the number of FTEs included in the Baseline Charges that
are assigned to complete and support the In-Flight Projects described in
Schedule H. The number of Project FTEs as of the Agreement Date is [***]*;
provided, however, that the Parties may use Change Control Management to adjust
the number of Project FTEs.
"Reduced Resource Charge" or "RRC" means the incremental credits to Customer
that apply when Service Provider delivers volumes of Service with respect to a
Resource Unit Category that are the lower limits for the related Baseline
Volume.
"Resource Unit Category" means each Service for which (i) there is a Baseline
Volume and (ii) Actual Resource Units are measured, as identified in Table
4.2.1.1
"Significant Event" means any event or series of events that results in a net
increase or decrease in the number of Customer Associates of [***]*
3. CUSTOMER BASELINE SPEND VERIFICATION
During the [***]* period following the Agreement Date, the Parties shall verify
Customer Baseline Spend, including all categories of HR, AP and IT Costs. This
shall include (i) verification of salaries of staff transferred to Service
Provider, (ii) discussions with or otherwise questioning knowledgeable members
of Customer's HR and AP staff concerning Customer operations and
responsibilities, (iii) review of Third Party Contracts to confirm assignability
and cost, (iv) validation of rates and associated charges from Customer, (v)
confirmation of the numbers of FTEs engaged in the performance of the Services
and (vi)
------------------------
* Confidential information has been omitted.
-2-
<PAGE> 59
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
confirmation of baseline volumes Upon completion of verification, this
Schedule will be amended by mutual agreement to adjust Customer Baseline Spend,
HR, AP, and IT Costs, and termination fees associated with termination for
convenience pursuant to Section 3.2.3 of the Agreement, as appropriate, and the
Parties shall use Change Control Management to assess the impact on any other
Schedule of any such adjustment. Any disputes between the Parties concerning
verification shall be resolved in accordance with Section 18.0. of this
Agreement. Adjustments determined from verification shall be retroactive to the
Agreement Date.
4. CHARGING METHODOLOGY
4.1 BASELINE CHARGES
Service Provider's Baseline Charges payable by Customer and are based on [***]*.
During the first Contract Year, Baseline Charges shall commence by Process based
on the Process Effective Date as identified in Section 4.1.7 of this Schedule.
Once the Process Effective Date has occurred, Baseline Charges will be invoiced
[***]*. Service Provider's Baseline Charges for each calendar quarter shall
equal:
[***]*
[***]*
4.1.1 Allocation of HR, AP and IT Labor Costs Baseline Charges Among
Processes
HR, AP and IT Labor Costs are allocated among Processes as follows:
HR, AP AND IT LABOR COSTS
TABLE 4.1.1.1
[***]*
* Commencing during the first month of the second Contract Year
4.1.2 Allocation of HR, AP, and IT Labor Related Other Costs
HR, AP and IT Labor Related Other Costs are allocated among Processes as
follows:
HR, AP, AND IT LABOR RELATED OTHER COSTS
TABLE 4.1.2.1
[***]*
* Commencing during the first month of the second Contract Year
------------------------
* Confidential information has been omitted.
-3-
<PAGE> 60
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
4.1.3 HR, AP and IT Non-Labor Related Other Costs
HR, AP and IT Non-Labor Related Other Costs are allocated among Processes as
follows:
HR, AP, AND IT NON-LABOR RELATED OTHER COSTS
TABLE 4.1.3.1
[***]*
4.1.4 Projects
4.1.4.1 In-Flight Projects
With exception to the upgrade of [***]* to a higher version, if (i) the
number of FTEs required to complete or support the In-Flight Projects is
greater than the total number of Project FTEs designated in Schedule H for
all In-Flight Projects or (ii) the completion or support of the In-Flight
Projects requires skills not included within the Project FTEs, then the
Parties shall use Change Control Management to discuss the use and cost of
additional FTEs or FTEs that posses the skills necessary to complete and/or
support the In-Flight Projects, as applicable. Table 4.1.4.2 sets forth the
standard FTE fees and consulting fees, which may be adjusted [***]* based on
the then current Service Provider rates.
For the upgrade of [***]* to a higher version, use of staff greater than the
number of Project FTEs designated by Customer for the [***]* upgrade shall
be included up to a charge of [***]* based on the standard FTE fees shown in
Table 4.1.4.2, will be based on the then current Service Provider rates. Any
charges above the [***]* will be determined through Change Control and be
the responsibility of the Customer.
4.1.4.2 New Projects
The FTE fees, consulting fees and resources required to complete or support
any new project that is not an In-Flight Project will be determined in
accordance with Change Control Management. Table 4.1.4.2 sets forth standard
FTE fees and consulting fees, which may be adjusted by Service Provider
[***]* based on the then current Service Provider rates, that may be
incurred. [***]*
PROJECT BILLING RATES
TABLE 4.1.4.2
[***]*
4.1.5 Non-Supported Software
------------------------
* Confidential information has been omitted.
-4-
<PAGE> 61
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
Upgrades to versions of [***]* or other Software that are not currently
supported by the respective vendors that are (i) requested by Customer or
(ii) necessary to enable Service Provider to perform the Services in
accordance Section 12.1.1 of this Agreement until such time as [***]*. as
applicable.. Such upgrades, and the costs and resources to accomplish such
upgrades, must be approved through Change Control Management.
4.1.6 Changes to Service Levels
Should Customer request the support of Service Levels solely for Customers
benefit that are higher than Service Levels currently supported, the
equipment, tools and resources required to support such enhanced Service
Levels must be approved through Change Control Management.
4.1.7 Baseline Charges During Transition
The Baseline Charges for each Process in the calendar quarter in which the
Process Effective Date for such Process and recurring and predictable costs
for Third Party Contracts in the calendar quarter is scheduled to occur
shall reflect a pro rata amount based on the number of days in such calendar
quarter from and after such Process Effective Date. Service Provider shall
submit the invoice for such pro rata amount on the [***]* in which the
Process Effective Date is scheduled to occur; provided, however, in the
event the actual Process Effective Date with respect to any Process is
different than the scheduled Process Effective Date, Service Provider shall
make an appropriate adjustment to the invoice submitted to Customer for the
following [***]*.
4.2 ARCS/RRCS
4.2.1 Baseline Volumes and Actual Resource Units
Baseline Volumes identify the expected volumes of Services to be provided by
Service Provider to Customer with respect to each Resource Unit Category.
Actual Resource Units are calculated as follows: (i) with respect to the
Resource Unit Category related to Associates Served, [***]* totaled for each
Contract Year and divided by twelve; (ii) with respect to all other Resource
Unit Categories, [***]* As of the Agreement Date, the upper limit and lower
limit volumes for the Band relating to each Resource Unit Category are
identified on Table 4.2.1.1. IT services deemed to be Major Enhancements
shall be approved through Change Control Management.
RESOURCE UNIT CATEGORIES, BASELINE VOLUMES AND ARC/RRC UNIT RATES
TABLE 4.2.1
[***]*
4.2.2 Calculation of ARCs and RRCs
Customer [***]* for the applicable Resource Unit Category, and Service
Provider [***]* for the applicable Resource Unit Category . The Resource
Unit Categories, Band limits, ARC unit rates and RRC unit rates are
identified in Table 4.2.1.
