Exhibit 10.17
SERVICES AGREEMENT
This AGREEMENT is entered into as of May 1, 2003 by and between TEAM AMERICA,
INC., a company incorporated under the laws of Ohio, USA, with principal
business address at 000 X. Xxxxxx Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxx 00000, XXX
(the "Client"), and VSOURCE (MALAYSIA) SDN BHD, a company incorporated under
the laws of Malaysia, with principal business address at Xxxxx 00, Xxxxxx HLA,
Xx. 0 Xxxxx Xxx Xxxx, 00000 Xxxxx Xxxxxx, Xxxxxxxx ("Vsource").
WHEREAS, the Client wishes to retain Vsource to provide certain services, and
Vsource wishes to provide such services to the Client.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
1. Services. Vsource will provide those services as specified in Schedule A
hereof (the "Services") to the Client in accordance with and subject to the
terms and conditions of this Agreement.
2. Compensation.
(a) As compensation for the Services, the Client will pay to Vsource the
fees (the "Fees") set forth in Schedule B hereof. The Client shall
reimburse Vsource for all reasonable expenses, including without
limitation expenses for travel, accommodation and subsistence, incurred
by Vsource and/or its sub-contractors (if any) in the course of
providing the Services.
(b) The Client acknowledges and agrees that the Fees in Schedule B do not
include any Taxes (as defined below). "Taxes" shall mean taxes, charges,
fees, levies or other assessments of any nature, including, without
limitation, any consumption, sales, value added, use, excise,
withholding, stamp or other taxes, customs, duties or landing fees or
other government charges however designated, now or hereafter imposed,
collected or assessed by, or payable to, any taxing authority of any
country and shall include interest, penalties and additions imposed,
collected or assessed or payable with respect to such amount. If the
Client is or was required by law to make any deduction or withholding
for Taxes or otherwise from any payment due under this Agreement to
Vsource, then notwithstanding anything to the contrary in this
Agreement, the gross amount payable by the Client to Vsource will be
increased so that, after any such deduction or withholding, the net
amount received by Vsource will not be less than the amount Vsource
would have received had such deduction or withholding not been required.
(c) Vsource will invoice the Client on a monthly basis for Fees incurred
during the immediately preceding calendar month and reimbursement of
expenses referred to in Section 2(a). Payment on each invoice is due
within 30 days of the date of the invoice. Interest for late payment
will accrue on overdue invoices at the rate of 1.5% per month from the
due date until the date of payment (whether before or after judgment).
Interest shall accrue notwithstanding termination of this Agreement or
the provision of any Services hereunder. Unless otherwise agreed in
Schedule B, Fees will be priced in US Dollars.
3. Service Quality; Cooperation of the Client.
(a) Vsource shall use (and procure that its sub-contractors (if any) use)
reasonable care and skill and shall perform the Services in a
workmanlike manner in accordance with applicable professional standards.
Vsource shall comply with all applicable laws, regulations and
directions of competent authorities in the performance of its
obligations under this Agreement.
(b) Vsource shall ensure that all of the personnel assigned to the
performance of its obligations under this Agreement (including the
personnel provided by its sub-contractors (if any)) have all the
requisite skill, experience, qualifications and knowledge necessary to
perform the tasks assigned to them.
(c) All deliverables with respect to the Services will be deemed to have
been accepted by the Client when the acceptance criteria described in
Schedule A, if any, have been met. Where no criteria are specified, such
deliverables will be deemed to have been accepted upon delivery to the
Client.
(d) In performing its obligations under this Agreement, Vsource (and its
sub-contractors, if any) will be entitled to rely upon any instructions,
authorisations, approvals or other information provided to it by the
Client and shall have no obligation to make any independent verification
of the accuracy or completeness of any
such instructions, authorizations, approval or information. Unless
Vsource knew of any error, incorrectness or inaccuracy in such
instructions, authorisations, approvals or other information, Vsource
will incur no liability or responsibility of any kind in relying on or
complying with any such instructions or information.
(e) The Client acknowledges that the support and co-operation of the Client
and its affiliates is in the best interest of both the Client and
Vsource so as to ensure efficient and effective delivery of the Services
by Vsource. The Client therefore agrees to provide its, and shall
procure that its affiliates provide their, full support and co-operation
to Vsource, especially in ensuring that Vsource is able to gain access
to key people and information.
