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Exhibit 10.26
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DATA PROCESSING AND INFORMATION TECHNOLOGY AGREEMENT
BETWEEN
ROADWAY EXPRESS, INC.
AND
AFFILIATED COMPUTER SERVICES, INC.
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September 11, 1998
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Roadway Express, Inc
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Affiliated Computer Services, Inc.
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DATA PROCESSING AND INFORMATION TECHNOLOGY AGREEMENT
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Table of Contents
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Page
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RECITALS 4
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GENERAL TERMS AND CONDITIONS 5
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SECTION 1. DEFINITIONS 5
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1.1 Certain Defined Terms 5
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1.2 Other Definitions 7
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SECTION 2. SERVICES 7
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2.1 Services 7
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2.2 Service Levels 7
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2.3 Additional Services 7
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2.4 Service Levels and Service Level Agreements 7
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2.5 Service Level Reports. 8
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2.6 8
2.7 Measurement and Monitoring Tools 8
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2.8 Continuous Improvement and Best Practices 8
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2.9 Subcontractors 9
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2.10 Software 9
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2.11 Equipment 9
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2.12 Procedures Manual 10
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2.13 Draft Procedures Manual 10
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2.14 Key ACS Personnel 11
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2.15 Qualifications 11
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2.16 ROADWAY FACILITIES(a) OFFICE AND DATA ROOM SPACE.(i) Throughout the Term, Roadway shall make
available to ACS adequate space in Roadway's headquarters facility to permit ACS personnel
to perform the Services in accordance with this Agreement (such space as it may exist from
time to time being referred to as the 14
2.17 Viruses 14
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2.18 Access to Facility 14
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2.19 14
2.20 15
2.21 Annual Performance Review; Benchmarking 15
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2.22 Reports 15
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2.23 Meetings 15
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2.24 Quality Assurance 15
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2.25 Productivity and Management Tools 16
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2.26 Planning Retreat. 16
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SECTION 3. TERM OF AGREEMENT 16
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SECTION 4. SECURITY OF INFORMATION; CONFIDENTIALITY 16
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4.1 Ownership of Data 16
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4.2 Confidential Information 16
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4.3 Non-Disclosure and Non-Use; Exceptions and Exclusions 17
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4.4 Burden of Proof 17
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4.5 Security 17
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SECTION 5. CERTAIN ADDITIONAL RESPONSIBILITIES 18
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5.1 General 18
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5.2 Roadway-Provided Software. 18
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SECTION 6. CHARGES 18
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6.1 Prices 18
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6.2 Price Adjustments 19
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6.3 Termination Charges 19
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6.4 Pass-Through Costs 19
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6.5 Payment 19
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6.6 Continued Performance 19
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6.7 Renegotiation 19
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SECTION 7. TAXES 20
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7.1 Roadway Responsibility 20
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7.2 Payment 20
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SECTION 8. TERMINATION 20
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8.1 At Roadway's Election 20
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8.2 Upon Material Breach 20
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8.3 Termination Assistance and Services 20
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8.4 Return of Materials 20
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8.5 Personnel Matters on Termination 21
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8.6 Software Matters on Termination 21
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8.7 Equipment Matters on Termination 21
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SECTION 9. WARRANTIES, REMEDIES AND INDEMNITIES 21
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9.1 Service Warranty 21
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9.2 Remedies 21
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9.3 Cross-Indemnity for Personal Injury and Property Damage 22
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9.4 Notice and Defense 22
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9.5 Year 0000 Xxxxxxxx 22
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SECTION 10. LIMITATION OF LIABILITIES AND REMEDIES 23
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10.2 Limitations of Liability 23
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10.3 Force Majeure 24
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SECTION 11. ERRORS AND OMISSIONS 24
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SECTION 12. TITLE TO PROPERTY 24
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SECTION 13. RISK OF LOSS, INSURANCE ON EQUIPMENT 24
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13.1 Roadway Risk of Loss. 24
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13.2 ACS Risk of Loss. 25
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SECTION 14. DISPOSITION OF DATA 25
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SECTION 15. GOVERNANCE, DISPUTE RESOLUTION AND 25
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15.1 Operational Committee 25
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15.2 Executive Committee; Disputes 26
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15.3 Formal Dispute Resolution 26
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SECTION 16. CERTAIN OBLIGATIONS REGARDING THIRD-PARTY SOFTWARE 27
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16.1 Roadway Obligations 27
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16.2 ACS Obligations 27
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SECTION 17. GENERAL 28
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17.1 Amendment; Waiver; Remedies 28
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17.2 Assignment; Binding Effect 28
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17.3 Jurisdiction 28
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17.4 Conflicts 28
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17.5 Integration; Complete Document 28
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17.6 Notices 28
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17.7 Audit Rights 29
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17.8 Employees 29
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17.9 Severability 29
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17.10 Further Assurances 29
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17.11 Survival 29
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17.12 Consent 30
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17.13 Counterparts 30
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Roadway Express, Inc.
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Affiliated Computer Services, Inc.
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DATA PROCESSING AND INFORMATION TECHNOLOGY AGREEMENT
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This Data Processing Services Agreement (this "Agreement") is
made and entered into as of September 11, 1998 (the "Effective Date") by and
between Roadway Express, Inc., a Delaware corporation with its corporate offices
in Akron, Ohio (hereinafter called "Roadway"), and Affiliated Computer Services,
Inc. a Delaware corporation with its corporate offices in Dallas, Texas ("ACS").
RECITALS
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A. Roadway provides nationwide, long-haul, less than truckload
freight and related transportation services. Roadway desires to enter into an
agreement with a vendor of information technology, processing, support and
management services to perform information technology outsourcing services for
Roadway.
B. ACS is experienced and expert in data processing and
information technology services, including the systems and environments employed
and being implemented by Roadway. ACS desires to establish a contract to provide
such services to Roadway in an economical, efficient and competent manner.
C. Roadway and ACS agree that the primary objective of this
document is to establish a framework which will be the basis for a structured
approach for ACS to provide information systems services necessary to outsource
the functions described below, including without limitation, in SCHEDULE 2.1.
This document, without limitation:
1. Describes the services that will be provided
and the related service levels; including a
defined reporting structure for reviewing
the actual service levels achieved by ACS.
2. Provides a flexible ACS organization to
deliver services.
3. Defines a controlled and structured process
which allows changes and continuous
improvements to service levels and the
overall scope of service.
4. Defines the formal communication interfaces
between ACS and Roadway.
5. Provides the rules, processes, and
responsibilities of both ACS and Roadway
relating to the services.
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D. ACS desires to provide reliable, high quality services at a
cost to Roadway which is predictable and is consistent with competitive market
prices for such services. The cost of services to Roadway should reflect
improvements over time in productivity by reason of new tools, methods and
technology in the providing of these types of services.
NOW, THEREFORE, in consideration of the mutual promises and
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
GENERAL TERMS AND CONDITIONS
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SECTION 1. DEFINITIONS.
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1.1 CERTAIN DEFINED TERMS. As used in the Agreement, the
following terms shall have the meanings set forth below.
(a) "ACS-Provided Software" means the software which ACS owns
or licenses or agrees to acquire in its own name and utilize during the Term for
the purpose of providing the Services. ACS-Provided Software is described or
identified on SCHEDULES 2.10.1 and 2.10.3. The parties agree to add and delete
items from the listing of ACS-Provided Software as ACS changes the software used
subject to the applicable provisions of this Agreement.
(b) "Administered Contracts" means the contracts and
agreements that ACS will have the responsibility of (i) managing and (ii)
verifying the accuracy of invoices related to such contracts and agreements.
Administered Contracts as of the Effective Date are identified on SCHEDULES
2.10.4a and 2.10.5.
(c) "Affiliate" means, for any person or entity, any other
person or entity that, directly or indirectly controls, is controlled by, or is
under common control with, such person or entity.
(d) "Base Price" means the resource-based prices excluding
Pass-Through Costs and Pass-Through Plus Costs, payable for each Period
(pro-rated for partial Periods) for Services, as described on SCHEDULE 6.1. The
Base Price includes the charges shown in SCHEDULE 6.1 as "One-Time Charges."
(e) "Commencement Date" means the date ACS actually begins to
perform Services.
(f) "Cutover Date" means the date that data processing,
support and management services are transitioned to ACS's Pittsburgh,
Pennsylvania facility.
(g) "Pass-Through Costs" means, collectively, costs and
expenses that will be paid by ACS and passed through without increase or xxxx-up
for reimbursement by Roadway which costs must be expressly approved in this
Agreement or subsequently approved by Roadway to be treated as Pass-Through
Costs. Pass-Through Costs are payable in addition to the Base
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Price. SCHEDULE 6.1 identifies and limits the categories of costs that will be
treated as Pass-Though Costs. If a cost is incurred by ACS for the benefit of
Roadway and others, then the Pass-Through Cost shall be Roadway's pro-rata share
of such cost, computed on a reasonable and equitable basis.
(h) "Pass-Through Plus Costs" means, collectively, costs and
expenses that will be paid by ACS and passed through, with an additional
administration fee, for reimbursement by Roadway which costs and fee must be
expressly approved in this Agreement or subsequently approved by Roadway to be
treated as Pass-Through Plus Costs. Pass-Through Plus Costs are payable in
addition to the Base Price. SCHEDULE 6.1 identifies and limits the categories of
costs that will be treated as Pass-Through Plus Costs.
