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Confidential and Proprietary Information of IBM and Xxxxxxxx
EXHIBIT 10.2
MASTER PROFESSIONAL SERVICES
AGREEMENT
BY AND BETWEEN:
THE XXXXXXXX COMPANIES, INC.
AND
INTERNATIONAL BUSINESS MACHINES CORPORATION
JUNE 1, 2004
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MASTER PROFESSIONAL SERVICES AGREEMENT
This Master Professional Services Agreement (this "AGREEMENT") is entered
into effective June 1, 2004 (the "EFFECTIVE DATE") by and between The Xxxxxxxx
Companies, Inc., a Delaware corporation having a principal place of business at
Xxx Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000-0000 ("XXXXXXXX"), and International
Business Machines Corporation, a New York corporation having a principal place
of business at Xxxxx 000, Xxxxxx, Xxx Xxxx 00000 ("PROVIDER").
WHEREAS, Xxxxxxxx and Provider have engaged in extensive negotiations,
discussions and due diligence that have culminated in the formation of the
contractual relationship described in this Agreement;
WHEREAS, Xxxxxxxx desires to procure from Provider, and Provider desires
to provide to Xxxxxxxx, for the benefit of itself and the other Eligible
Recipients, the finance and accounting business processes, human resources
business processes and information technology products and services described in
this Agreement, on the terms and conditions specified herein;
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and of other good and valid consideration, the receipt and
sufficiency of which is hereby acknowledged, Xxxxxxxx and Provider
(collectively, the "PARTIES" and each, a "PARTY") hereby agree as follows:
1. BACKGROUND AND OBJECTIVES
1.1 PERFORMANCE AND MANAGEMENT BY PROVIDER.
Xxxxxxxx desires that certain finance and accounting business processes,
human resources business processes and information technology services
presently performed and/or managed by or for Xxxxxxxx and the Eligible
Recipients, as each is described in this Agreement, be performed and
managed by Provider. Provider has carefully reviewed Xxxxxxxx'x
requirements, has performed all due diligence it deems necessary, and
desires to perform and to manage such finance and accounting business
processes, human resources business processes and information technology
services for Xxxxxxxx, for the benefit of Xxxxxxxx and the other Eligible
Recipients.
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1.2 GOALS AND OBJECTIVES.
The Parties acknowledge and agree that the specific goals and objectives
of the Parties in entering into this Agreement are to:
(1) Provide Xxxxxxxx with the flexibility for Xxxxxxxx to restructure
its business without retaining certain fixed finance and accounting
business process, human resources business process and information
technology costs;
(2) Utilize enabling technologies to add value to Xxxxxxxx'x business
processes;
(3) Implement common processes across Xxxxxxxx;
(4) Eliminate duplication across Xxxxxxxx;
(5) Allow Xxxxxxxx to focus on its core competencies and allow Xxxxxxxx
management to focus on business relationships and requirements;
(6) Provide the Xxxxxxxx finance and accounting business process, human
resources business process and information technology function with
the flexibility to adapt rapidly to Xxxxxxxx changing requirements
and changes in the Xxxxxxxx business environment; and
(7) Reduce Xxxxxxxx infrastructure capital and operating expenses.
1.3 INTERPRETATION.
The provisions of this ARTICLE 1 are intended to be a general introduction
to this Agreement and are not intended to expand the scope of the Parties'
obligations or alter the plain meaning of this Agreement's terms and
conditions, as set forth hereinafter. However, to the extent the terms and
conditions of this Agreement are unclear or ambiguous, such terms and
conditions are to be construed so as to be consistent with the background
and objectives set forth in this ARTICLE 1.
2. DEFINITIONS AND DOCUMENTS
2.1 DEFINITIONS.
As used in this Agreement:
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(1) "ACCEPTANCE" shall mean the determination, in Xxxxxxxx'x reasonable
discretion, following implementation, installation, testing and
execution in the production environment for an agreed upon number of
business cycles that Software, Equipment, Systems and/or other
contract deliverables are in Compliance in all material respects
with the Specifications.
(2) "ACQUIRED ASSETS" shall mean the Equipment, Software and other
assets owned or controlled by Xxxxxxxx or the Eligible Recipients
and listed on SCHEDULE F.1 that Provider will acquire as of the
Commencement Date.
(3) "ACQUIRED ASSETS CREDIT" shall mean the amount set forth on SCHEDULE
J that Provider will pay to Xxxxxxxx as consideration for the
Acquired Assets.
(4) "ADDITIONAL RESOURCE CHARGE" or "ARC" is the charge per Resource
Unit that is applicable whenever the actual consumption of a defined
Resource Unit by the Eligible Recipients exceeds the Resource
Baseline for such Resource Unit set forth in SCHEDULE J. The total
additional charges will be calculated by multiplying the Additional
Resource Charge by the number of Resource Units in excess of the
Resource Baseline actually consumed by the Eligible Recipients.
(5) "AFFILIATE" shall mean, generally, with respect to any Entity, any
other Entity Controlling, Controlled by or under common Control with
such Entity at the time in question.
(6) "AGREEMENT" shall have the meaning given in the preamble to this
Agreement.
(7) "APPLICABLE REGULATORY AUTHORITY" shall mean, in the United States,
the Federal Communications Commission (the "FCC"), the Federal
Energy Regulatory Commission (the "FERC"), or other national,
territorial, regional, state, provincial or local regulatory bodies
of competent jurisdictions and in geographic regions other than the
United States from, to or in which the Services are provided, the
national, territorial, regional, state, provincial or local
regulatory authorities.
(8) "APPLICATIONS SOFTWARE" or "APPLICATIONS" shall mean those software
application programs and programming (and all modifications,
replacements, Upgrades, enhancements, documentation, materials and
media related thereto) used to support day-to-day business
operations and accomplish specific business objectives to the extent
a Party has financial or operational responsibility for such
programs or programming under SCHEDULE E or U. Applications Software
shall mean all such programs or programming in use as of the
Effective Date, including
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those set forth in SCHEDULE A, those as to which the license,
maintenance or support costs are included in the Xxxxxxxx Base Case,
and those as to which Provider received reasonable notice prior to
the Effective Date. Applications Software also shall include all
such programs or programming developed and/or introduced by or for
Xxxxxxxx or the Eligible Recipients on or after the Effective Date
to the extent a Party has financial or operational responsibility
for such programs or programming under SCHEDULE E or U.
(9) "BASELINE FTES" shall have the meaning given in SECTION 11.8(a).
(10) "BENCHMARK STANDARD" shall have the meaning given in SECTION
11.11(C).
(11) "BENCHMARKER" shall have the meaning given in SECTION 11.11(a).
(12) "BENCHMARKING" shall have the meaning given in SECTION 11.11(a).
(13) "BEST PRACTICES" (whether or not capitalized) means established
procedures or processes used by businesses in a particular industry
that are widely accepted as being effective or efficient (whether in
cost or performance).
(14) "BUSINESS PROCESSES" shall mean the processes described in this
Agreement, the Statements of Work and/or the Policy and Procedures
Manual for conducting, performing, executing or completing the
various tasks and activities that comprise the Services.
(15) "BUSINESS PROCESS CHANGE" shall mean any change to the Business
Processes.
(16) "CABLING" shall mean the electric connection between the Equipment
and xxxx, including physical cabling media, peripheral cabling used
to interconnect electronic equipment, all terminating hardware and
cross connect fields, but not including conduits and pathways.
(17) "CHARGES" shall mean the amounts set forth in ARTICLE 11 and
SCHEDULE J (or otherwise set forth in the Agreement) as charges for
the Services.
(18) "COMMENCEMENT DATE" shall mean July 1, 2004, or such other date as
the Parties may agree upon in writing as the date on which Provider
will assume full responsibility for the Services (except for the
Transition Services, which shall commence on the Effective Date).
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(19) COMPLIANCE" and "COMPLY" shall mean, with respect to Software,
Equipment, Systems, Developed Materials or other contract
deliverables to be implemented, designed, developed, delivered,
integrated, installed and/or tested by Provider, conformance in all
material respects with the Specifications.
(20) "CONTRACT YEAR" shall mean the period ending on December 31, 2004
and on each December 31 thereafter during the Term. If any Contract
Year is more or less than twelve (12) months, the rights and
obligations under this Agreement that are calculated on a Contract
Year basis will be proportionately adjusted for such longer or
shorter period. For the avoidance of doubt, the first Contract Year
hereunder begins on the Commencement Date and ends on December 31,
2004.
(21) "CONTROL" and its derivatives shall mean: (a) the legal, beneficial,
or equitable ownership, directly or indirectly, of (i) at least
fifty percent (50%) of the aggregate of all voting equity interests
in an Entity, or (ii) equity interests having the right to at least
fifty percent (50%) of the profits of an Entity or, in the event of
dissolution, to at least fifty percent (50%) of the assets of an
Entity; (b) the right to appoint, directly or indirectly, a majority
of the board of directors; (c) the right to control, directly or
indirectly, the management or direction of the Entity by contract or
corporate governance document; or (d) in the case of a partnership,
the holding by an Entity (or one of its Affiliates) of the position
of sole general partner.
(22) "CRITICAL SUPPORT PERSONNEL" shall mean those individuals identified
in SCHEDULE C as critical to the ongoing success of Provider's
delivery of information technology services to Xxxxxxxx and the
Eligible Recipients.
(23) "DATA CENTER" shall mean any controlled, consolidated and
specialized location where computing equipment (e.g., mainframe,
midrange, telecommunications or server hardware) resides for the
delivery of computing services to Xxxxxxxx.
(24) "DERIVATIVE WORK" shall mean a work based on one or more preexisting
works, including a condensation, transformation, translation,
modification, expansion, or adaptation, that, if prepared without
authorization of the owner of the copyright of such preexisting
work, would constitute a copyright infringement under applicable
Law, but excluding the preexisting work.
(25) "DEVELOPED MATERIALS" shall mean any Materials (including Software),
or any modifications, enhancements or Derivative Works thereof,
developed by or on
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behalf of Provider for Xxxxxxxx or Eligible Recipients in connection
with or as part of the Services.
(26) "DIRECT XXXXXXXX COMPETITOR" shall mean the Entities identified in
SCHEDULE P, as well as their Affiliates, successors and assigns, as
such list of Entities may be modified by Xxxxxxxx from time to time.
(27) "EFFECTIVE DATE" shall have the meaning given in the preamble to
this Agreement.
(28) "ELIGIBLE RECIPIENTS" shall mean, collectively, and to the extent
such Entity is receiving Services under this Agreement, the
following:
(a) Xxxxxxxx;
(b) any Entity that is an Affiliate of Xxxxxxxx on the
Commencement Date, or thereafter becomes an Affiliate of
Xxxxxxxx;
(c) any Entity that purchases after the Commencement Date from
Xxxxxxxx or any Affiliate of Xxxxxxxx, all or substantially
all of the assets of Xxxxxxxx or such Affiliate, or of any
division, marketing unit, business unit, or manufacturing,
research or development facility thereof, provided that such
Entity agrees in writing to be bound by the terms and
conditions of this Agreement;
(d) any Entity that after the Effective Date is created using
assets of Xxxxxxxx or any Affiliate of Xxxxxxxx, provided that
such Entity agrees in writing to be bound by the terms and
conditions of this Agreement;
(e) any Entity into which Xxxxxxxx or any Affiliate of Xxxxxxxx
merges or consolidates, provided that such Entity has assumed
Xxxxxxxx'x obligations under this Agreement, and provided
further that such Entity agrees in writing to be bound by the
terms and conditions of this Agreement;
(f) any Entity which merges into or consolidates with Xxxxxxxx or
any Affiliate of Xxxxxxxx;
(g) any Entity or facility, including any corporation, joint
venture, partnership or manufacturing, research or development
facility, in which on or after the Commencement Date, Xxxxxxxx
or any Affiliate of Xxxxxxxx has an
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ownership interest of at least 50% and/or as to which Xxxxxxxx
or such Affiliate has management or operational responsibility
by law or contract;
(h) any customer of an Eligible Recipient identified in clauses
(a) through (g) above, or an Entity to which such an Eligible
Recipient is a subcontractor, but only in connection with the
provision of products or services by such Eligible Recipient
to such customer;
(i) any person or Entity engaged in the provision of products or
services to Xxxxxxxx or an Eligible Recipient identified in
clauses (a) through (g) of this definition, but only in
connection with the provision of such products or services to
Xxxxxxxx or such Eligible Recipient;
(j) any Entity to which Xxxxxxxx or an Affiliate of Xxxxxxxx
outsources any of its existing functions to the extent needed
for such Entity to continue performing such function for
Xxxxxxxx or its Affiliates, or any other customer of such
Entity, but only in connection with the provision of such
outsourced functions and provided such Entity agrees in
writing to be bound by the terms and conditions of this
Agreement; and
(k) other entities to which the Parties agree.
Except as used in SECTIONS 17.1, 17.3, 17.4, 17.5 and 17.6, Eligible
Recipients shall include the employees, contractors, subcontractors,
agents and representatives of the Entities identified as Eligible
Recipients in clauses (a) through (i) above.
(29) "EMPLOYMENT EFFECTIVE DATE" shall mean, with respect to each
Transitioned Employee, the date that such Transitioned Employee
begins employment with Provider, in accordance with applicable Laws.
(30) "END USER" shall mean, collectively all Eligible Recipients (and
their respective employees, contractors, subcontractors, agents and
representatives, other than Provider and its Subcontractors)
designated by Xxxxxxxx to receive or use the Systems or Services
provided by Provider.
(31) "ENTITY" shall mean a corporation, partnership, joint venture,
trust, limited liability company, limited liability partnership,
association or other organization or entity.
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(32) "EQUIPMENT" shall mean all computing, networking, communications,
and related computing equipment (hardware and firmware) procured,
provided, operated, supported, or used by Provider in connection
with the Services, including (i) mainframe, midrange, server and
distributed computing equipment and associated attachments,
features, accessories, peripheral devices, and Cabling, (ii)
personal computers, laptop computers, workstations and personal data
devices and associated attachments, features, accessories, printers,
multi-functional printers, peripheral or network devices, and
Cabling, and (iii) voice, data, video and wireless
telecommunications and network and monitoring equipment and
associated attachments, features, accessories, cell phones,
peripheral devices, and Cabling.
(33) "EQUIPMENT LEASES" shall mean all leasing arrangements whereby
Xxxxxxxx, the Eligible Recipients or a Xxxxxxxx Third Party
Contractor leases Equipment as of the Commencement Date which will
be used by Provider to perform the Services after such Commencement
Date. Equipment Leases shall include those leases identified on
SCHEDULE F.2, those as to which the lease, maintenance and support
costs are included in the Xxxxxxxx Base Case, and all other leases
as to which Provider received reasonable notice prior to the
Effective Date.
(34) "EXTRAORDINARY EVENT" shall have the meaning given in SECTION
11.6(a).
(35) "F&A TOWER" means the finance and accounting Services as further
described in SCHEDULE E.2.
(36) "FULL TIME EQUIVALENT" or "FTE" shall mean a level of effort,
excluding vacation, holidays, training, administrative and other
non-productive time (but including a reasonable amount of additional
work outside normal business hours), equivalent to that which would
be provided by one person working full time for one year. Unless
otherwise agreed, one FTE is assumed to be at least (i) for the IT
Tower, 1820 productive hours per Contract Year and 2000 hours per
Contract Year, (ii) for the F&A Tower, 1700 productive hours per
Contract Year and 2000 hours per Contract Year, and (iii) for the XX
Xxxxx, 0000 productive hours per Contract Year and 2000 hours per
Contract Year. Without Xxxxxxxx'x prior written approval, one (1)
dedicated individual's total work effort cannot amount to more than
one FTE.
(37) "FUNCTIONAL SERVICE AREA" shall mean each of the finance and
accounting business process, human resources business process and
information technology service areas defined in SCHEDULE E in which
Provider will provide Services, (i.e.,
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(i) Mainframe, Servers, (ii) Storage, (iii) Desktop Support, (iv)
Help Desk, (v) Network - Data, (vi) Network - Voice, (vii)
Application Development and Maintenance, (viii) IT Ad Hoc Services,
(ix) Accounts Payable, (x) Fixed Assets, (xi) General Accounting,
(xii) HR / Payroll, (xiii) ERP Support, (xiv) F&A Ad Hoc Services,
(xv) Compensation, (xvi) Benefits, (xvii) Performance Management,
(xviii) Training Administration, (xix) Employee Records & Data
Management, (xx) Recruiting / Staffing, (xxi) Expatriate
Administration / Relocation, (xxii) Severance & Outplacement,
(xxiii) Employee Services, and (xxiv) HR Ad Hoc Services service
areas).
(38) "HR TOWER" means the human resources Services as further described
in SCHEDULE E.3.
(39) "INCOME TAX" shall mean any tax on or measured by the net income of
a Party (including taxes on capital or net worth that are imposed as
an alternative to a tax based on net or gross income), or taxes
which are of the nature of excess profits tax, minimum tax on tax
preferences, alternative minimum tax, accumulated earnings tax,
personal holding company tax, capital gains tax or franchise tax for
the privilege of doing business.
(40) "IT TOWER" means the information technology Services as further
described in SCHEDULE E.1.
(41) "KEY PROVIDER PERSONNEL" shall mean the Provider Personnel filling
the positions designated in SCHEDULE C as Key Provider Personnel.
(42) "LAWS" shall mean all federal, state, provincial, regional,
territorial and local laws, statutes, ordinances, regulations,
rules, executive orders, supervisory requirements, directives,
circulars, opinions, interpretive letters and other official
releases of or by any government, or any authority, department or
agency thereof, including the United States Securities and Exchange
Commission and the Public Accounting Oversight Board. The definition
of Laws shall include Laws relating to data privacy, trans-border
data flow or data protection, such as the implementing legislation
and regulations of the European Union member states under the
European Union Directive 95/46/EC and any and all of Canada's
privacy laws ("PRIVACY LAWS").
(43) "LOSSES" shall mean all losses, liabilities, damages (however
characterized), fines, penalties and claims (including taxes), and
all related costs and expenses
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(including reasonable legal fees and disbursements and costs of
investigation, litigation, settlement, judgment, interest and
penalties).
(44) "MAJOR RELEASE" shall mean a new version of Software that includes
changes to the architecture and/or adds new features and
functionality in addition to the original functional characteristics
of the preceding software release. These releases are usually
identified by full integer changes in the numbering, such as from
"7.0" to "8.0," but may be identified by the industry as a major
release without the accompanying integer change.
(45) "MALICIOUS CODE" shall mean (i) any code, program, or sub-program
whose knowing or intended purpose is to damage or maliciously
interfere with the operation of the computer system containing the
code, program or sub-program, or to halt, disable or maliciously
interfere with the operation of the Software, code, program, or
sub-program, itself, or (ii) any device, method, or token that
permits any person to circumvent without authorization the normal
security of the Software or the system containing the code.
(46) MANAGED THIRD PARTIES" shall mean the Xxxxxxxx Third Party
Contractors, listed on SCHEDULE X, as such Schedule may be amended
from time to time.
(47) "MANAGED THIRD PARTY AGREEMENTS" shall mean the applicable Third
Party Contract(s) of a Managed Third Party.
(48) "MATERIALS" shall mean, collectively, Software, literary works,
other works of authorship, specifications, designs, analyses,
patentable processes, methodologies, inventions, programs, program
listings, programming tools, documentation, reports, drawings,
databases and work product, whether tangible or intangible.
(49) "MINOR RELEASE" shall mean a scheduled release containing small
functionality updates and/or accumulated resolutions to defects or
non-conformances made available since the immediately preceding
release (whether Major Release or Minor Release). Minor Releases
shall include "Maintenance Releases" which are supplemental to and
made available between Major Releases and other Minor Releases,
issued and provided under specific vendor service level or
maintenance obligations and contain only accumulated resolutions or
mandated changes. These releases are usually identified by a change
in the decimal numbering of a release, such as "7.12" to "7.13."
(50) "MONTHLY BASE CHARGE" shall mean the total Provider Charges,
excluding ARCs and RRCs, set forth in SCHEDULE J associated with the
performance of the
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Services in a given month in accordance with the Resource Baselines,
Service Levels and Provider responsibilities under this Agreement.
(51) "NEW ADVANCES" shall have the meaning given in SECTION 11.7(d).
(52) "NEW SERVICES" shall mean new services or significant changes to
existing Services requested by Xxxxxxxx, (i) that are materially
different from the Services, (ii) that require materially different
levels or types of effort, resources or expense from Provider,
and(iii) for which there is no current Resource Baseline or charging
methodology that is applicable to the effort to be provided.
(53) "OPERATING SYSTEM SOFTWARE" shall mean all software programs and
programming (and all modifications, replacements, Upgrades,
enhancements, documentation, materials and media related thereto)
that are used to deliver and manage Services on a particular
hardware platform including operating systems (e.g., UNIX, Windows,
VM and MVS) and network operating systems (e.g., NT Server, Windows,
and Novell), to the extent a Party has financial or operational
responsibility for such programs or programming under SCHEDULE E or
U. Operating System Software shall include all such programs or
programming in use as of the Effective Date, including those set
forth in SCHEDULE A, those as to which the license, maintenance or
support costs are included in the Xxxxxxxx Base Case, and those as
to which Provider received reasonable notice prior to the Effective
Date. Operating System Software also shall include all such programs
or programming developed and/or introduced by or for Xxxxxxxx or the
Eligible Recipients after the Effective Date to the extent a Party
has financial or operational responsibility for such programs or
programming under SCHEDULE E or U.
(54) "OUT-OF-POCKET EXPENSES" shall mean reasonable, demonstrable and
actual out-of-pocket expenses due and payable to a third party by
Provider in accordance with the Policy and Procedures Manual or that
are approved in advance by Xxxxxxxx and for which Provider is
entitled to be reimbursed by Xxxxxxxx under this Agreement.
Out-of-Pocket Expenses shall not include Provider's overhead costs
(or allocations thereof), general and/or administrative expenses or
other xxxx-ups. Out-of-Pocket Expenses shall be calculated at
Provider's actual incremental expense and shall be net of all
rebates and allowances.
(55) "PASS-THROUGH EXPENSES" shall mean the expenses so identified in
SCHEDULE J or otherwise agreed by the Parties, as such list may be
amended from time to time. Unless otherwise agreed, Provider shall
not charge any handling or
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administrative charge in connection with its processing or review of
such invoices.
(56) "POLICY AND PROCEDURES MANUAL" shall have the meaning given in
SECTION 9.1(a).
(57) "PROJECTS" shall have the meaning given in SECTION 11.8(a).
(58) "PROPRIETARY INFORMATION" shall have the meaning given in SECTION
13.3(a).
(59) "PROVIDER PROJECT EXECUTIVE" shall have the meaning given in SECTION
8.5 and shall describe the Provider representative responsible for
both the day to day relationship with Xxxxxxxx as well as the
delivery of all Services to Xxxxxxxx.
(60) "PROVIDER BUSINESS LAWS" shall have the meaning given in SCHEDULE S.
(61) "PROVIDER FACILITIES" shall mean the facilities owned or leased by
Provider, its Affiliates or Subcontractors and from which Provider,
its Affiliates or Subcontractors provides any Services. Provider
Facilities are listed on SCHEDULE O.2.
(62) "PROVIDER LAWS" means Provider Business Laws and Provider Services
Laws.
(63) "PROVIDER OWNED MATERIALS" shall have the meaning given in SECTION
14.3(a).
(64) "PROVIDER OWNED SOFTWARE" shall mean any Software owned by Provider
and used to provide the Services.
(65) "PROVIDER PERSONNEL" shall mean those employees, representatives,
contractors, subcontractors and agents of Provider, Subcontractors
and Provider Affiliates who perform any Services under this
Agreement.
(66) "PROVIDER SERVICES LAWS" shall have the meaning given in SCHEDULE S.
(67) "QUALITY ASSURANCE" means the actions, planned and performed, to
provide confidence that all Business Processes, Systems, Equipment,
Software and components that influence the quality of the Services
are working as expected individually and collectively.
(68) "REDUCED RESOURCE CREDIT" or "RRC" shall mean the credit per
Resource Unit that is applicable whenever the actual consumption of
a defined Resource Unit by
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the Eligible Recipients falls below the Resource Baseline for
utilization of such Resource Unit set forth in SCHEDULE J.
(69) "REPORTS" shall have the meaning set forth in SECTION 9.2(a).
(70) "REQUIRED CONSENTS" shall mean the consents (if any) required to be
obtained: (i) to assign or transfer to Provider of Xxxxxxxx licensed
Third Party Software, Third Party Contracts, Equipment Leases or
Acquired Assets (including related warranties); (ii) to grant
Provider the right to use and/or access the Xxxxxxxx licensed Third
Party Software in connection with providing the Services; (iii) to
xxxxx Xxxxxxxx and the Eligible Recipients the right to use and/or
access the Provider Owned Software, Third Party Software and
Equipment acquired, operated, supported or used by Provider in
connection with providing the Services; (iv) to assign or transfer
to Xxxxxxxx, the Eligible Recipients or their designee(s) any
Developed Materials, (v) to assign or transfer to Xxxxxxxx or its
designee Provider Owned Software, Third Party Software, Third Party
Contracts, Equipment Leases or other rights following the Term to
the extent provided in this Agreement; and (vi) all other consents
required from third parties in connection with Provider's provision
of the Services.
(71) "RESOURCE BASELINES" shall mean the estimated number of Resource
Units to be required and/or consumed by Xxxxxxxx and the Eligible
Recipients during a defined period of time and included in the
Monthly Base Charges. The Resource Baselines as of the Effective
Date are set forth in SCHEDULE J. The Resource Baselines will be
revised from time to time by agreement of the Parties based on the
usage, demand and business requirements of Xxxxxxxx and the Eligible
Recipients and the Monthly Base Charges will be adjusted
accordingly.
(72) "RESOURCE UNIT" ("RU") shall mean a particular unit of resource, as
described in SCHEDULE J, which is measured to determine Xxxxxxxx'x
and the Eligible Recipients actual utilization of such resource
compared to the applicable Resource Baseline for purposes of
calculating Additional Resource Charges and Reduced Resource Credits
as described in SCHEDULE J.
(73) "RETAINED SYSTEMS AND BUSINESS PROCESSES" means those systems and
business processes of Xxxxxxxx or an Eligible Recipient for which
Provider has not assumed responsibility under this Agreement
(including those provided, managed, operated, supported and/or used
on their behalf by Xxxxxxxx Third Party Contractors). Retained
Systems and Business Processes include equipment and software
associated with such systems and business processes.
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(74) "ROOT CAUSE ANALYSIS" shall mean the formal process, specified in
the Policy and Procedures Manual, to be used by Provider to diagnose
the underlying cause of problems at the lowest reasonable level so
that corrective action can be taken that will eliminate repeat
failures. Provider shall implement a Root Cause Analysis as
specified in SECTION 7.3 or as requested by Xxxxxxxx.
(75) "SERVICE LEVEL CREDITS" shall have the meaning given in SECTION 7.2
and SCHEDULE G.
(76) "SERVICE LEVELS" shall mean, individually and collectively, the
performance standards for the Services set forth in SCHEDULE G.
(77) "SERVICE TAXES" shall mean all sales, use, VAT, GST, excise and
other similar taxes that are assessed against either Party on the
provision of the Services as a whole, or on any particular Service
received by Xxxxxxxx or an Eligible Recipient from Provider,
excluding Income Taxes.
(78) "SERVICES" shall mean, collectively: (i) the services, functions and
responsibilities described in ARTICLE 4 and elsewhere in this
Agreement as they may be supplemented, enhanced, modified or
replaced during the Term in accordance with this Agreement; and (ii)
any New Services, upon Xxxxxxxx'x acceptance of Provider's proposal
for such New Services in accordance with SECTION 11.5 and the other
provisions of this Agreement.
(79) "SOFTWARE" shall mean all software programs and programming for
which a Party is financially or operationally responsible under
SCHEDULE E or U (and all modifications, replacements, Upgrades,
enhancements, documentation, materials and media related thereto),
including antivirus software, Applications, asset management
software, compilers, database software, development tools,
management tools, monitoring software, local area and wide area
network software, office images, Operating System Software, problem
management software, remote management software, Systems Software,
Third Party Software, and utilities, unless a more specific
reference is required by the context.
(80) "SPECIALIZED SERVICES" shall have the meaning given in SECTION 9.8.
(81) "SPECIFICATIONS" shall mean, with respect to Software, Equipment,
Systems, Developed Materials or other contract deliverables to be
designed, developed, delivered, integrated, installed and/or tested
by Provider, the technical, design and/or functional specifications
set forth in SCHEDULE E or H, in third party
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vendor documentation, in a New Services or Project description
requested and/or approved by Xxxxxxxx, or otherwise agreed upon in
writing by the Parties.
(82) "SUBCONTRACTORS" shall mean subcontractors (of any tier) of
Provider, including Shared Subcontractors (as defined in SECTION
9.11(b)). The initial list of Subcontractors is set forth on
SCHEDULE D, each of which has been approved by Xxxxxxxx to the
extent such approval is required and described thereon. SCHEDULE D
may be amended during the Term in accordance with SECTION 9.11.
(83) "SYSTEM" shall mean an interconnected grouping of Equipment,
Software and associated attachments, features, accessories,
peripherals and cabling, and all additions, modifications,
substitutions, Upgrades or enhancements to such System, to the
extent a Party has financial or operational responsibility for such
System or System components under SCHEDULE E. System shall include
all Systems in use as of the Effective Date, all additions,
modifications, substitutions, upgrades or enhancements to such
Systems and all Systems installed or developed by or for Xxxxxxxx,
the Eligible Recipients or Provider following the Effective Date.
(84) "SYSTEM CHANGE" shall mean any change to the, Software, Equipment,
System or operating environment including without limitation changes
to programs, manual procedures, job control language statements,
distribution parameters, or schedules.
(85) "SYSTEMS SOFTWARE" shall mean all software programs and programming
(and all modifications, replacements, Upgrades, enhancements,
documentation, materials and media related thereto) that perform
tasks basic to the functioning of the Equipment and are required to
operate the Applications Software or otherwise support the provision
of Services by Provider. For purposes of this Agreement, Systems
Software shall include antivirus software, asset management
software, local area and wide area network software, monitoring
software, Operating System Software, problem management software,
remote management software, system utilities, and System testing
tools, to the extent a Party has financial or operational
responsibility for such programs or programming under SCHEDULE E or
U. Systems Software shall include all such programs or programming
in use as of the Effective Date, including those set forth in
SCHEDULE A, those as to which the license, maintenance or support
costs are included in the Xxxxxxxx Base Case, and those as to which
Provider received reasonable notice prior to the Effective Date.
Systems Software also shall include all such programs or programming
developed and/or introduced by or for Xxxxxxxx, the Eligible
Recipients or
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Provider after the Effective Date to the extent a Party has
financial or operational responsibility for such programs or
programming under SCHEDULE E or U.
(86) "TAX AUTHORITY" shall mean any federal, state, provincial, regional,
territorial, local or other fiscal, revenue, customs or excise
authority, body or official competent to impose, collect or asses
tax.
(87) "TECHNOLOGY AND BUSINESS PROCESS EVOLUTION" means any improvement,
upgrade, addition, modification, replacement, or enhancement to the
standards, policies, practices, processes, procedures, methods,
controls, scripts, product information, technologies, architectures,
standards, Applications, Equipment, Software, Systems, tools,
products, transport systems, interfaces and personnel skills
associated with the performance of finance and accounting business
processes and related functions in line with the best practices of
leading providers of such services. Provider's obligations with
respect to Technology and Business Process Evolution apply not only
to the Services performed by Provider, but also to its support of
the finance and accounting business processes and related functions
performed by or for Xxxxxxxx and the Eligible Recipients at or from
Xxxxxxxx Facilities. Technology and Business Process Evolution
includes: (i) higher capacity, further scaling and commercializing
of business processes, more efficient and scalable business
processes, new versions and types of applications and
systems/network software, new business or IT processes, and new
types of hardware and communications equipment that will enable
Provider to perform the Services more efficiently and effectively as
well as support Xxxxxxxx and the Eligible Recipients in their
efforts to meet and support their business requirements and
strategies and (ii) any change to the Equipment, Software or
methodologies used to provide the Services that is necessary to
bring that function, Equipment or Software or those methodologies
into line with the Xxxxxxxx Standards and/or current industry
standards. For the avoidance of doubt, Technology and Business
Process Evolution shall not constitute New Services or Projects.
(88) "TECHNOLOGY AND BUSINESS PROCESS PLAN" shall have the meaning given
in SECTION 9.5(e).
(89) "TERM" shall have the meaning given in ARTICLE 3.
(90) "TERMINATION ASSISTANCE SERVICES" shall mean the
termination/expiration assistance requested by Xxxxxxxx to allow the
Services to continue without interruption or adverse effect and to
facilitate the orderly transfer of the Services
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to Xxxxxxxx or its designee, as such assistance is further described
in SECTION 4.4 and SCHEDULE I.
(91) "TERMINATION CHARGE" shall mean the termination charges payable by
Xxxxxxxx upon termination pursuant to SECTION 20.2 as set forth in
SCHEDULE N.
(92) "THIRD PARTY CONTRACTS" shall mean all agreements between third
parties and Xxxxxxxx or Provider that have been or will be used to
provide the Services to the extent a Party has financial or
operational responsibility for such contracts under SCHEDULE E or U.
Third Party Contracts shall include all such agreements in effect as
of the Effective Date, including those contracts identified in
SCHEDULE F.3, those as to which the costs are included in the
Xxxxxxxx Base Case, and those as to which Provider received
reasonable notice prior to the Effective Date. Third Party Contracts
also shall include those third party agreements entered into by
Provider following the Effective Date
(93) "THIRD PARTY SOFTWARE" shall mean all Software products (and all
modifications, replacements, Upgrades, enhancements, documentation,
materials and media related thereto) that are provided under license
or lease to Provider or Xxxxxxxx that have been or will be used to
provide the Services to the extent a Party has financial or
operational responsibility for such Software products under SCHEDULE
E or U. Third Party Software shall include all such programs or
programming in use as of the Effective Date, including those set
forth in SCHEDULE A, those as to which the license, maintenance or
support costs are included in the Xxxxxxxx Base Case, and those as
to which Provider received reasonable notice prior to the Effective
Date. Third Party Software also shall include all such programs or
programming licensed and/or leased after the Effective Date.
(94) "TOWER" means as applicable, the IT Tower, the F&A Tower and/or the
HR Tower.
(95) "TRANSFORMATION MILESTONE" shall have the meaning given in SECTION
4.3(c).
(96) "TRANSFORMATION PLAN" means the plan set forth in SCHEDULE H.2 and
further developed pursuant to SECTION 4.3 hereof, which identifies
the principal changes in technology and deliverables to be
undertaken by Provider in connection with the transformation
activities to be completed during and after the Transition Period,
and the dates by which each will be completed by Provider.
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(97) "TRANSFORMATION SERVICES" shall mean the services, functions and
responsibilities described in SECTION 4.3 and the Transformation
Plan to be performed by Provider.
(98) "TRANSITIONED EMPLOYEES" shall mean the employees of Xxxxxxxx or its
Affiliates who accept Provider's offer of employment and become
employed by Provider pursuant to ARTICLE 8. Upon being employed by
Provider, such Transitioned Employees shall be deemed to be Provider
Personnel as defined herein.
(99) "TRANSITION MILESTONE" shall mean each date identified in the
Transition Plan and SCHEDULE H.1 as a milestone by which Provider
shall have completed a key task or set of tasks in accordance with
the Transition Plan in a manner acceptable to Xxxxxxxx.
(100) "TRANSITION PERIOD" shall mean the period that commences on the
Effective Date and expires 11:59:59 p.m., Central Time, on the date
specified for the completion of the Transition Services as specified
in the Transition Plan, unless expressly extended in writing by
Xxxxxxxx.
(101) "TRANSITION PLAN" shall mean the plan set forth in SCHEDULE H and
developed pursuant to SECTION 4.2 hereof, which identifies all
material transition tasks, Projects and deliverables to be completed
by Provider in connection with the transition of all Services to
Provider, and the dates by which each is to be completed by
Provider.
(102) "TRANSITION SERVICES" shall mean the services, functions and
responsibilities described in SECTION 4.2 and the Transition Plan to
be performed by Provider during the Transition Period.
(103) "UNANTICIPATED CHANGE" shall have the meaning set forth in SECTION
11.7(i).
(104) "UPGRADE" and its derivatives shall mean the updates, renovations,
enhancements, additions and/or new versions or releases of Software
or Equipment by Provider. Unless otherwise agreed, financial
responsibility for the costs, fees and expenses associated with an
Upgrade of Software or Equipment shall be allocated between the
Parties in accordance with SECTIONS 6.4 and SCHEDULE J.
(105) "XXXXXXXX BASE CASE" shall mean the summary financial base case
attached hereto as SCHEDULE K, as well as the detailed financial and
budget information
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underlying such summary base case, including records of actual and
planned expenditures.
(106) "XXXXXXXX DATA" shall mean any data or information of Xxxxxxxx or
any Eligible Recipient that is provided to or obtained by Provider
in connection with the negotiation and execution of this Agreement
or the performance of its obligations under this Agreement,
including data and information with respect to the businesses,
customer, operations, facilities, products, rates, regulatory
compliance, competitors, consumer markets, assets, expenditures,
mergers, acquisitions, divestitures, xxxxxxxx, collections, revenues
and finances of Xxxxxxxx or any Eligible Recipient. Xxxxxxxx Data
also shall mean any data or information pertaining to Xxxxxxxx or an
Eligible Recipient that is created, generated, collected or
processed by Provider in the performance of its obligations under
this Agreement, including data processing input and output, service
level measurements, asset information, Reports, third party service
and product agreements, and retained and Pass-Through Expenses.
Xxxxxxxx Data shall also include contract charges, but
notwithstanding anything to the contrary (i) contract charges shall
be proprietary property of both Xxxxxxxx and Provider, and (ii) are
subject to disclosure to third parties in accordance with ARTICLE 13
and service level measurements are subject to the restrictions on
use set forth in SECTION 13.1.
(107) "XXXXXXXX FACILITIES" shall mean the facilities listed in SCHEDULE
O.1 provided by Xxxxxxxx or the Eligible Recipient for the use of
Provider to the extent necessary to provide the Services.
(108) "XXXXXXXX LAWS" shall have the meaning given in SCHEDULE S.
(109) "XXXXXXXX OWNED SOFTWARE" shall mean Software owned by Xxxxxxxx, a
Xxxxxxxx Affiliate or an Eligible Recipient and used, operated,
maintained or supported by or on behalf of Provider under or in
connection with this Agreement.
(110) "XXXXXXXX OWNED MATERIALS" shall have the meaning given in SECTION
14.1(a).
(111) "XXXXXXXX PERSONAL DATA" shall mean that portion of Xxxxxxxx Data
that is subject to any Privacy Laws.
(112) "XXXXXXXX PERSONNEL" shall mean the employees, agents, contractors
or representatives of Xxxxxxxx or its Affiliates or Eligible
Recipients who performed any of the services to be provided by
Provider during the twelve (12) months preceding the Commencement
Date.
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(113) "XXXXXXXX PROJECT EXECUTIVE" shall have the meaning given in SECTION
10.1.
(114) "XXXXXXXX RULES" shall have the meaning given in SECTION 6.3(a).
(115) "XXXXXXXX SITES" or "SITES" shall mean the offices or other
facilities listed on SCHEDULE W at or to which Provider is to
provide the Services.
(116) "XXXXXXXX STANDARDS" shall have the meaning given in SECTION 9.5(A).
(117) "XXXXXXXX THIRD PARTY CONTRACTORS" shall have the meaning given in
SECTION 4.5.
(118) "WIND DOWN CHARGES" shall have the meaning given in SCHEDULE N.
2.2 OTHER TERMS
The terms defined in this Article include the plural as well as the
singular and the derivatives of such terms. Unless otherwise expressly
stated, the words "herein," "hereof," and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section, Subsection or other subdivision. Article,
Section, Subsection and Attachment references refer to articles, sections
and subsections of, and attachments to, this Agreement. The words
"include" and "including" shall not be construed as terms of limitation.
The words "day," "month," and "year" mean, respectively, calendar day,
calendar month and calendar year. As stated in SECTION 21.3, the word
"notice" and "notification" and their derivatives shall mean notice or
notification in writing. Other terms used in this Agreement are defined in
the context in which they are used and shall have the meanings there
indicated.
2.3 ASSOCIATED CONTRACT DOCUMENTS.
This Agreement includes each of the following schedules and their attached
exhibits, all of which are attached to this Agreement and incorporated
into this Agreement by this reference:
A Software
B Approved Benchmarkers
C Key Provider Personnel and Critical Support Personnel
D Subcontractors
E Statement of Work
E.1 Information Technology Statement of Work
E.2 Finance & Accounting Statement of Work
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E.3 Human Resources Statement of Work
F.1 Acquired Assets
F.2 Equipment Leases
F.3 Third Party Contracts
F.4 Third Party Software
G Service Levels and Service Level Credits
G.1 Critical Service Levels
G.2 Key Performance Measurements
G.3 General Service Levels
H Transition Plan
H.1 Transition Milestones, Acceptance Criteria and Credits
H.2 Transformation Plan
I Termination Assistance Services
J Provider Charges
J-1 Annual Services Charges
J-2 Resource Baselines, Deadband Percentages and Definitions
J-3 ARC/RRC Rates
J-4 FTE Rates for Projects
J-5 ERP Project Statement of Understanding (SOU)
J-6 Incremental Projects
J-7 Travel Expense Responsibility Matrix
J-8 Assumed Efficiencies
J-9 Reserved
J-10 Refresh Commitments
J-11 ECA Provisions
J-12 Provider Value Adds
K Xxxxxxxx Base Case
L In-Flight and Planned Projects
M Affected Employees
M.1 Employee Benefit Plans
N Termination Charges
O.1 Xxxxxxxx Facilities
O.2 Provider Facilities
O.3 Xxxxxxxx Provided Equipment
P Direct Xxxxxxxx Competitors
Q Satisfaction Survey
R Reports
S Additional Matters
T Governance Model
U Responsibility Matrix
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V Xxxxxxxx Rules
W Xxxxxxxx Sites
X Managed Third Parties
Exhibit 1: Form of Non-Disclosure Agreement
Exhibit 2: Form of Invoice
Exhibit 3: Form of Xxxx of Sale
3. TERM
3.1 INITIAL TERM.
The initial Term of this Agreement shall commence as of 12:00:01 a.m.,
Central Time on the Effective Date and continue until 11:59:59 p.m.,
Central Time, on December 31, 2011, unless this Agreement is terminated as
provided herein or extended as provided in SECTION 3.2 or 4.4(a)(2), in
which case the Term shall end at 11:59:59 p.m., Central Time, on the
effective date of such termination or the date to which this Agreement is
extended. The Parties shall mutually agree in writing the date as of which
Provider has successfully completed the Transition Services.
3.2 EXTENSION.
By giving notice to Provider no less than ninety (90) days prior to the
expiration date of the initial Term or any extension, Xxxxxxxx shall have
the right to extend the Term for up to three (3) extension periods of up
to one (1) year, each on the same rates, charges and terms and conditions
set forth in this Agreement. No Termination Charges shall be applicable to
any termination on or after the expiration of the initial Term.
4. SERVICES
4.1 OVERVIEW.
(a) SERVICES. Commencing on the Commencement Date or such other date as
expressly provided herein, Provider shall provide the Services to
Xxxxxxxx, and, upon Xxxxxxxx'x request, to Eligible Recipients and
End Users designated by Xxxxxxxx. The Services shall consist of the
following, as they may evolve during the Term of this Agreement or
be supplemented, enhanced, modified or replaced:
(i) The services, functions and responsibilities described in this
Agreement and its Schedules and attachments, which include the
following:
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(1) the Transition Services, as described in SECTION 4.2 and
SCHEDULE H; and
(2) the Termination Assistance Services, as described in
SECTION 4.4 and SCHEDULE I.
(ii) The finance and accounting, human resources and information
technology related services, functions and responsibilities
(A) performed during the twelve (12) months preceding the
Commencement Date or (B) of a recurring nature performed in
the normal course of Xxxxxxxx'x business but not during the
twelve (12) months preceding the Commencement Date, in either
case by Xxxxxxxx Personnel who were displaced or whose
functions were displaced as a result of this Agreement, even
if the service, function, or responsibility is not
specifically described in this Agreement; provided, however,
such services, functions or responsibilities shall not include
services, functions or responsibilities for which both the
financial and labor resources were eliminated by Xxxxxxxx
prior to the Commencement Date such as through
reorganizations; and provided further that, in the event of a
direct conflict between SCHEDULE E and the scope of services
as described in this SECTION 4.1(a)(ii), this SECTION
4.1(a)(ii) shall not be construed as altering and/or
superseding SCHEDULE E); and
(iii) The finance and accounting, human resources and information
technology services, functions and responsibilities reflected
in those categories of the Xxxxxxxx Base Case which Provider
is assuming pursuant to this Agreement (provided, however, in
the event of a direct conflict between SCHEDULE E and the
scope of services as described in this SECTION 4.1(a)(iii),
this SECTION 4.1(a)(iii) shall not be construed as altering
and/or superseding SCHEDULE E).
(b) INCLUDED SERVICES. If any services, functions or responsibilities
not specifically described in this Agreement are an inherent,
necessary or customary part of the Services or are required for
proper performance or provision of the Services in accordance with
this Agreement, they shall be deemed to be included within the scope
of the Services to be delivered for the Charges, as if such
services, functions or responsibilities were specifically described
in this Agreement, except that for the first 12 months after the
Commencement Date, services, functions or responsibilities that
would be a customary part of the Services but which were not
performed by Xxxxxxxx during the 12 months before the Effective Date
are not
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within the Scope of Services delivered for the Charges for the first
12 months after the Commencement Date.
(c) REQUIRED RESOURCES. Except as otherwise expressly provided in this
Agreement, Provider shall be responsible for providing the
facilities, personnel, Equipment, Software, Materials technical
knowledge, expertise and other resources necessary to provide the
Services.
(d) PROVIDER RESPONSIBILITY. Provider shall be responsible for the
provision of the Services in accordance with this Agreement even if,
by agreement of the Parties, such Services are actually performed by
non-Provider Personnel acting under the project-management direction
of Provider (as opposed to acting as the employer), including
Xxxxxxxx employees.
4.2 TRANSITION SERVICES.
(a) TRANSITION. During the Transition Period, Provider shall perform the
Transition Services and provide the deliverables described in the
Transition Plan, which is attached to this Agreement as SCHEDULE H.
If any services, functions or responsibilities not specifically
described in the Transition Plan are an inherent, necessary or
customary part of the Transition Services or are required for the
proper performance of the Transition Services in accordance with
this Agreement, they shall be deemed to be included within the scope
of the Transition Services to be delivered for the transition
charges, as if such services, functions or responsibilities were
specifically described in the Transition Plan. During the Transition
Period, Xxxxxxxx will perform those tasks which are designated to be
Xxxxxxxx'x responsibility in the Transition Plan, provided that,
Xxxxxxxx shall not be obligated to perform any tasks during the
Transition Period that are not set forth in such Transition Plan.