------------------------
* Confidential information has been omitted.
-5-
<PAGE> 62
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
[***]*
[***]*
4.2.2.3. Addressing Sustained Deviations
Notwithstanding the foregoing, in the event either Party becomes aware
or anticipates that Actual Resource Units with respect to any Resource
Unit Category are or will be materially greater than or less than the
applicable Baseline volume for a sustained period of time, the Parties
shall use Change Control Management to address the impact of such
deviation and mutually agree as to what action, if any, should be taken
with respect to such deviation.
4.2.3 Periods Reconcilliation and Adjustments
Service Provider will calculate ARCs and RRCs annually, within [***]* after
the end of the Contract Year. Service Provider will prepare a detailed
supplementary invoice for the net amount to be paid by or credited to
Customer, including calculations of all ARCs and RRCs, which shall be paid
by Customer within [***]*. Service Provider will deliver regular reports
relating to reconciliation and adjustment activities as agreed upon by the
parties. If, following the final Contract Year, a net credit is owed to
Customer, it shall be paid in cash or deducted from any other amounts owed
by Customer.
SAMPLE ARC/RRC CALCULATION-HR
TABLE 4.2.3.1
[***]*
SAMPLE ARC/RRC CALCULATION-AP
TABLE 4.2.3.2
[***]*
4.3 FEES AT RISK
4.3.1 Service Provider Fees at Risk
If Service Provider is required to award Fees at Risk, such Fees at Risk shall
be calculated and paid as follows.
------------------------
* Confidential information has been omitted.
-6-
<PAGE> 63
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
In the event of [***]*, Service Provider shall be liable for Fees at Risk as
follows:
o Fees at Risk will be reported and calculated [***]*.
o The Fees at Risk shall be [***]*.
o The Fees at Risk for the General KPI relating to the Service Levels to
be agreed upon as described in Schedule B and the reports being
delivered in accordance with Schedule R is [***]*.
The Parties understand and intend that Fees at Risk are liquidated damages and
agree that the amounts of the Fees at Risk are reasonable under the
circumstances existing on the Agreement Date.
4.3.2 Service Provider Fees at Risk
In the event Service Provider is awarded Fees at Risk under any Managed
Agreement, Service Provider shall pass-through such Fees at Risk to Customer.
5. PASS THROUGH EXPENSES AND OTHER CHARGES
5.1 PASS THROUGH EXPENSES
Customer shall assist in the assignment of applicable Third Party Contracts to
Service Provider and Service Provider and Customer shall each be [***]* in
accordance with Section 11.2 of the Agreement. Service Provider will review and
pay third party invoices for costs related to the Third Party Contracts.
Recurring Third Party Contract which are predictable, shall be invoiced
quarterly in accordance with Section 6.of this Schedule. The remaining Third
Party Contracts shall be invoiced as received by the Service Provider
[***]* related to Third Party Contracts identified as of the Effective Date are
listed in Table 5.1.1, which may be amended through the verification process in
Section 3 of this Schedule or as agreed through Change Control Management.
NON LABOR RELATED OTHER 3RD PARTY COSTS
TABLE 5.1.1
[***]*
6. INVOICING
In accordance with Section 5.2.1 of the Agreement, Service Provider shall
deliver invoices for Baseline Charges and recurring Third Party Contracts which
are predictable [***]*. Service Provider shall invoice Customer for other
amounts payable under this Agreement as necessary and Customer shall pay such
amounts within [***]* in accordance with Section 5.2.2 of this Agreement. Fees
at Risk shall be calculated in accordance with Section 4.3 of this Schedule C
and [***]*.
If periodic computation and reconciliation of ARCs and RRCs yield net [***]* for
reasons other than unique or non-recurring events, then, in order to minimize
the net payment or credit following periodic reconciliation, subsequent
quarterly invoices for Baseline Charges shall be adjusted up or down, as
appropriate, by an amount equal to the net adjustment for the immediately
preceding period.
------------------------
* Confidential information has been omitted.
-7-
<PAGE> 64
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
[***]*
7. TERMINATION
7.1 TERMINATION FOR CONVENIENCE
As described in Section 3.2.3 of this Agreement, in the event of a termination
for convenience, Customer will pay Service Provider the full amount set forth in
Table 7.1 for the month within which the effective date of the termination
occurs.
TERMINATION FOR CONVENIENCE
TABLE 7.1
[***]*
7.2 [***]*
7.3 TERMINATION FOR CAUSE
As described in Section 3.2.1 and Section 3.2.2 of this Agreement, in the event
of a termination for cause [***]*
7.4 OTHER TERMINATION FEES
[***]*
8. COST OF LIVING ADJUSTMENT
Beginning [***]*, Baseline Charges and ARC's and RRC's shall be adjusted in
accordance to Section 5.7 of this Agreement on an [***]* basis as appropriate.
In the event an adjustment calculated pursuant the first sentence of Section
5.7.1 of this Agreement is greater than [***]*.
9. CONTRACT MINIMUMS
If total payments of Baseline Charges in any Contract Year (including any net
increase or decrease related to ARCs or RRCs, but excluding any allowance for
Fees at Risk) [***]*, then Service Provider shall deliver to Customer an invoice
for the shortfall, which, unless otherwise agreed by the Parties, Customer shall
pay within thirty (30) days after receiving such invoice. Upon the occurrence of
Extraordinary Changes in Workload as described in Section 5.6 of the Agreement,
the Parties shall use Change Control Management to address any adjustments to
the Baseline Charges
10. NON-LABOR RELATED SYSTEMS AND OTHER CHARGES
Prior to the Agreement Date, Customer received non-labor related systems and
other support services from various corporate groups. With the transition to
this Agreement, Customer will retain the responsibility and staff to perform
these systems and other support services. [***]*
------------------------
* Confidential information has been omitted.
-8-
<PAGE> 65
PROPRIETARY AND CONFIDENTIAL CUSTOMER/SERVICE PROVIDER
--------------------------------------------------------------------------------
10.1 NON-LABOR RELATED SYSTEMS AND OTHER CHARGES TO SERVICE PROVIDER
[***]* These charges shall commence following the Process Effective Date .
Non-Labor related systems and other charges to Service Provider shall be
adjusted at the end of each Contract Year for inflation as specified in Section
5.7 of this Agreement. Any change to the IT charges will be pre-approved by
Customer and Service Provider in accordance with Change Control Management.
NON-LABOR RELATED SYSTEMS AND OTHER CHARGES TO SERVICE PROVIDER
TABLE 10.1.1
[***]*
[***]*
10.1.1 [***]* in Non-Labor Related Systems and Other Charges to Service
Provider
[***]*
10.1.2 Billing of Non-Labor Related Systems and Other Charges to Service
Provider
Customer will invoice Service Provider [***]* for the agreed charges based
on actual usage for the provision of Non-Labor Related Systems and Other
services to Service Provider. Table 11.1.1 identifies the items, metrics and
charges to be incurred based on actual usage following the Agreement Date.
Any change to the number of Non-Labor Related Systems and Other Charges
and/or unit charges will be pre-approved by Customer and Service Provider
through Change Control Management.
