Systems Services Agreement - Exult Inc. and International Paper Co.
EXECUTION COPY
SYSTEMS SERVICES AGREEMENT
This Agreement is entered into as of October 18, 2001 (the "Effective
Date"), between EXULT, INC. ("PROVIDER") and INTERNATIONAL PAPER COMPANY
(together with the other members of the Company Group, "COMPANY").
The Parties agree to the terms and conditions set forth in this Agreement
including the Schedules referenced in this Agreement.
BACKGROUND
A. Company currently performs certain applications development and
enhancement services and functions in support of the Company Group's
payroll, benefits and human resources operations. As part of the Company
Group's overall strategic vision for its payroll, benefits and human
resources operations, Company desires to outsource certain of such
applications development and enhancement services to a third party with
significant knowledge, experience and expertise in the performance and
management of such services. One of Company's primary objectives for
outsourcing such services and functions to a third party rather than
performing such services itself is for Company to realize certain
operational and economic efficiencies and advantages.
B. Provider is a provider of various types of payroll, benefits and human
resources applications development and enhancement services to large
companies, including those services and functions required by Company.
C. After consideration of, and discussions with, a number of candidates,
Company determined that, given Company's objectives, Provider is the third
party most qualified to perform such applications development and
enhancement services and functions.
D. Provider desires to perform services for Company as provided in this
Agreement, and the Parties have set forth herein the terms and conditions
under which Company agrees to purchase, and Provider agrees to provide,
such services.
E. For ease of reference, capitalized terms used in this Agreement are
defined in the Glossary attached hereto as APPENDIX A.
Therefore, in consideration of the foregoing and the covenants set forth
herein, Company and Provider hereby agree as follows:
ARTICLE 1. RELATIONSHIP PROTOCOLS
1.1. Contracting Parties. Company shall contract on behalf of and will be
responsible for all obligations of the Company Group under this Agreement.
Provider shall contract on behalf of and will be responsible for all
obligations of Provider under this Agreement.
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TABLE OF CONTENTS
Background............................................................................................... 1
Article 1. Relationship Protocols....................................................................... 1
1.1 Contracting Parties.................................................................... 1
1.2 Evolving Nature of Relationship........................................................ 2
1.3 Inherent Services...................................................................... 2
1.4 Changing Nature of Services............................................................ 2
1.5 Conflicts of Interests................................................................. 3
1.6 Alternate Providers.................................................................... 3
1.7 Most Favored Customer.................................................................. 4
1.8 Additional Agreements.................................................................. 4
Article 2. The Services................................................................................. 4
2.1 Obligation to Provide Services......................................................... 4
2.2 Affiliate Participation................................................................ 4
2.3 Third Party Participation.............................................................. 5
2.4 Service Levels; Reporting.............................................................. 5
2.5 Service Credits; Fees at Risk.......................................................... 6
2.6 Sole and Exclusive Remedy; Option...................................................... 6
2.7 Disaster Recovery Services............................................................. 7
2.8 Audits................................................................................. 7
2.9 Change of Requirements................................................................. 7
2.10 Regulatory Compliance.................................................................. 8
2.11 Use of Subcontractors.................................................................. 9
2.12 Special Projects....................................................................... 9
2.13 New Services........................................................................... 9
2.14 Required Consents...................................................................... 10
2.15 Responsibility for Data Accuracy....................................................... 11
Article 3. Platform Components.......................................................................... 11
3.1 Component Rights....................................................................... 11
3.2 Software and Hardware Migration........................................................ 11
3.3 Appointment as Company Representative.................................................. 12
3.4 License, Lease and Maintenance Fees.................................................... 12
3.5 Viruses................................................................................ 12
Article 4. Change Management............................................................................ 13
4.1 Change Control Procedures.............................................................. 13
Article 5. Transition and Resources..................................................................... 13
5.1 Transition Plan........................................................................ 13
5.2 Affected Employees..................................................................... 13
5.3 Resources.............................................................................. 14
Article 6. Service Staffing............................................................................ 14
6.1 Relationship Managers.................................................................. 14
6.2 Key Personnel.......................................................................... 14
6.3 Provider's Replacement of Personnel.................................................... 14
6.4 Retention of Experienced Resources..................................................... 14
6.5 Efficient Use of Resources............................................................. 15
6.6 Non-solicitation of Employees.......................................................... 15
Article 7. Charges and Disbursements.................................................................... 15
7.1 Charges................................................................................ 15
7.2 Taxes.................................................................................. 15
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7.3 Service Credits........................................................................ 17
7.4 Benchmarking........................................................................... 17
Article 8. Invoicing and Payment........................................................................ 17
8.1 Invoicing.............................................................................. 17
8.2 Invoice Payment........................................................................ 17
8.3 Disputed Charges/Credits............................................................... 17
8.4 Setoff Rights.......................................................................... 17
Article 9. Technology Rights............................................................................ 17
9.1 Pre-Existing Property.................................................................. 17
9.2 Development Works...................................................................... 18
9.3 Provider License; No Other Licenses................................................... 18
9.4 Company License........................................................................ 18
9.5 No Other Licenses...................................................................... 18
9.6 Assignments............................................................................ 18
9.7 Other Agreements....................................................................... 18
Article 10. Confidentiality............................................................................. 19
10.1 Covenants.............................................................................. 19
10.2 Exclusions............................................................................. 19
10.3 Limitations............................................................................ 19
10.4 Residual Rights........................................................................ 20
Article 11. Security.................................................................................... 20
11.1 Data Ownership and Privacy............................................................. 20
11.2 Data Security.......................................................................... 20
11.3 Other Security Measures................................................................ 21
Article 12. Term and Termination........................................................................ 21
12.1 Term................................................................................... 21
12.2 Renewal................................................................................ 21
12.3 Termination by Company for Cause....................................................... 21
12.4 Termination by Company for Change of Control........................................... 22
12.5 Termination by Company for Convenience................................................. 22
12.6 Termination by Provider................................................................ 22
Article 13. Effect of Termination....................................................................... 22
13.1 Survival of Selected Provisions........................................................ 22
13.2 Extension.............................................................................. 23
13.3 Services Transfer Assistance........................................................... 23
13.4 Other Rights........................................................................... 24
13.5 Winddown............................................................................... 26
Article 14. Liability................................................................................... 26
14.1 Damages and Liability Limits........................................................... 26
14.2 Exclusions............................................................................. 27
Article 15. Warranties.................................................................................. 27
15.1 Provider Warranties.................................................................... 27
15.2 Party Warranties....................................................................... 27
15.3 Disclaimers............................................................................ 28
Article 16. Indemnities................................................................................. 28
16.1 Indemnity by Provider.................................................................. 28
16.2 Indemnity by Company................................................................... 29
16.3 Indemnification Procedures............................................................. 30
16.4 Clarifications......................................................................... 31
16.5 Primary Indemnification................................................................ 31
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Article 17. Insurance................................................................................... 31
17.1 Provider Insurance..................................................................... 31
17.2 Mutual Waiver of Subrogation........................................................... 31
Article 18. Dispute Resolution.......................................................................... 32
18.1 Dispute Resolution Process............................................................. 32
18.2 Continued Performance.................................................................. 32
Article 19. Force Majeure............................................................................... 32
19.1 Force Majeure.......................................................................... 32
19.2 Exceptions............................................................................. 33
Article 20. General Terms............................................................................... 33
20.1 Governing Law.......................................................................... 33
20.2 Choice of Forum........................................................................ 33
20.3 Relationship of the Parties............................................................ 33
20.4 Publicity.............................................................................. 33
20.5 Entire Agreement, Updates, Amendments and Modifications................................ 34
20.6 Waiver................................................................................. 34
20.7 Severability........................................................................... 34
20.8 Counterparts........................................................................... 34
20.9 Binding Nature and Assignment.......................................................... 34
20.10 Notices................................................................................ 34
20.11 No Third Party Beneficiaries........................................................... 35
20.12 Other Documents........................................................................ 35
20.13 Consents and Approvals................................................................. 35
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LIST OF SCHEDULES
Account Governance Schedule (Schedule L) Additional
Agreements Schedule (Schedule X) Affected Employees
Arrangements Schedule (Schedule J) Agreed Damages
Exceptions Schedule (Schedule O) Auditor Confidentiality
Schedule (Schedule Y) Benchmarking Schedule (Schedule P)
Change Control Schedule (Schedule K) Charges Schedule
(Schedule C) Data Privacy and Security Procedures Schedule
(Schedule Q) Disaster Recovery Schedule (Schedule N)
Dispute Resolution Schedule (Schedule R) Hardware Rights
Schedule (Schedule M) In Flight Projects Schedule
(Schedule H) Insurance Schedule (Schedule S) Key Personnel
Schedule (Schedule E) List of Affected Employees Schedule
(Schedule D) Reports Schedule (Schedule U) Service Levels
(Schedule B) Services Schedule (Schedule A) Software
Rights Schedule (Schedule F) Technology Process Governance
Schedule (Schedule V) Termination Assistance Schedule
(Schedule T) Termination for Convenience (Schedule Z)
Third Party Participation Schedule (Schedule W) Transition
Plan Schedule (Schedule G)
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1.2. Evolving Nature of Relationship.
(a) The Schedules to this Agreement will be updated by the Parties as
set forth in this Agreement as necessary or appropriate during the
Term to accurately reflect the evolution of the Services and
components and elements of the Services as described therein and the
development of the law applicable to the Services.
(b) Company and Provider agree that the Services may require adjustments
to reflect the developing business and operations of the Company
Group and Provider, that the relationship memorialized by this
Agreement is dynamic in nature and will evolve as the operating and
business environment of the Company Group changes and evolves, and
that the scope of the Services to be provided by Provider to the
Company Group during the Term and corresponding fees charged by
Provider may be changed and modified with the written agreement of
the Parties pursuant to the Change Control Procedures. Therefore,
the Company/Provider Executive Steering Committee will periodically
evaluate the business and operating strategies of each Party and
recommend modifications to, and evolution of, the Services
(including the Service Levels) to optimize such strategies and
determine the reasonable effect that any modifications of the
Services may have on the fees chargeable by Provider under this
Agreement, taking into account all relevant material facts and
circumstances [***]*
1.3. Inherent Services.
(a) The Parties acknowledge and agree that there are functions,
responsibilities, activities and tasks not specifically described in
this Agreement which are required for the proper performance and
provision of the Services and are a necessary, customary or inherent
part of, or a necessary sub-part included within, the Services.
Subject to the terms of Section 1.3(c) below, such functions,
responsibilities, activities and tasks shall be deemed to be implied
and included within the scope of the Services to the same extent and
in the same manner as if specifically described in this Agreement.
(b) The Parties acknowledge and agree that there are functions,
responsibilities, activities and tasks not specifically described in
this Agreement which are a customary or inherent part of, or a
necessary sub-part included within, the responsibilities retained by
Company and which shall not be transferred to Provider. Subject to
the terms of Section 1.3(c) below, such functions, responsibilities,
activities and tasks shall be deemed to be retained by Company to
the same extent and in the same manner as if specifically described
in this Agreement as being retained by Company.
(c) The Parties recognize that it may not be possible in all cases to
determine clearly whether a given function, responsibility, activity
or task should be performed by Provider as an inherent part of the
Services or instead should be retained by Company as a
responsibility that has not been transferred to Provider. The
Parties agree to work together in good faith in such cases to
appropriately assign responsibility for the performance of such
function, responsibility, activity or task, including those
described in the SERVICES SCHEDULE (SCHEDULE A).
1.4. Changing Nature of Services. While the Parties will endeavor to update,
modify and amend this Agreement and the Schedules as necessary or
appropriate from time to time to reflect various adjustments in the
arrangements contemplated by this Agreement, the Parties acknowledge that
such adjustments may not always be documented with specificity. Therefore,
the Parties agree to
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deal with each other in good faith to resolve all issues presented by each
Party to the other and any disputes that may arise.
1.5. Conflicts of Interests. Provider shall not use any of the Company
telephony platform, Hardware or Company Software Assets to perform
services for others (including Provider), without the prior written
consent of Company. Provider shall not use any of the Company Support
Services to perform services for others (including Provider), without the
prior written consent of Company until such time as Provider and Company
transition to a new delivery and fee model based on business process
outputs for the delivery of Services as described in the CHARGES SCHEDULE
(SCHEDULE C).
1.6. [***]*
1.7. [***]*
1.8 Additional Agreements. The parties have agreed to enter into the
transactions contemplated in the ADDITIONAL AGREEMENTS SCHEDULE.
ARTICLE 2. THE SERVICES
2.1. Obligation to Provide Services. During the Term, Provider shall provide
the Services to and perform the Services for the Company Group. The scope
of Services is described in the SERVICES SCHEDULE (SCHEDULE A), the
service levels are described in the SERVICE LEVEL SCHEDULE (SCHEDULE B),
and the charges are described in the CHARGES SCHEDULE (SCHEDULE C).
2.2. Affiliate Participation.
(a) [***]*
(b) If the Company Group divests or no longer controls a given Affiliate
or other particular operations or assets that were receiving
Services under this Agreement, at Company's request: (i) Provider
shall continue to provide the Services to such former Company Group
entity, operations or assets [***]* for a period of no more than
[***]* following the closing date of the applicable transaction,
(ii) the amount of Services provided to such former Company Group
entity, operations or assets will be consolidated with the amount of
Services provided to the Company for the purposes of calculating the
Charges to be charged by Provider to the Company and such former
Company Group entity from and after the closing date of such
transaction for the period during which Provider provides the
Services to the former Company Group entity at the direction of the
Company and (iii) at either Party's option, the relevant parties
will use commercially reasonable efforts to enter into a new
contract and modification of this Agreement in order to effectuate
the intent of this Section 2.2(b); provided that pending execution
of such new contract and modification, the provision of Services
[***]* therefor shall continue to be governed by this Agreement, and
Company shall require any divested entity or successor entity that
receives services under this Section 2.2(b) to agree to comply with
the provisions of this Agreement.
(c) Provider shall perform any transition services required to
transition any operation into or out of the Provider's Service
delivery platform contemplated by this Section 2.2 as a New Service
expressly subject to the provisions of Section 2.13 governing the
delivery of New Services by Provider to Company. [***]*
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2.3. Third Party Participation. Third parties supporting the Company Group
Business, such as Company contractors and subcontractors, shall be
entitled to access and use Services, but only as necessary or appropriate
for their delivery of services supporting the Company Group business.
Company shall ensure that, at the request of Provider, each such
third-party participant enters into a written agreement with Company that
(i) limits the third party's disclosure and use of information that it
obtains from Provider solely to the support of the Company Group, (ii)
obligates such third party supplier to comply with Provider's general
security policies applicable to the relevant Provider activities and (iii)
at the request of Provider in appropriate cases, names Provider as a
third-party beneficiary of such arrangement. The third parties or
categories of such third parties are set forth in the THIRD PARTY
PARTICIPATION SCHEDULE.
2.4. Service Levels; Reporting
(a) Provider agrees that, from and after the Process Take-On Date, that
its performance of the Services will conform to the requirements of
the applicable Service Levels set forth in the SERVICE LEVELS
SCHEDULE (SCHEDULE B) to this Agreement (as such schedule may be
modified from time to time pursuant to 2.4(b) below). Provider will
measure its performance of the Services relative to the Service
Levels.
(b) Company and Provider will, [***]* review and consider commercially
reasonable changes, modifications, deletions and replacements of and
additions to the Service Levels and the Service Credits for the
purposes of better and more timely reflecting, facilitating and
supporting the continuing development, and evolving priorities of
the Company Group and the Company Group Business. Any such changes
will be implemented through the Change Control Procedures. The
Service Levels shall not be changed, modified or adjusted downward
or upward without the prior written agreement of the Parties. [***]*
The Parties agree to cooperate and deal with each other in good
faith to promptly resolve on a reasonable basis in consonance with
the purposes of the review process, any differences between the
Parties regarding appropriate changes to, modifications of,
additions to, deletions of and replacements of the Service Levels
and the Service Credits.
(c) Provider shall implement the necessary measurement and monitoring
tools and procedures to measure and report Provider's performance of
the Services against the Service Levels as such standards and levels
may be developed, modified and changed during the Term and as the
Services may evolve and be supplemented and enhanced during the
Term. Such measurement and monitoring shall permit reporting at a
reasonable level of detail sufficient to verify compliance with the
Service Levels and application of any attendant Service Credits.
Provider shall prepare and maintain detailed records regarding its
compliance with the Service Levels and the determination and
application of attendant Service Credits, and shall permit Company
and its designees access to all such records for the purposes of
performing verifying audits, planning and identifying possible
process improvements. Upon request Provider shall provide Company
with information and reasonable access to such tools and procedures,
and the records relating thereto, for purposes of verification of
the reported performance levels.
(d) Provider shall provide Company with the reports regarding its
performance in accordance with the REPORTS SCHEDULE.
2.5. [***]*
2.6. [***]*
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2.7. Disaster Recovery Services. Provider will provide Disaster Recovery
Services pertaining to the Services in accordance with the DISASTER
RECOVERY SCHEDULE. Company shall provide reasonable assistance and
cooperation to support Provider's efforts to deliver such Disaster
Recovery Services. Company shall retain responsibility to perform its
obligations in accordance with the DISASTER RECOVERY SCHEDULE.
2.8. Audits. Provider will assist the Company Group in meeting the respective
audit and regulatory requirements applicable to members of the Company
Group as and to the extent described in this Section 2.8. Company shall
have the right to conduct or permit to be conducted regulatory,
operational, financial and internal audits. Provider will provide access
to the facilities where Provider will perform the Services and Provider's
data, information and records, (i) to enable the Company Group and its
auditors and examiners to conduct appropriate audits and examinations of
the Company Group's operations and Provider's operations relating to the
performance of the Services, and (ii) to verify that Provider's charges
and credits to Company are accurate and that the Services are being
provided in accordance with this Agreement and the Service Levels. Except
as otherwise required by regulatory auditors, Company shall provide at
least [five (5) days]* notice to Provider of its need for such access and
Provider shall then provide such access during reasonable hours. If any
audit or examination reveals that Provider's invoices for the audited
period are not correct (other than amounts in dispute pursuant to Section
8.3), Provider shall promptly reimburse Company for the amount of any
overcharges, or Company shall promptly pay Provider for the amount of any
undercharges. Company shall choose the auditors that will conduct the
audits provided for in this Section 2.8; provided, however, that except as
otherwise required by regulatory auditors, no personnel conducting such
audits shall then currently be engaged in any other assignment that is in
direct and material competition with Provider's principal business. In
addition, Company agrees to exercise commercially reasonable efforts to
reasonably accommodate any reasonable, good faith concerns identified by
Provider to Company's selection of an auditing firm that is a competitor
of or has a business unit that is competitive with Provider. No person or
entity may serve as an auditor unless and until that prospective auditor
has entered into a written agreement with Company that includes those
requirements set forth on the AUDITOR CONFIDENTIALITY SCHEDULE. Provider
shall have the right to conduct such orientation and closing conferences
with non-regulatory auditors as are reasonable and customary in the
management of such audit activities. Company will pay the costs associated
with conducting any audits (which shall include fees and expenses paid to
Company's third party auditors and examiners), except that each Party will
pay its internal costs relating to audits and Provider shall pay the
reasonable costs of any external auditors engaged by Company to perform
financial audit of the Charges invoiced by Provider under this Agreement
if such audit reveals that the audited Charges exceed the correct Charges
by [***]* or more.
2.9. Change of Requirements.
(a) During the Term, if either Party determines that Company requires a
sustained substantial increase or reduction in the level of Services
or any element of the Services needed by the Company Group Business
such changes shall be governed by applicable provisions of Section
2.2(b) and this Section 2.9.
(b) Each Party will notify the other of its determination that a
sustained substantial increase or reduction of the level of the
Services or any element of the Services will be required. Provider
will promptly prepare and deliver to Company a written plan setting
forth the nature, composition and extent of the changes to the
Services, the adjustments in the Charges and Service Levels, as
applicable, for the Services implied by such events and the Provider
resource disposition and asset reallocation schedule that will need
to be implemented in order to accommodate the increase or decrease
of resource requirements for such changes in
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an equitable and cost-effective manner without disruption to the
Company Group's continuing operations. The plan, including the
impact on the Charges that will result therefrom will be promptly
reported to Company for review and acceptance. Upon acceptance by
Company, Provider will make the applicable adjustments to the
Charges and components thereof in accordance with the plan to
reflect the foregoing and distribute and execute amended Schedules
as appropriate.
2.10. Regulatory Compliance.
(a) As part of, and to the extent relevant to, the Services, Provider
will identify, interpret and comply in all material respects (i)
with the laws and regulations applicable to payroll matters,
including without limitation wage and hour laws, tax withholding and
garnishments, and (ii) with the laws and regulations applicable as
relevant to Provider's business operations under this Agreement. In
addition and as part of the Services, Provider shall identify the
impact of changes in the foregoing laws and regulations on its
ability to deliver the Services. Provider shall notify Company of
such changes and shall work with Company to identify the impact of
such changes on how Company uses the Services. Provider does not
otherwise have, and Company retains, responsibility for identifying
or interpreting (i) laws and regulations applicable as relevant to
Company's business operations under this Agreement, including
without limitation, employment benefits, employee rights and
discrimination laws, other human resources-related Laws, and all
fiduciary obligations arising under such laws, and (ii) laws and
regulations applicable to Company in its capacity as a global forest
products, paper and packaging company.
(b) Without limiting the generality of the preceding sentence, the
Parties specifically agree that they may need to make appropriate
adjustments to the arrangements contemplated by this Agreement to
address the impact of the laws, rules and regulations applicable to
such arrangements. Further, the Parties may need to amend this
Agreement within a commercially reasonable time prior to the
effective date of any HIPAA privacy regulations, as may be necessary
for the Services and this Agreement to comply with such regulations.
Company's reasonable good faith interpretation of any law, rule or
regulation shall be conclusive in determining whether any such
change is necessary. Any change to the Services required as a result
of any change in any Law or in the interpretation thereof shall be
implemented by Provider in accordance with Company's written
instructions, and any changes to the Charges as may be appropriate
as a result of such changes in Services will be given effect through
the Change Control Procedures.
(c) If either Party receives an official charge of non-compliance from a
governmental entity with respect to the performance of its
obligations under this Agreement, such Party will promptly notify
the other Party of such charge in writing.
(d) To the extent that Company is obligated to comply with particular
laws and regulations associated with benefits plans, payroll and
other activities, Provider shall provide as part of the Services
assistance and cooperation (including without limitation,
documentation) as requested by Company in writing to permit Company
to comply with such laws and regulations; provided that any change
or addition to the Services and Charges required by such
cooperation, assistance and documentation shall be given effect
through the Change Control Procedures.
(e) Company may submit to Provider findings and recommendations
regarding compliance by Provider with applicable laws and
regulations, which Provider will analyze and consider in good faith.
Provider shall promptly provide to Company Provider's evaluation of
such findings and recommendations and, if applicable, Provider's
plan for addressing such findings and recommendations. The Parties
shall promptly make any resulting modifications
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to the Services and Charges as are reasonably necessary to give
effect to such changes through the Change Control Procedures.
(f) Provider shall be responsible for any fines and penalties imposed on
Provider or Company arising from any noncompliance with the laws and
regulations for which Provider is responsible under Subsection (a)
above by Provider, its agents, subcontractors or third party product
or service providers, except to the extent that such noncompliance
was caused by Company, Company Group or their respective affiliates,
agents or sub-contractors. Company shall be responsible for any
fines and penalties imposed on Provider and Company arising from any
noncompliance with the laws and regulations for which Company
retains responsibility under Subsection (a) above by Company or its
agents, subcontractors or third party product or service providers,
except to the extent that such noncompliance was caused by Provider,
its affiliates, agents or subcontractors.