Unless otherwise agreed, Xxxxxxxx shall not incur any charges, fees
or expenses payable to Provider or third parties in connection with
the Transition Services, other than those charges, fees and expenses
specified in SCHEDULE J and those incurred by Xxxxxxxx in connection
with its performance of tasks designated in the Transition Plan as
Xxxxxxxx'x responsibility.
(b) TRANSITION PLAN. The initial Transition Plan, is attached to this
Agreement as SCHEDULE H. During the thirty (30) days immediately
following the Effective Date, Provider shall prepare and deliver to
Xxxxxxxx a detailed Transition Plan for Xxxxxxxx'x review, comment
and approval. The proposed detailed Transition Plan shall describe
in greater detail the specific transition activities to be performed
by Provider, but, unless otherwise agreed by Xxxxxxxx, shall be
consistent in all
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respects with the initial Transition Plan, including the activities,
deliverables, Transition Milestones and Deliverable Credits
described therein. Provider shall address and resolve any questions
or concerns Xxxxxxxx may have as to any aspect of the proposed
detailed Transition Plan and incorporate any modifications,
additions or deletions to such Transition Plan requested by
Xxxxxxxx. If approved by Xxxxxxxx, the detailed Transition Plan
shall be appended to and incorporated in this Agreement as SCHEDULE
H and shall supersede and replace the initial Transition Plan.
(c) CONTENT OF TRANSITION PLAN. The Transition Plan shall identify,
among other things, (i) the transition activities to be performed by
Provider and the significant components and subcomponents of each
such activity, (ii) the portions of such transition activities, if
any, to be performed by Provider's Subcontractors and the identity
of such Subcontractors; (iii) the deliverables to be completed by
Provider, (iv) the date(s) by which each such activity or
deliverable is to be completed (the "TRANSITION MILESTONES"), (v) a
process and set of standards acceptable to Xxxxxxxx to which
Provider will adhere in the performance of the Transition Services
and that will enable Xxxxxxxx to determine whether Provider has
successfully completed the transition and the activities and
deliverables associated with each Transition Milestone, including
measurable success criteria by Functional Service Area that Provider
must meet before transitioning the work any further, (vi) a process
for Xxxxxxxx to delay Provider from proceeding with any part of the
transition, either current or future plans, or altering the timing
for implementation of parts of the Services if Xxxxxxxx determines
that any part of the transition poses a risk or hazard to Xxxxxxxx'x
or an Eligible Recipient's business interests, (vii) the contingency
or risk mitigation strategies to be employed by Provider in the
event of disruption or delay, (viii) any transition responsibilities
to be performed or transition resources to be provided by Xxxxxxxx
or the Eligible Recipients and (ix) a detailed work plan identifying
the specific transition activities to be performed by individual
Provider Personnel on a daily basis during the Transition Period.
(d) PERFORMANCE. Provider shall perform the Transition Services
described in the Transition Plan in accordance with the Transition
Milestones set forth in the Transition Plan. Provider shall provide
all cooperation and assistance reasonably required or requested by
Xxxxxxxx in connection with Xxxxxxxx'x evaluation or testing of the
deliverables set forth in the Transition Plan. Provider shall
perform the Transition Services so as to avoid or minimize to the
extent possible (i) any material disruption to or material adverse
impact on the business or operations of Xxxxxxxx or the Eligible
Recipients, (ii) any degradation of the Services then
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being received by Xxxxxxxx or the Eligible Recipients, or (iii) any
disruption or interference with the ability of Xxxxxxxx or the
Eligible Recipients to obtain the full benefit of the Services,
except as may be otherwise provided in the Transition Plan. Prior to
undertaking any transition activity, Provider shall discuss with
Xxxxxxxx all known Xxxxxxxx-specific material risks and shall not
proceed with such activity until Xxxxxxxx is reasonably satisfied
with the plans with regard to such risks (provided that, neither
Provider's disclosure of any such risks to Xxxxxxxx, nor Xxxxxxxx'x
acquiescence in Provider's plans, shall operate or be construed as
limiting Provider' responsibilities under this Agreement). Provider
shall identify and resolve, with Xxxxxxxx'x reasonable assistance,
any problems that may impede or delay the timely completion of each
task in the Transition Plan that is Provider's responsibility and
shall use all commercially reasonable efforts to assist Xxxxxxxx
with the resolution of any problems that may impede or delay the
timely completion of each task in the Transition Plan that is
Xxxxxxxx'x responsibility.
(e) REPORTS. Provider shall meet at least weekly with Xxxxxxxx to report
on its progress in performing its responsibilities and meeting the
timetable set forth in the Transition Plan. Provider also shall
provide written reports to Xxxxxxxx at least weekly regarding such
matters, and shall provide oral reports more frequently if
reasonably requested by Xxxxxxxx. Promptly upon receiving any
information indicating that Provider may not perform its
responsibilities or meet the timetable set forth in the Transition
Plan, Provider shall notify Xxxxxxxx in writing of material delays
and shall identify for Xxxxxxxx'x consideration and approval
specific measures to address such delay and mitigate the risks
associated therewith.
(f) FAILURE TO MEET TRANSITION MILESTONES. The Parties acknowledge and
agree that the Transition Plan specifies various Transition
Milestones by which transition activities and/or deliverables are to
be completed. Provider recognizes that its failure to meet the
Transition Milestones may have a material adverse impact on the
business and operations of Xxxxxxxx and the Eligible Recipients and
that the damages resulting from Provider's failure to meet such
Transition Milestones are not capable of precise determination.
Accordingly, if Provider fails to meet a Transition Milestone, then,
in addition to any other remedies available to Xxxxxxxx under this
Agreement, at law, or in equity, Provider shall be subject to the
imposition of the Deliverable Credits specified in SCHEDULE H.1 for
such Transition Milestone, as compensation to Xxxxxxxx and the
Eligible Recipients for their damages and not as a penalty. If
Xxxxxxxx recovers other monetary damages from Provider as a result
of Provider's failure to meet one or more Transition
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Milestones, Provider shall be entitled to set-off against such
damages any Deliverable Credits paid for the failure(s) giving rise
to such recovery. Neither the transition nor the activities and
deliverables associated with individual Transition Milestones shall
be deemed complete until Xxxxxxxx has determined that Provider has
successfully completed them in accordance with the process and
standards identified in the Transition Plan.
(g) TERMINATION FOR CAUSE. Notwithstanding the foregoing, Xxxxxxxx may
terminate this Agreement for cause if (i) Provider fails to comply
with its obligations with respect to the provision of Transition
Services and such failure causes or will cause a material disruption
to or otherwise has or will have a material adverse impact on the
operations or businesses of Xxxxxxxx or the Eligible Recipients,
(ii) Provider materially breaches its obligations with respect to
the provision of Transition Services and fails to cure such breach
within fifteen (15) days after its receipt of notice, (iii) Provider
fails to meet a Transition Milestone and such failure constitutes a
material breach of this Agreement and Provider fails to cure such
breach within fifteen (15) days after its receipt of notice, or (iv)
Provider fails to meet Service Levels applicable during the
Transition Period. In addition, unless otherwise agreed, if Provider
fails to meet the Transition Milestone for the completion of the
transition of all Services to Provider by more than thirty (30)
days, Xxxxxxxx may terminate this Agreement for cause by giving
Provider notice of such fact, such termination immediately effective
as of the termination date set forth in such notice. In all such
events, subject to SECTION 18.3, Xxxxxxxx may recover the damages
suffered by Xxxxxxxx or the Eligible Recipients in connection with
such a termination, provided that, if such termination is based on
Provider's failure to meet a Transition Milestone, Provider shall be
entitled to set-off against such damages any liquidated damages
Provider has paid for the failure to meet such Transition Milestone.
4.3 TRANSFORMATION SERVICES.
(a) TRANSFORMATION ACTIVITIES. Without limiting any of Provider's other
obligations hereunder with respect to technology and business
process evolution, Provider shall perform the Transformation
Services and implement the technology and other changes described in
the Transformation Plan attached to this Agreement as SCHEDULE H.2.
If any services, functions or responsibilities not specifically
described in the Transformation Plan are an inherent, necessary or
customary part of the Transformation Services or are required for
proper performance or provision of the Transformation Services or
the completion of the changes described in the Transformation Plan
in
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accordance with this Agreement, they shall be deemed to be included
within the scope of the Transformation Services to be delivered
without additional charge, as if such services, functions or
responsibilities were specifically described in the Transformation
Plan. Unless otherwise agreed in writing, Xxxxxxxx shall not incur
any charges, fees or expenses payable to Provider in connection with
the Transformation Services, other than those charges, fees and
expenses specified in SCHEDULE J and those incurred by Xxxxxxxx. At
Provider's request or as specified in the Transformation Plan.
Xxxxxxxx shall provide reasonable cooperation to Provider in
connection with its performance of the Transformation Services.
(b) TRANSFORMATION PLAN. The initial Transformation Plan, is attached to
this Agreement as SCHEDULE H.2. Within forty-five (45) days after
the Effective Date, Provider shall prepare and deliver to Xxxxxxxx a
detailed Transformation Plan for Xxxxxxxx'x review, comment and
approval. The proposed detailed Transformation Plan shall describe
in greater detail the specific transformational activities to be
performed by Provider, but, unless otherwise agreed by Xxxxxxxx,
shall be consistent in all respects with the initial Transformation
Plan, including the activities, deliverables, Transformation
Milestones and Deliverable Credits described therein. Provider shall
address and resolve any questions or concerns Xxxxxxxx may have as
to any aspect of the proposed detailed Transformation Plan and
incorporate any modifications, additions or deletions to such
Transformation Plan requested by Xxxxxxxx. If approved by Xxxxxxxx,
in its reasonable discretion, the detailed Transformation Plan shall
be appended to and incorporated in this Agreement as SCHEDULE H.2
and shall supersede and replace the initial Transformation Plan.
(c) CONTENTS OF TRANSFORMATION PLAN. The Transformation Plan shall
identify, among other things, (i) the transformational activities to
be performed by the Provider and the changes in technology and
business processes to be implemented by Provider, (ii) the date(s)
by which each such activity or implementation is to be completed
("TRANSFORMATION MILESTONES"), (iii) a process and set of standards
acceptable to Xxxxxxxx to which Provider will adhere in the
performance of the Transformation Services and that will enable
Xxxxxxxx to determine whether Provider has successfully completed
the Transformation Services and the activities and deliverables
associated with each Transformation Milestone, including measurable
success criteria by Functional Service Area that Provider must meet
before transforming the work any further; (iv) providing a process
for Xxxxxxxx to delay Provider from proceeding with any part of the
Transformation Plan, either current or future
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plans, or altering the timing for implementation of parts of the
Transformation Plan, if Xxxxxxxx determines that any part of the
Transformation Plan poses a material risk or hazard to Xxxxxxxx'x or
an Eligible Recipient's business interests; (v) the contingency or
risk mitigation strategies to be employed by Provider in the event
of disruption or delay, and (vi) any transformational activities to
be performed by Xxxxxxxx or the Eligible Recipients (provided that,
Xxxxxxxx and the Eligible Recipients shall not be obligated to
perform any transformational activities that are not specifically
contemplated by this Agreement and expressly set forth in the
Transformation Plan). If Xxxxxxxx elects to delay any part of the
Transformation Plan pursuant to clause (iv) above, and such delay
results in increased Charges or increased costs for Provider, then
Xxxxxxxx shall pay such increased Charges or increased costs to
Provider; provided, however, that (a) Provider has used commercially
reasonable efforts to mitigate such increased Charges or costs, (b)
Provider has notified Xxxxxxxx in advance of such fact and the need
for such increased Charges or costs, and (c) Xxxxxxxx has approved
in writing of such increased Charges or costs. In addition, Xxxxxxxx
shall not incur any increase in Provider's Charges or costs in such
circumstances to the extent that Xxxxxxxx'x determination is based
on Provider's failure to perform its transformation obligations or
other material obligations under this Agreement.
(d) IMPLEMENTATION PLAN. At least thirty (30) days before the end of
each calendar year, Provider shall deliver to Xxxxxxxx for
Xxxxxxxx'x review, comment and approval a detailed plan for the
implementation of Transformation Services for the succeeding
calendar year. Such implementation plan shall be based on and
consistent with SCHEDULE H.2, and shall identify each Transformation
Plan activity to be performed by Provider Personnel, and the
acceptance testing and review process for the system changes being
implemented. If approved by Xxxxxxxx, in its sole discretion, each
such plan for each calendar year shall become a part of the
Transformation Plan and be incorporated in SCHEDULE H.2.
Notwithstanding the foregoing, following the completion by Provider
of all Transformation Services contemplated by SCHEDULE H.2,
Provider shall no longer be required to prepare and submit such a
plan.
(e) PERFORMANCE. Provider shall perform the Transformation Services and
implement the Transformation Plan in accordance with the timetable
and Transformation Milestones set forth in the Transformation Plan,
and Xxxxxxxx shall reasonably cooperate with Provider to assist
Provider in implementing the Transformation Plan. Provider shall
provide all cooperation and assistance
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reasonably required or requested by Xxxxxxxx in connection with
Xxxxxxxx'x evaluation or testing of the deliverables resulting from
implementation of the Transformation Plan. Provider shall implement
the Transformation Plan in a manner that will not (i) materially
disrupt or have a material adverse impact on the business or
operations of Xxxxxxxx or the Eligible Recipients, (ii) degrade the
Services then being received by them, or (iii) interfere with their
ability to obtain the full benefit of the Services, except as may be
otherwise provided in the Transformation Plan. Prior to undertaking
any transformation activity, Provider shall discuss with Xxxxxxxx
all known Xxxxxxxx-specific material risks and shall not proceed
with such activity until Xxxxxxxx is reasonably satisfied with the
plans with regard to such risks (provided that, neither Provider's
disclosure of any such risks to Xxxxxxxx nor Xxxxxxxx'x acquiescence
in Provider's plans shall operate or be construed as limiting
Provider's responsibilities under this Agreement). Provider shall
identify and resolve, with Xxxxxxxx'x reasonable assistance, any
problems that may impede or delay the timely completion of any phase
of the Transformation Plan.
(f) FAILURE TO MEET TRANSFORMATION MILESTONES.
(i) The Parties acknowledge and agree that the Transformation Plan
specifies various Transformation Milestones by which
transformational activities and/or deliverables are to be
completed. Provider recognizes that its failure to meet the
Transformation Milestones may have a material adverse impact
on the business and operations of Xxxxxxxx and the Eligible
Recipients and that the damages resulting from Provider's
failure to meet such Transformation Milestones are not capable
of precise determination. Accordingly, if Provider fails to
meet a Transformation Milestone, then, in addition to any
other remedies available to Xxxxxxxx under this Agreement, at
law, or in equity, Provider shall be subject to the imposition
of Deliverable Credits specified in SCHEDULE H.2 for such
Transformation Milestone, as compensation for Xxxxxxxx'x
damages and not as a penalty. If Xxxxxxxx recovers other
monetary damages from Provider as a result of Provider's
failure to meet one or more Transformation Milestones,
Provider shall be entitled to set-off against such damages any
Deliverable Credits paid for the failures giving rise to such
recovery.
(ii) Neither the Transformation Services nor the activities and
deliverables associated with individual Transformation
Milestones shall be deemed complete until Xxxxxxxx has
determined that Provider has successfully
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completed them in accordance with the processes and standards
identified in the Transformation Plan.
4.4 TERMINATION ASSISTANCE SERVICES.
(a) AVAILABILITY. As part of the Services, and for the Charges set forth
in SECTION 4.4(b)(8) and 4.4(b)(10) and SCHEDULE J, Provider shall
provide to Xxxxxxxx, the Eligible Recipients or their designee(s)
the Termination Assistance Services described in SECTION 4.4(b) and
SCHEDULE I.
(1) PERIOD OF PROVISION. Provider shall provide such Termination
Assistance Services to Xxxxxxxx and any Eligible Recipients,
or their designee(s) (i) commencing upon notice from Xxxxxxxx
up to six (6) months prior to the expiration of the Term or on
such earlier date as Xxxxxxxx may request and continuing for
up to twelve (12) months following the effective date of the
expiration of the Term (as such Term may be extended pursuant
to SECTION 3.2), (ii) commencing upon any notice of
termination (including notice based upon breach or default by
Xxxxxxxx, breach or default by Provider or termination for
convenience by Xxxxxxxx) of the Term with respect to all or
any part of the Services, and continuing for up to twelve (12)
months following the effective date of such termination of all
or part of the Services, or (iii) commencing upon notice of
termination of all or part of the Services to an Eligible
Recipient no longer Controlled by Xxxxxxxx and continuing for
up to twelve (12) months following the effective date of such
termination; provided however, that if the Agreement is
terminated by Provider for Xxxxxxxx' failure to pay undisputed
charges, or Xxxxxxxx' failure to escrow amounts in accordance
with SECTION 12.4, Xxxxxxxx will be required to pay for
Termination Assistance Services in advance.
(2) EXTENSION OF SERVICES. Xxxxxxxx may elect, upon sixty (60)
days prior notice, to extend the effective date of any
expiration/termination of all or part of the Services, in its
sole discretion, provided that the total of all such
extensions will not exceed one hundred and eighty (180) days
following the originally specified effective date without
Provider's prior written consent. Xxxxxxxx also may elect,
upon sixty (60) days prior notice, to extend the period
following the effective date of any expiration/termination for
the performance of Termination Assistance Services, provided
that the period between the effective date and the completion
of all Termination Assistance Services is not greater than
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eighteen (18) months. In each case, if Xxxxxxxx provides less
than sixty (60) days prior notice of an extension, Provider
shall nonetheless use commercially reasonable efforts to
comply with Xxxxxxxx'x request and provide the requested
Services and/or Termination Assistance Services.
(3) FIRM COMMITMENT. Provider shall provide Termination Assistance
Services to Xxxxxxxx and any Eligible Recipients, or their
designee(s), regardless of the reason for the expiration or
termination of the Term; provided, if this Agreement is
terminated by Provider under SECTION 20.1(b) for failure to
pay undisputed amounts or for failure to escrow amounts in
accordance with SECTION 12.4, Provider may require payment by
Xxxxxxxx in advance for Termination Assistance Services to be
provided or performed under this SECTION 4.4. At Xxxxxxxx'x
request, Provider shall provide Termination Assistance
Services directly to an Eligible Recipient or an Entity
acquiring Control of an Eligible Recipient; provided that,
unless otherwise agreed by the Parties, all such Termination
Assistance Services shall be performed subject to and in
accordance with the terms and conditions of this Agreement.
(4) PERFORMANCE. To the extent Xxxxxxxx requests Termination
Assistance Services, such Termination Assistance Services
shall be provided subject to and in accordance with the terms
and conditions of this Agreement. Provider shall perform the
Termination Assistance Services with at least the same degree
of accuracy, quality, completeness, timeliness, responsiveness
and resource efficiency as it provided and was required to
provide the same or similar Services during the Term. The
quality and level of performance of the Termination Assistance
Services provided by Provider following the expiration or
termination of the Term as to all or part of the Services or
Provider's receipt of a notice of termination or non-renewal
shall continue to meet or exceed the Service Levels and shall
not be degraded or deficient in any respect. Accordingly,
Service Level Credits may still be earned for failure to meet
Service Levels during the period Termination Assistance
Services are provided. Provider Personnel (including all Key
Provider Personnel) reasonably considered by Xxxxxxxx to be
critical to the performance of the Services and Termination
Assistance Services shall be retained on the Xxxxxxxx account
through the completion of all relevant Termination Assistance
Services. Provider shall use commercially reasonable efforts
perform the Termination Assistance Services using personnel
dedicated to Xxxxxxxx'x account, at no additional charge to
Xxxxxxxx and without impacting the provision of or the cost to
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render the Services. To the extent that Provider is not able
to perform Termination Assistance using personnel dedicated to
the account without impacting the provision of or the cost to
render the Services, Xxxxxxxx shall pay Provider for the
additional Provider resources required to perform such
Termination Assistance Services using rates that are
comparable to the rates for the Services provided under this
Agreement; provided, however, that (a) Provider has used
commercially reasonable efforts to mitigate such increased
costs, (b) Provider has notified Xxxxxxxx in advance of such
fact and the need for such additional costs, and (c) Xxxxxxxx
has approved in writing of such additional costs.
(b) SCOPE OF TERMINATION ASSISTANCE SERVICE. As part of the Termination
Assistance Services, Provider will timely transfer the control and
responsibility for all Services previously performed by or for
Provider to Xxxxxxxx, the Eligible Recipients and/or their
designee(s) by the execution of any documents reasonably necessary
to effect such transfers. Additionally, Provider shall provide any
and all reasonable assistance requested by Xxxxxxxx to allow, among
other things:
- the Systems and processes associated with the Services to
operate efficiently;
- the Services to continue without interruption or adverse
effect; and
- the orderly transfer of the Services to Xxxxxxxx, the Eligible
Recipients and/or their designee(s).
The Termination Assistance Services shall include, as requested by
Xxxxxxxx, the Services, functions and responsibilities set forth on
SCHEDULE I. In addition, in connection with such termination or
expiration, Provider will provide the following assistance and
Services at Xxxxxxxx'x direction:
(1) GENERAL SUPPORT. Provider shall (i) assist Xxxxxxxx, an
Eligible Recipient, or their designee(s) in developing a
written transition plan for the transition of the Services to
Xxxxxxxx, an Eligible Recipient, or their designee(s), which
plan shall include (as requested by Xxxxxxxx) capacity
planning, facilities planning, systems planning, human
resources planning, telecommunications planning and other
planning necessary to effect the transition, (ii) perform
programming and consulting services as requested to assist in
implementing the transition plan, (iii) train personnel
designated by Xxxxxxxx, an Eligible Recipient, or their
designee(s) in the
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use of any business processes or associated Equipment,
Software, Systems, Materials or tools used in connection with
the provision of the Services, (iv) catalog all business
processes, Software, Xxxxxxxx Data, Equipment, Materials,
Third Party Contracts and tools used to provide the Services,
(v) provide machine readable and printed listings and
associated documentation for source code for Software owned by
Xxxxxxxx and source code to which Xxxxxxxx is entitled under
this Agreement and assist in its re-configuration, (vi)
analyze and report on the space required for the Xxxxxxxx Data
and the Software needed to provide the Services, (vii) assist
in the execution of a parallel operation, data migration and
testing process until the successful completion of the
transition to Xxxxxxxx, an Eligible Recipient, or their
designee(s), (viii) create and provide copies of the Xxxxxxxx
Data in the format and on the media reasonably requested by
Xxxxxxxx, (ix) provide a complete and up-to-date, electronic
copy of the Policy and Procedures Manual in the format and on
the media reasonably requested by Xxxxxxxx, and (x) provide
other technical assistance as requested by Xxxxxxxx, an
Eligible Recipient or their designee(s).
(2) HIRING.
(i) Xxxxxxxx, the Eligible Recipients and/or their
designee(s) shall be permitted to undertake, without
interference from Provider, Provider Subcontractors
(subject to SECTION 4.4(b)(2)(ii) below) or Provider
Affiliates (including counter-offers), to hire,
effective after the later of the expiration or
termination of the Term or completion of any Termination
Assistance Services requested under SECTION 4.4(b)(8),
any Provider Personnel primarily assigned to the
performance of Services within the 12-month period prior
to the expiration or termination date. Provider shall
waive, and shall cause its Subcontractors (as
contemplated in SECTION 4.4(b)(2)(ii) below) and
Affiliates to waive, their rights, if any, under
contracts with such personnel restricting the ability of
such personnel to be recruited or hired by Xxxxxxxx, the
Eligible Recipients and/or their designee(s). Xxxxxxxx,
the Eligible Recipients and/or their designee(s) shall
have reasonable access to such Provider Personnel for
interviews, evaluations and recruitment. Xxxxxxxx shall
endeavor to conduct the above-described hiring activity
in a manner that is not unnecessarily disruptive of the
performance by Provider of its obligations under this
Agreement.
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(ii) With respect to Subcontractors, Provider shall use all
commercially reasonable efforts to (A) obtain for
Xxxxxxxx, the Eligible Recipients and their designee(s)
the rights specified in this SECTION 4.4(b)(2)(ii), and
(B) ensure that the such rights are not subject to
subsequent Subcontractor approval or the payment by
Xxxxxxxx, an Eligible Recipient or their designee(s) of
any fees. If Provider is unable to obtain any such
rights with respect to a Subcontractor, it shall notify
Xxxxxxxx in advance and shall not use such Subcontractor
without Xxxxxxxx'x approval (and absent such approval,
Provider's use of any such Subcontractor shall obligate
Provider to obtain or arrange, at no additional cost to
Xxxxxxxx, the rights specified in this SECTION
4.4(b)(2)(i), for Xxxxxxxx, the Eligible Recipients and
their designee(s) upon expiration or termination).
(3) SOFTWARE. As provided in SECTION 14.6, and subject to SECTION
6.4(c), Provider shall provide, and hereby grants to Xxxxxxxx
(with a right to sublicense to the Eligible Recipients and/or
Xxxxxxxx'x designee), license, sublicense and/or other rights
to certain Software and other Materials used by Provider,
Provider Affiliates or Subcontractors in performing the
Services to the extent Xxxxxxxx is entitled to such license,
sublicense and/or other rights under SECTION 14.6, including,
where expressly provided, a copy of all source code, object
code and documentation related to such Software or other
Materials in Provider's possession or control in a form
reasonably requested by Xxxxxxxx.
(4) EQUIPMENT. Subject to SECTION 6.4(c), Xxxxxxxx, the Eligible
Recipients and/or their designee(s) shall have the right (but
not the obligation) to purchase, or assume the lease for, any
Equipment (including the Acquired Assets) owned or leased by
Provider that is primarily used by Provider, Provider
Subcontractors or Provider Affiliates to perform the Services.
Such Equipment shall be transferred in good working condition,
reasonable wear and tear excepted, as of the expiration or
termination date or the completion of any Services requiring
such Equipment requested by Xxxxxxxx under SECTION 4.4(b)(8),
whichever is later. Provider shall maintain such Equipment
through the date of transfer so as to be eligible for the
applicable manufacturer's maintenance program at no additional
charge to Xxxxxxxx. In the case of Provider-owned equipment,
Provider shall grant to Xxxxxxxx, the Eligible Recipients
and/or their designee(s) a warranty of title and a warranty
that such Equipment is free and clear of
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all liens and encumbrances. Such conveyance by Provider to
Xxxxxxxx, the Eligible Recipients and/or their designee(s)
shall be at fair market value. At Xxxxxxxx'x request, the
Parties shall negotiate in good faith and agree upon the form
and structure of the purchase. In the case of leased
Equipment, Provider shall (i) represent and warrant that the
lease is not in default, (ii) represent and warrant that all
payments thereunder have been made through the date of
transfer, and (iii) notify Xxxxxxxx of any lessor defaults of
which it is aware at the time.
(5) XXXXXXXX FACILITIES, EQUIPMENT AND SOFTWARE. Provider shall
vacate the Xxxxxxxx Facilities and return to Xxxxxxxx, if not
previously returned, any Xxxxxxxx owned or leased Equipment,
Xxxxxxxx Owned Software and Xxxxxxxx licensed Software, in
condition at least as good as the condition when made
available to Provider, ordinary wear and tear excepted. Such
Xxxxxxxx Facilities, Equipment and Software shall be vacated
and returned at the expiration or termination date or the
completion of any Services requiring such Xxxxxxxx Facilities,
Equipment and Software requested by Xxxxxxxx under SECTION
4.4(b)(8), whichever is later.
(6) PROVIDER SUBCONTRACTS AND THIRD PARTY CONTRACTS. Provider
shall inform Xxxxxxxx of all subcontracts (except Shared
Subcontractors) or Third Party Contracts primarily used by
Provider or Provider Subcontractors to perform the Services.
Subject to SECTIONS 6.4(c), Provider shall, at Xxxxxxxx'x
request, cause any such Subcontractors or third party
contractors to either (as mutually agreed by the Parties) (i)
permit Xxxxxxxx, the Eligible Recipients and/or their
designee(s) to assume prospectively any or all such contracts
or (ii) use commercially reasonable efforts to cause such
third party contractors to enter into new contracts with
Xxxxxxxx or its designees on substantially the same terms and
conditions, including price. In the event of assignment to
Xxxxxxxx or its designee, Provider shall so assign the
designated subcontracts and Third Party Contracts to Xxxxxxxx,
the Eligible Recipients and/or their designee(s) as of the
expiration or termination date or the completion of any
Termination Assistance Services requiring such subcontracts or
Third Party Contracts requested by Xxxxxxxx under SECTION
4.4(b)(8), whichever is later. There shall be no charge or fee
imposed on Xxxxxxxx, the Eligible Recipients and/or their
designee(s) by Provider or its Subcontractors or third party
contractors for such assignment. Provider shall (i) represent
and warrant that it is not in default under such subcontracts
and Third Party Contracts, (ii) represent and warrant that all
payments thereunder
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through the date of assignment are current, and (iii) notify
Xxxxxxxx of any Subcontractor's or third party contractor's
default with respect to such subcontracts and Third Party
Contracts of which it is aware at the time. Provider shall
retain the right to utilize any such Subcontractor or third
party services in connection with the performance of services
for other Provider customers.
(7) OTHER SUBCONTRACTS AND THIRD PARTY CONTRACTS. In addition to
its obligations under SECTION 4.4(b)(6), Provider shall use
commercially reasonable efforts to make available to Xxxxxxxx,
the Eligible Recipients and/or their designee(s), pursuant to
reasonable terms and conditions, any Subcontractor or third
party services then being utilized by Provider in the
performance of the Services. Provider shall retain the right
to utilize any such Subcontractor or third party services in
connection with the performance of services for any other
Provider customer. Xxxxxxxx and the Eligible Recipients shall
retain the right to contract directly with any Subcontractor
or third party previously utilized by Provider to perform any
Services or to assume Provider's contract with such
Subcontractor or third party to the extent provided in SECTION
4.4(b)(6).
(8) EXTENSION OF SERVICES. As part of the Termination Assistance
Services, for a period of twelve (12) months following the
expiration or termination date, Provider shall provide to the
Eligible Recipient(s), under the terms and conditions of this
Agreement, at Xxxxxxxx'x request, any or all of the Services
being performed by Provider prior to the expiration or
termination date, including those Services described in
SECTION 4.1 and SCHEDULE E; provided that Xxxxxxxx may extend
the period for the provision of such Services for up to six
(6) additional months in accordance with SECTION 4.4(a)(2). To
the extent Xxxxxxxx requests such Services, Xxxxxxxx will pay
Provider the Charges specified in SCHEDULE J that Xxxxxxxx
would have been obligated to pay Provider for such Services if
this Agreement had not yet expired or been terminated. To the
extent Xxxxxxxx requests a portion (but not all) of the
Services included in a particular Charge, the amount to be
paid by Xxxxxxxx will be equitably adjusted in proportion to
the portion of the Services included in the applicable Charge
that Provider will not be providing or performing.
(9) RATES AND CHARGES. Except as provided in SECTION 4.4(b)(8) and
(10), if Xxxxxxxx requests that Provider provide or perform
Termination Assistance Services in accordance with this
Agreement, Xxxxxxxx shall
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pay Provider the rates and charges specified in SCHEDULE J for
the additional Provider Personnel or resources required to
perform such Termination Assistance Services. To the extent
rates and charges for such Provider Personnel or resources are
not specified in SCHEDULE J, Xxxxxxxx shall pay Provider a
negotiated fee which shall be no less favorable to Xxxxxxxx
than the rates provided in SCHEDULE J or Provider's then
commercially available rates. To the extent the Termination
Assistance Services requested by Xxxxxxxx can be provided by
Provider using personnel and resources already assigned to
Xxxxxxxx, there will be no additional charge to Xxxxxxxx for
such Termination Assistance Services. If the Termination
Assistance Services requested by Xxxxxxxx cannot be provided
by Provider using personnel and resources then assigned to
Williams, Williams, in its sole discretion, may forego or
delay any work activities or temporarily or permanently adjust
the work to be performed by Provider, the schedules associated
therewith or the Service Levels to permit the performance of
such Termination Assistance Services using such personnel or
resources.
(10) PROPRIETARY COMMUNICATIONS NETWORK. If Provider uses a
proprietary communications network to provide Services to
Xxxxxxxx or the Eligible Recipients, then for a period of no
more than eighteen (18) months following the expiration or
termination date, Xxxxxxxx may request that Provider continue
to provide such proprietary communications network and other
Network Services at the rates, and subject to the terms and
conditions, set forth in this Agreement.
(c) RESOURCES. Provider shall ensure that, at all times during the Term,
on thirty (30) days notice, it is able to deploy all necessary
resources to perform Termination Assistance in accordance with this
SECTION 4.4.
(d) SURVIVAL OF TERMS. This SECTION 4.4 shall survive
termination/expiration of the Term.
(e) FAILURE TO PROVIDE TERMINATION ASSISTANCE SERVICES. This provision
shall be as set forth in SECTION 4.4(e) of SCHEDULE S.
4.5 USE OF THIRD PARTIES.
(a) RIGHT OF USE. Nothing in this Agreement shall prevent Xxxxxxxx or
any Eligible Recipient from obtaining from third parties (each, a
"XXXXXXXX THIRD PARTY
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CONTRACTOR"), or providing to itself, any or all of the Services or
any other services. Nor shall anything in this Agreement be
construed or interpreted as limiting Xxxxxxxx'x right or ability
during the Term to add or delete Eligible Recipients or to increase
or decrease its demand for Services. To the extent Xxxxxxxx or an
Eligible Recipient obtains from Xxxxxxxx Third Party Contractors, or
provides to itself, any of the Services, the amount to be paid to
Provider by Xxxxxxxx will be equitably adjusted downward in
accordance with SCHEDULE J and, subject to the minimum revenue
commitments set forth in SCHEDULE J, in proportion to the portion of
the Services that Provider will not be providing or performing.
Similarly, to the extent Xxxxxxxx adds or deletes Eligible
Recipients or increases or decreases its demand for Services, the
amount to be paid to Provider by Xxxxxxxx will be adjusted in
accordance with SCHEDULE J and the rates specified therein. Nothing
in this SECTION 4.5(A) shall be construed to limit or change any
minimum revenue commitment set forth in SCHEDULE J.
(b) PROVIDER COOPERATION.
(i) Provider shall fully cooperate with and work in good faith
with Xxxxxxxx or Xxxxxxxx Third Party Contractors as described
in SCHEDULE E or requested by Xxxxxxxx and at no additional
charge to Xxxxxxxx. Such cooperation may include: (A) timely
providing access to any facilities being used to provide the
Services, as necessary for Xxxxxxxx personnel or Xxxxxxxx
Third Party Contractors to perform the work assigned to them
(including, installation, maintenance or management of third
party software and equipment to provide the services to
Xxxxxxxx or the Eligible Recipients); (B) timely providing
reasonable electronic and physical access to the business
processes and associated Equipment, Materials and/or Systems
to the extent necessary and appropriate for Xxxxxxxx personnel
or Xxxxxxxx Third Party Contractors to perform the work
assigned to them; (C) timely providing written requirements,
standards, policies or other documentation for the business
processes and associated Equipment, Software, Materials or
Systems procured, operated, supported or used by Provider in
connection with the Services; (D) ensuring that there is no
degradation in the provision of the Services caused by the
adjustments made by Provider in transferring Services to a
third party, Xxxxxxxx or an Eligible Recipient; or (E) any
other cooperation or assistance reasonably necessary for
Xxxxxxxx personnel or Xxxxxxxx Third Party Contractors to
perform the work in question. Xxxxxxxx personnel and Xxxxxxxx
Third Party Contractors shall comply with Provider's
reasonable security and confidentiality requirements, and
shall, to the
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extent performing work on Software, Equipment or Systems for
which Provider has operational responsibility, comply with
Provider's reasonable standards, methodologies, and
procedures.
(c) NOTICE BY PROVIDER. Provider shall immediately notify Xxxxxxxx when
it becomes aware that an act or omission of a Xxxxxxxx Third Party
Contractor will cause, or has caused, a problem or delay in
providing the Services, and shall use commercially reasonable
efforts to work with Xxxxxxxx, the Eligible Recipients and the
Xxxxxxxx Third Party Contractor to prevent or circumvent such
problem or delay. Provider shall cooperate with Xxxxxxxx, the
Eligible Recipients and Xxxxxxxx Third Party Contractors to resolve
differences and conflicts arising between the Services and other
activities undertaken by Xxxxxxxx, the Eligible Recipients or
Xxxxxxxx Third Party Contractors. Any notification provided by
Provider in accordance with this SECTION 4.5(C) shall not excuse
Provider from the performance of any of its obligations under this
Agreement.
4.6 ACQUISITION AND DIVESTITURE SERVICES. Provider shall provide the following
Services (which, if applicable, may in part include New Services if the
required services satisfy such definition) related to Entities acquired or
divested by Xxxxxxxx.
(a) ACQUISITION SUPPORT. With respect to a potential acquisition by
Xxxxxxxx, upon Xxxxxxxx'x request, Provider will provide acquisition
support (including assessments of the current technology
environments to be acquired, potential integration approaches, and
the potential net economic impact of the acquisition in connection
with the Services) as reasonably necessary to assist Xxxxxxxx'x
assessment of the portion of the acquisition to which the Services
will relate. Such support will be provided within the timeframe
reasonably requested by Xxxxxxxx or as required by the timing of the
transaction.
(b) MIGRATION OF SYSTEMS AND BUSINESS PROCESSES. As requested by
Xxxxxxxx and as they relate to the Services, Provider will migrate
the business processes, systems, applications and data of the
acquired Entity to the Xxxxxxxx environment.
(c) ON-SITE SUPPORT. As requested by Xxxxxxxx, Provider will provide
personnel to staff vacancies and to provide management for the
information technology functions needed to support an acquisition,
including on-site support at the location of the acquired Entity.
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(d) DIVESTITURES. From time to time, Xxxxxxxx may divest business units.
In such cases, Provider will provide transition support services to
Xxxxxxxx, the divested business unit or the acquiring Entity.
Provider shall provide the services described in SECTION 11.1(E)
with respect to such divestitures. Any revenues, resources or other
similar usage measures in connection with services that are the same
as, or similar to, the Services and that are obtained by any
divested Xxxxxxxx business unit under a separate agreement between
such business unit and Provider, shall count toward the satisfaction
of any revenue, resource or other similar usage requirements under
this Agreement.
5. REQUIRED CONSENTS
5.1 PROVIDER RESPONSIBILITY.
At no additional cost to Xxxxxxxx, Provider shall undertake all
administrative activities necessary to obtain all Required Consents. At
Provider's request, Xxxxxxxx will cooperate with Provider in obtaining the
Required Consents by executing appropriate Xxxxxxxx approved written
communications and other documents prepared or provided by Provider. With
Xxxxxxxx'x approval, Provider shall exercise for the benefit of Xxxxxxxx
and the Eligible Recipients any rights Provider has to utilize or transfer
license rights or other applicable rights under Provider's existing third
party licenses, leases or contracts, and the Parties shall cooperate in
minimizing or eliminating any costs associated therewith.
5.2 FINANCIAL RESPONSIBILITY.
Provider shall pay all transfer, re-licensing or termination fees or
expenses associated with obtaining any of the Required Consents described
in clauses (iii), (iv) and (v) (collectively, the "PROVIDER REQUIRED
CONSENTS") of the definition of Required Consents set forth in SECTION
2.1. For all other Required Consents that are not Provider Required
Consents, Provider shall pay up to two hundred fifty thousand dollars
($250,000) of such transfer, re-licensing or termination fees or expenses
associated with such Required Consents. For any amounts payable in excess
of such $250,000 for Required Consents that are not Provider Required
Consents, the Parties shall equally share the financial responsibility for
any transfer, re-licensing or termination fees or expenses associated with
obtaining any such Required Consents or terminating any licenses or
agreements as to which Provider is unable to obtain such Required
Consents; provided, however, notwithstanding the foregoing, Xxxxxxxx shall
be responsible for any fees or expenses for Required Consents for Xxxxxxxx
Facilities.
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5.3 CONTINGENT ARRANGEMENTS.
If, despite using all commercially reasonable efforts, Provider is unable
to obtain a Required Consent, then, unless and until such Required Consent
is obtained, Provider shall use commercially reasonable efforts to
determine and adopt, subject to Xxxxxxxx'x prior approval, such
alternative approaches as are necessary and sufficient to provide the
Services without such Required Consent. If such alternative approaches are
required for a period longer than ninety (90) days following the
Commencement Date, the Parties will equitably adjust the terms and reduce
the prices specified in this Agreement to reflect any additional costs
being incurred by Xxxxxxxx and any Services not being received by Xxxxxxxx
and the Eligible Recipients. In addition, if Provider fails to obtain
Required Consent within ninety (90) days of the Commencement Date and such
failure has a material adverse impact on the use or enjoyment of the
Services by Xxxxxxxx or the Eligible Recipients, Xxxxxxxx may terminate
this Agreement or any affected portions thereof without any Termination
Charges. Wind Down Charges shall be payable if and only if and only to the
extent indicated as payable in SCHEDULE N. Except as otherwise expressly
provided herein, the failure to obtain any Required Consent shall not
relieve Provider of its obligations under this Agreement and Provider
shall not be entitled to any additional compensation or reimbursement
amounts in connection with obtaining or failing to obtain any Required
Consent or implementing any alternative approach.
6. FACILITIES, SOFTWARE, EQUIPMENT, CONTRACTS AND ASSETS ASSOCIATED WITH THE
PROVISION OF SERVICES
6.1 SERVICE FACILITIES.
(a) SERVICE FACILITIES. The Services shall be provided at or from (i)
the Xxxxxxxx Facilities described on SCHEDULE O.1, (ii) the Provider
Facilities described on SCHEDULE O.2, or (iii) any other service
location approved by Provider and Xxxxxxxx, in each case, for the
particular Services to be performed at the particular facilities, as
described in SCHEDULES O.1 and O.2. Provider shall obtain Xxxxxxxx'x
prior approval for any proposed relocation by Provider, its
Affiliates or Subcontractors of the provision of a Service to a new
or different Provider Facility. Xxxxxxxx acknowledges and has
approved the Provider Facilities set forth on SCHEDULE O.2 as of the
Effective Date for the provision of the Services and scope thereof
described therein. Provider shall be financially responsible for all
additional costs, taxes or expenses related to or resulting from any
Provider-initiated relocation to a new or different Provider
Facility, including any costs or expenses incurred or experienced by
Xxxxxxxx or any Eligible Recipient as a result of such relocation.
If (y) events or circumstances affecting a Provider-
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provided location may have a negative impact on Provider's ability
to provide the Services, or Xxxxxxxx'x ability to provide the
Services for itself or through any Xxxxxxxx Third Party Contractor
(including Xxxxxxxx'x ability to exercise all of its rights in
connection with Termination Assistance Services or termination of
this Agreement, or any portion thereof), or (z) with respect to a
Provider-provided location, Xxxxxxxx has a substantial business or
economic justification for requiring that Services be moved from
that Provider-provided location, then, in each case, upon written
request by Xxxxxxxx, Provider shall transition provision of the
Services from the affected location to another Provider-provided
location, as approved by Xxxxxxxx. If Xxxxxxxx requires Provider to
relocate from a Provider-provided location, Provider shall do so;
provided, that Xxxxxxxx shall pay Provider for its reasonable costs
and expenses in relocation and Provider's Charges for the affected
Services may be equitably adjusted (up or down) to reflect the fact
that the Services are provided from a new service location, but only
to the extent that there is a demonstrable and material affect on
Provider's costs and expenses to provide the affected Services from
the new location versus the prior location. In addition, Provider
must us commercially reasonable efforts to minimize, and where
possible avoid, any increased costs or expenses to Xxxxxxxx pursuant
to this SECTION 6.1(A), including choosing an alternative location
that does not result in increased costs and expenses.
(b) XXXXXXXX FACILITIES. Xxxxxxxx shall provide Provider with the use of
and access to the Xxxxxxxx Facilities (or equivalent space)
described in SCHEDULE O.1 (for the periods specified in a space plan
to be developed and mutually agreed to by the Parties during the
Transition Period) solely as necessary for Provider to perform its
obligations under this Agreement at no cost to Provider. Except as
set forth in a SCHEDULE O.1 or as otherwise agreed to by the
Parties, all Xxxxxxxx owned or leased assets provided for the use of
Provider under this Agreement shall remain in Xxxxxxxx Facilities.
In addition, all improvements or modifications to Xxxxxxxx
Facilities requested by Provider shall be (i) subject to review and
approval in advance by Xxxxxxxx, (ii) in strict compliance with
Xxxxxxxx'x then-current policies, standards, rules and procedures,
and (iii) performed by and through Xxxxxxxx at Provider's expense.
Xxxxxxxx shall own all improvements or modifications to Xxxxxxxx
Facilities. Provider acknowledges and agrees that the facilities to
be provided by Xxxxxxxx are sufficient for performing the Services
and for satisfying Provider's responsibilities under this Agreement.
THE Xxxxxxxx FACILITIES ARE PROVIDED BY Xxxxxxxx TO Provider ON AN
AS-IS, WHERE-IS BASIS. Xxxxxxxx EXPRESSLY DISCLAIMS ANY WARRANTIES,
EXPRESS OR IMPLIED, AS TO THE Xxxxxxxx FACILITIES, OR THEIR
CONDITION OR SUITABILITY FOR USE BY
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PROVIDER.
(c) FURNITURE, FIXTURES AND EQUIPMENT. Xxxxxxxx shall provide office
space and office furniture at the Xxxxxxxx Facilities specified in
SCHEDULE O.1 for the number of Provider Personnel and for such
periods specified in a space plan to be developed and mutually
agreed to by the Parties during the Transition Period. The office
space and office furniture provided by Xxxxxxxx for the use of
Provider Personnel will be generally comparable in quality to the
office space and office furniture provided to the then-standard
office space and office furniture provided to similarly situated
Xxxxxxxx employees. Provider shall be financially responsible for
providing all other office space, office furniture and fixtures
needed by Provider or Provider Personnel (including Transitioned
Employees) to provide the Services, and for all upgrades,
replacements and additions to such office furniture or fixtures;
provided that such office furniture and fixtures must be approved in
advance by Xxxxxxxx and meet Xxxxxxxx'x then-current standards; and
provided further that Provider shall use commercially reasonable
efforts to purchase and use surplus Xxxxxxxx furniture and fixtures
to the extent available. Provider Personnel using the office
facilities provided by Xxxxxxxx will be accorded reasonable access
to the communications wiring in such facilities (including fiber,
copper and wall jacks, subject to SECTION 6.1(d)) and the use of
certain shared office equipment and services, such as photocopiers,
local and long distance telephone service for Xxxxxxxx-related
calls, telephone handsets, mail service, office support service
(e.g., janitorial), heat, light, and air conditioning; provided that
such access and usage shall be solely for and in connection with the
provision of Services by such Provider Personnel; and provided
further that Provider shall reimburse Xxxxxxxx for the additional
incremental costs incurred by Xxxxxxxx or the Eligible Recipients if
and to the extent Provider's technology solution, service delivery
model and/or inefficiency cause its usage or consumption of such
resources to exceed historical levels. Provider shall be responsible
for providing all other office related equipment and services needed
by Provider or Provider Personnel at such Xxxxxxxx Facilities to
provide the Services, and for upgrades, improvements, replacements
and additions to such equipment or services.
