Agreement for Systems Operations Services - Dean Witter, Discover & Co. and Advantis
ADVANTIS / DEAN WITTER, DISCOVER & CO.
AMENDED AGREEMENT FOR SYSTEMS OPERATIONS SERVICES
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This Amended Agreement for Systems Operations Services ("Amended
Agreement"), dated as of January 1, 1996, is by and between Dean Witter,
Discover & Co., a Delaware corporation having a place of business at Two World
Trade Center, New York, NY 10006 ("DWD"), and Advantis, a New York general
partnership having its principal place of business at 231 North Martingale
Road, Schaumburg, Illinois, 60173-2254 ("Advantis"). DWD and Advantis
(collectively, the "Parties" and each, a "Party") agree that the following
terms and conditions will apply to services provided by Advantis under this
Amended Agreement.
TABLE OF CONTENTS
Background and Objectives.................................................. 4
Definitions, Documents and Term............................................ 5
Advantis Responsibilities.................................................. 10
DWD Responsibilities....................................................... 20
Charges and Expenses....................................................... 21
Invoicing and Payment...................................................... 25
[ * ]............................................................[ * ]
Confidentiality/Data Security.............................................. 28
Termination................................................................ 30
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
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Liability.................................................................. 34
Warranty................................................................... 35
Indemnities................................................................ 38
Insurance and Risk of Loss................................................. 43
Publicity.................................................................. 43
Dispute Resolution......................................................... 44
General.................................................................... 45
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LIST OF EXHIBITS
Exhibit 1 Data Network
Exhibit 2 Information Processing Systems and Services (IPSS)
Exhibit 3 Voice Network
Exhibit 4 Charging Methodology
Exhibit 5 Performance Standards
Exhibit 6 Advantis Software, DWD Software and Supported Software; Proprietary
Products
Exhibit 7 Special Services Agreements
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1. BACKGROUND AND OBJECTIVES
DWD and Advantis desire to amend and restate the Master Agreement for
Systems Operations Services between the Parties dated as of November 30, 1992
(the "Master Agreement"). This amended and restated document does not
terminate that Master Agreement, but only conforms the terms and conditions to
the revised business arrangement. The rights and responsibilities of the
Parties from and after the Amended Agreement Commencement Date shall be defined
solely by this Amended Agreement; the rights and responsibilities of the
Parties prior to the Amended Agreement Commencement Date shall be defined
solely by the Master Agreement. Under this Amended Agreement, Advantis will
continue to perform those Services it provided to DWD under the Master
Agreement prior to the Amended Agreement Commencement Date in a manner
consistent with prior practice between the Parties and with at least the same
levels of quality as Advantis performed under the Master Agreement prior to the
Amended Agreement Commencement Date. The charges for all activities necessary
for Advantis to meet this commitment are included in the Annual Service
Charges, in the Voice Services charges set forth in Exhibit 3, or are
separately indicated as an additional charge under this Amended Agreement
(e.g., are covered by an ARC/RRC, Direct Charge, SSA or Advantis tariff
amount). It is the Parties' intent that any activities or functions that were
performed by Advantis at no additional or separate charge to DWD prior to the
Amended Agreement Commencement Date under the Master Agreement will continue to
be performed by Advantis under this Amended Agreement at no additional or
separate charge to DWD. The Parties acknowledge and agree that the Direct
Charge items set forth in Exhibit 7 may not be a complete listing of all
special bid types of services being provided to DWD by Advantis as of the
Amended Agreement Commencement Date, and that there may be some services
currently provided by Advantis to DWD for which no formal documentation exists,
and thus reference to which is not included in Exhibit 7. The Parties shall
work together to formalize in writing all such special bid service arrangements
as soon after the Amended Agreement Commencement Date as possible, but no later
than ninety (90) days after the Amended Agreement Commencement Date; however,
in the interim, Advantis shall continue to provide such services to DWD
according to the business arrangements (same scope of service for same charge)
existing just immediately prior to the Amended Agreement Commencement Date,
unless the Parties mutually agree otherwise. Except as stated in the prior two
sentences, any charges for Services to be charged to DWD by Advantis under this
Amended Agreement must be expressly stated.
a) This Amended Agreement shall serve as the basic terms and
conditions for Services performed by Advantis for DWD.
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b) In the event of any inconsistency or conflict in the provisions of
the respective documents applicable to the provision of the
Services, the order of precedence shall be:
1) this Amended Agreement; and
2) the Exhibits attached to this Amended Agreement.
2. DEFINITIONS, DOCUMENTS AND TERM
2.1 GENERAL DEFINITIONS
As used in this Amended Agreement, the following terms shall have the
meanings set forth below.
a) "Additional Resource Charge" or "ARC" means the charge for
additional utilization of Resource Units above the applicable
Monthly Baseline and associated Deadband, if any, for a specific
Individual Service Element.
b) "Affiliate" means, with respect to a Person, any other Person at
any time Controlling, Controlled by or under common Control with,
such Person.
c) "Annual Revenue Commitment" shall have the meaning set forth in
Exhibit 4.
d) "Annual Service Charge" or "ASC" means the annual fixed charge to
DWD for each Contract Year of the Term for Advantis' providing to
DWD the Data Network and IPSS Services. There are two separate
Annual Service Charges: the Data Network Annual Service Charge and
the IPSS Annual Service Charge.
e) "Applications Software" means those programs and programming,
including all supporting documentation and media, that perform
specific user-related data processing and telecommunication tasks,
and which are being run, as of the Commencement Date, by Advantis,
and which will be run by Advantis on and after the Commencement
Date. Applications Software does not include DWD Software.
f) "Audit Notice" shall have the meaning set forth in Section 12.7
(a).
g) "Baseline" means the specific quantity and level of Resource Units
of a particular Individual Service Element which is being provided
to DWD by Advantis and which is included in an Annual Service
Charge.
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h) "Baseline Adjustment" means a change made to a specific Baseline
for an Individual Service Element.
i) "Claim" shall have the meaning set forth in Section 12.6 (a).
j) "Commencement Date" means January 1, 1996.
k) "Confidential Information" shall have the meaning set forth in
Section 8.1.
l) "Control" means the legal, beneficial or equitable ownership,
directly or indirectly, of more than 50% of the aggregate of all
voting equity interests in such entity.
m) "Cost of Living Adjustment" or "COLA" and "COLA Index" shall have
the meanings set forth in Section 5.2.
n) "Data Center" means the Equipment and Software to be located at an
Advantis location. "Data Center" does not include any DWD
Equipment or DWD Software.
o) "Data Network" means all Equipment, associated attachments,
features and accessories, Software, lines and cabling, including
communication controllers, multiplexors, lines and modems/DSUs used
to connect and transmit data. The Data Network does not include
DWD Equipment or DWD Software.
p) "DWD Equipment" means machines and equipment that are owned or
leased by DWD and for which DWD, rather than Advantis, retains
financial and administrative responsibility.
q) "DWD Locations" means those DWD locations to which Services are
provided.
r) "DWD Software" means the software and programs owned or licensed by
DWD for which DWD, rather than Advantis, retains financial and
administrative responsibility. Subject to Section 7(a), DWD
Software is identified in Exhibit 6.
s) "End Users" means those individuals within DWD who are users of
Services.
t) "End User Equipment" means all workstations, terminals, LAN
servers, printers and associated peripheral equipment located at
DWD Locations.
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u) "Equipment" means any machine, its features, conversions, upgrades,
elements, licensed internal code, or accessories, or any
combination of them provided by Advantis hereunder (including End
User Equipment) owned or leased by Advantis and used to provide the
Services to DWD. The term "Equipment" includes Advantis and
non-Advantis equipment provided by Advantis. The term does not
include DWD Equipment, as defined above.
v) "Force Majeure Event" shall have the meaning set forth in Section
16.4 (a).
w) "Hazardous Materials" shall have the meaning set forth in Section
11.2 (b).
x) "Include" and its derivatives shall mean including without
limitation. This term is as defined, whether or not capitalized in
this Amended Agreement.
y) "Indemnified Party" and "Indemnifying Party" shall have the
respective meanings set forth in Section 12.6 (a).
z) "Indemnifiable Taxes" shall have the meaning set forth in Section
12.7 (b).
aa) "Individual Service Element(s)" or "ISE(s)" means a specific type
of Service within a Service Category, such as CPU Prime A or 56KB.
ab) "Initial Pricing Period" means, for each Service Category, the
period from the Commencement Date through December 31, 1999 for
which prices are effective.
ac) "Losses" means all losses, liabilities, damages and claims
(including taxes), and all related costs and expenses (including
any and all reasonable attorneys' fees and reasonable costs of
investigation, litigation, settlement, judgment, interest and
penalties).
ad) "Out-of-Pocket Costs" shall mean reasonable and actual
out-of-pocket expenses incurred by Advantis for equipment,
materials, supplies, or other Services provided to DWD under this
Amended Agreement, but not including Advantis' overhead costs (or
allocations thereof), administrative expenses or other mark-ups.