2.11. Use of Subcontractors.
(a) Provider may not subcontract any material portion of the Services
(individually or in the aggregate) without Company's prior written
consent. Company agrees that when informed by Provider of Provider's
desire to subcontract with respect to the performance of the
Services, Company shall enter into good faith discussion with
Provider to assess the appropriateness of Provider's desired
subcontracting arrangement.
(b) Provider may use temporary staffing to perform information
technology services and temporary staffing that perform the services
of Affected Employees who are no longer employed by Provider without
limitation on the number of such personnel. Provider may utilize
other temporary staffing to provide other Services, [***]*
(c) No subcontracting, whether or not permitted, shall relieve Provider
of its performance obligations under this Agreement. Provider shall
remain primarily liable and obligated to Company for the timely and
proper performance of all of its obligations hereunder even if such
obligations are delegated to third party subcontractors, and for the
proper and timely performance and actions of any person or entity to
which it delegates or subcontracts any such obligation.
2.12. Special Projects. Provider will perform the special projects set forth in
the IN-FLIGHT PROJECTS SCHEDULE in accordance with its terms and with the
terms of this Agreement. From time to time during the Term, Provider will
perform additional special projects for Company at Company's request.
Except as otherwise agreed, charges for the performance of project work
will be determined in accordance with the CHARGES SCHEDULE (SCHEDULE C).
Any special projects will be completed on time and in accordance with the
specifications for each such project.
2.13. New Services.
(a) If Company requests Provider to perform an additional function,
responsibility or task that is not described on the SERVICES
SCHEDULE (SCHEDULE A), such additional function, responsibility or
task will be considered a "New Service". If Company's request for a
New Service includes a request for Provider to correspondingly
reduce or eliminate one or more existing elements of the Services
then being provided hereunder, Provider shall determine the
resources and expenses related to the element or elements of the
Services being reduced or eliminated and those required for the
services being added.
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(b) Promptly after receiving each request for New Services from Company,
Provider will provide a written quote to Company setting forth the
net increase or decrease in the Charges and/or other charging
methodologies, and if applicable, increases and decreases in
resource units and additional resource baselines, if any, that will
be attributable to such New Services, and will concurrently deliver
to Company as a part of such quote a detailed description of and
proposal for the New Services together with a report regarding the
ramifications and impacts of such New Services on the Services. All
changes in the Charges and other charging methodologies will be
based upon the required proportional increase in personnel, system
and other resources applicable to the New Services relative to the
Charges and other existing charging methodologies. Upon receipt of
such quote and other documentation, Company may then elect to have
Provider perform the New Services, and the Charges and, if
applicable, other charging methodologies and resource baselines will
be established and/or adjusted to reflect such New Services.
Notwithstanding the foregoing, nothing herein shall be deemed to
obligate Company to obtain New Services from Provider.
(c) The Parties agree that changes during the Term in functions,
responsibilities and tasks that are within the scope of the Services
will not be deemed to be New Services, if such functions,
responsibilities and tasks evolved or were supplemented and enhanced
during the Term by Provider in its sole discretion or pursuant to
the provisions of this Agreement, unless such function,
responsibility or task was approved by Company pursuant to the
Change Control Procedures.
(d) Without limiting the provisions of Section 1.6 or Section 2.2, if
the Parties cannot agree that a function, responsibility or task
falls within the definition of a New Service, and Company either
demonstrates that such function, responsibility or task is required
by law or regulation or determines in good faith that the function,
responsibility or task is critical to Company's business, then
Provider shall nevertheless perform the disputed function,
responsibility or task if requested by Company. The determination of
whether any function, responsibility or task is a New Service to be
paid by Company will be determined pursuant to the Dispute
Resolution Process.
(e) Changes to this Agreement and to the Schedules to reflect New
Services will be effected and documented through Change Control
Procedures.
2.14. Required Consents. With respect to Third Party Agreements, each Party will
be responsible for (i) obtaining all consents or rights to use, and (ii)
paying the costs, if any, of obtaining the consents or rights to use, in
accordance with the SOFTWARE RIGHTS SCHEDULE (SCHEDULE F) and as indicated
on the CHARGES SCHEDULE (SCHEDULE C). All such consents or rights to use
and transfers shall be obtained or made within [***]* after the Effective
Date, but in no event later than the Process Take-On Date or the date
required under the Transition Plan, unless otherwise agreed by the Parties
in writing. If any consent or right to use is not obtained or a required
transfer is not made, the Parties shall cooperate with each other in
achieving a reasonable alternative arrangement for each Party to continue
to process its work with minimum interference to its business operations
unless and until such consents or rights to use are obtained or required
transfers are made. The Parties shall allocate the cost of achieving such
reasonable alternative arrangement based on which Party is responsible for
obtaining the relevant consent or right to use or making the relevant
transfer and on such other facts and circumstances as may be appropriate.
2.15. Responsibility for Data Accuracy. Company shall use reasonable efforts to
detect, isolate and correct all errors in the data created, collected,
disseminated, forwarded, processed or stored by Company and provided to
Provider in connection with the Services. As part of the Services,
Provider shall use reasonable efforts to detect, isolate and correct all
errors in the data created,
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collected, disseminated, forwarded, processed or stored by Provider in
connection with the Services. Company shall reimburse Provider the cost of
Provider's correction of errors that are present in Company-provided data,
provided the errors are present in such data at the time Company delivers
or makes it available to Provider.
ARTICLE 3. PLATFORM COMPONENTS
3.1. Component Rights.
(a) The Parties shall identify on the SOFTWARE RIGHTS SCHEDULE (SCHEDULE
F) all Software required to provide the Services as of the
commencement date, and shall categorize the Software as follows: (i)
Software licensed by the Company Group which will be made available
for use by Provider in connection with its delivery of the Services
under Provider's appointment as Company's representative pursuant to
Section 3.3; (ii) third party Software licensed by the Company Group
for which a right to use shall be obtained permitting Provider to
access the Software in connection with its delivery of the Services,
designating whether Company or Provider shall have responsibility
for obtaining such right to use; (iii) proprietary Company-owned
Software for use by Provider in connection with its delivery of the
Services; (iv) proprietary Provider-owned Software which will be
made available for use by Company in connection with its receipt of
the Services; and (v) Software which is licensed by Provider from a
third party which will be made available for use by Company in
connection with its receipt of the Services.
(b) The Parties shall identify on the HARDWARE RIGHTS SCHEDULE (SCHEDULE
M) all Hardware required to provide the Services as of the
commencement date, and shall categorize such Hardware as follows:
(i) Company Group owned Hardware which shall be transferred to
Provider as part of the purchased assets; (ii) Company Group owned
Hardware which Company will make available for use by Provider in
connection with its delivery of the Services; (iii) Hardware which
is leased by the Company Group from a third party and which Provider
will use under Provider's appointment as Company's representative
pursuant to Section 3.3; and (iv) leased Hardware for which a
consent shall be obtained permitting Provider to use the Hardware in
connection with its delivery of the Services, designating whether
Company or Provider shall have responsibility for obtaining such
consent.
(c) The Parties shall identify on the SOFTWARE RIGHTS SCHEDULE (SCHEDULE
F) or the HARDWARE RIGHTS SCHEDULE (SCHEDULE M) all Third Party
Agreements required to provide the Services as of the Effective
Date, and shall categorize such Third Party Agreements as either
Right to Use Agreements, Retained Agreements, Company Proprietary
Agreements, Provider Proprietary Agreements, or Provider Third Party
Agreements.
(d) Provider will provide to Company within a reasonable period after
Company's request a current list of the applications Software
required to provide the Services.
3.2. Software and Hardware Migration.
(a) Provider and Company contemplate that certain of the information
technology platform operated by Company and used exclusively to
support the Employee Service Center shall be migrated from the
Company to Provider on or before the Migration Date. The Parties
therefore agree that on or before the Migration Date, Provider will
discontinue its use of the Company Hardware located at the Employee
Service Center and the Company Software residing on such Hardware.
Provider will be responsible for determining the information
technology migration plan and procedures with any changes to the
Services
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and Charges to be handled through the Change Control Procedures.
Except as otherwise agreed pursuant to the Change Control
Procedures, Provider will be responsible for obtaining the necessary
Hardware and Software at the Employee Service Center to continue to
perform the Services following the Migration Date and for all costs
associated with obtaining such Hardware and Software.
(b) Regarding the Company Hardware and Software, other than the SAP
software, that Provider has the right to use or access in connection
with the Services but which is not located at the Employee Service
Center, the Parties agree to use the Change Control Procedures at
any time and from time to time to determine any changes to
Provider's right to use or access to such Hardware and Software and
the impact of such changes on the Charges. Regarding the SAP
software, the Parties agree that Provider will not be responsible
for obtaining a SAP license to perform the Services for Company.
3.3. Appointment as Company Representative.
(a) Company authorizes Provider to act as the representative of the
Company and the members of the Company Group, and Provider accepts
such authorization, for the limited purposes of accessing the
applicable Software and Hardware under the Retained Agreements.
(b) Provider will perform its obligations and responsibilities as
representative of Company and Company Group under the Right to Use
Agreements and the Retained Agreements subject to the provisions of
this Agreement, the SOFTWARE RIGHTS SCHEDULE (SCHEDULE F), the
HARDWARE RIGHTS SCHEDULE (SCHEDULE M) and the SERVICES SCHEDULE
(SCHEDULE A). Upon Company's request, Provider will provide to
Company all information and documentation related to its activities
as the Company Group's representative under the Retained Agreements.
(c) Company may terminate or provide additional restrictions on
Provider's appointment as representative of Company and Company
Group with respect to the Retained Agreements at any time in
Company's discretion upon reasonable notice to Provider. The impact
on the Services of such termination or additional restrictions will
be addressed through the Change Control Procedures.
3.4. License, Lease and Maintenance Charges. In addition to the responsibility
for the costs of Required Consents provided for in Section 2.14, each
Party will be financially responsible for license, leasing, maintenance,
support and other such costs of Software and Hardware provided by Company
or used or accessed by Provider in connection with the arrangements
contemplated by this Agreement as and to the extent provided for in the
CHARGES SCHEDULE (SCHEDULE C). Provider will be financially responsible
for all other such costs. The Charges will include all license, lease,
maintenance, support and other costs for Provider Software and Hardware
and all other such costs for which Provider is financially responsible.
3.5. Viruses. Each Party will take commercially reasonable measures to ensure
that no Virus or similar items are coded or introduced into the Software
system and the operating environments used to provide the Services. If a
Virus is found to have been introduced into the Software systems and the
operating environments used in connection with the Services, each Party
shall use commercially reasonable efforts and diligently work to eliminate
the effects of the Virus; provided, however, both Parties shall take
immediate action if required due to the nature or severity of the Virus'
proliferation. If a Virus is introduced into the Software system or the
operating environments used to provide the Services from a desktop
computer or other source controlled by Provider, then Provider will be
financially responsible for the costs associated with eliminating the
effects of the Virus. If a Virus is introduced into the Software system or
the operating environment to provide the Services from other than an
Provider controlled source, then Provider shall not be
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financially responsible for the costs associated with eliminating the
effects of the Virus. Each Party shall be responsible for the reasonable
costs incurred by the other Party resulting from the responsible Party's
failure to fulfill its obligations under this Section 3.5.
ARTICLE 4. CHANGE MANAGEMENT
4.1. Change Control Procedures. Except as otherwise set forth in this
Agreement, the Account Governance Schedule or the Technology Process
Governance Schedule, all changes and approval procedures for performance
under this Agreement shall be made in accordance with the CHANGE CONTROL
PROCEDURES SCHEDULE.
ARTICLE 5. TRANSITION AND RESOURCES
5.1. Transition Plan. The Transition Plan as set forth on the TRANSITION PLAN
SCHEDULE (SCHEDULE G) will govern Provider's performance of the Services
and the Company's performance of various transition tasks during the
period from the Effective Date until such time as the Services are
completely migrated/converted to Provider, including without limitation
the satisfaction or written waiver of the conditions set forth on
ADDITIONAL AGREEMENTS SCHEDULE (the "Process Take-On Date"). Each Party
agrees to use its commercially reasonable efforts to satisfy the
conditions set forth on the ADDITIONAL AGREEMENTS SCHEDULE. The Parties'
expectation is that the Process Take-On Date will be no later than [***]*
After the Process Take-On Date and until expiration or termination of this
Agreement, Provider will perform the Services in accordance with the other
provisions of this Agreement. The charges for the transition services to
be provided by Provider are included in the Charges for the Services and
there shall be no additional charge to the Company for transition services
unless mutually agreed pursuant to the Change Control Procedures.
5.2. Affected Employees.
(a) Provider will offer employment to each of the individuals listed on
the AFFECTED EMPLOYEES SCHEDULE (SCHEDULE D). The offers to be made
to each of the Affected Employees by Provider will be as described
on the AFFECTED EMPLOYEE ARRANGEMENTS SCHEDULE (SCHEDULE J).
Additional details regarding the treatment of Affected Employees are
included in the AFFECTED EMPLOYEE ARRANGEMENTS SCHEDULE (SCHEDULE
J).
(b) All costs and expenses incurred by Provider in connection with the
offer to employ and the employment of the Affected Employees shall
be the responsibility of Provider. Provider will promptly reimburse
Company for the amount of salary and benefit costs incurred by
Company, if any, with respect to the Affected Employees after the
Process Take-On Date for the period until they receive offers and
they reject such offers, such offers expire or the Affected
Employees become Provider employees if and only if Provider requests
that Company retains such employees beyond the Process Take-On Date.
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5.3. Resources.
(a) Except as otherwise provided in Sections 2.14 and 3.4, each Party
will have the responsibility and obligation to provide, administer,
manage, support, maintain and pay for all resources (including,
without limitation, personnel, Hardware, Software, facilities,
services and other items, however described) necessary or
appropriate for the performance of such Party's obligations under
this Agreement.
(b) Beginning on the Effective Date and for the duration of the Term,
each Party will timely provide trained and qualified personnel as
necessary or appropriate to facilitate and ensure the timely and
proper performance of such Party's obligations under this Agreement.
ARTICLE 6. SERVICE STAFFING
6.1. Relationship Managers. Each Party's initial Relationship Manager shall be
the person so designated in the ACCOUNT GOVERNANCE SCHEDULE. A Party's
Relationship Manager shall have the authority to act for the appointing
Party and its subcontractors in connection with all aspects of this
Agreement, and shall be the person to whom all of the non-appointing
Party's communications to the appointing Party may be addressed. The
process the Parties will follow for the subsequent assignment of
Relationship Managers is specified in Section 6.3 and in the ACCOUNT
GOVERNANCE SCHEDULE.
6.2. Key Personnel. Each of the Provider personnel engaged in key positions
(including but not limited to the Relationship Manager) will devote
substantially all of his or her full time and effort to the performance of
the Services and the Company platform shared by the Parties. Company has
the right to approve Provider personnel in key positions, in advance and
in writing. Provider's personnel filling key positions as of the Effective
Date are listed in the KEY PERSONNEL SCHEDULE.
6.3. Provider's Replacement of Personnel. Provider will give Company at least
[***]* advance notice of a change in the person appointed as the Provider
Relationship Manager or the person appointed as the Provider Center
Manager (together, the "Provider Managers"), unless the Provider Manager
resigns or is unable to work due to his or her death, disability or is
removed at Company's request. In any such event, Provider will provide
Company with notice of such event as promptly as reasonably possible.
Company shall promptly provide Provider with notice of any concerns that
it may have with the proposed change and Provider and Company shall
discuss such concerns. Company shall have the right after such discussion
to require that its concerns be resolved on a mutually agreed basis.
Provider shall not reassign or replace any person assigned as the Provider
Relationship Manager or the Provider Center Manager during the first year
of his or her assignment to the Company service team, nor shall Provider
assign more than [***]* different individuals to either such position
during the Term, unless Company consents to such reassignment or
replacement, or the Provider employee voluntarily resigns from Provider,
is unable to work due to his or her death or disability or in consultation
with Company, is removed from the Company account for non-performance, or
takes a leave of absence that Provider is required to provide by law or
that is consistent with the terms of an ordinary and commercially
reasonable benefits package applicable to that individual. If a Provider
Relationship Manager resigns or is replaced and the Provider Center
Manager moves into the position of Provider Relationship Manager (or vice
versa), then such change will only be counted as a change in the Provider
Relationship Manager, but not also as a change in the Provider Center
Manager.
6.4. Retention of Experienced Resources. If Company reasonably believes that a
continuing deficiency in the performance of the Services is attributable
in whole or in part to Provider's reassignment,
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movement, or other changes in the personnel assigned by Provider to the
performance and delivery of the Services and/or to the Provider
subcontractors assigned to the Company service team, Company will notify
Provider of such belief and the basis for such belief. Upon receipt of
such notice from Company, Provider (i) will promptly provide to Company a
report setting forth Provider's position regarding the matters raised by
Company in its notice; (ii) will meet with Company to discuss the matters
raised by Company in its notice and Provider's positions with regard to
such matters; and (iii) will promptly and diligently take commercially
reasonable action to address any such Provider personnel assignment
practices and/or processes identified by Company as adversely impacting
the performance and delivery of the Services by Provider.
6.5. Efficient Use of Resources. Provider shall take commercially reasonable
actions (i) to efficiently administer, manage, operate and use the
resources employed by Provider to provide and perform the Services that
are chargeable to Company under this Agreement, and (ii) to diligently and
continuously improve the performance and delivery of the Services by
Provider and the elements of the policies, processes, procedures and
system that are used by Provider to perform and deliver the Services,
including, without limitation, re-engineering, tuning or optimizing the
processes, procedures and systems used to perform, deliver and track the
Services.
6.6. Non-solicitation of Employees. [***]* neither Party shall knowingly
solicit any employee of the other Party or their Affiliates without the
other Party's written consent, except as permitted upon termination under
Section 13.4 or under Section 5.2. Company or Provider employee's
responses to or employment resulting from general public solicitations
will be exempted from this provision. Notwithstanding each Party's right
to solicit the employment of employees of the other Party or its
Affiliates through general public solicitations as provided above in this
Section 6.6, neither Party will [***]* hire, employ or engage as a
consultant or in any other position, however described, any person who is
directly involved in the delivery or receipt of the Services while such
person is engaged in any such capacity by the other Party [***]* without
the prior written consent of such other Party.
ARTICLE 7. CHARGES AND DISBURSEMENTS
7.1. Charges. In consideration of Provider's performance of the Services,
Company will pay Provider the Charges in accordance with the CHARGES
SCHEDULE (SCHEDULE C). The Charges shall be the only amounts chargeable to
Company for the Services and other resources to be provided to Company
under this Agreement, except as otherwise provided for in Section 7.3.
7.2. Taxes.
(a) [***]*
(b) Each Party will provide notice to the other Party before remitting
sales and use Taxes in connection with any and all transactions
contemplated by this Agreement. The Parties will cooperate in good
faith to develop consistent sales and use Tax positions acceptable
to both Parties. Each Party shall then provide notice of all sales
and use Taxes voluntarily paid by that Party in connection with any
and all transactions contemplated by this Agreement. Either Party
may at its sole discretion elect to seek a refund of Taxes so paid,
either directly or through the other Party to this Agreement if
required by statutory refund procedures. When one Party elects to
seek a refund of any sales and use Tax, the other Party may choose
to participate in the litigation to obtain the refund (the term
litigation being used in sections (b) and (c) broadly to encompass
all efforts to seek administrative
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remedies and litigation in any appropriate trial or appellate
forum), by bearing its pro-rata share of all attorneys fees and
other expenses related thereto, based on the Parties share of the
potential recovery as determined in subsection(a). In that event,
all amounts recovered from said efforts to obtain a refund shall be
allocated to the calendar year in which the Taxes were paid and
distributed to the Parties according to the amounts of Taxes paid by
each in that calendar year pursuant to subsection (a). A Party may
elect to not participate in an effort to obtain a refund and not
contribute to the cost of said effort. In that event, the Party
proceeding in with a refund claim (whether directly, or through the
other Party to this Agreement) shall receive all amounts recovered,
with the non-litigating Party waiving all rights thereto. Each party
will seek any refund at the behest of the other Party to this
Agreement. When pursuing a claim for refund and related litigation,
each Party will make a good faith effort to reach an agreement with
the other Party regarding selection of counsel and litigation
strategies.
(c) Either Party will notify the other party to this Agreement in the
event it receives an assessment of sales and use Taxes arising out
of any transaction contemplated by this Agreement. Either Party may,
in the event it receives an assessment, pursue litigation to have
the assessment set aside or, in the event the other Party receives
an assessment, demand at its discretion that the other Party pursue
litigation to have the assessment set aside. Attorneys' fees and
other expenses associated with challenging any assessment shall be
borne by the Parties on a pro rata basis reflecting each Party's
share of the assessed tax liability as determined in paragraph (a).
Any statutory attorneys fees or other expenses recovered as part of
a challenge to an assessment shall be divided by the Parties on that
same pro-rata basis. In the event the Parties agree to pay an
assessment, the assessed Taxes paid shall be allocated to the
calendar year for which the Taxes were assessed and paid by the
Parties according to their respective liabilities as set out in
paragraph(a). When challenging an assessment and in related
litigation, each Party will make a good faith effort to reach an
agreement with the other Party regarding selection of counsel and
litigation strategies.
(d) The Parties agree to reasonably cooperate with each other to enable
each to more accurately determine each other's tax and to minimize
such liability to the extent legally possible. Provider's invoices
shall separately state the amounts of any Taxes Provider is
collecting from Company. In the case of Company, such cooperation
shall include providing Provider any applicable exemption or resale
certificates, and information regarding out-of-province or
out-of-country sales and use of equipment. In the case of Provider,
such cooperation shall include providing Company, at the reasonable
and written request of Company, with applicable information
regarding delivery or use of materials, services, or sales, and
taking reasonable additional steps to minimize Taxes, examples of
which include providing Company with thorough invoices and/or
additional billing information that may be reasonably requested in
order to determine the taxability of specific goods and services
provided under this Agreement.
7.3. [***]*
7.4. Benchmarking. Company and Provider shall engage in the Benchmark Process
provided for in the BENCHMARKING SCHEDULE. The Parties shall cooperate in
good faith to jointly select one or more suitable benchmarkers, [***]*
Provider shall not be specifically bound by the results of the
Benchmarking Process, but Provider agrees that it shall give due
consideration to such results in responding to reasonable requests
received from Company for adjustments in the arrangements contemplated by
this Agreement.
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ARTICLE 8. INVOICING AND PAYMENT
8.1. Invoicing. Provider will invoice Company for the Charges in accordance
with the invoicing procedures set forth on the CHARGES SCHEDULE (SCHEDULE
C).
8.2. Invoice Payment. Company will pay each invoice by wire funds transfer or
other electronic means to an account specified by Provider in accordance
with the payment terms set forth in the CHARGES SCHEDULE (SCHEDULE C).
8.3. Disputed Charges/Credits. In the event Company disputes the accuracy or
applicability of a charge or credit or other financial arrangement
described in this Agreement, Company shall notify Provider of such dispute
as soon as practicable after the alleged discrepancy has been discovered.
Notwithstanding any such dispute, Company shall timely pay all charges for
System Services within the Hours Cap, subject to correction for manifest
error. Any payment of disputed charges remitted by Company shall be deemed
to be made with a reservation of rights by Company. If Company disputes in
good faith any invoiced amounts for charges other than for charges for
System Services within the Hours Cap, Company may withhold payment of
particular charges that Company disputes provided that Company delivers to
Provider concurrently with the withholding of the disputed charges a
reasonably detailed written explanation of the basis of the dispute. All
undisputed accrued and payable amounts will be paid by Company in
accordance with the timeframes set forth in this Agreement.