11. ASSUMPTIONS
This Schedule has been prepared based on the Assumptions, as set forth in
Section 5.10 of this Agreement. In the event of any deviation from the above
listed assumptions, charges will be equitably adjusted to reflect the net change
in the cost of performing the relevant Services in accordance with such Section
5.10 and through the use of Change Control Management.
------------------------
* Confidential information has been omitted.
-9-
<PAGE> 66
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE D
THIRD PARTY CONTRACTS
FINAL
<PAGE> 67
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
A. INTRODUCTION.............................................................1
B. THIRD PARTY AGREEMENTS...................................................1
i
<PAGE> 68
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
A. INTRODUCTION
This Schedule D sets forth the Third Party Contracts and designates whether each
such agreement is intended to be an "Assigned Agreement", "Managed Agreement" or
an agreement "Retained" by Customer.
B. THIRD PARTY CONTRACTS
[***]*
----------------------
* Confidential information has been omitted.
1
<PAGE> 69
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE E
SERVICE PROVIDER SOFTWARE AND SERVICE PROVIDER TOOLS
FINAL
<PAGE> 70
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
This schedule sets forth the Software and Tools, or similar Software and Tools,
which may be used by Service Provider to provide the Services and will be
validated during the 90 day Adjustment Period. This Schedule E shall be updated
by the Parties from time to time to incorporate any Service Provider Software
and Service Provider Tools not listed on Schedule E that Service Provider uses
to provide the Customer Services.
[***]*
--------
* Confidential information has been omitted.
<PAGE> 71
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE F
CUSTOMER SOFTWARE AND CUSTOMER TOOLS
FINAL
<PAGE> 72
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE F
CUSTOMER SOFTWARE AND CUSTOMER TOOLS
This Schedule F sets forth the Customer Software and Customer Tools, which may
be used by or managed, or assigned to Service Provider, to provide the Services
and will be validated during the 90 day Adjustment Period. This Schedule F shall
be updated by the Parties from time to time to incorporate any Customer Software
and Customer Tools not listed on this Schedule F that the Customer used to
provide accounts payable services, internal human resources administration,
payroll processing and call center operations immediately prior to the Service
Provider taking over the responsibility to provide such services,
administration, processing and operations.
Each line item of Software includes an indicator showing its ownership status.
These indicators are:
C: Customer Proprietary
R: Third-party - Retained by Bank of America
A: Third-party - Assigned to Exult
M: Third-party - Managed by Exult
TBD: Status to be determined during the [***]* Adjustment Period
[***]*
--------
* Confidential information has been omitted.
<PAGE> 73
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE G
TRANSITION PLANNING
FINAL
<PAGE> 74
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 INTRODUCTION.............................................................1
2 TRANSITION PLANNING PRINCIPLES...........................................1
3 CONTRACTING/HIGH LEVEL DUE DILIGENCE.....................................1
4 TRANSITION APPROACH......................................................2
5 OVERALL TRANSITION ACTIVITIES............................................2
6 FIRST 90 DAYS PLAN TEMPLATE..............................................3
7 HIGH-LEVEL TRANSITION SCHEDULE...........................................3
i
<PAGE> 75
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE G
TRANSITION PLANNING
1 INTRODUCTION
This Schedule sets forth the Transition approach and initial Transition Plan
for conducting the transfer of services, people and facilities from Customer
to Service Provider and the transition approach that shall be followed. The
specific deliverables and milestones for the transition approach, subject to
ongoing review and revision by both parties, shall be agreed within [***]*.
2 TRANSITION PLANNING PRINCIPLES
2.1 Transition is a joint responsibility. Service Provider is responsible
for management of the overall transition program and Customer has
responsibility for ensuring the appropriate level of participation in
data gathering and requirements definition and of commitment and
involvement for their team.
2.2 The Transition Plan shall be primarily determined based on the
in-scope Processes and people, and certain dependencies for
transferring Customer facilities.
3 CONTRACTING/HIGH LEVEL DUE DILIGENCE
A contracting/high level due diligence phase has been completed prior to the
Agreement Date, pertaining to the in-scope Processes, people, and
facilities. This included:
3.1 Agreement development, negotiation and signing
3.2 Input for in-scope Processes ( Schedule A) and other Schedules
3.3 Volumetrics data collection (to indicate number of occurrences or
counts as applied to Process activities).
3.4 Budget/financial data collection
3.5 Headcount information
3.6 Service Level measurements
------------------
* Confidential information has been omitted.
1
<PAGE> 76
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
4 TRANSITION APPROACH
The Transition shall be conducted in two phases:
4.1 Phase I shall focus on:
4.1.1 The transfer of in-scope Customer Associates from Customer to
Service Provider and the establishment of an Service Provider
organization structure for in-scope Processes.
4.1.2 The transfer of facilities and other assets from Customer to
Service Provider.
4.1.3 The design and implementation of overall governance and
management processes to support the provision of Customer
Services through Transition and beyond.
4.1.4 The development of mutually agreed upon Transition Plans for
Phase 2.
Customer and Service Provider shall agree upon to the overall approach
and schedule for the Transition, the detailed work plan to complete
the work, and the staffing levels and commitments from both
organizations. The project reporting and governance shall also be
agreed upon and put in place.
4.2 Phase 2, shall commence for each Process once Customer Associates and
facilities have been transferred to Service Provider and shall focus
on:
4.2.1 The general approach for all Processes is to transfer the
current Process and people in place today from Customer to
Service Provider ("in-situ transition"). Once under Service
Provider management, the Processes will be improved through a
combination of changes to the procedures, underlying
technologies, organization design, and deployment of employees.
Some of these changes relate to In-Flight Projects, which are
documented in Schedule H, In-Flight Projects. Others will be
identified during the Transition Period, and will be undertaken
in a manner consistent with Schedule K, Change Control
Management.
4.2.2 The establishment of a service management infrastructure within
the delivery organization will provide appropriate activity and
lines of communication between Customer and Service Provider to
manage the delivery of Services according to Service Levels and
contractual requirements, while at the same time introducing an
effective commercial framework for the delivery of Processes.
5 OVERALL TRANSITION ACTIVITIES
Overall Transition activities are project wide and not specific to a
Process. The activities are:
[***]*
------------------
* Confidential information has been omitted.
2
<PAGE> 77
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
6 FIRST 90 DAYS APPROACH
The initial 90 day approach is focused upon [***]*. The key activities to be
covered over the time include:
[***]*
7 SAMPLE HIGH-LEVEL TRANSITION PLAN
See attached Sample Transition Plan
[***]*
---------------------
* Confidential information has been omitted.
3
<PAGE> 78
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE H
IN-FLIGHT PROJECTS
FINAL
<PAGE> 79
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 PROJECTS IDENTIFIED AS IN-SCOPE............................................1
2 PROCESS FOR AGREEING NEW PROJECTS AND CHANGES TO AGREED PROJECTS...........1
3 PROPOSED PROJECTS..........................................................1
i
<PAGE> 80
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE H
IN-FLIGHT PROJECTS
1 PROJECTS IDENTIFIED AS IN-SCOPE
As of the Agreement Date, Service Provider and Customer have identified the
following In-Flight Projects.
[***]*
1.1 In-Flight Projects Table Assumptions
1.1.1 These are the In-Flight Projects that are anticipated for [***]*
that will need resources that are currently in Baseline Charges
in Schedule C.