ae) "Party" or "Parties" shall have the meaning given in the preamble
to this Amended Agreement.
af) "Performance Standards" means the service levels and performance
responsibilities under which the Services
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will be provided. The Performance Standards will be described and
listed in the attached Exhibit 5.
ag) "Person" means any firm, company, corporation, unincorporated
association, partnership, trust, joint venture, governmental
authority or other entity, or a division of any of the foregoing,
or any individual, and shall include any successor (by merger or
otherwise) of such entity.
ah) "Reduced Resource Credit" or "RRC" means the credit for reduced
utilization of Resource Units below the applicable Monthly Baseline
and associated Deadband, if any, for a specific Individual Service
Element.
ai) "Required Consents" means any consents or approvals required for
the licensing or transfer to Advantis of the right to use or access
any applicable facilities, space, equipment, software or third
party services.
aj) "Resource Unit" or "RU" means, for each Individual Service Element,
a particular unit of resource used to measure Services provided by
Advantis pursuant to a particular Baseline.
ak) "Services" shall have the meaning set forth in Section 3.1 of this
Amended Agreement.
al) "Service Category" means one of the three categories of Services
set forth in this Amended Agreement: Voice, Data Network, or
Information Processing Systems and Services ("IPSS").
am) "Software" means either of or both Applications Software and
Systems Software, as applicable.
an) "Special Services Amendment" or "SSA" means agreements entered into
between Advantis and DWD which are in response to specific DWD
requirements for which the standard Advantis Services are not
applicable. Exhibit 7 includes those agreements executed under the
1992 Master Agreement and which continue under this Agreement,
unless otherwise mutually agreed.
ao) "Supported Software" means Software other than DWD Software, for
which Advantis has financial, administrative, operational, and
maintenance obligations as set forth in Section 3.7. Subject to
Section 7(a), Supported Software includes the Software so
identified in Exhibit 6.
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ap) "Systems Software" means those programs and programming, including
all supporting documentation and media, that perform tasks basic to
the functioning of the data processing and telecommunication
equipment and which are required to operate the Applications
Software or otherwise support the provision of Services by
Advantis. Systems Software does not include DWD Software.
aq) "Tax Claim" shall have the meaning set forth in Section 12.7 (b).
ar) "Tax Indemnified Party" and "Tax Indemnifying Party" shall have the
respective meanings set forth in Section 12.7 (a).
as) "Term" shall have the meaning set forth in Section 2.4.
at) "Termination Assistance" shall have the meaning set forth in
Section 9.3 (a).
au) "Voice Services" means those voice-related Services generally
described in Exhibit 3.
2.2 [INTENTIONALLY OMITTED.]
2.3 ASSOCIATED CONTRACT DOCUMENTS
This Amended Agreement includes Exhibits 1 through 7 which will be
updated by Advantis and DWD as necessary or appropriate during the Term in
compliance with the amendment process set forth in Section 16.3. In the
context of this Amended Agreement, as of the Commencement Date, Schedules A
through E of the Master Agreement are superseded and no longer in force.
2.4 TERM
The term of this Amended Agreement will begin as of 12:01 a.m. on the
Commencement Date and will end as of 12:00 midnight on December 31st 2002 (the
"Term"), unless earlier terminated or extended, in whole or in part, in
accordance with this Amended Agreement.
2.5 RENEWAL AND EXPIRATION
a) Advantis agrees to notify DWD in writing whether it desires to
renew this Amended Agreement and of the proposed prices and terms
to govern such renewal not less than 18 months prior to the
expiration of the Term. If Advantis so notifies DWD that it
desires to renew this Amended Agreement, DWD agrees to inform
Advantis in writing whether it desires to renew not
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less than 12 months prior to the expiration of the Term. Failure
by either Advantis or DWD to provide notice at the time specified
above shall be deemed to be notice of intent not to renew this
Amended Agreement. If either DWD or Advantis does not wish to
renew this Amended Agreement, it shall expire at the end of the
Term. If both Advantis and DWD desire to renew this Amended
Agreement but are unable to agree upon renewal prices, terms and
conditions no later than six months prior to the expiration of the
Term, DWD may elect to extend this Amended Agreement for one year
at the prices, terms and conditions in effect during the last year
of the Term. If Advantis and DWD are unable to reach agreement on
renewal during such extension period, if any, this Amended
Agreement will expire at the end of such extension period.
b) In the event of a failure to renew this Amended Agreement as
described in paragraph (a) above, if DWD elects to solicit bids or
proposals from competitive providers for the performance of any or
all of the Services, DWD agrees to provide Advantis with the same
proposal requirements and information, access to facilities and
pertinent personnel and other notices and materials as provided to
other potential vendors, and treat Advantis as it treats the other
potential vendors in the proposal or bidding process.
2.6 REQUIRED CONSENTS
DWD shall be responsible for obtaining any and all Required Consents
necessary to enable Advantis to use DWD Software and DWD Equipment. DWD shall
bear the costs, if any, of obtaining all of its Required Consents described
above. In the event that any Required Consent is not obtained, then unless and
until such Required Consents are obtained, Advantis and DWD shall cooperate
with each other in achieving a reasonable alternative arrangement for DWD to
continue to process its work with minimum interference to its business
operations.
3. ADVANTIS RESPONSIBILITIES
3.1 GENERAL
a) Advantis will provide those services listed in this Section 3,
those described in Exhibits 1 through 3 and 7 (SSAs), and those
implied or necessary to deliver such services, unless specifically
excluded from the Advantis responsibilities (each such service a
"Service" and in sum, the "Services"). The Parties anticipate and
expect that technology will evolve and advance over the Term and
that this will require
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evaluation and, if warranted based on the evaluation, testing and
piloting of technologies, methodologies and tools that are
different from those in use as of the Commencement Date. As
applicable to the Services and consistent with industry practice,
Advantis shall be responsible for such tasks and will offer,
subject to the mutual agreement of the Parties with respect to
scope, quality and price, such technologies, methodologies and
tools to DWD. Exhibits 1 through 3 and 7 are not meant to be an
exclusive listing of the services Advantis may provide or is
capable of providing, and the Exhibits will be amended as new
services are offered by Advantis and accepted by DWD.
b) As of the Commencement Date, Advantis will provide the Services to
DWD, DWD's Affiliates, and to the clients of all such entities who
receive Services; provided that (i) DWD shall remain Advantis' sole
point of contact with respect to the Services, except that for
specific technical issues Advantis may work directly with the
appropriate technical liaison within an Affiliate of DWD as
designated by DWD, (ii) DWD shall remain responsible for payment of
all such Services as though provided to DWD itself, and (iii) DWD
shall be solely responsible for the fulfillment of all obligations,
terms, and conditions under this Amended Agreement. For purposes
of this Amended Agreement, references to DWD in its capacity as a
beneficiary or recipient of services are to be read as references
to DWD and the entities referenced in this Section 3.1 (b), and
Services provided to such entities will be deemed to be Services
provided to DWD.
3.2 INFORMATION PROCESSING SYSTEMS AND SERVICES
Advantis will provide the following as requested by DWD:
a) Processing Services;
b) DASD Storage Services;
c) Tape Storage Services;
d) Printing Services;
e) Microfiche Services
f) Help Desk Support Services;
g) Distributed Processing Services;
h) Contingency (disaster recovery) Services;
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i) Application Support Services;
j) Information Processing Services (charged as Direct Charges);
k) Consulting and Project Management Services; and
l) Any other commercially available IPSS Service which Advantis offers
on or after the Commencement Date.
3.3 DATA NETWORK SERVICES AND VOICE SERVICES
Advantis will provide the following as requested by DWD:
a) Private Line Services;
b) Switched Access and Usage Services;
c) Transaction Usage Services;
d) On-Premises Services;
e) Network Services (charged as Direct Charges);
f) Voice Services;
g) Video Conferencing Services;
h) Voice Consulting and Optimizations Services; and
i) Any other commercially available Data Network Services or Voice
Services which Advantis offers on or after the Commencement Date.
3.4 STANDARDS
Advantis agrees that its performance of the Services for DWD will meet or
exceed each of the applicable Performance Standards. Within 120 days of the
Commencement Date, the Parties will review the existing Performance Standards,
Service Level Agreements and Service Level Objectives, including those set
forth in Exhibit 5, revise them in a manner mutually agreed to by the Parties,
and document such agreement as a revised Exhibit 5 to the Amended Agreement
("Amended Agreement Performance Standards" or "AAPS"). The AAPS will
specifically define a broad range of service levels, a more limited set of
business-oriented critical service levels, and the measurement methodologies
associated with the service levels and critical service levels. If Advantis
breaches a service level it will: (a) report such failure, (b) determine the
root cause of the problem, and (c) take such action as necessary to promptly
bring its performance back into conformance with the service level. The critical
service levels agreed to by the Parties will have a specified "lower limit"
(that will be set below related service levels) and a specified "higher limit"
(that will be set above related service levels). [*]
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
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3.5 MANAGEMENT AND CONTROL
a) Advantis, with the cooperation and assistance of DWD, will
establish operating processes and procedures relating to the
performance of the Services. Such processes and procedures will
include change control procedures, scheduling for projects and
other operational matters relating to the Data Center, Data Network
and Voice Services. Advantis will furnish a written description of
these processes and procedures to DWD for its review and comment,
and any reasonable comments or suggestions of DWD will be
incorporated therein.
b) Within 180 days after the Commencement Date, Advantis and DWD will
agree upon an appropriate set of periodic Services-related reports
to be provided by Advantis. In the absence of such agreement,
Advantis will provide DWD with the same periodic Services-related
reports that Advantis was providing to DWD prior to the
Commencement Date.
c) Within 60 days after the Commencement Date, Advantis and DWD will
mutually agree upon an appropriate set of periodic meetings to be
held between representatives of DWD and Advantis.
d) In the absence of agreement as to such processes, procedures,
reports and periodic meetings as contemplated by this Section 3.5,
such functions shall be performed in the manner followed by the
Parties prior to the Commencement Date.