8.4. Setoff Rights. Any fees charged by Provider under this Agreement may be
offset by the amount of [***]* costs paid by Company on behalf of Provider
in accordance with this Agreement, or any other damages incurred by
Company and finally awarded by a court of competent jurisdiction, or other
amounts owed and past due to Company by Provider in accordance with this
Agreement. Company shall provide at the time of such setoff a detailed
written explanation of, and backup information related to, such setoff
amount.
ARTICLE 9. TECHNOLOGY RIGHTS
9.1. Pre-Existing Property. Each Party will retain ownership of Pre-Existing
Property that it provides for the performance of the Services.
9.2. Development Works. Subject to any ownership rights of third parties
pursuant to third party agreements to which Company is a party, [***]*
9.3. Provider License; No Other Licenses. [***]* Provider will provide to
Company source and object versions of all such Code and other Materials
together with all other manifestations of such Code and other Materials
reasonably necessary to permit Company to exercise its rights under this
Section 9.3.
9.4. Company License. [***]* Company will provide to Provider copies of such
Code in object code form only and other Materials to the extent reasonably
necessary to permit Provider to exercise its rights under this Section 9.
Nothing in this Section shall prevent Provider from providing the
cooperation to Company's third party suppliers in accordance with Section
1.6 of this Agreement or from providing the access and use of the Services
to third parties supporting the Company in accordance with Section 2.3 of
this Agreement.
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9.5. No Other Licenses. Except as set forth in this Section 9 and in Section
13.4, with respect to licenses and rights granted upon a termination or
expiration of this Agreement, no other licenses or rights (including
without limitation licenses or rights under patents) are granted under
this Agreement.
9.6. Assignments. To the extent that by operation of law, any of the Materials
may not be owned by a Party to which ownership has been allocated under
this Article 9, each Party agrees to promptly assign, or cause to be
assigned, and take such actions and execute and deliver such documents as
shall be necessary or appropriate to effect such assignment (including,
without limitation, the intellectual property rights directly appurtenant
to such Materials) without further consideration.
9.7. Other Agreements. The assignment of ownership rights and the grant of
certain license rights by Company to Provider provided for in this Article
9 shall be expressly subject to the terms of any Software or Hardware
agreements that may limit Company's ability to make such an assignment or
grant to Provider, such as, for example, the terms of any license
agreement included in the SOFTWARE RIGHTS SCHEDULE (SCHEDULE F) or
HARDWARE RIGHTS SCHEDULE (SCHEDULE M) that may reserve some or all of such
rights to the licensor under such license agreement. Following the
Effective Date, Company will use commercially reasonable efforts to
identify any such restrictions, secure any waiver of any confidentiality
or similar provisions necessary to notify Provider of such restrictions,
and provide Provider with descriptions or abstracts of such provisions,
subject to the receipt of any such waivers necessary to make such
disclosures.
ARTICLE 10. CONFIDENTIALITY
10.1. Covenants. Company and Provider will each refrain from disclosing, will
hold as confidential and will use the same level of care to prevent
disclosing to third parties, the Proprietary Information of the other
Party as it employs to avoid disclosure, publication or dissemination of
its own information of a similar nature but in no event less than a
reasonable standard of care. Notwithstanding the foregoing, the Parties
may disclose Proprietary Information in the case of Company, to members of
the Company Group, to auditors in accordance with Section 2.8, to third
parties permitted to access the Services under Section 2.3 and in the case
of both Parties, the authorized contractors and subcontractors involved in
providing, accessing and using the Services under this Agreement where:
(i) such disclosure is necessary to further the purposes of this
Agreement; (ii) such receiving parties agree in writing to observe the
confidentiality and restricted use and disclosure covenants and standards
of care set forth in this Article 10 and under which the disclosing Party
is a third party beneficiary for all purposes; and (iii) the receiving
Party making the disclosure assumes full responsibility for the acts or
omissions of such other receiving parties.
Neither Company nor Provider shall use the Proprietary Information of the
other Party except in the case of Provider and its subcontractors, in
connection with the performance of the Services and as otherwise
specifically permitted in this Agreement, and in the case of Company, its
contractors, other members of the Company Group and other permitted
recipients of Provider's Proprietary Information, as specifically
permitted in this Agreement and in connection with the use of the
Services. Neither Provider nor Company will acquire any right in or assert
any lien against the other Party's Proprietary Information except as
contemplated by this Agreement; or refuse to promptly return, provide a
copy of or destroy such Proprietary Information upon the request of the
disclosing Party.
10.2. Exclusions. Notwithstanding the foregoing, this Article 10 will not apply
to any information which Provider or Company can demonstrate: (a) at the
time of disclosure to it, was in the public domain; (b) after disclosure
to it, was published or otherwise part of the public domain through no
fault of the receiving Party; (c) without a breach of duty owed to the
disclosing Party, was in the possession of the receiving Party at the time
of disclosure to
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it; (d) was received after disclosure to it from a third party who had a
lawful right to and, without a breach of duty owed to the disclosing
Party, did disclose such information to it; or (e) was independently
developed by the receiving Party without reference to Proprietary
Information of the disclosing Party. Further, either Party may disclose
the other Party's Proprietary Information to the extent required by law or
order of a court or governmental agency. However, the recipient of such
Proprietary Information must give the other Party prompt notice and make a
reasonable effort to obtain a protective order or otherwise protect the
confidentiality of such information, all at the disclosing Party's cost
and expense.
10.3. Limitations. The covenants of confidentiality set forth herein (a) will
apply after the Effective Date to any Proprietary Information disclosed to
the receiving Party before and after the Effective Date and [***]*
10.4. Residual Rights. Subject to any agreement between Company and its
personnel, contractors or subcontractors, or between Provider and its
personnel, contractors, or subcontractors, and notwithstanding any
provision of this Agreement or its Schedules to the contrary, Company,
Provider and their respective personnel, contractors and subcontractors
shall be free to use and employ their respective general skills, know-how
and expertise, and to use, disclose and employ any generalized ideas,
concepts, know-how, methods, techniques or skills gained or learned during
the course of any assignment, so long as they acquire and apply such
information without disclosure of any confidential or proprietary
information of the other Party and without any unauthorized use or
disclosure of the Code or Materials owned by or under license from the
other Party.
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ARTICLE 11. SECURITY
11.1. Data Ownership and Privacy. All Company Information is the exclusive
property of Company. The furnishing of or access to such Company
Information by Provider and/or its subcontractors will not grant to
Provider and/or its subcontractors any express or implied license to or
interest in the Company Information. Provider hereby waives any interest,
title, lien or right to any such Company Information. Company Information
shall not be (i) used by Provider except as required to perform the
Services pursuant to this Agreement, (ii) disclosed, sold, assigned,
leased, or otherwise provided to third parties by Provider other than to
subcontractors and vendors participating in the provision of the Services
in accordance with the terms of this Agreement and to the extent necessary
for such subcontractors and vendors to perform their services under this
Agreement, (iii) commercially exploited by or on behalf of Provider, its
employees, subcontractors and agents, or (iv) used by Provider, during and
after the term hereof, to solicit Company employees, directly or
indirectly, on behalf of itself or others for any purpose which is not
directly in furtherance of Provider's obligations with respect to Affected
Employees as set forth herein. Provider's use and handling of all data
shall at all times be in accordance with its obligations under Section
2.10, all data privacy and protection laws and regulations as well as
Company's data privacy requirements as set forth on the DATA PRIVACY AND
SECURITY PROCEDURES SCHEDULE. Company shall be entitled from time to time
during the Term and until such time as the Company Information is returned
to Company following expiration or termination of this Agreement to
supplement its data privacy requirements and any resulting impact on the
arrangements contemplated under this Agreement will be addressed in
accordance with the Change Control Procedures. Upon request by Company at
any time and from time to time during the Term and until such time as the
Company Information is returned to Company following expiration or
termination of this Agreement and without regard to the default status of
the Parties under this Agreement, Provider and/or its subcontractors shall
promptly deliver to Company its Company Information in electronic (tape)
format and in such hard copy as existing on the date of the request by
Company.
11.2. Data Security. Provider will establish and maintain electronic and
physical safeguards against unauthorized access, destruction, loss,
accidental or unauthorized deletion, disclosure or alteration of the
Company Information under Provider's control that are required by
applicable law and/or agreed to by the Parties, which will in no event be
less rigorous than (a) those safeguards set forth on the DATA PRIVACY AND
SECURITY PROCEDURES SCHEDULE, and (b) applicable industry standards.
Company shall be entitled from time to time during the Term and until such
time as the Company Information is returned to Company following
expiration or termination of this Agreement to supplement the security
procedures to be enforced by Provider in accordance with the Change
Control Procedures. Where Provider provides Company, Company Group, or
their employees, agents and contractors access to Provider systems with
password or other access restrictions, including restrictions to prevent
unauthorized access to portions of Provider systems containing data of
Provider or its other customers, Company agrees to abide by all reasonable
data security policies imposed by Provider.
11.3. Other Security Measures. Portions of the facilities used by Provider to
provide the Services shall be subject to data and records protection and
physical security measures set forth on the DATA PRIVACY AND SECURITY
PROCEDURES SCHEDULE. Provider will provide the Hardware, Software and
other resources required to meet its obligations under this Article 11. If
Provider provides the Services from a physical location or device that is
shared with a third party or used in part on behalf of a third party,
Provider shall develop a process, subject to Company's prior written
approval, to restrict access to the Company Information by Provider's
employees, subcontractors or agents engaged in business activities on
behalf of a third party. Where Provider provides Company, Company Group,
or their employees, agents and contractors access to Provider facilities
with password or other access restrictions, including restrictions to
prevent unauthorized
----------
* Confidential information has been omitted.
Confidential Systems Services Agreement
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<PAGE>
access to portions of Provider facilities containing data of Provider or
its other customers, Company agrees to abide by all reasonable data
security policies imposed by Provider [***]*
ARTICLE 12. TERM AND TERMINATION
12.1. Term. The term of this Agreement will begin as of the Effective Date and
will end as of [***]* (the "Term"), unless earlier terminated or extended
in accordance with the provisions of this Agreement.
12.2. Renewal. Upon expiration of the initial Term, Company may, at its option,
renew this Agreement [***]* The terms and conditions of this Agreement
(including, without limitation, the CHARGES SCHEDULE (SCHEDULE C)), as
amended from time to time, shall govern the renewal term. Company shall
notify Provider of its intent to renew at least [***]* prior to the
expiration of the initial Term. If Company renews either of the Optional
Agreements, Provider may require Company to renew this Agreement for a
concurrent renewal term. This Agreement shall be renewed for additional
renewal terms beyond the initial renewal term as the Parties may in each
instance agree.
12.3. Termination by Company for Cause. Company may terminate this Agreement for
cause immediately upon written notice to Provider by Company, if:
(a) Provider breaches any of its material duties or obligations under
this Agreement and does not cure such breach within [***]* after
notice thereof; provided that if by the nature of the breach a cure
can be achieved, but not within [***]* and that after receipt of
such notice Provider has begun to effect a cure without undue delay,
then Provider shall have such time as is reasonably required to
effect a cure with continuous and diligent effort, in any event not
to exceed [***]* from the date that Provider receives notice from
Company of such event; or
(b) [***]*;or
(c) [***]*; or
(d) Provider breaches its duty in accordance with the Account Governance
Schedule to deliver the plan or to execute against such plan to
remedy a series of non-material or persistent breaches by Provider
that Company perceives in the aggregate to have a significant
adverse impact on the Services and fails to cure such breach within
[***]* after written notice thereof; provided that if by the nature
of the breach a cure can be achieved, but not within [***]* and that
after receipt of such notice Provider has begun to effect a cure
without undue delay, then Provider shall have such time as is
reasonably required to effect a cure with continuous and diligent
effort, in any event not to exceed [***]* from the date that
Provider receives notice from Company of such event; or
(e) Provider becomes insolvent or is unable to pay its debts or enters
into or files (or has filed or commenced against it, unless
dismissed within [***]*) a petition, arrangement, application,
action or other proceeding seeking relief or protection under the
bankruptcy laws of the United States or any similar laws of the
United States or any state of the United States or any other country
or transfers all or substantially all of its assets to another
person or entity in an effort to avoid its obligations to creditors;
or
----------
* Confidential information has been omitted.
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<PAGE>
(f) Provider incurs Damages to Company in excess of the Provider Damages
Cap set forth in Section 14.1 as such Damages are either finally
adjudicated or agreed to by the Parties; or
(g) Company elects to terminate this Agreement for Provider's failure to
perform the Disaster Recovery Services in accordance with the
DISASTER RECOVERY SCHEDULE and Provider fails to cure such
non-compliance within [***]* after written notice from Company of
such non-compliance; or
(h) Company elects to terminate this Agreement upon a continuing Force
Majeure Event as provided for in Section 19.1(c)(ii); or
(i) Company elects to terminate this Agreement upon the occurrence of a
Material Termination Event.
12.4 [***]*
12.5 Termination by Company for Convenience. Company may elect to terminate
this Agreement for its convenience in accordance with the TERMINATION FOR
CONVENIENCE SCHEDULE.
12.6 Termination by Provider. Provider may terminate this Agreement for failure
by Company to pay Charges in accordance with this Agreement (other than
any payment of any invoiced charge that is withheld by Company as
permitted under Section 8.3), which payment remains uncured for a period
of [***]* after written notice thereof from Provider.
ARTICLE 13. EFFECT OF TERMINATION
13.1. Survival of Selected Provisions. Notwithstanding the expiration or earlier
termination of the Services or this Agreement for any reason however
described, the following terms of this Agreement shall survive any such
expiration or termination: (i) Article 7, Article 8, Article 9, Article
10, Article 11, Article 13, Article 14, Article 18, Article 20, Section
2.6, Section 2.8, Section 2.10, Section 5.2, and Section 6.6, (ii) until
the applicable statute of limitations expire, Section 16.1(c), Section
16.2(c) and Section 16.1(e), and (iii) for a period of three (3) years
after the expiration or termination date of this Agreement, Article 15,
Article 16 (except as otherwise provided in clause (ii)), and Article 17.
13.2. Extension. Upon any termination of this Agreement by either Party, or upon
expiration of the Term of this Agreement, Company may extend the Term of
this Agreement for a period not to exceed [***]* after the otherwise
effective date of termination, except that the extension period shall be
limited to [***]* in the event of any termination by Provider under
Section 12.5. If Company elects to extend either of the Optional
Agreements, Provider may require Company to extend this Agreement for a
concurrent extension term. The provisions of this Agreement will remain in
effect during such extension. Company may exercise such option by
providing Provider written notice of its wish to extend (i) following
termination of this Agreement by Company for Cause at least [***]* prior
to the otherwise effective date of termination, (ii) following termination
of this Agreement by Company for other than Cause, at least [***]* prior
to the otherwise effective date of termination, (iii) following
termination of this Agreement by Provider in accordance with Section 12.6
at least [***]* prior to the otherwise effective date of termination, or
(iv) following expiration of this Agreement, at least [***]* prior to the
date of expiration. Except as otherwise agreed between Company and
Provider, payments for Services during such extension will be due on the
standard invoicing terms set forth in Article 8 of this Agreement. If,
however, Provider terminates this Agreement under Section 12.6, Company
must prepay for any charges for System
----------
* Confidential information has been omitted.
Confidential Systems Services Agreement
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<PAGE>
Services within the Hours Cap as a condition to Provider's obligations
under this Section 13.2 and no election to extend shall be effective
unless accompanied by Company's payment in full of all then unpaid
invoices notwithstanding any disputes, provided that Company may reserve
its rights with respect to such disputes.
13.3. Services Transfer Assistance.
(a) During the period after any termination of this Agreement, or
expiration of this Agreement (the "Termination Assistance Period"),
Provider will perform the termination assistance services in
accordance with the Termination Assistance Plan set forth on the
TERMINATION ASSISTANCE PLAN SCHEDULE. The Parties will use
reasonable efforts to limit the Termination Assistance Period to no
more than [***]* after the termination or expiration of this
Agreement.
(b) The Parties agree that Provider will be compensated for any
Termination Assistance Services provided by Provider that require
the use of different or additional services or resources beyond that
which Provider is then using to provide the Services in accordance
with the Service Levels. In that event, Provider's request for
Termination Assistance Services will be considered New Services to
be provided in accordance with Section 2.13. Except as otherwise
agreed between Company and Provider, payments for Termination
Assistance Services will be due on the standard invoicing terms set
forth in Article 8 of this Agreement. If, however, Provider
terminates this Agreement for cause under Section 12.6, Company must
cure the breach giving rise to termination and will prepay for any
such Termination Assistance Services as a condition to Provider's
obligations under this Section 13.3.
(c) Within [***]* after each anniversary date of this Agreement,
Provider will submit for Company's approval a revised Termination
Assistance Plan, updated by Provider to reflect the then-existing
Company environment in which the Services are provided. Upon
approval by both Parties, each revised Termination Assistance Plan
will be signed by both Parties and attached as an Addendum to the
TERMINATION ASSISTANCE PLAN SCHEDULE.
(d) During the Termination Assistance Period, Provider will provide the
Company Group, its Affiliates, and third parties participating in
the transition activities, with reasonable access to the business
processes, Hardware, Software and other resources (including human
resources) used by Provider to deliver the Services, as necessary to
support the transition of the Services from Provider to performance
by Company or another provider of functions to replace the Services,
provided that (i) any such access does not interfere with Provider's
ability to provide the Services or Termination Assistance Services;
and (ii) such third parties and Company's Affiliates comply with
Provider's security and confidentiality requirements, including
execution of a confidentiality agreement reasonably acceptable to
Provider.
(e) The provisions of this Agreement will remain in effect during the
Termination Assistance Period.
13.4. Other Rights. At the expiration or earlier termination of this Agreement
for any reason, however described, and continuing through any extension,
renewal and Termination Assistance Period, Provider agrees that:
(a) Provider will cease using all Hardware, Software and other resources
made available by Company to Provider for purposes of performing the
Services.
(b) Provider will sell to Company at Company's request all other
Hardware and tangible property that are owned by Provider and which
on the date of expiration or termination of
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<PAGE>
this Agreement Provider is using on a dedicated basis to perform the
Services. Company will pay Provider in such event [***]* In the case
of property that Provider is leasing, Provider agrees to permit
Company or its designee to either buy-out the lease on such property
and purchase the property from the lessor or assume the lease(s) and
secure the release of Provider thereon. Company shall be responsible
for any sales, use or similar taxes associated with such purchase of
such property or the assumption of such leases.
(c) Provider will grant to the members of the Company Group and their
Affiliates an irrevocable, nonexclusive, worldwide, perpetual,
paid-up source code and object code and Script Language license to
use, execute, operate, reproduce, display, perform, distribute,
modify, develop and personalize, and create Derivative Works from,
the Derivative Code, Code and Works created by Provider specifically
for purposes of providing the Services under this Agreement as a
part of and in connection with the Company Group Business, and the
right to sublicense third parties to do any of the foregoing, but
this does not obligate Provider to provide any Code or Works that
are owned by third parties and licensed by Provider to the extent
such Software is otherwise addressed in Section 13.4(f).
(d) [***]*
(e) [***]* At Company's option, Provider will recommend a mutually
agreeable commercially available substitute, if available, to
perform the same function.
(f) For generally available third party Software which on the date of
expiration or termination of this Agreement Provider is using:
(i) solely to provide the Services to the Company Group, subject
to all required third party consents and the payment of all
required fees or charges in accordance with Subsection (iii)
below, Provider will assign its license, if any, to such
Software to Company or its designee subject to assumption by
Company or its designee of all obligations of Provider
thereunder (other than obligations of Provider arising before
the effective Date of the assignment) [***]*; and
(ii) to provide Services to the Company Group and other customers
in a shared environment, Provider will provide reasonable
assistance to Company in obtaining licenses for such Software;
and
(iii) [***]*
(g) Subject to all required third party consents, upon Company's
request, Provider will transfer or assign to Company or its
designee, subject to assumption by Company or its designee of all
obligations of Provider thereunder (other than obligations of
Provider arising before the effective date of the assignment) on
mutually acceptable terms and conditions, any third party agreements
applicable solely to services being provided to Company (such as
machine maintenance, disaster recovery or other such services)
[***]*
(h) Provider will use commercially reasonable efforts not including the
payment of license fees to negotiate license arrangements with third
parties that will minimize the amount of license and maintenance
agreement transfer and assignment fees to be paid by Company under
this Section 13.4. Company may participate in the negotiation of
such license and maintenance agreement arrangements. Provider shall
provide reasonable advance written notice to Company of such
anticipated negotiations.
----------
* Confidential information has been omitted.
Confidential Systems Services Agreement
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<PAGE>
(i) Company shall have the right to make offers of employment to any or
all Provider employees who devote a substantial portion of their
time and effort to the performance of the Services for the Company
Group hereunder (the "Services Employees"). Provider agrees that
promptly after either Party sends the other Party written notice of
termination or expiration, Provider shall supply Company at no
charge with the names and resumes requested by Company for the
purpose of exercising its rights under this Section 13.4; provided
that no name or resume for a specific employee shall be provided to
Company until after Provider has notified the employee of Company's
interest and obtained the employee's consent. Provider will waive
any provision of any Provider/employee employment contract or
covenant that may otherwise limit the right of any such employee to
accept employment with the Company Group.
(j) Provider will provide appropriate training for the employees of
Company or a third party provider who will be assuming
responsibility for operating any Software, Hardware or other
resources used by Provider in performing the Services that are being
licensed or transferred to Company.
(k) Upon Company's request, Provider will provide Company reasonably
detailed specifications for the Hardware and Software or other
resources used by Provider in performing the Services needed by
Company to properly provide the Services.
(l) All Software, Code, Works, Derivative Works, etc. provided under
this Section 13.4 (i) are provided as is with no warranties
whatsoever other than a warranty that to the best knowledge of
Provider such Materials do not infringe any intellectual property
right of any third party together with Provider's agreement to
provide reasonable notice to Company of any subsequent claim of
infringement with respect to such Materials; (ii) are provided
without any obligation by Provider to provide maintenance or support
except as specifically provided in paragraphs (j) and (k) above; and
(iii) other than the license granted by Provider under Section
13.4(c), may be used by Company only for purposes of providing to
Company services in replacement of the Services provided by Provider
under this Agreement.
13.5. Winddown. Upon expiration of this Agreement at the end of the Term or any
extension of the Term effected pursuant to Section 13.2 or the termination
of this Agreement for any reason, but subject to provision of Termination
Assistance Services, Provider will cease performing the Services, and
Company will pay Provider all amounts due as specified in this Agreement
for Services provided and expenses incurred, as specified herein.
ARTICLE 14. LIABILITY
14.1. Damages and Liability Limits.
(a) The liability of each Party and its respective Affiliates,
employees, officers and directors to the other for all Damages
resulting from any claim related to or arising out of this
Agreement, regardless of the form of action that imposes liability,
will be limited in the aggregate to:
(i) for events giving rise to Damages prior to or on the last day
of the third month following the Process Take-On Date, an
amount equal [***]*;
(ii) for events giving rise to Damages after the last day of the
third month following the Process Take-On Date but prior to
the one year anniversary of the Process Take-On
----------
* Confidential information has been omitted.
Confidential Systems Services Agreement
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<PAGE>
Date, an amount equal to [the cumulative fees paid to Provider
by Company (but not including amounts paid [***]* and
(iii) for events giving rise to Damages after the one year
anniversary of the Process Take-On Date, an amount equal to
[***]*
The amounts set forth in (i), (ii) and (iii) above shall collectively be
referred to as the "Damages Cap."
(b) Except the Agreed Damage Exceptions as set forth on the AGREED
DAMAGE EXCEPTIONS SCHEDULE, in no event will either Party or its
respective Affiliates, employees, officers and directors be liable
for any amounts for (i) loss of income, profit or revenue of the
other Party, (ii) incidental, consequential, special or indirect
damages suffered by the other Party or (iii) 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.