(d) PROVIDER'S RESPONSIBILITIES REGARDING XXXXXXXX'X NETWORK. To the
extent any Equipment provided or used by Provider or Provider
Personnel is connected directly to the network(s) of Xxxxxxxx or any
Eligible Recipient, such Equipment shall be (i) subject to review
and approval in advance by Xxxxxxxx, (ii) in strict compliance with
Xxxxxxxx'x
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then-current security policies, architectures, standards, rules and
procedures, and (iii) in strict compliance with Xxxxxxxx'x
then-current hardware and software specifications, provided, in the
cases of clauses (ii) and (iii) as such policies, standards, rules,
procedures and specifications are communicated to Provider in
writing (through the Xxxxxxxx Virtual Policy Center website or
otherwise) and documented or referenced in the Policies and
Procedures Manual. Provider shall not install or permit the
installation of any other software on such Equipment without
Xxxxxxxx'x prior approval.
(e) PROVIDER'S RESPONSIBILITIES. Except as provided in SECTIONS 6.1(a),
(b) and (c) and SECTION 6.4, Provider shall be responsible for
providing all furniture, fixtures, Equipment, space and other
facilities required to perform the Services and all upgrades,
improvements, replacements and additions to such furniture,
fixtures, Equipment, space and facilities. Without limiting the
foregoing, Provider shall (i) provide all maintenance, site
management, site administration and similar services for the
Provider Facilities, and (ii) provide uninterrupted power supply
services for the Provider Facilities.
(f) PHYSICAL SECURITY AT XXXXXXXX FACILITIES. Xxxxxxxx is responsible
for the physical security of the Xxxxxxxx Facilities; provided, that
Provider shall be responsible for the safety and physical access and
control of the areas that Provider is using in performing the
Services and Provider shall not permit any person to have access to,
or control of, any such area unless such access or control is
permitted in accordance with control procedures approved by Xxxxxxxx
or any higher standard agreed to by Xxxxxxxx and Provider. Provider
shall be solely responsible for compliance by Provider Personnel
with such control procedures, including obtaining advance approval
to the extent required.
(g) STANDARDS, REQUIREMENTS AND PROCEDURES AT XXXXXXXX FACILITIES.
Except as provided in SECTION 6.1(f), Provider shall adhere to and
enforce, and cause Provider Personnel to adhere to and enforce, the
operational, safety and security standards, requirements and
procedures described in the applicable lease and/or then in effect
at the Xxxxxxxx Facilities, as such standards, requirements and
procedures may be modified by Xxxxxxxx from time to time. Provider
shall regularly advise Xxxxxxxx of other operational, safety and
security practices, procedures and safeguards in effect at the
facilities of other Provider customers, where those practices,
procedures and safeguards are of a higher standard than those
contemplated in this Agreement.
(h) EMPLOYEE SERVICES. Subject to applicable security requirements,
Xxxxxxxx will permit Provider Personnel to use certain employee
facilities (e.g., designated
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parking facilities, cafeteria, and common facilities) at the
Xxxxxxxx Facilities that are generally made available to the
employees and contractors of Xxxxxxxx or the Eligible Recipients.
The employee facilities in question and the extent of Provider
Personnel's permitted use shall be specified in writing by Xxxxxxxx
and shall be subject to modification without advance notice in
Xxxxxxxx'x sole discretion. Provider Personnel will not be permitted
to use employee facilities designated by Xxxxxxxx for the exclusive
use of certain Xxxxxxxx or Eligible Recipient employees and will not
be entitled to the provision or reimbursement of paid parking.
(i) USE OF XXXXXXXX FACILITIES.
(i) Unless Provider obtains Xxxxxxxx'x prior written agreement,
which Xxxxxxxx may withhold in its sole discretion, Provider
shall use the Xxxxxxxx Facilities, and the Equipment and
Software located therein, only to provide the Services to
Xxxxxxxx and the Eligible Recipients.
(ii) Xxxxxxxx reserves the right to relocate any Xxxxxxxx Facility
from which the Services are then being provided by Provider to
another geographic location; provided that, in such event,
Xxxxxxxx will provide Provider with comparable office space in
the new geographic location. In such event, Xxxxxxxx shall pay
the applicable labor rate(s) for additional personnel,
reasonably required by Provider and for the incremental
Out-of-Pocket Expenses reasonably incurred by Provider in
physically relocating to such new geographic location;
provided that such relocation is not expressly contemplated in
this Agreement, and that Provider notifies Xxxxxxxx of such
additional required personnel and incremental Out-of-Pocket
Expenses, obtains Xxxxxxxx'x approval prior to using such
personnel or incurring such expenses, and uses commercially
reasonable efforts to minimize such personnel and expenses. In
addition, if the space provided in the new geographic location
is more than fifty (50) miles from the Xxxxxxxx Facility
previously occupied, Xxxxxxxx shall reimburse Provider for (A)
the relocation payments made to Key Provider Personnel
selected and approved for relocation, and (B) the severance
benefits provided to impacted Provider Personnel who are not
relocated and cannot be redeployed within a reasonable period
of time; provided that the Key Provider Personnel, if any, to
be offered relocation are approved in advance by Xxxxxxxx,
such relocation payments and severance benefits are made in
accordance with Provider's then current relocation and
severance policies, Provider notifies Xxxxxxxx in advance of
such payment and
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benefits and obtains Xxxxxxxx'x approval prior to incurring
such expenses, and Provider uses commercially reasonable
efforts to redeploy impacted Provider Personnel and otherwise
minimize the expenses to be reimbursed by Xxxxxxxx.
(iii) Xxxxxxxx also reserves the right to direct Provider to cease
using all or part of the space in any Xxxxxxxx Facility from
which the Services are then being provided by Provider and to
thereafter use such space for its own purposes. In such event,
Xxxxxxxx shall pay the incremental Out-of-Pocket Expenses
reasonably incurred by Provider in leasing required substitute
new space; provided that such relocation direction is not
expressly contemplated in this Agreement and that Provider
notifies Xxxxxxxx of such additional required incremental
Out-of-Pocket Expenses, obtains Xxxxxxxx'x approval prior to
or incurring such expenses; and uses commercially reasonable
efforts to minimize such expenses.
(j) CONDITIONS FOR RETURN. When the Xxxxxxxx Facilities are no longer to
be used by Provider as contemplated by SECTION 6.1 or are otherwise
no longer required for performance of the Services, Provider shall
notify Xxxxxxxx as soon as practicable and shall vacate and return
such Xxxxxxxx Facilities (including any improvements to such
facilities made by or at the request of Provider) to Xxxxxxxx in
substantially the same condition as when such facilities were first
provided to Provider, subject to reasonable wear and tear.
(k) NO VIOLATION OF LAWS. Provider shall (i) treat and use the Xxxxxxxx
Facilities in a reasonable manner, and (ii) ensure that neither
Provider nor any of its Subcontractors commits, and use all
commercially reasonable efforts to ensure that none of their
business visitors or invitees commits, any act in violation of any
Laws in such Provider occupied Xxxxxxxx Facility or any act in
violation of Xxxxxxxx'x insurance policies or in breach of
Xxxxxxxx'x obligations under the applicable real estate leases in
such Provider occupied Xxxxxxxx Facilities (in each case, to the
extent Provider has received notice of such insurance policies or
real estate leases or should reasonably be expected to know of such
obligations or limitations).
(l) COST OF EMPLOYEE MOVES. Prior to the Commencement Date, Xxxxxxxx
shall determine whether and to what extent to relocate Xxxxxxxx
employees and prospective Provider Personnel within Xxxxxxxx
Facilities or to different Xxxxxxxx locations to facilitate the
co-location of Xxxxxxxx employees and Provider Personnel or achieve
more effective and efficient usage of available space. Each
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Party shall be responsible for and pay the cost of moves of
personnel related to moves initiated by such Party. For the
avoidance of doubt, Provider shall pay for the cost of all moves of
Xxxxxxxx Personnel identified on SCHEDULE M who become employees of
Provider and who are required to be moved to a different location in
accordance with Provider's plans for Services delivery.
6.2 USE OF PROVIDER FACILITIES.
During the Term, Provider will provide to Xxxxxxxx during periodic visits
at no charge (i) reasonable access to and use of Provider facilities where
the Services are being performed, and (ii) access to reasonable
work/conference space at Provider facilities where the Services are being
performed, for the conduct of Xxxxxxxx'x business. At Xxxxxxxx'x request,
Provider shall provide reasonable access to and use of such Provider
facilities by Xxxxxxxx or Xxxxxxxx Third Party Contractors to install and
manage third party software and equipment to provide services to Xxxxxxxx
or Eligible Recipients.
6.3 XXXXXXXX RULES/EMPLOYEE SAFETY.
(a) XXXXXXXX RULES AND COMPLIANCE. In performing the Services and using
the Xxxxxxxx Facilities, Provider shall observe and comply with all
Xxxxxxxx policies, rules, and regulations applicable to Xxxxxxxx
Facilities or the provision of the Services which have been
communicated to Provider or Provider Personnel in advance by such
means as are generally used by Xxxxxxxx to disseminate such
information to its employees or contractors, including those set
forth on SCHEDULE V and those applicable to specific Xxxxxxxx sites
(collectively, "XXXXXXXX RULES"). Provider acknowledges that it is
fully informed as to the Xxxxxxxx Rules, both through due diligence
and its hiring of the Transitioned Employees. Provider shall be
responsible for the promulgation and distribution of Xxxxxxxx Rules
to Provider Personnel as and to the extent necessary and
appropriate. Additions or modifications to the Xxxxxxxx Rules will
be communicated by Xxxxxxxx to Provider or Provider Personnel by
such means generally used by Xxxxxxxx to disseminate such
information to its employees or contractors. Provider and Provider
Personnel shall observe and comply with such additional or modified
Xxxxxxxx Rules.
(b) SAFETY AND HEALTH COMPLIANCE. Provider and Provider Personnel shall
familiarize themselves with the premises and operations at each
Xxxxxxxx Site or Xxxxxxxx Facility at or from which Services are
rendered and the Xxxxxxxx Rules applicable to each such Site or
Facility. Provider shall, and shall cause Provider Personnel to,
observe and comply with all Laws applicable to the use of each
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Xxxxxxxx Facility or Site in its provision of the Services,
including environmental Laws and Laws regarding occupational health
and safety. Provider shall be responsible for the compliance of
Equipment, Software, Systems and Services for which it is
operationally responsible with such Laws; provided, however, that
Provider shall not be responsible for non-compliance with such Laws
existing as of the Effective Date during the first six (6) months
following the Commencement Date (subject to Provider's obligations
to correct, at Xxxxxxxx'x expense, any such non-compliance(s)).
Provider and Provider Personnel also shall observe and comply with
all Xxxxxxxx Rules with respect to safety, health, security and the
environment and shall take all commercially reasonable precautions
to avoid injury, property damage, spills or emissions of hazardous
substances, materials or waste, and other dangers to persons,
property or the environment. To the extent required by Xxxxxxxx,
Provider Personnel shall receive prescribed training prior to
entering certain Xxxxxxxx Sites or Facilities.
6.4 SOFTWARE, EQUIPMENT AND THIRD PARTY CONTRACTS.
(a) FINANCIAL RESPONSIBILITY. Provider shall be responsible for any
third party fees or expenses on or after the Commencement Date
associated with Software, Equipment, Equipment Leases and related
Third Party Contracts for which Provider is financially responsible
under SCHEDULE E or U and any other Third Party Contracts (excluding
Third Party Contracts administered by Provider on a pass-through
basis, which are addressed in SECTION 11.2) used by Provider to
provide the Services. Provider shall not be responsible for such
fees or expenses owed by Xxxxxxxx prior to the Commencement Date.
Xxxxxxxx shall be responsible for third party fees or expenses
incurred on or after the Commencement Date associated with Software,
Equipment, Equipment Leases and Third Party Contracts for which
Xxxxxxxx is financially responsible under SCHEDULE E or U. Unless
otherwise expressly provided, each Party also shall be responsible
for any third party fees or expenses on or after the Commencement
Date associated with new, substitute or replacement Software,
Equipment, Equipment Leases or Third Party Contracts (including
Upgrades, enhancements, new versions or new releases of such
Software or Equipment) for which such Party is financially
responsible under SCHEDULE E or U.
(b) OPERATIONAL RESPONSIBILITY. With respect to Software, Equipment,
Equipment leases and related Third Party Contracts for which
Provider is operationally responsible under SCHEDULE E or U and any
other Third Party Contracts (excluding Third Party Contracts
administered by Provider on a pass-through basis, which are
addressed in SECTION 11.2) used by Provider to provide the
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Services, Provider shall be responsible for (i) the evaluation,
procurement, testing, installation, rollout, use, support,
management, administration, operation and maintenance of such
Software, Equipment, Equipment leases and Third Party Contracts;
(ii) the evaluation, procurement, testing, installation, rollout,
use, support, management, administration, operation and maintenance
of new, substitute or replacement Software, Equipment, Equipment
leases and Third Party Contracts (including Upgrades, enhancements,
new versions or new releases of such Software); (iii) the
performance, availability, reliability, compatibility and
interoperability of such Software, Equipment and Third Party
Contracts each in accordance with this Agreement, including the
Service Levels and change management procedures; (iv) the compliance
with and performance of all operational, administrative and
contractual obligations specified in such licenses, leases and
contracts; (v) the administration and exercise as appropriate of all
rights available under such licenses, leases and contracts; and (vi)
the payment of any fees, penalties, charges, interest or other
expenses due and owing under or with respect to such Software
Licenses, Equipment, Equipment leases and Third Party Contracts that
are incurred, caused by or result from Provider's failure to comply
with or perform its obligations under this SECTION 6.4(b) (except to
the extent that such failure directly results from the acts or
omissions of Xxxxxxxx, the Eligible Recipients or Xxxxxxxx'x Third
Party Contractors in contravention of its obligations under this
Agreement).
(c) RIGHTS UPON EXPIRATION/TERMINATION.
(i) SOFTWARE. With respect to all Provider licensed Third Party
Software and related Third Party Contracts, Provider shall use
all commercially reasonable efforts to (A) obtain for
Xxxxxxxx, the Eligible Recipients and Xxxxxxxx'x designees the
license, sublicense, assignment and other rights specified in
SECTIONS 4.4(b)(3), (B) ensure that the granting of such
license, sublicense, assignment and other rights is not
subject to subsequent third party approval or the payment by
Xxxxxxxx, an Eligible Recipient or Xxxxxxxx'x designee of
license or transfer fees other than fees for periods after the
date of transfer or pursuant to SECTION 14.6(c), the license
fees relating to the period following expiration or
termination, (C) ensure that the terms, conditions and prices
applicable to Xxxxxxxx, the Eligible Recipients and/or
Xxxxxxxx'x designees following expiration or termination are
no less favorable than those otherwise applicable to Provider
(unless and to the extent more favorable pricing is based upon
volume), and at least sufficient for the continuation of the
activities comprising the Services, and (D) ensure that
Xxxxxxxx and Xxxxxxxx'x
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designee(s) shall have the right to review and disclose the
terms and conditions of all such licenses and related Third
Party Contracts to third party provider(s) in connection with
the procurement of services. If Provider is unable to obtain
any such rights and assurances, it shall notify Xxxxxxxx in
advance and shall not use such Software or Third Party
Contracts without Xxxxxxxx'x approval (and absent such
approval, Provider's use of any such Software or Third Party
Contract shall obligate Provider to obtain or arrange, at no
additional cost to Xxxxxxxx, for such license, sublicense,
assignment or other right for Xxxxxxxx, the Eligible
Recipients and Xxxxxxxx'x designees upon expiration or
termination). If Xxxxxxxx consents to Provider's use of
specific Software or Third Party Contracts under the foregoing
circumstances, such consent shall be deemed to be conditioned
on Provider's commitment to use all commercially reasonable
efforts to cause such third party to agree at expiration or
termination of this Agreement or the completion of Termination
Assistance Services to permit Xxxxxxxx or its designee to
assume prospectively the license or contract in question or to
enter into a new license or contract with Xxxxxxxx or its
designee on substantially the same terms and conditions,
including price. Xxxxxxxx may, in its sole discretion,
withhold its consent to any such Software or Third Party
Contract if, following expiration or termination (i) Xxxxxxxx,
the Eligible Recipients and Xxxxxxxx'x designees would not be
entitled to the license, sublicense, assignment or other
rights specified in SECTION 4.4(B), (ii) the granting of such
license, sublicense, assignment and other rights would be
subject to subsequent third party approval or the payment by
Xxxxxxxx, an Eligible Recipient or Xxxxxxxx'x designee of
license or transfer fees, or (iii) Xxxxxxxx would be obligated
to reimburse Provider for any termination or cancellation
fees, non-cancelable charges or other amounts under SCHEDULE
N.
(ii) EQUIPMENT. With respect to all Provider-owned or leased
Equipment, Equipment Leases and related Third Party Contracts
to be used primarily to provide the Services, Provider shall
use all commercially reasonable efforts to (A) obtain for
Xxxxxxxx, the Eligible Recipients and Xxxxxxxx'x designees the
rights specified in SECTION 4.4(b)(4), (B) ensure that the
granting of such rights is not subject to subsequent third
party approval or the payment by Xxxxxxxx, an Eligible
Recipient or Xxxxxxxx'x designee of transfer or other fees,
(C) ensure that the terms, conditions and prices applicable to
Xxxxxxxx, the Eligible Recipients and/or Xxxxxxxx'x designees
following expiration or termination are no less favorable than
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those otherwise applicable to Provider and at least sufficient
for the continuation of the activities comprising the
Services, (D) ensure that neither the expiration/termination
of this Agreement nor the assignment of the lease or contract
will trigger less favorable terms, conditions or pricing, and
(E) ensure that Xxxxxxxx, the Eligible Recipients and
Xxxxxxxx'x designee(s) shall have the right to review and
disclose the terms and conditions of all such leases and
related Third Party Contracts to third party provider(s) in
connection with the procurement of services.
(iii) THIRD PARTY CONTRACTS. With respect to all other Provider
Third Party Contracts to be used primarily to provide the
Services, Provider shall use all commercially reasonable
efforts to (A) obtain for Xxxxxxxx, the Eligible Recipients
and Xxxxxxxx'x designees the rights specified in SECTION
4.4(b)(6), (B) ensure that the granting of such rights is not
subject to subsequent third party approval or the payment by
Xxxxxxxx, an Eligible Recipient or Xxxxxxxx'x designee of
transfer or other fees, (C) ensure that the terms, conditions
and prices applicable to Xxxxxxxx, the Eligible Recipients
and/or Xxxxxxxx'x designees following expiration or
termination are no less favorable than those otherwise
applicable to Provider, and at least sufficient for the
continuation of the activities comprising the Services, (D)
ensure that neither the expiration/termination of this
Agreement nor the assignment of the contract will trigger less
favorable terms, conditions or pricing, and (E) ensure that
Xxxxxxxx, the Eligible Recipient and Xxxxxxxx'x designee(s)
shall have the right to review and disclose the terms and
conditions of all such Third Party Contracts to third party
provider(s) in connection with the procurement of services.
(iv) ALTERNATIVE ARRANGEMENTS. If in any instance Provider is
unable to obtain any of the rights and assurances described in
SECTION 6.4(c)(i), (ii) OR (iii), it shall notify Xxxxxxxx in
advance and shall not use such Software, Equipment, Equipment
Lease or Third Party Contract without Xxxxxxxx'x approval, and
absent such approval, Provider's use of any such Software,
Equipment, Equipment Lease or Third Party Contract shall
obligate Provider to obtain or arrange, at no additional cost
to Xxxxxxxx, for such license, sublicense, Equipment, lease,
sublease, assignment or other right for Xxxxxxxx, the Eligible
Recipients and their designee(s) upon expiration or
termination. If Xxxxxxxx so consents to Provider's use of any
specific Software Equipment, Equipment Lease or Third Party
Contracts under the foregoing circumstances, such consent
shall be deemed to be
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conditioned on Provider's commitment to use all commercially
reasonable efforts to cause such third party to agree at
expiration or termination of this Agreement or the completion
of Termination Assistance Services to permit Xxxxxxxx, the
Eligible Recipients and/or their designee(s) to assume
prospectively the license, lease or contract in question or to
enter into a new license, lease or contract with Xxxxxxxx, the
Eligible Recipients and/or their designee(s) on substantially
the same terms and conditions, including price.
(d) EVALUATION OF THIRD PARTY SOFTWARE, EQUIPMENT. In addition to its
obligations under SECTION 6.4(a) and (b) and in order to facilitate
Xxxxxxxx'x control of architecture, standards and plans pursuant to
SECTION 9.5, Provider shall use commercially reasonable efforts to
evaluate any Third Party Software and Equipment selected by or for
Xxxxxxxx or an Eligible Recipient to determine whether such Software
and Equipment will adversely affect Xxxxxxxx'x environment and/or
Provider's ability to provide the Services. Provider shall
diligently complete and report the results of such evaluation to
Xxxxxxxx within a timeframe mutually agreed upon by the Parties ;
provided, that Provider shall use all commercially reasonable
efforts to respond more quickly in the case of a pressing business
need or an emergency situation.
(e) BENEFITS PASS-THROUGH. With respect to any products and services
relating to the Services which Xxxxxxxx requests procured by
Provider for Xxxxxxxx on a cost plus, cost reimbursement or Pass
Through Expense basis during the Term, Provider shall use
commercially reasonable efforts to pass through to Xxxxxxxx all
benefits offered by the manufacturers and/or suppliers of such
products and services (including all warranties, refunds, credits,
rebates, discounts, training, technical support and other
consideration offered by such manufacturers and suppliers) except to
the extent otherwise agreed by Xxxxxxxx. If Provider is unable to
pass through any such benefit to Xxxxxxxx, it shall notify Xxxxxxxx
in advance and shall not purchase such product or service without
Xxxxxxxx'x prior written approval.
(f) XXXXXXXX PROVIDED EQUIPMENT. Xxxxxxxx shall provide Provider with
the use of the Xxxxxxxx owned and leased Equipment identified on
SCHEDULE O.3 (collectively, the "XXXXXXXX PROVIDED EQUIPMENT") for
the periods specified in such Schedule solely for and in connection
with the provision of the Services. Notwithstanding the foregoing,
except as provided in this SECTION 6.4(f) and SECTIONS 6.1(a), (b)
AND (c), Provider shall be responsible for providing all Equipment
required to perform the Services and all Upgrades, improvements,
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replacements and additions thereto on and after the Commencement
Date. Upon the expiration of the period specified in SCHEDULE O.3
for each item of Xxxxxxxx Provided Equipment (or when such Xxxxxxxx
Provided Equipment is no longer required by Provider for the
performance of the Services), Provider shall promptly return such
Xxxxxxxx Provided Equipment to Xxxxxxxx in substantially the same
condition (as it may have been modified or improved by Provider with
Xxxxxxxx'x approval) as when such Xxxxxxxx Provided Equipment was
first provided to Provider, subject to reasonable wear and tear. THE
XXXXXXXX PROVIDED EQUIPMENT IS PROVIDED BY XXXXXXXX TO PROVIDER ON
AN AS-IS, WHERE-IS BASIS. XXXXXXXX EXPRESSLY DISCLAIMS ANY
WARRANTIES, EXPRESS OR IMPLIED, AS TO THE XXXXXXXX PROVIDED
EQUIPMENT, OR ITS CONDITION OR SUITABILITY FOR USE BY PROVIDER TO
PROVIDE THE SERVICES, INCLUDING WARRANTIES OF NON-INFRINGEMENT,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.
6.5 ASSIGNMENT OF LICENSES, LEASES AND RELATED AGREEMENTS.
(a) ASSIGNMENT AND ASSUMPTION. On and as of the Commencement Date,
Xxxxxxxx shall assign to Provider, and Provider shall assume and
agree to perform all obligations related to, the Software licenses,
Equipment Leases and Third Party Contracts for which Provider is
financially responsible under SECTION 6.4 and SCHEDULES E and U,
that are designated to be assigned on SCHEDULES F.2, F.3 and F.4.
Xxxxxxxx and Provider shall execute and deliver a mutually
satisfactory assignment and assumption agreement with respect to
such leases, licenses and agreements, evidencing the assignment and
assumption provided for herein.
(b) ITEMS NOT ASSIGNABLE BY COMMENCEMENT DATE. With respect to any such
Software licenses, Equipment Leases or Third Party Contracts that
cannot, as of the Commencement Date, be assigned to Provider without
breaching their terms or otherwise adversely affecting the rights or
obligations of Xxxxxxxx or Provider thereunder, the performance
obligations shall be deemed to be subcontracted or delegated to
Provider until any requisite consent, notice or other prerequisite
to assignment can be obtained, given or satisfied by Provider. It is
understood that, from and after the Commencement Date, Provider, as
a subcontractor or delegatee, shall be financially and operationally
responsible for such Software license, Equipment Lease or Third
Party Contract as Xxxxxxxx'x agent pursuant to SECTION 9.11(b).
Provider shall use all commercially reasonable efforts to satisfy
the consent, notice or other prerequisites to assignment and, upon
Provider doing
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so, the Software license, Equipment Lease or Third Party Contract
shall immediately be assigned and transferred to and assumed by
Provider.
(c) NON-ASSIGNABLE ITEMS. If, after Provider using commercially
reasonable efforts for a reasonable period of time, a license, lease
or agreement cannot be assigned without breaching its terms or
otherwise adversely affecting the rights or obligations of Xxxxxxxx
or Provider thereunder, the Parties shall take such actions and
execute and deliver such documents as may be necessary to cause the
Parties to realize the practical effects of the allocation of
responsibilities intended to be effected by this Agreement.
(d) MODIFICATION AND SUBSTITUTION. Provider may terminate, shorten,
modify or extend the Software licenses, Equipment Leases and Third
Party Contracts for which Provider is financially responsible under
SCHEDULES E and U of this Agreement and may substitute or change
suppliers relating to goods or services covered thereby; so long as,
except as otherwise disclosed by Provider and agreed to by Xxxxxxxx,
such change(s) (i) do not constitute a breach of any obligation of
Xxxxxxxx or the Eligible Recipients under such Software licenses,
Equipment Leases or Third Party Contracts, (ii) do not result in
additional financial obligations, financial or operational risk or
Losses to Xxxxxxxx or the Eligible Recipients; (iii) do not result
in any increase to Xxxxxxxx or the Eligible Recipients in the cost
of receiving the Services; and (iv) if assumable by Xxxxxxxx, do not
provide for less favorable terms, conditions or prices for Xxxxxxxx,
the Eligible Recipients and/or their designee(s) following the
expiration or termination of the Term or any applicable Service than
would otherwise be applicable to Provider (except for terms,
conditions or prices available to Provider because of its volume
purchases). Provider's rights under the immediately preceding
sentence are conditioned upon Provider paying all applicable
termination or cancellation charges, Losses and other amounts due to
the applicable supplier associated with such action. Notwithstanding
anything to the contrary herein, Provider shall not terminate,
shorten or modify without Xxxxxxxx'x prior written consent any
license for Third Party Software either created exclusively for
Xxxxxxxx or the Eligible Recipients or otherwise not commercially
available. Provider shall reimburse Xxxxxxxx and the Eligible
Recipient(s) for any termination charges, cancellation charges, or
other amounts paid by them at Provider's direction in connection
with obtaining any such modification.
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6.6 LICENSE TO XXXXXXXX THIRD PARTY SOFTWARE AND MATERIALS.
Subject to Provider having obtained any Required Consents, Xxxxxxxx hereby
grants to Provider, for the sole purpose of performing the Services and
solely to the extent of Xxxxxxxx'x underlying rights, the same rights of
access and use as Xxxxxxxx possesses under the applicable software
licenses with respect to Xxxxxxxx licensed Third Party Software and
Materials. Xxxxxxxx also shall grant such rights to Subcontractors
designated by Provider if and to the extent necessary for Provider to
provide the Services. Except as otherwise agreed by the applicable third
party licensors, Provider and its Subcontractors shall comply with the
duties, including use restrictions and those of nondisclosure, imposed on
Xxxxxxxx by such licenses. In addition, each Subcontractor shall sign a
written agreement to be bound by all of the terms contained herein
applicable to such Third Party Software and Materials, including, to the
extent applicable, the terms specified in this Section and those
pertaining to the ownership of such Software and Materials and any
Derivative Works developed by the Parties, the scope and terms of the
license, the restrictions on the use of such Software and Materials, and
the obligations of confidentiality, etc. Except as otherwise requested or
approved by Xxxxxxxx (or the relevant licensor), Provider and its
Subcontractors shall cease all use of such Third Party Software and
Materials upon the end of the Term and the completion of any Termination
Assistance Services requested by Xxxxxxxx pursuant to SECTION 4.4. THE
XXXXXXXX LICENSED THIRD PARTY SOFTWARE AND MATERIALS IS PROVIDED BY
XXXXXXXX TO PROVIDER AND ITS SUBCONTRACTORS ON AN AS-IS, WHERE-IS BASIS.
XXXXXXXX EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, AS TO SUCH XXXXXXXX LICENSED THIRD PARTY SOFTWARE AND MATERIALS,
OR THE CONDITION OR SUITABILITY OF SUCH SOFTWARE AND MATERIALS FOR USE BY
PROVIDER OR ITS SUBCONTRACTORS TO PROVIDE THE SERVICES, INCLUDING
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6.7 LICENSE TO PROVIDER LICENSED THIRD PARTY SOFTWARE.
As of the Commencement Date and subject to Provider having obtained any
Required Consents, Provider hereby grants to Xxxxxxxx and the Eligible
Recipients, at no additional charge, for the sole purpose of receiving the
Services during the Term and any Termination Assistance Services period,
and solely to the extent of Provider's underlying rights, the same rights
of access and use as Provider possesses under the applicable software
licenses with respect to Provider licensed Third Party Software, a
non-exclusive, royalty-free right and license to access and/or use the
Third Party Software and Materials as to which Provider holds the license
or for which Provider is financially responsible
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under this Agreement (including related documentation, methodology and
tools) to the extent reasonably necessary to receive the full benefit of
the Services during the Term and any Termination Assistance Services
period. In addition, at no additional Charge, and subject to Provider
obtaining any Required Consents, Provider hereby grants to Xxxxxxxx Third
Party Contractor(s) a non-exclusive, royalty-free right and license to
access and/or use such Materials and Software (including related
documentation, methodology and tools) during the Term and any Termination
Assistance Services period, for the benefit of Xxxxxxxx and the Eligible
Recipients, as and to the extent reasonably necessary for such Xxxxxxxx
Third Party Contractor(s) to monitor, access, interface with or use the
Materials and Software then being used by Provider in order for Xxxxxxxx
and the Eligible Recipients to receive the benefit of the Services and the
services of such Third Party Contractor(s). Xxxxxxxx, the Eligible
Recipients, and Xxxxxxxx Third Party Contractors shall comply with the
duties, including use restrictions and those of nondisclosure, imposed on
Provider by such licenses; provided that Provider gives written advance
notice to Xxxxxxxx, the Eligible Recipients, and Xxxxxxxx Third Party
Contractors of such duties. Post-termination rights are set forth in
ARTICLE 14.
6.8 ACQUIRED ASSETS.
(a) CONVEYANCE. Xxxxxxxx agrees to convey (or shall cause the applicable
Eligible Recipient to convey) to Provider, and Provider agrees (or
shall cause an Affiliate to agree) to accept, as of the Commencement
Date, all of Xxxxxxxx'x (or the applicable Eligible Recipient's)
right, title and interest in and to the Acquired Assets. In
consideration for such conveyance, Provider agrees to pay Xxxxxxxx
or the applicable Eligible Recipient on the Commencement Date the
Acquired Assets Credit specified in this Agreement. The Acquired
Asset Credit shall be paid in the local currency of the country in
which the asset is located or, at Xxxxxxxx'x option, in the United
States dollars, using the exchange rates specified in SCHEDULE J. In
addition, Provider shall be responsible for, and shall pay, or
provide evidence of exemption from, all sales, use, goods and
services and other similar taxes arising out of the conveyance of
the Acquired Assets. Xxxxxxxx represents and warrants to Provider
that Provider (or its Affiliates) shall take good title to the
Acquired Assets as of the Commencement Date, free and clear of all
liens. The conveyance of the Acquired Assets shall be effected by
the delivery of each Acquired Asset to the Provider where possible
or, where this is not possible, by the delivery of a general
assignment and xxxx of sale in substantially the form set forth in
EXHIBIT 3. Except as otherwise expressly provided in this SECTION
6.8, XXXXXXXX OR THE APPLICABLE ELIGIBLE RECIPIENT CONVEYS THE
ACQUIRED ASSETS TO PROVIDER ON AN "AS IS," "WHERE IS" AND "WITH ALL
FAULTS" BASIS. XXXXXXXX HEREBY DISCLAIMS ALL
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WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE ACQUIRED ASSETS, OR
THE CONDITION OR SUITABILITY OF SUCH ACQUIRED ASSETS FOR USE BY VENDOR TO
PROVIDE THE SERVICES, INCLUDING WARRANTIES OF NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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6.9 MANAGED THIRD PARTIES.
Provider shall manage the Managed Third Parties to perform in accordance
with their agreements with Xxxxxxxx to the extent Xxxxxxxx makes those
agreements available to Provider. Unless otherwise agreed in writing by
the Parties, Provider shall be responsible for performing Services,
complying with Service Levels and providing reports and other
deliverables, even where doing so relies upon Managed Third Parties.
Unless otherwise specified in SCHEDULE X or agreed in writing by the
Parties, Provider shall be responsible for all costs and charges
associated with such Managed Third Parties and for any failure by any
Managed Third Party or its personnel to perform in accordance with this
Agreement or to comply with any duties or obligations imposed on Provider
under this Agreement to the same extent as if such failure to perform or
comply was committed by Provider or Provider Personnel. Provider shall not
be liable for the failure of a Managed Third Party to meet the specific
contractual obligation of such Managed Third Party under the Managed Third
Party's agreement with Xxxxxxxx or the Eligible Recipient (e.g., Provider
will not have to pay for any service level credits payable by a Managed
Third Party under its agreement with Xxxxxxxx); provided, however, that
Provider shall notify Xxxxxxxx of deficiencies or other failures to
perform by such Managed Third Party, and shall assist Xxxxxxxx in their
appropriate resolution. If (i) a Service Level Failure of Provider is
directly attributable to the failure of a Managed Third Party to meet its
service level obligations under the Managed Third Party Agreement, as
determined by a Root Cause Analysis, (ii) Provider promptly notifies
Xxxxxxxx that such Managed Third Party is failing to meet its service
level obligation and such failure will impair Provider's ability to meet
its corresponding Service Level obligation, and (iii) Provider uses
reasonably diligent efforts to meet such Service Level notwithstanding
such failure by the applicable Managed Third Party, then, after
establishing that clauses (i), (ii) and (iii) are satisfied, Provider
shall be given relief from such Service Level obligation in respect of
such Managed Third Party's failure to perform. In addition, the Parties
shall continually meet and reasonably discuss continuing performance and
material non-compliance issues with respect to any Managed Third Party.
Provider shall be Xxxxxxxx'x and the Eligible Recipients' sole point of
contact regarding the services provided by such Managed Third Parties.
6.10 NOTICE OF DEFAULTS.
Xxxxxxxx and Provider shall promptly inform the other Party in writing of
any material breach of, or misuse or fraud in connection with, any Third
Party Contract, Equipment lease or Third Party Software license used in
connection with the Services of which it becomes aware and shall cooperate
with the other Party to prevent or stay any such breach, misuse or fraud.
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7. SERVICE LEVELS
7.1 GENERAL. From and after the Commencement Date, Provider shall perform the
Services at the levels of accuracy, quality, completeness, timeliness,
responsiveness and resource efficiency that are equal to or higher or
better than the highest or best of (a) the applicable Service Levels set
forth in SCHEDULE G, (b) the accepted industry norms applicable to the
performance of such Services by top tier service providers, if such
industry norms are documented and verifiable, or (c) the documented or
otherwise verifiable levels of accuracy, quality, completeness,
timeliness, responsiveness and productivity received by Xxxxxxxx or the
Eligible Recipients in the twelve (12) months prior to the Commencement
Date. To the extent the Parties have established a Service Level in
SCHEDULE G for a specific Service, the obligations described in clause (b)
shall not alter, expand or supersede such Service Level. Provider shall be
responsible for meeting or exceeding the applicable Service Levels even
where doing so is dependent on the provision of Services by Subcontractors
or other non-Provider Personnel acting under the project-management
direction of Provider (as opposed to acting as the employer), including
Xxxxxxxx employees.
7.2 SERVICE LEVEL CREDITS.
Provider recognizes that Xxxxxxxx is paying Provider to deliver the
Services at specified Service Levels. If Provider fails to meet such
Service Levels, then Provider shall pay or credit to Xxxxxxxx the
performance credits specified in SCHEDULE G ("SERVICE LEVEL CREDITS") in
recognition of the diminished value of the Services resulting from
Provider's failure to meet the agreed upon level of performance, and not
as a penalty. Under no circumstances shall the imposition of Service Level
Credits be construed as Xxxxxxxx'x sole or exclusive remedy for any
failure to meet the Service Levels. However, if Xxxxxxxx recovers monetary
damages from Provider as a result of Provider's failure to meet a Service
Level, Provider shall be entitled to set-off against such damages any
Service Level Credits paid for the failure giving rise to such recovery.
7.3 PROBLEM ANALYSIS.
If Provider fails to provide Services in accordance with the Service
Levels and this Agreement, Provider shall (after restoring service or
otherwise resolving any immediate problem) (i) promptly investigate and
report on the causes of the problem; (ii) provide a Root Cause Analysis of
such failure as soon as practicable after such failure or at Xxxxxxxx'x
request (iii) implement remedial action and begin meeting the Service
Levels as soon as practicable; (iv) advise Xxxxxxxx of the status of
remedial efforts being undertaken with respect to such problem; (v)
provide Xxxxxxxx reasonable evidence that
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the causes of such problem have been or will be corrected on a permanent
basis; and (vi) take all commercially reasonable action to prevent any
recurrence of such problem. Provider shall use all commercially reasonable
efforts to complete the Root Cause Analysis within fifteen (15) days;
provided that, if it is not capable of being completed within fifteen (15)
days using reasonable diligence, Provider shall complete such Root Cause
Analysis as quickly as possible and shall notify Xxxxxxxx prior to the end
of the initial fifteen (15) day period as to the status of the Root Cause
Analysis and the estimated completion date.
7.4 CONTINUOUS IMPROVEMENT REVIEWS.
(a) IMPROVEMENT OF SERVICES QUALITY. Provider acknowledges that the
quality of the Services provided in certain Service areas can and
will be improved during the Term and agrees that the Service Levels
in such Service areas will be enhanced periodically in recognition
of the anticipated improvement in service quality. Provider will
improve the quality of the Services provided in such areas to meet
or exceed the enhanced Service Levels and will do so at no
additional charge to Xxxxxxxx.
(b) INCREASE OF SERVICE LEVELS. In addition to the foregoing, Xxxxxxxx
and Provider shall periodically (but at least annually) review the
Service Levels and the performance data collected and reported by
Provider in accordance with SCHEDULE G. As part of this review
process, the Parties shall, at no additional cost to Xxxxxxxx,
increase the Service Levels to reflect the higher performance levels
actually attained or attainable by Provider in accordance with
SCHEDULE G. In addition, subject to SECTION 11.5 and SCHEDULE G, the
Parties shall agree, to the extent reasonable and appropriate, to
(i) increase the Service Levels to reflect improved performance
capabilities associated with advances in the proven processes,
technologies and methods available to perform the Services; (ii) add
new Service Levels to permit further measurement or monitoring of
the accuracy, quality, completeness, timeliness, responsiveness,
cost-effectiveness, or productivity of the Services; (iii) modify or
increase the Service Levels to reflect changes in the processes,
architecture, standards, strategies, needs or objectives defined by
Xxxxxxxx; and (iv) modify or increase the Service Levels to reflect
agreed upon changes in the manner in which the Services are
performed by Provider.
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7.5 MEASUREMENT AND MONITORING.
Provider shall, on or before the Commencement Date, implement measurement
and monitoring tools and metrics as well as standard reporting procedures,
all acceptable to Xxxxxxxx, to measure and report Provider's performance
of the Services at a level of detail sufficient, as determined by
Xxxxxxxx, to verify Provider's compliance with the applicable Service
Levels. Xxxxxxxx or its designee shall have the right to audit all such
measurement and reporting tools, performance metrics and reporting
procedures. Provider shall provide Xxxxxxxx with on-line access to
up-to-date problem management data and other data regarding the status of
service problems, service requests and user inquiries. Provider also shall
provide Xxxxxxxx with access to the data used by Provider to calculate its
performance against the Service Levels and the measurement and monitoring
tools and procedures utilized by Provider to generate such data for
purposes of audit and verification. Xxxxxxxx shall not be required to pay
any amount in addition to the Charges for such measurement and monitoring
tools or the resource utilization associated with their use.
7.6 SATISFACTION SURVEYS.
(a) GENERAL. Within sixty (60) days after the Commencement Date and at
agreed upon intervals thereafter, Provider and/or independent third
parties engaged by Provider shall conduct the satisfaction surveys
of Xxxxxxxx'x management and End Users described in SCHEDULE Q in
accordance with the survey protocols and procedures specified
therein. To the extent Provider engages an independent third party
to perform all or any part of any satisfaction survey, such third
party shall be approved in advance by Xxxxxxxx.
(b) XXXXXXXX CONDUCTED SURVEYS. In addition to the satisfaction surveys
to be conducted by Provider or an independent third party pursuant
to SECTION 7.6(A), Xxxxxxxx may survey End User satisfaction with
Provider's performance in connection with and as part of broader End
User satisfaction surveys periodically conducted by Xxxxxxxx. At
Xxxxxxxx'x request, Provider shall cooperate and assist Xxxxxxxx
with the formulation of the survey questions, protocols and
procedures and the execution and review of such surveys.
(c) SURVEY FOLLOW-UP. If the results of any satisfaction survey
conducted pursuant to SECTION 7.6(a) or (b) indicate that the level
of satisfaction with Provider's performance is less than the target
level specified in SCHEDULE G and/or SCHEDULE Q, Provider shall
promptly: (i) conduct a Root Cause Analysis as to the cause of the
management or End User dissatisfaction; (ii) develop an action plan
to address
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and improve the level of satisfaction; (iii) present such plan to
Xxxxxxxx for its review, comment and approval; and (iv) take action
in accordance with the approved plan and as necessary to improve the
level of satisfaction. Xxxxxxxx and Provider shall establish a
schedule for completion of a Root Cause Analysis and the preparation
and approval of the action plan which shall be reasonable and
consistent with the severity and materiality of the problem;
provided, that the time for completion of such tasks shall not
exceed thirty (30) days from the date such user survey results are
finalized and reported. Provider's action plan developed hereunder
shall specify the specific measures to be taken by Provider and the
dates by which each such action shall be completed. Following
implementation of such action plan, Provider shall conduct follow-up
surveys with the affected Xxxxxxxx users and management to confirm
that the cause of any dissatisfaction has been addressed and that
the level of satisfaction has improved. The Parties recognize that
Provider's failure to attain the prescribed levels of satisfaction
or to take the actions set forth in such action plan by the agreed
upon dates may have an adverse impact on the business and operations
of Xxxxxxxx and the Eligible Recipients and that certain damages
resulting from Provider's failure to do so may not be capable of
precise determination. Accordingly, if Provider fails to take the
actions set forth in the action plan by the agreed upon dates, then,
in addition to any other remedies available to Xxxxxxxx under this
Agreement at law or in equity, Provider shall pay to Xxxxxxxx the
applicable Service Level Credits specified in SCHEDULE G.
7.7 NOTICE OF ADVERSE IMPACT.
If Provider Personnel becomes aware of any failure by Provider to comply
with its obligations under this Agreement that, or any other situation
that such Provider Personnel know (i) has impacted or reasonably could
impact the maintenance of Xxxxxxxx'x or any Eligible Recipient's financial
integrity or internal controls, the accuracy of Xxxxxxxx'x or any Eligible
Recipient's financial, accounting, or human resources records and reports
or compliance with Xxxxxxxx Rules, Xxxxxxxx Standards or applicable Laws,
or (ii) has had or reasonably could have any other material adverse impact
on the Services in question or the impacted business operations of
Xxxxxxxx or the Eligible Recipients, then, Provider shall promptly inform
Xxxxxxxx in writing of such situation and the impact or expected impact
and Provider and Xxxxxxxx shall meet to formulate an action plan to
minimize or eliminate the impact of such situation. The obligation to
report situations unrelated to Provider's obligations under this Agreement
shall not operate or be construed as imposing on Provider any affirmative
obligation of inquiry not otherwise imposed by this Agreement.
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8. PROJECT PERSONNEL
8.1 TRANSITIONED PERSONNEL.
(a) OFFERS AND EMPLOYMENT.
(i) PROVIDER OFFERS OF EMPLOYMENT. Provider shall extend offers of
employment to those Xxxxxxxx Personnel identified on SCHEDULE
M and shall waive certain preconditions to such offers,
including drug testing and/or medical examinations. Such
offers shall be for employment with Provider as either regular
employees, long-term supplemental employees or short-term
supplemental employees and in positions comparable to those
held by such employees at Xxxxxxxx, with initial base wages or
salaries, severance (subject to SECTION 8.2(f)) and other
terms of employment at least equal to that paid or provided to
such Xxxxxxxx Personnel as of the date of such offers and
variable compensation and employee benefits no less favorable
than those regularly available to similarly situated Provider
employees. Offers of employment as regular employees of
Provider shall be for an indeterminate period of time. Unless
otherwise specified below, in SCHEDULE M or agreed by the
Parties, Xxxxxxxx Personnel accepting such offers shall be
hired by Provider effective as of the Commencement Date. With
respect to the following Xxxxxxxx Personnel, such Xxxxxxxx
Personnel accepting such offers shall be hired by Provider
effective as of the dates listed below (each such Xxxxxxxx
Personnel, a "SECONDED EMPLOYEE" and each such date, a
"SECONDARY HIRING DATE"): (i) for Xxxxxxxx Personnel for which
a pension or retiree medical milestone date is specified in
SCHEDULE M, the first day of the first full month after such
milestone date; and (ii) for Xxxxxxxx Personnel who are
specified in SCHEDULE M as being subject to visa, immigration,
naturalization or other similar authorizations and
requirements and for which Provider, using commercially
reasonable efforts, is unable to complete the pre-employment
hiring process prior to the Commencement Date, such date as
mutually agreed to by the Parties. Xxxxxxxx shall make
available to Provider for the period starting on the
Commencement Date and ending on the applicable Secondary
Hiring Date (each a "SECONDMENT PERIOD") the Seconded
Employees for performance of the Services and the Seconded
Employees shall work under Provider's direction and
supervision during the Secondment Periods. Provider shall be
responsible for any failure by the Seconded Employees to
perform in accordance with Provider's obligations under this
Agreement. Provider
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shall reimburse Xxxxxxxx for the cost to Xxxxxxxx of employing
the Seconded Employees during the Secondment Periods that
would have been borne by Provider for salaries, incentive
compensation and benefits of such Seconded Employees during
the Secondment Period had they been hired by Provider as of
the Effective Date, instead of the Secondary Hiring Date, and
providing their services to Provider during the applicable
Secondment Period. The base salary, fringe rate and an
estimated Secondment Period for each Seconded Employee is set
forth in SCHEDULE M.