(i) "Period" means one of Roadway's thirteen (13) four
(4)-week accounting periods occurring in each calendar year.
(j) "Roadway-Provided Software" means any and all software
which Roadway owns or licenses in its name or agrees to provide and make
available to ACS for operation at the ACS data center or another ACS facility
for use by ACS to provide the Services. Roadway-Provided Software includes
Third-Party Software licensed by Roadway. Current Third-Party Software included
in the Roadway-Provided Software is listed and identified in SCHEDULES 2.10.2,
2.10.4 and 2.10.4a.
(k) "Service Level Agreements" means the service level
specifications or descriptions, the performance standards and the measurement
procedures set forth in SCHEDULE 2.4 and summarized in SCHEDULE 2.5.
(l) "Services" means, collectively, all of the data processing
and related information technology services and resources to be provided by ACS
to Roadway pursuant to this Agreement, including, but not limited to, those
Services described on SCHEDULE 2.1.
(m) "Third-Party Software" means any software owned by a
third-party and licensed to Roadway or ACS, as the case may be.
(n) "Year 2000 Compliant" means that the product is designed
to be used prior to, during, and after the calendar year 2000 AD, and that the
product will operate before, during, and after such time period without error
relating to date data, specifically including any error relating to, or the
product of, date data which represents or references different centuries or more
than one century. "Year 2000 Compliant" further means:
(i) The product will not abnormally end or provide invalid or
incorrect results as a result of date data, specifically including date
data which represents or references different centuries or more than
one century;
(ii) The product has been designed to ensure year 2000
compatibility, including, but not limited to, date data century
recognition, calculations which accommodate same century and
multi-century formulas and date values, and date data interface values
that reflect the century; and
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(iii) The product provides for correct processing of Leap
Years. (Leap Years shall mean the year during which an extra day is
added in February (February 29). Leap Year occurs in all years
divisible by 400 or evenly divisible by 4 and not evenly divisible by
100. For example, 1996 is a Leap Year since it is divisible by 4 and
not evenly divisible by 100. 2000 is a Leap Year since it is divisible
by 400.)
1.2 OTHER DEFINITIONS. Other capitalized defined terms
used in this Agreement are defined in the text in the context in which they
are used.
SECTION 2. SERVICES
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2.1 Services.
(a) In accordance with the charges, terms and conditions
contained in these General Terms and Conditions (the "General Terms and
Conditions") and in the Schedules attached hereto ("Schedules") (collectively,
the General Terms and Conditions and the Schedules are referred to as this
"Agreement"), as in effect from time to time, ACS shall furnish data processing
services and other information technology services and resources to Roadway.
The Services to be performed by ACS are described in this Agreement, on
SCHEDULES 2.1 AND 2.4.
(b) ACS shall furnish initial transition services to commence
Processing, and services to migrate to its Pittsburgh data center ("Cutover"),
including, without limitation, the services described on SCHEDULE 2.1. The fees
for these services are included in the One-Time Charges and the Pass-Through
Costs under SECTION 6.1 AND SCHEDULE 6.1.
2.2 SERVICE LEVELS. ACS will perform the Services at or
within the Service Level Agreements for the Base Price provided in SECTION 6.1.
2.3 ADDITIONAL SERVICES. ACS agrees to provide other Services
not described herein (but only if ACS provides such Services to any existing
customer of ACS), as needed by Roadway, from time to time upon the written
request of Roadway. Upon receiving Roadway's request for such Services, ACS will
promptly provide Roadway with a plan or proposal, including pricing at fair
market value (taking into account advances in technology and operating
efficiencies), as to the manner in which a requested Service will be provided.
If Roadway requests Services that ACS does not provide to any other ACS
customer, ACS will contract with a third party, upon commercially reasonable
terms, to perform such Services. Such Services will be performed under ACS's
management and control. ACS may charge Roadway the third party contract price
plus a management fee to be negotiated in good faith by the parties for
administering such contract.
2.4 SERVICE LEVELS AND SERVICE LEVEL AGREEMENTS. ACS agrees
that it will be responsible for and will perform all of the Services hereunder
beginning on the Commencement Date and continuing throughout the Term. ACS
agrees that its performance of all Services hereunder will meet and be in
accordance with the applicable Service Level Agreements contained in SCHEDULE
2.4.
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2.5 SERVICE LEVEL REPORTS. ACS will provide Roadway with
Periodic reports comparing ACS's performance to the Service Level Agreements
contained in Schedule 2.4. These reports shall be delivered to Roadway with the
content (metrics) identified on Schedule 2.5 to determine whether ACS's
performance meets the performance required under the Service Level Agreements.
The format of such reports, as may be amended from time to time, is to be
mutually agreed upon. At all times, ACS's level of performance shall meet or
exceed outsourcing industry standards under similar circumstances and the
Service Level Agreements identified in this Agreement.
2.6 Reviews.
(a) Within three (3) Periods after the Cutover Date and at
least annually thereafter, Roadway and ACS shall review the Service Level
Agreements and shall make adjustments to them as appropriate to reflect improved
performance capabilities associated with advances in the technology and methods
used to perform the Services. The Parties expect and understand that the Service
Level Agreements will be improved over time. As part of this review process, the
Parties shall jointly determine and agree on additional Service Level
Agreements, and Service Level Credits to be added to SCHEDULE 9.2 as
appropriate.
(b) Within three (3) Periods after the Commencement Date and
at least annually thereafter, ACS shall conduct customer satisfaction surveys
and shall make adjustments to its provisions of the Services as appropriate to
reflect valid recommendations in such surveys.
2.7 MEASUREMENT AND MONITORING TOOLS. ACS shall implement the
necessary measurement and monitoring tools and procedures required to measure
and report ACS performance of the Services against the applicable Service Level
Agreements. Such measurement and monitoring shall permit reporting at a level of
detail sufficient to verify compliance with the Service Level Agreements, and
shall be subject to audit by Roadway. ACS shall provide Roadway with information
and access to such tools and procedures upon request, for purposes of
verification.
2.8 Continuous Improvement and Best Practices.
(a) ACS shall: (i) on a continuous basis, as part of its total
quality management process, identify and document ways to improve service
levels; (ii) identify and apply proven techniques and tools from other
installations within its operations (i.e., "Best Practices") that would benefit
Roadway either operationally or financially; and (iii) document and pass on cost
reductions to Roadway as the Best Practices are implemented; provided, that
Section 2.8(a)(iii) will not be used to change the unit price for CPU, DASD or
Tape contained in the Baseline Pricing Matrix in SCHEDULE 6.1.
(b) MATERIAL COST REDUCTION OPPORTUNITIES. ACS shall advise
the Roadway Contract Executive of each opportunity to materially reduce costs
that is discovered or made known to ACS and to assist in estimating the
magnitude thereof. If ACS proposes an innovative, value-adding, cost-saving
solution outside the scope of Services, which Roadway has not previously
considered or began to investigate, that Roadway, in its sole discretion, elects
to implement, then in each of the three (3) years following such implementation,
ACS shall receive
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or retain, as appropriate, an amount equal to twenty-five percent (25%) of
Roadway's actual net cost reduction proximately caused by the solution during
such year. This Section 2.8(b) shall apply to net cost reductions that accrue
during the Term under accrual basis accounting under Generally Accepted
Accounting Principles consistently applied by Roadway, regardless of when the
avoided costs would have been incurred.
2.9 SUBCONTRACTORS. ACS may not delegate to subcontractors the
performance of any major Service hereunder without the prior written approval of
Roadway. Otherwise, ACS may engage subcontractors as it deems appropriate to
assist ACS in furnishing the Services; provided, that, ACS shall in all cases
remain liable hereunder for the performance of its obligations in this
Agreement.
2.10 SOFTWARE.
(a) At the Commencement Date, ACS shall utilize the
Roadway-Provided Software in use at the Effective Date by Roadway, including,
without limitation, that which is described on SCHEDULES 2.10.2, 2.10.4 AND
2.10.4a, to provide the Services.
(b) SCHEDULES 2.10.1, 2.10.2, 2.10.3, 2.10.4 AND 2.10.4a
describe the software that is Roadway-Provided Software and ACS-Provided
Software, but may not include an exhaustive listing.
(c) The parties agree to amend SCHEDULES 2.10.1, 2.10.2,
2.10.3, 2.10.4 AND 2.10.4a from time to time to add or delete items included in
Roadway-Provided Software and ACS-Provided Software, and to reflect other
changes in the software utilized by ACS to provide the Services hereunder. ACS
may not change Roadway-Provided Software without Roadway consent. If other
software changes will (i) increase the charges payable by Roadway, (ii) increase
Roadway's costs, (iii) adversely impact the Services or (iv) effect the rights
that Roadway may have negotiated with a vendor, ACS must receive Roadway's
consent before making such change.
(d) SCHEDULE 2.10.5 lists the Administered Contracts that ACS
will manage at no additional cost to Roadway. In addition, SCHEDULE 2.10.5 lists
(i) the party responsible for payments due under the agreements listed therein,
(ii) if ACS is to secure the agreement and (iii) the party that has the
responsibility to audit the invoices related to such agreements. Roadway may
elect to add or delete Administered Contracts, and the parties agree to amend
SCHEDULE 2.10.5 from time to time to add or delete items.
(e) ACS will maintain and make available to Roadway
comprehensive information (including copies of agreements with vendors other
than confidential terms and conditions) regarding all software and Administered
Contracts, from time to time.