14.2. Exclusions. The limitations on liability in this Agreement and the Damages
Cap will not apply to the liability of either Party to the extent such
liability results from (i) the failure of either Party to pay or credit
amounts to be paid or credited under this Agreement such as, but without
limitation, Charges for the Services, termination fees [***]*; (ii) any
infringement of the other Party's intellectual property rights by such
Party; (iii) such Party's breach of its confidentiality obligations under
Article 10 of this Agreement; (iv) Provider's failure to comply with its
payment obligations under Section 19.1(c) of this Agreement; and (v) the
Agreed Damage Exceptions as set forth on the AGREED DAMAGE EXCEPTION
SCHEDULE.
ARTICLE 15. WARRANTIES
15.1. Provider Warranties. Provider warrants, represents and covenants that:
(a) it has, and during the Term will have, and each of the Provider
employees and subcontractors that it will use to provide and perform
the Services has and during the Term will have, the necessary
knowledge, skills, experience, qualifications, rights and resources
to provide and perform the Services in accordance with this
Agreement; and
(b) the Services will be performed for Company in a professional,
diligent and workmanlike manner in accordance with industry
standards applicable to the performance of such services.
15.2. Party Warranties. Each Party hereby represents and warrants that:
(a) it will perform its responsibilities under this Agreement in a
manner that does not infringe, or constitute an infringement or
misappropriation of, any patent, trade secret, copyright or other
intellectual property right of the other Party, the respective
Affiliates of the other Party or any third party;
(b) it has all requisite corporate power and authority to enter, and
fully perform pursuant to, into this Agreement;
(c) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and properly authorized by all requisite corporate action on its
part;
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<PAGE>
(d) this Agreement has been duly executed and delivered by such Party;
and
(e) this Agreement is the legal, valid and binding obligation of such
Party, enforceable against it in accordance with its terms (assuming
the due authorization, execution, and delivery by the other Party).
15.3. Disclaimers. EXCEPT AS PROVIDED IN THIS SECTION 15, THERE ARE NO EXPRESS
WARRANTIES, REPRESENTATIONS, UNDERTAKINGS, OR CONDITIONS (STATUTORY OR
OTHERWISE) BY EITHER PARTY, AND THERE ARE NO IMPLIED WARRANTIES,
REPRESENTATIONS, UNDERTAKINGS, OR CONDITIONS (STATUTORY OR OTHERWISE) BY
EITHER PARTY, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, IN THIS AGREEMENT.
ARTICLE 16. INDEMNITIES
16.1. Indemnity by Provider. Provider will indemnify, defend and hold each
member of the Company Group and their respective officers, directors,
employees, agents, successors, contractors and assigns (each a "Company
Indemnitee") harmless on an as-incurred basis from and against any and all
Losses incurred by any Company Indemnitee arising from or in connection
with:
(a) any Claims of infringement of any patent or any copyright,
trademark, service mark, trade name, trade secret, confidential
information or similar intellectual property right, whether
conferred by contract or arising under law, alleged to have been
incurred because of or arising out of any aspect of the Services
(including without limitation any information technology,
information management and communications services, equipment,
Software or other resources) provided by Provider and/or its
subcontractors in its performance of the Services; provided,
however, that Provider will have no obligation with respect to any
Losses to the extent arising out of or in connection with (i) a
Company Indemnitee's modification of any Software, Hardware or
similar resource provided by a member of the Company Group; (ii) a
Company Indemnitee's combination, operation or use of the equipment,
Software or other resources provided by a Provider Indemnitee with
devices, data, programs or other resources not furnished by a
Provider Indemnitee; or (iii) any use by a Company Indemnitee of
devices, data, programs or other resources furnished by Provider in
a manner materially contravening Provider's express written
instructions to such Company Indemnitee, except to the extent in
each case that any of the activities described in clauses (i), (ii)
or (iii) above was at the written request or direction of, or in
accordance with specifications required by, Provider Indemnitee;
(b) any Claims arising out of personal injuries, death or damage to
tangible personal or real property of third parties including
employees of Provider, its contractors and subcontractors caused by
the tortious conduct, negligence or willful misconduct of Provider,
its employees, Affiliates, agents, contractors or subcontractors;
provided that Provider will have no obligation under this part, to
the extent the same arise out of or in connection with the tortious
conduct, negligence or willful misconduct of a member of the Company
Group or any other Company Indemnitee;
(c) any Claims for Taxes assessed or claimed against the Company Group
which are obligations of Provider under this Agreement (including
the obligations of Provider regarding Taxes described in Section 7.2
of this Agreement) or result from breach of obligations of Provider
under this Agreement, including, without limitation, any fines,
penalties, administrative fees
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<PAGE>
or the like payable by Company to any governmental entity (whether
or not a taxing entity) arising from Provider's failure to comply
with its obligations under this Agreement;
(d) any Claim by a third party (including without limitation employees
of Company or its contractors or subcontractors) resulting from
inadequacies in the physical and data security control systems to
the extent such physical and data security control systems are the
responsibility of Provider under Section 11 of this Agreement and
any act by Provider or any employee, agent, contractor or
sub-contractor of Provider resulting in a breach of Provider's
obligations under Section 11 (including, without limitation, any
theft, conversion, misappropriation, unauthorized disclosure or
other misuse of or unauthorized access to Company's Company
Information);
(e) any Claims for penalties, interest and other charges imposed by a
taxing authority (except the actual taxes payable by Company under
the terms of this Agreement) arising out of or resulting from
Provider's issuance of an incorrect invoice or other information
provided to Company in writing regarding its charges to Company for
the Services to Company;
(f) any Claims by any Affected Employees arising out of or resulting
from their treatment by Provider as employees of Provider and any
Claims resulting from any breach by Provider of its obligations
under the AFFECTED EMPLOYEE ARRANGEMENTS SCHEDULE (SCHEDULE J); and
(g) any Claims arising out of any breach by Provider of Sections 2.10,
10 or 11.
16.2. Indemnity by Company. Company will indemnify, defend and hold Provider,
its Affiliates and their respective officers, directors, employees,
agents, successors and assigns (each a "Provider Indemnitee") harmless on
an as-incurred basis from and against any and all Losses incurred by any
Provider Indemnitee arising from or in connection with:
(a) any Claims of infringement of any patent or any copyright,
trademark, service mark, trade name, trade secret, confidential
information or similar intellectual property right, whether
conferred by contract or arising under law, alleged to have been
incurred because of or arising out of any equipment, materials and
other resources (including without limitation information
technology, information management and communications services
equipment, Software or other resources) provided to Provider by the
Company Group in connection with the performance of the Services;
provided, however, that Company will have no obligation with respect
to any Losses to the extent arising out of or in connection with (i)
a Provider Indemnitee's modification of any Software, Hardware or
similar resource provided by a member of the Company Group; or (ii)
a Provider Indemnitee's combination, operation or use of the
equipment, Software or other resources provided by a Company
Indemnitee and/or its other contractors with devices, data, programs
or other resources not furnished by a Company Indemnitee and/or its
other contractors; or (iii) any use by a Provider Indemnitee of
devices, data, programs or other resources furnished by Company in a
manner materially contravening Company's express written
instructions to such Provider Indemnitee , except to the extent in
each case that any of the activities described in clauses (i) , (ii)
or (iii) above was at the written request or direction of, or in
accordance with specifications required by, Company Indemnitee
and/or its other contractors;
(b) any Claim arising out of or relating to personal injuries, death or
damage to tangible personal or real property of third parties
including employees of the Company Group caused by the tortious
conduct, negligence or willful misconduct of the Company Group or
their employees and agents; provided that Company will have no
obligation, under this part, to the extent the same arise out of or
in connection with the tortious conduct, negligence or willful
misconduct of Provider, its Affiliates , subcontractors or any other
Provider Indemnitee;
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<PAGE>
(c) any Claim for Taxes assessed or claimed against Provider which are
obligations of Company under this Agreement (including the
obligations of Company regarding Taxes described in Section 7.2 of
this Agreement) or result from breach of obligations of Company
under this Agreement, including, without limitation, any fines,
penalties, administrative fees or the like payable by Provider to
any governmental entity (whether or not a taxing entity) arising
from Company's failure to comply with its obligations under this
Agreement;
(d) any Claims by any Affected Employees arising out of or resulting
from their treatment by any member of the Company Group as employees
of the Company Group and Claims resulting from any breach by Company
of its obligations under the AFFECTED EMPLOYEE ARRANGEMENT SCHEDULE
(SCHEDULE J);
(e) any Claims arising out of any breach by Company of Sections 2.10, 10
or 11; and
(f) any Claims arising out of any breach by Company of its obligations
under ERISA except to the extent that such Claims are the result of
or arise out of Provider's breach of its obligations under this
Agreement or any act or omission of Provider in contravention of any
written instructions from Company Group.
16.3. Indemnification Procedures.
(a) Written notice shall be given to the Party that is obligated to
provide indemnification under Sections 16.1 and 16.2 (the
"Indemnifying Party"), if any civil, criminal, administrative or
investigative action or proceeding is commenced or threatened by a
third party (any of the above being a "Claim") against any Party
entitled to receive indemnification under Sections 16.1 and 16.2
(the "Indemnified Party"). Such notice shall be given as promptly as
practicable but in all events, within a period that will not
prejudice the rights of the Indemnified Party under this Agreement
or to defend the Claim. After such notice, if the Indemnifying Party
acknowledges in writing to the Indemnified Party that this Agreement
applies with respect to such Claim, then the Indemnifying Party
shall be entitled to take control of the defense and investigation
of such Claim and to employ and engage attorneys of its sole choice
to handle and defend the same, at the Indemnifying Party's sole cost
and expense. The Indemnifying Party must deliver written notice of
its election to take control of the claim to the Indemnified Party
not fewer than [***]* prior to the date on which a response to such
Claim is due or such lesser period as is reasonable given the nature
of the Claim and the notice and response time permitted by law or
the facts and circumstances.
(b) The Indemnified Party shall cooperate in all reasonable respects
with the Indemnifying Party and its attorneys in the investigation,
trial, defense and settlement of such Claim and any appeal arising
therefrom. The Indemnified Party may participate in such
investigation, trial, defense and settlement of such Claim and any
appeal arising therefrom, through its attorneys or otherwise, at its
own cost and expense. No settlement of a Claim 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.
(c) After notice to the Indemnified Party of the Indemnifying Party's
election to assume full control of the defense of any such Claim,
the Indemnifying Party shall not be liable for any legal expenses
incurred thereafter in connection with the defense of that Claim by
the Indemnified Party. If the Indemnifying Party does not promptly
assume full control over and diligently pursue the defense of a
Claim as provided in this Section 16.3, the Indemnified Party shall
have the right to defend, settle or otherwise resolve the Claim in
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* Confidential information has been omitted.
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such manner as it may deem appropriate, at the cost and expense of
the Indemnifying Party, and the Indemnifying Party may participate
in such defense, at its sole cost and expense. In no event shall any
settlement of the Claim require the consent of the Indemnifying
Party, unless the Indemnifying Party is required to be a party to
such settlement agreement.
16.4. Clarifications. In the event and to the extent that a Claim is made
against an Indemnitee by an employee of the Indemnifying Party or its
contractors or subcontractors, the Parties agree that the Indemnifying
Party shall indemnify and hold harmless the Indemnitee to the same extent
as if the Claim were made by a non-employee of the Indemnifying Party, its
contractors or subcontractors.
16.5. Primary Indemnification. The indemnification provided by each Indemnifying
Party hereunder shall be primary and immediate. Accordingly, in addition
to other provisions herein, and in order to render the Parties' intent and
this indemnification agreement fully enforceable, each Indemnifying Party,
in an indemnification claim hereunder, expressly and without reservation
waives any defense or immunity it may have under any statute or judicial
decision disallowing or limiting such indemnification and consents to a
cause of action for indemnity. This waiver and consent to indemnification
is made irrespective of and specifically waiving any defense or immunity
under any statute or judicial decision.
ARTICLE 17. INSURANCE
17.1. Provider Insurance. During the term of this Agreement, Provider will
maintain the insurance coverages specified in the INSURANCE SCHEDULE in
amounts no less than the coverage amounts set forth on the INSURANCE
SCHEDULE. Except for workers' compensation insurance and errors and
omissions insurance, Company shall be named as an additional insured on
all such required policies, and as such the carriers shall undertake to
provide at least [***]* prior written notice of cancellation or
modification of such policies. No such cancellation, modification or
change shall affect Provider's obligation to maintain the insurance
coverages required by this Agreement. The coverage afforded under any
insurance policy obtained by Provider pursuant to this Agreement shall be
primary coverage regardless of whether or not Company has similar
coverage. Provider and its contractors and subcontractors shall not
perform under this Agreement without the prerequisite insurance. Upon
Company's request, Provider shall provide Company with certificates of
such insurance including renewals thereof. The minimum limits of coverage
required by this Agreement may be satisfied by a combination of primary
and excess or umbrella insurance policies. If Provider or its contractors
or subcontractors shall fail to comply with any of the insurance
requirements herein, upon written notice to Provider by Company and a
[***]* cure period, Company may, without any obligation to do so, procure
such insurance and Provider shall pay Company the cost thereof plus a
reasonable administrative fee as designated by Company. The maintenance of
the insurance coverages required under this Agreement shall in no way
operate to limit the liability of Provider to Company under the provisions
of this Agreement. The Parties do not intend to shift all risk of loss to
insurance. The naming of Company as additional insured is not intended to
be a limitation of Provider's liability and shall in no event be deemed
to, or serve to, limit Provider's liability to Company to available
insurance coverage or to the policy limits specified in this Section 17.1,
nor to limit Company's rights to exercise any and all remedies available
to Company under contract, at law or in equity.
17.2. Mutual Waiver of Subrogation.
(a) To the extent permitted by law and applicable insurance policies,
Provider, its contractors, subcontractors, and their respective
insurers hereby waive their rights of subrogation against the
Company Group and their respective directors, officers, employees
and agents for any
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loss or damage to the Provider provided machines, Provider Software,
and other tangible and intangible, real and personal property of
Provider, its contractors and subcontractors resulting from
operations in connection with this Agreement. Each property and
workers' compensation insurance policy of Provider, its contractors
and subcontractors shall be endorsed to provide a waiver of any and
all rights of subrogation against the Company Group and their
respective directors, officers, employees and agents for loss
resulting from operations in connection with this Agreement.
(b) To the extent permitted by law and applicable insurance policies,
Company, its directors, officers, employees and agents hereby waive
their rights of subrogation against Provider, its contractors and
subcontractors for any loss or damage to the Company provided
Hardware, Software, office furnishings and other tangible and
intangible, real and personal property of Company, its directors,
officers, employees and agents resulting from operations in
connection with this Agreement. Each property and worker's
compensation insurance policy of Company shall be endorsed to
provide a waiver of any and all rights of subrogation against
Provider, its contractors and subcontractors for loss resulting from
operations in connection with this Agreement.
ARTICLE 18. DISPUTE RESOLUTION
18.1. Dispute Resolution Process. All disputes will be subject to the Dispute
Resolution Process set forth in the DISPUTE RESOLUTION SCHEDULE.
18.2. Continued Performance. The Parties agree to continue performing their
respective obligations under this Agreement while the dispute is being
resolved unless and until such obligations are terminated or expire in
accordance with the provisions of this Agreement.
ARTICLE 19. FORCE MAJEURE
19.1. Force Majeure.
(a) Neither Party shall be liable for any default or delay in the
performance of its obligations hereunder if and to the extent and
while such default or delay is caused, directly or indirectly, by
fire, flood, earthquake, elements of nature or acts of God, acts of
war, terrorism, riots, civil disorders, rebellions or revolutions in
the United States, strikes, lockouts, or labor difficulties or any
other similar cause beyond the reasonable control of such Party
other than strikes, lockouts, or labor difficulties initiated by
such Party's or its subcontractor's employees; provided such default
or delay could not have been prevented by reasonable precautions and
cannot reasonably be circumvented by the nonperforming Party through
the use of alternate sources, work-around plans or other means,
(individually, each being a "Force Majeure Event").
(b) If a Force Majeure Event occurs, the nonperforming Party will be
excused from any further performance or observance of the
obligation(s) so affected for as long as such circumstances prevail
and such Party continues to use commercially reasonable efforts to
recommence performance or observance whenever and to whatever extent
reasonably possible without delay. Any Party so delayed in its
performance will immediately notify the other by telephone and
describe at a reasonable level of detail the circumstances causing
such delay (to be confirmed in writing within [***]* after the
inception of such delay).
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(c) If any Force Majeure Event substantially prevents, hinders, or
delays performance of the Services necessary for the performance of
Company's critical functions for more than [***]* then Company may
at its option:
(i) subject to SECTION 19.2, procure such Services from an
alternate source until Provider is able to provide the
Services. During the Force Majeure Event, Provider will
directly and timely pay the alternate source the full amount
charged by such alternate source for the provision of such
Services to Company until such time as Provider is able to
restore the Services and meet the Service Levels, but in no
event for more than [***]*; or
(ii) if Provider has been unable to restore the Services without
aid of such alternative source within [***]* Company may
terminate this Agreement as of a date specified by Company in
a written notice of termination to Provider, and Company will
pay all Charges due and payable through the termination date
so specified by Company in its notice to Provider. If Company
elects such termination, Company shall not be obligated to pay
any other termination or other fees, however described, to
Provider, except charges for Termination Assistance Services.
19.2. Exceptions. Section 19.1 does not limit or otherwise affect Provider's
obligation to provide Disaster Recovery Services in accordance with
Section 2.7. In the event of a Force Majeure Event affecting Company,
Section 19.1 will not limit or otherwise relieve Company's obligation to
pay any monies due Provider under the terms of this Agreement.
ARTICLE 20. GENERAL TERMS
20.1. Governing Law. This Agreement and any and all claims and disputes arising
out of or in connection with or related to the relationships and
arrangements between the Company Group and Provider described in this
Agreement will be governed by and construed in accordance with the laws of
the State of New York (to the extent not preempted by federal law),
exclusive of its conflicts of laws provisions.
20.2. Choice of Forum. Subject to the Dispute Resolution Process, the Parties
hereby (i) agree that the courts sitting in New York, New York shall have
exclusive jurisdiction over the actions arising out of or related to or in
connection with this Agreement and the subject matter of this Agreement,
whether in contract tort, or any other form of action ("Action"); (ii)
agree to initiate any such Action against the other Party only in such
courts; (iii) agree that they shall not raise any defense to the lawful
jurisdiction of such courts; and (iv) agree that they shall not attempt
the removal of any Action to any other court, whether local, state or
federal courts of the United States or the courts of any other country.
20.3. Relationship of the Parties. This Agreement shall not be construed as
constituting either Party as partner of the other or to create any other
form of legal association that would impose liability upon one Party for
the act or failure to act of the other. This Agreement shall not be
construed as providing either Party with the right, power or authority
(express or implied) to create any duty or obligation of the other Party,
except to the limited extent consistent with the appointment of Provider
as Company's representative pursuant to Section 3.3. Each Party shall be
responsible for the management, direction and control of its employees and
such employees shall not be employees of the other Party. It is the mutual
intent and understanding of the Parties that each Party in performing its
obligations under this Agreement shall be an independent contractor
engaged in the business of providing such services.
Confidential Systems Services Agreement
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<PAGE>
20.4. Publicity. Each Party will submit to the other Party all advertising,
written sales promotion, press releases and other publicity matters
relating to this Agreement in which the other Party's name or mark is
mentioned or language from which the connection of said name or mark may
be inferred or implied, and will not publish or use such advertising,
sales promotion, press releases, or publicity matters without prior
written approval of the other Party. However, either Party may include the
other Party's name, and a factual description of the work performed under
this Agreement with language substantially equivalent to language approved
in a previously published press release, on employee bulletin boards, in
its list of references and in the experience section of proposals to third
parties, in internal business planning documents and in its annual report
to stockholders, and whenever required by reason of legal, accounting or
regulatory requirements.
20.5. Entire Agreement, Updates, Amendments and Modifications. This Agreement,
including all Schedules attached hereto, constitute the entire agreement
of the Parties with regard to the Services and matters addressed therein,
and all prior agreements, letters, proposals, discussions and other
documents regarding the Services and the matters addressed in this
Agreement (including the Schedules) are superseded and merged into this
Agreement (including the Schedules). Updates, amendments and modifications
to this Agreement may not be made orally, but shall only be made by a
written document signed by both Parties. Any terms and conditions varying
from this Agreement (including the Schedules) on any order or written
notification from either Party shall not be effective or binding on the
other Party.
20.6. Waiver. No waiver of any breach of any provision of this Agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provisions hereof.
20.7. Severability. If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable by any court or other tribunal with
jurisdiction over any proceeding relating to such provision, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby, and such provision shall be deemed to
be restated to reflect the Parties' original intentions as nearly as
possible in accordance with applicable law(s).
20.8. Counterparts. This Agreement shall be executed in counterparts. Each such
counterpart shall be an original and together shall constitute but one and
the same document.
20.9. Binding Nature and Assignment. This Agreement will be binding on the
Parties and their respective successors and permitted assigns. Except as
provided in this Section 20.9, neither Party may, or will have the power
to, assign this Agreement without the prior written consent of the other,
[***]* The assigning Party shall remain fully liable for and shall not be
relieved from the full performance of all obligations under this
Agreement. Any attempted assignment that does not comply with the terms of
this Section 20.9 shall be null and void.
20.10. Notices.
(a) Under this Agreement whenever one Party is required or permitted to
give notice to the other Party, such notice will be in writing
unless otherwise specifically provided herein and will be deemed
given when delivered in hand, one (1) day after being given to an
express courier with a reliable system for tracking delivery, or
five (5) days after the day of mailing, when mailed by United States
mail, registered or certified mail, return receipt requested,
postage prepaid.
(b) Notifications will be addressed as follows:
(i) For all notices:
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<PAGE>
In the case of Company:
[***]*
In the case of Provider:
[***]*
(ii) For notices relating to termination, breach or default,
also notify:
In the case of Company:
[***]*
In the case of Provider:
[***]*
Either Party may from time to time change its address for notification
purposes by giving the other prior written notice of the new address and
the date upon which it will become effective.
20.11. No Third Party Beneficiaries. The Parties do not intend, nor will any
Section hereof be interpreted, to create for the benefit of any third
party any beneficiary rights with respect to either of the Parties,
except each member of the Company Group shall be a third party
beneficiary under this Agreement.
20.12. Other Documents. Upon request of the other Party, on or after the
Effective Date and the date(s) of any amendments or revisions hereto each
Party shall furnish to the other a certificate of an executive officer
confirming that this Agreement and any amendment or revision hereto has
been duly executed and delivered on behalf of such Party.
20.13. Consents and Approvals. The Parties agree that in any instance where
consent, approval or agreement is required of a Party in order for the
other Party to perform under or comply with the terms and conditions of
this Agreement, then such Party will not unreasonably withhold or delay
such consent, approval or agreement, and where consent, approval or
agreement cannot be provided, the Party shall notify the other Party in a
timely manner.
[Signatures on Next Page]
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<PAGE>
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
executed on its behalf by its duly authorized officer, all as of the day and
year first written above.
PROVIDER:
EXULT, INC.
Signature:______________________________
[***]*
COMPANY:
INTERNATIONAL PAPER COMPANY
Signature:______________________________
[***]*
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Confidential Systems Services Agreement
Page 33
<PAGE>
APPENDIX A
GLOSSARY
TO
SYSTEMS SERVICES AGREEMENT
BETWEEN
INTERNATIONAL PAPER COMPANY
AND
EXULT, INC.
This Glossary contains the definitions of the capitalized terms used in
the Master Services Agreement between International Paper Company and Exult,
Inc. dated as of the Effective Date.