1.1.2 The In-Flight Project completion dates will be validated during
Transition.
1.1.3 The number of FTEs assigned to each project is approx -- will
fluctuate month-to-month and may change over time.
[***]*
1.2 For any In-Flight Projects identified in the table above that do not
have a complete and agreed project statement, including the information
identified in Section 2.2 of this Schedule, Customer and Service
Provider shall complete and agree to a project statement within [***]*
after the Agreement Date.
2 PROPOSED IN-FLIGHT PROJECTS
2.1 The terms applicable to a project shall be set out in a project
statement to be signed by both Parties. Once signed a project statement
will form part of this Agreement, unless agreed otherwise in writing by
the Parties.
2.2 Content of Project statement
- Scope of work
- Service Level impact
- Impact analysis including priority
- Deliverables (as applicable)
--------------------
* Confidential information has been omitted.
1
<PAGE> 81
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
- IP Ownership
- Acceptance criteria, timeframe & process [as applicable]
- Project timetable (including start and end dates, activity duration
and critical dependencies
- Responsibilities
- Staffing (implementation and ongoing)
- Assumptions
- Charges and payment terms
- Project manager contacts
- Other terms and conditions, to detail variations and/or additions to
this Agreement, and/or Schedules applicable in relation to the
In-Flight Project.
2
<PAGE> 82
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE I
CUSTOMER ASSOCIATES
FINAL
<PAGE> 83
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
This schedule sets forth the Customer Associates to be transferred from
Customer to Service Provider in accordance with Schedule J.
[***]*
---------------------
* Confidential information has been omitted.
<PAGE> 84
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE J
For the purposes of this Schedule J, "Customer Associate" means any
employee employed by Customer and Customer Affiliates (collectively, "Customer")
who has been identified by Customer and listed on Schedule I, including without
limitation, those employees on any approved leave under Customer's policies.
(a) Service Provider shall offer employment to all Customer Associates
prior to the date each Customer Associate's employment with the Customer is
terminated in order for him or her to become an employee of Service Provider
(the Customer Associate's "Separation Date"). Such offers of employment must be
made by Service Provider at least five (5) working days prior to each Customer
Associate's Separation Date, for employment to become effective immediately
after the Separation Date (the "Service Provider Employment Date"). Service
Provider will promptly notify Customer of each offer it plans to make prior to
extending the offer and of every acceptance or rejection of any such offer by
any Customer Associate. Customer Associates to whom an offer of employment is
extended by Service Provider will be asked to provide Service Provider with
personal/employment history information, but will not be required to submit to a
background check. [***]* Except as specifically set forth herein, employment by
Service Provider of Transferred Customer Associates will be pursuant to Service
Provider's policies and procedures.
(b) Customer will put each Customer Associate on a January salary review
schedule, commencing in January 2001. [***]*. Thereafter, all Transferred
Customer Associates will receive their first full salary review with Service
Provider in January 2002. [***]*
(c) Certain key Transferred Customer Associates will be considered for
[***]* as mutually agreed upon by Customer and Service Provider. All [***]*
provided in accordance with this paragraph (c) will be funded by Customer and
paid directly to the eligible Transferred Customer Associates by Service
Provider.
(d) [***]*
(e) Customer is responsible for timely payment, as required by law, of
all wages and salaries and other compensation payable with respect to service
provided by a Customer Associate on or prior to his or her Separation Date.
[***]*.
(f) Customer shall also be responsible for [***]*. For purposes of this
paragraph (f), [***]*
As of a Transferred Customer Associate's Service Provider Employment
Date, the Transferred Customer Associate will begin accruing vacation according
to [***]*.
(g) Customer shall retain the responsibility for payment of all health
insurance (medical, dental, vision) claims and disability claims incurred by any
Customer Associate prior to and including his or her Separation Date, and
Service Provider does not assume any liability with respect to such claims.
Effective as of each Transferred Customer Associate's Service Provider
Employment Date, all health insurance (medical, dental, vision) claims and
disability claims incurred by the Transferred Customer Associate will be
determined under Service Provider's benefit plans (subject to the Transferred
Customer Associate's election of Continuation Coverage under Customer's
----------------------
* Confidential information has been omitted.
<PAGE> 85
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
health plans). [***]* Each Transferred Customer Associate must provide Service
Provider with an Explanation (EOB) Statement in order to receive such credits.
The domestic partner of any Transferred Customer Associate will be eligible to
participate in Service Provider's medical, dental, vision and dependent life
plans to the same extent as a Transferred Customer Associate's spouse, except as
prohibited by applicable laws or the terms of a policy covering an insured
benefit.
(h) To the extent required by law, Customer will be responsible for
providing Customer Associates (and Customer Associates' "qualified
beneficiaries") who experience a "qualifying event" on or prior to the Customer
Associates' Separation Date, with "Continuation Coverage" (as each term is
defined in Section 4980B(f) or (g) of the Code) under the terms of the health
plans maintained by Customer. Service Provider will be responsible for providing
Continuation Coverage to any Transferred Customer Associate in Service
Provider's employ (and such Transferred Customer Associate's qualified
beneficiaries) who experiences a qualifying event on or after his or her Service
Provider Employment Date.
(i) [***]*
(j) Service Provider shall assume liability for severance pay and
similar obligations payable to any Transferred Customer Associate whose
employment is terminated by Service Provider. Such payment shall be made
pursuant to the severance policy of Service Provider applicable at the time of
termination, if any, [***]*. Notwithstanding the foregoing, Service Provider
shall pay any Transferred Customer Associate whose position with Service
Provider is eliminated within [***]* of his or her Service Provider Employment
Date at least the amount of severance pay such Transferred Customer Associate
would receive under the applicable Customer severance policy in effect on the
date his or her job elimination is officially communicated by Service Provider,
and the difference, if any, between this payment and the amount of severance pay
received by such Transferred Customer Associate under Service Provider's
severance policy shall be funded by Customer. Any severance payable to a
Transferred Customer Associate whose position is eliminated more than [***]*
after his or her Service Provider Employment Date shall be determined solely
under Service Provider's applicable severance policy.
(k) The Separation Date of a Customer Associate who accepts employment
with Service Provider, but who is absent from work due to a Customer-approved
leave of absence on the Customer Associate's original proposed Separation Date,
will be the date the Customer Associate returns to work, [***]*. If a Customer
Associate is absent from work for more than six (6) months from his or her
original proposed Separation Date, the Customer Associate will not become a
Service Provider employee, unless mutually agreed upon by Customer and Service
Provider.
(l) Service Provider will provide each Transferred Customer Associate
who is participating in [***]* a Transferred Customer Associate [***]* in the
[***]* prior to his or her Separation Date, [***]* in which the Transferred
Customer Associate's Service Provider Employment Date occurs and, thereafter, in
the [***]*, provided that the Transferred Customer Associate [***]* would
continue to satisfy the [***]*. Customer will [***]* described in this
paragraph.
----------------------
* Confidential information has been omitted.