4. Term and Termination.
(a) The initial term of this Agreement will be as set forth in Schedule A
(the "Initial Term") and thereafter will automatically renew for
subsequent one year periods unless either party notifies the other party
in writing at least 90 days prior to the expiration of the then-current
term that it does not wish to renew the Agreement.
(b) Either party may terminate this Agreement:
(i) by delivering 90 days' written notice upon material breach of any of
the terms of this Agreement by the other party and the failure of
such other party to remedy the same within such 90-day period;
(ii) immediately upon providing written notice if the other party has
passed a resolution for its winding up, a court of competent
jurisdiction has made an order for such other party's winding up or
dissolution, a receiver has been appointed over the assets of such
other party, such other party has made an arrangement or composition
with its creditors generally or has made an application to a court of
competent jurisdiction for protection from its creditors generally,
or the other party is generally unable to meet its obligations as
they become due; or
(iii) for convenience at any time after the Initial Term by delivering 120
days' written notice.
(c) Without prejudice to its other remedies under this Agreement, and
notwithstanding any provision in this Section 4 to the contrary, Vsource
may terminate this Agreement or the provision of any Services hereunder
immediately, if Vsource has given the Client 10 days written notice that
all or any part of Fees, expenses or Taxes payable in accordance with
Section 2 were not paid when due (except if payment was not made because
of Vsource's breach of its obligations under this Agreement).
(d) Upon termination of this Agreement, the Client shall promptly pay
Vsource all accrued Fees and expenses incurred up through the effective
date of termination.
(e) The provisions of Sections 2 (with respect to accrued Fees, expenses and
Taxes), 4(d), 5, 6, 7, 9(b), 13, 14, 18 and 19 shall survive any
termination of this Agreement and shall continue in full force and
effect.
5. Client Data.
(a) The Client acknowledges that as a result of providing the Services,
Vsource and its sub-contractors (if any) might collect, possess and have
access to Personal Data (as defined below) relating to the Client, its
affiliates, its customers and its and their directors, officers and
employees. The parties agree that such Personal Data is confidential and
will remain the property of the Client. Following expiration or
termination of this Agreement for any reason, Vsource will, upon written
request from the Client and at the Client's expense, return to the
Client all such Personal Data in Vsource's possession. "Personal Data"
means any information about a person that is subject to restrictions on
public disclosure imposed by law or regulation or by contract.
(b) The Client agrees that Vsource may use the Personal Data (i) as
necessary in connection with the delivery and performance of the
Services; (ii) as is required by law, including disclosing such Personal
Data to governmental or regulatory authorities having jurisdiction over
Vsource and/or its sub-contractors; and (iii) for any other purposes as
may be agreed to by the parties.
(c) The Client agrees that the Personal Data may be disclosed and
transferred in Malaysia or in places outside Malaysia to Vsource's
affiliates and sub-contractors and their respective agents and employees
to use, disclose, hold, process, retain or transfer for the purposes
listed in Section 5(b).
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(d) Where the provision of the Services to the Client entails the collection
by Vsource of Personal Data from the Client's customers, the Client
hereby authorizes Vsource and its sub-contractors to obtain any consents
from and provide any notices to such customers as may be required under
any applicable laws or regulations. Where the provision of the Services
to the Client requires or involves the transfer by the Client and/or its
affiliates and sub-contractors to Vsource of, and the use by Vsource and
its sub-contractors of, Personal Data, the Client hereby represents and
warrants that such transfer and use is in compliance with all applicable
laws and regulations, and the Client has obtained all consents,
licenses, permits and authorisations necessary to permit such transfer
and use.
6. Intellectual Property. Subject to any third party rights or restrictions and
the other provisions of this Section 6, the Client will own all intellectual
property rights relating to the deliverables that are (a) described in this
Agreement or any Schedule thereto, (b) developed and delivered by Vsource
and/or its sub-contractors hereunder and (c) paid for by the Client (the
"Deliverables"). Each party will retain all intellectual property rights it
possessed prior to the date of this Agreement. Notwithstanding anything to
the contrary in this Agreement, Vsource (i) will retain all right, title and
interest in and to all development tools, know-how, methodologies,
processes, technologies or algorithms used in performing the Services and
providing the Deliverables which are based on trade secrets or proprietary
information of Vsource or its sub-contractors or are otherwise owned or
licensed by Vsource or its sub-contractors, (ii) will be free to use the
ideas, concepts and know-how which are developed in the course of performing
the Services or providing the Deliverables and (iii) will retain ownership
of any Code and Data (as defined below) that are used in producing the
Deliverables and become embedded in the Deliverables; provided, that Vsource
hereby grants to the Client a worldwide, non-exclusive, royalty-free,
irrevocable license to use the Code and Data and any tools or
functionalities not created by Vsource or its sub-contractors that are
embedded in such Deliverables, to the extent that such Code and Data or
tools or functionalities (x) are and remain embedded in the Deliverables and
(y) are required for operation of the Deliverables or the Services. "Code
and Data" means software, in object code form, and any data and/or tools
created, acquired or licensed by or to Vsource either before or during the
course of performing the Services for the Client, which is utilized by
Vsource in performing the Services, is required for the operation and
functioning of the Deliverables, and which is not specifically created,
acquired or licensed by Vsource exclusively for the Client pursuant to the
terms of this Agreement or a Schedule thereto.