Action has the meaning given in Section 20.2.
Additional Agreements has the meaning given in the
ADDITIONAL AGREEMENTS SCHEDULE..
Affected Employees has the meaning given in Section 1.0
of the AFFECTED EMPLOYEE ARRANGEMENTS
SCHEDULE (SCHEDULE J) relating to the
individuals who are listed in the
AFFECTED EMPLOYEES SCHEDULE (SCHEDULE
D), as such Schedule is updated from
time to time after the Effective Date.
Affiliates means, with respect to a Party, any
entity at any time Controlling,
Controlled by or under common Control
with such Party.
Agreed Damages Exceptions means those matters set forth on the
AGREED DAMAGE EXCEPTIONS SCHEDULE that
are not subject to certain limitations
and waivers of liability set forth in
Article 14 of this Agreement.
Agreement means this Systems Services Agreement
and the Schedules referenced herein.
Benchmark Process has the meaning given in the
BENCHMARKING SCHEDULE.
Confidential Glossary to Systems Services Agreement
<PAGE>
Cause means termination of this Agreement by
Company pursuant to Section 12.3 of
this Agreement.
Change Control Procedures means the change control process set
forth on the CHANGE CONTROL SCHEDULE.
Change of Control [***]*
Charges means the charges, project fees,
charges for New Services, and any
other charges, each as described in
the CHARGES SCHEDULE (SCHEDULE C).
Claim has the meaning given in
Section 16.3(a).
COBRA means the Consolidated Omnibus Budget
Reconciliation Act of 1985 and any
regulations promulgated thereunder.
Code means computer programming code,
including Source Code, Object Code and
Script Language code.
Company has the meaning given in the first
paragraph of this Agreement.
Company Group means individually and collectively
Company and any of its existing and
future Affiliates [***]*
Company Group Business means the businesses engaged in by the
Company Group.
Company Indemnitee has the meaning given in Section 16.1.
Company Information means the Company Confidential
Information, the Company Trade Secrets
and any and all other data or
information of any kind owned or held
in custody by any member of the
Company Group, including, without
limitation, all records and reports
related to the Company Group, the
Company Group Business and the
Services and employee related data.
Company Software Assets means the Software owned by or
licensed to Company listed in the
SOFTWARE RIGHTS SCHEDULE (SCHEDULE F).
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Confidential Glossary to Systems Services Agreement
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<PAGE>
Company Support Services means the information technology
services provided or to be provided by
Affected Employees.
Confidential Information means any and all proprietary business
information in the possession of the
disclosing Party treated as secret by
the disclosing party (that is, it is
the subject of efforts by the
disclosing Party or its Affiliates
that are reasonable under the
circumstances to maintain its secrecy)
that does not constitute a Trade
Secret, including, without limitation,
any and all proprietary information in
the possession of such Party of which
the receiving Party becomes aware as a
result of its access to and presence
at the other Party's facilities.
Control, Controlling, or Controlled means possessing, directly or
indirectly, the power to direct or
cause the direction of the management
and policies of an entity, whether
through ownership of voting
securities, by contract or otherwise.
Damages mean actual, direct, damages incurred
by the claiming Party which include
the following non-exhaustive examples,
in the case of Company: (i) the costs
of cover incurred by the Company Group
to obtain services which are the same
as or substantially similar to the
Services; (ii) the costs to correct
any deficiencies in the Services
rendered by Provider; (iii) the costs
incurred by the Company Group to
transition to another services
provider and/or to take some or all of
such functions and responsibilities
in-house; and (iv) the difference in
the amounts to be paid to Provider
hereunder and the charges to be paid
to such other provider and/or the
costs of providing such functions,
responsibilities and tasks in-house.
Damages Cap has the meaning given in Section 14.1.
Derivative Code means Code that satisfies the
definition of a Derivative Work.
Derivative Work shall mean a work that is based upon
one or more preexisting works, such as
a revision, modification, translation,
abridgement, condensation, expansion,
Confidential Glossary to Systems Services Agreement
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<PAGE>
or any other form in which a
preexisting work may be recast,
transformed, or adapted, and that, if
prepared without the authorization of
the owner of the preexisting work,
would constitute a copyright
infringement.
Disaster Recovery Services means the Services described in the
DISASTER RECOVERY SCHEDULE.
Dispute Resolution Process has the meaning given in the DISPUTE
RESOLUTION SCHEDULE.
Effective Date means October 18, 2001, at 12:00 am,
CST.
Employee Service Center means the portion of the Company's
facility located at 4049 Willow Lake
Boulevard, Willow Lake Business Park,
Memphis, Tennessee 38118 through which
Company performs human resources
related functions.
ERISA means the Employee Retirement Income
Security Act of 1974 and any
regulations promulgated thereunder.
Event-Related Damages means the aggregate amount of Damages
to Company, plus any amounts that
Company is entitled to recover from
Provider under Section 16.1(c), that
collectively are caused by an event or
series of related events with respect
to which a Service Credit is paid or
credited.
Fees at Risk has the meaning set forth in CHARGES
SCHEDULE (SCHEDULE C).
Force Majeure Event has the meaning given in Section 19.1.
Glossary means this Appendix A Glossary to the
Systems Services Agreement.
Hardware means 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
Confidential Glossary to Systems Services Agreement
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<PAGE>
intended for the processing, input,
output, storage, manipulation,
communication, transmission and
retrieval of information and data.
HIPAA means the Health Insurance Portability
and Accountability Act of 1996 and any
regulations promulgated thereunder.
Hours Cap has the meaning set forth in CHARGES
SCHEDULE (SCHEDULE C).
Human Resources Services Agreement means that certain Human Resources
Services Agreement, dated as of
October 18, 2001, entered into between
the parties.
Indemnified Party has the meaning given in Section 16.3.
Indemnifying Party has the meaning given in Section 16.3.
Initial Services Period shall mean the period beginning on the
Process Take-On Date and ending on the
later of (a) December 31, 2002, or (b)
the date Project Viking is completed
and implemented according to the
current implementation plan.
Key Performance Indicators or KPIs has the meaning given in the SERVICE
LEVELS SCHEDULE (SCHEDULE B).
Losses means all losses, liabilities,
damages, penalties and claims
(including taxes and all related
interest and penalties incurred
directly with respect thereto), and
all related costs, expenses and other
charges (including all reasonable
attorneys' fees and reasonable costs
of investigation, litigation,
settlement judgment, interest and
penalties).
Maintenance Release means those software fixes and updates
provided by vendors of the Software as
part of normal maintenance service for
the software, such as, for example,
software point releases.
Material Termination Event means the termination for cause by
Company of the Human Resources
Services Agreement or the Technical
Services Agreement.
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<PAGE>
Materials means expressions of literary works or
other works of authorship, Code and
other development works of any kind
(such as programs, program listings,
programming tools, documentation,
reports, drawings and similar works)
that are developed by Provider,
Company, or by Provider and Company
(or the contractors or subcontractors
of either Party), under or in
connection with this Agreement.
Migration Date [***]*
Minor Enhancements has the meaning given in the CHARGES
SCHEDULE (SCHEDULE C).
New Services has the meaning given in Section 2.13.
Object Code is the version of Software that exists
in the form of binary-coded machine
instructions that may be specific to a
CPU or computer model or family. It is
sometimes called operating code or
machine language. Object Code is
created by using programs called
assemblers, compilers and interpreters
to convert the Source Code written by
human software developers into the
binary machine language the computer
understands.
Optional Agreements means the Human Resources Services
Agreement and the Technical Services
Agreement.
Parties means Company and Provider as
identified on the initial page of this
Agreement.
Party means Company or Provider as detailed
on the initial page of this Agreement.
Pre-Existing Property means any product, Code, property,
works or other subject matter of any
kind owned or licensed by either
Party, its Affiliate, sub-contractors
or licensors independent from, or
prior to the commencement date of, the
applicable development or deployment
activity under this Agreement.
Process Take-On Date has the meaning given in Section 5.1.
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<PAGE>
Proprietary Information means collectively the Confidential
Information and Trade Secrets.
Proprietary Information also includes
information which has been disclosed
to either Party by a third party which
such Party is obligated to treat as
confidential or secret.
Provider has the meaning given in the first
paragraph of this Agreement.
Provider Managers has the meaning given in Section 6.3.
Provider Indemnitee has the meaning given in Section 16.2.
Related Documentation means, with respect to Software,
documentation, as relevant to the
scope of the license for the
particular Software, that describes
the function and use (and installation
and operation) of such Software, which
may include the specifications,
technical manuals, user manuals,
procedures manuals, system manuals,
flow diagrams, and file descriptions.
Relationship Manager has the meaning given in the ACCOUNT
GOVERNANCE SCHEDULE.
Retained Agreements has the meaning given in the SOFTWARE
RIGHTS SCHEDULE (SCHEDULE F).
Reporting Service Levels or RSL's has the meaning given in the SERVICE
LEVELS SCHEDULE (SCHEDULE B).
Right to Use Agreements has the meaning given in the SOFTWARE
RIGHTS SCHEDULE (SCHEDULE F).
Schedules means the schedules to this Agreement.
Script Language is a high-level command language that
is interpreted by the computer
(translated on the fly) without having
to be compiled. Script Language is
usually used to write scripts for
limited functions that augment an
application or system program. Macros
and communications program scripts are
other examples. Script Language is not
a general-purpose programming
language. Examples, of Script Language
include Hyper-Text Mark-up Language
(HTML) and Microsoft's Visual Basic
for Applications (VBA).
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<PAGE>
Service Credits has the meaning set forth in the
CHARGES SCHEDULE (SCHEDULE C).
Service Levels means the service levels and
performance responsibilities under
which the Services will be provided,
which shall include Key Performance
Indicators and Reporting Service
Levels. The Service Levels are
described in the SERVICE LEVELS
SCHEDULE (SCHEDULE B).
Services means the Services to be provided by
Provider as set forth in the SERVICES
SCHEDULE (SCHEDULE A), the TRANSITION
PLAN SCHEDULE (SCHEDULE G) and the
other Schedules to this Agreement and
as those services may evolve and be
supplemented and enhanced during the
Term. Any New Services are included
among the Services once Company
accepts Provider's quote pursuant to
Section 2.13(b) and elects to have
Provider perform the New Services.
Services Employees has the meaning given in Section
13.4(i).
Similar Services has the meaning given in Section 1.6.
Software means and includes, as relevant to the
scope of the license for the
particular Software, Script Languages,
Source Code or Object Code versions of
any computer programs (including
operating system programs, computer
utilities programs), and Related
Documentation, in whatever format or
media, including the tangible media
upon which such programs and Related
Documentation are recorded or printed.
Source Code means the version of Software that
exists in the form of statements and
instructions written by, and readable
by, a human Software developer. Source
Code is not directly executable by a
computer, but must first be converted
into Object Code by compilers,
assemblers or interpreters. Source
Code differs from Script Language
which is both readable by a human
software developer and is executable
by a computer without compiling or
assembling.
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<PAGE>
System Services has the meaning given in the CHARGES
SCHEDULE (SCHEDULE C).
Tax Claim has the meaning given in Section 7.2.
Taxes means foreign, federal, state and
local sales, use, gross receipts,
excise, telecommunications, value
added, goods and services, provincial
sales, other similar types of transfer
taxes, duties, fees or charges
(including any related penalties,
additions to tax, and interest),
however designated or imposed, which
are in the nature of a transaction
tax, duty, fee or charge, but not
including any taxes, duties, fees or
charges imposed on or measured by net
or gross income (other than any such
taxes which are in the nature of
transaction taxes of the type listed
above), capital stock or net worth or
in the nature of an income, capital,
franchise, or net worth tax.
Technical Services Agreement means that certain Technical Services
Agreement, dated as of October 18,
2001, entered into between the
Parties.
Term has the meaning given in Section 12.1,
and includes any extension or renewal
term arising pursuant to this
Agreement.
Termination Assistance Period has the meaning given in Section 13.3.
Termination Assistance Plan means the plan to be created by
Provider in accordance with the
TERMINATION ASSISTANCE SCHEDULE, under
which plan Provider will assist
Company in transitioning the Services
to Company or to another provider
after termination of the Services
Agreement.
Termination Assistance Services means the termination assistance
services described in Sections 13.3
and 13.4 and the TERMINATION
ASSISTANCE SCHEDULE.
Third Party Agreements means those third party arrangements
listed in the SOFTWARE RIGHTS SCHEDULE
(SCHEDULE F) and the HARDWARE RIGHTS
SCHEDULE (SCHEDULE M).
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<PAGE>
Trade Secrets mean information related to the
services or business of the disclosing
Party or its Affiliates or of a third
party which (a) derives economic
value, actual or potential, from not
being generally known to or readily
ascertainable by other persons who can
obtain economic value from its
disclosure or use; and (b) is the
subject of efforts by the disclosing
Party or its Affiliates that are
reasonable under the circumstances to
maintain its secrecy, including
without limitation (i) marking any
information reduced to tangible form
clearly and conspicuously with a
legend identifying its confidential or
proprietary nature; (ii) identifying
any oral presentation or communication
as confidential immediately before,
during or after such oral presentation
or communication; or (iii) otherwise,
treating such information as
confidential or secret. Assuming the
criteria in sections (a) and (b) above
are met, Trade Secrets include, but
are not limited to, technical and
non-technical data, employee data,
personally identifiable information,
formulas, patterns, compilations,
computer programs and software,
devices, drawings, processes, methods,
techniques, designs, programs,
financial plans, product plans, and
lists of actual or potential customers
and suppliers.
Transition Plan means the Transition Plan described in
the TRANSITION PLAN SCHEDULE (SCHEDULE
G).
Version means major software upgrades that
generally add function to existing
Software and may be provided by the
Software vendor at a fee over and
above the standard software
maintenance costs.
Virus or Viruses means computer instructions (i) that
without functional purpose adversely
affect the operation, security or
integrity of a computing,
telecommunications or other digital
operating or processing system or
environment including without
limitation, other programs, data,
computer libraries and computer and
communications equipment, by altering,
destroying, disrupting or inhibiting
such operation, security or integrity;
(ii) that without functional purpose,
self-replicate written manual
intervention; or (iii) that purport to
Confidential Glossary to Systems Services Agreement
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<PAGE>
perform a useful function but which
actually perform either a destructive
or harmful function, or perform no
useful function and utilize
substantial computer,
telecommunications or memory
resources.
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SCHEDULE A
DESCRIPTION OF SERVICES
1 INTRODUCTION
1.1 PROCESSES; PARTIES' RESPONSIBILITIES
This Services Schedule (Schedule A) describes the responsibilities of
Provider and Company in performing the listed Processes and sub-processes
of the Services.
The following IT process ("Process") is covered in this Services Schedule
and within the scope of Services:
- Systems Development and Enhancement Services
The descriptions of processes and sub-processes in this Services Schedule
are intended to provide a high-level allocation of responsibilities
between Provider and Company. Various lesser-included subtasks are
intended to be included within such Processes and sub-processes according
to the following assumptions and principles, unless otherwise agreed or
specified: [***]*
Except where specifically set out in the applicable Transition Plan, from
the Process Take-On Date, Provider shall perform each of its agreed-upon
tasks within the Process included in the Services. The initial manner of
Provider's performance of its assumed responsibilities shall be generally
consistent with the manner in which Company performed such
responsibilities prior to the applicable Process Take-On Date, provided
that, Provider shall have control over the manner of its delivery of
Services in accordance with Provider's standard procedures and practices,
subject to Company's established internal service delivery obligations,
the Service Levels, reporting requirements, and any other specifically
agreed written requirements.
Provider will perform all of the tasks inherent within the Services
related to software development and enhancement services for the
information technology environment within which the human resources
processes operate as described in this Services Schedule. Those
responsibilities retained by Company as identified in this Schedule shall
be the responsibility of Company, and any failure by Company to perform
such responsibilities shall not constitute a breach of this Agreement by
Company; provided, however, that this sentence shall not relieve Company
of its obligation to perform any covenants expressly set forth in the
Agreement, including without limitation, Section 2.10 of the Agreement.
Provider shall be responsible for the services of all third parties
engaged as subcontractors by Provider.
Provider shall perform all services in this Schedule in accordance with
the existing process flows and timelines maintained by Company prior to
the Process Take-On Date as provided by Company to Provider prior to the
Effective Date, without limiting Provider's right to control the manner in
which the Services are delivered. Notwithstanding anything to the
contrary, Provider shall have discretion to manage and modify its
processes and internal timelines over time in any reasonable manner which
maintains compliance with the specific requirements of this Schedule.
1.2 [***]*
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1.3 LEGEND
The following legend applies for all tables in this Services Schedule
(Schedule A).
<CAPTION>
-------------------------------------------
Table Legend
-------------------------------------------
X Performs Task or Process
-------------------------------------------
A Approves
-------------------------------------------
2 SYSTEMS DEVELOPMENT AND ENHANCEMENT SERVICES PROCESS
The Systems Development and Enhancement Services Process refers to
the systems and software development and enhancement activities
performed to support the information technology environment within
which Company's human resources processes operate and which support
Company's human resources processes. For purposes of the license in
Section 9.3 of this Agreement, all tool creation activities
performed by Provider as part of the services and paid for within
the Baseline Charges under the Optional Agreements shall be deemed
to be included as Services within this Agreement.
[***]*
[***]*
[***]*
"Company IT Domain" means the data processing infrastructure,
servers, data communications equipment, local area networks, desktop
equipment and support, wide area network facilities operated and
maintained by Company at Company facilities and/or operated and
maintained by third parties under Third Party Contracts managed by
Company at Company facilities. This includes the infrastructure,
equipment and communications facilities for the Memphis ESC operated
by Provider that supports Company.
"DRP" means disaster recovery plan.
"Provider IT Domain" means the data processing infrastructure,
servers, data communications equipment, local area networks, desktop
equipment and support and wide area network facilities, operated and
maintained by Provider at Provider facilities and/or operated and
maintained by third parties under Third Party Contracts administered
by Provider at Provider facilities.
The following table shows the high level division of
responsibilities for Company IT Domain and Provider IT Domain
responsibilities, based on the application and/or support type.
[***]*
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The language used in developing, operating and supporting all
applications, documentation and web content under Provider
responsibility shall be English.
The table below specifies the software development and enhancement
related responsibilities for Company and Provider.
[***]*
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SCHEDULE B
SERVICE LEVELS
1 INTRODUCTION
This Schedule describes the Service Levels that will be measured to
establish certain performance requirements for Services to be performed
under the Agreement. 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) - A limited number of significant
Service Levels that will carry a fee credit for non-compliance
according to the Fees at Risk associated with the applicable KPI;
and
1.2 Reporting Service Levels (RSLs) - These measure 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 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 Company business users.
2.5 Provisional KPIs shall not be subject to Service Credits.
2.6 Should Company fail to meet its Company IT Service Levels (as set
forth in Section 3.3.1 of this Schedule), Provider's failure to meet
Service Levels (including KPIs) shall be excused to the extent such
failure is caused by any failure by Company to meet the Company IT
Service Levels. Any additional costs reasonably incurred by Provider
in order to provide the Services, as a result of Company's failure
to meet its Company IT Service Levels, shall be handled as agreed
through the Change Control Procedures.
3 PROCESS
Prior to the Effective Date, the Parties have agreed on the KPI Service
Level measurements, process weightings and certain Service Level metrics
that Provider will meet or exceed, as well as a representative list of RSL
measurements identified below. For the Service Level metrics that have not
been agreed upon as of the Agreement Date, such Service Level metrics
shall be determined following the Agreement Date in accordance with the
process identified below.
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3.1 KPIs
3.1.1 Except as otherwise provided in Section 3.1.2 below, the KPI's
shall have the values set forth in Table 3.1.3. (Table 3.1.3
also indicates certain "Target Metrics" for each process.
[***]*
[***]*
3.1.2 KPI Process Weightings
Company shall assign each KPI a weighting of no less than
[***]* The total KPI process weighting for all KPI Service
Levels shall [***]*
3.1.3 Key Performance Indicator Table
[***]*
[***]*
3.2 RSLs
3.2.1 With respect to RSL Service Levels that are set forth below,
Provider shall implement and report on such RSL Service Levels
as of the Process Effective Date.
3.2.2 Reporting Service Level Table
[***]*
Any requests for additional RSLs following the Process Take-On Date shall
be subject to the Change Control Procedures.
3.3 Company IT Service Levels
Table 3.3.1 outlines IT RSLs that Company shall be responsible for
meeting. [***]* The RSLs below shall be determined and reported in the
same manner as the RSLs identified above.
3.3.1 Company IT Service Levels Table
[***]*
4 ANNUAL SERVICE LEVEL REVIEW
The steering committee shall: (1) review the Service Levels metrics and
targets annually, and (2) use the Change Control Procedures with respect
to any Service Levels that require periodic adjustment pursuant to this
Agreement or that are no longer appropriate because of an increase,
decrease or change to the Services. In addition, either Party may, at any
time pursuant to the Change Control Process, initiate negotiations to
review and, upon agreement, adjust any Service Level which such Party in
good faith believes is
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inappropriate. [***]
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* Confidential information has been omitted.
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SCHEDULE C
CHARGES SCHEDULE
1. INTRODUCTION
This Schedule describes the methodology for determining the charges to be paid
by Company to Provider for the performance by Provider of its obligations under
the Agreement as well as the associated processes for invoicing Company for such
charges. 115
2. DEFINITIONS
Unless otherwise specified, any capitalized terms that are not defined in this
Schedule shall have the meanings assigned to them in the Agreement. The
following terms shall have the meanings set out below:
"CONTRACT YEAR" means each 12-month calendar year period during the Term, where
"Contract Year 1" or "Contract Year One" means the 12-month period from January
1, 2002 through December 31, 2002 and so forth.
"FEES AT RISK" means the maximum amount of Service Credits that are available to
be paid or credited to Company.
"MAJOR ENHANCEMENT" means application changes with an estimated effort of more
than [***]*
"MINOR ENHANCEMENT" means application changes with an estimated effort of [***]*
or less.
"PROCESS TAKE-ON DATE" has the meaning set forth in Section 5.1 of the
Agreement.
"ROOT CAUSE EVENT" means a one-time, discrete, non-continuing event that is the
sole cause of a KPI failure.
"SERVICE CREDITS" means an amount to be credited or paid to Company, at the
Company's option, in the event of an unexcused failure by Provider to achieve a
Key Performance Indicator as specified in the Service Levels Schedule (Schedule
B).
"SYSTEMS SERVICES" means the Services excluding activities dealing with Major
Enhancements.
3. CHARGING METHODOLOGY
3.1 SERVICES
Beginning on the Process Take-On Date, Provider will provide all Services
at a [***]* Each year after Contract Year 1 the Parties will review the
hourly rate through Change Control. This fee structure will remain in
place for [***]*from the Process Take-On Date, at which time the Parties
may agree through the Change Control Procedures on a revised fee structure
based on business outputs as outlined below.
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During the [***]* following the Process Take-On Date, Company and Provider
will evaluate work processes/workloads under the Agreement in order to
propose a new delivery and fee model. The Parties will construct the fee
structure [***]*
Provider's HR IT team will implement certain practices, procedures and
data processes to capture HR development services management (DSM) metrics
during the [***]* following the Process Take-On Date. Based on an analysis
of the gathered metrics, Company and Provider will agree on a work-based
output approach, and will implement a methodology to deliver and manage
the new approach. Any impact on the Service Levels, the new fee structure,
and the requirements for implementing the proposed changes, will be
handled through the Change Control Procedures.
Major Enhancements will be dealt with through the Change Control Process
as outlined in the Change Control Schedule or through reprioritization of
the HR IT resources.