-2-
<PAGE> 86
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
(m) Customer will pay Service Provider the [***]* under [***]* and (ii)
the outstanding [***]* described in (i), above, multiplied by the applicable
Transferred Customer Associate's [***]*. Service Provider will pay the [***]*
the sum of the [***]* described in (i) to [***]* as of the Customer Associate's
Separation date and will provide each Transferred Customer Associate with his or
her [***]*.
(n) Service Provider is responsible for advising Customer Associates of
the details of any offers and terms of employment with Service Provider, and
answering any questions relating thereto, but Customer will be allowed to review
and approve, prior to its distribution (i) any communication with Customer
Associates prior to the applicable Separation Date, and (ii) any communication
with such Customer Associates after the applicable Separation Date that
describes or refers to any of Customer's benefits or policies to the extent they
apply to Customer Associates.
(o) Nothing herein is intended to create any right or cause of action in
or on behalf of any person or entity other than Customer and Service Provider.
(p) Customer shall indemnify Service Provider from, and defend and hold
Service Provider harmless from and against, any losses suffered, incurred or
sustained by Service Provider or to which Service Provider becomes subject,
resulting from, arising out of or relating to any claim asserted by any Customer
Associate or former Customer Associate of Customer, including any Customer
Associate who becomes an employee of Service Provider, that is attributable to
any period during which such Customer Associate was employed by Customer and
arising out of Customer's employment of that Customer Associate, including
claims relating to (i) any violation of laws for the protection of persons or
category of persons of a protected class by Customer or Customer Agents,
including unlawful discrimination, (ii) any work-related injury or death caused
by Customer or Customer Agents, except to the extent the claim is covered by any
applicable workers' compensation plan, (iii) accrued employee benefits not
expressly assumed or provided for by Service Provider, (iv) any representations,
oral or written, made by Customer or Customer Agents to such Customer Associate,
and (v) any other aspect of such Customer Associates' employment relationship
with Customer or termination of such employment relationship with Customer
(including claims for breach of an express or implied contract of employment).
Service Provider shall indemnify Customer from, and defend and hold
Customer harmless from and against, any losses suffered, incurred or sustained
by Customer or to which Customer becomes subject, resulting from, arising out of
or relating to any claim asserted by any Customer Associate or former Customer
Associate of Customer, including any Customer Associate who becomes an employee
of Service Provider, attributable to any period during which such employee is
employed by Service Provider and arising out of Service Provider's employment of
that employee, including claims relating to (i) a violation of law for the
protection of persons or categories of persons of a protected class by Service
Provider or Service Provider Agents, including unlawful discrimination, (ii) any
work-related injury or death caused by Service Provider or Service Provider
Agents, except to the extent the claim is covered by any workers' compensation
plan, (iii) accrued employee benefits expressly assumed by or provided by
Service Provider, (iv) any representations, oral or written, made by Service
Provider or Service Provider Agents to such employees, and (v) any other aspect
of such employees' employment relationship with Service Provider or termination
of such employment relationship with Service Provider (including claims for
breach of an express or implied contract of employment).
-----------------
* Confidential information has been omitted.
-3-
<PAGE> 87
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE K
CHANGE CONTROL MANAGEMENT
FINAL
<PAGE> 88
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 CHANGE REQUESTS...........................................................1
2 CLASSIFICATION OF THE CHANGE REQUEST......................................1
3 EVALUATION OF THE PROPOSED CHANGE.........................................1
4 IMPACT ANALYSIS...........................................................2
5 APPROVAL..................................................................2
6 REPORTING.................................................................3
i
<PAGE> 89
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE K
CHANGE CONTROL MANAGEMENT
This Schedule sets out the procedure to be followed for any proposed change to
this Agreement.
1 CHANGE REQUESTS
Either Party may request, orally or in writing, a change to this Agreement.
Except for proposed changes that will not have a material impact on the
Services, the Services Fees or the operations of either Party, upon either
Party's receipt of request for a change, the Parties shall (a) work together
to prepare a written change request containing the general information
regarding the proposed change (a "Change Request") and (b) classify the
proposed change pursuant to Section 2 of this Schedule.
2 CLASSIFICATION OF THE CHANGE REQUEST
The Service Provider and Customer designee shall agree to the classification
of proposed change as follows:
2.1 Where it is determined by the Parties that the proposed change is an
operational change, the proposed change shall be evaluated as set out
in Section 3.1 of this Schedule.
2.2 Where it is determined by the Parties that the proposed change is a
project or New Service, the proposed change shall be evaluated and
processed as set out in Section 3.2 of this Schedule.
2.3 Where it is determined by the Parties that the proposed change is a
change to the terms and conditions of this Agreement or a change
related to the Schedules to this Agreement and not related to a
specific project or New Service, the proposed change shall be
evaluated and processed as set out in Section 3.2 of this Schedule.
2.4 Where it is determined that the proposed change should not proceed,
the change request shall be rejected and returned to the Party
requesting such change in accordance with Section 8.1.2 of this
Agreement.
If Service Provider and Customer cannot agree to the classification of a
proposed change, then such change shall be handled in accordance with
Section 18.0 of this Agreement.
3 EVALUATION OF THE PROPOSED CHANGE
The proposed change shall be evaluated and classified, as described below:
3.1 Operational Changes
3.1.1 In the event the Parties agree that a proposed change is an
operational change, such change shall be implemented in
accordance with Service Provider's internal operational change
control procedures and be subject to approval as provided in
Section 5 of this Schedule. Service Provider's internal
operational control procedures are substantially similar to the
procedures described in this Schedule.
1
<PAGE> 90
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
3.2 Projects and New Services
In the event the Parties agree that a proposed change is a project or
New Service, the Parties shall comply with the following procedures.
3.2.1 An impact analysis shall be performed in accordance with
Section 4 of this Schedule.
3.2.2 Service Provider shall prepare a project statement or New
Service statement, as applicable, that incorporates the results
of the impact analysis.
3.2.3 Service Provider shall submit materials related to the proposed
change, including the Change Request, the project statement or
New Service Statement, as applicable, and the impact analysis,
to Customer.
3.2.4 Based on the materials prepared and submitted to Customer
pursuant to Section 3.2.3 of this Schedule, Customer and
Service Provider account management shall, within a reasonable
period of time, but in no event more than [***]* after receipt
of such materials;
(i) approve the proposed change and the project statement and
proceed to its implementation, subject to approval as
provided in Section 5 of this Schedule; or
(ii) identify which items of information either Party is
dissatisfied with, and request that the other Party
modify and re-submit the proposed change, impact analysis
or project statement, as applicable, within a reasonable
timeframe; or
(iii) reject the proposed change, in which case Service
Provider will not implement the project or New Service,
as applicable.
4 IMPACT ANALYSIS
4.1 Upon determination of the classification of the proposed change, within
[***]* or within the timeframe otherwise agreed to by the Parties,
Service Provider and Customer shall agree to an estimate of the time and
cost necessary to complete the impact analysis and the manner in which
the impact analysis should be conducted. If Customer determines that the
impact analysis should not proceed, the proposed change shall be
rejected.
4.2 If the Parties agree to proceed, Service Provider and, to the extent
applicable, Customer shall as soon as reasonably practicable and acting
in good faith, conduct an impact analysis to assess and evaluate the
impact of the proposed change having regard to relevant factors
including the following:
[***]*
5 APPROVAL
Approval for Change Requests shall be handled through account management.