2.11 EQUIPMENT.
(a) ACS will supply all equipment necessary to perform the
Services except those categories of equipment listed on SCHEDULE 2.11. Although
ACS may procure, manage and operate it, the party owning or leasing an item of
equipment will continue to bear the financial responsibility for that equipment.
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(b) ACS will procure for Roadway, and ACS will own or lease,
all equipment purchased by ACS pursuant to the One-Time Charges shown on the
Baseline Pricing Matrix in SCHEDULE 6.1 at the Effective Date. At any time
during the Term or upon termination or expiration of this Agreement and after
Roadway has paid the One-Time Charges, upon Roadway's written request, ACS will
transfer title, free and clear of all liens, charges or encumbrances, to any
such equipment (as replaced or supplemented) to Roadway for no additional
consideration. However, if such equipment is located at an ACS facility, ACS
will have the option of either (i) transferring title as set forth above, (ii)
transferring title to an agreed upon comparable piece of equipment or (iii)
paying Roadway the fair market value of such equipment.
(c) ACS will be responsible for acquiring, obtaining and
keeping current maintenance for equipment that is necessary to provide the
Services.
(d) If ACS and Roadway determine that new equipment (other
than mainframe equipment) is necessary to perform the Services, Roadway will
have the option to obtain the equipment or to require ACS to obtain the
equipment. If Roadway obtains such equipment, ACS shall support and maintain
such equipment under the terms of and with pricing consistent with this
Agreement. If ACS is required to obtain the equipment, ACS will provide to
Roadway detailed cost data including, but not limited to, the actual cost of the
equipment, including on-going maintenance costs and lease financing
arrangements, if any, the amount of the cost of such equipment that will be
charged to Roadway for each Period going forward, the price at which Roadway may
acquire such equipment if Roadway were to exercise its right to purchase such
equipment at the termination of this Agreement. and the amount of any additional
termination fees if Roadway does not wish to purchase such equipment upon
termination of this Agreement.
2.12 PROCEDURES MANUAL. ACS shall provide a Procedures Manual.
The Procedures Manual shall describe how ACS shall perform the Services under
this Agreement, the equipment and software being used, and the documents (e.g.,
operations manuals, user guides, specifications) which provide further details
of such activities. The Procedures Manual shall describe the activities ACS
proposes to undertake in order to provide the Services, including where
appropriate, those direction, supervision, monitoring, staffing, reporting,
planning and oversight activities normally undertaken at facilities that provide
services of the type ACS shall provide under this Agreement. The Procedures
Manual shall be suitable for use by Roadway to understand the Services. The
Procedures Manual is for Roadway's internal use only and will not be disclosed
to third parties without written authorization from ACS.
2.13 DRAFT PROCEDURES MANUAL. Within ninety (90) days after
the Cutover Date, ACS shall deliver a draft Procedures Manual to Roadway, for
its comments and review. ACS shall incorporate reasonable comments or
suggestions of Roadway and shall finalize the Procedures Manual within one
hundred and twenty (120) days of the Cutover Date. The final Procedures Manual
shall be subject to the approval of Roadway. ACS shall periodically update the
Procedures Manual to reflect changes in the operations or procedures described
therein. Updates of the Procedures Manual shall be provided to Roadway for
review, comment, and approval. ACS shall perform the Services in accordance with
the Procedures Manual. In the event of a conflict between the provisions of this
Agreement and the Procedures Manual, the provisions of this Agreement shall
control unless the parties expressly agree otherwise and such
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agreement is set forth in the relevant portion of the Procedures Manual.
2.14 KEY ACS PERSONNEL. The Key ACS Personnel shall be the
personnel set forth as such in SCHEDULE 2.14. The ACS Account Manager shall (i)
devote all of his or her time and effort to managing the Services, (ii) serve as
the single point of accountability for the Services, and (iii) have day-to-day
authority for undertaking to ensure Roadway satisfaction. ACS shall cause each
of the Key ACS Personnel to devote all of his or her time and effort to
provision the Services under this Agreement. Before assigning an individual to a
position designated as Key ACS Personnel, whether as an initial assignment or a
subsequent assignment, ACS shall notify Roadway of the proposed assignment,
shall introduce the individual to appropriate Roadway representatives, and shall
provide Roadway with a resume and other information about the individual
reasonably requested by Roadway. If Roadway in good faith objects to the
proposed assignment, the Parties shall attempt to resolve Roadway's concern on a
mutually agreeable basis. If the Parties have not been able to resolve Roadway's
concerns within five (5) working days, ACS shall not assign the individual to
that position and shall propose to Roadway the assignment of another individual
of suitable ability and qualifications. Key ACS Personnel may not be transferred
or reassigned until a suitable replacement has been approved by Roadway. ACS
will ensure that during any transition period, any position designated as Key
ACS Personnel will be fully staffed by a qualified individual.
2.15 QUALIFICATIONS, RETENTION AND REPLACEMENT OF ACS
PERSONNEL. The personnel ACS assigns to perform the Services shall be properly
educated, trained and duly qualified for the Services they are to perform.
Roadway and ACS both agree that it is in their best interests to keep the
turnover rate of the ACS personnel performing the Services to a reasonably low
level (the level maintained by well-managed professional service organizations).
Accordingly, if ACS and Roadway determine that ACS turnover rate is excessive as
compared to information processing service organizations in similar markets, ACS
and Roadway shall meet to discuss the reasons for the turnover rate. If
appropriate, ACS shall submit to Roadway its proposals (which shall be at no
cost to Roadway) for reducing the turnover rate to a reasonable level, and the
Parties shall mutually agree on a program to bring the turnover rate down to
such level. In any event, notwithstanding transfer or turnover of personnel, ACS
remains obligated to perform the Services without degradation and in accordance
with this Agreement. In the event that Roadway determines in good faith that the
continued assignment to the Roadway account of an ACS employee performing
Services hereunder is not in the best interest of Roadway, then Roadway shall
give ACS written notice to that effect. After receipt of such notice, ACS shall
have a reasonable period of time in which to investigate the matters stated in
such notice, discuss its findings with Roadway and resolve any problems with
such employee. If, following such period, Roadway requests replacement of such
employee, ACS shall replace that employee with a person of suitable ability and
qualifications.
2.16 ROADWAY FACILITIES
(a) OFFICE AND DATA ROOM SPACE.
(i) Throughout the Term, Roadway shall make available to
ACS adequate space in Roadway's headquarters facility to permit ACS personnel to
perform the Services in accordance with this Agreement (such space as it may
exist from time to time being referred to as
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the "Designated Space"). ACS personnel who are assigned to be on-site full time
at Roadway's headquarters facility shall have access to the Designated Space 24
hours a day, seven days a week. The Designated Space shall be separated from the
remainder of Roadway's headquarters facility and shall have either a separate
entrance or an entrance immediately beyond Roadway's guard station, as
determined by Roadway. In either case, the location, configuration and use of
such entrance shall be subject to Roadway's security requirements. Roadway shall
cause the Designated Space to comply and be maintained in accordance with all
applicable local, state and federal laws, including but not limited to the
Americans with Disabilities Act. The manner in which such compliance and
maintenance is achieved (E.G., the type of fire suppression system utilized)
shall be determined solely by Roadway. ACS may establish reasonable security
procedures with respect to the Designated Space, but Roadway shall have access
to the Designated Space at all times upon reasonable notice (which may be verbal
or telephonic) to ACS (which notice shall not be required for performing routine
security checks or maintenance and repair activities, or in the event of
emergency). ACS agrees that the Designated Space and the common areas described
below are made available solely as a convenience to Roadway, and that ACS does
not have and will not assert any tenancy or other occupancy right whatsoever
with respect to any Designated Space or common areas.
(ii) From the Commencement Date through the Cutover Date,
the Designated Space shall consist of those portions of Roadway's AGO West (1077
Gorge Boulevard, Akron, Ohio) and AGO East (557 East Tallmadge Avenue, Akron,
Ohio) facilities described or identified on SCHEDULE 2.16, which ACS initial
Designated Space ACS agrees is adequate. From and after the Cutover Date,
Roadway shall have the right in its sole discretion, exercisable from time to
time throughout the remainder of the Term, to change the Designated Space to
another portion or portions of the AGO West and/or AGO East facilities upon
notice to ACS. ACS acknowledges that, since as of the Cutover Date the data
processing, support and management services previously accommodated within the
initial Designated Space shall be transitioned to ACS' Pittsburgh, Pennsylvania
facility, such replacement Designated Space identified by Roadway from time to
time following the Cutover Date shall be smaller than the initial Designated
Space and shall be of such size as to accommodate only the Services which are
not so transitioned. At such time as the new Designated Space is made available
for ACS' use, ACS promptly shall vacate the former Designated Space.
Notwithstanding the foregoing, at all times the Designated Space shall be (i) of
the same kind and at the same level and quality as provided to comparable
Roadway employees, and (ii) adequate to permit ACS personnel to perform the
Services in accordance with this Agreement.