3.6 EQUIPMENT
Advantis will provide the Services using the Equipment. Additional or
replacement Equipment, including upgrades, will be added by Advantis to the
Data Center and Data Network as necessary to perform the Services in accordance
with the Performance Standards. For purposes of assigning financial
responsibility for the Equipment, and for no other purposes, the Parties agree
as follows:
a) Other than with respect to DWD Equipment, financial responsibility
for (i) acquisition, lease, and ownership costs for Equipment,
including: current and future Equipment, upgrades, enhancements,
growth and technology refreshments ("Equipment Capital" costs); and
(ii) all costs and expenses related to operational support,
including: installation, support, hardware maintenance, disaster
recovery of the Equipment, service levels, and moves, adds and
changes ("Equipment
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Operational Support" costs) shall be borne by Advantis and will be
recovered by Advantis through the pricing provisions set forth in
the Exhibits.
b) Other than with respect to DWD Equipment, Advantis shall be
administratively and operationally responsible for the Equipment
used to provide the Services, including provisioning, staging,
configuring, installing, operating, maintaining, upgrading, and
enhancing the Equipment, all as set forth in more detail in
Exhibits 1 through 3 and 7.
3.7 SOFTWARE
a) SUPPORTED SOFTWARE. Advantis will be financially responsible
for (i) acquisition and ownership costs for Supported Software,
including: current and future packages, new releases, growth and
technology refreshment ("Software Capital" costs); and (ii) all
costs and expenses related to operational support, including:
installation, support, Software maintenance, and service levels
("Software Operational Support" costs). Advantis will:
1) operate, maintain and enhance as necessary to perform in
accordance with the Performance Standards, all Supported
Software in the Data Center and Data Network;
2) apply preventive maintenance and program temporary fixes to
correct defects in the Supported Software running in the Data
Center and Data Network;
3) provide or obtain new versions and releases, upgrades,
replacements or additional Supported Software as necessary in
order to perform the Services in accordance with the
Performance Standards; and
4) operate all Applications Software in the Data Center and Data
Network.
b) DWD SOFTWARE. DWD will be financially responsible for the
Software Operational Support and Software Capital costs for DWD
Software, including: current and future packages, new releases,
support, software maintenance, service levels, growth and
technology refreshment.
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3.8 AUDITS
a) Advantis will assist DWD in meeting its audit and regulatory
requirements, including providing access to the Data Center
locations sufficient to enable DWD and its auditors and examiners
to conduct appropriate audits and examinations of the operations of
Advantis to verify:
1) the accuracy of the application of Advantis' charges to DWD;
and
2) that Services are being provided in accordance with this
Amended Agreement.
Such access will require a minimum 72-hour notice to Advantis and
will be provided at reasonable hours, provided that any audit does
not interfere with Advantis' ability to perform (i) the Services in
accordance with this Amended Agreement or (ii) services for any of
its other customers, or compromise any reasonable security
processes or procedures or the integrity of any information or
data. DWD will make every reasonable effort to coordinate and
reach agreement with Advantis regarding the timing and scope of any
such audit, and also limit the number, scope and duration of such
audits, and otherwise attempt to minimize any disruption to
Advantis' business caused by such audit(s). Further, the initial
request for an audit will be directed only to the Advantis Business
Controls Department for consideration and processing. Upon
request, Advantis will notify DWD of the appropriate individual(s)
within such department who will act as the liaison for audit
requests.
b) Advantis will provide access only to information reasonably
necessary to perform the audit. In the event Advantis believes
that a request from DWD, its auditors or examiners would involve
the disclosure of Confidential Information, DWD agrees that its
auditors and examiners will be required to execute an appropriate
confidentiality agreement before receiving such Confidential
Information. In no event shall Advantis allow DWD, its auditors or
examiners access to (i) other Advantis customers' proprietary data
or information, or (ii) Advantis' proprietary data and systems
(other than the proprietary data and systems described in (a) (1)
and (2) above as they specifically relate to DWD). Advantis will
also provide reasonable assistance to DWD's employees, auditors, or
examiners in testing DWD's data files and programs, including
installing and running audit software. Following any
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such audit, DWD shall conduct or request its auditors and examiners
to conduct an exit conference with Advantis to obtain factual
concurrence with any issues identified in the audit. Advantis and
DWD shall meet to review each audit report promptly after the
issuance thereof and to mutually agree upon the appropriate manner,
if any, in which to respond to the changes suggested by the audit
report.
c) In connection with such audits, in the event DWD requests Advantis
to make changes or take other actions necessary in order to
maintain compliance with applicable laws or regulations (other than
those changes or actions required due to a breach of Advantis'
obligations, in which event the costs associated with such change
shall be Advantis' responsibility), Advantis agrees to make any
reasonable changes and take other reasonable actions which are
necessary in order to maintain compliance with applicable laws or
regulations. DWD may submit additional findings or recommendations
to Advantis for its consideration and Advantis shall consider such
findings.
d) If an audit or examination reveals that Advantis' invoices are not
correct, and:
1) If the aggregate invoice amount in error is a net credit to
DWD equal to or less than [ * ] Advantis shall promptly
pay that net credit amount to DWD, without interest, and DWD
shall pay the cost of the audit.
2) If the aggregate invoice amount in error is a net credit to
DWD of more than [ * ], Advantis shall promptly pay that
net credit amount, without interest, and shall further
reimburse the reasonable cost of the audit to DWD.
3) If the aggregate invoice amount in error is a net credit to
Advantis equal to or less than [ * ], DWD shall pay the
cost of the audit without any further obligation to pay the
amount of such credit to Advantis.
4) If the aggregate invoice amount in error is a net credit to
Advantis of more than [ * ], DWD shall promptly pay to
Advantis, without interest, that
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
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net credit amount less the reasonable cost of the audit.
3.9 DISCLAIMER OF RESPONSIBILITIES
Unless otherwise agreed to in writing, Advantis shall have no obligation
to:
a) provide data, data entry, or database management or coordinate such
activities with its systems design and production functions;
b) designate or document application information requirements,
including report design or content, frequency of reports, or
accessibility to information;
c) provide or perform upgrades, replacements, acquisitions or
maintenance of DWD Equipment;
d) operate the DWD Equipment necessary for Services required to be
provided by Advantis;
e) provide or perform new revisions, releases, upgrades, enhancements
or maintenance for DWD Software;
f) provide End User office support including clerical and
administrative tasks, such as courier and internal distribution;
g) provide support to End Users for questions and problems related to
Applications Software;
h) provide personnel or equipment to ensure the physical security of
DWD Locations;
i) be responsible for the creation or administration of user access
and password management or security programs;
j) provide any preprinted and paper forms or supplies required by End
Users;
k) be responsible for any mail, messenger, postage, courier or print
distribution services;
l) be responsible for storage, retrieval, distribution or filing of
any microfilm/microfiche output;
m) provide move, add and change service support for End User Equipment
not otherwise supported under the "on-premises services"; or
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n) be responsible for DWD activities or functions as described in this
Amended Agreement.
3.10 [*]
4. DWD RESPONSIBILITIES
4.1 PROJECT EXECUTIVE
Each Party agrees to designate, prior to the Commencement Date, an
authorized individual to whom all communications may be addressed and who will
have the authority to act for and bind that Party and its subcontractors in
connection with all aspects of this Amended Agreement. In addition, each Party
will designate, prior to the Commencement Date, a Project Executive to have
overall responsibilities with respect to this Amended Agreement. A Party may
change either of the designated individuals by giving the other Party written
notice.
4.2 APPLICATIONS SOFTWARE
During the Term, DWD will be responsible for selecting or defining its
requirements for its Applications Software and DWD Software.