Neither Party shall be obliged to comply with any proposed changes unless
and until approval has been given in accordance with this Change Control
Management process and, pending approval, no Change shall be made to any
Services or to this Agreement.
6 REPORTING
A consolidated report, including status updates with respect to all approved
changes and Change Requests, shall be included in the monthly report.
-------------
* Confidential information has been omitted.
2
<PAGE> 91
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE M
FORM OF CONFIDENTIALITY AGREEMENT
FINAL
<PAGE> 92
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
FORM OF
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (this "Agreement") is made as of the ___ day of
______, 20__, by and among Bank of America Corporation ("Bank of America"),
having its principal place of business located at 100 North Tryon Street,
Charlotte, NC 28255, Exult, Inc. ("Exult"), having its principal place of
business located at 4 Park Plaza, Suite 1000, Irvine, Ca 92614 and
___________________________ ("Recipient"), having its principal place of
business located at _______________________________________.
RECITALS
WHEREAS, Exult and Bank of America have entered into a Master Services Agreement
(the "MSA"), dated as of ________, 2000, relating to the provision by Exult to
Bank of America of certain business process services;
[USE THE FOLLOWING IF EXECUTED BY A PROVIDER OF NEW SERVICES]
[WHEREAS, Bank of America has selected Recipient to provide certain New Services
(as defined in the MSA) to Bank of America;
WHEREAS, Recipient and Bank of America desire that Exult cooperate with
Recipient in connection with its provision of such New Services by disclosing
certain of its Confidential Information (hereinafter defined); and
WHEREAS, the MSA provides that Exult shall not be required to disclose such
Confidential Information unless Recipient executes a confidentiality agreement
in the form attached thereto as Schedule M;]
[USE THE FOLLOWING IF EXECUTED BY PROVIDER OF SUBCONTRACTED SERVICES]
[WHEREAS, Exult desires to enter into a subcontract with Recipient pursuant to
which Recipient shall provide certain services (the "Subcontracted Services") to
Bank of America;
WHEREAS, in connection with Recipient's provision of the Subcontracted Services,
Exult may disclose, among other things, certain of Bank of America's Customer
Information (hereinafter defined) to Recipient; and
WHEREAS, the MSA provides that Exult shall not disclose Bank of America's
Confidential Information to any subcontractor (as defined in the MSA) unless
such subcontractor shall have entered into a confidentiality agreement in the
form attached thereto as Schedule M;]
[USE THE FOLLOWING IF EXECUTED BY PROVIDER OF AUDIT SERVICES]
[WHEREAS, Recipient is providing certain audit services (the "Audit Services")
to Bank of America pursuant to the MSA; and
WHEREAS, the MSA provides that Exult shall only be required to provide access to
Bank of America's auditors that have entered a confidentiality agreement in the
form attached thereto as Schedule M, to Bank of America's auditors that have
entered a confidentiality agreement in the form attached thereto as Schedule M,
to Bank of America's data and records and Exult's records in order to audit the
accuracy of Service Provider's Invoices and Service Provider's Systems, internal
controls, security and Service Level (as defined in the MSA) performance;]
i
<PAGE> 93
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, Exult, Bank of America and Recipient covenant and agree
as follows:
1. In connection with Recipient's provision of the [New Services]
[Subcontracted Services] [Audit Services], Exult may disclose to Recipient
confidential and proprietary data and information for the sole purpose of
assisting Recipient in its performance of the [New Services] [Subcontracted
Services] [Audit Services]. The parties hereby agree that the following
terms and conditions shall apply to the delivery, disclosure and use of all
Confidential Information provided by Exult or Bank of America, as
applicable, to Recipient any time before or after execution and delivery of
this Agreement. For purposes hereof, "Confidential Information" of Exult or
Bank of America, as applicable, means either such party's software
(including applications and web-based software) technology, know-how, data
and/or other information relating to its current and/or proposed business,
customers, research, products, services, compilations, techniques,
development efforts, inventions, processes, designs, drawings, marketing or
finances, whether disclosed in written or other tangible form, orally or
visually, and in the case of non-tangible information, provided such
Confidential Information transmitted verbally or visually is either readily
ascertainable as confidential by its nature or presentation or is identified
as confidential at the time of disclosure. Notwithstanding the foregoing, in
the case of information relating to the other customers of Exult or
customers of Bank of America or, if applicable, their accounts, the parties
agree that such information shall be kept strictly confidential regardless
of whether such information is in writing or tangible form or whether marked
or otherwise identified as proprietary or confidential. [USE THE FOLLOWING
SENTENCE WITH RESPECT TO DISCLOSURES TO PROVIDERS OF SUBCONTRACTING
SERVICES] [The Confidential Information shall be disclosed at the sole
discretion of Exult.] [USE THE FOLLOWING SENTENCE WITH RESPECT TO
DISCLOSURES TO PROVIDERS OF NEW SERVICES] [Upon Bank of America's written
request, Exult will disclose to Recipient such Confidential Information as
Exult is required to disclose pursuant to the MSA.] [USE THE FOLLOWING WITH
RESPECT TO DISCLOSURES TO PROVIDERS AND AUDIT SERVICES] [Upon notice from
Bank of America in accordance with Section 17.0 of the MSA, Exult will
disclose to Recipient such Confidential information as Exult is required to
disclose pursuant to the MSA.] THE CONFIDENTIAL INFORMATION PROVIDED BY
EXULT OR BANK OF AMERICA, AS APPLICABLE, UNDER THIS AGREEMENT IS PROVIDED
"AS IS." NO OTHER WARRANTIES WITH RESPECT TO SUCH CONFIDENTIAL INFORMATION,
EITHER EXPRESS OR IMPLIED, ARE MADE BY EXULT OR BANK OF AMERICA.
2. Recipient acknowledges that Bank of America has a responsibility to its
customers to keep information about its customers and their accounts
("Customer Information") strictly confidential. Confidential Information
includes Customer Information hereunder. In addition to the other
requirements set forth in this Agreement regarding Confidential Information,
Customer Information shall also be subject to the additional restrictions
set forth in this paragraph. Recipient shall not disclose or use Customer
Information other than solely to carry out the purposes for which Bank of
America or its affiliates disclosed such Customer Information to Recipient.
Recipient shall not disclose any Customer Information other than on a "need
to know" basis and then only to: (a) affiliates of Bank of America; (b)
Recipient's representatives provided that any such representatives which
constitute nonaffiliated third parties shall be subject to subsection (d)
below; (c) affiliates of Recipient, provided that such affiliates shall be
restricted in use and re-disclosure of the Customer Information to the same
extent as Recipient; (d) to carefully selected subcontractors provided that
such subcontractors shall have entered into a confidentiality agreement no
less restrictive than the terms hereof; (e) to independent contractors,
agents, and consultants designated by Bank of America; or (f) pursuant to
the exceptions set forth in 15 USC 6802(e) and accompanying regulations
which disclosures are made in the ordinary course of business. The
restrictions set forth herein shall apply during the term and after the
termination of this Agreement.
ii
<PAGE> 94
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
3. Recipient acknowledges that Exult has a responsibility to its customers to
keep information about its customers and, as applicable, its accounts
("Exult Customer Information") strictly confidential. Confidential
Information includes Exult Customer Information hereunder. In addition to
the other requirements set forth in this Agreement regarding Confidential
Information, Exult Customer Information shall also be subject to the
additional restrictions set forth in this paragraph. Recipient shall not
disclose or use Exult Customer Information other than solely to carry out
the purposes for which Exult or Bank of America or the affiliates of either
of them, as applicable, disclosed such Exult Customer Information to
Recipient. Recipient shall not disclose any Customer Information other than
on a "need to know" basis and then only to: (a) affiliates of Exult; (b)
Recipient's representatives and affiliates who need to know such Exult
Customer Information to facilitate performance by Recipient of the duties in
connection with which it has received Confidential Information, provided
that such representatives and affiliates shall be restricted in sue and
re-disclosure of the Exult Customer Information to the same extent as
Recipient; and (c) independent contractors, agents, and consultants
designated by Exult. The restrictions set forth herein shall apply during
the term and after the termination of this Agreement.