(ii) ON-LEAVE EMPLOYEES. With respect to any Xxxxxxxx Personnel
identified on SCHEDULE M who on the Commencement Date is on
leave status, including without limitation medical,
disability, industrial or sick leave, such employee shall
remain an employee of Xxxxxxxx until such employee returns to
work, with physician's release or other appropriate
documentation stating that such employee may resume his or her
prior work schedule. If such Xxxxxxxx Personnel returns to
work within six (6) months after the Commencement Date,
Provider shall promptly extend an offer of employment to such
employee and the compensation and other terms and conditions
of such offer shall be as set forth in this ARTICLE 8. If such
Xxxxxxxx Personnel does not return within such six (6) month
period, Provider shall be under no obligation to offer
employment to such employee or to treat such employee as a
Transitioned Employee hereunder.
(iii) EMPLOYMENT EFFECTIVE DATE. All Xxxxxxxx Personnel who accept
Provider's offer of employment and begin work with Provider
pursuant to the foregoing paragraphs are herein referred to as
"TRANSITIONED EMPLOYEES." Each such Transitioned Employee's
"EMPLOYMENT EFFECTIVE DATE" shall be the effective date on
which Provider actually employs such employee.
(b) RELOCATION OF TRANSITIONED EMPLOYEES. Provider shall not relocate a
Transitioned Employee or his or her assigned work location during
the six (6) months immediately following such Transitioned
Employee's Employment Effective Date, unless such relocation or
reassignment is expressly disclosed in the Transitioned Employee's
offer letter and agreed to by him or her at the time of hiring.
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(c) ADDITIONAL TRANSITIONED EMPLOYEES. During the six (6) months
following the Commencement Date, the Parties may agree upon,
additional Xxxxxxxx Personnel to whom offers of employment are to be
extended by Provider. The compensation and other terms and
conditions of such offers of employment shall be as set forth in
this ARTICLE 8, and Xxxxxxxx Personnel accepting such offers shall
be treated as Transitioned Employees for all purposes.
(d) REEMPLOYMENT OF TRANSITIONED EMPLOYEES. During the twenty-four (24)
months following the Commencement Date, Xxxxxxxx may designate,
subject to Provider's agreement (not to be unreasonably withheld),
one or more Transitioned Employees to whom Xxxxxxxx may extend
offers of reemployment. Provider shall actively support this process
and not interfere with Xxxxxxxx'x efforts to reemploy any such
Transitioned Employee. Any Transitioned Employees so re-employed by
Xxxxxxxx shall not be included in the calculation of the turnover
rates specified in SECTION 8.4(b) and 8.8(c) below.
(e) TRAINING/CAREER OPPORTUNITIES. Provider shall offer training, skills
development and career growth opportunities to Transitioned
Employees that are at least as favorable as those offered generally
to its similarly situated employees.
8.2 EMPLOYEE BENEFIT PLANS.
(a) GENERAL. Except as otherwise provided in this ARTICLE 8, Provider
shall enroll each Transitioned Employee and his or her dependents,
effective as of his or her Employment Effective Date, in the
employee plans of Provider that are made available to similarly
situated employees of Provider. Provider has listed all of such
employee plans (and the eligibility of regular employees, long-term
supplemental employees, and short-term supplemental employees
therefor) on SCHEDULE M.1 and provided Xxxxxxxx with true and
complete copies of the most recent summary plan descriptions and
summary of material modifications for such employee plans or has
provided a written summary where no current summary plan description
exists. During the Term of this Agreement and any extensions
thereof, compensation and benefits provided by Provider to
Transitioned Employees shall be, in the aggregate, no less favorable
than the compensation and benefits generally available to similarly
situated Provider employees.
(b) YEARS OF SERVICE CREDIT. The service prior to his or her Employment
Effective Date of a Transitioned Employee who is a regular employee
of Provider shall be recognized by Provider under Provider's
employee plans for purposes of vacation time, short term disability,
long term disability, severance, and rule of 65
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unsubsidized access for retiree medical. In addition, the service
prior to his or her Employment Effective Date of a Transitioned
Employee who is a long-term supplemental employee or a short-term
supplemental employee of Provider, shall be recognized by Provider
for purposes of SECTION 8.2(f) below.
(c) EMPLOYEE WELFARE BENEFIT PLANS. Subject to SECTION 8.2(a), each
Transitioned Employee shall be eligible as of his or her Employment
Effective Date to participate immediately in Provider's employee
welfare benefit plans ("WELFARE PLANS"), which shall include medical
care, hospitalization, life, accidental death and dismemberment,
prescription drug, dental insurance benefits, short term disability
and long term disability. Subject to SECTION 8.2(a), eligibility
for, the benefits of, and the amount, if any, of employee
contributions toward welfare plan coverage will be determined by
Provider; provided, however, that each of Provider's welfare plans
shall (i) waive all pre-existing condition exceptions, exclusionary
provisions and/or waiting periods for each such Transitioned
Employee and any eligible spouse or covered dependents, and (2)
grant credit for years of service in accordance with SECTION 8.2(b).
In addition, any out of pocket deductible amounts paid by any
Transitioned Employee in the calendar year of his or her Employment
Effective Date shall be applied toward any deductible required by
Provider's group insurance program for the calendar year of his or
her Employment.
(d) PAID-TIME-OFF (VACATION/SICK LEAVE). Beginning on his or her
Employment Effective Date, Provider shall make available to all
Transitioned Employees paid-time-off benefits for vacation and sick
leave under its applicable plans, with years of service of such
Transitioned Employees determined in accordance with SECTION 8.2(b).
The paid-time-off benefits provided by Provider shall be no less
favorable than the vacation and sick leave benefits generally
available to similarly situated Provider employees. Provider shall
make every effort to recognize vacations plans made by the
Transitioned Employees and approved by Xxxxxxxx prior to his or her
Employment Effective Date and shall permit such Transitioned
Employees to incur negative leave balances for this purpose.
(e) BONUS PROGRAMS. Provider shall provide to the Transitioned Employees
bonus programs no less favorable than the bonus programs available
to similarly situated Provider employees.
(f) SEVERANCE PAY PLANS. The Parties responsibilities with respect to
separation packages for Transitioned Employees are as set forth in
SCHEDULE J.
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8.3 OTHER EMPLOYEE MATTERS.
As of the Employment Effective Date, the Transitioned Employees shall be
employees of Provider for all purposes. Provider shall be responsible for
funding and distributing benefits under the benefit plans in which
Transitioned Employees participate on or after the Transitioned Employee's
Employment Effective Date and for paying any compensation and remitting
any income, disability, withholding and other employment taxes for such
Transitioned Employees beginning on the Employment Effective Date. Unless
otherwise agreed, Xxxxxxxx shall be responsible for funding and
distributing benefits under the Xxxxxxxx benefit plans in which
Transitioned Employees participated prior to the Employment Effective Date
and for paying any compensation and remitting any income, disability,
withholding and other employment taxes for such Transitioned Employees for
the period prior to the Employment Effective Date of such Transitioned
Employee. Xxxxxxxx shall provide Provider with such information in
Xxxxxxxx'x possession reasonably requested by Provider in order to fulfill
its obligations under this ARTICLE 8. Transitioned Employees who are
short-term supplemental employees of Provider may elect to continue to
receive the Xxxxxxxx medical and dental benefits such employee received
from Xxxxxxxx immediately prior to the Employment Effective Date (as and
to the extent permitted under the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended) during the term of such
Transitioned Employee's employment with Provider as a short-term
supplemental employee and Xxxxxxxx shall continue to pay the employer's
contribution for such benefits. Provider shall promptly reimburse Xxxxxxxx
for the amount of all such contributions. No later than seven days prior
to the Commencement Date, Provider shall notify Xxxxxxxx of the expected
term of each short-term supplemental employee so that the reimbursement of
such employer contribution may be administered. If Provider extends the
term of employment of any short-term supplemental employees beyond the
original term, Provider shall provide Xxxxxxxx reasonable notice of such
extension so that such reimbursement may be extended. If Provider extends
the term of any short-term supplemental employee greater than 12 months,
Provider will convert such short-term supplemental employee either to a
long-term supplemental or to a regular employee of Provider.
8.4 KEY PROVIDER PERSONNEL AND CRITICAL SUPPORT PERSONNEL.
(a) APPROVAL OF KEY PROVIDER PERSONNEL.
(i) Before assigning an individual to act as one of the Key
Provider Personnel whether as an initial assignment or a
subsequent assignment, Provider shall notify Xxxxxxxx of the
proposed assignment, shall introduce the individual to
appropriate Xxxxxxxx representatives, shall provide
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reasonable opportunity for Xxxxxxxx representatives to
interview the individual, and shall provide Xxxxxxxx with a
resume and such other information about the individual as may
be reasonably requested by Xxxxxxxx. If Xxxxxxxx in good faith
objects to the proposed assignment, the Parties shall attempt
to resolve Xxxxxxxx'x concerns on a mutually agreeable basis.
If the Parties have not been able to resolve Xxxxxxxx'x
concerns within five (5) business days of Xxxxxxxx
communicating its concerns, Provider shall not assign the
individual to that position and shall propose to Xxxxxxxx the
assignment of another individual of suitable ability and
qualifications.
(ii) Provider shall identify and obtain Xxxxxxxx'x approval of all
Key Provider Personnel prior to the Commencement Date, but
unless otherwise agreed, the number of Key Provider Personnel
at any given point in time shall not exceed five percent (5%)
of the total number of Provider Personnel dedicated to
supporting Xxxxxxxx'x account, but no less than 10 people at
any time (even if 10 people exceeds 5%). The Key Provider
Personnel that have been selected and approved as of the
Effective Date are listed in SCHEDULE C.
(iii) Xxxxxxxx may from time to time determine the positions
designated as Key Provider Personnel under this Agreement with
Provider's approval which shall not be unreasonably withheld.
(b) CONTINUITY OF KEY PROVIDER PERSONNEL. Provider shall cause each of
the Key Provider Personnel to devote substantially full time and
effort to the provision of Services under this Agreement for, unless
otherwise specified in SCHEDULE C, a minimum of two (2) years from
the date he or she assumes the position in question (provided that,
in the case of Key Provider Personnel assigned prior to the
Commencement Date, the minimum period shall be two (2) years from
the Commencement Date). Provider shall not transfer, reassign or
remove any of the Key Provider Personnel (except as a result of
voluntary resignation, involuntary termination for cause, illness,
disability, or death) or announce its intention to do so during such
two (2) year period without Xxxxxxxx'x prior approval, which
Xxxxxxxx may withhold in its sole discretion. In the event of the
voluntary resignation, involuntary termination for cause, illness,
disability or death of one of its Key Provider Personnel during or
after the specified period, Provider shall (i) give Xxxxxxxx as much
notice as reasonably possible of such development, and (ii)
expeditiously identify and obtain Xxxxxxxx'x approval of a suitable
replacement. In addition, even after the specified two (2) year
period, Provider
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shall transfer, reassign or remove one of its Key Provider Personnel
(except as a result of voluntary resignation, involuntary
termination for cause, illness, disability, or death) only after (i)
giving Xxxxxxxx at least forty-five (45) days prior notice of such
action, (ii) identifying and obtaining Xxxxxxxx'x approval of a
suitable replacement at least thirty (30) days prior to such
transfer, reassignment or removal and (iii) demonstrating to
Xxxxxxxx'x reasonable satisfaction that such action will not have an
adverse impact on Provider's performance of its obligations under
this Agreement. After such two year period, unless otherwise agreed,
Provider shall not transfer, reassign or remove more than 50% Key
Provider Personnel in any twelve (12) month period.
(c) CONTINUITY OF CRITICAL SUPPORT PERSONNEL. Provider shall cause each
of the Critical Support Personnel to devote substantially full time
and effort to the provision of Services under this Agreement for the
lesser of (i) the two (2) year period immediately following his or
her Employment Effective Date or (ii) the period from his or her
Employment Effective Date until the completion to Xxxxxxxx'x
reasonable satisfaction of any necessary knowledge transfer from
such Critical Support Personnel to other Provider Personnel, such
shorter period to be agreed to by the Parties. Provider shall not
transfer, reassign or remove any of the Critical Support Personnel
(except as a result of voluntary resignation, involuntary
termination for cause, illness, disability, or death) during the
specified period without Xxxxxxxx'x prior approval, which Xxxxxxxx
may withhold in its sole discretion. In the event of the voluntary
resignation, involuntary termination for cause, illness, disability
or death of one of its Critical Support Personnel during the
specified period, Provider shall (i) give Xxxxxxxx as much notice as
reasonably possible of such development, and (ii) expeditiously
identify and obtain Xxxxxxxx'x approval of a suitable replacement.
(d) RETENTION AND SUCCESSION. Provider shall implement and maintain a
retention strategy designed to retain Key Provider Personnel and
Critical Support Personnel on the Xxxxxxxx account for the
prescribed period. Provider shall also maintain active succession
plans for each of the Key Provider Personnel positions. Provider
shall implement various retention strategies to retain Key Provider
Personnel and Critical Support Personnel, including but not limited
to, granting stock options, awards, salary increases, recognition
events and other retention and incentive programs on terms at least
equal to those offered to similarly situated Provider employees.
Upon termination or resignation of any Key Provider Personnel,
Provider shall provide notice to Xxxxxxxx of such termination and
identify potential suitable replacements.
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8.5 PROVIDER PROJECT EXECUTIVE.
Provider shall designate a "PROVIDER PROJECT EXECUTIVE" for this Xxxxxxxx
engagement who, unless otherwise agreed by Xxxxxxxx, shall maintain his or
her office in Tulsa, Oklahoma. The Provider Project Executive shall (i) be
one of the Key Provider Personnel; (ii) be a full time employee of
Provider; (iii) devote his or her full time and effort to managing the
Services; (iv) remain in this position for a minimum period of two (2)
years from the initial assignment (except as a result of voluntary
resignation, involuntary termination for cause, illness, disability, or
death); (v) serve as the single point of accountability for the Services,
(vi) be the single point of contact to whom all Xxxxxxxx communications
concerning this Agreement may be addressed; (vii) have authority to act on
behalf of Provider in all day-to-day matters pertaining to this Agreement;
and (viii) have day-to-day authority for ensuring customer satisfaction
and attainment of all Service Levels.
8.6 EVALUATION AND COMPENSATION OF PROVIDER PROJECT EXECUTIVE AND KEY PROVIDER
PERSONNEL.
Xxxxxxxx shall have a meaningful opportunity to provide information to
Provider with respect to Xxxxxxxx'x evaluation of the performance of the
Provider Project Executive and the other Key Provider Personnel and such
evaluation shall be considered and accorded substantial weight by Provider
in establishing the incentive and annual total compensation of such
individuals, in accordance with Provider's personnel policies for
similarly situated employees (or a separate mutually agreed upon process,
if such personnel policies are changed in a manner that eliminates such
opportunity for Xxxxxxxx input). Such input may be based upon: (i) the
level of customer satisfaction reflected in the periodic customer
satisfaction surveys; (ii) the extent to which Provider has met or
exceeded the Service Levels, Service Levels and Provider's other
responsibilities and obligations under this Agreement; (iii) Provider's
achievement of the objectives relating to Xxxxxxxx and its businesses set
forth in SECTION 1.2, as reasonably determined by Xxxxxxxx and (iv)
Xxxxxxxx'x determination as to whether Provider has met the technical
objectives set by the Xxxxxxxx executive officer sponsors (e.g., the Chief
Financial Officer and the Chief Administrative Officer) or his or her
designee.
8.7 PROVIDER PERSONNEL ARE NOT XXXXXXXX EMPLOYEES.
Except as otherwise expressly set forth in this Agreement, the Parties
intend to create an independent contractor relationship and nothing in
this Agreement shall operate or be construed as making Xxxxxxxx (or the
Eligible Recipients) and Provider partners, joint venturers, principals,
joint employers, agents or employees of or with the other. No
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officer, director, employee, agent, Affiliate, contractor or subcontractor
retained by Provider to perform work on Xxxxxxxx'x behalf hereunder shall
be deemed to be an officer, director, employee, agent, Affiliate,
contractor or subcontractor of Xxxxxxxx or the Eligible Recipients for any
purpose. Provider, not Xxxxxxxx or the Eligible Recipients, has the right,
power, authority and duty to supervise and direct the activities of the
Provider Personnel and to compensate such Provider Personnel for any work
performed by them on the behalf of Xxxxxxxx or the Eligible Recipients
pursuant to this Agreement. Each Party shall be responsible and therefore
solely liable for all acts and omissions of its personnel to the extent
required by applicable Law or specified in this Agreement.
8.8 REPLACEMENT, QUALIFICATIONS, AND RETENTION OF PROVIDER PERSONNEL.
(a) SUFFICIENCY AND SUITABILITY OF PERSONNEL. Provider shall assign (or
cause to be assigned) sufficient Provider Personnel to provide the
Services in accordance with this Agreement and such Provider
Personnel shall possess suitable competence, ability and
qualifications and shall be properly educated and trained for the
Services they are to perform.
(b) REQUESTED REPLACEMENT. In the event that Xxxxxxxx determines
lawfully and in good faith that the continued assignment to Xxxxxxxx
of any individual Provider Personnel (including Key Provider
Personnel) is not in the best interests of Xxxxxxxx or the Eligible
Recipients, then Xxxxxxxx shall give Provider notice to that effect
requesting that such Provider Personnel be replaced. Provider shall
have ten (10) business days following Xxxxxxxx'x request for removal
of such Provider Personnel in which to investigate the matters
forming the basis of such request, correct any deficient performance
and provide Xxxxxxxx with assurances that such deficient performance
shall not recur (provided that, if requested to do so by Xxxxxxxx
for actual or suspected violations of Xxxxxxxx Rules, Provider shall
immediately remove (or cause to be removed) the individual in
question from all Xxxxxxxx sites pending completion of Provider's
investigation and discussions with Xxxxxxxx). If, following such ten
(10) business day period, Xxxxxxxx is not reasonably satisfied with
the results of Provider's efforts to correct the deficient
performance and/or to ensure its non-recurrence, Provider shall, as
soon as possible, remove and replace such Provider Personnel with an
individual of suitable ability and qualifications, without cost to
Xxxxxxxx. Nothing in this provision shall operate or be construed to
limit Provider's responsibility for the acts or omission of the
Provider Personnel or be construed as joint employment.
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(c) TURNOVER RATE AND DATA. Provider shall use commercially reasonable
efforts to keep the turnover rate of Provider Personnel to a level
comparable to or better than the industry average for large,
well-managed service companies performing services similar to the
Services. Provider shall provide to Xxxxxxxx reports on a quarterly
basis of the turnover rate of Provider Personnel. If Xxxxxxxx
determines that the turnover rate of Provider Personnel is
unacceptable and so notifies Provider, Provider shall within ten
(10) business days (i) provide Xxxxxxxx with data concerning
Provider's turnover rate of Provider Personnel, (ii) meet with
Xxxxxxxx to discuss the reasons for the turnover rate of Provider
Personnel, and (iii) submit a proposal for reducing the turnover
rate of Provider Personnel for Xxxxxxxx'x review and approval.
Notwithstanding any transfer or turnover of Provider Personnel,
Provider shall remain obligated to perform the Services without
degradation and in accordance with the Service Levels. In addition,
Provider shall notify Xxxxxxxx of any turnover of Provider Personnel
with roles or functions that include the categories specified in the
Policy and Procedures Manual. Such notice shall be provided to
Xxxxxxxx within the timeframes specified in the Policy and
Procedures Manual. Until such time as the Policy and Procedures
Manual has been approved by Xxxxxxxx in accordance with this
Agreement, Provider shall provide Xxxxxxxx with same day notice of
any turnover of Provider Personnel.
(d) RESTRICTIONS ON PERFORMING SERVICES TO COMPETITORS. Neither Provider
nor any Subcontractor shall cause or permit any Key Provider
Personnel to perform services directly or indirectly for a Direct
Xxxxxxxx Competitor either while engaged in the provision of
Services or during the six (6) months immediately following the
termination of his or her involvement in the provision of such
Services without Xxxxxxxx'x prior written consent. If the Parties
agree to expand the scope of Services provided under this Agreement,
then the Parties shall meet and discuss in good faith whether a
restriction more stringent than that set forth in this SECTION
8.8(d) is required to address Xxxxxxxx'x concerns related to such
expanded scope.
8.9 CONDUCT OF PROVIDER PERSONNEL.
(a) CONDUCT AND COMPLIANCE. While at Xxxxxxxx Facilities and Xxxxxxxx
Sites, Provider Personnel shall (i) comply with the Xxxxxxxx Rules
and other rules and regulations regarding personal and professional
conduct generally applicable to personnel at such Xxxxxxxx
Facilities and Xxxxxxxx Sites (and communicated to Provider in
writing or by any other means generally used by Xxxxxxxx to
disseminate such information to its employees or contractors), (ii)
comply with
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reasonable requests of Xxxxxxxx or the Eligible Recipients personnel
pertaining to personal and professional conduct, (iii) attend
workplace training offered by Xxxxxxxx and/or the Eligible
Recipients at Xxxxxxxx'x request, and (iv) otherwise conduct
themselves in a businesslike manner.
(b) IDENTIFICATION OF PROVIDER PERSONNEL. All Provider Personnel shall
clearly identify themselves to Xxxxxxxx, the other Eligible
Recipients and third parties as Provider Personnel and not as
employees of Xxxxxxxx and/or the Eligible Recipients. This shall
include any and all communications, whether oral, written or
electronic. Each Provider Personnel shall wear a badge indicating
that he or she is employed by Provider or its Subcontractors when at
a Xxxxxxxx Facility or Xxxxxxxx Site.
(c) RESTRICTION ON MARKETING ACTIVITY. Except for marketing
representatives designated in writing by Provider to Xxxxxxxx, none
of the Provider Personnel shall conduct any marketing activities to
Xxxxxxxx or Eligible Recipient employees at Xxxxxxxx Facilities or
Xxxxxxxx Sites (including marketing of any New Services), other
than, subject to SECTION 13.3, reporting potential marketing
opportunities to Provider's designated marketing representatives.
8.10 SUBSTANCE ABUSE.
Provider represents and warrants that it has and will maintain substance
abuse policies, in each case in conformance with applicable Laws, and
Provider Personnel will be subject to such policies. Provider represents
and warrants that it shall require its Subcontractors and Affiliates
providing Services to have and maintain such policy in conformance with
applicable Law and to adhere to this provision.
8.11 UNION AGREEMENTS AND WARN ACT.
(a) NOTICE BY PROVIDER. Provider shall provide Xxxxxxxx not less than
ninety (90) days notice of the expiration of any collective
agreement with unionized Provider Personnel if the expiration of
such agreement or any resulting labor dispute could potentially
interfere with or disrupt the business or operations of Xxxxxxxx or
an Eligible Recipient or impact Provider's ability to timely perform
its duties and obligations under this Agreement.
(b) WARN ACT COMMITMENT. Provider shall not, for a period of sixty (60)
days after the Employment Effective Date, cause any of the
Transitioned Employees to suffer "employment loss" as that term is
construed under the Worker Adjustment and Retraining Notification
Act ("WARN ACT"), if such employment loss could
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create any liability for Xxxxxxxx, the Eligible Recipients, or its
or their Affiliates, unless Provider delivers notices under the WARN
Act in a manner and at a time such that Xxxxxxxx, the Eligible
Recipients, or its or their Affiliates bear no liability with
respect thereto.
(c) RESPONSIBILITY. Provider shall be responsible for any liability,
cost, claim, expense, obligation or sanction attributable to any
breach by Provider of SECTION 8.11(b) that results in Xxxxxxxx or
the Eligible Recipients being in violation of the WARN Act or the
regulations promulgated thereunder.
9. PROVIDER RESPONSIBILITIES
9.1 POLICY AND PROCEDURES MANUAL.
(a) DELIVERY AND CONTENTS. As part of the Services, and at no additional
cost to Xxxxxxxx, Provider shall deliver to Xxxxxxxx for its review,
comment and approval (i) a reasonably complete draft of the Policy
and Procedures Manual within forty-five (45) days after the
Commencement Date, and (ii) a final draft of the Policy and
Procedures Manual within thirty (30) days of Provider's receipt of
Xxxxxxxx'x comments and suggestions (the "POLICY AND PROCEDURES
MANUAL"). At a minimum, the Policy and Procedures Manual shall
include the following:
(i) a detailed description of the Services and the manner in which
each will be performed by Provider, including (A) the
Equipment, Software, and Systems to be procured, operated,
supported or used; (B) documentation (including operations
manuals, user guides, specifications, policies/procedures and
disaster recovery plans) providing further details regarding
such Services; and (C) the specific activities to be
undertaken by Provider in connection with each Service,
including, where appropriate, the direction, supervision,
monitoring, staffing, reporting, planning and oversight
activities to be performed by Provider under this Agreement;
and (D) the processes, methodologies and controls to be
implemented and used by Provider to meet its obligations in
this Agreement (including, its obligations under SECTION
15.10) regarding compliance with applicable Laws, and
generally accepted accounting principles;
(ii) the procedures for Xxxxxxxx/Provider interaction and
communication, including (A) call lists; (B) procedures for
and limits on direct communication by Provider with Xxxxxxxx
personnel; (C) problem management and escalation procedures;
(D) priority and project
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procedures; (E) Acceptance testing and procedures; (F) Quality
Assurance procedures and checkpoint reviews; and (G) annual
and quarterly financial objectives, budgets, and performance
goals;
(iii) processes that conform and integrate with Xxxxxxxx'x change
control procedures and the regulatory compliance requirements
(as further described in SECTION 15.10 and 15.14); and
(iv) practices and procedures addressing such other issues and
matters as Xxxxxxxx shall require.
Provider shall incorporate Xxxxxxxx'x then current policies
and procedures in the Policy and Procedures Manual to the
extent it is directed to do so by Xxxxxxxx.
(b) REVISION AND MAINTENANCE. Provider shall incorporate any comments or
suggestions of Xxxxxxxx into the Policy and Procedures Manual and
shall deliver a final revised version to Xxxxxxxx within thirty (30)
days of its receipt of such comments and suggestions for Xxxxxxxx'x
approval. The Policy and Procedures Manual will be delivered and
maintained by Provider in hard copy and electronic formats and will
be accessible electronically via a secure web site to Xxxxxxxx
management and End Users in a manner consistent with Xxxxxxxx'x
security policies.
(c) COMPLIANCE. Provider shall perform those Services which are
generally subject to generally accepted accounting principles in
accordance with generally accepted accounting principles (except as
otherwise instructed by Xxxxxxxx) and Xxxxxxxx'x then current
policies and procedures until the Policy and Procedures Manual is
finalized and agreed upon by the Parties. Thereafter, Provider shall
perform the Services in accordance with the Policy and Procedures
Manual. In the event of a conflict between the provisions of this
Agreement and the Policy and Procedures Manual, the provisions of
this Agreement shall control unless the Parties expressly agree
otherwise and such agreement is set forth in the relevant portion of
the Policy and Procedures Manual.
(d) MODIFICATION AND UPDATING. Provider shall promptly modify and update
the Policy and Procedures Manual monthly to reflect changes in the
operations or procedures described therein and to comply with
Xxxxxxxx Standards, the Technology and Business Process Plan and
Strategic Plans as described in SECTION 9.5. Provider shall provide
the proposed changes in the manual to Xxxxxxxx for review, comment
and approval. To the extent such change could (i)
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increase Xxxxxxxx'x total costs of receiving the Services; (ii)
require material changes to the facilities, systems, software or
equipment of Xxxxxxxx and/or the Eligible Recipients; (iii) have a
material adverse impact on the functionality, interoperability,
performance, accuracy, speed, responsiveness, quality or resource
efficiency of the Services, or (iv) violate or be inconsistent with
the Xxxxxxxx Standards, Provider shall not implement such change
without first obtaining Xxxxxxxx'x approval, which Xxxxxxxx may
withhold in its sole discretion.
9.2 REPORTS.
(a) REPORTS. Provider shall provide Xxxxxxxx with reports pertaining to
the performance of the Services and Provider's other obligations
under this Agreement sufficient to permit Xxxxxxxx to monitor and
manage Provider's performance ("REPORTS"). The Reports to be
provided by Provider shall include those described in SCHEDULE R in
the format and at the frequencies provided therein, as well as those
provided by Xxxxxxxx prior to the Commencement Date. In addition,
from time to time, Xxxxxxxx may identify additional Reports to be
generated by Provider and delivered to Xxxxxxxx on an ad hoc or
periodic basis. All Reports shall be provided to Xxxxxxxx as part of
the Services and at no additional charge to Xxxxxxxx. The Reports
described in SCHEDULE R and, to the extent reasonably possible, all
other Reports shall be provided to Xxxxxxxx (i) by secure on-line
connection in an electronic format capable of being accessed by
Microsoft Office components and downloadable by Xxxxxxxx, with the
information contained therein capable of being displayed graphically
and accessible from a web browser, or, (ii) at Xxxxxxxx' request, in
traditional printed form.
(b) BACK-UP DOCUMENTATION. As part of the Services, Provider shall
provide Xxxxxxxx with such documentation and other information
available to Provider as may be reasonably requested by Xxxxxxxx
from time to time in order to verify the accuracy of the Reports
provided by Provider. In addition, Provider shall provide Xxxxxxxx
with all documentation and other information reasonably requested by
Xxxxxxxx from time to time to verify that Provider's performance of
the Services is in compliance with the Service Levels and this
Agreement.
(c) CORRECTION OF ERRORS. As part of the Services and at no additional
charge to Xxxxxxxx, Provider shall promptly correct any errors or
inaccuracies in or with respect to the Reports, the information or
data contained in such Reports, or other contract deliverables
caused by Provider or its agents, Subcontractors, Managed
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Third Parties or third party product or service providers used by
Provider to provide the Services.
9.3 GOVERNANCE MODEL; MEETINGS.
(a) GOVERNANCE MODEL. The Parties will manage their relationship under
this Agreement using the governance model in SCHEDULE T. The Parties
shall use all commercially reasonable efforts to complete and agree
upon SCHEDULE T on or before the Commencement Date.
(b) MEETINGS. During the Term, representatives of the Parties shall meet
periodically or as requested by Xxxxxxxx to discuss matters arising
under this Agreement, including any such meetings provided for under
the Transition Plan, the Transformation Plan and the Implementation
Plan. Each Party shall bear its own costs in connection with the
attendance and participation of such Party's representatives in such
meetings. Such meetings shall include, at a minimum, the following
(except to the extent the Parties agree on a different meeting
schedule as set forth in SCHEDULE T from time to time):
(i) a periodic meeting at least monthly to review performance and
monthly reports, planned or anticipated activities and changes
that might impact performance, and such other matters as
appropriate;
(ii) a quarterly management meeting to review the monthly reports
for the quarter, review Provider's overall performance under
the Agreement, review progress on the resolution of issues,
provide a strategic outlook for Xxxxxxxx'x and the Eligible
Recipients' information systems requirements, and discuss such
other matters as appropriate;
(iii) a meeting associated with the transition and ongoing provision
of the Services, quarterly during the first year of the Term
and semi-annually thereafter;
(iv) an annual meeting of senior management of both Parties to
review relevant contract and performance issues;
(v) a periodic meeting of management of both Parties in which
Provider will (A) explain how the Systems that Provider
operates in connection with the provision of the Services work
and are operated, (B) explain how the Services are provided
(in such detail as Xxxxxxxx may request), (C) provide such
training and documentation as Xxxxxxxx may require for
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Xxxxxxxx to understand and operate such Systems and provide
the Services after the termination or expiration of the
Agreement; and
(vi) such other meetings of Xxxxxxxx and Provider Personnel,
including senior management of Provider, as Xxxxxxxx may
reasonably request.
(c) AGENDA AND MINUTES. For each such meeting, upon Xxxxxxxx request,
Provider shall prepare and distribute an agenda, which will
incorporate the topics designated by Xxxxxxxx. Provider shall
distribute such agenda in advance of each meeting so that the
meeting participants may prepare for the meeting. In addition, upon
Xxxxxxxx request, Provider shall record and promptly distribute
minutes for every meeting for review and approval by Xxxxxxxx.
(d) END USER AND ELIGIBLE RECIPIENT MEETINGS. Provider shall notify the
Xxxxxxxx Project Executive in advance of scheduled meetings with End
Users or Eligible Recipients (other than meetings pertaining to the
provision of specific Services on a day-to-day basis) and shall
invite the Xxxxxxxx Project Executive to attend such meetings or to
designate a representative to do so.
9.4 QUALITY ASSURANCE AND INTERNAL CONTROLS.
Provider shall develop and implement Quality Assurance and internal
control processes and procedures, including implementing tools and
methodologies, to verify that the Services are performed (i) in an
accurate and timely manner, (ii) in accordance with the Service Levels and
other requirements of this Agreement, (iii) to the extent applicable to
the particular Services, in a manner consistent with generally accepted
accounting principles (unless otherwise instructed by Xxxxxxxx), (iv) the
best practices of the finance and accounting and human resources business
process services outsourcing industry, (v) the best practices of the
information technology industry, (vi) subject to SECTION 15.10, the Laws
applicable to Xxxxxxxx and the Eligible Recipients (including the
Xxxxxxxx-Xxxxx Act of 2002 and implementing Regulations promulgated by the
United States Securities and Exchange Commission and Public Accounting
Oversight Board) as interpreted by Xxxxxxxx and communicated to Provider
and (vii) industry standards (e.g., QS 9000, ISO 9001/2000, ISO 14000,
COSO, CobIT) applicable to Xxxxxxxx and the Eligible Recipients and the
performance of the Services. Such procedures and controls shall include
verification, checkpoint reviews, testing, acceptance, and other
procedures for Xxxxxxxx to assure the quality and timeliness of Provider's
performance. Without limiting the generality of the foregoing, Provider
will:
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(a) Maintain a strong control environment in day-to-day operations, such
that the following fundamental control objectives regarding the
Services are met: (1) financial and operational information is
valid, complete and accurate; (2) operations are performed
efficiently and achieve effective results, consistent with the
requirements of this Agreement; (3) assets are safeguarded; and (4)
actions and decisions are in compliance with Laws to the extent set
forth in SECTION 15.10;
(b) Build the following basic control activities into Provider work
processes related to the Services: (1) accountability clearly
defined and understood; (2) access properly controlled; (3) adequate
supervision; (4) transactions properly authorized; (5) transactions
accurately recorded; (6) transactions recorded in the proper
accounting period; (7) policies, procedures, and responsibilities
documented; (8) adequate training and education; (9) adequate
separation of duties; and (10) recorded assets compared with
existing assets;
(c) Develop and execute a process such that annual internal control
self-assessments are performed with respect to all Services;
(d) Maintain an internal audit function to sufficiently monitor the
processes and Systems used to provide the Services (i.e., perform
audits, track control measures, communicate status to management,
drive corrective action, etc.). As part of such internal audit
function, Provider will:
(i) Develop and execute an annual risk assessment process to
evaluate risk in the Services. This assessment shall become
the basis to create an annual risk-based audit plan of the
Services. The plan shall be provided to Xxxxxxxx for its
review and approval thirty (30) days before the end of each
calendar year;
(ii) Promptly provide audit reports resulting from each subsequent
audit contemplated by SECTION 9.4(d)(i) to Xxxxxxxx, and make
information reasonably necessary to address any problems,
issues or concerns of Xxxxxxxx relating to the results of such
audit reports available to Xxxxxxxx upon request;
(iii) Adopt a qualitative methodology (e.g., high, medium, low
effectiveness) of reporting the level of controls and internal
audit results;
(iv) As part of the annual risk assessment, provide a summary of
audit activity performed, associated significant findings, and
status of follow-up
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activity, and a summary of control incidents (i.e., frauds,
conflict of interest situations, etc.) and related corrective
action, every six (6) months; and
(v) Provide, on a quarterly basis, a written report that
identifies, in sufficient detail but no less than that
provided by Xxxxxxxx'x ICQ process, any and all (i) changes to
the internal control processes and procedures and (ii)
deficiencies in compliance with the internal control processes
and procedures.
(e) Conduct, with the assistance of Xxxxxxxx, investigations of
suspected fraudulent activities within the Provider's organization
that impact or could impact Xxxxxxxx or the Eligible Recipients and
notify Xxxxxxxx.
(f) Provider shall submit such processes, procedures and internal
controls to Xxxxxxxx for its review, comment and approval within
thirty (30) days after the Commencement Date. Upon Xxxxxxxx'x
approval, such processes and procedures shall be included in the
Policy and Procedures Manual. Prior to the approval of such
processes and procedures by Xxxxxxxx, Provider shall adhere strictly
to Xxxxxxxx'x then current policies and procedures. No failure or
inability of the quality assurance procedures to disclose any errors
or problems with the Services shall excuse Provider's failure to
comply with the Service Levels and other terms of this Agreement.
(g) Work with Xxxxxxxx, and with Xxxxxxxx'x prior approval, implementing
compliance measures to satisfy Xxxxxxxx requirements relating to its
compliance with the Xxxxxxxx-Xxxxx Act and associated regulations,
including, without limitation, Xxxxxxxx' certification as to
internal controls.
9.5 PROCESSES, PROCEDURES, ARCHITECTURE, STANDARDS AND PLANNING.
(a) PROVIDER SUPPORT. As requested by Xxxxxxxx, Provider shall assist
Xxxxxxxx in defining (A) finance and accounting and human resources
standards, policies, practices processes, procedures and controls to
be adhered to and enforced by Provider in performance of the
Services; and (B) IT technologies, architectures, standards,
products and systems to be applied or used by Provider in providing
the Services (collectively, the "XXXXXXXX STANDARDS") and in
annually preparing long-term strategic Plans and short-term
implementation plans based thereon. The assistance to be provided by
Provider shall include: (i) active participation with Xxxxxxxx
representatives on permanent and ad-hoc committees and working
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groups addressing such issues; (ii) assessments of the then-current
Xxxxxxxx Standards at a level of detail reasonably specified by
Xxxxxxxx; (iii) analyses of the appropriate direction for such
Xxxxxxxx Standards in light of business priorities, business
strategies, competitive market forces, and changes in technology;
(iv) the provision of information to Xxxxxxxx regarding Provider's
technology, business processes and telecommunications strategies for
its own business; and (v) recommendations regarding standards,
processes, procedures and controls and associated information
technology architectures, standards, product and systems. With
respect to each recommendation, Provider shall provide the following
at a level of detail reasonably specified by Xxxxxxxx: (i) the
projected cost to Xxxxxxxx and the Eligible Recipients and
cost/benefit analyses; (ii) the changes, if any, in the personnel
and other resources Provider, Xxxxxxxx and/or the Eligible
Recipients will require to operate and support the changed
environment; (iii) the resulting impact on the total costs of
Xxxxxxxx and the Eligible Recipients; (iv) the expected performance,
quality, responsiveness, efficiency, reliability, security risks and
other service levels; and (v) general plans and projected time
schedules for development and implementation. Any assistance
provided by Provider under SECTION 9.5 shall be at no additional
Charge beyond the Charges specified in SCHEDULE J for the Services,
unless an additional Charge has been approved by Xxxxxxxx.
(b) PROVIDER FAMILIARITY WITH XXXXXXXX STANDARDS. Provider is fully
informed as to the Xxxxxxxx Standards provided by Xxxxxxxx as of the
Commencement Date, both through due diligence and its hiring of the
Transitioned Employees. Provider shall be responsible for
integrating the Xxxxxxxx Standards into the Policy and Procedures
Manual in accordance with SECTION 9.1. Additions, deletions or
modifications to the Xxxxxxxx Standards shall be communicated in
writing by Xxxxxxxx to Provider and will be made available to
Provider through Xxxxxxxx'x Virtual Policy Center or other means.
(c) XXXXXXXX AUTHORITY AND PROVIDER COMPLIANCE. Xxxxxxxx shall have
final authority to promulgate Xxxxxxxx Standards and to modify or
grant waivers from such Xxxxxxxx Standards. Provider shall (i)
comply with and implement the Xxxxxxxx Standards in providing the
Services, (ii) work with Xxxxxxxx to enforce the Xxxxxxxx Standards,
(iii) modify the Services as and to the extent necessary to conform
to such Xxxxxxxx Standards, and (iv) obtain Xxxxxxxx'x prior written
approval for any deviations from such Xxxxxxxx Standards. Provider's
compliance with new Xxxxxxxx Standards and its modification of the
Services in accordance therewith may or may not constitute a New
Service.
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(d) FINANCIAL, FORECASTING AND BUDGETING SUPPORT. On a monthly basis,
Provider shall provide a twelve (12) month (or longer upon
reasonable request of Xxxxxxxx) rolling forecast to Xxxxxxxx for
Xxxxxxxx'x forecasting and budgeting purposes, including: (i) actual
and forecasted utilization of Resource Units; and (ii) actual and
forecasted changes in the total price or resource utilization of
Xxxxxxxx and the Eligible Recipients associated with changes to the
environment. In addition, on an annual basis, Provider shall provide
information to Xxxxxxxx regarding opportunities to modify or improve
the Services, and reduce the Charges and/or total price to Xxxxxxxx
of receiving the Services.
(e) TECHNOLOGY AND BUSINESS PROCESS PLAN. Provider shall develop and
implement a technology and business process plan ("TECHNOLOGY AND
BUSINESS PROCESS PLAN") that contains the information described in
SECTION 9.5(e)(ii) below and is consistent with the Xxxxxxxx
Standards and Strategic Plan that describes Xxxxxxxx'x strategic
objectives and its planned means to achieve them. The Technology and
Business Process Plan will also describe how Provider will provide
the Services to support Xxxxxxxx in Xxxxxxxx'x efforts (i) to
achieve the Strategic Plan objectives and (ii) to implement and
support its business, finance, accounting and information technology
objectives and strategies. The development of the Technology and
Business Process Plan will be an iterative process that Provider
shall carry out in consultation with Xxxxxxxx. The timetable for
finalization of the Technology and Business Process Plan shall be
set each year having regard to the timetable for the Strategic Plan.
(i) PROCESS. The process for developing and approving the
Technology and Business Process Plan shall be as follows.
Provider shall provide a draft Technology and Business Process
Plan each year that includes multi-year implementation plans
to achieve multi-year objectives. Xxxxxxxx shall review the
draft Technology and Business Process Plan and provide
requested amendments. Provider shall incorporate any such
amendments, unless it reasonably believes that any requested
amendment would not assist Xxxxxxxx to achieve its objectives
and strategies. Xxxxxxxx and Provider shall escalate any
disagreements about requested amendments to the draft
Technology and Business Process Plan in accordance with the
dispute resolution procedure in ARTICLE 19. Following approval
by Xxxxxxxx, the draft Technology and Business Process Plan
will replace the previous plan. Approval of the Technology and
Business Process Plan by Xxxxxxxx shall not relieve Provider
of any obligation under this Agreement in relation to its
provision of the Services.
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(ii) CONTENTS. In the Technology and Business Process Plan,
Provider shall, among other things, include plans for: (A)
refreshing Equipment and Software (consistent with the refresh
cycles defined in SECTION 11.7(e), (f) and (g); (B) adopting
new technologies and business processes as part of the
Technology and Business Process Evolution of the Services, as
defined in this Agreement; and (C) maintaining flexibility as
described in SECTION 11.7. In the Technology and Business
Process Plan, Provider shall also present implementation plans
for promoting the achievement of the Strategic Plan and the
Xxxxxxxx Standards in areas relating to the Services.
(iii) COMPLIANCE AND REPORTING. Provider shall comply with the
Technology and Business Process Plan at all times, unless
Xxxxxxxx agrees to depart from the Technology and Business
Process Plan. Any such agreement to depart from the Technology
and Business Process Plan from the date on which it is signed
by Xxxxxxxx will not relieve Provider of its responsibilities
under the previous plan prior to the date of such agreement.
9.6 CHANGE CONTROL.
(a) COMPLIANCE WITH CHANGE CONTROL PROCEDURES. In requesting or making
any System Change and/or Business Process Change in the finance and
accounting standards, business processes, procedures and controls or
associated IT technologies, architectures, standards, products,
Software, Equipment, Systems, Services or Materials provided,
operated, managed, supported or used in connection with the
Services, both Parties shall comply with the Change Control
Procedures specified in the Policy and Procedures Manual. Prior to
making any System Change or using any new (e.g., not tested in or
for the Xxxxxxxx environment) Software or Equipment to provide the
Services, Provider shall have verified by appropriate testing that
the change or item has been properly installed, is operating in
accordance with its specifications, is performing its intended
functions in a reliable manner and is compatible with and capable of
operating as part of the Xxxxxxxx environment. This obligation shall
be in addition to any unit testing done by Provider as part of
routine deployment or installation of Software or Equipment.
(b) SYSTEM CHANGE/BUSINESS PROCESS CHANGE COSTS. Unless otherwise set
forth in this Agreement, including specified in SCHEDULE E, or
approved in accordance with SECTION 9.6(c) or otherwise, Provider
shall bear all charges, fees and costs
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associated with any System Change and/or Business Process Change
desired by Provider, including all charges, fees and costs
associated with (i) the design, installation, implementation,
testing and rollout of such System Change and/or Business Process
Change, (ii) any modification or enhancement to, or substitution
for, any impacted business processes or associated Software,
Equipment or System, (iii) any increase in the cost to Xxxxxxxx or
the Eligible Recipients of operating, maintaining or supporting any
impacted business process or associated Software, Equipment or
System, and (iv) subject to SECTION 9.6(h), any increase in resource
usage to the extent it results from a System Change and/or Business
Process Change.
(c) XXXXXXXX APPROVAL - COST, ADVERSE IMPACT. Provider shall make no
System Change and/or Business Process Change which may (i) increase
Xxxxxxxx'x total cost of receiving the Services; (ii) require
material changes to Xxxxxxxx'x or an Eligible Recipient's business
operations, environments, facilities, systems, software, utilities,
tools or equipment (including those provided, managed, operated,
supported and/or used on their behalf by Xxxxxxxx Third Party
Contractors); (iii) require Xxxxxxxx, the Eligible Recipients or
Provider to install a new version, release, upgrade of, or
replacement for, any Software or Equipment or to modify any Software
or Equipment, (iv) have a material adverse impact on the
functionality, interoperability, performance, accuracy, speed,
responsiveness, quality or resource efficiency of the Services; (v)
have an adverse impact on any Applications run by Xxxxxxxx or the
Eligible Recipients, (vi) have an adverse impact on the cost, either
actual or planned, to Xxxxxxxx of terminating all or any part of the
Services or exercising its right to in-source or use third parties;
(vii) have an adverse impact on the functionality, interoperability,
performance, accuracy, speed, responsiveness, quality, cost or
resource efficiency of William's Retained Systems and Business
processes or require change to Xxxxxxxx'x Retained Systems and
Business Processes; or (viii) violate or be inconsistent with
Xxxxxxxx Standards or Strategic Plans as specified in SECTION 9.5,
without first obtaining Xxxxxxxx'x approval, which approval Xxxxxxxx
may withhold in its sole discretion. If Provider desires to make
such a System Change and/or Business Process Change, it shall
provide to Xxxxxxxx a written proposal describing in detail the
extent to which the desired System Change and/or Business Process
Change may affect the functionality, performance, price or resource
efficiency of the Services and any benefits, savings or risks to
Xxxxxxxx or the Eligible Recipients associated with such System
Change and/or Business Process Change.