7. Liability.
(a) EXCEPT FOR THE WARRANTIES PROVIDED IN THIS AGREEMENT, VSOURCE DISCLAIMS
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
(b) The Client agrees with Vsource (contracting for itself, and as trustee
for each of its directors, officers, employees, agents and
sub-contractors from time to time) (Vsource and each of these persons
being referred to as an "Indemnified Person") to indemnify each
Indemnified Person against any third party losses, liabilities and costs
incurred by such Indemnified Person arising as a result of or in
connection with the Client's breach of this Agreement or the Client's
negligent or willful act or omission.
(c) Subject to Section 7(b), neither party to this Agreement will be liable
to the other party, whether for negligence, breach of contract,
misrepresentation or otherwise, for: (i) loss or damage incurred by the
other party as a result of third party claims or (ii) any special,
indirect, consequential or incidental damages, including without
limitation, any lost profits, lost savings, lost business opportunity,
downtime, lost or damaged files or data, or loss of goodwill, resulting
from any cause whatsoever, including negligence or other torts, product
defects or malfunctions or the breach of this Agreement, in either case
regardless of the form of legal action and even if the other party has
been notified of the possibility of such damages.
(d) Vsource shall not be liable to the Client for any failure by Vsource to
perform its obligations under this Agreement to the extent that such
failure arises from or relates to: (i) any failure by the Client to
perform its obligations under this Agreement or any other default or
negligence by the Client or (ii) any event beyond the reasonable control
of Vsource including, without limitation, strike, lock-out, labour
dispute (but excluding strike, lock-out and labour dispute involving the
employees of Vsource), act of God, war, riot, civil commotion, malicious
damage (but excluding malicious damage involving the employees of
Vsource), accident, fire, flood, earthquake, typhoon, hurricane, storm,
power outage, telecommunication outage or degradation, or compliance
with a law or governmental order, rule, regulation or direction.
(e) Except as set out in this Agreement and any document referred to in this
Agreement, all conditions, warranties and representations, expressed or
implied by (i) statute, (ii) common law or (iii) otherwise, in relation
to the Services are excluded.
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(f) The entire liability of Vsource under or in connection with this
Agreement whether for negligence, breach of contract, misrepresentation
or otherwise (but excluding the categories of liability referred to in
Section 7(f)) shall not in aggregate exceed an amount equal to twelve
months' Fees actually paid by the Client to Vsource under this
Agreement, regardless of the number or extent of claims made on the
Client.
(g) Nothing in this Agreement shall operate to exclude or restrict either
party's liability for death or personal injury resulting from negligence
or from fraud.
8. Covenants of Client. Client agrees to the following:
(a) Any Affiliate of the Client for whom Vsource performs any of the
Services, including any Affiliate with respect to which Vsource will
perform Services relating to such Affiliate's employees, is hereby
defined as a "Relevant Affiliate".
(b) If any of the Services require Vsource to make payments to any persons
on behalf of the Client or a Relevant Affiliate (each, a "Payee"),
including employees of the Client or such Relevant Affiliate, the Client
shall, and shall procure that each such Relevant Affiliate shall: (a)
first obtain a signed authorization, in a form approved by Vsource, from
each such Payee (a "Payee Authorization") authorizing the initiation of
credits to such Payee's account and debit of such account to recover
funds credited to such Payee's account in error and setting forth the
bank account details, address or other relevant information of the Payee
required by Vsource to make such payments (the "Payee Details"); (b)
retain a copy of each Payee Authorization during the period such Payee
Authorization is in effect and for two years thereafter; (c) promptly
furnish a copy of any Payee Authorization to Vsource upon written
request; (d) not, to the extent payment to a Payee is made by a check
issued by Vsource (a "Vsource Check"), distribute such check to such
Payee prior to the relevant pay date; and (e) cooperate with Vsource to
recover funds erroneously included in any Vsource Check or credited to a
Payee's account in error. The Client authorizes, and shall procure that
each Relevant Affiliate authorizes, Vsource to rely on the Payee Details
in making payments to a Payee and sending to such Payee any advice,
acknowledgements and reports required in connection with the Services.