4. Recipient acknowledges and agrees that title to and ownership of the
Confidential Information shall remain with Exult or Bank of America, as
applicable, and that the Confidential Information disclosed under this
Agreement is confidential and proprietary and constitutes valuable trade
secret information of Exult or Bank of America, as applicable. Recipient
agrees not to use the Confidential Information of Exult or Bank of America
for its own use or for any other purpose except solely to perform the [New
Services] [Subcontracted Services] [Audit Services]. Recipient shall not
copy or reproduce, in any manner, any Confidential Information disclosed by
Exult or Bank of America, as applicable, beyond that necessary for the use
of the Confidential Information as expressly permitted under this Agreement.
Recipient agrees that it will hold the Confidential Information in
confidence and will not disclose the Confidential Information to any third
party, and will limit disclosure of the Confidential Information only to
those of its bona fide employees, agents or consultants who will be directly
involved with the provision of the [New Services] [Subcontracted Services]
[Audit Services]. Further, Recipient agrees it will take all appropriate
action and use no less than reasonable care to satisfy its obligations under
this Agreement. Without limiting the foregoing, Recipient shall refrain from
trading in securities of Exult of Bank of America while in possession of
material nonpublic information related to Exult or Bank of America, as the
case may be, and provided hereunder.
5. Recipient agrees that it shall have no rights in or to the Service Provider
Software, Service Provider Tools and New Intellectual Property, and agrees
not to Use (as such term is defined in the MSA) the Service Provider
Software, Service Provider Tools or New Intellectual Property for any
purpose or in any manner (including internal purposes, for Bank of America
or for any marketing or commercial purposes, in each case with or without
any consideration of any type), except to the extent necessary to perform
the [New Services] [Subcontracted Services] [Audit Services].
6. The provisions of this Agreement shall not apply to any Confidential
Information that:
(a) Recipient can establish by competent documentation was known to it
without restriction prior to disclosure by Exult or Bank of America, as
applicable, or was independently developed by Recipient;
(b) is now or hereafter comes into the public domain through no fault of
Recipient;
(c) is disclosed to Recipient without restriction on disclosure by a third
party who has the lawful right to make such disclosure to Recipient; or
(d) is required by operation of law to be disclosed by Recipient, provided,
however, that Exult and Bank of America are given reasonable advance
notice of the intended disclosure and reasonable opportunity to
challenge such legal requirement(s).
iii
<PAGE> 95
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
7. This Agreement shall be effective as of the date and year first cited and
the term shall extend through and until a period of [_______] year[s]
thereafter unless the term of this Agreement is extended, in writing, by the
mutual agreement of the parties hereto. Within ten (10) days after the
termination or expiration of this Agreement, Recipient shall return to Exult
and Bank of America, as applicable, or, at the direction of Exult or Bank of
America, as applicable, destroy any and all Confidential Information
disclosed hereunder.
8. Recipient's non-disclosure and non-use obligations applicable to the
Confidential Information under this Agreement shall survive any termination
or expiration of this Agreement for as long as the Confidential Information
is not within any of the categories described in Section 4 above, except in
the case of Customer Information which confidentiality survives perpetually
and irrevocably.
9. All Confidential Information disclosed under this Agreement shall remain the
sole and exclusive property of Exult or Bank of America, as applicable, and
this Agreement shall not be construed as granting or conferring any rights
by license or otherwise in or to any Confidential Information to Recipient.
10. The validity, terms, performance and enforcement of this Agreement shall be
governed and construed by its provisions and in accordance with the laws of
the State of California and of the United States of America.
11. Should any provision of this Agreement be deemed illegal or otherwise
unenforceable, that provision shall be severed and the remainder of this
Agreement shall remain in full force and effect. The waiver of any right or
election of any remedy in one instance shall not affect any rights or
remedies in another instance. A waiver shall be effective only if made in
writing and signed by an authorized representative of each of the parties
hereto.
12. All notices that any party is required or may desire to give the another
party under this Agreement shall be given by addressing the communication to
the address set forth on the first page of this Agreement, and may be given
by certified or registered mail, overnight carrier, telex or cable. Such
notices shall be deemed given on the date of receipt (or refusal) of
delivery of said notice. Any party may designate a different address for
receipt of notices upon written notice to the other parties.
13. Recipient may not transfer or otherwise assign its rights, duties or
obligations under this Agreement to any other person or entity, in whole or
in part, without the prior written consent of Exult and Bank of America. Any
such prohibited assignment shall be void. However, notwithstanding the
foregoing or anything else in this Agreement to the contrary, each party
will cause all of its subsidiaries, its direct and indirect parent entities,
and the subsidiaries of its direct and indirect parent entities, and other
third parties to which it transfers Confidential Information pursuant to
this Agreement, to comply with this Agreement.
14. Except for the obligations and responsibilities of Exult and Bank of America
set forth in the MSA, this Agreement supersedes in full all prior
discussions and agreements between the parties relating to the Confidential
Information, constitutes the entire agreement between the parties relating
to the Confidential Information, and may be modified or supplemented only by
a written document signed by an authorized representative of each party.
15. The signatories hereto warrant and represent that they are duly authorized
to bind Exult, Bank of America and Recipient, respectively, and to execute
this Agreement.
iv
<PAGE> 96
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
16. Recipient agrees that its obligations under this Agreement are necessary and
reasonable in order to protect Exult and Bank of America, as applicable, and
their respective businesses, and Recipient expressly agrees that monetary
damages would be inadequate to compensate Exult and Bank of America, as
applicable, for any breach by Recipient of its covenants and agreements set
forth in this Agreement. Accordingly, Recipient agrees and acknowledges that
any such violation or threatened violation could cause irreparable injury to
Exult and Bank of America, as applicable, and that, in addition to any other
remedies that may be available, in law, in equity or otherwise, Exult and
Bank of America shall be entitled to obtain injunctive relief against the
threatened breach of this Agreement or the continuation of any such breach
by Recipient, without the necessity of proving actual damages.