(d) XXXXXXXX APPROVAL - REQUIRED SOFTWARE OR EQUIPMENT CHANGE. Provider
shall make no System Change and/or Business Process Change that may
require
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Xxxxxxxx to install a new version, release or upgrade of, or
replacement for, any Software or Equipment or to modify any Software
or Equipment without first obtaining Xxxxxxxx'x approval, which
approval Xxxxxxxx may withhold in its sole discretion.
(e) TEMPORARY EMERGENCY CHANGES. Notwithstanding the foregoing, Provider
may make temporary System Changes required by an emergency if it has
been unable to contact the Xxxxxxxx Project Executive or his or her
designee to obtain approval after making reasonable efforts.
Provider shall document and report such emergency changes to
Xxxxxxxx not later than the next business day after the change is
made. Such System Changes shall not be implemented on a permanent
basis unless and until approved by Xxxxxxxx.
(f) IMPLEMENTATION OF SYSTEM CHANGES. Provider will schedule and
implement all System Change and/or Business Process Change so as not
to (i) disrupt or adversely impact the business or operations of
Xxxxxxxx or the Eligible Recipients, (ii) degrade the Services then
being received by them, or (iii) interfere with their ability to
obtain the full benefit of the Services.
(g) PLANNING AND TRACKING. On a monthly basis, Provider will prepare a
rolling quarterly "look ahead" schedule for ongoing and planned
System Change and/or Business Process Change for the next three (3)
months. The status of System Change and/or Business Process Change
will be monitored and tracked by Provider against the applicable
schedule.
(h) COMPARISONS. For any System Change and/or Business Process Change,
Provider shall, upon Xxxxxxxx'x request, perform a comparison at a
reasonable and mutually agreed level of detail, between the amount
of resources required by the affected Business Process, Software or
Equipment to perform a representative sample of the processing being
performed for Xxxxxxxx and the Eligible Recipients immediately prior
to the System Change and/or Business Process Change and immediately
after the System Change and/or Business Process Change. Xxxxxxxx
shall not be required to pay for increased resource usage due to a
System Change and/or Business Process Change except to the extent
that such System Change and/or Business Process Change is requested
or approved by Xxxxxxxx after notice from Provider of such increased
resource usage.
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9.7 SOFTWARE CURRENCY.
(a) CURRENCY OF SOFTWARE. Subject to and in accordance with SECTIONS
6.4, 9.5, 9.6, 9.7(c) and SCHEDULE J, Provider agrees to maintain
reasonable currency for Software for which it is financially
responsible under this Agreement and to provide maintenance and
support for new releases and versions of Software for which it is
operationally responsible. For purposes of this Section, "reasonable
currency" shall mean that, unless otherwise directed by Xxxxxxxx,
(i) Provider shall maintain Software within one Major Release of the
then current Major Release, unless otherwise specified in SCHEDULE
J, ATTACHMENT J-10, and (ii) Provider shall install Minor Releases
promptly or, if earlier, as requested by Xxxxxxxx. Provider will
maintain reasonable numbers of multiple Major Releases for which
commercial support is available, as directed by Xxxxxxxx, without
any increase in the Monthly Base Charges.
(b) EVALUATION AND TESTING. Prior to installing a new Major Release or
Minor Release, Provider shall evaluate and test such Release to
verify that it will perform in accordance with this Agreement and
the Xxxxxxxx Standards and that it will not (i) increase Xxxxxxxx'x
total cost of receiving the Services; (ii) require material changes
to Xxxxxxxx'x or the Eligible Recipient's business, facilities,
systems, software or equipment; or (iii) adversely impact the
functionality, interoperability, performance or resource efficiency
of the Services. The evaluation and testing performed by Provider
shall be at least consistent with the reasonable and accepted
industry norms applicable to the performance of such Services and
shall be at least as rigorous and comprehensive as the evaluation
and testing usually performed by highly qualified service providers
under such circumstances.
(c) APPROVAL BY XXXXXXXX. Notwithstanding SECTION 9.7(a) and (b),
Provider shall confer with Xxxxxxxx prior to installing any Major
Release or Minor Release, shall provide Xxxxxxxx with the results of
its testing and evaluation of such Release and a detailed
implementation plan and shall not install such Release if directed
not to do so by Xxxxxxxx. Where specified by Xxxxxxxx, Provider
shall not install new Software releases or make other Software
changes until Xxxxxxxx has completed and provided formal signoff on
successful user acceptance testing. Notwithstanding the foregoing,
Provider shall not install new Software releases or make other
Software changes if doing so would require Xxxxxxxx or the Eligible
Recipients to install new releases of, replace, or make other
changes to Applications Software or other Software for which
Xxxxxxxx is financially responsible unless Xxxxxxxx consents to such
change. Provider shall install,
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operate and support reasonable numbers of multiple versions of the
same Software as and to the extent directed to do so by Xxxxxxxx.
(d) UPDATES BY XXXXXXXX. Xxxxxxxx and the Eligible Recipients shall have
the right, but not the obligation, to install new releases of,
replace, or make other changes to Applications Software or other
Software for which Xxxxxxxx is financially responsible under this
Agreement.
9.8 ACCESS TO SPECIALIZED PROVIDER SKILLS AND RESOURCES.
Upon Xxxxxxxx'x request, Provider shall provide Xxxxxxxx and the Eligible
Recipients with prompt access to Provider's specialized services,
personnel and resources pertaining to finance and accounting and human
resources standards, processes and procedures and associated software,
equipment and systems on an expedited basis taking into account the
relevant circumstances (the "SPECIALIZED SERVICES"). The Parties
acknowledge that the provision of such Specialized Services may, in some
cases, constitute New Services for which Provider is entitled to
additional compensation, but in no event shall Provider be entitled to any
additional compensation for New Services under this subsection unless the
Xxxxxxxx Project Executive and Provider Project Executive, or their
authorized designee, expressly agree upon such additional compensation or
Provider's entitlement to additional compensation is established through
the dispute resolution process. If Xxxxxxxx authorizes Provider to proceed
but the Parties disagree as to whether the authorized work constitutes New
Services and Xxxxxxxx reasonably believes that such work is material and
is required on an urgent basis, Provider shall (reserving its rights)
proceed with such work, Xxxxxxxx shall pay for such work at the rates set
forth in SCHEDULE J (reserving its rights that resolution of the dispute
may result in a lower rate) and the disagreement shall be submitted to
dispute resolution pursuant to ARTICLE 19. For avoidance of doubt, access
to Provider's personnel with appropriate skills and training in Oracle
products shall not constitute a Specialized Services for which Provider
shall be entitled to additional compensation.
9.9 AUDIT RIGHTS.
(a) PROVIDER RECORDS. Provider shall, and shall cause its Subcontractors
and suppliers to, maintain complete and accurate records of and
supporting documentation for all Charges, all Xxxxxxxx Data and all
transactions, authorizations, System Changes, implementations, soft
document accesses, reports, analyses, procedures, controls, records,
data or information created, generated, collected, processed or
stored by Provider in the performance of its obligations under this
Agreement ("CONTRACT RECORDS"). Provider shall maintain
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such Contract Records in accordance with applicable Laws and
generally accepted accounting principles (unless otherwise directed
by Xxxxxxxx) for the applicable jurisdiction applied on a consistent
basis. Provider shall retain Contract Records in accordance with
Xxxxxxxx'x record retention policy as modified from time to time and
provided to Provider in writing.
(b) OPERATIONAL AUDITS. During the Term and for a period of thirty-six
(36) months after the end of any Termination Assistance Services
period (the "AUDIT PERIOD"), Provider shall, and shall cause its
Subcontractors to, provide to Xxxxxxxx (and internal and external
auditors, inspectors, regulators and other representatives that
Xxxxxxxx may designate from time to time) access at reasonable hours
to Provider Personnel, to the facilities at or from which Services
are then being provided and to Provider records and other pertinent
information, all to the extent relevant to the Services and
Provider's obligations under this Agreement. Such access shall be
provided for the purpose of performing audits and inspections of
Xxxxxxxx and its businesses, to (i) verify the integrity of Xxxxxxxx
Data, (ii) examine the systems that process, store, support and
transmit that data, (iii) examine the internal controls (e.g.,
organizational controls, input/output controls, system modification
controls, processing controls, system design controls, and access
controls) and the security (including physical and logical
information technology security), disaster recovery and back-up
practices and procedures; (iv) examine Provider's performance of the
Services; (v) verify Provider's reported performance against the
applicable Service Levels; (vi) examine Provider's measurement,
monitoring and management tools; and (vii) enable Xxxxxxxx and the
Eligible Recipients to meet applicable legal, regulatory and
contractual requirements (including the Xxxxxxxx-Xxxxx Act of 2002
and the implementing regulations promulgated by the United States
Securities and Exchange Commission and Public Accounting Oversight
Board), in each case to the extent applicable to the Services.
Provider shall during the Audit Period (A) provide any assistance
reasonably requested by Xxxxxxxx or its designee in conducting any
such audit, including installing and operating audit software, (B)
make requested personnel (to the extent still employed by Provider),
records and information available to Xxxxxxxx or its designee, and
(C) in all cases, provide such assistance, personnel, records and
information in an expeditious manner to facilitate the timely
completion of such audit. Provider shall reimburse Xxxxxxxx for the
actual cost of any follow on audit conducted by Xxxxxxxx to confirm
that an issue identified in a previous audit has been appropriately
corrected or resolved. In addition, if Xxxxxxxx suspects a
non-trivial breach of this Agreement, and Provider does not present
sufficient evidence to Xxxxxxxx that such non-trivial breach does
not exist or has been appropriately corrected or resolved, and if
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Xxxxxxxx subsequently conducts an audit and confirms the existence
of such non-trivial breach, then Provider shall promptly reimburse
Xxxxxxxx for the actual cost of such audit.
(c) FINANCIAL AUDITS. During the Audit Period, Provider shall, and shall
cause its Subcontractors to, provide to Xxxxxxxx (and internal and
external auditors, inspectors, regulators and other representatives
that Xxxxxxxx may designate from time to time, provided such
personnel are escorted by Provider) access at reasonable hours to
Provider Personnel and to Contract Records and other pertinent
information, all to the extent relevant to the performance of
Provider's obligations under this Agreement. Such access shall be
provided for the purpose of performing audits and inspections to (i)
verify the accuracy and completeness of Contract Records, (ii)
verify the accuracy and completeness of Charges and any Pass-Through
Expenses and Out-of-Pocket Expenses, (iii) examine the financial
controls, processes and procedures utilized by Provider, (iv)
examine Provider's performance of its other financial obligations,
and (v) enable Xxxxxxxx and the Eligible Recipients to meet
applicable legal, regulatory and contractual requirements, in each
case to the extent applicable to the Services and/or the Charges for
such Services. Provider shall (A) provide any assistance reasonably
requested by Xxxxxxxx or its designee in conducting any such audit,
(B) make requested personnel, records and information available to
Xxxxxxxx or its designee during the Term and thereafter, during the
period specified in Xxxxxxxx'x records retention policy, as it may
be modified from time to time, and (C) in all cases, provide such
assistance, personnel, records and information in an expeditious
manner to facilitate the timely completion of such audit. If any
such audit reveals an overcharge by Provider, and Provider does not
successfully dispute the amount questioned by such audit in
accordance with ARTICLE 19, Provider shall promptly pay to Xxxxxxxx
the amount of such overcharge, together with interest from the date
of Provider's receipt of such overcharge at the maximum amount
permitted under applicable law or the rate of one and one-half
percent (1.5%) per month, whichever is less. In addition, if any
such audit reveals an overcharge of more than five percent (5%) of
the aggregated audited Charges for the applicable audit, Provider
shall promptly reimburse Xxxxxxxx for the actual cost of the entire
audit, provided that the audit was not performed on a contingent fee
basis.
(d) AUDIT ASSISTANCE. Xxxxxxxx and certain Eligible Recipients may be
subject to regulation and audit by governmental bodies, other
regulatory authorities, customers or other parties to contracts with
Xxxxxxxx or an Eligible Recipient under applicable Laws, rules,
regulations, standards and contract provisions. If a governmental
body, other regulatory authority or customer or other party to a
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contract with Xxxxxxxx or an Eligible Recipient exercises its right
to examine or audit Xxxxxxxx'x or an Eligible Recipient's books,
records, documents or practices and procedures pursuant to such
Laws, rules, regulations, standards or contract provisions, Provider
shall provide all assistance requested by Xxxxxxxx or the Eligible
Recipient in responding to such audits or requests for information
provided that assistance required in excess of those Provider
Personnel primarily assigned to provide or support the Services may
result in additional charges to Xxxxxxxx to the extent that (a)
Provider has used all reasonable efforts to mitigate such increased
costs, (b) Provider has notified Xxxxxxxx in advance of such fact
and the need for such additional costs, and (c) Xxxxxxxx has
approved in writing of such additional costs.
(e) GENERAL PROCEDURES.
(i) Provider shall obtain audit rights equivalent to those
specified in this SECTION 9.9 from all Subcontractors and will
cause such rights to extend to Xxxxxxxx.
(ii) Notwithstanding the intended breadth of Xxxxxxxx'x audit
rights, Xxxxxxxx and its designated representatives shall not
be given access to (A) the proprietary information of other
Provider customers, (B) Provider locations that are not
related to Xxxxxxxx, the Eligible Recipients or the Services,
or (C) Provider's internal costs, except to the extent such
costs are the basis upon which Xxxxxxxx is charged.
(iii) In performing audits, Xxxxxxxx shall endeavor to avoid
unnecessary disruption of Provider's operations and
unnecessary interference with Provider's ability to perform
the Services in accordance with the Service Levels.
(iv) Following any audit, Xxxxxxxx shall conduct (in the case of an
internal audit), or request its external auditors or examiners
to conduct, an exit conference with Provider to obtain factual
concurrence with issues identified in the review.
(v) Xxxxxxxx shall be given adequate private workspace in which to
perform an audit, plus reasonable access to photocopiers,
telephones, facsimile machines, computer hook-ups, and any
other facilities or equipment needed for the performance of
the audit.
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(vi) To the extent practicable, Xxxxxxxx shall provide Provider
with reasonable notice prior to any operational or financial
audit initiated by Xxxxxxxx; provided that no such notice
shall be required with respect to audits conducted by
government auditors, inspectors, regulators or
representatives.
(vii) In the event that Xxxxxxxx uses external auditors to perform
auditing activities for Xxxxxxxx, Xxxxxxxx shall require such
external auditors to execute non-disclosure agreements
substantially in the form of EXHIBIT 1, (Form of
Non-Disclosure Agreement).
(f) PROVIDER INTERNAL AUDIT. If Provider determines as a result of its
own internal audit that it has overcharged Xxxxxxxx, then Provider
shall promptly pay to Xxxxxxxx the amount of such overcharge,
together with interest from the date of Provider's receipt of such
overcharge at the rate of one and one-half percent (1.5%) per month.
(g) PROVIDER RESPONSE. Provider and Xxxxxxxx shall meet to review each
audit report promptly after the issuance thereof. Provider will
respond to each audit report in writing within thirty (30) days from
receipt of such report, unless a shorter response time is specified
in such report. Provider and Xxxxxxxx shall develop and agree upon
an action plan to promptly address and resolve any deficiencies,
concerns and/or recommendations in such audit report and Provider,
at its own expense, shall undertake remedial action in accordance
with such action plan and the dates specified therein to the extent
necessary to comply with Provider's obligations under this
Agreement.
(h) PROVIDER RESPONSE TO NON-XXXXXXXX AUDITS. If an audit by a
governmental body or regulatory authority having jurisdiction over
Xxxxxxxx, an Eligible Recipient or Provider results in a finding
that Provider is not in compliance with any applicable generally
accepted accounting principle or other audit requirement or, subject
to SECTION 15.10 any Law relating to the performance of its
obligations under this Agreement, Provider shall, at its own expense
and within the time period specified by such auditor, address and
resolve the deficiency(ies) identified by such governmental body or
regulatory authority.
(i) SAS70 AUDIT. In addition to its other obligations under this SECTION
9.9, Provider shall cause a Type 2 Statement of Auditing Standards
("SAS") 70 audit (or equivalent audit) to be conducted with respect
to certain Provider facilities at or from which the Services are
provided. Provider shall promptly provide a copy of
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the resulting audit report to Xxxxxxxx as it pertains to the
Services being performed for Xxxxxxxx.
(j) AUDIT COSTS. Provider and its Subcontractors and suppliers shall
provide the Services described in this SECTION 9.9 at no additional
charge to Xxxxxxxx, subject to the Parties' discussions in
governance regarding staffing and re-prioritization of Projects and
related efforts, if required due to extraordinary or atypical levels
of audit activity for Xxxxxxxx.
9.10 AGENCY AND DISBURSEMENTS.
(a) DISBURSEMENTS. Beginning on the Commencement Date, Provider shall
make payments to certain lessors, licensors and suppliers as paying
agent of Xxxxxxxx or the Eligible Recipients, or shall reimburse
Xxxxxxxx for payments made by Xxxxxxxx or the Eligible Recipients to
such lessors, licensors and suppliers, if and to the extent such
payments relate or to Third Party Contracts, Equipment Leases or
Third Party Software licenses as to which Provider is financially
responsible as set forth in SCHEDULE U, but which have not been
formally transferred to Provider.
(b) LIMITED AGENCY. Xxxxxxxx hereby appoints Provider as its limited
agent during the Term solely for the purposes of the administration
of and payment of Pass-Through Expenses, amounts under Managed Third
Party Agreements and Managed Transport Agreements, and amounts under
Third Party Contracts, Equipment Leases and Third Party Software
licenses for which Provider is financially responsible under
SCHEDULES E or X. Xxxxxxxx shall provide, on a timely basis, such
affirmation of Provider's authority to such lessors, licensors,
suppliers, and other third parties as Provider may reasonably
request.
(c) REIMBURSEMENT FOR SUBSTITUTE PAYMENT. If either Party in error pays
to a third party an amount for which the other Party is responsible
under this Agreement, the Party that is responsible for such payment
shall promptly reimburse the paying Party for such amount.
(d) NOTICE OF DECOMMISSIONING. Provider agrees to notify Xxxxxxxx
promptly if and to the extent any Xxxxxxxx or Eligible Recipient
owned Equipment or Xxxxxxxx or Eligible Recipient leased Equipment
will no longer be used to provide the Services. The notification
will include the identification of the Equipment, and the date it
will no longer be needed by Provider, along with the reason for
decommissioning. Upon receipt of any such notice, Xxxxxxxx may (or
may cause the applicable Eligible Recipient to), in its sole
discretion, terminate the
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Equipment lease for such leased Equipment as of the date specified
in such notice and sell or otherwise dispose of or redeploy such
Xxxxxxxx or Eligible Recipient owned Equipment that is the subject
of such a notice as of the date specified in such notice. Upon
Provider ceasing to use any Xxxxxxxx or Eligible Recipient owned
Equipment (or, in the case of or Xxxxxxxx or Eligible Recipient
leased Equipment, upon the last day Xxxxxxxx or Eligible Recipient
is obligated to make such leased Equipment available to Provider, if
earlier), Provider shall return the same to Xxxxxxxx, the Eligible
Recipients and/or their designee(s) in condition at least as good as
the condition thereof on the Commencement Date, ordinary wear and
tear excepted. If such Equipment is not already located at a
Xxxxxxxx location, Provider shall, at Xxxxxxxx'x expense, deliver
such Equipment to the location designated by Xxxxxxxx, the Eligible
Recipients and/or their designee(s).
9.11 SUBCONTRACTORS.
(a) USE OF SUBCONTRACTORS. Provider shall not subcontract any of its
responsibilities without Xxxxxxxx'x prior written approval, which
may be withheld in Xxxxxxxx'x sole discretion. Prior to entering
into a subcontract with a third party for the Services, Provider
shall (i) give Xxxxxxxx reasonable prior notice specifying the
components of the Services affected, the scope of the proposed
subcontract, the identity and qualifications of the proposed
Subcontractor, and the reasons for subcontracting the work in
question; and (ii) obtain Xxxxxxxx'x prior written approval of such
Subcontractor. Xxxxxxxx also shall have the right during the Term to
revoke its prior approval of a Subcontractor and direct Provider to
replace such Subcontractor as soon as possible. Such replacement
shall be at no additional cost to Xxxxxxxx if Xxxxxxxx'x reason for
revoking its prior approval of Subcontractor was for cause. With
respect to a Subcontractor where William's reason for revoking its
prior approval of such Subcontractors was other than for cause,
Xxxxxxxx may incur additional charges in the event charges for a
replacement Subcontractor are higher than the charges for the
original Subcontractor; (a) provided Provider has used commercially
reasonable efforts to mitigate such increased costs, (b) Provider
has notified Xxxxxxxx in advance of such fact and the need for such
additional costs, and (c) Xxxxxxxx has approved in writing of such
additional costs. In addition, Xxxxxxxx may incur additional charges
if it requires termination of a Subcontractor where the subcontract
was a Third Party Contract assigned to Provider by Xxxxxxxx if such
Third Party Contract does not permit termination without additional
charges. With respect to any Provider Affiliates who are
Subcontractors, Xxxxxxxx may only require replacement of such
Provider Affiliate for cause, and such replacement shall be at no
additional cost to Xxxxxxxx.
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(b) SHARED SUBCONTRACTORS. Provider may, in the ordinary course of
business, subcontract (i) for third party services or products that
are not a material portion of the Services, that are not exclusively
dedicated to Xxxxxxxx and that do not include regular direct contact
with Xxxxxxxx or Eligible Recipient personnel or the performance of
services at Xxxxxxxx sites, or (ii) with temporary personnel firms
for the provision of temporary contract labor (collectively, "SHARED
SUBCONTRACTORS"); provided, that such Shared Subcontractors possess
the training and experience, competence and skill to perform the
work in a skilled and professional manner. Xxxxxxxx shall have no
approval right with respect to such Shared Subcontractors. If,
however, Xxxxxxxx expresses dissatisfaction with the services of a
Shared Subcontractor, Provider shall work in good faith to resolve
Xxxxxxxx'x concerns on a mutually acceptable basis and, at Xxxxxxxx'
request, replace such Shared Subcontractor. Such replacement shall
be at no additional cost to Xxxxxxxx if Xxxxxxxx'x reason for
requesting replacement of such Subcontractor was for cause. With
respect to a Subcontractor where William's reason for requesting
replacement of such Subcontractors was other than for cause,
Xxxxxxxx may incur additional charges in the event charges for a
replacement Shared Subcontractor are higher than the charges for the
original Shared Subcontractor (a) provided Provider has used
commercially reasonable efforts to mitigate such increased costs,
(b) Provider has notified Xxxxxxxx in advance of such fact and the
need for such additional costs, and (c) Xxxxxxxx has approved in
writing of such additional costs.
(c) PROVIDER RESPONSIBILITY. Provider shall be responsible for any
failure by any Subcontractor or Subcontractor personnel to perform
in accordance with this Agreement or to comply with any duties or
obligations imposed on Provider under this Agreement to the same
extent as if such failure to perform or comply was committed by
Provider or Provider employees. Provider shall be responsible for
the performance of all such Subcontractors and Subcontractor
personnel providing any of the Services hereunder. Provider shall be
Xxxxxxxx'x sole point of contact regarding the Services, including
with respect to payment.
9.12 GOVERNMENT CONTRACT FLOW-DOWN CLAUSES.
(a) GENERAL. The Parties acknowledge and agree that, as a matter of
federal procurement law, Provider may be deemed a "SUBCONTRACTOR" to
Xxxxxxxx and/or an Eligible Recipient under one or more of their
contracts with the federal government, that the Services provided or
to be provided by Provider in such circumstances constitute
"COMMERCIAL ITEMS" as that term is defined in the Federal
Acquisition Regulation, 48 C.F.R. Section 52.202, and that
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"SUBCONTRACTORS" providing "COMMERCIAL ITEMS" under government
contracts are subject to certain mandatory "FLOW-DOWN" clauses
(currently, (i) Equal Opportunity, (ii) Affirmative Action for
Special Disabled and Vietnam Era Veterans, and (iii) Affirmative
Action for Handicapped Workers) under the Federal Acquisition
Regulation, 48 C.F.R. Section 52.244-6. The Parties agree that,
insofar as certain clauses are be required to be flowed down to
Provider, Provider shall comply with such clauses at no additional
cost to Xxxxxxxx.
(b) SPECIAL REQUIREMENTS. The Parties do not believe that the Services
provided by Provider under this Agreement will be subject to
government flow-down requirements other than those associated with
any subcontracts for commercial items. Should compliance by Provider
with additional flow-down provisions nevertheless be required by the
federal government in certain circumstances, Provider shall comply
with such additional flow-down provisions and the Parties shall
negotiate in good faith regarding the additional consideration, if
any, to be paid to Provider in such circumstances. If the Parties
are unable to reach agreement as to consideration within thirty (30)
days, Xxxxxxxx, in its sole discretion, may elect to (i) terminate
the specific Services triggering the additional flow-down
requirements, (ii) terminate the Agreement in its entirety, or (iii)
pay Provider the additional incremental costs, if any, reasonably
incurred by Provider in complying with the additional flow-down
requirements. If Xxxxxxxx elects to terminate the Services or
Agreement, Xxxxxxxx shall not be obligated to pay any Termination
Charges set forth in SCHEDULE N. Wind Down Charges shall be payable
if and only if and only to the extent indicated as payable in
SCHEDULE N. If the Parties are unable to agree on the additional
incremental costs to be incurred by Provider, the Parties may agree
jointly to select a third-party accounting expert to make that
determination.
(c) SPECIAL PURCHASES SUPPORT. Xxxxxxxx'x intent is to purchase products
and services from Small Disadvantaged Businesses and Small Woman
Owned Businesses (collectively "SDBS") in order to satisfy its goals
and comply with government procurement laws and regulations. To help
Xxxxxxxx achieve its goals, Xxxxxxxx shall notify Provider of such
goals and Provider agrees to establish as a goal the purchase, when
commercially feasible, of products and services from SDBs, on behalf
of Xxxxxxxx and/or the Eligible Recipients, in the performance of
Provider's obligations under this Agreement. Provider, as part of
the Service, shall track invoice payments made to SDBs, and shall
submit a quarterly summary to Xxxxxxxx with respect to such
activity.
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9.13 RETAINED SYSTEMS AND BUSINESS PROCESSES.
(a) INTERFACE. Provider shall ensure that the Systems and business
processes used by Provider will interface and integrate with the
Retained Systems and Business Processes.
(b) KEEP INFORMED. Provider shall inform itself and maintain up to date
general knowledge about the existing and future Retained Systems and
Business Processes.
(c) ASSISTANCE. As part of the Services, Provider shall provide Xxxxxxxx
(upon Xxxxxxxx'x request) with assistance in relation to Retained
Systems and Business Processes, including: (i) liaising with
Xxxxxxxx or third parties regarding the impact of any alterations to
the Retained Systems and Business Processes and vice versa; and (ii)
assistance with identifying favorable vendors in relation to the
acquisition, support and development of Retained Systems and
Business Processes.
9.14 ANNUAL REVIEWS.
Annually, or more frequently if Xxxxxxxx requires, the Parties shall
conduct a detailed review of the Services then being performed by the
Provider. As part of this review, the Parties shall review the Resource
Baselines against actual service volumes for the previous year, and
forecast the service volumes for the next year. In addition, the Parties
shall examine: (i) whether the Charges are consistent with Xxxxxxxx'x
forecasts, industry norms and the Provider's representations; (ii) the
quality of the performance and delivery of the Services; (iii) whether the
Provider has delivered cost saving or efficiency enhancing proposals; (iv)
the level and currency of the technologies and business processes
employed; (v) the finance and accounting business processes, business and
technology strategy and direction; and (vi) such other things as Xxxxxxxx
may reasonably require.
10. XXXXXXXX RESPONSIBILITIES
10.1 RESPONSIBILITIES.
In addition to Xxxxxxxx'x responsibilities as expressly set forth
elsewhere in this Agreement, Xxxxxxxx shall be responsible for the
following:
(a) XXXXXXXX PROJECT EXECUTIVE. Xxxxxxxx shall designate one (1)
individual to whom all Provider communications concerning this
Agreement may be addressed
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(the "XXXXXXXX PROJECT EXECUTIVE"), who shall have the authority to
act on behalf of Xxxxxxxx and the Eligible Recipients in all
day-to-day matters pertaining to this Agreement. Xxxxxxxx may change
the designated Xxxxxxxx Project Executive from time to time by
providing notice to Provider. Additionally, Xxxxxxxx will have the
option, but will not be obligated, to designate additional
representatives who will be authorized to make certain decisions
(e.g., regarding emergency maintenance) if the Xxxxxxxx Project
Executive is not available.
(b) COOPERATION. Xxxxxxxx shall cooperate with Provider by, among other
things, making available, as reasonably requested by Provider,
management decisions, information, approvals and acceptances so that
Provider may accomplish its obligations and responsibilities
hereunder.
(c) REQUIREMENT OF WRITING. To the extent Provider is required under
this Agreement to obtain Xxxxxxxx'x approval, consent or agreement,
such approval, consent or agreement must be in writing and must be
signed by or directly transmitted by electronic mail from the
Xxxxxxxx Project Executive or an authorized Xxxxxxxx representative.
Notwithstanding the preceding sentence, the Xxxxxxxx Project
Executive may agree in advance in writing that as to certain
specific matters oral approval, consent or agreement will be
sufficient.
10.2 SAVINGS CLAUSE.
Provider's failure to perform its responsibilities under this Agreement or
to meet the Service Levels shall be excused if and to the extent such
Provider non-performance is caused by Xxxxxxxx'x, an Eligible Recipient's
or Xxxxxxxx Third Party Contractor's wrongful or tortious action or
failure to perform any of its obligations or responsibilities under this
Agreement, but only if (i) Provider expeditiously notifies Xxxxxxxx of
such wrongful or tortious action or failure to perform and its inability
to perform under such circumstances, (ii) Provider provides Xxxxxxxx with
every reasonable opportunity to correct such wrongful or tortious action
or failure to perform and thereby avoid such Provider non-performance,
(iii) Provider identifies and pursues commercially reasonable means to
avoid or mitigate the impact of such wrongful or tortious action or
failure to perform, (iv) Provider uses commercially reasonable efforts to
perform notwithstanding Xxxxxxxx'x, an Eligible Recipient's or Xxxxxxxx
Third Party Contractor's (including Managed Third Parties) wrongful or
tortious action or failure to perform, and (v) Provider conducts a Root
Cause Analysis and thereby demonstrates that such wrongful or tortious
action or failure to perform is the cause of Provider's non-performance.
Xxxxxxxx shall reimburse Provider for the additional incremental labor
charges and Out-of-Pocket Expenses reasonably incurred by Provider to
perform notwithstanding Xxxxxxxx wrongful
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or tortious actions or failure to perform; provided that (A) to the extent
practicable, Provider notifies Xxxxxxxx of such additional incremental
charges and expenses and obtains Xxxxxxxx' approval prior to incurring
such costs; and (B) Provider uses commercially reasonable efforts to
minimize such costs (if and to the extent Xxxxxxxx declines to approve
certain reasonable additional costs, Provider shall not be obligated to
proceed with the efforts associated therewith). Notwithstanding the
foregoing, Xxxxxxxx shall not be obligated to pay any additional labor
charges or expenses to the extent Provider is able to use personnel and
resources already assigned to Xxxxxxxx. Xxxxxxxx, in its sole discretion,
may forego or delay any work activities or temporarily adjust the work to
be performed by Provider, the schedules associated therewith or the
Service Levels to permit the performance of such activities using such
personnel or resources already assigned to perform the Services and
Provider shall be temporarily relieved of its obligation to meet impacted
Service Levels as and to the extent provided for in Xxxxxxxx'x decision.
11. CHARGES
11.1 GENERAL.
(a) PAYMENT OF CHARGES. In consideration of Provider's performance of
the Services, Xxxxxxxx agrees to pay Provider the applicable
Charges.
(b) NO ADDITIONAL CHARGES. The charges for Transition Services are set
forth in SCHEDULE J and there are no separate or additional charges
for such Transition Services. Xxxxxxxx shall not pay any Charges for
the Services in addition to those set forth in this Agreement. Any
costs incurred by Provider prior to the Effective Date are included
in the Charges as set forth in SCHEDULE J and are not to be
separately paid or reimbursed by Xxxxxxxx.
(c) NO CHARGE FOR REPERFORMANCE. At no additional expense to Xxxxxxxx,
Provider shall reperform (including any required backup or
restoration of data from scheduled backups or, if not available on
such backups, restoration by other means with Xxxxxxxx'x reasonable
cooperation) any Services that result in incorrect outputs due to an
error or breach by Provider, and the resources required for such
performance shall not be counted in calculating the Charges payable
or resources utilized by Xxxxxxxx hereunder.
(d) CHARGES FOR CONTRACT CHANGES. Unless otherwise agreed, System
Changes, changes in the Services (including changes in the Xxxxxxxx
Standards) and changes in the rights or obligations of the Parties
under this Agreement
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(collectively, "CONTRACT CHANGES") shall result in changes in the
applicable Charges only if and to the extent (i) the Agreement
expressly provides for a change in the Provider Charges in such
circumstances; (ii) the agreed upon Charges or pricing methodology
expressly provides for a price change in such circumstances (for
example, SCHEDULE J specifies the number of FTEs or hours of
coverage to be provided for the quoted price, or defines a Resource
Baseline for the Resource Unit in question with ARCs and RRCs for
increased or decreased usage); or (iii) the Contract Change meets
the definition of New Services for purposes of SECTION 11.5 and
additional Charges are applicable in accordance therewith.
(e) ELIGIBLE RECIPIENT SERVICES.
(i) ELIGIBLE RECIPIENTS. Provider shall provide the Services to
Eligible Recipients designated by Xxxxxxxx. To the extent a
designated Eligible Recipient will receive less than all of
the Services, Xxxxxxxx shall identify the categories of
Services to be provided by Provider to such Eligible
Recipient. Xxxxxxxx agrees that the Eligible Recipients will
direct all communications regarding this Agreement through and
to Xxxxxxxx, and not through or to Provider. Xxxxxxxx is fully
responsible for the performance of Xxxxxxxx'x obligations
under this Agreement with respect to the Services provided to
such Eligible Recipients.
(ii) NEW ELIGIBLE RECIPIENTS. From time to time Xxxxxxxx may
request that Provider provide Services to Eligible Recipients
not previously receiving such Services. Except as provided in
SECTION 11.5 or otherwise agreed by the Parties, such Services
shall be performed in accordance with the terms, conditions
and prices (excluding any non-recurring transition or start-up
activities specific to such Eligible Recipients) then
applicable to the provisions of the same Services to existing
Eligible Recipients. If applicable, Provider's work effort
associated with adding new Eligible Recipients shall be
conducted in accordance with SECTION 4.6.
(iii) ELECTION PROCEDURE. In the event of a transaction described in
clause (c) or (d) within the definition of Eligible Recipient
in SECTION 2.1, Xxxxxxxx may elect, on behalf of the Eligible
Recipient in question, either (i) that such Eligible Recipient
shall continue to obtain Services in some or all Functional
Service Areas subject to and in accordance with the terms and
conditions of this Agreement for the longer of two (2) years
or the remainder of the Term, (ii) that the Entity shall
obtain some or all of the
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Services under a separate agreement between Provider and such
Entity containing the same terms and conditions as this
Agreement or (iii) that the Term shall be terminated as to
such Eligible Recipient with respect to some or all the
Services as of a specified date, subject to its receipt of
Termination Assistance Services pursuant to SECTION 4.4. If
the Services are provided under a separate agreement, Xxxxxxxx
shall pay any fees in relation to the Services provided to
such Entity in the event such Entity cannot or does not pay
for the Services; provided, however, that (i) Xxxxxxxx'x
obligation to pay such fees shall be subject to any defenses,
conditions and limitations that would be available to such
Entity (other than the protection of bankruptcy and insolvency
laws), and (ii) Provider shall exhaust its contract and legal
remedies against such Entity prior to seeking payment from
Xxxxxxxx. Notwithstanding the foregoing, Xxxxxxxx shall not be
obligated to pay any fees for Services provided to an Entity
under a separate agreement if at the time the Entity agrees in
writing to be bound by the separate agreement, such Entity has
the same or a better credit rating than Xxxxxxxx. Services
provided to such Entity shall be included in the calculation
of Service volumes, if any, under this Agreement, but shall be
excluded when determining any Termination Charges payable as a
result of termination for convenience.
11.2 PASS-THROUGH EXPENSES.
(a) PROCEDURES AND PAYMENT. Xxxxxxxx shall pay all Pass-Through Expenses
directly to the applicable suppliers following review, validation
and approval of such Pass-Through Expenses by Provider. Before
submitting an invoice to Xxxxxxxx for any Pass-Through Expense,
Provider shall (i) review and validate the invoiced charges, (ii)
identify any errors or omissions, and (iii) communicate with the
applicable supplier to correct any errors or omissions, resolve any
questions or issues and obtain any applicable credits for Xxxxxxxx.
Provider shall deliver to Xxxxxxxx the original supplier invoice,
together with any documentation supporting such invoice and a
statement that Provider has reviewed and validated the invoiced
charges, within ten (10) days after Provider's receipt thereof. To
the extent that an invoice is received by Provider less than ten
days prior to its due date, Provider shall use commercially
reasonable efforts to deliver such invoice, documentation and
statement at least two (2) days after the date Provider receives
such invoice; and provided further that, if it is not possible to
deliver such invoice, documentation and statement at least two (2)
days after the date Provider receives such invoice, Provider shall
promptly notify Xxxxxxxx and, at Xxxxxxxx' option, either request
additional time for review and validation or submit the invoice for
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payment subject to subsequent review and validation. In addition, if
the supplier offers a discount for payment prior to a specified
date, Provider shall deliver such invoice and associated
documentation to Xxxxxxxx at least ten (10) days prior to such date
if Provider has received such invoice at least fifteen (15) days
prior to the specified date. To the extent Provider fails to comply
with its obligations hereunder, it shall be financially responsible
for any discounts lost or any late fees or interest charges incurred
by Xxxxxxxx and/or the Eligible Recipients.
(b) EFFORTS TO MINIMIZE. Provider will continually seek to identify
methods of reducing and minimizing Xxxxxxxx'x retained and
Pass-Through Expenses and will notify Xxxxxxxx of such methods and
the estimated potential savings associated with each such method.
11.3 INCIDENTAL EXPENSES.
Provider acknowledges that, except as expressly provided otherwise in this
Agreement, expenses that Provider incurs in performing the Services are
included in Provider's charges and rates set forth in this Agreement.
Accordingly, such Provider expenses are not separately reimbursable by
Xxxxxxxx unless Xxxxxxxx has agreed in advance and in writing to reimburse
Provider for the expense.
11.4 TAXES.
The Parties' respective responsibilities for taxes arising under or in
connection with this Agreement shall be as follows:
(a) INCOME TAXES. Each Party shall be responsible for its own Income
Taxes.
(b) SALES, USE AND PROPERTY TAXES. Each Party shall be responsible for
any sales, lease, use, personal property, stamp duty or other such
taxes on Equipment, Software or property it owns or leases from a
third party, including any lease assigned pursuant to this
Agreement, and/or for which it is financially responsible under this
Agreement.
(c) TAXES ON GOODS OR SERVICES USED BY PROVIDER. Provider shall be
responsible for all sales, service, value-added, lease, use,
personal property, excise, consumption, and other taxes and duties,
including VAT, payable by Provider on any goods or services used or
consumed by Provider in providing the Services (including services
obtained from Subcontractors) where the tax is imposed on Provider's
acquisition or use of such goods or services and the amount of tax
is
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measured by Provider's costs in acquiring or procuring such goods or
services and not by Xxxxxxxx'x cost of acquiring such goods or
services from Provider.
(d) SERVICE TAXES. The Parties responsibilities for Service Taxes
assessed against either Party on the provision of the Services as a
whole, or on any particular Service received by Xxxxxxxx or the
Eligible Recipients from Provider shall be as set forth in SCHEDULE
J.
(e) USER FEES. To the extent Xxxxxxxx is responsible under SCHEDULE J
for telecommunication surcharges or user fees imposed by government
authorities and associated with the Services and the allocation of
such fees or surcharges is within Provider's or its Subcontractors'
discretion, Provider and its Subcontractors shall act fairly and
equitably in allocating such fees and surcharges to Xxxxxxxx, and
Xxxxxxxx and the Eligible Recipients shall not receive more than a
proportionate share of such fees and surcharges. In addition, in the
event any such fee or surcharge for which Xxxxxxxx or an Eligible
Recipient is responsible is subsequently reduced or vacated by the
appropriate regulatory authority or court of competent jurisdiction,
Provider shall seek on behalf of Xxxxxxxx a refund of any
overpayment of such fee or surcharge by Xxxxxxxx or the Eligible
Recipient.
(f) NOTICE OF NEW TAXES AND CHARGES. Provider shall promptly notify
Xxxxxxxx when it becomes aware of any new taxes or other charges
(including changes to existing taxes or charges) to be passed
through and/or collected by Xxxxxxxx under this Section. Such
notification (which may be separate from the first invoice
reflecting such taxes or other charges) shall contain a detailed
explanation of such taxes or charges, including the effective date
of each new tax or charge.
(g) EFFORTS TO MINIMIZE TAXES. The Parties agree to cooperate fully with
each other to enable each to more accurately determine its own tax
liability and to minimize such liability to the extent legally
permissible. Provider's invoices shall separately state the Charges
that are subject to taxation and the amount of taxes included
therein. Each Party will provide and make available to the other any
resale certificates, information regarding out-of-state or
out-of-country sales or use of equipment, materials, or services,
and other exemption certificates or information reasonably requested
by either Party. At Xxxxxxxx'x request, Provider shall provide
Xxxxxxxx with (i) written documentation that Provider has filed all
required tax forms and returns required in connection with any
Service Taxes collected from Xxxxxxxx, and has collected and
remitted all applicable Service
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Taxes, and (ii) such other information pertaining to applicable
Taxes as Xxxxxxxx may reasonably request.
(h) TAX AUDITS OR PROCEEDINGS. Each Party shall promptly notify the
other Party of, and coordinate with the other Party, the response to
and settlement of, any claim for Tax Authorities by applicable
taxing authorities for which the other Party is financially
responsible hereunder. With respect to any claim arising out of a
form or return signed by a Party to this Agreement, such Party will
have the right to elect to control the response to and settlement of
the claim, but the other Party will have all rights to participate
in the responses and settlements commensurate with its potential
responsibilities or liabilities. Each Party also shall have the
right to challenge the imposition of any tax liability for which it
is financially responsible under this Agreement or, if necessary, to
request the other Party to challenge the imposition of any such tax
liability. If either Party requests the other to challenge the
imposition of any tax liability, such other Party shall not
unreasonably deny such request (unless and to the extent it assumes
financial responsibility for the tax liability in question), and,
the requesting Party shall reimburse the other for all fines,
penalties, interest, additions to taxes or similar liabilities
imposed in connection therewith, plus the reasonable legal,
accounting and other professional fees and expenses it incurs. Each
Party shall be entitled to any tax refunds or rebates obtained with
respect to the taxes for which such Party is financially responsible
under this Agreement.
(i) TAX FILINGS. Each Party represents, warrants and covenants that it
will file appropriate tax returns, and pay applicable taxes owed
arising from or related to the provision of the Services in
applicable jurisdictions. Provider represents, warrants and
covenants that it is registered to and will collect and remit
Service Taxes in all applicable jurisdictions.
11.5 NEW SERVICES.
(a) PROCEDURES. If Xxxxxxxx requests that Provider perform any New
Services reasonably related to the Services or other services
generally provided by Provider, Provider shall promptly prepare a
New Services proposal for Xxxxxxxx'x consideration. Unless otherwise
agreed by the Parties, Provider shall prepare such New Services
proposal at no additional charge to Xxxxxxxx and shall deliver such
proposal to Xxxxxxxx within ten (10) days of its receipt of
Xxxxxxxx'x request (or, where a longer time frame is required to
respond, such timeframe mutually agreed to by the Parties);
provided, that Provider shall use all commercially reasonable
efforts to respond more quickly in the case of a pressing business
need or an
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emergency situation. Xxxxxxxx shall provide such information as
Provider reasonably requests in order to prepare such New Service
proposal. Such New Services proposal shall include, among other
things, the following at such a level of detail as Xxxxxxxx may
reasonably request: (i) a project plan and fixed price or price
estimate for the New Service; (ii) a breakdown of such price or
estimate, (iii) a description of the service levels to be associated
with such New Service, (iv) a schedule for commencing and completing
the New Service, (v) a description of the new hardware or software
to be provided by Provider in connection with the New Service, (vi)
a description of the software, hardware and other resources,
including Resource Unit utilization, necessary to provide the New
Service, (vii) any additional facilities or labor resources to be
provided by Xxxxxxxx or the Eligible Recipients in connection with
the proposed New Service, and (viii) in the case of any Developed
Materials to be created through the provision of the proposed New
Services, any ownership rights therein that differ from the
provisions of SECTION 14.2. Xxxxxxxx may accept or reject any New
Services proposal in its sole discretion and Provider shall not be
obligated to perform any New Services to the extent the applicable
proposal is rejected. Unless the Parties otherwise agree, if
Xxxxxxxx accepts Provider's proposal, Provider will perform the New
Services and be paid in accordance with the proposal submitted by
Provider and the provisions of this Agreement. Upon Xxxxxxxx'x
acceptance of a Provider proposal for New Services, the scope of the
Services will be expanded and this Agreement will be modified to
include such New Services. Notwithstanding any provision to the
contrary, (i) Provider shall act reasonably and in good faith in
formulating such pricing proposal, (ii) Provider shall use
commercially reasonable efforts to identify potential means of
reducing the cost to Xxxxxxxx, including utilizing Subcontractors as
and to the extent appropriate, (iii) such pricing proposal shall be
no less favorable to Xxxxxxxx than the pricing and labor rates set
forth herein for comparable Services, and (iv) such pricing proposal
shall take into account the existing and future volume of business
between Xxxxxxxx and Provider.
(b) USE OF THIRD PARTIES. Xxxxxxxx may elect to solicit and receive bids
from third parties to perform any New Services. If Xxxxxxxx elects
to use third parties to perform New Services, (i) such New Services
shall not be deemed "Services" under the provisions of this
Agreement, and (ii) Provider shall cooperate with such third parties
as provided in SECTION 4.4.
(c) SERVICES EVOLUTION AND MODIFICATION. The Parties anticipate that the
Services will evolve and be supplemented, modified, enhanced or
replaced over time to keep pace with technological advancements and
improvements in the methods of
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delivering services and changes in the businesses of Xxxxxxxx and
the Eligible Recipients. The Parties acknowledge and agree that
these changes will modify the Services and will not be deemed to
result in New Services unless the changed services meet the
definition of New Services.
(d) END USER AND ELIGIBLE RECIPIENT REQUESTS. Provider will promptly
inform the Xxxxxxxx Project Executive of requests for New Services
from End Users or Eligible Recipients, and shall submit any
proposals for New Services to the Xxxxxxxx Project Executive or his
or her designee. Provider shall not agree to provide New Services to
any End Users or Eligible Recipients without the prior written
approval of the Xxxxxxxx Project Executive or his or her designee.
If Provider fails to comply strictly with this SECTION 11.5(d), it
shall receive no compensation for any services rendered to any
person or entity in violation of such provision.