If the Client or any Relevant Affiliate desires to stop payment on any
Vsource Check, the Client or such Relevant Affiliate must provide
Vsource with a written stop payment request in the form provided from
time to time to the Client by Vsource. The Client shall not, and shall
procure that the Relevant Affiliates shall not, request Vsource to stop
payment on any Vsource Check that represents funds to which a Payee is
rightfully entitled.
(c) If any of the Services require funds of the Client or a Relevant
Affiliate to either be remitted by the Client or such Relevant Affiliate
to Vsource or debited by Vsource directly from a bank account of the
Client or such Relevant Affiliate in order for Vsource to make payments
to third parties on behalf of the Client or such Relevant Affiliate, the
Client hereby:
(i) authorizes, and shall procure that such Relevant Affiliate
authorizes, Vsource to commingle such funds with other funds, whether
of Vsource or other clients of Vsource, and all amounts earned on
such funds while held by Vsource will be for the sole account of
Vsource,
(ii) represents and warrants, and shall procure that such Relevant
Affiliate represents and warrants, that it has obtained all required
authorizations and consents from the bank from which the Client's or
the Relevant Affiliate's funds will be debited in order for Vsource
to make such debits;
(iii) undertakes, and shall procure that such Relevant Affiliate
undertakes, to have sufficient funds in such account, within the
deadline established by Vsource, to satisfy in full the payments due
to such third parties, or in the case where the Client or such
Relevant Affiliate will remit funds to Vsource, to remit to Vsource
an amount sufficient to satisfy in full the payments due to such
third parties;
(iv) authorizes Vsource, and shall procure that such Relevant Affiliate
authorizes Vsource, if the funds made available by the Client or such
Relevant Affiliate to Vsource are in a currency different from the
currency in which payment will be made to the third party, to convert
at any time such funds into the appropriate currency of payment to
the third party at such time and rate of exchange in accordance with
Vsource's prevailing practice, and the Client or such Relevant
Affiliate, as the case may be, shall bear all exchange risks, losses,
commission and other bank charges which may thereby arise; and
(v) represents and warrants, and shall procure that such Relevant
Affiliate represents and warrants, to Vsource and any bank
originating debit/credit instructions on behalf of Vsource (an
"Originating Bank"), if applicable, that (i) each credit and debit to
the account of a Payee is timely and has been authorized pursuant to
a Payee Authorization signed by such Payee and held by the Client or
such Relevant Affiliate, (ii) at the time any credit or debit is made
with respect to a Payee, the Client and
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such Relevant Affiliate has no actual knowledge of the revocation or
termination of such Payee's Payee Authorization, and (iii) each debit
from the account of a Payee is for a sum which is due and owing to the
Client or such Relevant Affiliate, and the Client or such Relevant
Affiliate has notified such Payee of such debit prior to its initiation.
(d) If any of the Services require Vsource to debit funds from a Payee's
account, the Client agrees that it shall be liable for any such debit
initiated by Vsource and shall indemnify Vsource in full against any
loss, liability, expenses or damage arising from: (a) any fraudulent or
criminal acts of the Client's or any Relevant Affiliate's employees or
agents or (b) any claim by such Payee or any other third party against
Vsource in connection with such debit, unless such claim was the result
of Vsource's gross negligence or willful misconduct.
(e) The Services are designed to assist the Client and its Relevant
Affiliates in complying with applicable laws and government regulations.
Nevertheless, the Client acknowledges and agrees that it, and not
Vsource, will be responsible for: (a) compliance by the Client and the
Relevant Affiliates with all relevant laws and government regulations
relating to the Client's and the Relevant Affiliates' business and (b)
for any use the Client or any Relevant Affiliate may make of the
Services to assist it in complying with such laws and government
regulations. The Client will indemnify Vsource in full against any loss,
liability, expenses or damage arising from the Client's or any Relevant
Affiliate's breach of the foregoing obligations.