4.3 FACILITIES AND SUPPORT SERVICES
The Parties acknowledge that permanent leasing of space on DWD Locations
for Advantis employees and node license arrangements shall be subject to
separate agreements. In addition, DWD agrees to provide, at no charge to
Advantis, the use of its DWD Locations and such additional space as may be
reasonably necessary for the performance of the Services. This includes
reasonable office space, storage space, and all reasonable and customary office
support services, employee-type services, such as parking privileges and
cafeteria services, office supplies and furniture. DWD agrees that if it
decides to relocate a current DWD Location it will provide comparable space,
facilities and resources in the new DWD Location, under the same terms and
conditions of this Amended Agreement. It is understood that Advantis' use of
the DWD Locations does not constitute or create a leasehold interest. In the
event, however, Advantis needs to place Equipment on DWD Locations in order to
provide specific Services under this Amended Agreement, DWD will allow Advantis
to do so and use reasonable care to protect such Equipment.
4.4 BIDDING OF FRAME RELAY SERVICES
If DWD elects to solicit bids or proposals from competitive providers for
the performance of frame relay services (beyond the ongoing, current efforts),
DWD agrees to provide Advantis with
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
<PAGE>
the same proposal requirements and information, access to facilities and
pertinent personnel and other notices and materials as provided to other
potential vendors, and treat Advantis as it treats the other potential vendors
in the proposal or bidding process.
5. CHARGES AND EXPENSES
5.1 SERVICES CHARGES
a) DWD agrees to pay the charges for the Services specified in the
applicable Exhibits together with the amounts described in this
Section 5. The Charging Methodology shall be set forth in Exhibits
1,2,3 and 4.
b) Where an Affiliate of DWD (e.g., SPS Transactions Services, Inc.)
has a separate contractual relationship with Advantis, that
Affiliate may at its option receive Services and pricing for such
Services pursuant to this Amended Agreement. Nothing in this
Amended Agreement shall otherwise change or affect the terms of
such other agreements, including that any termination of this
Amended Agreement shall have no effect on the separate contractual
relationship between Advantis and such Affiliate of DWD, and that
the termination of such separate contractual relationship shall
have no effect on this Amended Agreement.
5.2 COST OF LIVING ADJUSTMENT
a) The Parties intend that commencing January 1, 1997, certain
identified charges listed in the Exhibits ("Identified Charges")
will increase if inflation, measured from January 1, 1993, exceeds
4% per year, compounded annually. These Identified Charges include
protection against inflation at a rate of 4% per year, compounded
annually (the "COLA Index"). The COLA Index for each year of the
Term shall be provided in Exhibit 4. DWD agrees to pay Advantis a
Cost of Living Adjustment ("COLA") beginning 12 months after the
Commencement Date if actual cumulative inflation exceeds the
inflation covered by the COLA Index as set forth in Exhibit 4.
Advantis and DWD agree to use the Consumer Price Index, as
published by the Bureau of Labor Statistics, U.S. Department of
Labor, For All Urban Consumers, U.S. City Average, All Items,
1982-84=100 ("CPI-U") for purposes of calculating actual inflation.
The COLA will be calculated using the COLA Factor specified below.
This COLA shall be applied on a prospective basis, i.e., the
identified charges payable by DWD will be surcharged by the Factor
as determined below, if such Factor is in excess of
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zero. The COLA Factor will be determined as soon as practicable
after the end of each calendar year. If applicable, Advantis will
invoice DWD for COLA beginning with Services rendered on or after
January 1, 1997 in accordance with Section 6.1. The COLA Factor is
equal to:
((Actual Inflation - Protected Inflation) / Prior Year's Protected
Inflation) x .50, where:
Actual Inflation = CPI-U for the December preceding the
year for which COLA is being
calculated; and
Protected Inflation = the Base Year Index multiplied by the
COLA Index for the December preceding
the year for which COLA is being
calculated.
Prior Year's
Protected Inflation = the Base Year Index multiplied by the
COLA Index for the December preceding
the year for which the Protected
Inflation is being calculated.
Base Year Index = CPI-U for December, 1992.
b) In the event the Bureau of Labor Statistics stops publishing the
CPI-U or substantially changes its content and format, Advantis and
DWD will substitute another comparable index published at least
annually by a mutually agreeable source. If the Bureau of Labor
Statistics merely redefines the base year for the CPI-U from
1982-84 to another year, Advantis and DWD will continue to use the
CPI-U, but will convert the COLA Index to the new base year by
using an appropriate conversion formula.
c) [*]
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
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5.3 TAXES
a) Advantis shall be responsible and pay for:
(i) any sales, use, personal or other taxes based upon or
measured by Advantis' cost in acquiring or providing
equipment, materials, supplies or services (including
Equipment and Software) furnished or used by Advantis in
performing or furnishing the Services; and
(ii) taxes, assessments and other levies on its net income and
real and personal property.
b) DWD shall be responsible and pay for any sales, use, excise or
services-related tax levied or assessed on (i) the provision of the
Services by Advantis to DWD or (ii) the use of Data Network lines
or circuits by Advantis for the benefit of DWD.
c) DWD shall also be responsible and pay for:
(i) taxes, assessments and other levies on its net income and
real property, and
(ii) all personal property or use taxes due on or with respect to
DWD Equipment and DWD Software.
d) The Parties agree to reasonably cooperate with each other to more
accurately determine each Party's tax liability and to minimize
such liability to the extent legally permissible.
e) Advantis and DWD shall provide and make available to the other any
resale certificates, information regarding out of state sales or
use of equipment, materials or services, and other exemption
certificates or other information reasonably requested by either
Advantis or DWD. In addition, Advantis will provide to DWD such
documentation as DWD may reasonably request to establish that
Advantis is registered to collect any
tax described in Section 5.3 (b) above which Advantis seeks to
collect from DWD.
f) When the Parties mutually agree, invoices for Services rendered by
Advantis to DWD shall segregate the charges for:
(i) taxable Services;
(ii) non-taxable Services; and
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(iii) items for which Advantis functions merely as a paying agent
for DWD in receiving goods, supplies or services (including
leasing and licensing arrangements) that are nontaxable or
have previously been subject to tax.
[*]
5.4 OTHER EXPENSES AND CHARGES
DWD will be financially responsible for all costs and expenses associated
with its responsibilities specified in Section 4, and for all costs and
expenses necessitated by compliance with Section 3.8 (c).
6. INVOICING AND PAYMENT
6.1 MONTHLY SERVICES CHARGE INVOICES
Advantis will invoice DWD on a monthly basis. The invoices will state
for DWD the monthly charge applicable (including the basis for that charge) and
applicable taxes (as set forth in Section 5.3(b)) by tax jurisdiction.
6.2 OTHER CHARGES
Any amount due under this Amended Agreement for which a time for payment
is not otherwise specified will be due and payable no later than seven (7)
business days from receipt of the invoice.
6.3 INVOICE PAYMENT
a) DWD will pay its invoices by wire funds transfer or other
electronic means acceptable to Advantis to an account specified by
Advantis no later than seven (7) business days from receipt of an
invoice. If payment is not received by the seventh day after the
receipt of the invoice, Advantis will promptly notify DWD in
writing of such nonpayment on or about such seventh day; provided
however, that Advantis' failure to give such notice does not affect
the payment obligations of DWD in any way.
b) [Intentionally omitted.]
c) In the event that any payments are not received by Advantis within
five days following the due date, such payment shall include
interest at the rate of 1% per
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
22
<PAGE>
month on the amount of such arrears accruing from the original due
date until the date of payment.
d) In the event that DWD challenges any invoice, DWD will pay the
entire invoiced amount (absent manifest error, in which event DWD
will promptly notify Advantis of such error), and shall pursue
resolution of such disputed invoice pursuant to the dispute
resolution process set forth in Section 15. In the event DWD is
successful in challenging the disputed invoice, Advantis will
provide DWD with a credit against the charges otherwise payable to
Advantis. Such credit shall include interest at the rate of 1% per
month accruing from the original due date until the date the credit
is applied.
6.4 PRORATION
All periodic charges under this Amended Agreement are to be computed on a
calendar month basis, and will be prorated for any partial month, unless
specifically stated otherwise in this Amended Agreement.
6.5 CREDITS
Except as otherwise set forth in this Amended Agreement, with respect to
any amount to be paid or reimbursed to DWD by Advantis, Advantis may, at its
option, pay that amount to DWD by giving it a credit against the charges
otherwise payable to Advantis hereunder the next time an amount is due and
payable by DWD. In the event such credit to DWD from Advantis exceeds the
charges payable by DWD to Advantis over a three-month period, then Advantis
shall apply such credits to the charges to DWD over a period not to exceed
three months, with any excess being paid to DWD at the end of such three-month
period.
[*]
8. CONFIDENTIALITY/DATA SECURITY
8.1 CONFIDENTIAL INFORMATION
Each Party acknowledges that the other Party possesses and will continue
to possess information that has been created, discovered, or developed by that
Party or provided to it by a third party, or in which property rights have been
assigned or otherwise conveyed to it, which information has commercial value in
its business and is not in the public domain. Except as
-----------------------------
[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
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<PAGE>
otherwise specifically provided by the Parties, "Confidential Information"
shall mean:
a) all information and documents marked confidential, restricted, or
proprietary by either Party; or
b) DWD's customer lists, DWD information, account information, and
information regarding business planning and operations of DWD and
its administrative, financial or marketing activities.