(iii) ACS shall not make any alterations or improvements
to the Designated Space without Roadway's prior written consent. In the event
that ACS obtains Roadway's approval of any such alteration or improvement, or if
ACS elects to relocate any of its personnel from one portion of the Designated
Space to another portion of the Designated Space, ACS shall pay for all of the
costs thereof (including without limitation the costs of set-up and of
relocating or installing voice data lines), which costs shall not be reimbursed
by Roadway. In the event that Roadway desires to alter or improve the Designated
Space, or to relocate any of ACS' personnel from one portion of the Designated
Space to another portion of the (or to different) Designated Space, Roadway
shall pay for all of the costs thereof (including without limitation the costs
of set-up and of relocating or installing voice data lines).
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(iv) From time to time, whether pursuant to Section
2.16(a)(ii) above or at the end or earlier termination of the Term, ACS shall
cause its personnel to vacate any Designated Space, and shall remove all of ACS'
furniture or equipment therefrom, promptly upon request by Roadway, leaving such
Designated Space and any Office Furniture (as defined herein) furnished by
Roadway in at least as good condition as such Designated Space or Office
Furniture was in when first made available to ACS, subject to ordinary wear and
tear, the effects of casualty (other than the intentional acts of ACS
personnel), and any alterations or improvements made or approved by Roadway.
(b) DIRECT COSTS. Subject to the other applicable provisions
of this Agreement, Roadway shall be responsible for the direct costs and
expenses (I.E., rent, real estate taxes, utilities and other related expenses,
excluding telephone charges) of the Designated Space. ACS shall provide its own
phone equipment for use within the Designated Space (to the extent that the
phone equipment being used by Caliber Technology, Inc. prior to the Effective
Date is insufficient for ACS' needs). Long-distance and other phone charges from
the Designated Space shall be the responsibility of ACS and shall not be
reimbursed by Roadway.
(c) TRAINING AREA: In the event that Roadway and ACS agree to
have ACS provide training of Roadway personnel, Roadway shall make available to
ACS as part of the Designated Space an adequate area in Roadway's headquarters
facility to permit ACS personnel to perform such training services in accordance
with the agreement between Roadway and ACS. Such training area shall be subject
to all of the same terms and conditions as are applicable to the Designated
Space under this Agreement.
(d) COMMON AREAS: ACS' personnel performing the Services under
this Agreement shall have the right to use, subject to availability and in
common with Roadway and its employees, agents and invitees, the conference rooms
within Roadway's Conference Center in the AGO West facility known as Conference
Rooms 201-204, the cafeteria located in the AGO West facility (subject to paying
the same prices as are charged therein to Roadway's employees), the lobbies and
hallways providing access to the Designated Space, and the restrooms in the
building(s) in which the Designated Space is located.
(e) OFFICE FURNITURE.
(i) Throughout the Term, Roadway shall make available to
ACS within the Designated Space adequate work surfaces and cubicles (the "Office
Furniture" to permit ACS personnel to perform the Services in accordance with
this Agreement. From the Commencement Date through the Cutover Date, such Office
Furniture shall consist of those items described or identified on SCHEDULE 2.16.
From and after the Cutover Date, Roadway shall have the right in its sole
discretion, exercisable from time to time throughout the remainder of the Term,
to change the Office Furniture so provided to ACS upon notice to ACS. ACS
acknowledges that, since as of the Cutover Date the data processing, support and
management services previously accommodated within the initial Designated Space
shall be transitioned to ACS' Pittsburgh, Pennsylvania facility, such
replacement Office Furniture provided by Roadway from time to time following the
Cutover Date may consist of less than the Office Furniture initially provided by
Roadway and shall consist only of such items as to permit ACS personnel to
perform the Services which are not so transitioned. At such time as any
replacement Office Furniture is made available
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for ACS' use, ACS promptly shall surrender the former Office Furniture.
Notwithstanding the foregoing, at all times the Office Furniture provided by
Roadway to ACS shall be (i) of the same kind and at the same level and quality
as provided to comparable Roadway employees, and (ii) adequate to permit ACS
personnel to perform the Services in accordance with this Agreement.
(ii) The Office Furniture or equipment which Roadway
may make available for use by ACS shall be strictly "as is" and without
warranty, whether of merchantability or fitness for a particular purpose or
otherwise. ACS shall maintain in good condition and repair all Office
Furniture made available by Roadway to ACS.
(iii) In order to avoid any confusion over the ownership
of furniture and equipment, ACS shall prominently affix an identification label
to all items as to which ACS claims ownership or possession and which are
located within the Designated Space or elsewhere at Roadway properties. Upon
request by Roadway from time to time, ACS shall provide Roadway with a list,
including inventory numbers, of all such items, which list shall be updated on a
regular basis so that Roadway accurately may identify the same.
(f) GENERAL: ACS' use of the Designated Space, the common
areas and the Office Furniture shall be subject to all of the other provisions
of this Agreement. All ACS personnel, when present at the Designated Space, the
common areas or any other portion of any Roadway facility, or when using Roadway
computer systems or the Roadway information systems environment, shall comply
with those applicable Roadway rules regarding security, access, conduct, and
network and Internet usage that are generally applicable to Roadway personnel
and that are furnished to ACS in writing. ACS shall utilize the Designated
Space, the common areas and the Office Furniture solely for the purpose of
providing the Services to Roadway under this Agreement. ACS shall cause all of
its personnel to (i) limit their activities in the use of the Designated Space,
the common areas, and the Office Furniture so as not to interfere with the
conduct of Roadway's business or with Roadway's customers, vendors or employees,
and (ii) conform to all of the standards which Roadway requires of its own
employees and that are furnished to ACS in writing.
2.17 VIRUSES. ACS will make Roadway aware of any viruses
discovered by ACS which may impact Services. ACS will use reasonable industry
standard practices and policies to guard against viruses. In the event that a
virus is found to have been introduced in Roadway's environment, ACS shall use
commercially reasonable efforts to eliminate the virus and to reduce the effects
of the virus.
2.18 ACCESS TO FACILITY. Except as otherwise provided in
SECTION 2.16, upon receipt of at least 72 hours notice, ACS will provide access
during normal business hours, to Roadway, its employees, agents and
representatives to ACS's facilities used to provide the Services for the purpose
of exercising audit and inspection rights hereunder. Upon receipt of notice, ACS
also will provide access during normal business hours, to Roadway, its
employees, agents and representatives to ACS's facilities used to provide the
Services for the purpose of visiting such site.
2.19 CONFIDENTIALITY AGREEMENTS. ACS shall execute any
confidentiality and user restriction agreements required in order for Roadway to
obtain any Third Party Software licenses and consents provided ACS has an
opportunity to review and comment on such
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agreement and restrictions in advance. ACS shall provide a copy of the standard
confidentiality agreement entered into between ACS and all of its employees.
2.20 TRAINING. ACS shall be responsible for all education or
training to maintain or improve ACS personnel skills required for performance by
ACS of the Services under this Agreement.
2.21 ANNUAL PERFORMANCE REVIEW; BENCHMARKING. On an annual
basis, the parties shall review the performance of the parties' respective
obligations under this Agreement. If Roadway determines at such annual review
that ACS is significantly under-performing, Roadway may, with each party sharing
the costs equally, obtain the services of an independent third party reasonably
acceptable to ACS (which shall include Real Decisions and the Gartner Group and
its other affiliates) to benchmark ACS's performance of and cost of performing
the Services. The consultant shall compare ACS's performance hereunder against
the standards achieved by the top tier of well-managed outsourcing services
vendors and internal information systems organizations performing functions
similar to the functions that ACS is performing hereunder (a "Benchmarking".)
The Benchmarking shall take into account the cost of entering into the
Agreement, the Term of the Agreement and other relevant terms and conditions.
Roadway shall provide the results of any such audit to ACS. Based on the results
of such Benchmarking, the parties, during the annual review, will discuss any
unfavorable variances, and ACS will modify its practices to eliminate the
variances that are unfavorable to Roadway and bring its practices (including
prices under this Agreement) and results to the levels of the standards applied
in the Benchmarking. If significant deficiencies are identified in the
Benchmarking resulting in an assessment of ACS that is below the above
standards, then ACS shall reimburse Roadway for the expense of one (1) follow-up
study and shall be subject to the Service Level Credits set forth on SCHEDULE
9.2.
2.22 REPORTS. Roadway and ACS have identified an appropriate
set of Periodic service management reports to be issued by ACS to Roadway. Such
reports shall be issued at the frequency to be mutually agreed upon by both
Parties. ACS shall provide Roadway with suggested formats for such reports, for
Roadway's review and approval. In any event, ACS shall provide to Roadway,
commencing on the Period after the Commencement Date, a Periodic performance
report in a form mutually established by the Parties, describing ACS performance
of the Services in the preceding Period. This report will be provided to Roadway
by the first Friday after each Period ends. ACS shall also provide reasonable
ad-hoc service management reports to Roadway for no additional charge.
2.23 MEETINGS. The Parties shall mutually agree upon an
appropriate set of meetings to be held between representatives of Roadway and
ACS. Additional meetings will be held at the request of either party. ACS shall
prepare and circulate an agenda sufficiently in advance to give participants an
opportunity to prepare for the meeting, and shall incorporate into such agenda
items that Roadway desires to discuss. Roadway shall prepare and circulate
minutes promptly after a meeting. ACS will have the right to comment on such
minutes before they become final minutes.
2.24 QUALITY ASSURANCE. ACS shall provide and implement the
quality assurance procedures that are reasonably necessary for the Services to
be performed in accordance with
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SCHEDULES 2.1 AND 2.4. Such procedures shall include checkpoint reviews,
testing, acceptance, and other procedures for Roadway to assure the quality of
ACS performance, and shall be included in the Procedures Manual.