(f) Vsource will take reasonable precautions to prevent the loss of or
alteration to the Client's and the Relevant Affiliates' data files in
Vsource's possession, but Vsource does not undertake to guarantee
against any loss or alteration to such files. The Client acknowledges
and agrees, and shall procure that each such Relevant Affiliate
acknowledges and agrees, that Vsource is not and will not be the
Client's or such Relevant Affiliate's official record keeper.
Accordingly, the Client will, to the extent it deems necessary, keep or
cause such Relevant Affiliates to keep copies of all source documents of
the information delivered to Vsource.
(g) Neither Vsource nor any Originating Bank shall be liable for any damages
to the Client or any Relevant Affiliate arising from any decision to
refrain from or delay issuing any credit or debit instructions with
respect to, or a Vsource Check to, a third party if: (a) Vsource is
unable, after reasonable efforts, to verify such debit or credit
instructions in accordance with an agreed upon security procedure or (b)
Vsource has not received timely funds from the Client or any Relevant
Affiliate as required under Section 8(c) of this Agreement. The Client
shall be, and shall procure that its Relevant Affiliates shall be, bound
by any debit/credit instructions issued in respect of the Client or such
Relevant Affiliate and received and verified by the Originating Bank in
accordance with agreed upon security procedures, and neither Vsource nor
such Originating Bank will be liable for any loss sustained from any
instructions which are not authentic if such security procedures have
been followed in good faith. The Client agrees, and shall procure that
its Relevant Affiliates agree, that Vsource shall not be liable for any
loss or damages arising from any act or omission of any clearing house,
correspondent bank or agent required to be used to provide the Services
under this Agreement.
(h) If any of the Services provided under this Agreement are terminated by
the Client, the Client shall immediately (a) become solely responsible
for all of its third-party payment obligations covered by such Services
then or thereafter due and (b) reimburse Vsource for all payments made
by Vsource hereunder on the Client's or a Relevant Affiliate's behalf to
any third party.
(i) To the extent permitted by applicable law and in addition to any other
remedy which Vsource may have, Vsource may at any time at its
discretion, without prior notice to the Client or any Relevant
Affiliate, deduct from, set-off, appropriate, combine, consolidate
and/or apply any monies owing by Vsource to the Client or any Relevant
Affiliate under this Agreement, in any currency, in or towards
settlement or discharge of any sums payable or due to Vsource from the
Client or such Relevant Affiliate under this Agreement. This Clause
shall without limitation apply to any amount previously overpaid by
Vsource to the Client or such Relevant Affiliate under this Agreement,
any claim that Vsource may have against the Client or any Relevant
Affiliate and all sums payable or due to Vsource from the Client or any
Relevant Affiliate under this Agreement. Where any deduction, set-off,
appropriation, combination, consolidation and/or application of monies
under this Section 8(i) requires the conversion of one currency into
another, Vsource shall be entitled to effect such conversion at such
time and rate of exchange in accordance with its prevailing practice and
the Client and its Relevant Affiliates shall bear all exchange risks,
losses, commission and other bank charges which may thereby arise;
provided, that Vsource acts in a reasonable and responsible manner.
(j) Vsource shall not be liable for any loss arising from an error of
judgment or mistake of law, by it or any officer or employee, made in
the course of its performance of the Services unless such loss was the
result of Vsource's gross negligence or willful misconduct. No provision
of this Agreement shall require Vsource to do anything which may be
illegal or contrary to applicable law or regulation or expend or risk
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its own funds or otherwise incur any financial liability in the
performance of its duties if it shall have grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it. Without prejudice to the generality of
the foregoing, nothing contained in this Agreement shall impose any
obligation on Vsource to borrow any moneys or to maintain, protect or
preserve any moneys of the Client or any Relevant Affiliate.
(k) The Client will use, and shall procure that its Relevant Affiliates will
use, the Services in accordance with the instructions and reasonable
policies established by Vsource from time to time and communicated to
the Client. The Client will use, and shall procure that its Relevant
Affiliates will use, the Services only for the internal business
purposes of the Client or such Relevant Affiliates and will not provide,
directly or indirectly, any of the Services or any portion thereof to
any other person.
(l) The Client acknowledges and agrees that any equipment to be used by the
Client in order to accept any Service must be compatible with Vsource's
required standards and must be approved by Vsource. Vsource shall not be
liable to the Client for any breach by it or any Sub-contractor under
this Agreement caused by failure of any of the Client's software or
hardware.