8.2 OBLIGATIONS
a) Each Party will use the same care to prevent disclosing to third
parties the Confidential Information of the other as it employs to
avoid disclosure, publication or dissemination of its own
information of a similar nature. Notwithstanding the foregoing, a
Party may disclose such information to subcontractors involved in
providing Services under this Agreement where:
1) such disclosure is necessary to permit the subcontractor to
perform its duties hereunder; and
2) that Party assumes full responsibility for the acts or
omissions of its subcontractor, no less than if the acts or
omissions were those of such Party.
b) Without limiting the generality of the foregoing, no Party will:
1) make any use of the Confidential Information of the other
except as contemplated by this Amended Agreement;
2) acquire any right in or assert any lien against the
Confidential Information of the other; or
3) refuse to promptly return, provide a copy of or destroy such
Confidential Information upon the request of the other Party.
c) Nothing in this Amended Agreement shall be construed so as to
restrict a Party from using any data processing or network
management ideas, concepts, know-how and techniques retained in the
unaided memories of such Party's personnel or subcontractors,
without limitation, in the development, manufacturing and marketing
of products and services, provided that such products or services
do not breach that Party's obligations of confidentiality or
infringe on the other
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Party's patent, copyright, trademark, trade secret or other
proprietary rights.
8.3 EXCLUSIONS
Notwithstanding the foregoing, this Section 8 will not apply to any
Confidential Information of a Party which the other Party can demonstrate was:
a) at the time of disclosure to it, in the public domain;
b) after disclosure to it, published or has otherwise become part of
the public domain through no fault of its own;
c) in the possession of it at the time of disclosure to it without any
obligation of it to maintain such confidentiality;
d) received after disclosure to it from a third party who had a lawful
right to disclose such information to it; or
e) independently developed by it without reference to Confidential
Information of the other Party.
Further, either Party may disclose Confidential Information of the other to the
extent required by law or order of a court or governmental agency; provided,
however, that such Party 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 its own cost and expense. It is
understood that the receipt of Confidential Information under this Amended
Agreement will not limit or restrict assignment or reassignment of employees of
the Parties within or among the respective Parties.
8.4 LOSS OF CONFIDENTIAL INFORMATION
In the event of any disclosure or loss of Confidential Information, the
Party which has lost or disclosed such Confidential Information will promptly
notify the other Party.
8.5 LIMITATION
Neither Advantis nor DWD will be responsible for corruption, loss or
mistransmission of data or for the security of data while such data is being
transmitted via public telecommunications facilities.
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<PAGE>
9. TERMINATION
9.1 TERMINATION FOR CAUSE
a) In the event of a material breach of this Amended Agreement by DWD,
Advantis may terminate this Amended Agreement upon written notice
to DWD in accordance with Section 9.1 (c). In the event Advantis
terminates this Amended Agreement as set forth in this Section 9.1
(a), the Termination Charge(s) as set forth in Exhibit 4 of this
Amended Agreement shall be paid to Advantis.
b) In the event of a material breach of this Amended Agreement by
Advantis, DWD may terminate this Amended Agreement upon written
notice to Advantis, in accordance with Section 9.1 (c), without
obligation to pay the Termination Charge(s) set forth in Exhibit 4.
c) The written notice provided in (a) and (b) above will specifically
describe such material breach. The recipient of such notice shall
have 20 days to cure the breach unless it would be unreasonable to
cure such breach within 20 days, in which event, the breaching
Party shall be given an additional 20 days to cure such breach. In
the event the material breach is not cured within the period
specified above, the nonbreaching Party may terminate this Amended
Agreement, as provided for in Section 9.1 (a) and (b) above, which
termination shall be in writing, as of a date specified in such
notice of termination. The terminating Party shall have all rights
and remedies generally afforded by law or equity, subject to the
limitations expressed in this Amended Agreement.
9.2[*] TERMINATION FOR SPECIAL CIRCUMSTANCES
a) [*]
b) [Intentionally Omitted.]
c) [Intentionally Omitted.]
d) Any Termination Charge paid by DWD for a partial termination will
decrease the Baseline and revenue commitment levels set forth in
Exhibits 1, 2, 3, and 4, as applicable, for DWD for such year on a
pro-rata basis. Additionally, in the event DWD terminates any
Services and pays any Termination Charge (or that Termination
Charge is paid by another provider), Advantis shall adjust the
relevant pricing provisions set forth in the applicable Exhibits
for DWD to reflect the loss of the revenue commitment of those
Services,
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
<PAGE>
in order to maintain the current price levels for Services to DWD.
e) [*]
9.3 TERMINATION ASSISTANCE
a) With respect to the expiration or termination (in whole or in part)
of this Amended Agreement, Advantis will cooperate with DWD to
assist with the orderly transfer of the Services, functions and
operations provided by Advantis hereunder to another provider or to
DWD itself. Prior to termination or expiration of this Amended
Agreement, DWD may request Advantis to perform, and if so requested
Advantis shall perform (but may require advance payment in the
event of a termination by Advantis due to a failure by DWD to pay
amounts due and payable under this Amended Agreement) reasonable
services in connection with migrating the work of DWD to another
provider or to DWD itself ("Termination Assistance"). Termination
Assistance shall be provided until the effective date of
termination or expiration with respect to the Services. Upon
termination, DWD will allow Advantis access to DWD Locations to
remove Equipment, Software and other Advantis assets. Upon
termination, Advantis will return to DWD any DWD Software or DWD
Equipment that Advantis possesses.
b) [*]
10. LIABILITY
10.1 GENERAL INTENT
The liability of DWD, Advantis, and each of their subcontractors to the
other Party and their exclusive remedies are set forth in this Section 10 and
Section 12. Subject to the specific provisions of this Section, it is the
intent of DWD and Advantis that the breaching Party will be liable for any
damages incurred by the nonbreaching Party as a result of the breaching Party's
failure to perform its obligations in the manner required by this Amended
Agreement.
10.2 DAMAGES
a) The liability of DWD and Advantis for actual, direct damages
resulting from the breaching Party's performance or nonperformance
under this Amended Agreement, regardless of the form of action, and
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
27
<PAGE>
whether in contract, tort (including, without limitation,
negligence), warranty or other legal or equitable grounds, will be
limited for each event which is the subject matter of the cause of
action[*]
b) In no event will DWD or Advantis have any liability whether based
on contract, tort (including, without limitation, negligence),
warranty or any other legal or equitable grounds, for any loss of
interest, profit or revenue by the other Party or for any
consequential, indirect, incidental, special, punitive or exemplary
damages suffered by the other Party arising from or related to this
Amended Agreement, even if such Party has been advised of the
possibility of such losses or damages; provided, however, that this
clause will not prevent DWD or Advantis from recovering amounts
owed under this Amended Agreement.
c) Notwithstanding anything to the contrary contained herein, the
limitations set forth in this Section 10.2 will not apply to:
1) any failure by DWD to pay any amounts due and owing Advantis
pursuant to the terms of this Amended Agreement;
2) losses for bodily injury or damage to real property or
tangible personal property, as described in Section 12.3;
3) either Party's obligation to indemnify the other for patent
and copyright infringement Losses and Losses relating to tax
liabilities, as provided in Sections 12.1 and 12.7
respectively; or
4) intentional misappropriations of Confidential Information.
d) In no event will Advantis or its subcontractors be liable for
damages if and to the extent caused by the failure of DWD to
perform its responsibilities, nor shall DWD be liable for damages
if and to the extent caused by any failure of Advantis or its
subcontractors to perform their responsibilities.
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
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10.3 NONRECOURSE
Notwithstanding anything to the contrary contained in this Amended
Agreement, no partner of Advantis shall have any duties, obligations or
liabilities under or in respect of this Amended Agreement as a result of its
status as a partner of Advantis, nor shall any direct or indirect owner of any
such partner have any duties, obligations or liabilities as a result of its
direct or indirect beneficial ownership; it being understood and agreed that
all duties, obligations and liabilities of Advantis are expressly nonrecourse
to the partners of Advantis and their respective direct and indirect beneficial
owners.
11. WARRANTY
11.1 WORK STANDARDS
Advantis represents and warrants that all Services performed by Advantis
for DWD will be in a workmanlike manner in accordance with industry standards
and practices applicable to the performance of such Services.