(e) EFFORTS TO REDUCE COSTS AND CHARGES. From time to time, Xxxxxxxx may
request that the Parties work together to identify ways to achieve
reductions in the cost of service delivery and corresponding
reductions in the Charges to be paid by Xxxxxxxx by modifying or
reducing the nature or scope of the Services to be performed by
Provider, the applicable Service Levels or other contract
requirements. If requested by Xxxxxxxx, Provider shall promptly
prepare a proposal at such a level of detail as Xxxxxxxx may
reasonably request identifying all viable means of achieving the
desired reductions without adversely impacting business objectives
or requirements identified by Xxxxxxxx. In preparing such a
proposal, Provider shall give due consideration to any means of
achieving such reductions proposed by Xxxxxxxx, Provider shall
negotiate in good faith with Xxxxxxxx about each requested reduction
in Charges and, without disclosing the actual cost of providing the
Services, shall identify for Xxxxxxxx if and to what extent the cost
of service delivery may be reduced by implementing various changes
in the contract requirements. Xxxxxxxx shall not be obligated to
accept or implement any proposal; and Provider shall not be
obligated to implement any change that affects the terms of this
Agreement unless and until such change is reflected in a written
amendment to this Agreement.
11.6 EXTRAORDINARY EVENTS.
(a) DEFINITION. As used in this Agreement, an "EXTRAORDINARY EVENT"
shall mean a circumstance in which an event or discrete set of
events has occurred or is planned with respect to the business of
the Eligible Recipients that results or will result in a change in
the scope, nature or volume of the Services that the Eligible
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Recipients will require from Provider, and which is expected to
cause the estimated average monthly amount of chargeable Resource
Unit usage in any Resource Baseline to increase or decrease by
twenty-five percent (25%) or more. Examples of the kinds of events
that might cause such substantial increases or decreases include the
following:
(i) changes in locations where the Eligible Recipients operate;
(ii) changes in products of, or in markets served by, the Eligible
Recipients;
(iii) mergers, acquisitions, divestitures or reorganizations of the
Eligible Recipients;
(iv) material changes in the method of service delivery;
(v) material changes in the applicable regulatory environment;
(vi) changes in market priorities; or
(vii) changes in the business units being serviced by Provider.
(b) CONSEQUENCE. If an Extraordinary Event occurs, Xxxxxxxx may, at its
option, request more favorable pricing with respect to applicable
Charges in accordance with the following:
(1) Provider and Xxxxxxxx shall mutually determine on a reasonable
basis the efficiencies, economies, savings and resource
utilization reductions resulting from such Extraordinary Event
and, upon Xxxxxxxx'x approval, Provider shall then proceed to
implement such efficiencies, economies, savings and resource
utilization reductions as quickly as practicable and in
accordance with the agreed upon schedule. As the net
efficiencies, economies, savings or resource utilization
reductions are realized, the Charges specified on SCHEDULE J
and any affected Resource Baselines shall be promptly and
equitably adjusted to pass through to Xxxxxxxx the full
benefit of such efficiencies, economies, savings and resource
utilization reductions; provided, that Xxxxxxxx shall
reimburse Provider for any net costs or expenses incurred to
realize such efficiencies, economies, savings or resource
utilization reductions if and to the extent Provider (i)
notifies Xxxxxxxx of such additional costs and obtains
Xxxxxxxx'x approval prior to incurring such costs, (ii) uses
commercially reasonable efforts to identify and consider
practical alternatives, and reasonably determines that
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there is no other more practical or cost effective way to
obtain such savings without incurring such expenses, and (iii)
uses commercially reasonable efforts to minimize the
additional costs to be reimbursed by Xxxxxxxx.
(2) An Extraordinary Event shall not result in Charges to Xxxxxxxx
being higher than such Charges would have been if the RRCs,
ARCs and other rates and charges then specified in SCHEDULE J
had been applied, unless and to the extent such Extraordinary
Event results in New Services (e.g., Xxxxxxxx requires that
Provider create a new infrastructure to support an acquired
Entity). Xxxxxxxx may, at its sole option, elect, for each
Extraordinary Event, at any time to forego its rights under
this SECTION 11.6 and instead, apply RRCs, ARCs and other
rates and charges specified in SCHEDULE J to adjust the
Charges.
(c) DIVESTITURE OF XXXXXXXX POWER. Xxxxxxxx anticipates that it
ultimately will divest Xxxxxxxx Power. Provider acknowledges and
agrees that it has anticipated and planned for such divestiture, and
such divestiture shall not result in any adverse impact to Xxxxxxxx
under this Agreement. Upon the divestiture, Xxxxxxxx may require
Provider to, and Provider shall agree to, adjust the Resource
Baseline and to adjust any other affected provision such that
Xxxxxxxx has the full benefit of the provision as it operated prior
to the divestiture.
11.7 TECHNOLOGY.
(a) OBLIGATION TO EVOLVE. Provider acknowledges and agrees that its
current technologies and business processes shall continue to evolve
and change over time, and at a minimum, shall remain consistent with
the best practices of leading providers of finance and accounting
business process services and the business, and finance and
accounting objectives and competitive needs of Xxxxxxxx and the
Eligible Recipients. Subject to SECTION 9.5, Provider shall provide
the Services using current technologies and business processes that
will enable Xxxxxxxx and the Eligible Recipients to take advantage
of advances in the industry and support their efforts to maintain
competitiveness in the markets in which it competes. In addition,
subject to SECTIONS 9.5 and 11.5, Provider shall make such current
technologies and business processes available to Xxxxxxxx to perform
finance and accounting business processes and related services and
functions on behalf of itself and/or the Eligible Recipients at or
from Xxxxxxxx facilities. Xxxxxxxx may elect to conduct an annual
technology and business process audit to compare
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Provider's then current technologies and business processes against
the best practices of leading providers of finance and accounting
business processes and services. If any such audit reveals that the
technologies and business process then utilized by Provider are not
at the level of industry best practice, then Xxxxxxxx and the
Provider will review the results of the audit and establish and
implement a plan to implement identified best practices.
(b) OBLIGATION TO PROPOSE TECHNOLOGY AND BUSINESS PROCESS EVOLUTIONS.
Provider shall identify and propose the implementation of Technology
and Business Process Evolutions that are likely to: (i) improve the
efficiency and effectiveness of the Services (including cost
savings); (ii) improve the efficiency and effectiveness of the
finance and accounting business processes and related services and
functions performed by or for Xxxxxxxx and the Eligible Recipients
at or from Xxxxxxxx facilities; (iii) result in cost savings or
revenue increases to Xxxxxxxx and the Eligible Recipients in areas
of their business outside the Services; (iv) enhance the ability of
Xxxxxxxx and the Eligible Recipients to conduct their business and
serve their customers; and (v) achieve the objectives of Xxxxxxxx
and the Eligible Recipients (as described in SECTION 1.3) faster
and/or more efficiently than the then current strategies.
(c) PROVIDER BRIEFINGS AND TECHNOLOGY AND BUSINESS PROCESS AUDIT.
Provider shall routinely and regularly monitor and analyze
Technology and Business Process Evolutions of possible interest or
applicability to Xxxxxxxx and the Eligible Recipients. At least
semi-annually, Provider shall meet with Xxxxxxxx to formally brief
Xxxxxxxx regarding such Technology and Business Process Evolutions.
Such briefing shall include Provider's assessment of the business
impact, performance improvements and cost savings associated with
such Technology and Business Process Evolutions. Where requested by
Xxxxxxxx, Provider shall develop and present to Xxxxxxxx proposals
for: (i) implementing Technology and Business Process Evolutions or
(ii) changing the direction of Xxxxxxxx'x then current strategy.
(d) PROVIDER DEVELOPED ADVANCES. If Provider develops technological
advances in or changes to the finance and accounting business
processes and associated technologies used to provide the same or
substantially similar services to other Provider customers or
Provider develops new or enhanced processes, services, software,
tools, products or methodologies to be offered to such customers
(collectively, "NEW ADVANCES"), Provider shall, subject to SECTION
11.5, and to the extent permissible under any agreements between
Provider and third parties relating to New Advances, (i) offer
Xxxxxxxx the opportunity to serve as a pilot
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customer in connection with the implementation of such New Advances;
and (ii) if Xxxxxxxx declines such opportunity, offer Xxxxxxxx
preferred access to such New Advances and the opportunity to be
among the first ten percent (10%) of the Provider customer base to
implement and receive the benefits of any New Advances.
(e) FLEXIBILITY. Provider shall ensure that the technologies and
business process strategies it employs to provide the Services are
flexible enough to allow integration with new technologies or
business processes, or significant changes in Xxxxxxxx'x or an
Eligible Recipient's business, and finance and accounting business
process objectives and strategies. For example, Equipment must have
sufficient scalability and be sufficiently modular to allow
integration of new technologies without the need to replace whole,
or significant parts of, systems or business processes (e.g., made
to be a one-to-many model) to enable Xxxxxxxx'x and/or the Eligible
Recipients' business to become more scalable and flexible.
(f) EQUIPMENT IMPLEMENTATION AND REFRESH. Provider shall be fully
responsible for the implementation of new Equipment in the ordinary
course of Technology and Business Process Evolution. Provider shall
refresh all Equipment in accordance with Xxxxxxxx'x refresh
strategies, as set out in the Technology and Business Process Plan,
and as necessary to provide the Services in accordance with the
Service Levels and satisfy its other obligations under this
Agreement. If Provider is aware that these strategies differ from
generally accepted practice (or there are any other areas of concern
in relation to such strategies) it shall provide Xxxxxxxx with
notice of that fact and, upon request, provide Xxxxxxxx with further
information as to how to more closely align the strategies with
generally accepted practice.
(g) SOFTWARE IMPLEMENTATION AND REFRESH. Provider shall be fully
responsible for the implementation of new or changed Software, tools
and methodologies in the ordinary course of Technology and Business
Process Evolution. Provider shall: (i) refresh Software in
accordance with SECTION 9.7 of this Agreement and the Technology and
Business Process Plan; and (ii) provide training to Xxxxxxxx staff
regarding the use of any new or changed Software, tools and
methodologies.
(h) INCLUDED IN MONTHLY BASE CHARGES. Subject to the last sentence of
this SECTION 11.7(h), Technology and Business Process Evolution and
New Advances shall be included in the Monthly Base Charges and
Provider shall deploy, implement and support Technology and Business
Process Evolution and New Advances throughout the Term. Provider
shall be financially responsible for the capital cost
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of implementing Technology and Business Process Evolution and New
Advances to the extent such implementation involves categories of
Equipment, Software and other assets as to which responsibility is
allocated to Provider in SCHEDULE U. The performance of projects
required to implement Technology and Business Process Evolution
shall be included within the Monthly Base Charge. Xxxxxxxx shall pay
additional sums for implementation only if and to the extent (i) the
Technology and Business Process Evolution or New Advance is
considered a New Service pursuant to SECTION 11.5, or (ii) Xxxxxxxx
requests accelerated implementation of the Technology and Business
Process Evolution or New Advance (i.e., more rapidly than previously
contemplated in the Technology and Business Process Evolution Plan),
and in each case, only if and to the extent additional Provider
Personnel and resources are required to implement the Technology and
Business Process Evolution or New Advance in the desired timeframe.
(i) UNANTICIPATED CHANGE. If an Unanticipated Change occurs, and if
Xxxxxxxx requests that such Unanticipated Change be substituted or
added by Provider to the Services, the Parties shall use the
procedures in SECTION 11.6(b) to equitably adjust the Charges and
other relevant provisions of this Agreement to take such
Unanticipated Change into Account. An "UNANTICIPATED CHANGE" shall
consist of a material shift and improvement in technology capable of
providing all or part of the Services which is outside the normal
evolution of technology experienced by the finance and accounting
business process services outsourcing industry, the human resources
business processes outsourcing industry and/or the information
technology industry, was not generally available as of the Effective
Date, is judged by the Parties to be reasonably reliable and
relevant and can be technically substituted or added by Provider to
the Services. In the event of a significant and unanticipated change
that would materially reduce Provider's costs in providing the
Services, Xxxxxxxx may, at its option, request more favorable
pricing with respect to some or all of the Charges categories
specified in SCHEDULE J. If Xxxxxxxx makes such a request, the
Parties shall use the procedures in SECTION 11.6(B) to equitably
adjust such Charges.
11.8 PROJECT RESOURCES.
(a) PROCEDURES AND PERFORMANCE. As part of the Monthly Base Charges,
Provider shall provide the number of FTEs per Contract Year
specified in SCHEDULE J for each Functional Service Area listed
therein (the "BASELINE FTES") to perform certain activities and
projects requested by Xxxxxxxx under this Agreement ("PROJECTS").
The Projects underway as of the Effective Date are specified in
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SCHEDULE L. A "PROJECT" is a discrete unit of non-recurring work
that is not an inherent, necessary or customary part of the day -
to-day Services, and is not required to be performed by Provider to
meet the existing Service Levels (other than Service Levels related
to Project performance). A Project may consist of or include work
that would otherwise be treated as New Services. The Provider
Personnel assigned to perform such Projects shall possess the
training, education, experience, competence and skill to perform
such work. The staffing of Projects shall be determined by the
Parties through the governance process in accordance with the
following principles. In staffing Projects, Provider shall first
attempt to use existing resources available within the then current
Resource Baselines. At its option, Xxxxxxxx may re-prioritize in
scope work and other existing Projects to staff other Project
requirements as needed. If no additional Project effort capacity is
available within the then current Resource Baselines to staff a
Project, then with Xxxxxxxx prior approval, Provider may staff the
Project using new or additional resources, according to rates and in
such numbers as the Parties agree. The maximum rates applicable to
such additional resources that will be used to staff Project efforts
are set forth in SCHEDULE J, ATTACHMENT J-1; provided, that the
Parties may agree to more favorable rates than those set forth in
such Attachment. Where the Parties agree that additional resources
are required, Provider shall utilize additional personnel as and to
the extent necessary to perform the work in question and meet the
agreed Project schedule. The Xxxxxxxx Project Executive or his or
her designee shall define and set the priority for such Projects.
Provider shall maintain appropriate continuity of personnel assigned
to perform Projects. Provider shall report monthly on the level of
effort expended by Provider in the performance of Projects and shall
not exceed the Baseline FTE's without Xxxxxxxx'x prior approval. If
and to the extent Xxxxxxxx authorizes Provider to exceed the
Baseline FTE's in any Contract Year, Xxxxxxxx shall pay Provider for
such additional FTEs at the rates specified in SCHEDULE J,
ATTACHMENT J-1.
(b) PROJECT PROPOSALS. To the extent required under this Agreement or
the Policy and Procedures Manual, Provider shall prepare a Project
proposal in accordance with the process set forth in SECTION 11.5(a)
prior to beginning such Project. Xxxxxxxx may accept or reject such
Project proposal in its sole discretion. The hours expended by
Provider in preparing proposals or plans or reporting on the status
of such Projects shall be included in the Monthly Base Charges and
shall not be counted as FTEs.
(c) ADDITIONAL WORK OR REPRIORITIZATION. In addition to the FTEs
provided for in SECTION 11.8(a), the Xxxxxxxx Project Executive or
his or her designee may identify new or additional work activities
to be performed by Provider Personnel
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(including work activities that would otherwise be treated as New
Services) or reprioritize or reset the schedule for existing work
activities to be performed by such Provider Personnel. Unless
otherwise agreed, Xxxxxxxx shall incur no additional charges for the
performance of such work activities by Provider Personnel then
assigned to Xxxxxxxx. Provider shall use commercially reasonable
efforts to perform such work activities without impacting the
established schedule for other tasks or the performance of the
Services in accordance with the Service Levels. If it is not
possible to avoid such an impact, Provider shall notify Xxxxxxxx of
the anticipated impact and obtain its consent prior to proceeding
with such work activities. Xxxxxxxx, in its sole discretion, may
forego or delay such work activities or temporarily adjust the work
to be performed by Provider, the schedules associated therewith or
the Service Levels to permit the performance by Provider of such
work activities.
11.9 PRORATION.
Periodic charges under this Agreement are to be computed on a calendar
month basis, and shall be prorated for any partial month on a calendar day
basis.
11.10 REFUNDABLE ITEMS.
(a) PREPAID AMOUNTS BY XXXXXXXX. Where Xxxxxxxx and/or the Eligible
Recipients have prepaid for a service or function for which Provider
is assuming financial responsibility under this Agreement, Provider
shall refund to Xxxxxxxx, upon either Party identifying the
prepayment, that portion of such prepaid expense which is
attributable to periods on and after the Commencement Date.
(b) PREPAID AMOUNTS BY PROVIDER. Where Provider, Provider Affiliates
and/or Subcontractors have prepaid for a service or function which
extends past the expiration or termination of this Agreement,
Xxxxxxxx shall refund to Provider or such Provider Affiliate or
Subcontractor, upon either Party identifying the prepayment, that
portion of such prepaid expense which is attributable to periods
after the expiration or termination of this Agreement.
(c) REFUNDS AND CREDITS BY PROVIDER. If Provider should receive a
refund, credit, discount or other rebate for goods or services paid
for by Xxxxxxxx and/or the Eligible Recipients on a Pass-Through
Expense, Retained Expense, cost-plus or cost-reimbursement basis,
then Provider shall (i) notify Xxxxxxxx of such refund, credit,
discount or rebate and (ii) pay the full amount of such refund,
credit, discount or rebate to Xxxxxxxx.
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(d) REFUNDS AND CREDITS BY XXXXXXXX. If Xxxxxxxx or the Eligible
Recipients should receive a refund, credit, discount or other rebate
for goods or services paid for which they have been reimbursed by
Provider and/or the Provider Affiliates or Subcontractors, then
Xxxxxxxx shall (i) notify Provider of such refund, credit, discount
or rebate and (ii) pay the full amount of such refund, credit,
discount or rebate to Provider or such Provider Affiliate or
Subcontractor.
(e) ALLOCATION OF BALLOON, ROLL-OVER AND SIMILAR PAYMENTS. With respect
to contracts assigned to Xxxxxxxx pursuant to SECTIONS 4.4(b)(3),
4.4(b)(4), 4.4(b)(6) or 4.4(b)(7), where the costs under any such
contracts entered into by Provider, a Provider Affiliate or
Subcontractor are to be apportioned between the Parties, Provider
shall be responsible for the payment of any costs required to be
paid by Xxxxxxxx after the assignment of such contracts to Xxxxxxxx,
to the extent such costs are attributable to periods during the Term
and the provision of any Termination Assistance Services.
Additionally, if during their respective terms, the payment terms
for lease, license, maintenance, service charges or other periodic
payments under any such contract provide for increased fees
allocable to a period after assignment to Xxxxxxxx (other than to
account for cost of living or similar increases) (e.g., balloon or
similar payments), all such payments shall be recalculated so that,
as between the Parties, the entire cost shall be amortized evenly
over the entire term of such contract. Provider shall be responsible
for those roll-over and recalculated costs that are attributable to
periods during the Term and the provision of any Termination
Assistance Services, and, upon assignment to Xxxxxxxx, Xxxxxxxx
shall be responsible for all other payments. Provider shall provide
a credit to Xxxxxxxx for any such roll-over costs and recalculated
costs against any amounts then-due and owing by Xxxxxxxx or, if
there are no amounts then-owed by Xxxxxxxx, pay such roll-over or
recalculated amounts to Xxxxxxxx within thirty (30) days after the
assignment of the applicable contract to Xxxxxxxx.
11.11 XXXXXXXX BENCHMARKING REVIEWS.
(a) BENCHMARKING REVIEW. From time to time during the Term, Xxxxxxxx
may, at its expense and subject to this SECTION 11.11, engage the
services of an independent third party (a "BENCHMARKER") to compare
the quality and cost of one or more of the Functional Service Areas
of the Services against the quality and cost of first tier, well
managed service providers performing similar services to verify that
Xxxxxxxx is receiving from Provider pricing and levels of service
that are competitive with market rates, prices and service levels,
given the nature, volume and type of Services provided by Provider
hereunder ("BENCHMARKING"). In
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making this comparison, the Benchmarker shall consider normalization
factors, including the following, and adjust the prices as and to
the extent appropriate: (i) whether supplier transition charges are
paid by the customer as incurred or amortized over the term of this
agreement; (ii) the extent to which supplier pricing includes the
purchase of the customer's existing assets; (iii) the extent to
which supplier pricing includes the cost of acquiring future assets;
(iv) the extent to which this Agreement calls for supplier to
provide and comply with unique Xxxxxxxx requirements; and (v)
whether Service Taxes are included in such pricing or stated
separately in supplier invoices.
(b) GENERAL. The Benchmarker engaged by Williams shall be a firm listed
in SCHEDULE B, or a nationally recognized firm with experience in
benchmarking similar services and agreed to by the Parties, and
shall execute a non-disclosure agreement substantially in the form
attached hereto as EXHIBIT 1. Provider shall cooperate fully with
Williams and the Benchmarker and shall provide reasonable access to
the Benchmarker during such effort, all at Provider's cost and
expense; provided, however, that Provider will not be obligated to
provide the Benchmarker with the following items: (i) proprietary or
confidential information of Provider not related to the Services
provided to Williams or the Eligible Recipients; (ii) any internal
cost data (except where a Service is provided on a cost
pass-through, cost-plus, or cost-reimbursement basis); or (iii)
proprietary or confidential information of other Provider customers.
The Benchmarking shall be conducted so as not to unreasonably
disrupt Providers' operations under this Agreement. Williams shall
not initiate a Benchmarking of the Services during the first twelve
(12) months following the Effective Date.
(c) RESULT OF BENCHMARKING. If the Benchmarker finds that the Charges
paid by Williams for the benchmarked Services are greater than the
lowest twenty-five percent (25%) of the prices (adjusted in
accordance with SECTION 11.11(A)) charged by other first-tier, well
managed service providers providing similar services for work of a
similar nature, type or volume, (the "BENCHMARK STANDARD"), the
Benchmarker shall submit a written report setting forth such
findings and conclusions. The Parties shall then meet and negotiate
in good faith as to reductions in the Charges to eliminate any
unfavorable variance. If the Parties are unable to agree upon such
reductions after utilizing the dispute resolution process set forth
in SECTION 19.1, Williams may, at its option, terminate all the
Services or the applicable Functional Service Area. Williams must
exercise its right to terminate on this basis within one hundred
twenty (120) days of its receipt of the Benchmarker's final report
or within thirty (30) days after the end of the dispute resolution
process, whichever is later. If Williams terminates
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the Services on this basis, it shall not be obligated to pay
Termination Charges. Wind Down Charges shall be payable if and only
if and only to the extent indicated as payable in SCHEDULE N. If the
Services are terminated in part, Provider's Charges shall be
equitably adjusted to reflect the Services no longer performed by
Provider
(d) PROVIDER REVIEW AND DISPUTE. Williams shall provide Provider with a
copy of the Benchmarker's report and Provider shall have ten (10)
days to review such report and contest the Benchmarker's findings.
If the Parties are unable to agree upon the validity of such
findings, the matter shall be resolved pursuant to the dispute
resolution procedures set forth in ARTICLE 19. Reductions in
Provider's Charges shall be implemented effective as of the date the
Benchmarker's report was first provided to Provider.
11.12 PROVIDER PROCUREMENT.
Procurement management services are not within the scope of Services.
However, In event that at Williams's request, Provider procures products
and services from a third party on behalf of Williams or an Eligible
Recipient (as distinguished from procurement on Provider's own behalf for
use under this Agreement), Provider shall: (i) give Williams and the
Eligible Recipients the benefit of Provider's most favorable vendor
arrangements to the extent permitted under vendor's terms with the
applicable vendor; (ii) use commercially reasonable efforts to obtain the
most favorable pricing and terms and conditions then available from any
customary vendor sources for such products and services; (iii) use the
aggregate volume of Provider's procurements on behalf of itself, Williams
and other customers as leverage in negotiating such pricing or other terms
and conditions if permitted by the applicable vendor(s); (iv) use
commercially reasonable efforts to enable Williams to receive at least an
equitable and proportionate share of the total refunds, credits,
discounts, rebates, incentives and other benefits then available to
Provider directly in connection with such procurements; and (v) adhere to
the procurement procedures specified in the Policy and Procedures Manual,
as such procedures may be modified from time to time by Williams. In
performance of the activities contemplated by this paragraph, Provider
shall adhere to Williams's product, services and contract standards and
shall not deviate from such standards without Williams's prior approval.
To the extent an authorized Williams representative specifies the vendor,
pricing and/or terms and conditions for a procurement contemplated by this
paragraph, Provider shall not deviate from such instructions without
Williams's prior approval. Unless otherwise agreed by the Parties, the
procurement price of such products and services shall be treated as a Pass
Through Expense in accordance with SECTION 11.2.
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12. INVOICING AND PAYMENT
12.1 INVOICING.
(a) INVOICE. Provider shall invoice Williams for Provider Charges as
described below and in SCHEDULE J:
(i) MONTHLY BASE CHARGES. Upon the first day of each month in
which the Services are to be rendered, Provider will present
Williams with an invoice for any Monthly Base Charges due and
owing for the that month.
(ii) VARIABLE CHARGES. On or before the tenth (10th) day of each
month, Provider shall present Williams with an invoice for any
variable charges, credits or amounts due and owing for the
preceding month, including ARCs and RRCs and Transition
Milestone and Transformation Milestone Charges.
(iii) PROJECT CHARGES. Unless different payment terms are agreed to
by the Parties with respect to Project work, promptly
following the Acceptance of a Project deliverable, Provider
shall present Williams with an invoice for any Charges due and
owing in addition to the Monthly Base Charges payable pursuant
to SECTION 12.1(a)(i) above for such Project that are
associated with such Project deliverable.
The foregoing invoices shall be delivered to Williams
electronically, and, at its request, at the address(es) listed in
SECTION 21.3. Payments of all invoices shall be made via electronic
funds transfer to an account designated by Provider.
(b) FORM AND DATA. At Williams's request, Provider shall provide (1)
separate monthly invoices to Williams and each Williams Affiliate
that has executed a local agreement to receive Services, and (2)
detailed data to allocate the invoiced Charges among the Eligible
Recipients and their respective business units or other divisions
based on the chargeback data generated by Provider and/or the
allocation formula provided by Williams. Each invoice shall be in
the form specified in EXHIBIT 2, or such other form to which the
Parties may mutually agree. Each invoice shall include details
necessary to meet Williams' reasonable objectives to (i) comply with
all applicable legal, regulatory and accounting requirements, (ii)
allow Williams to validate volumes and fees, (iii) permit Williams
to chargeback internally to the same organizational level and at the
same level of detail in use by Williams as of the Effective Date,
and (iv) meet
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Williams's and the Eligible Recipient's billing requirements. Each
invoice shall include the pricing calculations and related data
utilized to establish the Charges. The data underlying each invoice
shall be delivered to Williams electronically in a form and format
compatible with Williams's accounting systems.
(c) CREDITS. To the extent a credit may be due to Williams pursuant to
this Agreement, Provider shall provide Williams with an appropriate
credit against amounts then due and owing; if no further payments
are due to Provider, Provider shall pay such amounts to Williams
within thirty (30) days.
(d) TIME LIMITATION. If Provider fails to provide an invoice to Williams
for any amount within one hundred twenty (120) days after the month
in which the Services in question are rendered or the expense
incurred, Provider shall waive any right it may otherwise have to
invoice for and collect such amount. (excluding Pass-Through
Expenses, which are covered in SECTION 11.2, and Transition
Milestone Payments, which must be invoiced within ninety (90) days
after completion and acceptance of the applicable Transition
Milestone)
12.2 PAYMENT DUE.
Subject to the other provisions of this ARTICLE 12, the invoices provided
for under SECTION 12.1 shall be due and payable on or before the following
dates (the "PAYMENT DATE"), unless the amount in question is disputed in
accordance with SECTION 12.4:
(a) For the invoices described in SECTION 12.1(a), (i) the last day of
the calendar month in which Williams receives the invoice, provided
Williams receives such invoice upon the first day of the month and
(ii) in all other cases, thirty (30) days after Williams's receipt
of such invoice.
(b) For the invoices described in SECTION 12.1(b), (i) the last day of
the calendar month in which Williams receives the invoice, provided
Williams receives such invoice upon the tenth day of the month and
(ii) in all other cases, twenty (20) days after Williams's receipt
of such invoice.
(c) For the invoices described in SECTION 12.1(c), ten (10) days after
Williams's receipt of such invoice.
(d) For any undisputed amount due under this Agreement for which a time
for payment is not otherwise specified, thirty (30) days after
Williams's receipt of such invoice.
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If Williams fails to make payment of any undisputed amount on or before
the Payment Date specified in this SECTION 12.2 and thereafter fails to
make such undisputed payment within five (5) business days after its
receipt of written notice from Provider of such overdue payment, Williams
shall pay interest on such overdue payment at the lesser of one and
one-half percent (1.5%) per month or the maximum amount permissible under
the applicable law. Prior to the Commencement Date and until such time
Williams achieves an investment grade status of Moody's Baa or better,
Williams shall provide to Provider an irrevocable letter of credit of Two
Million Dollars ($2,000,000) to the benefit of Provider to be drawn upon
by Provider in its sole discretion in the event of Williams's non-payment
of undisputed amounts after first giving notice to Williams and providing
Williams the five (5) business day opportunity to cure as set forth above.
12.3 SET OFF.
With respect to any amount to be paid or reimbursed by Williams hereunder,
Williams may set off against such amount any amount that Provider is
obligated to pay Williams hereunder.
12.4 DISPUTED CHARGES.
Williams may withhold payment of particular Charges that Williams
reasonably disputes in good faith subject to the following:
(a) DESCRIPTION AND EXPLANATION. If Williams disputes any Provider
Charges, Williams shall so notify Provider and provide a description
of the particular Charges in dispute and an explanation of the
reason why Williams disputes such Charges.
(b) ESCROW. To the extent the disputed Charges exceed, in the aggregate,
an amount equal to the average total monthly Charges for the
preceding six (6) months (i.e., the total Charges for the preceding
six (6) months, divided by six), the excess disputed Charges shall
be paid or deposited by Williams in an interest bearing escrow
account for the benefit of both Parties at a financial institution
reasonably acceptable to Provider until such dispute has been
resolved. Upon resolution of such dispute, the prevailing party
shall be entitled to such escrowed amounts and interest earned on
such escrowed amounts.
(c) CONTINUED PERFORMANCE. Each Party agrees to continue performing its
obligations under this Agreement while any dispute is being resolved
unless and
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until such obligations are terminated by the termination or
expiration of this Agreement.
(d) NO WAIVER. Neither the failure to dispute any Charges or amounts
prior to payment nor the failure to withhold any amount shall
constitute, operate or be construed as a waiver of any right
Williams may otherwise have to dispute any Charge or amount or
recover any amount previously paid.
(e) EXPEDITED DISPUTE RESOLUTION. The Parties agree that the following
expedited timeframes shall apply to the dispute resolution process
set forth in ARTICLE 19 with respect to payment disputes: (i)
fifteen (15) days (instead of thirty (30) days) in SECTION
19.1(d)(ii); and (ii) five (5) days (instead of ten (10) days) for
each of the mediator selection periods set forth in SECTION 19.2(c).
In addition, each Party shall use its best efforts to conclude any
mediation of payment disputes within sixty (60) days after the
Notice of Dispute.
13. WILLIAMS DATA AND OTHER PROPRIETARY INFORMATION
13.1 WILLIAMS OWNERSHIP OF WILLIAMS DATA.
Williams Data are and shall remain the property of Williams (and/or the
applicable Eligible Recipients). Provider shall promptly deliver Williams
Data (or the portion of such Williams Data specified by Williams) to
Williams in the format and on the media prescribed by Williams (i) at any
time at Williams's request, (ii) at the end of the Term and the completion
of all requested Termination Assistance Services, or (iii) with respect to
particular Williams Data, at such earlier date that such data are no
longer required by Provider to perform the Services. Thereafter, Provider
shall return or destroy, as directed by Williams, all copies of the
Williams Data in Provider's possession or under Provider's control within
ten (10) business days and deliver to Williams written certification of
such return or destruction signed by an authorized representative of
Provider. Provider shall not withhold any Williams Data as a means of
resolving any dispute. Williams Data shall not be utilized by Provider for
any purpose other than the performance of Services under this Agreement
and shall not be sold, assigned, leased, commercially exploited or
otherwise provided to third parties by or on behalf of Provider or any
Provider Personnel. Notwithstanding any other provision of this Agreement,
Provider shall not undertake or engage in any activity with respect to any
Williams Personal Data which would constitute Provider's functioning in
the capacity of a "controller," as such capacity may be identified and
defined in the respective applicable Privacy Laws and Provider shall
promptly notify Williams if it believes that any use of Williams Data by
Provider contemplated under this Agreement or to be undertaken as part of
the Services would
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constitute Provider so functioning in the capacity of a "controller."
Provider shall not possess or assert any lien or other right against or to
Williams Data. Notwithstanding the foregoing, (i) Provider may use and
retain copies of Williams Data to the extent required by applicable Laws
or necessary for litigation or dispute resolution proceedings that are
ongoing at the time Williams's requests return or destruction of such
Williams Data, and (ii) with respect to service level measurements
included in Williams Data, Provider may use such service level
measurements for purposes of this Agreement and otherwise on an
aggregated, non-identifiable basis for Provider's internal business
purposes and Williams may not authorize a Benchmarker to include such
service level measurements in such Benchmarker's databases unless such
restriction effectively leaves Williams unable to obtain such
Benchmarker's services.
13.2 SAFEGUARDING WILLIAMS DATA.
(a) SAFEGUARDING PROCEDURES. Provider shall establish and maintain
environmental, safety and facility procedures, data security
procedures and other safeguards against the destruction, loss,
unauthorized access or alteration of Williams Data in the possession
of Provider which are (i) no less rigorous than those maintained by
Williams as of the Commencement Date (or implemented by Williams in
the future to the extent deemed necessary by Williams), (ii) no less
rigorous than those maintained by Provider for its own information
of a similar nature, and (iii) adequate to meet the requirements of
Williams's records retention policy and applicable Laws. Provider
will revise and maintain such procedures and safeguards upon
Williams's request. Williams shall have the right to establish
backup security for Williams Data and to keep backup copies of the
Williams Data in Williams's possession at Williams's expense if
Williams so chooses. Provider shall remove all Williams Data from
any media taken out of service and shall destroy or securely erase
such media in accordance with the Policy and Procedures Manual. No
media on which Williams Data is stored may be used or re-used to
store data of any other customer of Provider or to deliver data to a
third party, including another Provider customer, unless securely
erased in accordance with the Policy and Procedures Manual. In the
event Provider discovers or is notified of a breach or potential
breach of security relating to Williams Data, Provider shall (i)
expeditiously notify Williams of such breach or potential breach,
(ii) investigate such breach or potential breach and perform a Root
Cause Analysis thereon, (iii) remediate the effects of such breach
or potential breach of security, and (iv) provide Williams with such
assurances as Williams shall request that such breach or potential
breach will not recur.
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(b) RECONSTRUCTION PROCEDURES. As part of the Services, Provider shall
be responsible for developing and maintaining procedures for the
reconstruction of lost Williams Data which are (i) no less rigorous
than those maintained by Williams as of the Commencement Date (or
implemented by Williams in the future to the extent deemed necessary
by Williams), and (ii) no less rigorous than those maintained by
Provider for its own information of a similar nature.
(c) CORRECTIONS. Provider shall restore all destroyed, lost or altered
Williams Data using generally accepted data restoration techniques.
In addition, if Provider or its Affiliates or Subcontractors has
caused the destruction, loss or alteration of any Williams Data due
to a Provider failure to perform its obligations under this
Agreement, Provider shall be responsible for the cost of restoring
such data. Provider shall at all times adhere to the procedures and
safeguards specified in SECTION 13.2(a) and (b) and shall correct
(including any required back-up or restoration of data from
scheduled backups, or if not available on such backups, restoration
by other means with Williams's reasonable cooperation), at no charge
to Williams, any destruction, loss or alteration of any Williams
Data attributable to the failure of Provider or Provider Personnel
to comply with Provider's obligations under this Agreement.
13.3 CONFIDENTIALITY.
(a) PROPRIETARY INFORMATION. Provider and Williams each acknowledge that
the other possesses and will continue to possess information that
has been developed or received by it, has commercial value in its or
its customers' business and is not generally available to the
public. Except as otherwise specifically agreed in writing by the
Parties, "PROPRIETARY INFORMATION" shall mean (i) this Agreement and
the terms hereof, (ii) all information marked confidential,
restricted or proprietary by either Party, and (iii) any other
information that is treated as confidential by the disclosing Party
and would reasonably be understood to be confidential, whether or
not so marked. In the case of Williams and the Eligible Recipient,
Proprietary Information also shall include Software provided to
Provider by or through Williams or the Eligible Recipients,
Developed Materials (to the extent owned by Williams pursuant to
SECTION 14.2), Williams Data, attorney-client privileged materials
or attorney work product, customer lists, customer contracts,
customer information, rates and pricing, information with respect to
competitors, strategic plans, account information, rate case
strategies, research information, chemical formulae, product
formulations, plant and equipment design information, catalyst
information, trade secrets, financial/accounting information
(including assets, expenditures, mergers,
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acquisitions, divestitures, billings collections, revenues and
finances), human resources and personnel information,
marketing/sales information, information regarding businesses,
plans, operations, third party contracts, licenses, internal or
external audits, law suits, regulatory compliance or other
information or data obtained, received, transmitted, processed,
stored, archived, or maintained by Provider under this Agreement. By
way of example, Williams Proprietary Information shall include plans
for changes in Williams's or an Eligible Recipient's facilities,
business units and product lines, plans for business mergers,
acquisitions or divestitures, rate information, plans for the
development and marketing of new products, financial forecasts and
budgets, technical proprietary information, employee lists and
company telephone or e-mail directories. In the case of Provider,
Proprietary Information shall include financial information, account
information, information regarding Provider's business plans and
operations, and proprietary software, tools and methodologies, and
Developed Materials owned by Provider and used in the performance of
the Services.
(b) OBLIGATIONS.
(i) During the term of this Agreement and at all times thereafter,
Provider and Williams shall not disclose, and shall maintain
the confidentiality of, all Proprietary Information of the
other Party (and in the case of Provider, the Eligible
Recipients). Williams and Provider shall each use at least the
same degree of care to safeguard and to prevent disclosing to
third parties the Proprietary Information of the other as it
employs to avoid unauthorized disclosure, publication,
dissemination, destruction, loss, or alteration of its own
information (or information of its customers) of a similar
nature, but not less than reasonable care. Provider Personnel
shall not have access to Williams Proprietary Information
without proper authorization. Upon receiving such
authorization, authorized Provider Personnel shall have access
to Williams Proprietary Information only to the extent
necessary for such person to perform his or her obligations
under or with respect to this Agreement or as otherwise
naturally occurs in such person's scope of responsibility,
provided that such access is not in violation of Law.
(ii) The Parties may disclose Proprietary Information to their
Affiliates, auditors, attorneys, accountants, consultants,
contractors and subcontractors, where (A) use by such person
or entity is authorized under this Agreement, (B) such
disclosure is necessary for the performance of
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such person's or entity's obligations under or with respect to
this Agreement or otherwise naturally occurs in such person's
or entity's scope of responsibility, (C) the person or entity
(and its applicable officers and employees) agree in writing
to assume the obligations consistent with this SECTION 13.3,
and (D) the disclosing Party assumes full responsibility for
the acts or omissions of such person or entity regarding their
use and disclosure of such Proprietary Information and takes
all reasonable measures to ensure that the Proprietary
Information is not disclosed or used in contravention of this
Agreement. Any disclosure to such person or entity shall be
under the terms and conditions as provided herein. Each
Party's Proprietary Information shall remain the property of
such Party.
(iii) Neither Party shall (A) make any use or copies of the
Proprietary Information of the other Party except as
contemplated by this Agreement, (B) acquire any right in or
assert any lien against the Proprietary Information of the
other Party, (C) sell, assign, transfer, lease, or otherwise
dispose of Proprietary Information to third parties or
commercially exploit such information, including through
Derivative Works, or (D) refuse for any reason (including a
default or material breach of this Agreement by the other
Party) to promptly provide the other Party's Proprietary
Information (including copies thereof) to the other Party if
requested to do so. Upon expiration or any termination of this
Agreement and completion of each Party's obligations under
this Agreement, each Party shall return or destroy, as the
other Party may direct, all documentation in any medium that
contains, refers to, or relates to the other Party's
Proprietary Information within thirty (30) days, except that
either Party may retain copies of the other Party's
Proprietary Information to the extent required by applicable
Laws or for litigation or dispute resolution proceedings that
are ongoing at the time Williams's requests return or
destruction of such Williams Data. Each Party shall deliver to
the other Party written certification of its compliance with
the preceding sentence signed by an authorized representative
of such Party. In addition, each Party shall take all
necessary steps to ensure that its employees comply with these
confidentiality provisions.
(c) EXCLUSIONS. SECTION 13.3(b) shall not apply to any particular
information which the receiving Party can demonstrate (i) is, at the
time of disclosure to it, generally available to the public other
than through a breach of the receiving Party's or a third party's
confidentiality obligations; (ii) after disclosure to it, is
published by the disclosing Party or otherwise becomes generally
available to the public other
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than through a breach of the receiving Party's or a third party's
confidentiality obligations; (iii) is lawfully in the possession of
the receiving Party at the time of disclosure to it; (iv) is
received from a third party having a lawful right to disclose such
information; or (v) is independently developed by the receiving
Party without reference to Proprietary Information of the furnishing
Party. Information disclosed hereunder to Provider and any
combination of features thereof shall not be deemed to be within the
foregoing exceptions merely because such information or any
combination of the individual features thereof are embraced by more
general information in the public knowledge or literature. In
addition, the receiving Party shall not be considered to have
breached its obligations under this SECTION 13.3 for disclosing
Proprietary Information of the other Party as required, in the
opinion of legal counsel, to satisfy any legal requirement of a
competent government or regulatory body, provided that, promptly
upon receiving any such request, such Party, to the extent it may
legally do so, advises the other Party of the Proprietary
Information to be disclosed and the identity of the third party
requiring such disclosure prior to making such disclosure in order
that the other Party may interpose an objection to such disclosure,
take action to assure confidential handling of the Proprietary
Information, or take such other action as it deems appropriate to
protect the Proprietary Information. The receiving Party shall use
commercially reasonable efforts to cooperate with the disclosing
Party in its efforts to seek a protective order or other appropriate
remedy or in the event such protective order or other remedy is not
obtained, to obtain assurance that confidential treatment will be
accorded such Proprietary Information. Notwithstanding the
requirements of this SECTION 13.3, Williams shall be entitled to
disclose the terms of this Agreement and such related information as
Williams deems necessary if Williams determines it is required to
disclose such terms and information as part of a public filing or as
otherwise required by the rules and regulations promulgated by the
United States Securities and Exchange Commission, the Federal Energy
Regulatory Commission, or any similar governmental or regulatory
body having jurisdiction over Williams. In such event, Williams
shall cooperate with Provider, at Provider's expense, to minimize
the scope of such disclosure to the extent reasonably requested by
Provider; provided that nothing shall prevent or delay Williams from
fulfilling its public filing or similar disclosure obligations even
if Provider and Williams are unable to agree on the appropriate
manner in which to control the scope of the disclosure, and the
final discretion regarding how Williams must satisfy its legal
disclosure obligations with respect to such public filings shall
remain with Williams.
(d) LOSS OF PROPRIETARY INFORMATION. Each Party shall (i) immediately
notify the other Party of any possession, use, knowledge,
disclosure, or loss of such other
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Party's Proprietary Information in contravention of this Agreement,
(ii) promptly furnish to the other Party all known details and
assist such other Party in investigating and/or preventing the
reoccurrence of such possession, use, knowledge, disclosure, or
loss, (iii) cooperate with the other Party in any investigation or
litigation deemed necessary by such other Party to protect its
rights, and (iv) promptly use all commercially reasonable efforts to
prevent further possession, use, knowledge, disclosure, or loss of
Proprietary Information in contravention of this Agreement. Each
Party shall bear any costs it incurs in complying with this SECTION
13.3(d).
(e) NO IMPLIED RIGHTS. Nothing contained in this SECTION 13.3 shall be
construed as obligating a Party to disclose its Proprietary
Information to the other Party, or as granting to or conferring on a
Party, expressly or impliedly, any rights or license to any
Proprietary Information of the other Party.
(f) SURVIVAL. The Parties' obligations of non-disclosure and
confidentiality shall survive the expiration or termination of this
Agreement.
13.4 FILE ACCESS.
Williams shall have unrestricted access to, and the right to review and
retain the entirety of, all computer or other files containing Williams
Data, as well as all systems and network logs, system parameters and
documentation. At no time shall any of such files or other materials or
information be stored or held in a form or manner not immediately
accessible to Williams. Provider shall provide to the Williams Project
Executive all passwords, codes, comments, keys, documentation and the
locations of any such files and other materials promptly upon the request
of Williams, including Equipment and Software keys and such information as
to format, encryption (if any) and any other specification or information
necessary for Williams to retrieve, read, revise and/or maintain such
files and information. Upon the request of the Williams Project Executive,
Provider shall confirm that, to the best of its knowledge, all files and
other information provided to Williams are complete and that no material
element, amount, or other fraction of such files or other information to
which Williams may request access or review has been deleted, withheld,
disguised or encoded in a manner inconsistent with the purpose and intent
of providing full and complete access to Williams as contemplated by this
Agreement.
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13.5 REQUIREMENTS FOR INFORMATION IN LEGAL PROCEEDINGS.
(a) PRESERVATION OF LEGAL PRIVILEGES. If Williams notifies Provider, or
Provider is otherwise aware, that particular Williams Data or
Williams Proprietary Information may be within Williams
attorney-client or work-product privileges of Williams, then
regardless of any applicable exclusions, Provider (i) shall not
disclose such Williams Data or Williams Proprietary Information or
take any other action that would result in waiver of such privileges
and (ii) shall instruct all Provider Personnel and Subcontractors
who may have access to such communications to maintain privileged
material as strictly confidential and otherwise protect Williams
privileges. Communications to and from Williams Law Department shall
be deemed to contain privileged material unless Williams otherwise
states.
(b) LITIGATION RESPONSE PLAN. If Williams so requests, Provider shall
participate in periodic meetings to discuss implementation and
updating of Williams litigation response plan, including policies
and procedures to prepare for and respond to discovery requests,
subpoenas, investigatory demands, and other requirements for
information related to legal and regulatory proceedings (the
"LITIGATION RESPONSE PLAN"). At such meetings, Provider shall fully
cooperate with Williams in providing all information requested by
Williams or that would assist Williams in improving the Litigation
Response Plan. To the extent requested by Williams, Provider shall
comply with the Litigation Response Plan as it may be revised from
time to time, including preparing for an complying with requirements
for preservation and production of data in connection with legal and
regulatory proceedings and government investigations.
(c) RESPONSE TO PRESERVATION AND PRODUCTION REQUIREMENTS.
(i) If Williams is required to, or sees a risk that it will be
required to, preserve and/or produce any Materials, Williams
Data, Williams Confidential Information or related Systems
possessed by Provider or under Provider's control in the
context of legal proceedings or investigations, Williams may
send Provider a notice (a "LITIGATION REQUIREMENTS NOTICE")
describing the items to be preserved or produced in reasonable
detail. If Williams so requests, Provider shall promptly
provide Williams with information needed to determine with
greater specificity the scope of the request.