(m) The Client will promptly notify Vsource in writing of any changes in
Client policies that affect the provision of the Services, such as the
Client's expense claim policies or accounting policies, with sufficient
detail to enable Vsource to reflect such changes in the Services. The
Client and Vsource will mutually agree on the time schedule for when
such changes need to be reflected in the Services.
(n) To the extent that any codes or numbers used by the Client in connection
with the Services are allocated to it by Vsource, then Vsource may
change any such codes or numbers if a telecommunications carrier being
used by Vsource in connection with the Services requires Vsource to
change any of such codes or numbers.
9. Advance.
(a) Upon execution of this Agreement, Vsource will advance the amount of
US$500,000 (the "Advance Amount") to Client to assist Client with the
working capital expenditures that Client will need to incur in order to
meet its obligations during implementation of the Services.
(b) If the Detailed Project Definition (as described in Schedule A) is not
completed and mutually agreed upon by the parties on or prior to May 31,
2003, then Client shall repay the Advance Amount in full on May 31,
2003. If the Detailed Project Definition is successfully completed and
mutually agreed upon by the parties on or prior to May 31, 2003, then
the Advance Amount shall be repaid in 11 equal monthly installments
starting on June 30, 2003. No interest shall accrue if the Advance
Amount (or installment thereof, as the case may be) is repaid in full by
the applicable due date(s), but any overdue unpaid amount shall accrue
interest in accordance with Section 2(c) of this Agreement. Client
agrees that its obligation to repay the Advance Amount ranks senior to
all of its currently outstanding debt obligations, except any secured
debt obligations and debt obligations which by their terms shall rank
senior to any subsequently incurred debt obligation unless the lender
thereunder agrees to either be pari passu or be subordinated to such
subsequent debt obligation. Client further agrees that it shall not
incur any debt obligation subsequent to the Advance Amount that is pari
passu or senior to the Advance Amount, or pledge, place a lien on or
otherwise encumber any of its assets, without the written consent of
Vsource. For purposes of this Section 9(b), "debt obligation" means any
debt incurred by Client and also includes any guarantee or surety
provided by Client with respect to another party's, including an
Affiliate's, debt obligations.
(c) Client represents and warrants that it has all authorizations, consents
and permits required for it to execute and deliver this Agreement and
perform all of its obligations hereunder, and such execution, delivery
and performance will not (i) contravene, conflict with, or constitute or
result in a breach or violation of, or a default under any of its
charter or constitution documents or any law, regulation or court order
to which it or any of its subsidiaries is subject, or (ii) contravene,
conflict with, or constitute or result in a breach or violation of, or a
default under, or the acceleration of, or the triggering of any payment
or other obligations (including the creation of a lien on any properties
or assets owned or used by Client or any of its subsidiaries) pursuant
to, any provision of any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument
to which it or any of its subsidiaries is a party or by which it or its
subsidiaries may be bound, or to which any of its or its subsidiaries'
property or assets is subject.
10. Amendments; Waiver.
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(a) No alteration, amendment, assignment or modification of any of the terms
or provisions of this Agreement shall be valid unless made pursuant to
an instrument in writing signed by each of the parties hereto; provided,
that the waiver by a party hereto of compliance with the provisions
hereof or of any breach or default by the other party hereto need be
signed only by the party waiving such provision, breach or default.
(b) Either party to this Agreement may request changes to the Services.
Changes must be supported by sufficient details to enable the other
party to assess the impact of the requested change on the cost,
timetable or any other aspect of this Agreement. The parties agree to
work together to consider, and if appropriate, agree on any such
changes. Until a change is agreed in writing, the parties to this
Agreement will continue to act in accordance with this Agreement.
(c) No failure or delay on the part of any of the parties in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power preclude any
other right or power.
11. Assignment. Neither party may assign this Agreement nor any of the rights
or obligations hereunder without the prior written consent of the other,
except that the rights and obligations of Vsource under this Agreement may
be assigned or otherwise transferred to one of the affiliates of Vsource.
Vsource shall provide to the Client prior written notice of any such
assignment or transfer. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective legal successors and
permitted assigns.
12. Independent Contractor. Vsource will perform the Services as an independent
contractor, and not as an employee, officer or agent of the Client or of
its general partner. In addition, nothing in this Agreement will constitute
the parties an association, joint venture or partnership.