[USE SECTION 17 IF EXECUTED BY PROVIDER OF AUDIT SERVICES - RENUMBER IF
APPROPRIATE]
17. Notwithstanding anything herein to the contrary,
(a) In consideration of access to the Confidential Information, Recipient
shall keep the Confidential Information confidential and refrain from
using such Confidential Information for any purpose other than
performance of the Audit Services by Recipient's employees actually
performing such Audit Services (the "Auditors"). For theses purposes,
use of Confidential Information for purposes of the Audit Services by
the Auditors includes review of the Confidential Information by the
Auditors, preparation by the Auditors of summaries and analyses
("Auditor Reports"), delivery of such Auditor Reports, including the
Confidential Information, to representatives of Bank of America who have
a need to know such information in connection Audit Services, and
discussion of the Confidential Information with such persons, but no
other uses.
(b) Without limiting the foregoing, Recipient shall advise the Auditors that
they shall be permitted to provide the Confidential Information only to
Recipient's employees and, if applicable, partners involved in the
performance of the Audit Services.
(c) Recipient shall inform Exult in writing of the names of all persons
involved in the performance of the Audit Services on behalf of
Recipient, and shall inform all such persons of their obligations as
employees or, if applicable, partners of Recipient, to abide by this
Agreement. If applicable, Recipient shall not permit any persons
employed or engaged in Recipient's human resources business process
outsourcing line of service, to participate in the performance of Audit
Services or to have access to any of the Confidential Information.
Recipient shall at all times cause the Auditors to abide by this
Agreement, and shall not permit any of its employees, partners, if
applicable, contractors, advisors or other representatives, other than
the Auditors, to have access to any Confidential Information.
(d) Bank of America shall treat all Confidential Information it receives
from the Auditors as though it were received from Exult and subject to
confidentiality agreements between Bank of America and Exult.
18. For a period of two years from the date of this Agreement, Recipient will
not, directly or indirectly, solicit for employment any employee of Exult or
Bank of America or any of their respective affiliates, provided that this
will not prohibit Recipient from employing persons who approach Recipient on
their own initiative or in response to public advertising by Recipient
without any direct or indirect solicitation or encouragement from Recipient.
19. If there is any dispute between the parties regarding this agreement, the
prevailing party parties will be entitled to recover its or their costs,
including without limitation its attorneys' fees and costs, from the
nonprevailing party or parties.
v
<PAGE> 97
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties have hereto caused this Agreement to be executed
by their duly authorized representatives as of the day and year above stated.
EXULT, INC. BANK OF AMERICA ENTITY
By: _____________________________ By: ______________________________
Name: ___________________________ Name: ____________________________
Title: __________________________ Title: ___________________________
[RECIPIENT]
By: _____________________________
Name: ___________________________
Title:___________________________
vi
<PAGE> 98
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE N
KEY POSITIONS
FINAL
2.0
<PAGE> 99
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
A. INTRODUCTION............................................................1
1 KEY POSITIONS...........................................................1
i
<PAGE> 100
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
A. INTRODUCTION
This schedule sets forth the Key Positions which shall be governed by
Section 4.3.2 of the Agreement. Key Positions
[***]*
------------------
* Confidential information has been omitted.
1
<PAGE> 101
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE R
REPORTS
FINAL
<PAGE> 102
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 INTRODUCTION.............................................................1
2 PRINCIPLES GOVERNING REPORTS.............................................1
3 TABLE OF REPORTS.........................................................1
i
<PAGE> 103
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE R
REPORTS
1 INTRODUCTION
The Parties shall update this Schedule during the Transition Period as
described in Section 15.2 of this Agreement.
This Schedule identifies the Reports that the Service Provider shall provide
to the Customer.
2 PRINCIPLES GOVERNING REPORTS
2.1 Reporting shall remain consistent with currently provided reports as of
the Agreement Date.
2.2 Following the Agreement Effective Date, the existing reports shall be
reviewed and agreed by the Parties to determine if applicable, and
included in the table below.
2.3 Any new requests for reports shall be reviewed and agreed by the Parties
through Change Control Management.
3 TABLE OF REPORTS
REPORT NAME REPORT TYPE DELIVERY DATE DELIVERY FREQUENCY
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1
<PAGE> 104
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE T
TERMINATION ASSISTANCE SERVICES
FINAL
<PAGE> 105
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 INTRODUCTION.............................................................1
2 SERVICE PROVIDER TERMINATION ASSISTANCE PLAN SERVICES....................1
i
<PAGE> 106
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SCHEDULE T
TERMINATION ASSISTANCE SERVICES
1 INTRODUCTION
Subject to Section 3.5 of this Agreement, upon expiration or any termination
of this Agreement, Service Provider will take all reasonable action
requested by Customer to enable the Services to continue without
interruption or material disruption..
2 SERVICE PROVIDER TERMINATION ASSISTANCE PLAN SERVICES
Subject to Section 3.5 of this Agreement, Service Provider shall provide the
following Termination Assistance Plan Services in accordance with the
Termination Assistance Plan:
2.1 Service Provider shall deliver all tangible Customer data to Customer,
or Customer designee ("Designee") in Service Provider's existing data
formats which shall meet accepted industry standards, when reasonably
requested by Customer or Designee. Service Provider may not retain any
Customer data, apart from authorized archival copies.
2.2 Service Provider shall provide or make available technical information
reasonably requested by Customer or Designee concerning software
configurations, production operation of Customer applications,
environment, operations and procedures.
2.3 Service Provider shall make knowledgeable members of Service
Provider's account management, technical and operations staff
available in person at Service Provider facilities or by telephone to
answer questions concerning Services to Customer, as performed by
Service Provider, including the matters referred in Section 2.1 and
2.3 above.
2.4 Service Provider shall cooperate with Customer and Designee in
preparation and Approved Service Provider in preparation and
implementation of a migration or Termination Assistance Plan,
including reasonable testing. Customer and its successor shall have
primary responsibility for preparation, delivery and performance of
any such plan.
2.5 Service Provider shall remove Service Provider assets located on
Customer premises.
2.6 Service Provider shall certify to Customer that all Customer data and
files have been removed from equipment managed by Service Provider.
2.7 Service Provider shall cooperate with Customer, Approved Service
Provider and other third parties to take action reasonably necessary
to effect an orderly transition of telecommunications, data center and
other third party services.
2.8 [***]*
2.9 Service Provider shall, in accordance with Sections 3.6, 12.2.2, 12.4
and the other applicable provisions of this Agreement, cooperate with
Customer to transfer software licenses to applicable parties to the
extent permitted by applicable licenses.
2.10 Service Provider shall certify to Customer that it has complied with
its obligations set forth in Section 2.1 and Section 2.2 of this
Schedule.
-------------------
* Confidential information has been omitted.
1
<PAGE> 107
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
SERVICES AGREEMENT
SCHEDULE U
CUSTOMER SERVICE LOCATIONS
FINAL
<PAGE> 108
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1 INTRODUCTION............................................................2
2 EMPLOYEE LOCATIONS AND COUNTS...........................................2
1
<PAGE> 109
PROPRIETARY AND CONFIDENTIAL BANK OF AMERICA/EXULT
--------------------------------------------------------------------------------
1 INTRODUCTION
This schedule sets forth the Customer Service Locations and the number of
Service Provider employees to be situated at each of those locations.
2 EMPLOYEE LOCATIONS AND COUNTS
The table below lists the cities where Customer Associates that shall be
transferred to Service Provider are situated and the respective employee
counts.
[***]*
---------------
* Confidential information has been omitted.
2