[***]*
3.2 NEW PROJECTS
Fees, including consulting fees, resource fees, out-of pocket costs, and
other costs required to complete or support any new project or for New
Services may be based upon Service Provider's then-current daily
commercial rates adjusted [***]* project pricing, or other bases, and will
be determined in accordance with Change Control Procedures. Fees for each
project are not necessarily the hourly rate hereunder for Systems
Services, and will be negotiated and agreed to by the parties on a
case-by-case basis.
3.3 CHANGES TO SERVICE LEVELS
Subject to the requirements of Section 2.4(a) of the Agreement, if Company
requests the support of Service Levels solely for Company's benefit that
are higher than Service Levels supported as of the Process Take-On Date,
or agreed to be supported during the Term, and Provider agrees to meet
such higher service levels, then the equipment, tools and resources
required to support such enhanced Service Levels, and any associated fees
and costs must be approved through Change Control Procedures.
3.4 FEES AT RISK
In the event of [***]* Provider shall be liable for Service Credits as
follows:
1. Subject to Section 3.4(2) below, any payment due based on Service
Credits will be reported and calculated [***]*
2. The aggregate Fees at Risk shall be [***]*
3. [***]*
4. [***]*
3.5 FEES ASSOCIATED WITH SOFTWARE AGREEMENTS
Company shall, with Provider's assistance as reasonably requested by
Company, use commercially reasonable efforts to obtain for Provider the right to
use certain Software as designated on the Software Rights Schedule. [***]*
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* Confidential information has been omitted.
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4. INVOICING
4.1 RECORDKEEPING; CHARGES
Provider shall record and maintain timecards for all work performed under
this Agreement. During the Transition Period, the parties shall mutually agree
on such timekeeping record requirements; provided, however, such timecards shall
be maintained on an individual, daily basis and shall contain, at a minimum, a
description of the tasks performed, and a description of the particular project
for which such tasks were performed. The parties shall mutually agree on the
methodology for recording the time spent (taking into account the methodologies
described above). Provider shall invoice Company monthly in arrears for such
charges.
4.2 FEES AT RISK
Service Credits from Provider shall be credited to Company in accordance
with Section 3.4 of this Charges Schedule.
4.3 INVOICING OF DAMAGES
Neither Party shall be permitted to invoice the other for damages or
increased costs incurred as a result of the other Party's breach of this
Agreement, unless and until Company and Provider have agreed to such charges
through the Change Control Procedures.
5. COST OF LIVING ADJUSTMENT
Beginning [***]* all fees and charges of Provider hereunder will be
subject to increase to reflect increases, if applicable, in the [***]* If a
transition is made from the [***]* to a successor index, then for the year in
which the transition takes place, the parties will use the applicable
translation or conversion methodology published by the [***]* and in the absence
thereof the Parties will base adjustments for the year in which the transition
takes place upon a comparison of the successor index with such index for the
prior year. Percentage increases in the [***]* for any adjustment period will be
reflected by commensurate percentage increases in Provider's fees and charges
hereunder [***]* for any adjustment period, and any increases in the [***]* for
any adjustment period will result in an additional percentage increase in
Provider's fees and charges hereunder equal to [***]*
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* Confidential information has been omitted.
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SCHEDULE D
AFFECTED EMPLOYEES
1 INTRODUCTION
This schedule sets forth the employees to be transferred from Company to
Provider in accordance with Schedule J.
2 TABLE OF AFFECTED EMPLOYEES
[***]*
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SCHEDULE E
KEY PERSONNEL SCHEDULE
1.0 INTRODUCTION
This Schedule identifies Provider's personnel filling key positions, as
contemplated by Section 6.2 of the Agreement.
2.0 KEY PERSONNEL
As of the Process Take-On Date, Company has designated the following key
personnel:
1. The Provider Relationship Manager; and
2. The Provider Center Manager (as defined in the Account Governance
Schedule).
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October 18, 2001
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SCHEDULE G
TRANSITION PLAN
1 INTRODUCTION
This Schedule sets forth the Transition approach and initial Transition
Plan for conducting the transfer of services and facilities from Company
to Provider and the treatment of Affected Employees. Subsequent
transitions will follow the transition approach as defined in Schedule G.
The specific deliverables and milestones for the transition approach,
subject to ongoing review and revision by both parties, shall be completed
by [***]*
2 TRANSITION PLANNING PRINCIPLES
2.1 Transition is a shared responsibility. The Provider is responsible
for management of the overall transition program. Each Party has
responsibility for ensuring there is full participation in data
gathering and requirements definition. Furthermore, each Party has
responsibility to ensure the commitment and involvement of its team.
2.2 The Transition Plan shall be primarily determined based on the
in-scope Processes, people, and certain dependencies for
transferring Company facilities.
3 TRANSITION APPROACH
The general approach for all Processes is to transfer the current Process
in place today from Company to Provider "as is". Once under Provider
management, the Processes, where possible or practical, will be improved
through a combination of changes to the procedures, underlying
technologies, organization design, and deployment of employees. Other
changes may be identified during the Transition Period, and will be
undertaken in a manner consistent with Change Control Schedule.
The Transition shall consist of a number of Workstreams:
[***]*
The establishment of a service management infrastructure within the
delivery organization will provide appropriate activity and lines of
communication between Company and Provider to manage the delivery of
Services according to Service Levels and contractual requirements.
Company and Provider shall agree 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.
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* Confidential information has been omitted.
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4 TRANSITION ACTIVITIES
Transition activities are:
[***]*
5 HIGH-LEVEL TRANSITION SCHEDULE
Attached below is a High-level Transition Schedule outlining various Key
Activities. Each Party agrees to use its commercially reasonable efforts
to perform the tasks for which it is responsible in the Timeline for Key
Activities by the date set forth for completing such activity.
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* Confidential information has been omitted.
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SCHEDULE H
IN-FLIGHT PROJECTS SCHEDULE
1.0 INTRODUCTION
This In-Flight Projects Schedule sets forth certain projects that are either
in-process or anticipated by the Parties, as contemplated by Section 2.12 of the
Agreement.
2.0 PROJECTS
[***]*
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* Confidential information has been omitted.
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October 18, 2001
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SCHEDULE J
AFFECTED EMPLOYEE ARRANGEMENTS
1.0 DEFINITIONS
For the purposes of this Schedule J:
"DESIGNATED EMPLOYEE" means any employee of Company listed on Schedule D,
including those employees on any approved leave under Company's policies.
"AFFECTED EMPLOYEE" means a Designated Employee who accepts Provider's offer of
employment and becomes an employee of Provider.
"SEPARATION DATE" of a Designated Employee means the date such Designated
Employee's employment with Company terminates.
"EMPLOYMENT DATE" means the date an Affected Employee commences employment with
Provider.
2.0 OFFER OF EMPLOYMENT; EMPLOYMENT TERMS
2.1 Provider shall offer employment to all Designated Employees prior to the
Separation Date, which will be mutually agreed by Company and Provider. Except
as specifically set forth herein, (i) each Affected Employee shall be employed
pursuant to Provider's standard employment terms, policies and programs,
including at-will employment; (ii) Provider will have no obligations to Affected
Employees except as required pursuant to Provider's standard employment terms,
policies and programs and applicable laws and regulations; (iii) Provider is not
required to continue any employment terms, policies, or programs of Company;
(iv) no Affected Employee will be entitled to any designated period of
employment; and (v) Provider will have no obligations to any Designated Employee
who does not become an Affected Employee.
2.2 [***]*
2.3 [***]*
2.4 [***]* Provider is an at-will employer. The terms and conditions of
employment may change from time to time at the Provider's sole discretion. An
Affected Employee's employment can be terminated either by the Affected Employee
or the Provider at any time with or without cause or advance notice.
2.5 [***]*
2.6 [***]*
2.6.1 [***]*
2.6.2 Provider's annual review cycle for Affected Employees will commence
on [***]* with the first Provider review being initiated in [***]*
2.6.3 [***]*
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* Confidential information has been omitted.
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2.7 Company 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 Designated Employee on or prior to his or her Separation Date, and all
obligations to Designated Employees arising out of and relating to their
employment by Company, termination of that employment, and their participation
in all of Company's employee benefit plans and programs. [***]*
2.8 As of an Affected Employee's Employment Date, the Affected Employee will
begin accruing vacation according to [***]*
2.8.1 Company will pay out each Designated Employee for all unused
vacation outstanding at his or her Separation Date directly to Designated
Employee in a timely manner.
2.9 [***]*
2.10 [***]*
2.11 The Separation Date of a Designated Employee who accepts employment with
Provider, but who is absent from work due to a Company-approved leave of absence
on the Designated Employee's original proposed Separation Date, will be the date
the Designated Employee is eligible to return to work. If that date is within
[***]* of the original proposed Separation Date, then the Employment Date of
such Designated Employee will occur immediately after such date..
2.11.1 If a Designated Employee is absent from work for more than [***]*
from his or her original proposed Separation Date, the Designated Employee
will not become a Provider Employee, unless mutually agreed upon by
Company and Provider.
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* Confidential information has been omitted.
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October 18, 2001
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SCHEDULE K
CHANGE CONTROL SCHEDULE
1.0 INTRODUCTION
1.1 This Change Control Schedule describes the process (the "Change Control
Process") to be followed by Company and Provider when either Party wishes
to make a change to the Services, software, hardware, systems, activities,
processes, provisions, operations or any other terms and conditions under
the Agreement (each a "Change"). The Parties may by joint written
agreement amend or waive any part of the Change Control Process including,
but not limited to, where the relevant Parties agree that shorter or
longer timeframes are more appropriate or as may be agreed to by the
Parties in the Technology and Business Process Procedures, provided that
any Changes made to the Agreement are recorded in a Change Proposal (as
such term is defined in Section 2.3(b)) and such Change Proposal is
allocated a unique number by Provider and is signed by duly authorized
representatives of Company and Provider.
1.2 The purposes and objectives of the Change Control Process are as follows:
(a) to review each request for a Change (a "Change Request") to
determine whether such Change is appropriate;
(b) to determine whether a Change is within the scope of the Services or
constitutes a New Service;
(c) to prepare a more detailed proposal to implement a Change Request
(such proposal, a "Change Proposal")
(c) to prioritize all Change Requests and Change Proposals;
(d) to minimize the risk of exceeding both time and cost estimates
associated with the requested Change by identifying, documenting,
quantifying, controlling, managing and communicating: (i) Change
Requests, (ii) the preparation of Change Proposals), and (iii) their
disposition; and
(e) to identify the different roles, responsibilities and actions that
shall be assumed and taken by the Parties to define and implement
the Changes to the Services and to the Agreement.
1.3 Each Party shall be responsible for all costs and expenses incurred by its
employees, agents and subcontractors with respect to its participation in,
and responsibilities and obligations under, the Change Control Process,
unless expressly agreed otherwise in writing by both Parties.
2.0 CHANGE CONTROL PROCESS
2.1 Either Provider or Company may initiate a Change Request by delivering to
the other's Relationship Manager or his/her nominated representative a
writing that describes the Change and sets forth the reasons for it.
Provider shall assign a unique number to any such request and shall
register the Change Request in the Change Request Log as described in
Section 7.1. Each Change Proposal that may be prepared for a Change
Request shall be tracked by reference to the Change Request to which it
relates.
2.2 Each Party's respective Relationship Manager or his/her nominated
representatives shall be responsible for reviewing and considering any
Change Request, and shall approve it for further investigation, if deemed
necessary. If the Parties agree that the Change Request requires further
investigation, the Company and Provider Relationship Managers shall
authorize such investigation, which shall be performed as required by
Provider and/or Company. In accordance with Section 7.2, the Relationship
Managers shall be responsible for keeping up to date the status of each
Change Request in the Change Request Log as the status of the Change
Request changes through the Change Control Process.
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2.3 For each Change Request that the Parties have approved for further
investigation, regardless of which Party has proposed or investigated the
Change, Provider shall prepare and submit to Company within [***]* (or as
otherwise agreed), with Company's full cooperation and provision of any
information reasonably requested by Provider, a preliminary report
containing the following information and analysis:
(a) Such preliminary report shall contain:
(i) the estimated costs associated with the Change;
(ii) the timeframe for implementing the Change (including any
timing constraints);
(iii) the preliminary technical or business case for making
the Change, as well as any changes or additions to
policies, standards and procedures in accordance with
which the Change is to be implemented;
(iv) an initial analysis of the potential risks (if any) to
Company or Provider if the Change is not implemented;
(v) an estimate of the costs and expenses associated with
preparing a comprehensive Change Proposal containing the
information and analysis set forth in Section 2.3(b)
below (the "Estimate").
Provider shall bear the costs of preparing the
preliminary report and Estimate as set forth in this
Section 2.3(a), and shall provide such report as part of
the Services.
(b) Company and Provider shall review the preliminary report and
Company shall, within [***]* after deliver of such preliminary
report, either (1) instruct Provider to prepare a
comprehensive Change Proposal as set forth in this Section
2.3(b), or (2) notify the Provider that it does not wish to
proceed with the Change. Where Company has instructed Provider
to prepare a comprehensive Change Proposal, [***]* (or as
otherwise agreed) after receiving such instruction, Provider
shall prepare a Change Proposal describing the impact of the
Change on the following elements of the Agreement, to the
extent relevant:
(i) [***]*
2.4 Once submitted by Provider, Company shall review the Change Proposal and
as soon as reasonably practicable, and in any event not more than [***]*
(or as otherwise agreed) after receipt of the Change Proposal, either:
(a) the Parties may approve the Change Proposal in which case the Change
Proposal shall be signed by the Relationship Managers and the Change
incorporated in accordance with Section 3.0 below;
(b) Company may notify Provider that it does not wish to proceed with
the Change, in which case no further action shall be taken in
respect of the Change Proposal; provided, however, that Provider
shall be entitled to charge Company for its reasonable costs
associated with preparing the Change Proposal, but not to exceed the
Estimate (and not
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including any costs incurred in preparing the preliminary report or
Estimate described in Section 2.3(a) above); or
(c) either Party may request that it and the other Party meet to discuss
the Change Proposal (such meeting to be referred to as the "Change
Proposal Meeting").
2.5 At the Change Proposal Meeting, the Parties shall use reasonable endeavors
to agree to either:
(a) take no further action in respect of the proposed Change, in which
case no further action shall be taken in respect of the Change
Proposal;
(b) acquire further information before deciding whether to proceed with
the Change;
(c) amend some or all of the contents of the Change Proposal, which
Provider will incorporate into a revised version of the Change
Proposal; or
(d) proceed with the Change as detailed in the Change Proposal in which
case the Change Proposal shall be signed and the Change incorporated
in accordance with Section 3.0.
2.6 In the event that the Parties agree to proceed in accordance with one of
the options detailed in Section 2.5(b) or 2.5(c) above, then the Parties
shall gather any necessary information and/or Provider shall prepare a
revised version of the relevant Change Proposal, upon which the Parties
shall decide whether to proceed in accordance with Section 2.5(a)-(d)
above. The Parties shall continue to go through the process detailed above
until such time as a final resolution is made by the Parties. The Parties
shall act in good faith at all times during such process.
2.7 If the Parties' Relationship Managers agree to a Change prior to any
investigation conducted by either Party, Provider shall in any event
prepare a Change Proposal in accordance with Section 2.3 and submit such
Change Proposal for review and approval in accordance with Section 2.4.
3.0 EFFECTIVENESS OF A CHANGE
3.1 Upon the signature of a Change Proposal by both Provider's and Company's
Relationship Managers in respect of a Change, the contents of such Change
Proposal shall be deemed to be agreed and incorporated into the Agreement
on the date of signature or as the Parties may otherwise agree. No part of
the discussions or interchanges between the Parties shall obligate the
Parties to approve any Change or shall constitute an amendment or waiver
of the Agreement unless and until reflected in a Change Proposal and
adopted in accordance with this Change Control Schedule.
3.2 Neither Party shall have any obligation to commence or comply with any
Change until such time as the relevant Parties have signed the appropriate
Change Proposal.
4.0 CHANGE MANAGEMENT REPORTING REQUIREMENTS
4.1 Provider shall provide Company (as part of Provider's reporting
requirements under the Reports Schedule) a summary specifying the status
of all pending Change Requests and Change Proposals.
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* Confidential information has been omitted.
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5.0 FAILURE TO AGREE
5.1 In the event that the Party requesting a Change believes that the
requested Change is required or necessary, the requesting Party shall
inform the other Party in writing of such nature of the proposed Change.
In the event that the other Party does not agree to implement the Change,
the requesting Party shall be entitled to consider the other Party's
failure to agree to implement the Change as a Dispute, and the requesting
Party may escalate such Dispute for resolution in accordance with the
Dispute Resolution Schedule and the Agreement.
6.0 EMERGENCY CHANGE PROCESS; COMPULSORY CHANGES
6.1 In the event that either Party requires a Change in order to respond to an
emergency and such Change would, in the reasonable opinion of the
requesting Party, if it was not implemented until the Change Control
Process had been followed, have a detrimental effect on the requesting
Party's ability to meet its obligations pursuant to this Agreement, the
requesting Party shall make all reasonable efforts to contact the other
Party's Relationship Manager, and if the requesting Party is unable to
contact the other Party's Relationship Manager after reasonable efforts,
the requesting Party shall, where appropriate and practical, make all
reasonable efforts to contact the other Party's designated member of the
Executive Steering Committee. If the requesting Party is unable to contact
either the other Party's Relationship Manager or the other Party's
designated Executive Steering Committee member, the requesting Party may
make temporary Changes to the Services without the prior consent of the
other Party. The requesting Party shall notify the other Party as soon as
practicable of such Change and shall, as soon as reasonably practicable
document and report on such Changes to the other Party. Any permanent
Change as a result shall be agreed in accordance with the Change Control
Process.
6.2 Notwithstanding the Change consideration and implementation process
outlined in Sections 2 and 3 of this Change Control Schedule, if a Change
requested by Company is a Compulsory Change (as defined hereafter),
Provider shall immediately begin implementing as appropriate the Change
upon request by Company. Provider shall also prepare and deliver to
Company a Change Proposal related to the Compulsory Change on an expedited
basis, where appropriate, and the Parties shall work together in good
faith to determine the impact on the Agreement (including without
limitation, any impact on the Charges) as a result of implementing the
Compulsory Change. If the Parties are unable to agree on the impact on the
Agreement within [***]* after Company has received the Change Proposal
from Provider, either Party may consider such failure to agree to be a
Dispute, and may escalate such Dispute for resolution in accordance with
the Dispute Resolution Schedule and the Agreement. A "Compulsory Change"
shall be any Change [***]*
7.0 CHANGE REQUEST LOG
7.1 Each entry made in the Change Request Log shall consist of the following
fields:
(a) serial number of the Change Request;
(b) name of the originating party;
(c) a brief description of the Change;
(d) the current status of the Change; and
(e) the date of registration of the Change Request in the Change Request
Log.
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* Confidential information has been omitted.
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7.2 The status of the Change Request at any stage in the Change Control
Process shall be one of the following:
(a) raised (i.e., that the Change Request has been entered in the Change
Request Log, but no Change Proposal has been issued);
(b) pending (i.e., that the Change Request has been raised and the
Change Proposal has been issued);
(c) approved (i.e., awaiting implementation);
(d) closed (i.e., all implementation tasks have been completed); or
(e) rejected (i.e., closed and not implemented).
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October 18, 2001
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SCHEDULE L
ACCOUNT GOVERNANCE SCHEDULE
1.0 INTRODUCTION
1.1 This Account Governance Schedule provides a high level outline of the
account governance process that the Parties will implement to manage the
administration of the Agreement and the Services. The purpose of this
schedule is to define agreed upon principles and processes that will guide
the Parties' relationship under the Agreement.
2.0 DEFINITIONS
"Relationship Manager" has the meaning given in Section 6.1 of the
Agreement.
"Provider Center Manager" has the meaning given in Section 6.3 of the
Agreement.
"Authorized Company Manager" shall mean interchangeably the Company
Relationship Manager or those individuals identified in writing from time
to time by the Company Relationship Manager to Provider as having
authority to provide instructions or approvals to Provider on the matters
otherwise requiring the approval of the Company Relationship Manager.
"Operations Manager" shall mean each of the Company and Provider payroll,
benefits and information technology representatives on the Operations
Management Team as identified in Section 6.0 below.
3.0 ORGANIZATION; ACTIVITIES
3.1 Governance will be carried out through committees and teams consisting of
representatives of each Party. This Schedule describes the primary roles,
responsibilities and membership of the following committees and teams:
a. Executive Steering Committee
b. Operations Management Team
3.2 The Executive Steering Committee and the Operations Management Team will
be formed and the initial members assigned as of the Process Take-On Date.
3.3 Unless otherwise dictated by procedures contained in this Schedule, the
SERVICES SCHEDULE (Schedule A), or other Schedules to the Agreement, the
internal operations, scheduling and procedures for each committee or team
will be determined by agreement of the members of such committee or team
in a manner consistent with the principles stated in this Schedule;
provided that the Executive Steering Committee will have the right to
elect to dictate any such matters as they relate to the other committees
or teams.
3.4 In the event that Company believes that Provider has committed a series of
non-material or persistent breaches that Company perceives in the
aggregate to have a significant adverse impact on the Services, Company
shall provide Provider with notice of such breaches. Upon receipt of such
notice and subsequent discussions, Provider shall prepare and deliver to
Company for Company's approval a plan by which Provider shall remedy such
breaches. Once approved by Company, Provider shall execute against such
plan until such breaches are successfully remedied.
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4.0 ROLE DESCRIPTIONS
4.1 Company and Provider shall ensure that the individuals referred to in this
Account Governance Schedule possess the skills and perform the roles set
out in the following role descriptions.
4.1.1 The Company Relationship Manager
(a) Role
To be responsible for and to manage the Provider relationship.
(b) Reporting
To the Company Vice President of Human Resources
(c) Specific Responsibilities
To develop and maintain high level relationships with
Provider.
To act as the principal point of contact for Provider.
To attend review meetings as required by the Agreement.
To propose new prospective services, in conjunction with
Provider.
To be responsible for the provision of reports as required by
the Agreement.
To manage the Change Control Process on behalf of Company and
sign Change Orders.
To identify opportunities for development or improvement to
the Services.
To manage and resolve Disputes between Company and Provider.
To participate on the Technology and Business Process
Governance Committee (as identified in the Technology and
Process Governance Schedule).
4.1.2 The Provider Relationship Manager
(a) Role
To be responsible for and to manage the Company account.
(b) Reporting
To the Vice President, Client Relationships
(c) Specific Responsibilities
To develop and maintain high level relationships with Company.
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To act as the principal point of contact for Company in
relation to the Services.
To attend review meetings as required by the Agreement.
To propose and develop new prospective services, in
conjunction with Company.
To manage the Change Control Process on behalf of Provider and
sign Change Orders.
To identify opportunities for development or improvement to
the Services.
To manage and resolve Disputes between Company and Provider.
To work closely with the Center Manager to ensure the quality
of all Services in conformance to the Agreement.
To monitor customer satisfaction.
To oversee startup and transition initiatives.
To participate on the Technology and Business Process
Governance Committee (as identified in the Technology and
Process Governance Schedule)
4.1.3 The Provider Center Manager
(a) Role
To be responsible for all aspects of the day-to-day
operational delivery of the Services to the Service Level
Standards.
(b) Reporting
This role reports to the Director of U.S. Operations.
(c) Specific Responsibilities
To be responsible for the day-to-day operational delivery of
the Services.
To plan, allocate and monitor work undertaken in relation to
the Services.
To attend review meetings as required by the Agreement.
To be responsible for the provision of Reports as required by
the Agreement.
To ensure that appropriate operational and quality control
procedures are in use.
To manage and resolve customer complaints relating to
operational activities.
4.1.4 The Company Operations Manager
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(a) Role
To be responsible for all aspects of the day-to-day
operational delivery of Company's performance related to and
necessary for Provider's performance of the Services and
Company's use of the Services.
(b) Reporting
This role reports to the Company Relationship Manager.