13. Confidentiality. Each party hereto agrees that it, its employees, agents
and sub-contractors will keep confidential and will not disclose or divulge
the terms of the transactions contemplated by this Agreement and all
information concerning the other party which such other party treats as
confidential, including, but not limited to, Personal Data, proprietary
intellectual property, information concerning customers, marketing plans,
technical information, and possible new products or services; provided,
however, that each party shall not be required to keep such information
confidential (i) after such information otherwise becomes generally
available to the public in the absence of a breach of this Agreement by the
disclosing party, or (ii) if such information is required to be disclosed
by law, rule, regulatory authority or stock exchange on request of any
governmental body, court of law, regulatory authority or stock exchange.
The parties acknowledge that monetary damages may not be a sufficient
remedy for unauthorized disclosure of confidential information and a
disclosing party of confidential information shall be entitled, without
waiving any other rights or remedies, to such injunctive or equitable
relief as may be deemed proper by a court of competent jurisdiction.
14. Publicity. The Client agrees that Vsource and its parent company may
publicly refer to the Client, orally and in writing, as a customer and may
use the Client's logo, trade name, trademark or service xxxx in connection
therewith. Vsource agrees that the Client may publicly refer to Vsource,
orally and in writing, as a vendor and may use Vsource's logo, trade name,
trademark or service xxxx in connection therewith. Any other reference to
the other party by either party, including any details of this Agreement or
the Services, whether in the form of press release or otherwise, may be
made only with such other party's prior written consent except as required
by law, regulation or rules of the stock exchange on which a party's shares
are listed.
15. Notices. All notices, requests and other communications hereunder must be
in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (prepaid first class
certified mail, return receipt requested) to the parties at the following
addresses or facsimile numbers:
If to Vsource, to:
Vsource (Malaysia) Sdn Bhd
Xx. 0 Xxxxx Xxx Xxxx
00000 Xxxxx Xxxxxx
Malaysia
Attn: Chief Operating Officer
Telefacsimile No.: 60-3-7490-8000
If to the Client, to:
000 X. Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxxx, Xxxx 00000
7
USA
Attn: CEO
Telefacsimile No.: 0-000-000-0000
All such notices, requests and other communications will (i) if delivered
personally against written receipt to the address as provided in this
Section, be deemed given upon delivery, (ii) if delivered by facsimile
transmission to the facsimile number as provided in this Section, be deemed
given upon receipt or upon the next business day in Malaysia ("Business
Day") if received after normal business hours or on a holiday, a Saturday or
a Sunday, and (iii) if delivered by mail in the manner described above to
the address as provided in this Section, be deemed given upon receipt (in
each case regardless of whether such notice is received by any other person
to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change
its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other
party hereto.
16. Severability. If any provision of this Agreement is held to be invalid,
illegal, unenforceable, in whole or in part, the remaining provisions shall
be unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable provision, which being valid, legal and
enforceable, comes closest to the economic effect and intention of the
parties hereto underlying the invalid, illegal or unenforceable provision.
17. Entire Agreement. This Agreement, together with the Schedules and any other
attachments hereto, constitutes the entire Agreement between the parties
hereto and supersedes all previous agreements, including, without
limitation, promises, proposals, representations, understanding and
negotiations, whether written or oral, between the parties respecting the
subject matter hereof. Except as expressly provided in this Agreement, the
rights and remedies contained in the Agreement are cumulative and not
exclusive of rights or remedies provided by law.
18. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of Hong Kong. Each party irrevocably submits to
the non-exclusive jurisdiction of the courts of Hong Kong.
19. Non-solicitation. The Client agrees that it and its affiliates will not
during the term of this Agreement, and for one year after the completion
thereof, employ, solicit, entice away from Vsource or its affiliates any
officer or employee thereof.
20. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original, and all of which, when taken
together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
VSOURCE (MALAYSIA) SDN BHD
By: /s/ XXXXXX X. XXXXX
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice Chairman and Chief
Financial Officer
TEAM AMERICA, INC.
By: /s/ S. CASH XXXXXXXXX
-----------------------------
Name: S. Cash Xxxxxxxxx
Title: Chief Executive Officer
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SCHEDULE A
DESCRIPTION OF SERVICES
Part I. Requested Services/Products:
Section 1 Description Of Services
Client operates primarily as a Professional Employer Organization ("PEO")
throughout the United States. Client, through its subsidiaries, provides
comprehensive human resource services, including payroll and payroll
administration, benefits administration, on-site and on-line employee and
employer communications, employment practices and human resource risk
management and workforce compliance administration. Client provides these
services by becoming co-employer of its clients employees. As of December 28,
2002, Client served approximately 1,500 clients and approximately 12,750
worksite employees. In addition, Client had 150 corporate employees located at
its headquarters in Worthington, Ohio and at its offices around the United
States.