2.25 PRODUCTIVITY AND MANAGEMENT TOOLS. ACS shall utilize
project management tools, including productivity aids and project management
systems, as reasonably necessary to perform the Services. ACS shall designate a
Project Manager for all major activities, whom Roadway will interview and
approve. ACS shall use project management tools in all major projects and employ
a regular reporting mechanism to identify project tasks, present current status
reports, and identify potential bottlenecks and problems.
2.26 PLANNING RETREAT. On an annual basis, the parties shall
meet, at a mutually agreeable location, at ACS's expense (Roadway to pay its own
travel costs), and ACS shall review and report on technology advances to Roadway
and shall suggest a technology improvement plan for the next year and beyond.
SECTION 3. TERM OF AGREEMENT
-----------------
This Agreement shall become effective from and as of the date
first set out above (the "Effective Date") and shall remain in effect until the
month of March of 2004 (the day of such month to be determined by Roadway),
unless (i) earlier terminated as provided herein or (ii) extended in writing by
mutual agreement of the parties at least six (6) months prior to the end of the
Term. At least nine (9) months prior to the end of the Term, ACS shall provide
Roadway with its final extension pricing terms which will be consistent with the
pricing terms (similar margins) set forth on SCHEDULE 6.1. Roadway will then
have ninety (90) days to determine whether to (i) accept such pricing and extend
the Agreement or (ii) let the Term of the Agreement lapse. This Agreement may be
terminated by the parties before the end of the Term only as provided in SECTION
8.
SECTION 4. SECURITY OF INFORMATION; CONFIDENTIALITY
----------------------------------------
4.1 OWNERSHIP OF DATA. All of the data provided to ACS or held
by ACS in performance of its obligations hereunder is and shall remain the
property of Roadway or Roadway's customers or other trading partners and will be
safeguarded by ACS against loss, disclosure, unauthorized access or alteration
under reasonable security procedures, consistent with those employed by other
professional data processing service providers. ACS is authorized to have access
to and make use of only that portion of Roadway's data as is necessary and
appropriate for the performance of ACS's obligations under this Agreement. It is
further agreed that no data provided by Roadway to ACS or held by ACS shall be
duplicated and/or disclosed to others, in whole or in part, by ACS, without the
express written consent of Roadway, except only to the extent that such
duplication or disclosure is necessary to carry out the day-to-day performance
of its duties hereunder.
4.2 CONFIDENTIAL INFORMATION.
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(a) All information, including, without limitation,
information relating to software and to development projects, provided by either
party (or any of its subsidiaries) to the other party, or developed or acquired
by ACS for the benefit of Roadway, either before or after the Effective Date
("Confidential Information") shall be treated as confidential information of the
party disclosing it or the party for whose benefit it was developed or acquired
(the "Disclosing Party") to the other party (the "Receiving Party"), subject to
the exceptions and exclusions set forth below.
(b) Each party shall exercise diligence to notify the other as
to which information it considers Confidential Information and to xxxx such
information with legends and notices. However, the failure to so notify or xxxx
shall not, standing alone, constitute a defense.
4.3 NON-DISCLOSURE AND NON-USE; EXCEPTIONS AND EXCLUSIONS.
Each of Roadway and ACS, to the extent it is a Receiving Party, agrees that it
shall not disclose nor use the Confidential Information of the Disclosing Party
without the prior written consent of the Disclosing Party, except:
(a) Disclosure may be made to, and use may be made by,
employees, agents, consultants and contractors of a party for the purpose of
performing or effectuating the rights, obligations and responsibilities of the
parties under this Agreement, provided that each of the parties shall take
reasonable steps to prevent unauthorized use, copying or disclosure of the
Confidential Information by such persons, including, without limitation, the use
of appropriate written confidentiality agreements; and
(b) Information other than data covered by SECTION 4.1 shall
no longer be deemed to be "Confidential Information," where such information (i)
is or becomes generally known through no fault of the Receiving Party; (ii) is,
prior to submission by the Disclosing Party, in the Receiving Party's possession
free of any obligation of confidentiality to the Disclosing Party; provided,
that, information in the possession of the Receiving Party prior to the
Effective Date which was received or developed, and then held, as confidential
information for the benefit of the other party, shall not be excluded from
Confidential Information under this subparagraph; (iii) is rightfully obtained
by the Receiving Party from a third party who is free of any duty of
confidentiality to the Disclosing Party; or (iv) is independently developed by
the Receiving Party.
(c) Disclosure of Confidential Information, including data
covered by SECTION 4.1, shall be allowed where information is required to be
disclosed pursuant to any law, rule or regulation or pursuant to an order or
judgment of any court or government body; provided, that, the Receiving Party
shall have notified the Disclosing Party promptly prior to making such
disclosure and shall have taken all reasonable measures to obtain confidential
treatment. The Receiving Party may rely on the opinion of outside counsel as to
the disclosure of such Confidential Information.
4.4 BURDEN OF PROOF. The burden of proving the availability of
any exception to these confidentiality and use restrictions shall be on the
party claiming the exception.
4.5 SECURITY. ACS will establish, with input from Roadway,
security procedures for its physical facilities and data centers, and electronic
security measures for all
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systems and databases. ACS will comply with the reasonable security procedures
that are in effect at Roadway's premises upon notice from Roadway on the
Effective Date or as they may be changed from time to time during the Term.
Roadway agrees to comply with all security procedures established by ACS. ACS
and Roadway will jointly agree on and comply with all data security procedures.
SECTION 5. CERTAIN ADDITIONAL RESPONSIBILITIES
-----------------------------------
5.1 GENERAL. In connection with the performance by ACS of the
Services, Roadway agrees to perform the responsibilities, if any, specified and
described in SCHEDULES 2.1 AND 2.4.
5.2 ROADWAY-PROVIDED SOFTWARE.
(a) Unless the obligation is expressly assumed in writing by
Roadway or set forth on a sub-schedule contained in SCHEDULE 2.10, ACS agrees
that it will have the responsibility, at ACS's sole expense, to support, obtain
maintenance, enhance and manage the maintenance contracts related to the
Roadway-Provided Software.
(b) Each party will retain its license agreements and
maintenance agreements, but will obtain consent from the licensor, to the extent
required, for such software to be operated on ACS's computers or otherwise by
ACS to provide the Services to Roadway in accordance with this Agreement.
(c) ACS will be responsible for the licensing, management,
support, maintenance and/or enhancement of all systems software used in the
Services except where such responsibility is expressly retained or assumed, in
writing, by Roadway or set forth on a sub-schedule in SCHEDULE 2.10.
(d) In the event that ACS already has or acquires an
independent license to any Roadway-Provided Software that could be used to
provide Services at no additional cost to ACS, or at a favorable price to
Roadway, then, at Roadway's election,
(i) ACS will include such software in the ACS-Provided
Software;
(ii) such software will be removed from the
Roadway-Provided Software; and
(iii) ACS will use its best efforts, with participation by
Roadway, to negotiate with the vendor of such software so that when this
Agreement terminates, Roadway without an additional license or other one-time
fee, will have a fully maintained and updated license to such software, based on
license maintenance fees paid to the vendor by ACS.
SECTION 6. CHARGES
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6.1 PRICES. For the Services furnished by ACS under this
Agreement,
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Roadway shall pay the Base Price set forth in SCHEDULE 6.1. The Base Price
includes all charges for the Services, including, but not limited to the
following:
(a) the Services, as set forth in this Agreement;
(b) ACS efforts to complete all outstanding Year 2000
hardware and software testing according to Roadway's
plan;
(c) transition costs required to commence services and
migrate all platforms to Pittsburgh;
(d) all hardware and software costs of operation and
support for all platforms;
(e) all hardware and software maintenance costs for the
mainframe computer and peripherals and the WAN
network; and
(f) Services relating to Administered Contracts.
6.2 PRICE ADJUSTMENTS. SCHEDULE 6.1 also sets out the price
adjustment procedures to be used in connection with this Agreement. Except as
specifically set forth in this Agreement, all third party costs that are
authorized by Roadway, other than those already included in the Base Price, will
be charged as Pass-Through Costs unless specifically categorized as a
Pass-Through Plus Cost.
6.3 TERMINATION CHARGES. SCHEDULE 6.1 contains the charges for
termination services provided in accordance with SECTION 8.3.
6.4 PASS-THROUGH COSTS. Prices payable hereunder in any Period
shall also include any Pass-Through Costs and Pass-Through Plus Costs authorized
by Roadway and incurred by ACS in that Period. SCHEDULE 6.1 lists the categories
of costs that will be Pass-Through Costs and the categories of costs that will
be Pass-Through Plus Costs.
6.5 PAYMENT. ACS will invoice Roadway for each Period in
arrears for all charges hereunder, which invoices will be payable on or before
the thirtieth (30th) day after receipt.
6.6 CONTINUED PERFORMANCE. If (i) all undisputed amounts have
been paid by Roadway, (ii) Roadway continues to make payments to ACS which are
not in dispute in accordance with this Agreement, and (iii) dispute resolution
procedures have been commenced and are being pursued in good faith, then Roadway
shall not be deemed to be in default of its obligations to make said payments
and ACS must continue to provide the Services.