11.2 ENVIRONMENTAL
a) In the event that Hazardous Materials are discovered at any DWD
Location during the term of this Amended Agreement, Advantis may
cease the performance of that portion of the Services affected by
such discovery if, in the reasonable judgment of Advantis,
Advantis' ability to perform such portion of the Services safely
and properly is substantially adversely impacted by the presence of
such Hazardous Materials. Advantis shall not be responsible for
remedying any violation of federal, state or local law with respect
to the presence of such Hazardous Materials to be remedied, it
being understood that matters relating to the investigation,
detection, abatement and remediation of any Hazardous Materials
discovered at any DWD Location are not within the scope of this
Amended Agreement and that Advantis shall not be liable or
responsible for any expense incurred by DWD in this connection,
unless investigation reveals that the presence of the Hazardous
Materials was caused by the conduct of an Advantis employee,
invitee, or subcontractor or that Hazardous Materials were
knowingly and willfully disturbed by an Advantis employee, invitee
or subcontractor. In such event, the limitations of this paragraph
will not apply.
b) For purposes of this Section, "Hazardous Materials" means:
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1) any "hazardous substance" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended from time to time (42 U.S.C. 9601 et seq.)
and the regulations promulgated thereunder;
2) any asbestos or asbestos-containing materials;
3) petroleum, crude oil or any fraction thereof, natural gas or
synthetic gas used for fuel; and
4) any additional substances or materials which at such time are
classified or considered to be hazardous or toxic under the
laws of the state wherein the facilities are located.
11.3 NONINFRINGEMENT
The Parties represent and warrant that they will perform their
responsibilities under this Amended Agreement in a manner that does not
infringe, or constitute an infringement or misappropriation of, any patent,
trade secret, copyright or other proprietary right of any third party.
11.4 COMPLIANCE WITH OBLIGATIONS
DWD represents and warrants that its entry into this Amended
Agreement does not violate or constitute a breach of any of its
contractual obligations with third parties. Advantis represents
and warrants that its entry into this Amended Agreement does not
violate or constitute a breach of any of its contractual
obligations with third parties.
11.5 SOFTWARE
Advantis will ensure that Advantis-owned Proprietary Products,
Advantis-owned derivative works thereof, or other Software
created by Advantis will continue to function in accordance with
Advantis' intended use of such software and such software's
specifications prior to, during, and after the year 2000;
provided, however, to the extent that any such specified
software fails to meet this obligation, Advantis shall timely
replace it with other software of equivalent or better
functionality at no additional cost to DWD. Further, Advantis
shall work with its third party Supported Software licensors to
assist them in ensuring that their respective Supported Software
is year 2000 compatible. Where Advantis believes that any third
party Supported Software will not be year 2000 compatible or
interoperable with Supported Software or Equipment, Advantis
will notify DWD and work with DWD to identify alternative third
party software, as needed. Advantis will pass through to DWD
any third party Supported Software warranties related to such
30
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Software which it has the right to pass through. Upon DWD's
reasonable request, Advantis will notify DWD of the year 2000
compatibility status of any specified Supported Software
utilized by Advantis in its performance hereunder.
11.6 DISCLAIMER
a) Advantis shall not be responsible for the inaccuracy of any advice,
report, date or other product delivered to DWD, which is
attributable to data and/or software provided by DWD. Such
products are delivered "AS IS", and Advantis shall not be liable
for any inaccuracy thereof.
b) Subject to the obligations of Advantis contained in this Amended
Agreement including the Performance Standards, Advantis does not
assure uninterrupted or error-free operation of the Equipment.
c) EXCEPT AS PROVIDED IN THIS AMENDED AGREEMENT, THERE ARE NO OTHER
EXPRESS WARRANTIES AND THERE ARE NO IMPLIED WARRANTIES, INCLUDING,
BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
11.7 AUTHORIZATION AND ENFORCEABILITY
DWD and Advantis each hereby respectively represent, as to
itself, that:
a) it has all requisite power and authority to enter into this Amended
Agreement and to carry out the transactions contemplated hereby;
and
b) the execution, delivery and performance of this Amended Agreement
and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite corporate action on its part.
11.8 REGULATORY AND CORPORATE PROCEEDINGS
Each Party agrees to obtain all necessary regulatory approvals applicable
to its business, obtain any necessary permits, and comply with any regulatory
requirement applicable to the performance of the Services.
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12. INDEMNITIES
12.1 INDEMNITY BY ADVANTIS
Advantis agrees to indemnify, defend and hold DWD, its
Affiliates and their respective officers, directors, employees,
agents, successors and assigns harmless, in accordance with the
procedures described in Section 12.6 from and against any and
all Losses arising from or in connection with:
a) any claims of infringement made against DWD of any Canadian or
United States patent, or any copyright, trademark, service mark,
trade name or similar proprietary rights conferred by contract or
by common law or by any law of Canada or any Canadian Providence,
the United States, or any state of the United States, alleged to
have occurred because of Equipment, systems, Software, products or
other resources or items provided to DWD by Advantis; provided,
however, that Advantis will have no obligation with respect to any
Losses to the extent the same arise out of or in connection with
the modification of Software or Equipment by DWD or DWD's
combination, operation or use with devices, data or programs not
furnished by Advantis or its subcontractors;
b) any amounts, including but not limited to, taxes, interest and
penalties that are obligations of Advantis pursuant to Section 5.3
and that either (i) are assessed against DWD, or (ii) DWD elects to
pay pursuant to Section 5.3 (h); and
c) the inaccuracy or untruthfulness of any representation or warranty
made by Advantis under this Amended Agreement.
12.2 INDEMNITY BY DWD
DWD agrees to indemnify, defend and hold Advantis, its
Affiliates and their respective officers, directors, employees,
agents, successors and assigns harmless, in accordance with the
procedures described in Section 12.6 from and against any and
all Losses arising from or in connection with:
a) any claims of infringement made against Advantis of any Canadian or
United States patent, or any copyright, trademark, service mark,
trade name or similar proprietary rights conferred by contract or
by common law or by any law of Canada or any Canadian Providence,
the United States, or any state of the United States, alleged to
have occurred because of equipment, systems, programs, products or
other resources or items provided
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to Advantis by DWD; provided, however, that DWD will have no
obligation with respect to any Losses to the extent the same arise
out of or in connection with the modification of a program or
equipment by Advantis or any Advantis Affiliate, or Advantis' or
Advantis Affiliates' combination, operation or use with devices,
data or programs not furnished by DWD or any of its subcontractors;
b) any amounts, including but not limited to, taxes, interest and
penalties that are obligations of DWD pursuant to Section 5.3 and
that either (i) are assessed against Advantis or any Advantis
Affiliate, or (ii) Advantis or any Advantis Affiliate elects to pay
pursuant to Section 5.3 (h). Notwithstanding the foregoing, if
Advantis has determined pursuant to Section 5.3 (g) that a
potential tax of the type described in Section 5.3 (b) should not
be collected from DWD, then any penalties and interest with respect
to such tax shall not be indemnified hereunder; and
c) the inaccuracy or untruthfulness of any representation or warranty
made by DWD under this Amended Agreement.
12.3 CROSS INDEMNITY AND CONTRIBUTION
Each Party agrees to contribute to the amount paid or payable by the
other Party for any and all Losses for which such Party is legally liable and
in proportion to such Party's comparative fault in causing such Losses, arising
in favor of any person, corporation or other entity, including the Parties
hereto and their employees, contractors and agents, on account of personal
injuries, death, or damage to tangible personal or real property in any way
incident to, or in connection with or arising out of:
a) the Services provided by Advantis hereunder;
b) the presence of such Party, its employees, contractors or agents on
the premises of any other Party; or
c) the act or omission of such Party, its employees, contractors or
agents.
12.4 SUBROGATION
In the event that an Indemnifying Party shall be obligated to indemnify
an Indemnified Party pursuant to Sections 12.1, 12.2
or 12.3, the Indemnifying Party shall, upon payment of such indemnity in full,
be subrogated to all rights of the Indemnified Party with respect to all the
claims and defenses to which such indemnification relates.
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12.5 EXCLUSIVE REMEDY
The indemnification rights of each Indemnified Party pursuant to Sections
12.1, 12.2 or 12.3 shall be the exclusive remedy of such Indemnified Party with
respect to the claims to which such indemnification relates.
12.6 GENERAL INDEMNIFICATION PROCEDURES
a) If any civil, criminal, administrative or investigative action or
proceeding (any of the above being a "Claim") is commenced against
either Party entitled to indemnification under Sections 12.1 (a),
12.1 (c), 12.2 (a), 12.2 (c) or 12.3 (an "Indemnified Party")
written notice thereof shall be given to the Party that is
obligated to provide indemnification under such Sections (the
"Indemnification Party") as promptly as practicable. After such
notice, if the Indemnifying Party shall acknowledge in writing to
such Indemnified Party that this Amended Agreement applied with
respect to such Claim (such acknowledgment not to be deemed an
acknowledgment of liability by such Indemnifying Party), then the
Indemnifying Party shall be entitled, if it so elects, in a written
notice delivered to the Indemnified Party not fewer than 10 days
prior to the date on which the first response to such Claim is due,
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 Indemnified Party shall cooperate in all reasonable respects
with the Indemnifying Party and its attorneys in the investigation,
trial and defense of such Claim and any appeal arising therefrom;
provided, however, that the Indemnified Party may, at its own cost
and expense, participate, through its attorneys or otherwise, in
such investigation, trial and defense of such Claim and any appeal
arising therefrom. No settlement of a Claim 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, which
consent will not be unreasonably withheld.
b) After notice by the Indemnifying Party to the Indemnified Party of
its election to assume full control of the defense of any such
Claim, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses incurred thereafter by
such Indemnified Party in connection with the defense of that
Claim. If the Indemnifying Party does not assume full control over
the defense of a Claim subject to such defense as provided in this
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Section 12.6, the Indemnifying Party may participate in such
defense, at its sole cost and expense, and the Indemnified Party
shall have the right to defend the Claim in such manner as it may
deem appropriate, at the cost and expense of the Indemnifying
Party.