(ii) Upon receipt of a Litigation Requirements Notice, Provider
shall (A) designate a legal information management
representative who shall be
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responsible for managing Provider's response and any resulting
Services and (B) cooperate with Williams in developing a
reasonable, complete and cost effective plan for preserving
and/or producing data covered by an Litigation Requirement
Notice.
(iii) To the extent that a Litigation Requirement Notice designates
for preservation items that Provider can identify with
reasonable certainty, Provider shall immediately take all
commercially reasonable measures to preserve such items. To
the extent that a Litigation Requirement Notice covers
production of items that Provider can identify with reasonable
certainty, Provider shall use all commercially reasonable
efforts to produce such items by the date set forth in the
Litigation Requirements Notice (or within 30 days, if no date
is given). If Provider is unable to determine from the
Litigation Requirements Notice what items are to be preserved
and/or produced, or is not able for technical or other reasons
to take effective steps to fully preserve or produce such
items, Provider shall immediately notify Williams and
cooperate with Williams in further specifying such items and
in implementing the required technology or procedures.
(iv) Provider shall cooperate with Williams in generating
information to be presented in legal proceedings, including,
as Williams requests, (A) cost estimates, (B) descriptions of
systems, data, media and processes, (C) reports, declarations
and affidavits, (D) reasons why it may be infeasible to
preserve or produce certain items, and (E) other material as
requested by Williams. Without limiting the generality of the
foregoing, Provider shall fully document all actions taken by
Provider pursuant to any Litigation Requirement Notice.
Provider shall promptly report to Williams on its activities
related to complying with the requirements described in the
Litigation Requirement Notice, and shall issue periodic
reports pursuant to SECTION 9.5 on a schedule to be agreed to
by the Parties.
(d) PROVIDER RESPONSIBILITY FOR WILLIAMS INFORMATION. Upon receipt of
any request, demand, notice, subpoena, order or other legal
information request relating to legal proceedings or investigations
by third parties relating to any Materials, Williams Data, Williams
Confidential Information or related Systems in Provider's
possession, Provider shall immediately notify Williams Project
Executive (or his or her designee) and provide Williams with a copy
of all documentation of such legal information request, to the
extent Provider legally
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may do so. Prior to responding to such legal information request,
Provider shall meet and confer with Williams and shall cooperate
with Williams in preserving Williams legal rights, including but not
limited to objections, reservations, limitations and privileges,
relating to such legal information request. If legally permissible,
Williams at its sole discretion may demand tender of the request by
Provider and assume primary responsibility for responding, in which
case (i) Provider shall cooperate fully with Williams in preparing
the response and (ii) Williams shall inform Provider of all
proceedings related to the response and protect Provider's interests
and legal rights. If Provider is barred legally from notifying
Williams of the legal information request, Provider shall take all
commercially reasonable steps, at Williams' expense, to preserve
Williams legal rights in connection with any response.
(e) COST OF COMPLIANCE. The Parties acknowledge that compliance with
this SECTION 13.3 may, in some cases, constitute New Services for
which Provider is entitled to additional compensation. However, in
no event shall Provider be entitled to any additional compensation
for New Services under this subsection unless the Williams Project
Executive and Provider Project Executive, or their authorized
designee, expressly agree upon such additional compensation or
Provider's entitlement to additional compensation is established
through the dispute resolution process.
14. OWNERSHIP OF MATERIALS
14.1 WILLIAMS OWNED MATERIALS.
(a) OWNERSHIP OF WILLIAMS MATERIALS. Williams shall be the sole and
exclusive owner of all (i) Materials, including Software owned by
Williams prior to the Commencement Date or developed or acquired by
Williams other than in connection with the Services, (ii) Williams
Special Category Materials, and (iii) all Derivative Works of such
Williams owned Materials and Williams Special Category Materials,
including all United States and foreign patent, copyright and other
intellectual property rights in such Materials ("WILLIAMS OWNED
MATERIALS"). "WILLIAMS SPECIAL CATEGORY MATERIALS" means Developed
Materials so identified by written agreement of the Parties prior to
the development of such Developed Materials. In addition, Williams
shall own the copyrights to Williams Specific Developed Materials in
accordance with SECTION 14.2(b) below.
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(b) LICENSE TO WILLIAMS OWNED MATERIALS. As of the Commencement Date,
Williams hereby grants Provider (and, to the extent necessary for
Provider to provide the Services, to Subcontractors designated by
Provider that sign a written agreement to be bound by terms
consistent with the terms contained herein including, to the extent
applicable, the terms specified in this Section as well as those
pertaining to the ownership of such Williams Owned Materials and any
Derivative Works developed by the Parties, the scope and term of the
license, the restrictions on the use of such Williams Owned
Materials, and the obligations of confidentiality) a non-exclusive,
non-transferable, royalty-free right and license during the Term
(and thereafter during the performance of any Termination Assistance
Services requested by Williams) to access, use, execute, reproduce,
display, perform, modify, distribute and create Derivative Works of
the Williams Owned Materials for the express and sole purpose of
providing the Services. Provider and its Subcontractors shall have
no right to the source code to Williams Owned Software unless and to
the extent approved in advance by Williams. Williams Owned Materials
shall remain the property of Williams. Provider and its
Subcontractors shall not (i) use any Williams Owned Materials for
the benefit of any person or Entity other than Williams or the
Eligible Recipients, (ii) separate or uncouple any portions of the
Williams Owned Software, in whole or in part, from any other
portions thereof, or (iii) reverse assemble, reverse engineer,
translate, disassemble, decompile or otherwise attempt to create or
discover any source or human readable code, underlying algorithms,
ideas, file formats or programming interfaces of the Williams Owned
Software by any means whatsoever, without the prior approval of
Williams, which may be withheld at Williams's sole discretion.
Except as otherwise requested or approved by Williams, Provider and
its Subcontractors shall cease all use of Williams Owned Materials
upon the end of the Term and the completion of any Termination
Assistance Services requested by Williams pursuant to SECTION
4.4(b)(8) and shall certify such cessation to Williams in a notice
signed by an officer of Provider and each applicable Subcontractor.
Williams may agree, on a case by case basis, to grant Provider the
right to use certain Williams Owned Materials (including Williams
Owned Software and Williams owned Developed Materials) for the
benefit of other customers of Provider or for any other purpose
subject to mutually beneficial terms and conditions to be agreed to
by the Parties. THE WILLIAMS OWNED MATERIALS ARE PROVIDED BY
WILLIAMS TO PROVIDER AND ITS SUBCONTRACTORS ON AN AS-IS, WHERE-IS
BASIS. WILLIAMS EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, AS TO SUCH WILLIAMS OWNED MATERIALS,
OR THE CONDITION OR SUITABILITY OF SUCH SOFTWARE FOR USE BY PROVIDER
OR ITS SUBCONTRACTORS TO
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PROVIDE THE SERVICES, INCLUDING WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
(c) LICENSE TO THIRD PARTY SOFTWARE. Subject to Provider having obtained
any Required Consents, Williams hereby grants to Provider, for the
sole purpose of performing the Services and solely to the extent of
Williams's underlying rights, the same rights of access and use as
Williams possesses under the applicable software licenses with
respect to Williams licensed Third Party Software. Williams also
shall grant such rights to Subcontractors designated by Provider if
and to the extent necessary for Provider to provide the Services;
provided that, Provider shall pay all fees, costs and expenses
associated with the granting of such rights to such Subcontractors.
Provider and its Subcontractors shall comply with the duties,
including use restrictions and those of nondisclosure, imposed on
Williams by such licenses. In addition, each Subcontractor shall
sign a written agreement to be bound by all of the terms contained
herein applicable to such Third Party Software (such agreement shall
be agreed to by the Parties and shall include the terms specified in
this Section as well as those pertaining to the ownership of such
Software and any derivative materials developed by the Parties, the
scope and term of the license, the restrictions on the use of such
Software, the obligations of confidentiality, etc.). Except as
otherwise requested or approved by Williams (or the relevant
licensor), Provider and its Subcontractors shall cease all use of
such Third Party Software upon the end of the Term and the
completion of any Termination Assistance Services requested by
Williams pursuant to SECTION 4.4(b)(8). THE WILLIAMS LICENSED THIRD
PARTY SOFTWARE IS PROVIDED BY WILLIAMS TO PROVIDER AND ITS
SUBCONTRACTORS ON AN AS-IS, WHERE-IS BASIS. WILLIAMS EXPRESSLY
DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS
TO SUCH WILLIAMS LICENSED THIRD PARTY SOFTWARE, OR THE CONDITION OR
SUITABILITY OF SUCH SOFTWARE FOR USE BY PROVIDER OR ITS
SUBCONTRACTORS TO PROVIDE THE SERVICES, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
14.2 DEVELOPED MATERIALS.
The Parties rights and responsibilities with respect to Developed
Materials shall be as set forth in SECTION 14.2 of SCHEDULE S.
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14.3 PROVIDER OWNED MATERIALS.
(a) OWNERSHIP OF PROVIDER OWNED MATERIALS. Provider shall be the sole
and exclusive owner of the (i) Materials owned by it prior to the
Commencement Date, (ii) Materials acquired by Provider on or after
the Commencement Date, other than acquisitions for Williams or an
Eligible Recipient in connection with the performance of the
Services, (iii) Developed Materials owned by Provider in accordance
with SECTION 14.2(d), (iv) Materials developed by Provider other
than in the course of the performance of its obligations under this
Agreement, including all United States and foreign patent, copyright
and other intellectual property rights in such Materials described
in clauses (i) through (iv) of this paragraph ("PROVIDER OWNED
MATERIALS").
(b) LICENSE TO PROVIDER OWNED SOFTWARE AND MATERIALS. As of the
Commencement Date, Provider hereby grants to Williams and the
Eligible Recipients, at no additional charge, a non-exclusive,
royalty-free right and license to access, use, execute, reproduce,
display, perform, modify, enhance, distribute and create Derivative
Works of the Provider Owned Software and other Materials (including
all modifications, replacements, Upgrades, enhancements,
methodologies, tools, documentation, materials and media related
thereto), during the Term and any Termination Assistance Services
period, to the extent reasonably necessary to receive the full
benefit of the Services. In addition, at no additional charge,
Provider hereby grants to Williams Third Party Contractor(s) a
non-exclusive, royalty-free right and license to access, use,
execute, reproduce, display, perform, modify, enhance, distribute
and create Derivative Works of such Materials and Software
(including all modifications, replacements, Upgrades, enhancements,
methodologies, tools, documentation, materials and media related
thereto), during the Term and any Termination Assistance Services
period, for the purposes described below. Such license and other
rights shall be granted to Williams, the Eligible Recipients, and
Williams Third Party Contractors for the following purposes:.
(i) The receipt by Williams and the Eligible Recipients of the
full benefit of the Services provided by Provider; or
(ii) The performance by Williams, the Eligible Recipients or
Williams Third Party Contractors for Williams and/or the
Eligible Recipients of services or functions that are
ancillary to, but not part of, the Services provided by
Provider, including related information technology services
and functions.
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The rights and obligations of Williams, the Eligible Recipients and
Williams Third Party Contractors with respect to such Provider Owned
Materials following the expiration or termination of the Agreement
or termination of any Service are set forth in SECTION 14.6.
(c) EMBEDDED MATERIALS. This provision shall be as set forth in SECTION
14.3(c) of SCHEDULE S.
14.4 OTHER MATERIALS.
This Agreement shall not confer upon either Party intellectual property
rights in Materials of the other Party (to the extent not covered by this
ARTICLE 14) unless otherwise so provided elsewhere in this Agreement.
14.5 GENERAL RIGHTS.
(a) COPYRIGHT LEGENDS. Each Party agrees to reproduce copyright legends
which appear on any portion of the Materials which may be owned by
the other Party or third parties.
(b) This provision shall be as set forth in SECTION 14.5(b) of SCHEDULE
S.
(c) NO IMPLIED LICENSES. Except as expressly specified in this
Agreement, nothing in this Agreement shall be deemed to grant to one
Party, by implication, estoppel or otherwise, license rights,
ownership rights or any other intellectual property rights in any
Materials owned by the other Party or any Affiliate of the other
Party (or, in the case of Provider, any Eligible Recipient).
(d) INCORPORATED MATERIALS. Should either Party incorporate into
Developed Materials any intellectual property subject to third party
patent, copyright or license rights, any ownership or license rights
granted herein with respect to such Materials shall be limited by
and subject to any such patents, copyrights or license rights;
provided that, prior to incorporating any such intellectual property
in any Materials, the Party incorporating such intellectual property
in the Materials has disclosed this fact and obtained the prior
approval of the other Party (and provided further that, in the case
of patents, the obligation to disclose and obtain approval shall be
limited to patents about which such Party knows or reasonably should
know).
(e) POLICY AND PROCEDURES MANUAL. Provider shall own all right, title
and interest in the Policy and Procedures Manual (which contains
Proprietary Information of
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Provider and Williams), provided, however, that Williams shall be
the sole and exclusive owner of all portions of the Policy and
Procedures Manual (i) provided by Williams, or (ii) that are unique
to Williams or the Eligible Recipients or their business operations.
Provider hereby grants to Williams and the Eligible Recipients a
worldwide, perpetual, irrevocable, non-exclusive, fully-paid up,
royalty-free, transferable license, for Williams's and each Eligible
Recipient's internal business purposes, to use, execute, reproduce,
display, perform, modify, enhance, sublicense, distribute and create
derivative works of the Policy and Procedures Manual and all
enhancements and derivative works thereof, including the right to
have contractors and agents use the policy and Procedures Manual,
and all enhancements and derivative works thereof, on behalf of
Williams or such Eligible Recipient. Williams's proprietary or
confidential data contained within the Policy and Procedures Manual
will remain confidential pursuant to ARTICLE 13.
14.6 WILLIAMS RIGHTS UPON EXPIRATION OR TERMINATION OF AGREEMENT.
As part of the Termination Assistance Services, Provider shall provide the
following to Williams, Williams Affiliates and the Eligible Recipients
with respect to Materials and Software:
(a) WILLIAMS OWNED MATERIALS AND DEVELOPED MATERIALS. With respect to
Williams Owned Materials and Williams Specific Developed Materials,
Provider shall, at no cost to Williams:
(i) deliver to Williams all Williams Owned Materials and Williams
Specific Developed Materials and all copies thereof in the
format and medium in use by Provider in connection with the
Services as of the date of such expiration or termination; and
(ii) following confirmation by Williams that the copies of the
Williams Owned Materials and Williams Specific Developed
Materials delivered by Provider are acceptable and the
completion by Provider of any Termination Assistance Services
for which such Materials are required, destroy or securely
erase all other copies of such Materials then in Provider's
possession and cease using such Materials for any purpose
(except that Provider may retain a copy of such Materials as
required by applicable Law or with respect to any ongoing
dispute between Williams and Provider, as may be reasonably
necessary to enforce Provider's rights under this Agreement).
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(b) COMMERCIALLY AVAILABLE PROVIDER OWNED MATERIALS. With respect to
Materials owned by Provider, Provider Affiliates or (subject to
SECTION 6.4(c)) Subcontractors that are generally commercially
available and used by them to provide the Services (and any
modifications, enhancements, methodologies, tools, documentation,
materials and media related thereto used to provide the Services):
(i) Provider hereby grants to Williams and the Eligible Recipients
a license on standard terms and conditions no less favorable
than those offered generally by Provider to other commercial
customers to use such Materials following the expiration or
termination of the Term or termination of the Service(s) for
which such Materials were used; provided that, in all events,
such terms and conditions must be at least broad enough to
permit Williams and the Eligible Recipients to use such
Materials to provide for themselves, or have provided for them
by third party contractors, services similar to the Services,
and for Williams and the Eligible Recipients to receive such
services;
(ii) Provider (A) shall deliver a copy of such Provider Owned
Materials and related documentation to Williams and the
Eligible Recipients, (B) shall deliver source code and/or
object code to the extent such Provider Owned Materials
include source code or object code and such code is
customarily provided to commercial customers licensing such
Provider Owned Materials, and (C) if Provider fails to offer
or provide Upgrades, maintenance, support or other services
for such Provider Owned Materials as provided in SECTION
14.6(b)(iii), shall deliver source code and object code for
such Provider Owned Materials to the extent such Materials
include source code, together with the right to modify,
enhance and create derivative works of such Materials
(provided that, in such event, the licensed Provider Owned
Materials shall thereafter be provided on an "as is" basis);
and
(iii) Provider shall offer to provide to Williams and the Eligible
Recipients Upgrades, maintenance, support and other services
for commercial off-the-shelf Materials on Provider's
then-current standard terms and conditions for such services.
Unless Williams has otherwise agreed in advance, Williams and the
Eligible Recipients shall not be obligated to pay any license or
transfer fees in connection with its receipt of the licenses and
other rights above. Provider shall not use any generally
commercially available Provider Owned Materials for which it is
unable
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to offer such license or other rights without Williams's prior
written approval (and absent such approval, Provider's use of any
such Provider Owned Materials shall obligate Provider to provide, at
no additional cost to Williams, such license and other rights to
Williams, Williams Affiliates, the Eligible Recipients and
Williams's designees).
(c) NON-COMMERCIALLY AVAILABLE PROVIDER OWNED MATERIALS. This provision
shall be as set forth in SECTION 14.6(c) of SCHEDULE S.
(d) THIRD PARTY RIGHTS TO NON-COMMERCIALLY AVAILABLE OWNED MATERIALS.
This provision shall be as set forth in SECTION 14.6(d) of SCHEDULE
S.
(e) THIRD PARTY SOFTWARE AND MATERIALS. Subject to SECTION 6.4(C), with
respect to Third Party Software and Materials licensed by Provider
or Provider Affiliates or Subcontractors and used by them to provide
the Services, Provider hereby grants to Williams and the Eligible
Recipients (or, at Williams's election, to their designee(s)) a
sublicense (with the right to grant sublicenses) offering the same
rights and warranties with respect to such Third Party Software and
Materials available to Provider (or Provider Affiliates or
Subcontractors), on the same or substantially similar terms and
conditions, for the benefit and use of Williams, Williams Affiliates
and the Eligible Recipients upon the expiration or termination of
the Term with respect to the Services for which such Third Party
Software or Materials were used; provided that, during the
Termination Assistance Services period, Provider may, by mutual
agreement of the Parties, substitute the license described in
subpart (i) or (ii) for such sublicense or, with Williams's
approval, in its reasonable discretion, substitute the license
described in subpart (iii) :
(i) the assignment to Williams and the Eligible Recipients (or, at
Williams's election, to their designee(s))of the underlying
license for such Third Party Software or Materials;
(ii) the procurement for Williams and the Eligible Recipients (or,
at Williams's election, to their designee(s)) of a new license
(with terms at least as favorable as those in the license held
by Provider or its Affiliates or Subcontractors and with the
right to grant sublicenses) to such Third Party Software and
Materials for the benefit or use of Williams and the Eligible
Recipients.
(iii) the procurement for Williams and the Eligible Recipients (or,
at Williams's election, to their designee(s)) of a substitute
license for Third
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Party Software or Materials sufficient to perform, without
additional cost, support or resources and at the levels of
performance and efficiency required by this Agreement, the
functions of the Third Party Software and Materials necessary
to enable Williams or its designee to provide the Services
after the expiration or termination of the Term.
In addition, Provider shall deliver to Williams and the Eligible
Recipients a copy of such Third Party Software and Materials
(including source code, to the extent it has been available to
Provider) and related documentation and shall use commercially
reasonable efforts to cause maintenance, support and other services
to continue to be available to Williams and the Eligible Recipients
(to the extent it has been available to Provider). Unless Williams
has otherwise agreed in advance in accordance with SECTION 6.4(c),
Williams and the Eligible Recipients shall not be obligated to pay
any license or transfer fees in connection with its receipt of the
licenses, sublicenses and other rights specified in this SECTION
14.6(c). Provider shall not use any Third Party Software and
Materials for which it is unable to offer such license, sublicense
or other rights without Williams's prior approval (and absent such
approval, Provider's use of any such Third Party Software and
Materials shall obligate Provider to provide, at no additional cost
to Williams and the Eligible Recipients, such licenses, sublicenses
and other rights). Williams, however, shall be obligated to make
monthly or annual payments attributable to periods after the
expiration or termination of the Term with respect to the Services
for which such Third Party Software or Materials were used for the
right to use and receive maintenance or support related thereto, but
only to the extent Provider would have been obligated to make such
payments if it had continued to hold the licenses in question or
Williams has agreed in advance to make such payments.
To the extent Williams has agreed in advance to pay any fees in
connection with its receipt of such licenses, sublicenses or other
rights, Provider shall, at Williams's request, identify the
licensing and sublicensing options available to Williams and the
Eligible Recipients and the license or transfer fees associated with
each. Provider shall use commercially reasonable efforts to obtain
the most favorable options and the lowest possible transfer,
license, relicense, assignment or termination fees for Third Party
Software and Materials. Provider shall not commit Williams or the
Eligible Recipients to paying any such fees or expenses without
Williams's prior approval. If the licensor offers more than one form
of license, Williams (not Provider) shall select the form of license
to be received by Williams, the Eligible Recipients or their
designee(s).
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Provider's obligations under this SECTION 14.6(e) shall be subject
to SECTION 6.4(c).
15. REPRESENTATIONS AND WARRANTIES
15.1 WORK STANDARDS.
Provider represents and warrants that the Services shall be rendered with
promptness and diligence and shall be executed in a workmanlike manner, in
accordance with the best practices of the information technology services
industry and the Service Levels. Provider represents and warrants that it
shall use adequate numbers of qualified individuals with suitable
training, education, experience, competence and skill to perform the
Services. Provider shall provide such individuals with training as to new
products and services prior to the implementation of such products and
services in the Williams/Eligible Recipients environment. Provider shall
have the resources, capacity, expertise and ability in terms of Equipment,
Software, know-how and personnel to provide the Services.
15.2 MAINTENANCE.
(a) PROVIDER RESPONSIBILITY. Provider represents and warrants that,
unless otherwise agreed and to the extent it has operational
responsibility under this Agreement, it shall maintain the Equipment
and Software so that they operate substantially in accordance with
their specifications, including (i) maintaining Equipment in good
operating condition, subject to normal wear and tear, (ii)
undertaking repairs and preventive maintenance on Equipment in
accordance with the applicable Equipment manufacturer's
recommendations and requirements, and (iii) performing Software
maintenance in accordance with the applicable Software supplier's
documentation, recommendations and requirements.
(b) OUT OF SUPPORT THIRD PARTY EQUIPMENT AND SOFTWARE. For Third Party
Equipment and Software no longer supported by the licensor or
manufacturer for which Provider has operational responsibility under
this Agreement, Provider shall use commercially reasonable efforts
to perform maintenance for such Equipment or Software as required to
meet its obligations under this Agreement.
(c) REFRESH. To the extent Provider has financial responsibility under
this Agreement for Equipment or Software, Provider shall, subject to
SECTION 9.7 or as otherwise agreed by the Parties, Upgrade or
replace such Equipment or Software in accordance with SCHEDULE J,
ATTACHMENT J-10.
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15.3 EFFICIENCY AND COST EFFECTIVENESS.
Provider represents and warrants that it shall use commercially reasonable
efforts to provide the Services in the most cost-effective manner
consistent with the required level of quality and performance. Without
limiting the generality of the foregoing, such actions shall include:
(a) TIMING OF ACTIONS. Making adjustments in the timing of actions
(consistent with Williams priorities and schedules for the Services
and Provider's obligation to meet the Service Levels).
(b) TIMING OF FUNCTIONS. Delaying or accelerating, as appropriate, the
performance of non-critical functions within limits reasonably
acceptable to Williams.
(c) SYSTEMS OPTIMIZATION. Tuning or optimizing the Systems (including
memory) and/or Applications Software to optimize performance and
minimize costs.
(d) USAGE SCHEDULING. Controlling its use of the System and/or the
Williams data network by scheduling usage, where practicable, to low
utilization periods.
(e) ALTERNATIVE TECHNOLOGIES. Subject to SECTION 9.5, using alternative
technologies to perform the Services.
(f) EFFICIENCY. Efficiently using resources for which Williams is
charged hereunder, consistent with industry norms, and compiling
data concerning such efficient use in segregated and auditable form
whenever practicable.
15.4 SOFTWARE.
(a) OWNERSHIP AND USE. Provider represents, warrants and covenants that
it is either the owner of, or authorized to use, any and all
Software provided and used by Provider in providing the Services,
subject to Provider obtaining any Required Consents in connection
with Software provided by Williams or the Eligible Recipients. As to
any such Software that Provider does not own but is authorized to
use, Provider shall advise Williams as to the ownership and extent
of Provider's rights with regard to such Software to the extent any
limitation in such rights would materially impair Provider's
performance of its obligations under this Agreement.
(b) PERFORMANCE. Provider represents, warrants and covenants that any
Provider Owned Software will, in all material respects, perform in
compliance with its
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Specifications and provide the functions and features and operate in
the manner described therein.
(c) DEVELOPED MATERIALS COMPLIANCE. Provider warrants and covenants that
Developed Materials will be free from material errors in operation
and performance, will Comply with the documentation and the
Specifications in all material respects and will provide the
functions and features and operate in the manner described in
SCHEDULES E or F or otherwise agreed by the Parties for twelve (12)
months after the Effective Date or for Developed Materials Accepted
after such date, for twelve (12) months following Acceptance of such
Developed Materials, unless a different period is agreed by the
Parties. Provider shall correct any failure to Comply and shall use
commercially reasonable efforts to do so as expeditiously as
possible. In the event that Provider fails or is unable to repair or
replace such nonconforming Developed Material, Williams shall, in
addition to any and all other remedies available to it hereunder, be
entitled to obtain from Provider a copy of any source code to such
Developed Material to the extent that Provider has the right to make
it available; provided, however, that for any Developed Material
where Provider will not create source code or Provider does not have
the rights to make source code available to Williams in accordance
with this Agreement, Provider shall notify Williams of such facts
and obtain Williams prior written approval, which Williams may
withhold in its reasonable discretion.
(d) NONCONFORMITY. In addition to the foregoing, in the event that the
Provider Owned Software or Developed Materials do not Comply with
the Specifications and criteria set forth in this Agreement, and/or
materially and adversely affect the Services provided hereunder,
Provider shall expeditiously repair or replace such Software or
Material with conforming Software or Material.
(e) OUT OF SUPPORT THIRD PARTY SOFTWARE. To the extent Third Party
Software for which Provider has operational responsibility under
SCHEDULE E or U is no longer supported by the applicable licensor or
manufacturer, Provider shall use commercially reasonable efforts to
perform maintenance for such Software as required, subject to
Service Level relief where (i) lack of licensor or manufacturer
support impairs Provider's ability to provide such maintenance
unless Transitioned Employees maintained such Software prior to the
Effective Date or (ii) lack of licensor or manufacturer support
impairs interoperability of such Software with upgrades, updates or
enhancements to other Software or with new Software.
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(f) EXCEPTIONS TO WARRANTY OBLIGATIONS. The warranties and corresponding
obligations of Provider set forth in this SECTION 15.4 will not
apply to the extent any noncompliance of Software, Developed
Materials or Materials to the criteria set forth in this SECTION
15.4 is attributable to (i) any change or modification to Software,
Developed Materials or other Materials not recommended, performed or
approved in writing by Provider; or (ii) from operation or use by
Williams or the other Eligible Recipients of such Software,
Developed Materials or other Materials other than (A) in accordance
with the applicable documentation and Specifications, (B) for the
purposes contemplated by this Agreement, and (C) on hardware and
operating systems recommended or approved in writing by Provider.
15.5 NON-INFRINGEMENT.
(a) PERFORMANCE OF RESPONSIBILITIES. Provider represents and warrants
that it shall perform its responsibilities under this Agreement in a
manner that does not infringe, or constitute an infringement or
misappropriation of, any patent, copyright, trademark, trade secret
or other proprietary or privacy rights of any third party; provided,
however, that Provider shall not have any obligation or liability to
the extent any infringement or misappropriation is caused by (i)
modifications made by Williams or its contractors or subcontractors,
without the knowledge or approval of Provider, (ii) Williams's
combination of Provider's work product or Materials with items not
furnished, specified or reasonably anticipated by Provider or
contemplated by this Agreement, (iii) a breach of this Agreement by
Williams, (iv) the failure of Williams to use corrections or
modifications provided by Provider offering equivalent features and
functionality, or (v) Third Party Software, except to the extent
that such infringement or misappropriation arises from the failure
of Provider to obtain the licenses or Required Consents required of
it under this Agreement or to abide by the limitations of the
applicable Third Party Software licenses. Provider further
represents and warrants that it will not use or create materials in
connection with the Services or otherwise in performance of its
obligations under this Agreement which are libelous, defamatory or
obscene. Provider's representation and warranty set forth in this
SECTION 15.5(a) shall be subject to the limitations set forth in
SECTION 15.5(a) of SCHEDULE S.
(b) THIRD PARTY SOFTWARE INDEMNIFICATION. In addition, with respect to
Third Party Software provided by Provider pursuant to this Agreement
(i.e., not transferred or furnished by Williams), Provider covenants
that it shall obtain and provide intellectual property
indemnification for Williams and the Eligible Recipients (or
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obtain intellectual property indemnification for itself and enforce
such indemnification on behalf of Williams and the Eligible
Recipients) from the suppliers of such Software. Unless otherwise
approved in advance by Williams, such indemnification shall be (i)
comparable to the intellectual property indemnification provided by
Provider to Williams and the Eligible Recipients under this
Agreement, or (ii) the customary indemnification available in the
industry for the same or substantially similar types of software
products.
15.6 AUTHORIZATION.
Each Party represents and warrants to the other that:
(a) CORPORATE EXISTENCE. It is a corporation duly incorporated, validly
existing and in good standing under applicable Laws (other than
nonconformities with such Laws that would not have materially affect
on the performance of their respective obligations under this
Agreement);
(b) CORPORATE POWER AND AUTHORITY. It has the requisite corporate power
and authority to execute, deliver and perform its obligations under
this Agreement;
(c) LEGAL AUTHORITY. It has obtained all licenses, authorizations,
approvals, consents or permits required to perform its obligations
under this Agreement under all applicable federal, state or local
laws and under all applicable rules and regulations of all
authorities having jurisdiction over the Services, except to the
extent the failure to obtain any such license, authorizations,
approvals, consents or permits is, in the aggregate, immaterial;
(d) DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement have been duly authorized by the requisite corporate
action on the part of such Party; and
(e) NO VIOLATION OR CONFLICT. The execution, delivery, and performance
of this Agreement shall not constitute a violation of any judgment,
order, or decree; a material default under any material contract by
which it or any of its material assets are bound; or an event that
would, with notice or lapse of time, or both, constitute such a
default.
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15.7 INDUCEMENTS.
Provider represents and warrants that it has not given and will not give
commissions, payments, kickbacks, lavish or extensive entertainment, or
other inducements of more than minimal value to any employee or agent of
Williams in connection with this Agreement. Provider also represents and
warrants that, to the best of its knowledge, no officer, director,
employee, agent or representative of Provider has given any such payments,
gifts, entertainment or other thing of value to any employee or agent of
Williams in connection Provider's interactions with Williams employees or
agents prior to Provider's execution of this Agreement. Provider also
acknowledges that the giving of any such payments, gifts, entertainment,
or other thing of value is strictly in violation of Williams policy on
conflicts of interest, and may result in the cancellation of this
Agreement.
15.8 MALICIOUS CODE.
Each Party shall cooperate with the other Party and shall take
commercially reasonable actions and precautions to prevent the
introduction and proliferation of Malicious Code into Williams's or an
Eligible Recipient's environment or any System used by Provider to provide
the Services. Without limiting Provider's other obligations under this
Agreement, in the event Malicious Code is found in Equipment, Software or
Systems managed or supported by Provider or used to provide the Services,
Provider shall exercise all commercially reasonable efforts as part of the
Charges, unless, if applicable, the Parties agree that such activity
constitutes New Services, to eliminate and reduce the effects of such
Malicious Code and, if the Malicious Code causes a loss of operational
efficiency or loss of data, to mitigate such losses and restore such data
with generally accepted data restoration techniques.
15.9 DISABLING CODE.
Provider represents and warrants that, without the prior written consent
of Williams, Provider shall not insert into the Software any code that
could be invoked without William's written authorization to disable or
otherwise shut down all or any portion of the Services. Provider further
represents and warrants that, with respect to any disabling code that may
be part of the Software, Provider shall not invoke or cause to be invoked
such disabling code at any time, including upon expiration or termination
of this Agreement for any reason, without Williams's prior written
consent. Provider also represents and warrants that it shall not use Third
Party Software with disabling code without the prior approval of Williams.
For purposes of this provision, code that serves the function of ensuring
software license compliance (including passwords) shall not be
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deemed disabling code, provided that Provider notifies Williams in advance
of all such code and obtains Williams's approval prior to installing such
code in any Software, Equipment or System.
15.10 COMPLIANCE WITH LAWS.
(a) COMPLIANCE BY PROVIDER.
(i) Provider represents and warrants that it is and shall be in
compliance in all material respects with all Provider Business Laws
applicable to its provision of the Services and the performance of
its other legal and contractual obligations hereunder on the
Commencement Date and shall remain in compliance in all material
respects with such Laws for the entire Term, including identifying
and procuring applicable permits, certificates, approvals and
inspections required under such Laws.
(ii) This provision shall be as set forth in SECTION 15.10(a)(ii) of
SCHEDULE S.
(iii) If a written charge of non-compliance by Provider with any
such Laws occurs, Provider shall promptly notify Williams of such
charge. Provider shall provide such notice in accordance with the
timeframes set forth in the Policy and Procedures Manual, which may
specify events for which same day notice is required, and shall
perform an expedited Root Cause Analysis in accordance with the
requirements set forth in the Procedures Manual.
(b) COMPLIANCE BY WILLIAMS. Subject to Sections 15.10(a) and (e),
Williams represents and warrants that, with respect to the
performance by Williams and the Eligible Recipients of Williams's
legal and contractual obligations under this Agreement, it is and
shall be in compliance in all material respects with all applicable
Williams Laws for the entire Term of the Agreement. If a written
charge of non-compliance by Williams with any such Laws occurs,
Williams shall promptly notify Provider of such charge.
(c) COMPLIANCE DATA AND REPORTS. At no additional charge, Provider shall
provide Williams with data and reports in Provider's possession
necessary for Williams to comply with all Williams Laws applicable
to the Services.
(d) NOTICE OF LAWS. Provider shall notify Williams of any Provider Laws
and changes in Provider Laws applicable to Provider's performance
and Williams's and/or the Eligible Recipients' receipt and use of
the Services). Williams shall notify Provider of any Williams Laws
and any changes in such Williams Laws
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applicable to Provider's performance and Williams's and/or the
Eligible Recipients' receipt and use of the Services. Provider
shall, through the Provider Personnel, maintain familiarity with the
Provider Laws, and shall use commercially reasonable efforts to
maintain general familiarity with Williams Laws, and shall bring
additional or changed requirements of which it becomes aware to
Williams's attention. Subject to its non-disclosure obligation under
other customer contracts, Provider also shall make commercially
reasonable efforts to obtain information regarding Williams Laws and
Provider Services Laws from other finance and accounting,
information technology and human resources services outsourcing
customer engagements and to communicate such information to Williams
in a timely manner. Each Party shall use commercially reasonable
efforts to advise the other of Laws and changes in Laws about which
such Party becomes aware in the other Party's area of
responsibility, but without assuming an affirmative obligation of
inquiry, except as otherwise provided herein, and without relieving
the other Party of its obligations hereunder.
(e) INTERPRETATION OF LAWS OR CHANGES IN LAWS. Williams shall be
responsible, with Provider's cooperation and assistance, for
interpreting Williams Laws or changes in Williams Laws and for
identifying the impact of such Williams Laws or changes in Williams
Laws on Provider's performance and Williams's and/or the Eligible
Recipients' receipt and use of the Services. Provider shall be
responsible, with Williams's cooperation and assistance, for
interpreting Provider Laws or changes in Provider Laws and for
identifying the impact of such Provider Laws or changes in Provider
Laws on Provider's performance and Williams's and/or the Eligible
Recipients' receipt and use of the Services. To the extent the
impact of any Provider Services Law or change in Provider Services
Law cannot be readily identified by Provider, the Parties shall
cooperate in interpreting such Law or change in Law and shall seek
in good faith to identify and agree upon the impact on Provider's
performance and Williams's and/or the Eligible Recipients' receipt
and use of the Services. In such event, Provider shall inform
Williams about such Provider Services Law or change in Provider
Services Law and propose approaches as to changes in the performance
or receipt of the Services to be made in response thereto. If the
Parties are unable to agree upon such impact, Williams shall retain
the right, in its sole discretion, to interpret such Provider
Services Law or change in Provider Services Law and determine its
impact. In addition, if Provider reasonably concludes, after due
inquiry, that the compliance obligations associated with any
Provider Services Law or change in Provider Services Law are unclear
or that there is more than one reasonable approach to achieving
compliance, Provider may escalate the issue to Williams for a final
decision. In all events, to the extent Williams makes the final
decision as to the
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interpretation of a Law or change in Law or its impact on Provider's
performance and Williams's and/or the Eligible Recipients' receipt
and use of the Services and Provider complies with such decision,
Provider shall be relieved of responsibility for any resulting
non-compliance with such Law if and to the extent such decision is
ultimately determined to be in error. Provider shall notify Williams
expeditiously of such non-compliance upon learning thereof and shall
work expeditiously to remedy such non-compliance upon receipt of
Williams's approval.
(f) IMPLEMENTATION OF CHANGES IN LAWS. In the event of any changes in
Laws (including Williams Laws to the extent Provider receives prompt
notice of such Williams Laws from Williams or as otherwise provided
in SECTION 15.10(e)), Provider shall implement any necessary
modifications to the Services prior to the deadline imposed by the
regulatory or governmental body having jurisdiction for such
requirement or change. Provider shall bear the costs associated with
compliance with changes in Laws applicable to the Services unless
such change meets the definition of New Service, in which case it
shall be treated as a Project; provided, that to the extent such
changes in Laws impact other Provider customers, any additional
costs shall be apportioned on a equitable basis to all such
customers. With respect to changes in Provider Business Laws,
Provider shall bear all costs associated with those Laws. At
Williams's request, Provider Personnel shall participate in Williams
provided regulatory compliance training programs.
(g) COMPLIANCE WITH PRIVACY LAWS. Without limiting the foregoing, with
respect to any Williams Personal Data, Provider shall comply with
any obligations imposed on Provider under any applicable Privacy
Laws in connection with Provider's performance of Services and shall
provide Williams with such assistance as Williams may reasonably
require to fulfill the responsibilities of Williams and the Eligible
Recipients under such Privacy Laws. Provider shall also comply with
the Williams data privacy policy. Provider will act in the capacity
of a processor of Williams Personal Data, and Williams will be the
controller of such Williams Personal Data, under applicable Privacy
Laws.
(h) ASSISTANCE TO WILLIAMS. As part of the Services and on an ongoing
basis, Provider shall assist Williams and the Eligible Recipients as
they may reasonably require in their efforts to comply with
applicable Williams Laws (including any changes to Williams Laws)
not applicable to Provider or related to the Services. Without
limiting Provider's obligations under this Agreement, this Agreement
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shall not be construed as requiring either Party to provide legal,
audit or attest advice to the other Party.
(i) RESPONSIBILITY FOR GOVERNMENT FINES, PENALTIES, INTEREST OR OTHER
REMEDIES. The Parties responsibilities for government fines,
penalties, interest and other monetary remedies shall be as set
forth in SECTION 15.10(i) of SCHEDULE S.
(j) NO LIABILITY FOR WILLIAMS OBLIGATIONS. This provision shall be as
set forth in SECTION 15.10(j) of SCHEDULE S.
(k) TERMINATION. In the event that any change in Laws (other than a
change in Laws resulting in new or higher Service Taxes as described
in SECTION 11.4(d)) results in an increase of ten percent (10%) or
more in the estimated average monthly Charges in any Functional
Service Area or otherwise has a material adverse impact on
Provider's ability to perform the Services and Williams would not
have incurred such additional cost or impact if it had not
outsourced the Services in question, then Williams may, at its
option, terminate the Agreement by giving Provider at least ninety
(90) days prior notice and designating a date upon which such
termination shall be effective. If Williams terminates on this
basis, Williams shall not be obligated to pay Termination Charges.
Wind Down Charges shall be payable if and only if and only to the
extent indicated as payable in SCHEDULE N.
15.11 INTEROPERABILITY.
Provider represents and warrants that the Software, Equipment and Systems
provided through, and used to provide, the Services will be interoperable
with the software, equipment, systems, firmware, and embedded chips used
by Williams which may deliver records to, receive records form, or
otherwise interact with the Systems, including for receipt of the Services
in accordance with the applicable Specifications for such Software,
Equipment and Systems.
15.12 PROVIDER PERSONNEL.
Provider represents and warrants that the Provider Personnel are
authorized to work in each of the locations where such personnel are
providing Services, and that Provider and its Subcontractors have complied
with all obligations under applicable Laws regarding immigration. Provider
shall bear all financial responsibility for all matters relating to
Provider obtaining any visa, immigration, naturalization or other similar
authorizations and requirements under the Laws applicable to visas,
immigration, naturalization and other similar authorizations.
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15.13 NO LITIGATION.
Each Party represents and warrants that there is no claim, or any
litigation, proceeding, arbitration, investigation or material controversy
pending to which it or any of its affiliates, agents, or representatives
(and in the case of Williams, the other Eligible Recipients) is a party,
relating to the provision of the Services offered by Provider or the
performance of their respective obligations under this Agreement, which
would have a material adverse effect on Provider's or Williams' ability to
enter into this Agreement and perform their respective obligations
hereunder and, to the best of each Party's knowledge, no such claim,
litigation, proceeding arbitration, investigation or material controversy
has been threatened or its contemplated.
15.14 DISCLAIMER.
(a) WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS, CONDITIONS OR
WARRANTIES TO THE OTHER PARTY, WHETHER EXPRESS OR IMPLIED, INCLUDING
IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE.
(b) PUBLIC TELECOMMUNICATIONS TRANSMISSIONS. In the case of transmission
of data via public telecommunications facilities permitted under
this Agreement, Provider shall not be responsible for corruption,
damage, loss or mis-transmission of, or loss of security with
respect to, data during such transmission unless and to the extent
such corruption, damage, loss, mis-transmission or loss of security
is attributable to Provider's failure to comply with its obligations
(including data security and Service Level requirements) under this
Agreement, including the obligation to (i) provide the Services
(including data security requirements) in accordance with the
accepted practices of well-managed tier one providers of information
technology services, (ii) provide and maintain the technology
required to detect and correct any corrupt, damaged, lost or
mis-transmitted data and require retransmission of any such corrupt,
damaged, lost or mis-transmitted data, and (iii) perform other
Services appropriate to assist in the resolution of such corruption,
damage, loss or mis-transmission (e.g., backup and data recovery).
(c) DISCLAIMER OF UNINTERRUPTED OR ERROR-FREE OPERATIONS. Subject to
Provider's obligations under this Agreement, including Service
Levels, Provider does not assure uninterrupted or error-free
operation of the Equipment, Software or Services.
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16. INSURANCE AND RISK OF LOSS
16.1 INSURANCE.
(a) REQUIREMENTS. Provider agrees to keep in full force and effect and
maintain at its sole cost and expense the following policies of
insurance with the specified minimum limits of liability during the
term of this Agreement:
(i) Workers' Compensation and Employer's Liability Insurance:
- Statutory Worker's Compensation including occupational
disease in accordance with the law.
- Employer's Liability Insurance with minimum limits of $5
million per employee by accident/$5 million per employee
by disease/$5 million policy limit by disease (or, if
higher, the policy limits required by applicable Law).
(ii) Commercial General Liability Insurance (including coverage for
Contractual Liability assumed by Provider under this
Agreement, Premises-Operations, Completed
Operations--Products, Independent Contractors, and explosion,
collapse, and underground property damage hazards) providing
coverage for bodily injury, personal injury and property
damage with combined single limits of not less than $10
million per occurrence and $10 million in the aggregate per
Provider policy year.
(iii) Commercial Business Automobile Liability Insurance including
coverage for all owned, non-owned, leased, and hired vehicles
providing coverage for bodily injury and property damage
liability with combined single limits of not less than $2
million per occurrence and $2 million in the aggregate per
Provider policy year, except as may otherwise be required by
Law.
(iv) Professional Liability (also known as Errors and Omissions
Liability) Insurance covering acts, errors and omissions
arising out of Provider's operations or Services in an amount
not less than $10 million per occurrence and $10 million in
the aggregate per Provider policy year.
(v) Comprehensive Crime Insurance, including Employee Dishonesty
and Computer Fraud Insurance covering losses arising out of or
in connection with any fraudulent or dishonest acts committed
by Provider employees,
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acting alone or with others, in an amount not less than $10
million per occurrence and $10 million in the aggregate per
Provider policy year.
(vi) All-risk property insurance covering loss or damage to
Provider owned or leased Equipment and other assets in an
amount not less than the full replacement cost of such
Equipment and assets.
(b) APPROVED COMPANIES. All such insurance shall be procured with
reputable insurance companies and in such form as is usual and
customary to Provider's business. Such insurance companies shall
maintain a rating at least "A-" and be at least a Financial Size
Category VII as both criteria are defined in the most current
publication of Best's Policyholder Guide, provided that Provider may
be self-insured with respect to the Professional Liability and
Errors and Omissions Liability Insurance.
(c) ENDORSEMENTS. Provider's insurance policies as required herein under
SECTIONS 16.1(a)(ii), (iii) and (iv) shall name Williams, Williams
Affiliates and Eligible Recipients and their respective officers,
directors and employees as Additional Insureds for any and all
liability arising at any time in connection with Provider's
performance under this Agreement. The Provider insurance policies
required under SECTION 16.1(a)(v) and (vi) shall name Williams,
Williams Affiliates and Eligible Recipients and their respective
officers, directors and employees as loss payees for any and all
liability arising at any time in connections with Provider's
performance under this Agreement. Each policy shall provide that it
will not be canceled or materially altered except after thirty (30)
days advance written notice to Williams. Should any policy expire or
be canceled during the Term and Provider fails to immediately
procure replacement insurance as specified, Williams reserves the
right (but not the obligation) to procure such insurance and to
deduct the cost thereof from any sums due Provider under this
Agreement. All insurance required under this SECTION 16.1 shall be
primary insurance and any other valid insurance existing for the
benefit of Williams, Williams Affiliates and Eligible Recipients and
their respective officers, directors and employees shall be excess
of such primary insurance. Provider shall obtain such endorsements
to its policy or policies of insurance as are necessary to cause the
policy or policies to comply with the requirements stated herein.
(d) CERTIFICATES. Provider shall provide Williams with certificates of
insurance evidencing compliance with this ARTICLE 16 (including
evidence of renewal of insurance) signed by authorized
representatives of the respective carriers for each year that this
Agreement is in effect. Each certificate of insurance shall provide
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that the issuing company shall not cancel, reduce, or otherwise
materially alter the insurance afforded under the above policies
unless notice of such cancellation, reduction or material alteration
has been provided at least thirty (30) days in advance to:
The Williams Companies, Inc.