(c) Specific Responsibilities
To be responsible for the day-to-day operational delivery of
Company's performance obligations.
To plan, allocate and monitor work undertaken in relation to
the Services.
To attend review meetings as required by the Agreement.
To be responsible for the provision of Reports as required by
the Agreement.
To ensure that appropriate operational and quality control
procedures are in use.
To manage and resolve Provider complaints relating to
Company's operational activities.
5.0 EXECUTIVE STEERING COMMITTEE
5.1 The Executive Steering Committee shall not be involved in day-to-day
management of the Agreement or Services. The Executive Steering Committee
will meet periodically as it deems necessary, but at a minimum, [***]*
until such time, if any, that the Executive Steering Committee agrees to a
different schedule for meetings.
5.2 Company will designate one of its members on the Executive Steering
Committee to act as the chairman of the Executive Steering Committee,
provided that such designation and role will be for administrative
convenience purposes only and the rights, responsibilities and authority
of the chairman shall be the same as all other members of the Executive
Steering Committee. Company and Provider may mutually agree to increase or
decrease the size of the Executive Steering Committee or to change the
qualifications of who may serve on the Executive Steering Committee. The
Executive Steering Committee will initially be comprised of executives of
the Parties as follows:
a. [***]*
b. [***]*
5.3 The Executive Steering Committee will be governed according to the
following principles:
a. Each Party shall have a single vote;
b. Members may participate in meetings in person, by telephone, or by
teleconference;
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* Confidential information has been omitted.
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c. Participation by one member from each team is sufficient for a
quorum; and
d. Unanimity of the Parties is required for action to be taken.
5.4 The responsibilities of the Executive Steering Committee will include:
a. generally overseeing the performance of each Party's obligations
under the Agreement;
b. review and authorization of high-level technical, financial and
resource plans;
c. review of reports and recommendations, as reviewed and approved by
the Operations Management Team, and, on [***]* basis, --- review
recommendations and provide authorization as required for:
(i) Service Levels for previous [***]*
(ii) adjustment of Service Levels
(iii) changes in pricing
(iv) Company employee satisfaction surveys and Service Level
results
(v) benchmarking results
(vi) summary of out-of-scope work
(vii) implementation process of the Agreement and the achievement of
key milestones and deliverables
(viii) adjustments to Services;
d. review of the relationship issues arising out of the Agreement;
e. consider the business and operating strategies of each party
f. resolution of concerns regarding replacement of a Relationship
Manager or Center Manager or Operations Manager;
g. resolution of disputes;
h. final resolution of certain disputes, as noted in the Dispute
Resolution Schedule; and
i. provision of advice and guidance to the Operations Management Team
for performance improvement and submission of recommendations
directly to Company and Provider on issues affecting the
relationships between the Parties.
6.0 OPERATIONS MANAGEMENT TEAM
6.1 [***]*
6.2 Operations Management Team will meet [monthly,]* and at other times as
agreed between the Parties.
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* Confidential information has been omitted.
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6.3 Operations Management Team reviews shall be chaired by the Company
Relationship Manager.
6.4 The responsibilities and authorities of the Operations Management Team
will include the following:
a. review of the overall performance of the Parties' respective roles
and responsibilities under this Agreement;
b. review of progress of the implementation of the Agreement with
emphasis on the achievement of key milestones and deliverables;
c. implementation of risk management and provide an analysis for review
by the Executive Steering Committee;
d. review of Service delivery and transition management activities and
the associated contract management reports as provided by the
Provider Service delivery teams;
e. approval of changes to reports;
f. review of summary reports as set out in Reports Schedule and submit
for Executive Steering Committee review, as necessary;
g. annual review of the following and making recommendations to the
Executive Steering Committee, as necessary:
(i) KPI's and RSL's based on previous [***]*
(ii) Proposal for adjustments to KPI's and RSL's;
(iii) Company Employee satisfaction surveys;
(iv) Adjustments to Services; and
(v) Benchmarking results.
h. review of the recommendations and suggestions made by the Executive
Steering Committee relating to the Services and/or Agreement and
initiate appropriate actions;
i. implementation of technical, financial and resource plans;
j. providing advice and guidance to the Service delivery teams for
performance improvement and making recommendations directly to
Company and Provider; and
k delegating any of its powers it considers appropriate to the service
delivery teams, subject to the terms of the Agreement.
7.0 INITIAL COMMITTEE MEMBERS
7.1 The initial Relationship Managers shall be:
[***]*
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* Confidential information has been omitted.
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[***]*
7.2 The initial Executive Steering Committee members shall be:
[***]*
[***]*
8.3 The initial Operations Management Team members shall be:
[***]*
[***]*
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* Confidential information has been omitted.
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SCHEDULE M
HARDWARE RIGHTS SCHEDULE
1.0 INTRODUCTION
The Parties have identified on this Schedule M (Hardware Rights Schedule) the
Hardware required for Provider to perform the Services as of the Process Take-On
Date. After the Effective Date, this Hardware Rights Schedule shall be updated
by Provider from time to time to incorporate any Hardware not listed on this
Hardware Rights Schedule that is required for Provider to perform the Services
on or after the Process Take-On Date.
2.0 HARDWARE
Consistent with Section 3.1(b) of the Agreement, the Hardware is categorized in
the Exhibits attached hereto as follows:
Exhibit I: Company Group owned Hardware which shall be transferred to
Provider as part of the purchased assets;
Exhibit II: Company Group owned Hardware which Company will make available
for use by Provider in connection with its delivery of the
Services;
Exhibit III: Hardware which is leased by the Company Group from a
third party and which Provider will use under Provider's
appointment as Company's representative pursuant to Section
3.3 of the Agreement; and
Exhibit IV: leased Hardware for which a consent shall be obtained
permitting Provider to use the Hardware in connection with its
delivery of the Services, designating whether Company or
Provider shall have responsibility for obtaining such consent.
With respect to Hardware leased by a Party from a third party which the other
Party will use in either the delivery or receipt of the Services, the Party
using such Hardware shall comply at all times with the terms and conditions of
the then existing lease agreement between the lessee and the applicable third
party vendor (each a "Retained Agreement") and any and all agreements
(including, but not limited to, consent letters, sublease agreements,
confidentiality agreements, etc.) entered into by the lessee and/or the other
Party and a third party vendor pursuant to which the applicable rights to access
and use are granted (each a "Right to Use Agreement"). The right to use grantee
shall be responsible for all damages incurred by the right to use grantor
arising out of the grantee's non-compliance with any and all Retained Agreements
and Right to Use Agreements. In addition, the grantee shall comply at all times
with the grantor's Hardware policies and procedures with respect to Hardware
owned or leased by the grantor. All Company-owned or leased Hardware used by
Provider shall be subject to Section 3.2 of the Agreement, including, but not
limited to, any time limitations on Provider's rights to access and use such
Hardware. All Provider-owned or leased Hardware shall be subject to equivalent
restrictions applicable to Company's access and use.
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EXHIBIT I
TO
SCHEDULE M
Following is a list of the Company Group owned Hardware which shall be
transferred to Provider as part of the purchased assets:
[***]*
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* Confidential information has been omitted.
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EXHIBIT II
TO
SCHEDULE M
Following is a list of the Company Group owned Hardware which Company will make
available for use by Provider in connection with its delivery of the Services:
[***]*
COMPANY OWNED NETWORK HARDWARE LOCATED OUTSIDE ESC
[***]*
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* Confidential information has been omitted.
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EXHIBIT III
TO
SCHEDULE M
Following is a list of the Hardware which is leased by the Company Group from a
third party and which Provider will use under Provider's appointment as
Company's representative pursuant to Section 3.3 of the Agreement:
COMPANY LEASED DESKTOPS/LAPTOPS LOCATED OUTSIDE ESC
[***]*
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* Confidential information has been omitted.
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EXHIBIT IV
TO
SCHEDULE M
Following is a list of the leased Hardware for which a consent shall be obtained
permitting Provider to use the Hardware in connection with its delivery of the
Services, designating whether Company or Provider shall have responsibility for
obtaining such consent:
[***]*
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* Confidential information has been omitted.
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SCHEDULE N
DISASTER RECOVERY SERVICES
1. EXISTING DISASTER RECOVERY PLANS
Commencing on the Process Take on Date, Provider shall follow the existing
Company ESC Disaster Recovery Plan, as provided in writing by Company to
Provider, for the applicable Services. In addition, Company shall follow
the existing Company IT Disaster Recovery Plan.
2. DISASTER RECOVERY PLAN REVIEW AND MODIFICATION
In the [***]* following the Process Take On, Company and Provider agree to
review and revise, as appropriate, the existing Company ESC Disaster
Recovery Plan and the existing Company IT Disaster Recovery Plan. In
addition, the Parties shall develop and implement a Joint Disaster
Recovery Dependency Plan which identifies the interfaces and dependencies
between the plans and outlines areas of joint responsibility. Each
Disaster Recovery Plan shall be made up of the following Disaster Recovery
Plan Description:
- Recovery Management Team Procedures:
- Functional Team Recovery Procedures:
- Administrative and Recovery Progress Procedures:
- Ongoing Preparedness Procedures:
3. REVISED DISASTER RECOVERY PLAN
Following the [***]* period, Provider and Company shall follow the revised
Provider ESC Disaster Recovery Plan Company IT Disaster Recovery Services
and the Joint Disaster Recovery Plans and the provisions agreed to
therein.
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* Confidential information has been omitted
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SCHEDULE O
AGREED DAMAGES EXCEPTIONS SCHEDULE
1.0 INTRODUCTION
This Agreed Damages Exceptions Schedule sets forth certain exceptions to the
Damages Cap (as defined in Section 14.1(a) of the Agreement) and the limitation
on damages as set forth in Section 14.2(a) of the Agreement.
2.0 EXCEPTIONS
a. Provider's indemnification obligations under Section 16.1 of the
Agreement; and
b. Company's indemnification obligations under Section 16.2 of the
Agreement.
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October 18, 2001
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SCHEDULE P
BENCHMARKING SCHEDULE
1.0 INTRODUCTION
This Schedule describes the Benchmark Process, as well as the procedure Company
and Provider will follow to select a Benchmarker, as contemplated under Section
7.4 of the Agreement.
2.0 DEFINITIONS
The following terms have the meanings set forth below when used in this
Schedule:
a. BENCHMARK PROCESS means the relevant objective measurement and comparison
process provided for in this Schedule as a means of measuring the
technology, pricing, processes and Service Levels supplied or adhered to
by Provider in providing the Services to Company, as compared to other
organizations providing similar services under relevant arrangements.
b. BENCHMARK RESULTS shall mean the results of the Benchmarking Process
delivered by the Benchmarker in a written report to Company and Provider,
including any supporting documentation requested by Company or Provider to
analyze the results of the Benchmark Process.
c. BENCHMARKER means the third party or third parties jointly selected by
Company and Provider as described in this Schedule to conduct the
Benchmarking Process.
3.0 ROLE OF BENCHMARKER
The Benchmarking Process shall be conducted by the Benchmarker.
3.1 BENCHMARKER SELECTION PROCESS
a. Company and Provider will cooperate in good faith to jointly select one or
more suitable Benchmarkers, taking into consideration the skill,
experience, responsiveness, objectivity, fees and expenses of qualified
firms or individuals. Once a Benchmarker has been selected, unless the
Parties agree otherwise, such Benchmarker shall be used for any future
Benchmarks.
b. In the event: (1) a Benchmarker is no longer providing the services
required to conduct the Benchmarking Process, (2) Company and Provider
agree that the Benchmarker should be replaced or (3) Company and Provider
determine that another Benchmarker would be needed to take advantage of
another system or methodology used by such Benchmarker to conduct the
Benchmarking Process, Company and Provider shall promptly designate a
replacement Benchmarker.
3.2 BENCHMARKING PROCESS
a. The Parties shall not conduct any Benchmarking Process prior to [***]*
Thereafter, no Benchmarking Process shall be conducted more frequently
than [***]* period, unless otherwise agreed by the Parties. Subject to the
foregoing, Company and Provider shall designate the time when each
Benchmarking Process shall be undertaken.
b. [***]*
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* Confidential information has been omitted.
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c. The Benchmarking Process shall be based upon and consistent with, in all
material respects, the benchmarking methodology, principles and approach
agreed to by the Parties, in consultation with the Benchmarker, which
shall include:
(i) a representative sampling of a sufficient number of arrangements
between providers and receivers of services comparable to the
Services (the "Comparables"); and
(ii) any appropriate adjustments due to differences between the
Comparables on one hand, and the arrangements between Provider and
Company under this Agreement, such as differences in the nature or
type of services received, the respective service environments,
relative performance standards, volumes, term of agreement, location
of services, amount of investments made pursuant to or in connection
with the Comparables, and other similar terms and conditions.
d. The Parties shall cooperate with each other and the Benchmarker to
facilitate the Benchmarking Process, which shall include providing
reasonable information as is necessary to conduct the Benchmarking
Process; provided, however, that Provider will not be required to (i)
disclose any of its Confidential Information, (ii) disclose details of
other customers' confidential information without such customers' consent,
or (iii) provide any information relating to Provider's margins or costs.
e. Within [***]* (or as otherwise agreed to by the Parties and the
Benchmarker) after the completion of any Benchmarking Process, the
Benchmarker shall deliver the Benchmark Results to each Party's Account
Manager.
f. During the [***]* following delivery of the Benchmark Results from the
Benchmarker, Company and Provider shall review the Benchmark Results and
schedule one or more meetings (which shall include the Benchmarker) to
address any issues either Party may have with the Benchmark information or
the Benchmark Results.
3.3 EFFECT OF BENCHMARK RESULTS
The Parties shall not be specifically bound by the results of the Benchmarking
Process, but the Parties agree that they shall each give due consideration to
such results in accordance with the provisions of Section 7.4 of the Agreement.
3.4 DISPUTES
Any disputes between the Parties concerning the selection of the Benchmarker,
the Benchmark Process, the Benchmark Results, or any other aspects of
benchmarking may be escalated to the Executive Steering Committee for final and
binding resolution. No such disputes may be escalated beyond the Executive
Steering Committee or submitted to any other forum except as provided in the
Dispute Resolution Schedule.
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* Confidential information has been omitted.
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SCHEDULE Q
DATA PRIVACY AND SECURITY PROCEDURES SCHEDULE
1.0 INTRODUCTION
This schedule sets forth the respective data management, data privacy and
security responsibilities of Company and Provider under the Agreement, which are
in addition to those Services described in the Agreement and the SERVICES
SCHEDULE.
2.0 DEFINITIONS
The following terms have the meanings set forth below when used in this
schedule. Capitalized terms used but not defined in this schedule have the
meanings assigned to them in the Glossary.
"Focal Point" means, with respect to either Provider or Company, the
person designated by a Party with responsibility for day-to-day data and
security management for such Party.
"Personal Data" means any data relating to Employees Served (as defined in
the Charges Schedule (Schedule C)) that Provider processes on behalf of
Company or otherwise has access to under or in connection with this
Agreement or in performing the Services.
3.0 GENERAL
a. Prior to the Process Take-On Date, Provider shall, with Company's
participation and assistance, develop and document a framework and
plan for the ongoing identification, implementation, and maintenance
of, and compliance with, data management, data privacy and security
practices that Provider and Company will be responsible for
implementing and following during the Term of the Agreement. Both
Parties recognize and agree that the detailed requirements for data
management, data privacy, and security will likely develop and
evolve over the Term of the Agreement, and that this Schedule, and
the Parties' obligations with respect to such matters will similarly
evolve during the Term.
b. Provider's Focal Point will be responsible for supervising
Provider's data management, data privacy and security activities,
and will be generally familiar with data management, data privacy
and data security requirements and issues relevant to the Services
and Provider's business. Company's Focal Point will be responsible
for supervising Company's data management, data privacy and security
activities, and will be generally familiar with data management,
data privacy and data security requirements and issues relevant to
the Services and Company's business.
c. Unless otherwise agreed by Company and Provider, the services
required from Provider under this Schedule are deemed to be an
inherent part of the Services and shall be included in the Services
provided by Provider and the Base Charges.
d. Company shall retain responsibility for all server-level data
management, data privacy and security practices.
e. The Parties acknowledge that they may need to amend this Schedule or
the Agreement within a commercially reasonable time prior to the
effective date of any HIPAA privacy regulations, pursuant to the
terms of Section 2.10(b) of the Agreement.
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4.0 DATA MANAGEMENT
a. Obligations with Respect to Privacy and Data Protection Laws
1. Provider and Company are each responsible for complying with
their respective obligations under the applicable privacy and
data protection laws governing Personal Data. Provider shall
comply with its obligations as Company's service provider,
processor and/or business associate under applicable data
protection laws. Where applicable, Company shall comply with
its obligations as the owner or controller of any such
Personal Data under applicable privacy and data protection
laws.
2. Company may create, or request that Provider create, any and
all programs, plans, procedures or measures Company deems
necessary, in its sole discretion, to comply with its
obligations set forth in Section 4.0(a)(1) of this Schedule.
Upon Company's request, Provider shall implement and maintain
throughout the term of the Agreement any and all such
programs, plans, procedures or measures created or dictated by
Company as part of the Services.
3. Subject to the terms and conditions of the Agreement and this
Schedule, each Party shall take steps it deems necessary to
comply with its obligations set forth in Section 4.0(a)(1) and
this Schedule; provided, however, that such Party shall use
commercially reasonable efforts to minimize the impact of such
steps on the other Party.
4. Provider shall fully cooperate with and reasonably assist
Company with responding to any data protection authority,
governmental agency, or other third party to the extent
necessary, in Company's sole reasonable discretion, to comply
with applicable privacy or data protection laws. To the extent
requested by Company, Provider shall fully cooperate with and
assist Company in support of Company's efforts to satisfy the
requirements of applicable privacy and data protection laws or
regulations, or any safe harbors or exemptions to such privacy
and data protection laws as such relate to the Services.
5. Provider shall fully cooperate with and reasonably assist
Company in fulfilling registration or other applicable
requirements under privacy or data protection laws, including
without limitation, providing requested information and
registering with data protection authorities or joining
self-regulatory programs as requested by Company in order to
permit Company and Provider to acheive the purposes of the
Agreement.
6. Changes to the Charges required by this Section 4.0(a) shall
be handled through the Change Control Procedures.
b. Data Usage and Management
1. Provider shall use the Personal Data only for the purposes of
providing the Services under this Agreement. Provider shall
treat all Personal Data as Confidential Information in
accordance with the confidentiality and security provisions of
the Agreement. Provider shall not disclose any such Personal
Data to any third party except as expressly authorized under
the Agreement, to the extent required by law or order of a
court of governmental agency, as required in order to perform
the Services in the ordinary course of business, or as
otherwise permitted under the terms of this Agreement.
Provider shall not use or disclose the Personal Data for the
purpose of marketing products or services to individuals whose
names are contained in the Personal Data. For the avoidance of
doubt, the foregoing sentence shall not restrict Provider's
communications to such individuals about the Services or any
products or services of Company.
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2. Provider will enter into such data protection agreements with
Company as may be reasonably required by governmental agencies
or data protection authorities in any jurisdiction after the
Effective Date and reasonably agreed to by Provider and
Company in discussions with such data protection authorities.
3. Company and Provider shall, as part of the plan to be
established under Section 3.0(a) above, establish technical
and organizational measures to ensure the security and
confidentiality of Personal Data, and to protect against
accidental or unlawful destruction or accidental loss,
alteration, unauthorized disclosure of or access to the
Personal Data, and security programs and procedures to ensure
that unauthorized persons will not have access to the systems
used to access or process the Personal Data.
4. Provider will ensure that any of its employees and
subcontractors whom it authorizes to have access to Personal
Data will comply with Provider's obligations under this
schedule and the confidentiality and security provisions of
the Agreement as applicable to the Personal Data.
c. Data Transfer
1. Provider will not transfer Personal Data out of the United
States, or otherwise engage in transfers of Personal Data from
one country to another, except as required for the express
purpose of fulfilling its obligation to provide Services under
this Agreement. Provider will obtain any required consents
prior to transferring any such Personal Data in accordance
with this provision.
d. Information Requests
1. If Company is required to provide information to an individual
regarding his or her Personal Data, Provider will respond
promptly to Company's inquiries concerning such Personal Data
and will reasonably cooperate with Company in providing such
information.
2. Upon Provider's or Company's reasonable written request,
Company or Provider will provide the other with such
information that it has regarding Personal Data and its access
and processing that is necessary to enable the requester to
comply with its obligations under this Section and the
applicable data protection laws.
e. Audit Rights
1. Provider will permit Company to audit Provider's compliance
with its data management, data privacy and security
obligations under the Agreement, this Schedule and the other
Schedules in accordance with Section 2.9 of the Agreement.
f. Event Management
1. Company and Provider shall develop, document and implement a
process for immediately addressing any incident relating to
data privacy, protection or security. In the event of any
claim or charge by a third party (including any individual or
data protection authority) that Company or Provider is not in
compliance with its obligations under applicable privacy and
data protection laws or has violated any privacy or data
protection law, Provider and Company shall cooperate with each
other and provide without delay all necessary resources or
cooperation to address and remedy such claim or charge that it
has not complied with its obligations as rapidly as possible.
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5.0 PHYSICAL/FACILITY SECURITY; LOGICAL SECURITY CONTROLS
a. Provider shall provide reasonable physical security controls at the
Employee Service Center, which shall provide for physical security
controls consistent with or better than those in place as of the
Process Take-on Date. Provider shall immediately notify Company of
any breach of such security controls or any suspicious activity
affecting Company, Personal Data, Company Information or Provider's
systems and shall take all necessary action to promptly correct such
security problem.
b. Provider shall permit only those persons with legitimate business
purposes to have access to the Employee Services Center.
c. Provider shall use the South Entrance of the building for access to
the Employee Services Center.
d. Company's Relationship Manager, and members of Company's Operations
Team, Executive Steering Committee, Gain Sharing Governance
Committee, and Technology and Business Processes Governance
Committee shall have reasonable unrestricted access to the Employee
Services Center.
e. Provider shall comply with Company's logical access control
procedures, and shall cooperate with Company in the administration
of such controls.
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SCHEDULE R
DISPUTE RESOLUTION SCHEDULE
1.0 DEFINED TERMS
Capitalized terms not otherwise defined herein have the meanings ascribed to
them in the Glossary.
"Complex Dispute List" means the Complex Dispute List maintained by
J*A*M*S/Endispute ("JAMS") or another list of individuals having similar
qualifications maintained by JAMS.
"Committee Exclusive Disputes" shall have the meaning set forth in Section
2.2(e) below.
"Dispute" means any dispute, controversy or claim of any kind or nature
arising under or in connection with the Agreement, including without
limitation, disputes as to the creation, validity, interpretation, breach
or termination of this Agreement.
"Executive Steering Committee" shall have the meaning set forth in the
Account Governance Schedule.
"Qualifications" means extensive knowledge or experience regarding the
subject of the Dispute.
2.0 DISPUTE RESOLUTION PROCESS
2.1 General. Except as otherwise stated in the Agreement, all Disputes arising
between the Parties shall be resolved in accordance with the process set
forth in this Dispute Resolution Schedule (the "Dispute Resolution
Process"). Notwithstanding the foregoing, in the event of any
inconsistency in the Dispute Resolution Process set forth in this Schedule
and any other process to resolve Disputes set forth elsewhere in this
Agreement or otherwise used by the Parties to resolve Disputes without
referring the Dispute to a third party, either Party may elect that both
Parties adhere to this Dispute Resolution Process (it being acknowledged
that such other processes generally contemplate that the Parties can
resolve a Dispute without the need for mediation or arbitration, whereas
the Dispute Resolution Process in this Schedule generally contemplates the
potential need for the parties to resort to mediation or arbitration to
resolve a particular Dispute). Company and Provider shall at all times
exercise reasonable, good faith efforts to resolve all Disputes in a
timely, amicable and efficient manner.