[*]
13. INSURANCE AND RISK OF LOSS
13.1 INSURANCE
When this Amended Agreement requires performance by employees or subcontractors
of Advantis or DWD on the other Party's premises, the performing Party shall
carry and maintain Worker's Compensation and Employer's Liability Insurance
covering its employees or subcontractors engaged in such performances in amounts
not less than required by law in the application location. Self insurance is
permissible, if permitted by law.
13.2 RISK OF LOSS
DWD is responsible for risk of loss of, or damage to, DWD Equipment,
unless due to the negligence or willful misconduct of Advantis, in which case
Advantis shall be responsible. Advantis is responsible for risk of loss of, or
damage to, Equipment, unless due to the negligence or willful misconduct of DWD,
in which case DWD shall be responsible.
14. PUBLICITY
Each Party will submit to the other Party all advertising, written sales
promotion, press releases and other publicity matters relating to this Amended
Agreement in which such 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 approval of such other Party. However, either
Party may include the other Party's name and a factual description of the work
performed under this Amended Agreement 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.
15. DISPUTE RESOLUTION
15.1 DISPUTE RESOLUTION
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[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
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a) Any dispute between the Parties with respect to this Amended
Agreement or with respect to the performance by Advantis or by DWD
hereunder shall be resolved as specified in this Section 15.1.
1) Upon the written request of either Party, each Party will
appoint a designated representative who does not devote
substantially all of his or her time to performance under the
Amended Agreement, whose task it will be to meet for the
purpose of endeavoring to resolve such dispute.
2) The designated representative shall meet within 7 days after
notification of dispute and as often as necessary to gather
and furnish to the others all information with respect to the
matter in issue which is appropriate and germane in
connection with its resolution.
3) Such representative shall discuss the problem and negotiate
in good faith in an effort to resolve the dispute without the
necessity of any formal proceeding relating thereto.
4) During the course of such negotiation, all reasonable
requests made by one Party to the other Party for
nonprivileged information reasonably related to this Amended
Agreement and for which the disclosing Party is not prevented
from disclosing pursuant to an obligation of confidentiality
and non-disclosure will be honored in order that both Parties
may be fully advised of the other's positions.
5) The specific format for such discussions will be left to the
discretion of the designated representatives but may include
the preparation of agreed upon statements of fact or written
statements of position furnished to the other Party.
b) If the designated representatives cannot resolve the dispute within
30 days, then the dispute shall be escalated to the Chief Executive
Officer of DWD and the Chief Executive Officer of Advantis, or
their respective designees, for their review and resolution.
Formal proceedings for the judicial resolution of any such dispute
may not be commenced until the earlier of:
1) the designated representatives concluding in good faith that
amicable resolution through continued
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negotiation of the matter in issue does not appear likely; or
2) 60 days after the initial request to negotiate such dispute;
or
3) 30 days before the statute of limitations governing any cause
of action relating to such dispute would expire.
15.2 CONTINUED PERFORMANCE
Except where clearly prevented by the area in dispute, each Party agrees
to continue performing its respective obligations
under this Amended Agreement while the dispute is being resolved
unless and until such obligations are terminated or expire in
accordance with the provisions hereof.
16. GENERAL
16.1 CONTROL OF SERVICES
a) This Amended Agreement shall not be construed as constituting
either Party as partner of the other Party 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 or as providing
either Party with the right, power or authority (express or
implied) to create any duty or obligation of the other Party.
b) 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.
c) The Services will be under the control, management and supervision
of Advantis.
16.2 RIGHT TO PERFORM SERVICES FOR OTHERS
Each Party recognizes that Advantis personnel providing Services to DWD
under this Amended Agreement may perform similar services for others and this
Amended Agreement shall not prevent Advantis from using the personnel and
Equipment provided to DWD under this Amended Agreement for such purposes,
unless otherwise expressly agreed by the Parties. Advantis may perform its
obligations through its subsidiaries, Affiliates or through the use of
Advantis-selected independent contractors; provided, however, that Advantis
shall not be relieved of its obligations under this Amended Agreement by use of
such subsidiaries, Affiliates or subcontractors.
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16.3 AMENDMENTS AND REVISIONS
Changes or modifications to this Amended Agreement and Exhibits may be
made only by a written amendment or revision signed by both Advantis and DWD.
Any terms and conditions varying from this Amended Agreement and Exhibits
on any order or written notification from Advantis and DWD are void.
16.4 FORCE MAJEURE
a) No Party shall be liable for any default or delay in the
performance of its obligations hereunder:
1) if and to the extent 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; and
2) 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 such default or delay being a "Force
Majeure Event").
b) In such event, 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 possible without delay.
The Party so delayed in its performance will immediately notify the
other Party by telephone (to be confirmed in writing within five
days of the inception of such delay) and describe at a reasonable
level of detail the circumstances causing such delay. Such Party
will then provide a plan to address the delay in performance within
twenty-four hours after the telephone notification, and will meet
with the other Party impacted by the delay to review the plan. Any
difference in opinion regarding the plan shall immediately be
reviewed with the Chief Executive Officers of Advantis and DWD for
immediate resolution.
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c) If any Force Majeure Event substantially prevents, hinders, or
delays performance of the Services necessary for the performance of
DWD's critical functions for more than 30 consecutive days, then at
DWD's option:
1) DWD may procure such Services from an alternate source and
Advantis will be liable for [ * ] of the payment for such
Services in excess of Advantis' charges under this Amended
Agreement for up to 180 days, and if such Force Majeure is
continuing thereafter, at DWD's option, DWD may exercise its
rights pursuant to (2) below, or
2) this Amended Agreement will terminate (in whole or in part)
as of a date specified by DWD in a written notice of
termination to Advantis and DWD will pay the Termination
Charge. Any Termination Charge paid by DWD for a termination
in part of this Amended Agreement will decrease the revenue
commitment level as set forth in Exhibit 4 for DWD for such
year on a pro-rata basis and, each year after payment of the
Termination Charge, by an amount equal to the pro-rata
portion of revenue attributable to the terminated Services
for each such year. Additionally, in the event DWD
terminates any Services (in whole or in part) and pays any
Termination Charge, Advantis shall adjust the relevant
pricing provisions set forth in the applicable Exhibits for
DWD to reflect the loss of the usage in order to maintain the
current price levels for Services to DWD.
d) In the event of a Force Majeure Event, if DWD elects to procure
Services from an alternate source provider, then Advantis shall use
reasonable efforts to cause Integrated Systems Solutions
Corporation to provide such Services. In the event the Force
Majeure Event continues for more than 5 days, to the extent that
use of the Services is made impossible by the Force Majeure Event,
DWD may, upon written notice to Advantis, suspend its obligation to
procure Services from Advantis hereunder retroactively from the
time of the initiation of the Force Majeure Event until the Force
Majeure Event is remedied. During the period that DWD's obligation
to procure Service is suspended, the revenue commitment level set
forth in Exhibit 4 for DWD shall be suspended for that portion of
the Services that Advantis is unable to provide due to the Force
-----------------------------
[*] = CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
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Majeure Event until such force Majeure Event is remedied. Advantis
shall also adjust the relevant pricing provisions set forth in the
applicable Exhibits for DWD to reflect the suspension of the usage
during such suspended period in order to maintain the current price
levels for Services to DWD. If such Force Majeure Event is
remedied during the 180-day period, then, if DWD has not yet
terminated this Amended Agreement pursuant to Section 16.4 (c) (2)
above, DWD shall, as soon as practicable, terminate any Services it
is procuring from the alternate source provider and resume
procuring Services from Advantis. Upon resuming Services with
Advantis, the Term of the Amended Agreement shall be extended by an
amount of time equal to the amount of time Advantis was unable to
provide such Services to DWD due to the Force Majeure Event. In
addition, DWD shall be obligated to Advantis during such extended
Term for that portion of the revenue commitment suspended due to
the Force Majeure Event. Upon resuming Services with Advantis, the
relevant pricing provisions for the balance of the calendar year
shall be adjusted to maintain the current price levels to DWD. If
the Term is extended pursuant to this Section 16.4 (e), the
relevant pricing provisions for such extended term shall be fixed
to maintain, during such Term, the prices that would otherwise have
been paid during the period of suspended service.
16.5 NONPERFORMANCE
To the extent any nonperformance by either Party of its
nonmonetary obligations under this Amended Agreement results
from or is caused by the other Party's failure to perform its
obligations under this Amended Agreement, such nonperformance
shall be excused.