6.7 RENEGOTIATION. In the event that Roadway's use of the
Services increases or decreases over or below the Baseline Usage (as such term
and such levels of usage are defined in SCHEDULE 6.1) by more that twenty
percent (20%), upon sixty (60) days notice by either party, the parties will
negotiate in good faith new pricing with respect to that Service based on the
then current usage. ACS and Roadway will renegotiate the LAN/Desktop charge on
SCHEDULE 6.1 to a lower amount after Roadway completes the thin-client roll-out
and desktop standardization projects.
6.8 ADDITIONAL CHARGES. Prices payable hereunder will not
include any charge for any services not previously approved in writing by
Roadway.
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SECTION 7. TAXES
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7.1 ROADWAY RESPONSIBILITY. In addition to the payments due to
ACS for the prices and charges for the Services, Roadway shall be responsible
for payment of all taxes, however designated, which are exacted in connection
with the performance hereof, except net corporate income or franchise taxes of
ACS, which are levied or based on the Services provided or the charges made
under this Agreement. These taxes shall include, but shall not be limited to,
state and local taxes based on gross revenue, including sales, use and/or excise
taxes. ACS will work with and accept all legal methods of allocation suggested
by Roadway. In the event that Roadway's methodology of allocation is determined
to be improper by a taxing authority and ACS incurs tax liability due to such
determination, Roadway will indemnify and hold harmless ACS for such liability.
7.2 PAYMENT. All charges and prices stated herein are
exclusive of such taxes, and ACS may add such taxes to its invoices hereunder.
Upon payment by Roadway to ACS, ACS shall be responsible for filing applicable
tax returns and paying and remitting the taxes when due.
SECTION 8. TERMINATION
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8.1 AT ROADWAY'S ELECTION. As to any or all of the Services,
Roadway may, at its sole discretion, terminate such portions of this Agreement
at any time after 26 Periods after the Commencement Date, provided it has given
ACS at least six (6) Periods prior written notice. Upon such termination,
Roadway agrees to pay and ACS will be entitled to receive the termination
charges set forth on SCHEDULE 6.1.
8.2 UPON MATERIAL BREACH. This Agreement may be terminated by
either party upon a material breach by the other party if such breach is not
cured within thirty (30) days after written notice by the non-breaching party or
if the breaching party has not commenced corrective action within such thirty
(30) day period which is reasonably likely to cure such breach in a reasonable
further period of time; provided, that, this Agreement may not be terminated by
ACS for any breach by Roadway other than a repeated failure to pay undisputed
amounts when due.
8.3 TERMINATION ASSISTANCE AND SERVICES. Upon expiration or
termination of this Agreement for any reason, and upon Roadway's request, ACS
will provide the termination assistance (including all requests for information)
and transition services described in SCHEDULE 8.3 hereto to enable Roadway to
transfer its processing to its own facilities or to a third party. Such
termination services shall commence as promptly as practicable after the date of
the notice and shall continue as long as reasonably necessary. All applicable
provisions of this Agreement shall be extended for the period during which such
services are provided. Roadway shall pay for Services rendered during such
transition period in accordance with the applicable provisions of this
Agreement, and shall also pay the charges for other termination services, if
any, described in SCHEDULE 6.1.
8.4 RETURN OF MATERIALS. Upon completion of the termination
services, ACS shall have returned to Roadway or its designee all Roadway data
and Roadway Confidential Information in its possession or control, including,
without limitation, all copies of all Roadway
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Applications Software and all Roadway-Provided Software transferred or made
available by Roadway to ACS.
8.5 PERSONNEL MATTERS ON TERMINATION. SCHEDULE 8.5 contains
certain rights and obligations of the parties arising with regard to personnel
in connection with the termination or expiration of this Agreement.
8.6 SOFTWARE MATTERS ON TERMINATION. In connection with
providing the termination services described herein, ACS will deliver, transfer
or assign to Roadway (with Roadway having the right to audit such process
through automated means or otherwise), effective as of the date of expiration or
termination of the Agreement:
(a) all Roadway-Provided Software, and licenses and
maintenance agreements thereto, if any, which have
been transferred or made available to ACS; and
(b) licenses and maintenance agreements for any other
Third-Party Software, if any, used by ACS to furnish
Services to Roadway or acquired by ACS on Roadway's
behalf;
provided, however, that ACS shall have no obligation to assign or transfer any
license or maintenance agreement to Roadway if assignment or transfer is
prohibited under the terms of the applicable license or agreement.
8.7 EQUIPMENT MATTERS ON TERMINATION. SCHEDULE 8.7 contains
certain rights and obligations of the parties arising in connection with
termination or expiration with regard to equipment.
SECTION 9. WARRANTIES, REMEDIES AND INDEMNITIES
------------------------------------
9.1 SERVICE WARRANTY. ACS warrants that all Services provided
by ACS to Roadway will be performed in a professional, competent and timely
manner, and will meet the standards set forth on SCHEDULES 2.1, 2.4 AND 2.5.
9.2 REMEDIES.
(a) If ACS is in breach of the warranty of SECTION 9.1, ACS
shall, at ACS's sole cost and expense, take any and all actions necessary to
remedy such breach, including, without limitation: (i) initiating problem
reports to identify causes of problems; (ii) developing reasonable, feasible
written recommendations to Roadway for changes in Roadway procedures to avoid
future breaches of the same or similar nature; (iii) implementing modifications
to ACS systems and procedures to remedy such breach; and (iv) changing the wide
area network, the data center equipment, ACS equipment on Roadway's premises,
the operating software environment, or other components of the systems being
used by ACS.
(b) Further, for continuing failures to perform in accordance
with the standards set forth on SCHEDULES 2.1, 2.4 AND 2.5, Roadway shall
receive the Service Level Credits computed in accordance with SCHEDULE 9.2.
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(c) The remedies in this SECTION 9.2 shall not be Roadway's
sole and exclusive remedies for breaches of the warranty of SECTION 9.1. These
remedies shall in no way limit other remedies available to Roadway for other
breaches of this Agreement.
9.3 CROSS-INDEMNITY FOR PERSONAL INJURY AND PROPERTY DAMAGE.
ACS and Roadway each agree to indemnify and hold harmless the other from any and
all liabilities, costs, losses, and expenses, including reasonable attorneys'
fees and expenses, arising out of or in connection with any personal injury or
death, damage to or destruction of the property or premises leased, licensed, or
owned by the indemnitee caused by the negligence or willful acts of the
indemnitor's officers, employees, agents or other representatives. During the
term of this Agreement, both Roadway and ACS will maintain in full force and
effect, at their own expense, insurance coverage to include Workers'
Compensation, Employer's Liability, Commercial General Liability (including
contractual liability), Automobile Liability and Property insurance.
Certificates of Insurance evidencing the required coverages shall be furnished
to Roadway and ACS respectively before any work is commenced hereunder and shall
provide that there will be no cancellation without 30 days prior written notice.
All insurance policies shall be written by a company authorized to do business
in the state where the services are delivered. Notwithstanding the foregoing,
Roadway understands that ACS is a non-subscriber to the Texas Workers
Compensation Act. ACS provides an ERISA qualified plan of benefits for its
employees who sustain an occupational injury or disease. ACS currently maintains
excess employers indemnity insurance in an amount of $2,000,000 per employee,
$10,000,000 per occurrence and annual aggregate limits of $20,000,000 for
occupational injury and $2,000,000 for occupational disease.
9.4 NOTICE AND DEFENSE. The indemnified party shall give the
indemnitor prompt notice of any claim as to which it seeks indemnification. The
indemnitor shall have the right to control the defense and settlement of any
indemnified claim. The indemnitee agrees to provide reasonable assistance in the
defense of indemnified claims. Unless it prejudices the indemnitor, a failure to
give prompt notice shall not terminate the indemnitor's obligation to indemnify
hereunder.
9.5 YEAR 2000 WARRANTY. ACS will be responsible for ensuring
that the operating system and hardware platforms are Year 2000 Compliant and
available to Roadway for its production use. Additionally, to the extent that
each third-party system software provider has a Year 2000 Compliant product, ACS
will work with each vendor to ensure that all system software is Year 2000
Compliant. In the event that any ACS hardware or software used by ACS relating
to the Services fails to operate and such failure is caused by a problem
regarding Year 2000 Compliance, ACS will, at its own expense, either correct the
non-compliant item(s) or, upon receiving Roadway's consent, replace them with
compatible and functionality equivalent item(s) within sixty (60) days of either
Roadway's written notice to ACS of the non-compliance or ACS' knowledge of such
non-compliance, and in no case later than December 31, 1999. ACS will take all
reasonable steps to minimize the impact of any Year 2000 Compliance defect on
the continuity and quality of the services. ACS will supply to Roadway ACS's
Year 2000 preparedness strategy and ACS's current state of Year 2000 readiness
with sufficient detail to allow Roadway to make proper disclosure to the
Securities and Exchange Commission as to the potential material adverse effect
of the Year 2000 problem.
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9.6 INDEMNIFICATION.
(a) ACS shall indemnify and hold harmless Roadway against any
costs, fees or damages solely arising out of any claim by a third party that
Roadway's authorized use or possession of the ACS-Provided Software infringes
any United States patent, trade secret, copyright or trademark of any third
party; provided however, that (i) ACS has sole control of the defense and/or
settlement, (ii) Roadway notifies ACS promptly (but no later than ten (10) days
upon receipt by Roadway of notice of such claim in writing of each such claim or
suit) and gives ACS all information known to Roadway relating thereto, and (iii)
Roadway cooperates with ACS in the settlement and/or defense. ACS shall
reimburse Roadway for all reasonable out-of-pocket expenses, including
reasonable attorney's fees incurred by Roadway in providing any cooperation
requested by ACS.