2.2 Escalation Procedure.
(a) Relationship Managers. All Disputes shall initially be referred by
either Party to both Parties' Relationship Manager. Each Party's
Relationship Manager shall negotiate with the other Party's
Relationship Manager to resolve the Dispute.
(b) Executive Steering Committee. If the Relationship Managers do not
resolve the Dispute within [***]* (or such longer period as the
Relationship Managers may agree) after the date of referral of the
Dispute to them, either Party may elect to proceed directly to the
Executive Steering Committee.
(c) Acceleration. Notwithstanding the foregoing, in the event either
Party determines at any time and in its sole discretion that the
Dispute relates to such a critical matter that the Escalation
Procedure set forth in this Section 2.2 will not resolve the Dispute
in a timely
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or satisfactory manner, such Party may accelerate the Dispute
directly to the Executive Steering Committee. Subject to the
provisions of Section 2.2(e) with respect to Committee Exclusive
Disputes, if the Executive Steering Committee does not resolve the
accelerated Dispute within [***]* after the date of referral of such
Dispute to such committee, either Party may submit the Dispute to
binding arbitration in accordance with Section 2.4 below.
(d) Committee Exclusive Disputes. The Executive Steering Committee shall
be the final forum for the resolution of any Dispute with respect to
the following matters (the "Committee Exclusive Disputes"):
1. Technology strategy and policy issues which are the subject of
the Technology and Process Governance Schedule;
2. Benchmarking;
3. Claims for damages arising under the Agreement where the
damages claimed, together with related damages claimed under
the Human Resources Services Agreement and the Technical
Services Agreement, are less than [***]* measured annually;
and
4. [***]*
In no event may a Committee Exclusive Dispute be escalated beyond
the Executive Steering Committee, or submitted to mediation,
arbitration, or any other forum for resolution, unless the Executive
Steering Committee agrees to do so. [***]*
2.3 Further Escalation. Any Dispute that is not a Committee Exclusive Dispute
may be further escalated as follows:
(a) Non-binding Mediation. If the Executive Steering Committee does not
resolve the Dispute within [***]* (or such longer period as that
Committee may agree) after the date of referral to it, either Party
may submit the Dispute to non-binding mediation in accordance with
Section 2.4 below.
(b) Binding Arbitration. If the Dispute is not resolved by any of the
preceding steps and is not resolved by mediation, either Party may
submit the Dispute to binding arbitration in accordance with Section
2.5 below.
(c) Miscellaneous. If the Parties act pursuant to another process set
forth elsewhere in this Agreement or as otherwise agreed to in their
attempt to resolve a particular Dispute without referral of the
Dispute to a third party (e.g., the parties utilize dispute
resolution procedures pursuant to the ACCOUNT GOVERNANCE SCHEDULE),
the Parties shall be deemed to have completed the steps in Sections
2.2(a), 2.2(b) and 2(c) of this Dispute Resolution Process if the
substance of those steps have been taken and those timeframes have
been met by the Parties in such other process, such that either
Party may then elect to proceed directly to either non-binding
mediation in accordance with Section 2.4below or to binding
arbitration in accordance with Section 2.5 below.
2.4 Mediation. Mediation of an unresolved Dispute shall be conducted in the
following manner:
(a) Either Party may submit the Dispute to mediation by giving Notice of
mediation to the other Party. The Parties shall thereafter attempt
to promptly agree upon and appoint a sole mediator who has the
Qualifications.
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(b) If the Parties are unable to agree upon a mediator within [***]*
after the date the Dispute is submitted to mediation, either Party
may request the [***]* office of JAMS to appoint a mediator who has
the Qualifications. The mediator so appointed shall be deemed to
have the Qualifications and to be accepted by the Parties.
(c) The mediation shall be conducted in the [***]* at a place and a time
agreed by the Parties with the mediator, or if the Parties cannot
agree, as designated by the mediator. The mediation shall be held as
soon as practicable, considering the schedules of the mediator and
the Parties.
(d) If either Party has substantial need for information from the other
Party in order to prepare for the mediation, the Parties shall
attempt to agree on procedures for the formal exchange of
information. If the Parties cannot agree, the mediator's
determination shall become effective.
(e) Each Party shall be represented in the mediation by at least its
Relationship Manager or another natural Person with authority to
settle the Dispute on behalf of that Party and, if desired by that
Party, by counsel for that Party. The Parties' representatives in
the mediation shall continue with the mediation as long as the
mediator requests, but in no event longer than [***]* unless
otherwise agreed.
(f) [***]*
2.5 Arbitration. Arbitration of an unresolved Dispute shall be conducted in
the following manner:
(a) Either Party may initiate arbitration by filing a demand for
arbitration (the "Demand") in accordance with the American Rules of
Arbitration (the "Arbitration Rules"). The Parties shall thereafter
attempt to promptly agree upon and appoint a Panel of three
arbitrators (the "Panel"). Each of those arbitrators must have the
Qualifications, and at least two of those arbitrators must be
included in the Complex Dispute List.
(b) If the Parties are unable to agree upon any or all of the
arbitrators within [***]* after the filing of the Demand (and do not
agree to an extension of that ten-day period), either Party may
request the [***]* office of JAMS to appoint the arbitrator or
arbitrators, who have the Qualifications (and at least two of whom
must be included in the Complex Dispute List), necessary to complete
the Panel in accordance with the Arbitration Rules. Each arbitrator
so appointed shall be deemed to have the Qualifications and to be
accepted by the Parties as part of the Panel.
(c) The arbitration shall be conducted in the [***]* at a place and a
time agreed by the Parties with the Panel, or if the Parties cannot
agree, as designated by the Panel. The Panel may, however, call and
conduct hearings and meetings at such other places as the Parties
may agree or as the Panel may, on the motion of one Party, determine
to be necessary to obtain significant testimony or evidence.
(d) The Parties shall attempt to agree upon the scope and nature of any
discovery for the arbitration. If the Parties do not agree, the
Panel may authorize any and all forms of discovery, including
depositions, interrogatories, and document production, upon a
showing of particularized need that the requested discovery is
likely to lead to material evidence needed to resolve the Dispute.
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(e) The arbitration shall be subject to the Federal Arbitration Act and
conducted in accordance with the Arbitration Rules to the extent
they do not conflict with this Section 2.4. The Parties and the
Panel may, however, agree to vary the provisions of this Section 2.4
or the matters otherwise governed by the Arbitration Rules.
(f) The Panel has no power to:
(i) rule upon or grant any extension, renewal, or continuance of
the Agreement; or
(ii) award remedies or relief either expressly prohibited by the
Agreement or under circumstances not permitted by the
Agreement.
(g) Unless the Parties otherwise agree, all Disputes hereunder and under
the Human Resources Services Agreement and/or the Technical Services
Agreement regarding or related to the same topic or event that are
subject to arbitration during the same time period shall be
consolidated in a single arbitration proceeding.
(h) A Party or other Person involved in an arbitration under this
Section 2.4 may join in that arbitration any Person other than a
Party if:
(i) the Person to be joined agrees to resolve the particular
Dispute or controversy in accordance with this Section 2.4 and
the other provisions of this Dispute Resolution Schedule
applicable to arbitration; and
(ii) the Panel determines, upon application of the Person seeking
joinder, that the joinder of that other Person will promote
the efficiency, expediency and consistency of the result of
the arbitration and will not unfairly prejudice any other
party to the arbitration.
(i) The arbitration hearing shall be held within [***]* after the
appointment of the Panel unless the Parties agree otherwise. Upon
request of either Party, the Panel shall arrange for a transcribed
record of the arbitration hearing, to be made available to both
Parties.
(j) The Panel's final decision or award shall be made within [***]*
after the hearing. That final decision or award shall be made by
unanimous or majority vote or consent of the arbitrators
constituting the Panel, and shall be deemed issued at the place of
arbitration. The Panel shall issue a reasoned written final decision
or award based on the Agreement and the laws of the State of [***]*
exclusive of its conflicts of laws provisions and to the extent not
preempted by federal law.
(k) The Panel's final decision or award may include:
(i) recovery of Damages to the extent permitted by the Agreement;
or
(ii) injunctive relief in response to any actual or threatened
breach of the Agreement or any other actual or threatened
action or omission of a Party under or in connection with the
Agreement.
(l) The Panel's final decision or award shall be final and binding upon
the Parties, and judgment upon that decision or award may be entered
in any court having jurisdiction over either or both of the Parties
or their respective assets. The Parties specifically waive any right
they may have to apply or appeal to any court for relief from the
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preceding sentence or from any decision of the Panel, or any
question of law arising from or related to the Dispute, before or
after the final decision or award.
(m) [***]*
3.0 EXCEPTIONS
3.1 Recourse to Courts. Nothing in the Agreement, this Dispute Resolution
Schedule or otherwise shall limit the right of either Party to apply to a
court or other tribunal having jurisdiction to:
(a) enforce the Dispute Resolution Process;
(b) seek provisional or injunctive relief (including without limitation
the provision of Termination Assistance Services), in response to an
actual or impending breach of the Agreement or otherwise so as to
avoid irreparable damage or maintain the status quo, until a final
arbitration decision or award is rendered or the Dispute is
otherwise resolved; or
(c) take any other action to resolve the Dispute, whether or not
permitted by or in conflict with the Dispute Resolution Process, if
the action is specifically agreed to in writing by the Parties.
4.0 MISCELLANEOUS
4.1 Confidentiality. The proceedings of all negotiations, mediations, and
arbitrations as part of the Dispute Resolution Process shall at all times
be privately conducted. The Parties agree that all information, materials,
statements, conduct, communications, negotiations, mediations,
arbitrations, offers of settlement, documents, decisions, and awards of
either Party, in whatever form and however disclosed or obtained in
connection with the Dispute Resolution Process:
(a) shall at all times be Confidential Information;
(b) shall not be offered into evidence, disclosed, or used for any
purpose other than the Dispute Resolution Process; and
(c) will not constitute an admission or waiver of rights.
4.2 Continued Performance. Except where clearly prevented by the nature of the
Dispute as agreed to in writing by both Parties or where restrained or
enjoined by the Panel or a court or tribunal with appropriate
jurisdiction, the Parties agree to continue performing their respective
obligations under the Agreement while a Dispute is being resolved.
4.3 Notice. Any referral or acceleration required or permitted herein shall be
made by Notice to the applicable Persons designated herein. The date of
referral is the effective date of the Notice to the Persons to whom the
Dispute must have been referred.
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SCHEDULE S
INSURANCE SCHEDULE
1.0 INTRODUCTION
This Insurance Schedule sets forth the types of insurance and the minimum limits
per occurrence, accident, claim or loss the Provider will maintain throughout
the term of the Agreement.
2.0 COVERAGES TABLE
[***]*
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SCHEDULE T
TERMINATION ASSISTANCE SCHEDULE
1.0 INTRODUCTION
1.1 This Termination Assistance Schedule describes certain activities that the
Parties shall undertake in connection with a termination or expiration of
the Agreement. The Parties shall develop a Termination Assistance Plan.
Capitalized terms used but not defined in this Schedule have the meanings
assigned to them in the Glossary to the Agreement.
2.0 TERMINATION ASSISTANCE PLAN
2.1 Provider and Company shall establish a termination assistance team
("Termination Assistance Team") tasked with:
(a) documenting a Termination Assistance Plan that can be executed in
connection with expiration or termination of the Agreement;
(b) meeting and agreeing to the details of the relevant Termination
Assistance Plan and reviewing and updating the plan at least
annually;
(c) facilitating the transition during the Termination Assistance
Period; and
(d) managing the performance of the Parties' respective obligations
under the Termination Assistance Plan.
2.2 In accordance with Section 13.3 of the Agreement, the Termination
Assistance Team shall jointly develop, and Provider will submit for
Company's approval a Termination Assistance Plan within [***]* after the
Process Take-On Date. Provider will update the entire plan at least once
per [***]* or after any significant event.
2.3 The Termination Assistance Plan will include the activities, timeframes
and dependencies for transition of the Services performed by Provider to
Company or a third party successor of Provider. This will include, by
necessity, any activities needed to extract Company data and processes and
access to those assets in the event that extraction is not feasible or
desirable. The Termination Assistance Plan shall also address the manner
in which Provider will minimize any disruption and/or degradation of the
Services.
2.4 Provider will provide Company the opportunity to provide input into the
Termination Assistance Plan through the Termination Assistance Team.
2.5 Consistent with the provisions set forth in Sections 13.3 and 13.4 of the
Agreement, and any other services agreed to by the Parties, Provider will
include the following Termination Assistance Services in the Termination
Assistance Plan to be performed upon a termination or expiration of the
Agreement:
[***]*
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SCHEDULE U
REPORTS SCHEDULE
1.0 INTRODUCTION
This Schedule identifies Provider's and Company's responsibilities in connection
with providing reports ("REPORTS").
2.0 GENERAL
2.1 Provider shall prepare and deliver to Company the Reports required under
the Agreement and the Schedules to the Agreement.
2.2 From time to time, as part of the Services, Provider shall be responsible
for preparing and delivering ad hoc Reports which require code development
as required under the Services Schedule. Such Reports shall be delivered
according to timing reasonably specified by Company.
2.3 Provider shall prepare and deliver to Company, within [***]* following the
end of each calendar month, Reports regarding Provider's performance
against each of the established Service Levels (i.e., the KPIs and RSLs as
set forth in the Service Levels Schedule); provided, however, that Company
may identify certain priority Reports which shall be delivered earlier, as
mutually agreed. Company shall prepare and deliver to Provider within
[***]* following the end of each calendar month, Reports regarding
Company's performance against each of the established Company RSLs. Such
reports shall be in sufficient detail to permit Company and Provider to
determine the level of the other's performance in accordance with the
Service Levels Schedule (Schedule B).
2.4 [***]*
2.5 The format of the Reports (including the form of delivery media, which may
include paper and/or electronic form) shall be in accordance with
Provider's standard formats; provided, however, that during the [***]*
period following the Process Take-On Date, Company and Provider shall
refine the appearance and content of the Reports to accommodate Company's
reasonable business requirements.
2.6 All Reports will contain accurate and complete data based on the available
data.
2.7 Preparation and delivery of Provider's Reports under this Schedule shall
be considered part of the Services, and there shall be no additional
charges or fees to Company associated with such activity.
2.8 For each Report, upon Company's reasonable request, Provider will answer
any questions that Company may have regarding such Report.
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SCHEDULE V
TECHNOLOGY PROCESS GOVERNANCE SCHEDULE
1.0 INTRODUCTION
Prior to the Process Take-On Date, Company and Provider will develop specific
procedures regarding changes, modifications and amendments to the Services IT
platform and certain business processes, which the Parties will follow as of the
Process Take-On Date (the "Technology Process Procedures"). This Technology
Process Governance Schedule sets out the process by which the Technology Process
Governance Procedures will be developed and finalized and the scope and
requirements of the Technology Process Procedures. For purposes hereof,
"technology process" or "Technology Process" means technology processes as
outlined in the Services Schedule (Schedule A) that involve how inputs are
prepared by Company and delivered to Provider, and how outputs are received by
Company from Provider, provided that such terms shall not include technology or
other processes that are internal to Provider.
2.0 TECHNOLOGY PROCESS PROCEDURES
2.1 Development. Provider and Company shall jointly develop and finalize the
Technology Process Procedures prior to the Process Take-On Date. The
Parties shall establish a team to develop the Technology Process
Procedures, which shall be comprised of the Company Relationship Manager,
the Provider Relationship Manager and no more than two additional
representatives from each Party designated by the Relationship Managers.
Company's processes and procedures shall apply until such time as the
Parties have agreed to the Technology Process Procedures and Provider
shall comply with all such Company processes and procedures. The Parties
shall act in good faith at all times during the development of the
Technology Process Procedures.
2.2 Scope. The Technology Process Procedures will describe in detail the
processes and procedures to be followed by the Parties for management of
the day-to-day operations relating to the following:
(a) Nomination and implementation of application and other operational
changes to the Services IT platform;
(b) Requests by Company for personnel and other resources;
(c) Initiation and management of projects;
(d) Approval and implementation of changes required prior to Provider
providing services to any third party other than Company using the
Employee Service Center;
(e) Establishment of a technology governance team;
(f) Implementation of any changes or other initiatives according to
Change Control Procedures or agreement on New Services; and
(g) Any other pertinent information as mutually agreed upon by the
Parties.
2.3 Required Provisions. The Parties agree that, in addition to any provisions
agreed to by the Parties, the Technology Process Procedures shall include
provisions relating to the following:
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(a) Disputes involving the Services IT platform shall be escalated for
resolution in accordance with the Dispute Resolution Schedule;
(b) Company shall make any changes, modifications or enhancements that
Company deems appropriate in its sole discretion to any Company
owned or provided hardware, software or system provided that any
such change, modification or enhancement shall not have a material
adverse impact on Provider's delivery of the Services, or Provider's
performance in accordance with the Agreement (including Service
Levels).
(c) Provider shall use commercially reasonable efforts to make
additional SAP support personnel available as requested by Company
to assist Company with Project Viking, which resources shall be
charged to Company as set forth in Section 4.1.4(6) of the CHARGES
SCHEDULE.
(d) Subject to Section 1.5 of the Agreement, prior to Provider providing
services to any third party other than Company using the Employee
Service Center, the Parties shall have agreed upon the transfer or
replacement of the Company owned or provided IT infrastructure in
the Employee Service Center, which includes, but shall not be
limited to, the following:
[***]*
(e) With respect to the establishment of a Technology Process Management
Team:
(i) A Technology Process Management Team will be formed and the
initial members assigned prior to the Process Take-On Date.
(ii) The Technology Process Management Team shall be involved in
the management of any proposed or implemented change,
amendment or addition to the Services IT platform or the
business processes. The Technology Process Management Team
will meet on a monthly basis, and at any other time as
required by the Agreement or as necessary or as agreed to by
the Parties.
(iii) The Technology Process Management Team will be comprised of
the Parties' Relationship Managers and any other
representatives designated by the Relationship Managers.
(iv) The responsibilities and authorities of the Technology Process
Management Team will include management of the Technology
Process Procedures, including, but not limited to, management
of the Change Control Process with respect to Changes that
impact the Services IT platform and/or any business processes.
2.4 Mutual Responsibilities. Each Party agrees to perform its responsibilities
set forth in the Technology Process Procedures as mutually agreed upon by
the Parties.
2.5 Effectiveness. Once approved by both Parties, the Technology Process
Procedures shall be signed by both Provider's and Company's Relationship
Managers, at which time such signed Technology Process Procedures shall be
deemed to be agreed and incorporated into the Agreement on the date of
signature or as the Parties may otherwise agree.
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2.6 Conflicts. In the event of a conflict between the provisions of the
Agreement and the Technology Process Procedures, the provisions of the
Agreement will control unless the Parties expressly agree otherwise in
writing.
2.7 Updates and Amendments. During the Term, Provider will update and amend
the Technology Process Procedures to the extent deemed necessary by the
Parties to reflect new Services, changes in the operating environment or
changes in the operations or procedures described in the Technology
Process Procedures. The Parties shall submit any changes to the Technology
Process Procedures for review, comment and approval in accordance with the
CHANGE CONTROL SCHEDULE.
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* Confidential information has been omitted.
Schedule V - Systems Services Agreement - Final 3
October 18, 2001
<PAGE>
Proprietary and Confidential International Paper / Exult
SCHEDULE W
THIRD PARTY PARTICIPATION SCHEDULE
1.0 INTRODUCTION
This Schedule lists certain third party contractors and subcontractors of
Company having certain access and cooperation rights, as contemplated by Section
2.3 of the Agreement.
The listing of Third Parties and the nature of access and cooperation provided
under this Schedule may be amended from time to time by mutual agreement of the
Parties. Company will be responsible for requiring all Third Parties to have
adequate insurance against damages to Provider's assets and people, to comply
with Provider's security and confidentiality procedures, and Company will make
its Relationship Manager (or appropriate designee) available to assist Provider
with any necessary problem resolution with such third parties.
2.0 PARTICIPATING THIRD PARTIES
[***]*
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* Confidential information has been omitted.
Schedule W - Systems Services Agreement - Final 1
October 18, 2001
<PAGE>
Proprietary and Confidential International Paper / Exult
SCHEDULE X
ADDITIONAL AGREEMENTS SCHEDULE
1. Additional Agreements shall mean:
(a) The Side Letter regarding the possible commission payments to be
paid by Provider to Company;
(b) The Conveyance Document;
(c) The ancillary agreements to the Conveyance Document;
(d) The Sub-Lease;
(e) The Personal Property Sublease; and
(f) Site Licenses for the following locations:
BPTC
4070 Willow Lake Blvd.
Memphis, TN 38118
ITDC
4100 Willow Lake Blvd.
Memphis, TN 38118
Tower I
6400 Poplar Ave.
Memphis, TN 38197.
2. The Process-Take-On Date shall not occur unless and until each of the
following conditions has been satisfied or waived by each Party:
(a) The Services under this Agreement and the services under each of the
Optional Agreements shall have been completely migrated/converted to
Provider; and
(b) The Additional Agreements shall have been completed and executed in
a form satisfactory to each Party.
Schedule X - Systems Services Agreement - Final 1
October 18, 2001
<PAGE>
Proprietary and Confidential International Paper / Exult
SCHEDULE Y
AUDITOR CONFIDENTIALITY SCHEDULE
The terms and conditions listed below, or terms and conditions that are
equivalent in all material respects, shall be included in a confidentiality and
non-disclosure agreement that any auditor designated by Company ("Auditor")
under Section 2.8 of the Agreement shall execute prior to the commencement of
any audit activities permitted under the Agreement. At the request of Provider
at the time, Company shall provide Provider with a copy of the executed
confidentiality and non-disclosure agreement for each Auditor prior to the
commencement of any audit activities by such Auditor.
1. That Auditor will hold as confidential all Confidential Information
of Provider and Company, restricting access and use of all such
Confidential Information solely to those of Auditors employees who
have a legitimate need to know for purposes of the applicable audit.
2. That Auditor's employees having access to Provider's Confidential
Information shall be bound by written employment or non-disclosure
agreements broad enough in scope to require such employees to
maintain the confidentiality of Provider's Confidential Information.
3. That Auditor's access to systems, data, facilities and personnel
owned or managed by Provider shall be solely for purposes of the
audit and Auditor shall comply with Provider's reasonable security
and access restrictions to safeguard any Provider Confidential
Information and any information relating to other Provider customer.
4. That Auditor shall not under any circumstances use, copy, disclose,
disseminate, commercially exploit in any way (including, without
limitation, to compete with Provider), or prepare Derivative Works
from, any Confidential Information of Provider, except as reasonably
necessary to perform the audit activities or as required by law.
5. At the request of Provider at the time, Provider shall be named as a
third party beneficiary of the agreement with the Auditor.
Schedule Y - Systems Services Agreement - Final 1
October 18, 2001
<PAGE>
Proprietary and Confidential International Paper / Exult
SCHEDULE Z
TERMINATION FOR CONVENIENCE SCHEDULE
1.0 INTRODUCTION
This Termination for Convenience Schedule describes the procedures to be
followed by Company if it elects to terminate the Agreement for convenience
pursuant to Section 12.5 of the Agreement.
2.0 TERMINATION FOR CONVENIENCE
Company may elect to terminate the Agreement for its convenience, by providing
Provider with [***]* prior written notice stating Company's election to
terminate for its convenience and the effective date of such termination,
provided that such effective date shall be no earlier than [***]* A termination
for convenience under either Optional Agreement shall be deemed an election to
terminate for convenience under this Agreement.
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* Confidential information has been omitted.
Schedule Z - Systems Services Agreement - Final 1
October 18, 2001