16.6 REMARKETING
DWD may not remarket all or any portion of the Services
provided under this Amended Agreement without the prior written
consent of Advantis. It is understood that the phrase 'remarketing
of services' does not include either (i) the provision of Services
pursuant to Section 3.1 (b) or (ii) the adding of material and
substantial value to any of the Services by DWD and the subsequent
resale of these value-added services to customers of DWD to the
extent the resale of such value-added services constitute a part of
the core business of DWD.
16.7 WAIVER
No waiver of any breach of any provision of this Amended
Agreement shall constitute a waiver of any prior, concurrent or
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subsequent breach of the same or any other provisions hereof.
16.8 SEVERABILITY
If any provision of this Amended Agreement shall be held to be invalid,
illegal or unenforceable, 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 original
intentions of the Parties as nearly as possible in accordance with applicable
law(s).
16.9 LIMITATIONS PERIOD
No Party may bring an action, regardless of form, arising out of this
Amended Agreement more than two years after the later of the date the cause of
action arose or the date such cause of action was or should have been
discovered.
16.10 COUNTERPARTS
This Amended Agreement may be executed in duplicate counterparts. Each
such counterpart shall be an original and both together shall constitute but
one and the same document.
16.11 GOVERNING LAW
This Amended Agreement shall be governed by the laws of the State of
Illinois as such laws are applied to contracts which are entered into and
performed entirely within the State of
Illinois.
16.12 BINDING NATURE. ASSIGNMENT AND FEES PAYABLE UPON CHANGE IN CONTROL
a) DWD (the "Assigning Entity") shall have the right, upon thirty (30)
days' prior written notice, to assign this Amended Agreement (the
"Assigned Agreement") to: (1) an Affiliate of the Assigning Entity,
or (2) to a successor or another entity into which DWD may be
merged, (x) so long as such successor or other entity has net
assets equal to or greater than the Assigning Entity on the
effective date of the assignment or is not engaged in the business
of developing manufacturing, selling or leasing information
processing hardware and has, together with all Affiliates thereof,
annual revenues for the most recently completed fiscal year in
excess of $1 billion, or (y) if such assignment does not materially
impair Advantis' ability to conduct its business in substantially
the same manner it had enjoyed prior to the proposed assignment.
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b) Should Advantis, in its reasonable discretion, determine that an
assignment does not meet the requirements of Section 16.12 (a)
above, Advantis shall either consent to such assignment or escalate
the matter to the Advantis Board. Upon such escalation, Advantis
may, upon majority vote of the Advantis Board in favor of
termination, give twelve (12) months' written notice, effective
upon such assignment, of termination of the Assigned Agreement,
without any obligation of the Assigning Entity to pay the
Termination Charge. If Advantis does not advise the Assigning
Entity, within thirty (30) days of receipt of notice from the
Assigning Entity of the proposed assignment, that the Advantis
Board has voted to terminate the Assigned Agreement, then Advantis
shall be deemed to have consented to such proposed assignment and
to have waived its right to terminate the Amended Agreement with
such Assigning Entity upon such Assignment.
c) With respect to any proposed assignment of this Amended Agreement
by DWD that is not permitted under Section 16.12 (a) above, the
Assigning Party shall first obtain Advantis' prior written consent
to such proposed assignment, such consent not to be unreasonably
withheld or delayed. If Advantis withholds its consent to such
proposed assignment, the matter will be escalated to the Advantis
Board for consent to the proposed assignment. If the Advantis
Board determines not to consent to the assignment, such consent not
to be unreasonably withheld, the Assigning Entity shall be
precluded from such proposed assignment.
d) A change in Control of DWD shall be deemed the assignment by DWD of
this Amended Agreement to the Person who, after such change in
Control, would Control DWD. If DWD seeks the consent of Advantis
in advance for such change of Control, Sections 16.12 (a) and (b)
above shall apply as if such change of Control were a merger of DWD
into such Person. If DWD does not seek the consent of Advantis in
advance for such change of Control, or such Person does not meet
the requirements of Section 16.12 (a), Advantis may upon a majority
vote of the Advantis Board in favor of termination, give twelve
(12) months' written notice of termination of the Amended
Agreement, without any obligation of DWD to pay the Termination
Charge.
e) Advantis shall have the right to assign this Amended Agreement to
any Affiliate of Advantis provided that DWD is given thirty (30)
days' prior written notice of such proposed assignment and the
entity to which this
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Amended Agreement is to be assigned is capable of assuming, and
agrees to assume, all of the obligations of Advantis under the
Assigned Agreement.
f) In addition to the rights specified in Section 16.12 (e) above,
Advantis shall have the right, upon thirty (30) days' prior written
notice to DWD, to assign this Amended Agreement in connection with
the acquisition of Control of Advantis by any entity, or the
transfer of substantially all of the assets of Advantis to any
entity ("Advantis Successor") so long as (1) the Advantis Successor
assumes all the obligations of Advantis under this Amended
Agreement, (2) the Advantis Successor has a net worth equal to or
greater than Advantis on the effective date of the assignment, and
(3) the assignment to the Advantis Successor will not have a
negative effect on the proprietary information or Confidential
Information of DWD and (4) such assignment to the Advantis
Successor will not materially impair DWD's ability to conduct its
business in substantially the same manner it had enjoyed prior to
the proposed assignment.
g) For any proposed assignment of the Amended Agreement by Advantis
which is not covered by Section 16.12 (e) and (f) above, Advantis
must first obtain DWD's consent prior to the effective date of such
assignment, such consent not to be unreasonably withheld. If DWD
reasonably withholds its assignment, Advantis will be precluded
from such assignments.
h) Any attempted assignment that does not comply with the terms of
this Section 16.12 shall be null and void. It is understood by DWD
that Advantis may condition its consent to an assignment or change
in Control requested by DWD, if granted, as it deems necessary or
appropriate, including, without limitation, imposing conditions
requiring changes in the charges payable by DWD under this Amended
Agreement after an assignment due to increased costs or expenses
incurred by Advantis as a result of such assignment or change of
Control.
16.13 NOTICES
a) Under this Amended Agreement whenever one Party is required or
permitted to give notice to the other, such notice will be deemed
given when (i) delivered in hand; (ii) received after being mailed
by United States mail, registered or certified mail, return receipt
requested, postage prepaid or (iii) received after delivery by an
express courier with a reliable system for tracking deliveries.
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b) Notification will be addressed as follows:
In the case of Advantis: In the case of DWD:
Advantis Dean Witter, Discover & Co.
231 North Martingale Road Two World Trade Center
Schaumburg, Illinois 60173-2254 New York, New York 10006
Attention: General Counsel Attention: General Counsel
Either Party hereto may from time to time change its address for
notification purposes by giving the other Party prior written
notice of the new address and the date upon which it will become
effective.
16.14 NO THIRD PARTY BENEFICIARIES
Except as specified in Section 12 with respect to Persons entitled to
indemnification, the Parties do not intend, nor will any clause be interpreted,
to create for any third party any obligations to or benefits from either
Advantis or DWD. This does not affect or limit the obligations of or benefits
to any entity receiving Services pursuant to Section 3.1 (b).
16.15 HEADINGS
All headings herein and the table of contents are not to be considered in
the construction or interpretation of any provision of this Amended Agreement.
This Amended Agreement was drafted with the joint participation of DWD and
Advantis and shall be construed neither against nor in favor of either, but
rather in accordance with the fair meaning thereof. In the event of any
apparent conflicts or inconsistencies between this Amended Agreement and any
Exhibits or other Attachments to this Amended Agreement, to the extent possible
such provisions shall be interpreted so as to make them consistent, and if such
is not possible, the provisions of this Amended Agreement shall prevail.
16.16 NON-EXCLUSIVITY
Subject to DWD's obligation to meet its respective revenue commitment
obligations and subject to DWD's obligation to pay any Termination Charge as
set forth in this Amended Agreement, nothing herein shall prohibit DWD from
procuring information processing, data networking and voice services from other
providers or providing such services for itself.
THE PARTIES ACKNOWLEDGE THAT THEY HAVE READ THIS AMENDED AGREEMENT, UNDERSTAND
IT, AND AGREE TO BE BOUND BY ITS TERMS AND CONDITIONS, FURTHER THE PARTIES AGREE
THAT THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES
RELATING TO THIS SUBJECT SHALL CONSIST OF (1) THIS AMENDED AGREEMENT, AND (2)
THE EXHIBITS, INCLUDING THOSE MADE EFFECTIVE BY THE PARTIES IN THE FUTURE. THIS
AMENDED RESTATEMENT OF THE MASTER AGREEMENT SUPERSEDES ALL PROPOSALS OR THE
PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER COMMUNICATIONS BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER DESCRIBED IN THIS AMENDED AGREEMENT.
Accepted by: Accepted by:
ADVANTIS DEAN WITTER, DISCOVER & CO.
By: By:
---------------------------------- -----------------------------------
Name: Name:
---------------------------------- -----------------------------------
Title: Title:
---------------------------------- -----------------------------------
Date: Date:
---------------------------------- -----------------------------------
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