(b) If all or any part of the ACS-Provided Software is, or in
the opinion of ACS may become, the subject of any claim or suit for infringement
of any third party's U.S. trademark or copyright, or if Roadway's use of the
Software or Documentation is enjoined, ACS shall, in its sole discretion and at
its expense, do one of the following: (i) procure for Roadway the right to use
the ACS-Provided Software or the affected part thereof; (ii) replace the
ACS-Provided Software or affected part with other suitable software and
documentation or (iii) modify the ACS-Provided Software or affected part to make
it non-infringing.
(c) Roadway shall indemnify and hold harmless ACS against any
costs, fees or damages arising out of or relating to any claim by any third
party for unpaid invoices for products and/services ordered or received by
Roadway prior to the Effective Date, including any matter under the Letter of
Intent between the parties.
SECTION 10. LIMITATION OF LIABILITIES AND REMEDIES
--------------------------------------
10.1 DIRECT DAMAGES. For any claim concerning the performance
or nonperformance by ACS pursuant to, or the breach by ACS of, or in any other
way related to the subject matter of, this Agreement, Roadway shall be entitled
to recover actual direct damages to the limit set forth herein. Direct damages
shall include, without limitation, Roadway's costs of cover resulting from a
breach or failure of performance hereunder, defined to be Roadway's reasonable
internal costs and out-of-pocket expenses for obtaining alternative processing
or services and charges of outside contractors.
10.2 LIMITATIONS OF LIABILITY.
(a) ACS's cumulative liability for damages (regardless of the
form of action, whether in contract or in tort and excluding any Service Level
Credits) shall in no event exceed the greater of $[18 million] or the amount
paid by Roadway to ACS during the preceding ten (10) Periods (or the first ten
(10) Periods of scheduled payments by Roadway if this Agreement has not been in
effect for ten (10) Periods following the Effective Date). Notwithstanding the
foregoing, the above limits of liability shall not apply to damages covered
under SECTIONS 7.1, 9.3 AND 9.6.
(b) IN NO EVENT WILL ACS OR ROADWAY BE LIABLE FOR ANY
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LOSS OF PROFITS OR OTHER INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES
EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR
FOR ANY CLAIM AGAINST THE OTHER PARTY BY ANY OTHER PARTY UNLESS SUCH CLAIM IS
EXPRESSLY INDEMNIFIED HEREUNDER.
10.3 FORCE MAJEURE. Without limiting ACS's obligations to
provide disaster recovery services as described in SCHEDULE 2.1, neither party
shall be liable for any failure to perform its obligations under this Agreement
if prevented from doing so by a cause or causes beyond its control. Such causes
include strikes, Acts of God or the public enemy, fires, floods, storms,
earthquakes, riots, war or war operations, restraints of government or other
cause or causes which could not, with reasonable diligence, be controlled or
prevented by the party. A party's excuse of performance under this paragraph
shall continue only so long as the cause preventing the performance continues or
the party could with reasonable diligence have resumed performance through
alternative means or otherwise.
SECTION 11. ERRORS AND OMISSIONS
--------------------
Roadway is responsible for the correctness and accuracy of the
data it submits to ACS. ACS shall not be responsible for errors in processing or
output due to errors in such data. ACS shall regularly perform backups and
off-site file storage in accordance with the policies and practices set out in
SCHEDULES 2.1 AND 2.4 or as required to meet the appropriate Service Levels.
SECTION 12. TITLE TO PROPERTY
-----------------
Roadway does not transfer hereby to ACS any title or ownership
right or interest in or to any data or programs provided by Roadway to ACS or
any intellectual property rights therein. Except to the extent expressly set out
in separate written transfer, assignment, consent or other conveyance documents,
neither party transfers or will transfer hereunder rights under any licenses to
Third-Party Software. ACS is hereby granted a fully-paid, non-exclusive,
non-transferable license, without the right to sublicense, in programs owned by
Roadway solely for the purpose of performing the Services hereunder. All
ownership rights in any modifications to such Roadway programs whether made by
Roadway or ACS, and all intellectual property rights therein, shall belong to
Roadway. ACS hereby assigns any such intellectual property rights which it may
obtain to Roadway. All Roadway equipment on ACS premises will be properly
identified as Roadway property.
SECTION 13. RISK OF LOSS, INSURANCE ON EQUIPMENT
------------------------------------
13.1 ROADWAY RISK OF LOSS. All risk of loss from whatever
cause, including theft, destruction and damage, to equipment which is furnished
by ACS for use at Roadway locations (other than those locations leased by ACS
from Roadway) is assumed by Roadway. Roadway will procure and maintain, at its
expense, casualty insurance with extended coverage, on all such equipment.
Equipment will be insured for its replacement value, for the full Term of this
Agreement. Public liability insurance for death, bodily injury and property
damage resulting from ownership, maintenance, use or operation of equipment
shall also be obtained by Roadway. All such insurance shall name ACS as an
additional insured, shall be in reasonable amounts and with
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reputable insurers rated at least A by A.M. Best and Company and shall provide
that the same may not be materially modified, altered or canceled except with
notice to ACS. Roadway shall deliver to ACS, at least fifteen (15) days prior to
the Effective Date a copy of its insurance policies then in effect. In the event
of failure on the part of Roadway to provide such insurance, ACS may, at its
option, provide such insurance and add the amount of the premiums to the
periodic rental charged to Roadway for such equipment.
13.2 ACS RISK OF LOSS. All risk of loss from whatever cause,
including theft, destruction and damage, to equipment which is furnished by
Roadway for use at ACS locations (other than those locations leased by Roadway
from ACS) is assumed by ACS. ACS will procure and maintain, at its expense,
casualty insurance with extended coverage, on all such equipment. Equipment will
be insured for its replacement value, for the full Term of this Agreement.
Public liability insurance for death, bodily injury and property damage
resulting from ownership, maintenance, use or operation of equipment shall also
be obtained by ACS. All such insurance shall name Roadway as an additional
insured, shall be in reasonable amounts and with reputable insurers rated at
least A by A.M. Best and Company and shall provide that the same may not be
materially modified, altered or canceled except with notice to Roadway. ACS
shall deliver to Roadway, at least fifteen (15) days prior to the Effective Date
a copy of its insurance policies then in effect. In the event of failure on the
part of ACS to provide such insurance, Roadway may, at its option, provide such
insurance and deduct the amount of the premiums from the periodic payments due
ACS.
SECTION 14. DISPOSITION OF DATA
-------------------
All data, programs, storage media, and other materials
furnished by Roadway to ACS in connection with this Agreement and all data used
by ACS to set up the operating environment and to perform the Services shall be
returned or provided (as the case may be) by ACS to Roadway or delivered to
Roadway's designee upon the termination or expiration of this Agreement, unless
Roadway requests that ACS otherwise dispose of any of such items. Upon request,
Roadway shall be entitled to receive copies of any such data, programs or other
materials at any time during the Term. Roadway shall remain liable for all
charges imposed under SCHEDULES 6.1 OR 8.3 as a result of data and/or physical
media stored with ACS. ACS shall dispose of the data and media not returned to
Roadway in the manner requested by Roadway. Roadway agrees to pay ACS for its
out-of-pocket expenses incurred as a result of the disposition of the data
and/or media. After termination or expiration, ACS reserves the right to dispose
of data and/or media stored by Roadway with ACS if Roadway has not utilized ACS
facilities and equipment at any time during a continuous period of at least
ninety (90) days.
SECTION 15. GOVERNANCE, DISPUTE RESOLUTION AND ARBITRATION
----------------------------------------------
15.1 OPERATIONAL COMMITTEE. Each party will appoint up to five
managers to a Operational Committee, whose purpose will be to provide a forum
for discussing performance, problems and service needs. The Operational
Committee will meet Periodically and no less frequently than Periodically at
Roadway's headquarters facility or other location mutually agreed by the
parties. The initial members of the Operational Committee are set out on
SCHEDULE 15.1. Each party may change its members of the Operational Committee
upon written notice to the other party.
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15.2 EXECUTIVE COMMITTEE; DISPUTES.
(a) Each of the parties will appoint up to three high-level
executives, at least one of which will be an officer of such party, to serve on
an Executive Committee. The purpose of the Executive Committee will be to review
and resolve any dispute which may arise pertaining to the interpretation and the
performance of obligations under this Agreement. If a dispute can not be
resolved by the relationship managers or the Operational Committee, then either
party may request that the Executive Committee meet to seek to resolve the
dispute. Roadway shall prepare and circulate minutes for such meetings. ACS will
have the right to comment on such minutes before they become final minutes.
(b) The Executive Committee will meet as promptly as
practicable after a request to discuss the dispute or controversy, cause
information to be presented and negotiate in good faith in an effort to resolve
the dispute or controversy without the necessity of any formal proceeding
relating thereto. No formal proceedings for the resolution of such dispute or
controversy may be commenced until either or both of the groups of designated
executives on the Executive Committee conclude in good faith that resolution
through continued negotiation of the matter in issue is not likely to occur.
(c) Each party may change its members of the Executive
Committee upon written notice to the other party.