Client has engaged Vsource to provide general outsourcing services to support
its PEO operations across the United States. Vsource will support Client from
its Shared Services Center in Kuala Lumpur, Malaysia, and will provide services
in the following functional areas:
. Payroll services
. Customer support
. IT hosting and maintenance
. Corporate financial services
1.1 Payroll services
Vsource will provide payroll services to all Client Work Site Employees (WSEs).
Key tasks will include the following:
. Payroll, Checks & Journals Processing
. Complete Employment Tax Processing, FIT, FICA, FUTA, SUTA, State & City
Income Taxes
. W-2, W-4, W-5, & I-9 Processing
. Administration of Wage Garnishments & Tax Liens
. Payroll Record Storage
. All Required Payroll Reports
1.2 Customer Support Services
Client will migrate certain customer support functionality currently performed
by its Human Resources Associates (HRA) and Human Resources Consultant (HRC) to
Vsource's Shared Services Center in Kuala Lumpur, Malaysia.
Based on past indicators, Vsource expects that it will provide answers (both
inbound and outbound) to Client's customers as well as WSE in the areas of
payroll (80%) and benefits (20%). Vsource will also establish a knowledge
database to log, track, and analyze inquiries and their associated actions,
escalations, and resolutions.
1.3 IT Host And Maintenance
Vsource will provide hardware maintenance and support for Client's corporate
database (in Oracle) and core customer application, Team Direct. Vsource will
host a version of the application and database in its Shared Services Center in
Kuala Lumpur. Key tasks performed will include:
. Perform daily database backup and weekly system backup of Client
data and files on the Oracle Servers. System backup includes
operating system and applications.
. Perform network and security configuration and support within
Vsource
. Provide patch management for operating system
. Replace faulty hardware components
. Provide database administration which includes monitoring,
performance management and storage space management
. Schedule downtime for system maintenance
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. Diagnose and attempt to resolve connectivity and system problems
1.4 Corporate Financial Services
Vsource will also perform certain Client's corporate finance functions as a
part of this outsourcing initiative, more specifically:
1. General Ledger
2. Fixed Asset
3. Accounts Receivables
4. Accounts Payables
5. Reporting
Section 2 Assumptions
Vsource has based this scope of Services, and the pricing therefor, on the
following assumptions:
. Payroll services will be carried out at the back office level. Client and
WSE "onboarding" will still be performed by Client staff in the region.
. HRC will still perform majority of the customer support function that
require in-person presence as well as specific industry knowledge.
Malaysia based Vsource agents will support Client clients and WSE's based
on pre-defined FAQs and knowledge base. Non-standard inquiries will be
escalated to the regional HRCs for resolution.
. While back office IT functions will be maintained in Vsource's Shared
Services Center in Malaysia, client-facing functions such as corporate
web pages and web-input forms will need to be hosted in the US to reduce
overall latency and improve performance
Section 3 Project Schedule
Phase 1: Detailed Project Definition May 1-May 31
Phase 2: Setup and system testing June 1-July 31
Live August 1
Section 4 Initial Term
The initial term of this Agreement shall be two years from the date hereof.
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SCHEDULE B
SCHEDULE OF FEES
The minimum Fees for the Services shall be US$166,667 per month, payable
beginning on May 31, 2003. The Fees have been determined based on the nature
and size of Client's business, number of WSEs and number of corporate employees
as of December 28, 2002, as described in Client's Form 10-K for the year ended
December 28, 2002 (the "Variables"). During the Project Definition phase,
Vsource and Client will jointly quantify expected Service volume and develop
and agree upon a more complete recurring Fees structure based on Vsource
standard corporate pricing table. In the event that any of the Variables
increases, thereby requiring Vsource to perform a greater number of
transactions or provide a greater volume of the Services, such agreed-upon
pricing table shall go into effect and monthly Fees shall be increased in
accordance therewith.
Currently, Vsource utilizes the following methodology in determining overall
project pricing with consideration for volume:
. Payroll-based on number of pay-slips as well as initial setup charges
. Customer support: number of agents or number of inquiries plus relevant
setup charges
. IT support: usually time and material or functionality based
. Corporate finance: transaction based plus all necessary setup charge
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