15.3 FORMAL DISPUTE RESOLUTION.
(a) MEDIATION. If the dispute has not been resolved by
negotiation as provided hereinabove, the parties shall endeavor to settle the
dispute by mediation (with the participation of at least one officer of each
party) under the then current presently effective Center for Public Resources
("CPR") Model Procedure for Mediation of Business Disputes. The neutral third
party will be selected from the CPR Panels of Neutrals. If the parties encounter
difficulty in agreeing on a neutral, they will seek the assistance of CPR in the
selection process.
(b) ARBITRATION. Any dispute that shall not have been resolved
as hereinabove provided or otherwise by agreement between the parties shall be
finally settled by arbitration conducted expeditiously in accordance with the
CPR Rules. Arbitration shall be held at Cleveland, Ohio or such other place as
the parties shall agree. Upon request of either party for arbitration in
accordance with this section, the appropriate representatives of each party
shall attempt to agree on a single arbitrator. If no agreement is reached within
thirty (30) days of the request, each party shall, within ten (10) days
thereafter appoint a single arbitrator. The two arbitrators so appointed shall
select a third arbitrator and all decisions thereafter shall be made by a
majority of the arbitrators. The parties shall share equally in the fees and
costs charged by the arbitrator(s) and shall act in good faith to avoid
unnecessary fees and costs. Unless otherwise agreed by the parties, discovery
shall be permitted in said arbitration, provided that all discovery is taken
within 60 days of commencement of the arbitration proceeding, and each side
takes no more than two depositions, and serves only a reasonable number of
interrogatories and document requests to be determined by the arbitrator. Any
award rendered in arbitration shall be limited to those remedies available to
any court of competent jurisdiction. The award rendered through arbitration
shall be final and binding upon the parties and judgment thereon may be entered
in any
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court of competent jurisdiction for execution.
SECTION 16. CERTAIN OBLIGATIONS REGARDING THIRD-PARTY SOFTWARE
--------------------------------------------------
16.1 ROADWAY OBLIGATIONS.
(a) Roadway may add or delete applications from the Services
being provided hereunder. Any Third-Party Software which Roadway purchases or
licenses during the Term shall be treated as Roadway-Provided Software and
SCHEDULE 2.10 shall be amended accordingly with installation Services occurring
at no cost to Roadway. Unless otherwise agreed in writing by the parties, such
Software shall be used solely to provide Services to Roadway and Roadway shall
be responsible for all license, usage, maintenance and other fees and charges
payable as Pass-Through Costs or charges under Administered Contracts with
respect to such software, without change in the Base Price. All software
license, usage, maintenance and other fees and charges included in the Base
Price shall be so indicated on SCHEDULE 2.10 for each software product listed
therein.
(b) In the event that Roadway desires to add Third-Party
Software to SCHEDULE 2.10, ACS will detail to Roadway the one-time acquisition
costs, the on-going maintenance costs and the administrative fee to be charged
by ACS for such software. Based on such costs, Roadway will have the option of
not adding the software, acquiring the software itself or requiring ACS to
acquire the software in Roadway's name. If Roadway chooses to add such software,
the charges hereunder will be adjusted accordingly.
(c) In the event that Roadway chooses to delete software from
SCHEDULE 2.10, the charges hereunder will be adjusted accordingly.
16.2 ACS OBLIGATIONS
(a) ACS shall obtain all consents, licenses or other rights
needed to allow ACS to use all ACS and Roadway-Provided Software that may be
required from time to time to provide the Services. ACS shall acquire upgrades
and obtain maintenance, support and problem resolution with respect to all such
Software, including, without limitation, any data center and systems software
utilized by it except to the extent, if any, that Roadway expressly retains or
assumes that responsibility in writing.
(b) ACS shall endeavor to obtain Third-Party Software in the
most economical manner feasible, and if any such Third-Party Software licenses
are also used for purposes other than providing Services to Roadway, such as
ACS's internal use or for services to other customers of ACS, the related
Pass-Through Costs or other charges shall be abated proportionately. ACS agrees
that maintenance agreements on all such Third-Party Software will be kept
current and in full force and effect unless approved in writing by Roadway.
Unless otherwise approved by Roadway in writing, ACS shall keep all such
Third-Party Software at version levels that are supported by the vendor. Upon
the written request of Roadway and at no additional charge to Roadway, ACS will
upgrade any Third-Party Software with any available upgrade.
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SECTION 17. GENERAL
-------
17.1 AMENDMENT; WAIVER; REMEDIES.
(a) No amendment, waiver, alteration or modification of any of
the provisions hereof shall be binding upon either party unless signed in
writing by the duly authorized representatives of each party. As the parties
make authorized changes to the Schedules, the Agreement will be amended
accordingly.
(b) The services provided under this Agreement are for the
sole benefit and use of Roadway and its Affiliates, and shall not be made
available to any other persons. Unless expressly provided otherwise herein, all
remedies provided for in this Agreement will be cumulative and in addition to
and not in lieu of any other remedies available to either party at law, in
equity or otherwise.
17.2 ASSIGNMENT; BINDING EFFECT. This Agreement may not be
assigned by either party without the other's prior written consent; provided,
that, Roadway may assign this Agreement to a successor in connection with a sale
of all or substantially all of its assets and business. This Agreement shall be
binding upon, and inure to the benefit of, any successors or assigns of the
parties. Upon a change in control of ACS, Roadway will be able to terminate this
Agreement without the payment of any termination fees if, in its reasonable
discretion, Roadway does not approve of the new ACS controlling entity. In
addition, Roadway may terminate this Agreement without the payment of any
termination fees if Roadway determines, in its reasonable discretion, that ACS
is not financially viable.
17.3 JURISDICTION. This Agreement will be governed by the laws
of the State of Ohio. ACS and Roadway agree to jurisdiction and venue in the
State and Federal Courts in Ohio.
17.4 CONFLICTS. In the event of conflict between these General
Terms and Conditions and the Schedules, the Schedules shall prevail.
17.5 INTEGRATION; COMPLETE DOCUMENT. Roadway and ACS each
acknowledges that it has read the Recitals and these General Terms and
Conditions together with the Schedules, which together constitute this
Agreement, and understands and agrees to be bound by their terms and conditions.
Further, the parties agree that this Agreement is the complete and exclusive
statement of the agreement between the parties which supersedes all proposals or
prior agreements, oral or written, and all other communications between the
parties relating to the subject matter of this Agreement.
17.6 NOTICES. Any notices permitted or required hereunder may
be given by certified mail, return receipt requested; by telecopy if the
receiving machine confirms receipt; or by electronic mail, followed by
confirmation either by telecopy or certified mail, to the addresses set out
below or any other addresses as to which notice is given.
To Roadway:
Roadway Express, Inc.
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0000 Xxxxx Xxxxxxxxx
Xxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxx
Vice Pres. of Operations, Planning
Engineering
and
Xxxxxx X. Xxxxxx, Dir. of
Information Technology
Copy To: General Counsel
To ACS: Affiliated Computer Services, Inc.
0000 X. Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: President
Copy To: General Counsel
17.7 AUDIT RIGHTS. ACS agrees that internal and external
auditors designated by Roadway in writing may, at reasonable times, have such
access to ACS's data facilities and its programs, records and procedures
relating to the processing of Roadway's data as they may reasonably request for
purposes of conducting audits of Roadway's financial condition, results of
operations or financial statements. ACS will also provide such auditors with
access to its personnel who are responsible for maintaining such programs,
practices and procedures. Additionally, ACS will provide reasonable assistance
to such auditors and inspectors. ACS will not be required to provide such
auditors and inspectors access to data of other ACS customers or the proprietary
data of ACS.
17.8 EMPLOYEES. With the exception of employees who may be
employed by Roadway in accordance with SECTION 8.5 and SCHEDULE 8.5, each party
agrees that during the Term and for a Period of thirteen (13) Periods
thereafter, it will not, without the consent of the other party, offer
employment or employ any person who was an employee of the other party at any
time during the Term of this Agreement, without the written consent of the other
party.
17.9 SEVERABILITY. If any term or provision of this Agreement
or the application thereof to any person or circumstance is, to any extent,
declared or found to be illegal, unenforceable or void, then both parties will
be relieved of all obligations arising under such term or provision, but only to
the extent that such term or provision is illegal, unenforceable or void. The
validity of the other provisions hereof shall not be affected, and the remainder
of this Agreement shall continue in full force and effect.
17.10 FURTHER ASSURANCES. Each party agrees that it will
execute, deliver or file such further documents, and take such actions, as the
other party may reasonably request to carry out the purposes and agreements
herein.
17.11 SURVIVAL. The covenants and obligations of the parties
under SECTIONS 4, 7, 9, 10, 12, 14, 15 AND 17 of this Agreement shall survive
the termination or expiration hereof.
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17.12 CONSENT. Whenever consent of a party is required
hereunder, it shall not be unreasonably withheld nor unduly delayed.
17.13 COUNTERPARTS. This Agreement may be signed in any number
of identical counterparts each of which shall be deemed to be an original, and
all of which, when taken together, shall constitute a single Agreement.
AFFILIATED COMPUTER SERVICES, INC. ROADWAY EXPRESS, INC.
----------------------------- -------------------------------
Authorized Signature Authorized Signature
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Name (Print or Type) Name (Print or Type)
----------------------------- -------------------------------
Title Title
----------------------------- -------------------------------
Date Date
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