One Williams Center, MD 41-3
Tulsa, OK 74172
Attention: Business Process Outsourcing Executive
Fax: (918) 573-4503
(e) NO IMPLIED LIMITATION. The obligation of Provider and its Affiliates
to provide the insurance specified herein shall not limit or expand
or otherwise affect in any way any obligation or liability of
Provider provided elsewhere in this Agreement. The rights of
Williams and its subsidiaries, Affiliates and Eligible Recipients to
insurance coverage under policies issued to or for the benefit of
one or more of them are independent of this Agreement and shall not
be limited by this Agreement.
(f) INSURANCE SUBROGATION. With respect to insurance coverage to be
provided by Provider pursuant to this SECTION 16.1, the insurance
policies shall provide that the insurance companies waive all rights
of subrogation against Williams, the Eligible Recipients and their
respective Affiliates, officers, directors and employees. Provider
waives its rights to recover against Williams, Williams Affiliates
and Eligible Recipients and their respective officers, directors,
and employees in subrogation or as subrogee for another party.
16.2 RISK OF LOSS.
(a) GENERAL. Subject to SECTION 17.3, Provider and Williams each shall
be responsible for any damage, destruction, loss, theft or
governmental taking of their respective tangible property or real
property (whether owned or leased) and each Party agrees to look
only to its own insuring arrangements (if any) with respect to such
damage, destruction, loss, theft, or governmental taking. Each Party
shall promptly notify the other Party of any damage (except normal
wear and tear), destruction, loss, theft, or governmental taking of
such other Party's tangible property or real property (whether owned
or leased).
(b) WAIVER. Provider and Williams will cause their respective insurers
to issue appropriate waivers of subrogation rights endorsements (but
only to the limits, if
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any, of Provider's or Williams's respective obligations of
indemnification) to all property insurance policies maintained by
each Party.
17. INDEMNITIES
17.1 INDEMNITY BY PROVIDER.
Provider agrees to indemnify, defend and hold harmless Williams and its
Affiliates and the Eligible Recipients and their respective officers,
directors, employees, agents, representatives, successors, and assigns
from any and all Losses and threatened Losses payable to third parties
which are due to third party claims arising from or in connection with any
of the following:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. Provider's breach of any
of the representations, warranties and covenants set forth in
SECTIONS 15.6, 15.7, 15.9 (but in the case of SECTION 15.9, only to
the extent that such code is intentionally invoked), and 15.13.
(b) ASSUMED CONTRACTS. Provider's decision to terminate or failure to
observe or perform any duties or obligations to be observed or
performed on or after the Commencement Date by Provider under any of
the Third Party Software licenses, Equipment Leases or Third Party
Contracts assigned to Provider or for which Provider has assumed
financial or operational responsibility pursuant to this Agreement.
(c) LICENSES, LEASES AND CONTRACTS. Provider's failure to observe or
perform any duties or obligations to be observed or performed on or
after the Commencement Date by Provider under Third Party Software
licenses, Equipment leases or Third Party Contracts used by Provider
to provide the Services.
(d) WILLIAMS DATA OR PROPRIETARY INFORMATION. Provider's breach of its
obligations under SECTIONS 13.1 13.3 and 13.4 with respect to
Williams Data or Williams Proprietary Information (excluding, in the
case of SECTIONS 13.1 and 13.4, circumstances in which the
unavailability of Williams Data is directly caused by technical or
other operational problems).
(e) INFRINGEMENT. Infringement or misappropriation or alleged
infringement or alleged misappropriation of a patent, trade secret,
copyright or other proprietary right by the Provider Owned
Materials, Provider Software, the Developed Materials (except to the
extent that infringement results from such Developed Materials
conforming to designs or specifications provided by Williams or the
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Eligible Recipients), Materials provided or used by Provider
pursuant to this Agreement, Equipment provided by Provider, or
Provider's performance of its obligations under this Agreement;
provided, however, that Provider shall not have any indemnity
obligation under this SECTION 17.1(E) to the extent any infringement
or misappropriation is caused by (i) modifications made by Williams
or its contractors or subcontractors, without the knowledge or
approval of Provider, (ii) Williams's combination of Provider's work
product, Equipment or Materials with items not furnished, specified
or reasonably anticipated by Provider or contemplated by this
Agreement, (iii) a breach of this Agreement by Williams, (iv) the
failure of Williams to use corrections or modifications provided by
Provider offering equivalent features and functionality, or (v)
items provided or supplied by Williams. The indemnity obligations in
this SECTION 17.1(e) shall also include the matters set forth in
SECTION 17.1(e) on SCHEDULE S.
(f) GOVERNMENT CLAIMS. Claims by government regulators or agencies for
fines, penalties, interest or other monetary remedies to the extent
exceeding the amounts set forth in SECTION 15.10(i), to the extent
such fines, penalties, interest or other monetary remedies, result
from Provider's failure to perform its responsibilities under
SECTION 15.10 of this Agreement.
(g) TAXES. Taxes, together with interest and penalties, that are the
responsibility of Provider under SECTION 11.4.
(h) SHARED FACILITY SERVICES. Services, products or systems (not
constituting Services provided pursuant to this Agreement) provided
by Provider to a third party other than an Eligible Recipient from
any shared Provider facility or using any shared Provider resources
and not constituting Services provided to an Eligible Recipient
pursuant to this Agreement.
(i) AFFILIATE, SUBCONTRACTOR OR ASSIGNEE CLAIMS. Any claim, other than
an indemnification claim under this Agreement, initiated by (i) a
Provider Affiliate or Subcontractor asserting rights under this
Agreement or (ii) any entity to which Provider assigned,
transferred, pledged, hypothecated or otherwise encumbered its
rights to receive payments from Williams under this Agreement.
(j) EMPLOYMENT CLAIMS. Any claim (including claims by Transitioned
Employees) resulting from any (i) violation by Provider, Provider
Affiliates or Subcontractors, or their respective officers,
directors, employees, representatives or agents, of any applicable
Laws or any common law protecting persons or members of protected
classes or categories, including Laws prohibiting discrimination or
harassment on
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the basis of a protected characteristic; (ii) liability arising or
resulting from the failure by Provider, Provider Affiliates or
Subcontractors to collect or withhold for (for any social security
or other employment taxes, workers' compensation claims and premium
payments, and contributions applicable to the wages and salaries of
such Provider Personnel) for periods after their Employment
Effective Dates; (iii) Provider's payment or failure to pay any
salary, wages or other cash compensation due and owing to any
Provider Personnel (including Transitioned Employees from and after
their Employment Effective Dates), (iv) employee pension or other
benefits of any Provider Personnel (including Transitioned
Employees) accruing from and after their Employment Effective Date,
(v) other acts and omissions of Provider in its capacity as employer
of Provider Personnel (including Transitioned Employees) with
Provider, Provider Affiliates or Subcontractors or the termination
of such relationship, including claims for wrongful discharge,
claims for breach of express or implied employment contract and
claims of joint employment (unless and to the extent such claims of
joint employment are based in material part on acts or omissions of
Williams or the Eligible Recipients inconsistent with Williams's
rights and obligations under this Agreement); and/or (vi) liability
resulting from representations (oral or written) to the Williams or
Eligible Recipient employees identified on SCHEDULE M by Provider,
Provider Affiliates or Subcontractors (or their respective officers,
directors, employees, representatives or agents), or other acts or
omissions with respect to the Williams or Eligible Recipient
employees identified on SCHEDULE M by such persons or entities,
including any act, omission or representation made in connection
with the interview, selection, hiring and/or transition process, the
offers of employment made to such employees, the failure to make
offers to any such employees or the terms and conditions of such
offers (including compensation and employee benefits), except, in
each case, to the extent resulting from the wrongful actions of
Williams, the Eligible Recipients, or Williams Third Party
Contractors, errors or inaccuracies in the information provided by
Williams and faithfully communicated by Provider or the failure of
Williams, the Eligible Recipients, or Williams Third Party
Contractors to comply with Williams's responsibilities under this
Agreement.
17.2 INDEMNITY BY WILLIAMS.
Williams agrees to indemnify, defend and hold harmless Provider and its
officers, directors, employees, agents, representatives, successors, and
assigns, from any Losses and threatened Losses payable to third parties
which are due to third party claims arising from or in connection with any
of the following:
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(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. Williams breach of any of
the representations, warranties and covenants set forth in SECTION
15.6, and 15.13.
(b) LICENSES, LEASES OR CONTRACTS. Williams's failure to observe or
perform any duties or obligations to be observed or performed by
Williams under any of the applicable Third Party Software licenses,
Equipment leases or Third Party Contracts to the extent Williams is
financially or operationally responsible under this Agreement.
(c) PRE-COMMENCEMENT DATE MATTERS. Williams's failure to observe or
perform any duties or obligations to be observed or performed prior
to the Commencement Date by Williams under any of the Third Party
Software licenses, Equipment Leases or Third Party Contracts
assigned to Provider by Williams pursuant to this Agreement.
(d) WILLIAMS DATA OR PROPRIETARY INFORMATION. Williams's breach of its
obligations under SECTIONS 13.1, 13.3 and 13.4 with respect to
Provider's Proprietary Information.
(e) INFRINGEMENT. Subject to SECTION 17.1(e), Infringement or
misappropriation or alleged infringement or alleged misappropriation
of a patent, trade secret, copyright or other proprietary right by
the Williams Owned Materials, the Materials or Equipment provided by
Williams for Provider's use in providing the Services (other than
the Materials or Equipment assigned to Provider by Williams or an
Eligible Recipient) or Williams's performance of its obligations
under this Agreement, or the matters set forth in SECTION 17.2(e) of
SCHEDULE S; provided, however, that Williams shall not have any
indemnity obligation under this SECTION 17.2(e) to the extent any
infringement or misappropriation is caused by (i) modifications made
by Provider or its contractors or subcontractors, without the
knowledge or approval of Williams, (ii) Provider's combination of
Williams's work product, Equipment or Materials with items not
furnished, specified or reasonably anticipated by Williams or
contemplated by this Agreement, (iii) a breach of this Agreement by
Provider, (iv) the failure of Provider to use corrections or
modifications provided by Williams offering equivalent features and
functionality, or (v) items provided or supplied by Provider.
(f) TAXES. Taxes, together with interest and penalties, that are the
responsibility of Williams under SECTION 11.4.
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(g) WILLIAMS AFFILIATE, ELIGIBLE RECIPIENT OR THIRD PARTY CONTRACTOR
CLAIMS. Any claim, other than an indemnification claim or insurance
claim under this Agreement, initiated by an Williams Affiliate, an
Eligible Recipient (other than Williams) or an Williams Third Party
Contractor asserting rights under this Agreement.
(h) ACQUIRED ASSETS. Any claim relating to the Acquired Assets accruing
prior to the transfer of such Acquired Assets to Provider, including
but not limited to liens or encumbrances.
(i) EMPLOYMENT CLAIMS. Any claim resulting from for any (i) violation by
Williams or the Eligible Recipients, or their respective officers,
directors, employees, representatives or agents, of any applicable
Laws or any common law protecting persons or members of protected
classes or categories, including laws or regulations prohibiting
discrimination or harassment on the basis of a protected
characteristic; (ii) liability arising or resulting from the failure
of Williams or the Eligible Recipients to collect or withhold for
any social security or other employment taxes, workers' compensation
claims and premium payments, and contributions applicable to the
wages and salaries of such Williams Personnel; (iii) Williams's
payment or failure to pay any salary, wages or other cash
compensation due and owing to any employee of Williams or the
Eligible Recipients (including Transitioned Employees prior to their
Employment Effective Dates); (iv) employee pension or other benefits
of any employee of Williams or the Eligible Recipients (including
Transitioned Employees prior to their Employment Effective Dates);
(v) other acts and omissions of Williams in its capacity as employer
of any employee of Williams or the Eligible Recipients (including
Transitioned Employees prior to their Employment Effective Dates)
but excluding claims covered by SECTION 17.1(j) (and provided, in no
event will Williams be liable for any claim related to a
Transitioned Employee's employment relationship arising on or after
such Transitioned Employee's Employment Effective Date regardless of
a finding by any court or authoritative body that Williams is or was
an employer of such Transitioned Employee on or after his or her
Employment Effective Date, unless and to the extent such claims of
joint employment are based in material part on acts or omissions of
Williams or the Eligible Recipients inconsistent with Williams's
rights and obligations under this Agreement); (vi) liability
resulting from representations (oral or written) to the Williams
employees identified on SCHEDULE M by Williams (or its officers,
directors, employees, representatives or agents), or the wrongful
acts of Williams or the Eligible Recipients prior to the applicable
Employment Effective Date in connection with the selection and
hiring by Provider of the Williams employees
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identified on SCHEDULE M, except, in each case, to the extent
resulting from the wrongful actions of Provider, Provider Affiliates
or Subcontractors (or their respective officers, directors,
employees, representatives or agents), errors or inaccuracies in the
information provided by Provider and faithfully communicated by
Williams, or the failure of Provider, Provider Affiliates or
Subcontractors (or their respective officers, directors, employees,
representatives or agents) to comply with Provider's
responsibilities under this Agreement.
(j) GOVERNMENT CLAIMS. Claims by government regulators or agencies for
fines, penalties, interest or other monetary remedies to the extent
such fines, penalties, interest or other monetary remedies result
from Williams' failure to perform its responsibilities under SECTION
15.10 of this Agreement.
17.3 ADDITIONAL INDEMNITIES.
Provider and Williams each agree to indemnify, defend and hold harmless
the other, and the Eligible Recipients and their respective Affiliates,
officers, directors, employees, agents, representatives, successors, and
assigns, from any and all Losses and threatened Losses to the extent they
arise from any of the following: (a) the death or bodily injury of any
agent, employee, customer, business invitee, business visitor or other
person caused by the negligence or other tortious conduct of the
indemnitor or the failure of the indemnitor to comply with its obligations
under this Agreement; and (b) except as otherwise provided in SECTION
16.2, the damage, loss or destruction of any real or tangible personal
property caused by the negligence or other tortious conduct of the
indemnitor or the failure of the indemnitor to comply with its obligations
under this Agreement.
17.4 INFRINGEMENT.
In the event that (1) any item supplied by Provider that is subject to the
indemnity in SECTION 17.1(e), or any item supplied by Williams that is
subject to the indemnity in SECTION 17.2(e) (each the "INDEMNIFYING PARTY"
with respect to the items it has supplied) are found, or in the
Indemnifying Party's reasonable opinion are likely to be found, to
infringe upon the patent, copyright, trademark, trade secrets,
intellectual property or proprietary rights of any third party in any
country in which Services are to be performed or received under this
Agreement, or (2) the continued use of such items is enjoined, the
Indemnifying Party shall, in addition to defending, indemnifying and
holding harmless other Party (the "INDEMNIFIED PARTY") as provided in
SECTIONS 17.1(e) and 17.2(e) and to the other rights the Indemnified Party
may have under this Agreement, promptly and at its own cost and expense
and, where Williams is the Indemnified Party,
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in such a manner as to minimize the disturbance to Williams's and the
Eligible Recipients' business activities do one of the following:
(a) OBTAIN RIGHTS. Obtain for the Indemnified Party the right to
continue using such item.
(b) MODIFICATION. Modify the item(s) in question so that it is no longer
infringing (provided that such modification does not degrade the
performance or quality of the Services or, where Williams is the
Indemnified Party, adversely affect Williams's and the Eligible
Recipients' intended use as contemplated by this Agreement).
(c) REPLACEMENT. Replace such item(s) with a non-infringing functional
equivalent reasonably acceptable to the Indemnified Party (provided
that such replacement does not degrade the performance or quality of
the Services or, where Williams is the Indemnified Party, adversely
affect Williams's and the Eligible Recipients' intended use as
contemplated by this Agreement); provided, however, that in the case
where Williams is the Indemnifying Party, Williams may in its sole
discretion elect to accept degraded or diminished Services in lieu
of taking the actions required by the foregoing clauses (a), (b) and
(c).
If Williams accepts degraded or diminished Services in lieu of taking the
actions in clauses (a), (b) and (c) above, and if Provider fails to meet
the Service Levels or its other obligations under this Agreement, then
such failure shall be excused if and to the extent such failure is
attributable to the degraded or diminished Services elected by Williams if
(i) Provider notifies Williams prior to its final decision that Provider
is not likely to be able, using commercially reasonable efforts, to meet
such Service Level or other obligation under such circumstances; (ii)
Provider uses commercially reasonable efforts to identify and consider
reasonable alternatives available to address and avoid the impending
performance failure; and (iii) Provider uses commercially reasonable
efforts to meet such Service Level or other obligation notwithstanding
Williams's election of the degraded or diminished Services.
If, after all commercially reasonable efforts, options (a) - (c) are not
feasible (or if Williams so elects), the Indemnifying Party shall remove
the infringing items from the Services and equitably adjust the Charges to
adequately reflect such removal. The Parties shall also agree on a
work-around designed to minimize the financial and operational effects of
such removal.
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17.5 INDEMNIFICATION PROCEDURES.
With respect to third party claims which are subject to indemnification
under this Agreement (other than as provided in SECTION 17.6 with respect
to claims covered by SECTION 17.1(f)), the following procedures shall
apply:
(a) NOTICE. Promptly after receipt by any entity entitled to
indemnification under this Agreement of notice of the commencement
or threatened commencement of any civil, criminal, administrative,
or investigative action or proceeding involving a claim in respect
of which the indemnitee will seek indemnification hereunder, the
indemnitee shall notify the indemnitor of such claim. No delay or
failure to so notify an indemnitor shall relieve it of its
obligations under this Agreement except to the extent that such
indemnitor has suffered actual prejudice by such delay or failure.
Within fifteen (15) days following receipt of written notice from
the indemnitee relating to any claim, but no later than five (5)
days before the date on which any response to a complaint or summons
is due, the indemnitor shall notify the indemnitee in writing that
the indemnitor elects to assume control of the defense and
settlement of that claim (a "NOTICE OF ELECTION").
(b) PROCEDURE FOLLOWING NOTICE OF ELECTION. If the indemnitor delivers a
Notice of Election within the required notice period, the indemnitor
shall assume sole control over the defense and settlement of the
claim; provided, however, that (i) the indemnitor shall keep the
indemnitee fully apprised as to the status of the defense, and (ii)
the indemnitor shall obtain the prior written approval of the
indemnitee before entering into any settlement of such claim
acknowledging any liability against the indemnitee or imposing any
obligations or restrictions on the indemnitee or ceasing to defend
against such claim. The indemnitor shall not be liable for any legal
fees or expenses incurred by the indemnitee following the delivery
of a Notice of Election; provided, however, that (i) the indemnitee
shall be entitled to employ counsel at its own expense to
participate in the handling of the claim, and (ii) the indemnitor
shall pay the fees and expenses associated with such counsel if
there is a conflict of interest with respect to such claim which is
not otherwise resolved or if the indemnitor has requested the
assistance of the indemnitee in the defense of the claim or the
indemnitor has failed to defend the claim diligently and the
indemnitee is prejudiced or likely to prejudiced by such failure.
The indemnitor shall not be obligated to indemnify the indemnitee
for any amount paid or payable by such indemnitee in the settlement
of any claim if (i) the indemnitor has delivered a timely Notice of
Election and such amount was agreed to without the written consent
of the indemnitor, (ii) the indemnitee has not provided the
indemnitor with notice of such claim and a reasonable
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opportunity to respond thereto, or (iii) the time period within
which to deliver a Notice of Election has not yet expired.
(c) PROCEDURE WHERE NO NOTICE OF ELECTION IS DELIVERED. If the
indemnitor does not deliver a Notice of Election relating to any
claim within the required notice period, the indemnitee shall have
the right to defend the claim in such manner as it may deem
appropriate. The indemnitor shall promptly reimburse the indemnitee
for all such reasonable costs and expenses incurred by the
indemnitee, including reasonable attorneys' fees.
17.6 INDEMNIFICATION PROCEDURES - GOVERNMENTAL CLAIMS.
With respect to claims covered by SECTION 17.1(f), the following
procedures shall apply:
(a) NOTICE. Promptly after receipt by either Party of notice of the
commencement or threatened commencement of any action or proceeding
involving a claim in respect of which the indemnitee will seek
indemnification pursuant to SECTION 17.1(f), such Party shall notify
the other Party of such claim. No delay or failure to so notify the
other Party shall relieve such other Party of its obligations under
this Agreement except to the extent that such other Party has
suffered actual prejudice by such delay or failure.
(b) PROCEDURE FOR DEFENSE. Williams shall be entitled, at its option, to
have the claim handled pursuant to SECTION 17.5 or to retain sole
control over the defense and settlement of such claim; provided
that, in the latter case, the indemnitee shall (i) consult with
indemnitor on a regular basis regarding claim processing (including
actual and anticipated costs and expenses) and litigation strategy,
(ii) reasonably consider any settlement proposals or suggestions by
the indemnitor, and (iii) use commercially reasonable efforts to
minimize any amounts payable or reimbursable by the indemnitor.
17.7 SUBROGATION.
Except as otherwise provided in SECTIONS 16.1 or 16.2, in the event that
an indemnitor shall be obligated to indemnify an indemnitee pursuant to
any provision of this Agreement, the indemnitor shall, upon payment of
such indemnity in full, be subrogated to all rights of the indemnitee with
respect to the claims to which such indemnification relates.
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18. LIABILITY
18.1 GENERAL INTENT.
Subject to the specific provisions and limitations of this ARTICLE 18, it
is the intent of the Parties that each Party shall be liable to the other
Party for any actual damages incurred by the non-breaching Party as a
result of the breaching Party's failure to perform its obligations in the
manner required by this Agreement.
18.2 FORCE MAJEURE.
(a) GENERAL. Subject to SECTION 18.2(d), no Party shall be liable for
any default or delay in the performance of its obligations under
this Agreement if and to the extent such default or delay is caused,
directly or indirectly, by fire, flood, earthquake, elements of
nature or acts of God, wars, riots, civil disorders, rebellions or
revolutions, acts of terrorism or any other similar cause beyond the
reasonable control of such Party except to the extent that the
non-performing Party is at fault in failing to prevent or causing
such default or delay, and provided that such default or delay can
not reasonably be circumvented by the non-performing Party through
the use of alternate sources, workaround plans or other means. A
strike, lockout or labor dispute involving Provider Personnel shall
not excuse Provider from its obligations hereunder. In addition, the
refusal of Provider Personnel to enter a facility that is the
subject of a labor dispute shall excuse Provider from its
obligations hereunder only if and to the extent such refusal is
based upon a reasonable fear of harm.
(b) DURATION AND NOTIFICATION. In such force majeure event the
non-performing Party shall be excused from further performance or
observance of the obligation(s) so affected for as long as such
circumstances prevail and such Party continues to use all
commercially reasonable efforts to recommence performance or
observance whenever and to whatever extent possible without delay.
Any Party so prevented, hindered or delayed in its performance
shall, as quickly as practicable under the circumstances, notify the
Party to whom performance is due by telephone (to be confirmed in
writing within one (1) day of the inception of such delay) and
describe at a reasonable level of detail the circumstances of the
force majeure event, the steps being taken to address such force
majeure event, and the expected duration of such force majeure
event.
(c) SUBSTITUTE SERVICES; TERMINATION. If any event described in SECTION
18.2(a) has substantially prevented, hindered or delayed or is
reasonably expected to
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substantially prevent, hinder or delay the performance by Provider
or one of its Subcontractors of Services necessary for the
performance of critical Williams or Eligible Recipient functions for
longer than the recovery period specified in the applicable disaster
recovery plan, Provider shall, to the extent practicable, procure
such Services from an alternate source, and Provider shall be solely
liable for payment for such services from the alternate source for
so long as the delay in performance shall continue; provided that
Xxxxxxxx continues to pay the applicable Charges for all Services
that it continues to receive from Provider or an alternate source at
Provider's expense; provided, however, that the obligation of
Provider to provide "cover" pursuant to this Section shall not
exceed 180 days. In addition, if any event described in SECTION
18.2(a) substantially prevents, hinders or delays the performance by
Provider or one of its Subcontractors of Services necessary for the
performance of critical Xxxxxxxx functions (and Provider is not able
to procure such Services from an alternate source for more than five
(5) days, Xxxxxxxx, at its option, may (i) terminate any portion of
this Agreement so affected without payment of Termination Charges
and the charges payable hereunder shall be equitably adjusted to
reflect those terminated Services; or (ii) terminate this Agreement
in its entirety without payment of Termination Charges. Wind Down
Charges shall be payable if and only if and only to the extent
indicated as payable in SCHEDULE N. Provider shall not have the
right to additional payments or increased usage charges as a result
of any force majeure occurrence affecting Provider's ability to
perform.
(d) DISASTER RECOVERY. Upon the occurrence of a force majeure event that
constitutes a disaster under the disaster recovery plan, Provider
shall implement promptly, as appropriate, its disaster recovery plan
and provide disaster recovery services as described in SCHEDULE E.
The occurrence of a force majeure event shall not relieve Provider
of its obligation to implement its disaster recovery plan and
provide disaster recovery services.
(e) PAYMENT OBLIGATION. If Provider fails to provide Services in
accordance with this Agreement due to the occurrence of a force
majeure event, all amounts payable to Provider hereunder shall be
equitably adjusted in a manner such that Xxxxxxxx is not required to
pay any amounts for Services that it is not receiving whether from
Provider or from an alternate source at Provider's expense pursuant
to SECTION 18.2(c).
(f) ALLOCATION OF RESOURCES. Without limiting Provider's obligations
under this Agreement, whenever a force majeure event or disaster
causes Provider to allocate limited resources between or among
Provider's customers and Affiliates,
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Xxxxxxxx and the Eligible Recipients shall receive at least the same
treatment as comparable Provider customers. In no event will
Provider re-deploy or re-assign any Key Personnel to another
customer or account in the event of the occurrence of a force
majeure event.
18.3 LIMITATION OF LIABILITY.
(a) EXCLUSIONS FROM LIMITATIONS. EXCEPT AS PROVIDED IN THIS SECTION
18.3, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL, COLLATERAL, EXEMPLARY OR
PUNITIVE DAMAGES, INCLUDING LOST PROFITS, REGARDLESS OF THE FORM OF
THE ACTION OR THE THEORY OF RECOVERY, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) GENERAL LIABILITY CAP. Additionally, except as provided below, the
total aggregate liability of either Party, for claims asserted by
the other Party under or in connection with this Agreement,
regardless of the form of the action or the theory of recovery,
shall be limited to the total Charges payable to Provider during the
twelve (12) month period preceding the last act or omission giving
rise to such liability provided that if the event giving rise to
liability occurs in the first twelve (12) months immediately
following the Commencement Date, the total aggregate liability of
either Party shall be limited to the total Charges that would be
payable to Supplier for the performance of the Services during such
twelve (12) month period.
(c) EXCEPTIONS TO LIMITATIONS OF LIABILITY. The limitations of liability
set forth in SECTIONS 18.3(a) and (b) shall not apply with respect
to:
(i) Amounts paid to third parties in satisfaction or settlement of
claims brought by such third parties that are the subject of
indemnification under ARTICLE 17 of this Agreement (provided
that amounts paid pursuant to the indemnitees set forth in
SECTION 17.1(f) and 17.2(j) shall each remain subject to the
liability cap set forth in SECTION 18.3(b)).
(ii) Damages occasioned by any breach of a Party's obligations
under SECTIONS 13.1, 13.3 and 13.4 (excluding, in the case of
SECTIONS 13.1 and 13.4, circumstances in which the
unavailability of Xxxxxxxx Data is directly caused by
technical or other operational problems).
(iii) Termination Charges.
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(d) EXCEPTIONS TO LIABILITY CAP. The limitations of liability set forth
in SECTION 18.3(b) shall not apply with respect to:
(i) Losses occasioned by a breach of a Party's representations,
warranties or covenants set forth in SECTIONS 15.6, 15.7, 15.9
(but only to the extent that such code is intentionally
invoked) and 15.13.
(ii) Damages occasioned by a breach of Provider's representations,
warranties or covenants set forth in SECTION 15.10(a)(i).
(e) ITEMS NOT CONSIDERED DAMAGES. The following shall not be considered
as part of the Charges payable to Provider for purposes of
calculating the liability cap in SECTION 18.3(b), and accordingly
shall not be counted toward the liability exclusion or cap specified
in, SECTION 18.3(a) or (b):
(i) Service Level Credits assessed against Provider pursuant to
SCHEDULE G.
(ii) Invoiced Charges that Xxxxxxxx is not obligated to pay under
this Agreement because such Charges are attributable to
billing errors or are disputed in good faith by Xxxxxxxx in
accordance with the disputed payment provisions of this
Agreement.
(iii) Amounts paid by Xxxxxxxx but subsequently recovered from
Provider due either to incorrect Charges by Provider or
non-conforming Services.
(iv) Invoiced Charges and other amounts that are due and owing to
Provider for Services under this Agreement.
(f) WAIVER OF LIABILITY CAP. If, at any time, the total aggregate
liability of one Party for claims asserted by the other Party under
or in connection with this Agreement exceeds eighty-five percent
(85%) of the liability cap specified in SECTION 18.3(b) and, upon
receipt of the request of the other Party, the Party incurring such
liability refuses to waive such cap and/or increase the available
cap to an amount at least equal to the original liability cap, then
the other Party may terminate this Agreement without payment of
Termination Charges. Wind Down Charges shall be payable if and only
if indicated as payable in SCHEDULE N.
(g) ACKNOWLEDGED DIRECT DAMAGES. The following shall be considered
direct damages and neither Party shall assert that they are
indirect, incidental, collateral, consequential or special damages
or lost profits to the extent they result directly from either
Party's failure to perform in accordance with this Agreement:
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(i) Costs and expenses of recreating or reloading any lost, stolen
or damaged Xxxxxxxx Data, subject to Xxxxxxxx providing
available sources as necessary for the re-creation of such
Xxxxxxxx Data if Provider has no other means to re-create such
data.
(ii) Costs and expenses of implementing a work-around in respect of
a failure to provide the Services or any part thereof in
accordance with this Agreement.
(iii) Costs and expenses of replacing lost, stolen or damaged
Equipment, Software, and Materials.
(iv) Cover damages, including the costs and expenses incurred to
obtain or procure the Services or corrected Services from an
alternate source or to provide the Services or corrected
Services using a Party's own internal resources, to the extent
in excess of Provider's Charges under this Agreement.
(v) Straight time, overtime or related expenses incurred by either
Party, including overhead allocations for employees, wages and
salaries of additional employees, travel expenses, overtime
expenses, telecommunication charges and similar charges, due
to failure of Provider to provide all or a portion of the
Services incurred in connection with clauses (i) through (iv)
above or otherwise perform in accordance with this Agreement.
(vi) Damages of a Xxxxxxxx Affiliate or an Eligible Recipient which
would be direct damages if they had instead been suffered by
Xxxxxxxx (including being so considered under this SECTION
18.3(f)).
(vii) Fines, penalties, interest or other monetary remedies imposed
by a governmental body or regulatory agency for failure to
comply with requirements or deadlines which are a Party's
obligation to pay under SECTION 17.1(f) or SECTION 17.2(j).
(viii) Liquidated damages assessed under SECTION 4.2(e) and 4.4(d).
(ix) Service Level Credits assessed against Provider pursuant to
SCHEDULE G.
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19. DISPUTE RESOLUTION
19.1 INFORMAL DISPUTE RESOLUTION.
Prior to the initiation of formal dispute resolution procedures with
respect to any dispute, other than as provided in SECTION 19.1(d) or
SECTIONS 20.7, the Parties shall first attempt to resolve such dispute
informally, as follows:
(a) INITIAL EFFORT. The Parties agree that the Xxxxxxxx Project
Executive and the Provider Project Executive shall attempt in good
faith to resolve all disputes (other than those described in SECTION
19.1(d) or 20.7). In the event the Xxxxxxxx Project Executive and
the Provider Project Executive are unable to resolve a dispute in an
amount of time that either Party deems reasonable under the
circumstances, such Party may refer the dispute for resolution to
the senior corporate executives specified in SECTION 19.1(b) below
upon written notice to the other Party.
(b) ESCALATION. Within five (5) business days of a notice under SECTION
19.1(a) above referring a dispute for resolution by senior corporate
executives, the Xxxxxxxx Project Executive and the Provider Project
Executive will each prepare and provide to a Provider Vice
President, IBM Global Services Process and Petroleum Industry and
the Xxxxxxxx Chief Financial Officer and Chief Administrative
Officer, respectively, summaries of the non-privileged relevant
information and background of the dispute, along with any
appropriate non-privileged supporting documentation, for their
review. The designated senior corporate executives will confer as
often as they deem reasonably necessary in order to gather and
furnish to the other all non-privileged information with respect to
the matter in issue which the Parties believe to be appropriate and
germane in connection with its resolution. The designated senior
corporate executives shall discuss the problem and negotiate in good
faith in an effort to resolve the dispute without the necessity of
any formal proceeding. The specific format for the discussions will
be left to the discretion of the designated senior corporate
executives, but may include the preparation of agreed-upon
statements of fact or written statements of position.
(c) PROVISION OF INFORMATION. During the course of negotiations under
SECTION 19.1(a) or (b) above, all reasonable requests made by one
Party to another for non-privileged information, reasonably related
to the dispute, will be honored in order that each of the parties
may be fully advised of the other's position. All negotiation shall
be strictly confidential and used solely for the purposes of
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settlement. Any materials prepared by one Party for these
proceedings shall not be used as evidence by the other Party in any
subsequent arbitration or litigation; provided, however, the
underlying facts supporting such materials may be subject to
discovery.
(d) PREREQUISITE TO FORMAL PROCEEDINGS. Formal proceedings for the
resolution of a dispute may not be commenced until the earlier of:
(i) the designated senior corporate executives under SECTION
19.1(b) above concluding in good faith that amicable
resolution through continued negotiation of the matter does
not appear likely; or
(ii) thirty (30) days after the notice under SECTION 19.1(a) above
referring the dispute to senior corporate executives.
The provisions and time periods specified in this SECTION 19.1 shall
not be construed to prevent a Party from instituting, and a Party is
authorized to institute, formal proceedings earlier to (A) avoid the
expiration of any applicable limitations period, (B) preserve a
superior position with respect to other creditors, or (C) address a
claim arising out of the breach of a Party's obligations under
ARTICLE 13 or a dispute subject to SECTION 20.7.
19.2 NON-BINDING MEDITATION.
(a) NON-BINDING MEDIATION. Except for claims arising out of the breach
of a Party's obligations under ARTICLE 13 or disputes subject to
SECTIONS 20.7, any controversy or claim arising out of or relating
to this Agreement, or any breach thereof, which cannot be resolved
using the procedures set forth above in SECTION 19.1 shall be first
attempted to be resolved through non-binding mediation under the
mediation rules of the Center for Public Resources then in effect;
provided, however, that without limiting any rights at law or in
equity a Party may have because of an improper termination of this
Agreement by the other Party, nothing contained in this Agreement
shall limit either Party's right to terminate this Agreement
pursuant to ARTICLE 20.
(b) LOCATION AND DECISION. The mediation shall take place in Tulsa,
Oklahoma, and shall apply the governing law of this Agreement. The
recommendations of the mediators shall be non-binding. The mediators
shall be instructed to state the reasons for their recommendations.
The mediators shall be bound by the warranties, limitations of
liability and other provisions of this Agreement. Except with
respect to the provisions of this Agreement which provide for
injunctive
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relief rights or an unjustified failure by the other Party to
participate in the mediation process described in SECTION 19.2, such
mediation shall be a precondition to any application by either Party
to any court of competent jurisdiction.
(c) SELECTION AND QUALIFICATION OF MEDIATORS. Within ten (10) days after
delivery of written notice ("NOTICE OF DISPUTE") by one Party to the
other in accordance with this Section, the Parties each shall use
good faith efforts to mutually agree upon one (1) mediator. If the
Parties are not able to agree upon one (1) mediator within such
period of time, the Parties each shall within ten (10) days: (i)
appoint one (1) mediator who has at no time ever represented or
acted on behalf of either of the Parties, and is not otherwise
affiliated with or interested in either of the Parties and (ii)
deliver written notice of the identity of such mediator and a copy
of his or her written acceptance of such appointment to the other
Party. If either Party fails or refuses to appoint a mediator within
such ten (10) day period, the single mediator appointed by the other
Party shall decide alone the issues set out in the Notice of
Dispute. Within ten (10) days after such appointment and notice,
such mediators shall appoint a third neutral and independent
arbitrator who at no time ever represented or acted on behalf of
either of the Parties, and is not otherwise affiliated with or
interested in either of the Parties. In the event that the two (2)
mediators fail to appoint a third mediator within ten (10) days of
the appointment of the second mediator, either mediator or either
Party may apply for the appointment of a third mediator to the
Center for Public Resources.
(d) GENERAL. All mediators selected pursuant to this Section shall be
practicing attorneys with at least five (5) years experience with
the business processes, technology and/or law applicable to the
Services or similar services or transactions. The Parties shall use
commercially reasonable efforts to conclude the mediation within
sixty (60) days after selection of the mediator or mediators. The
recommendations of the mediator or the majority of the three
mediators, as applicable, shall be rendered within fifteen (15) days
after the conclusion of the hearing, shall be in writing, shall set
forth the basis therefore. Each Party shall bear its own mediation
costs and expenses and all other costs and expenses of the mediation
shall be divided equally between the Parties.
19.3 JURISDICTION.
Each Party irrevocably agrees that any legal action, suit or proceeding
brought by it in any way arising out of this Agreement must be brought
solely and exclusively in Tulsa, Oklahoma, and each Party irrevocably
submits to the sole and exclusive jurisdiction of
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the courts in Oklahoma in personam, generally and unconditionally with
respect to any action, suit or proceeding brought by it or against it by
the other Party.
19.4 CONTINUED PERFORMANCE.
Each Party agrees that it shall, unless otherwise directed by the other
Party, continue performing its obligations under this Agreement while any
dispute is being resolved; provided, that this provision shall not operate
or be construed as extending the Term of this Agreement or prohibiting or
delaying a Party's exercise of any right it may have to terminate the Term
as to all or any part of the Services. For purposes of clarification,
Xxxxxxxx Data may not be withheld by Provider pending the resolution of
any dispute.
19.5 GOVERNING LAW.
This Agreement and performance under it shall be governed by and construed
in accordance with the applicable laws of the State of New York without
giving effect to the principles thereof relating to conflicts of laws. The
application of the United Nations Convention on Contracts for the
International Sale of Goods is expressly excluded.
20. TERMINATION
20.1 TERMINATION FOR CAUSE.
(a) BY XXXXXXXX. If Provider:
(i) commits a material breach of its obligations with respect to
Transition Services as provided in SECTION 4.2(g);
(ii) commits a material breach of this Agreement, which breach is
not cured within thirty (30) days after notice of the breach
from Xxxxxxxx;
(iii) commits a material breach of this Agreement which is not
capable of being cured within the period specified pursuant to
SECTION 20.1(a)(ii); or
(iv) commits numerous breaches of its duties or obligations which
collectively constitute a material breach of this Agreement;
then Xxxxxxxx may, by giving notice to Provider, terminate the Term
with respect to all or any part of the Services, in whole or in
part, as of a date specified in the notice of termination. Provider
shall not be entitled to any Termination Charges in connection with
such a Termination for Cause. If Xxxxxxxx chooses to
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terminate this Agreement in part, the Charges payable under this
Agreement will be adjusted in accordance with the pricing by charge
component, as set forth in SCHEDULE J, to reflect such partial
termination.
(b) BY PROVIDER. In the event that Xxxxxxxx fails to pay Provider
undisputed charges exceeding in the aggregate one (1) month of
Monthly Base Charges and fails to cure such default within thirty
(30) days of notice from Provider of the possibility of termination
for failure to make such payment, Provider may, by notice to
Xxxxxxxx, terminate the Term.
20.2 TERMINATION FOR CONVENIENCE.
Xxxxxxxx may terminate the Term with respect to all or any portion of the
Services for convenience and without cause with effect at any time after
twelve months from the Commencement Date by giving Provider at least six
(6) months prior written notice designating the termination date. Upon the
satisfactory completion of all Termination Assistance Services requested
by Xxxxxxxx under SECTION 4.4, Xxxxxxxx shall pay to Provider a
Termination Charge calculated in accordance with SCHEDULE N. Wind Down
Charges shall be payable if and only if and only to the extent indicated
as payable in SCHEDULE N. In the event that a purported termination for
cause by Xxxxxxxx under SECTION 20.1 is determined by a competent
authority not to be properly a termination for cause, then such
termination by Xxxxxxxx shall be deemed to be a termination for
convenience under this SECTION 20.2.
20.3 TERMINATION UPON PROVIDER CHANGE OF CONTROL.
In the event of a change in Control of Provider (or that portion of
Provider providing Services under this Agreement) or the Entity that
Controls Provider (if any), where such control is acquired, directly or
indirectly, in a single transaction or series of related transactions, or
all or substantially all of the assets of Provider are acquired by any
entity, or Provider is merged with or into another entity to form a new
entity, then at any time within six (6) months after the last to occur of
such events, Xxxxxxxx may at its option terminate the Term by giving
Provider at least ninety (90) days prior notice and designating a date
upon which such termination shall be effective; provided, however, if such
change in Control of Provider involves a Direct Xxxxxxxx Competitor,
Xxxxxxxx may terminate the Term by giving Provider at least ten (10) days
prior notice, and such Direct Xxxxxxxx Competitor shall be prohibited from
any contact with Xxxxxxxx Data, Xxxxxxxx Proprietary Information and any
and all other information about the Xxxxxxxx account, including
discussions with Provider Personnel regarding specifics relating to the
Services. Provider shall not be entitled to Termination Charges in
connection with a
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termination on this basis. Wind Down Charges shall be payable if and only
if and only to the extent indicated as payable in SCHEDULE N.
20.4 TERMINATION UPON XXXXXXXX CHANGE OF CONTROL.
In the event that, in a single transaction or series of transactions,
Xxxxxxxx acquires or is acquired by any other Entity (by stock sale, asset
sale or otherwise) or merges with any other Entity, and such transactions
or transaction result in a change in Control of Xxxxxxxx, then, at any
time within six (6) months after the last to occur of such events,
Xxxxxxxx may at its option terminate the Term by giving Provider at least
ninety (90) days prior notice and designating a date upon which such
termination shall be effective. Provider shall be entitled to Termination
Charges in connection with a termination on this basis calculated in
accordance with SCHEDULE N. Wind Down Charges shall be payable if and only
if and only to the extent indicated as payable in SCHEDULE N.
20.5 TERMINATION FOR INSOLVENCY.
In the event that any Party (i) files for bankruptcy, (ii) becomes or is
declared insolvent, or is the subject of any bona fide proceedings related
to its liquidation, administration, provisional liquidation, insolvency or
the appointment of a receiver or similar officer for it, (iii) passes a
resolution for its voluntary liquidation, (iv) has a receiver or manager
appointed over all or substantially all of its assets, (v) makes an
assignment for the benefit of all or substantially all of its creditors,
(vi) enters into an agreement or arrangement for the composition,
extension, or readjustment of substantially all of its obligations or any
class of such obligations, or (vii) experiences an event analogous to any
of the foregoing in any jurisdiction in which any of its assets are
situated, then the other Party may terminate this Agreement as of a date
specified in a termination notice; provided, however, that Provider will
not have the right to exercise such termination under this Section so long
as Xxxxxxxx pays for the Services to be received hereunder in advance on a
month-to-month basis. Provider shall not be entitled to Termination
Charges in connection with a termination on this basis.
20.6 XXXXXXXX RIGHTS UPON PROVIDER'S BANKRUPTCY.
(a) GENERAL RIGHTS. In the event of Provider's bankruptcy or other
formal procedure referenced in SECTION 20.5 or of the filing of any
petition under bankruptcy laws affecting the rights of Provider
which is not stayed or dismissed within thirty (30) days of filing,
in addition to the other rights and remedies set forth herein, to
the maximum extent permitted by Law, Xxxxxxxx will have the
immediate right to retain and take possession for safekeeping all
Xxxxxxxx Data, Xxxxxxxx
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Proprietary Information, Xxxxxxxx licensed Third Party Software,
Xxxxxxxx owned Equipment, Xxxxxxxx owned Materials, Xxxxxxxx owned
Developed Materials, and all other Software, Equipment, Systems or
Materials to which Xxxxxxxx and/or the Eligible Recipients are or
would be entitled during the Term or upon the expiration or
termination of this Agreement. Provider shall cooperate fully with
Xxxxxxxx and the Eligible Recipients and assist Xxxxxxxx and the
Eligible Recipients in identifying and taking possession of the
items listed in the preceding sentence. Xxxxxxxx will have the right
to hold such Xxxxxxxx Data, Proprietary Information, Software,
Equipment, Systems and Materials until such time as the trustee or
receiver in bankruptcy or other appropriate insolvency office holder
can provide adequate assurances and evidence to Xxxxxxxx that they
will be protected from sale, release, inspection, publication, or
inclusion in any publicly accessible record, document, material or
filing. Provider and Xxxxxxxx agree that without this material
provision, Xxxxxxxx would not have entered into this Agreement or
provided any right to the possession or use of Xxxxxxxx Data,
Xxxxxxxx Proprietary Information, or Xxxxxxxx Software covered by
this Agreement.
(b) XXXXXXXX RIGHTS IN EVENT OF BANKRUPTCY REJECTION. Notwithstanding
any other provision of this Agreement to the contrary, in the event
that Provider becomes a debtor under the United States Bankruptcy
Code (11 U.S.C. Section 101 et. seq. or any similar Law in any other
country (the "BANKRUPTCY CODE")) and rejects this Agreement pursuant
to Section 365 of the Bankruptcy Code (a "BANKRUPTCY REJECTION"),
(i) any and all of the licensee and sublicensee rights of Xxxxxxxx
and the Eligible Recipients arising under or otherwise set forth in
this Agreement, including without limitation the rights of Xxxxxxxx
and/or the Eligible Recipients referred to in SECTION 14.6, shall be
deemed fully retained by and vested in Xxxxxxxx and/or the Eligible
Recipients as protected intellectual property rights under Section
365(n)(1)(B) of the Bankruptcy Code and further shall be deemed to
exist immediately before the commencement of the bankruptcy case in
which Provider is the debtor; (ii) Xxxxxxxx shall have all of the
rights afforded to non-debtor licensees and sublicensees under
Section 365(n) of the Bankruptcy Code; and (iii) to the extent any
rights of Xxxxxxxx and/or the Eligible Recipients under this
Agreement which arise after the termination or expiration of this
Agreement are determined by a bankruptcy court not to be
"intellectual property rights" for purposes of Section 365(n), all
of such rights shall remain vested in and fully retained by Xxxxxxxx
and/or the Eligible Recipients after any Bankruptcy Rejection as
though this Agreement were terminated or expired. Xxxxxxxx shall
under no circumstances be required to terminate this Agreement after
a Bankruptcy Rejection in order to enjoy or acquire any of its
rights under this
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Agreement, including without limitation any of the rights of
Xxxxxxxx referenced in SECTION 14.6.
20.7 EQUITABLE REMEDIES.
Provider acknowledges that, in the event it breaches (or attempts or
threatens to breach) its obligation to provide Termination Assistance
Services as provided in SECTION 4.4, its obligation respecting continued
performance in accordance with SECTION 19.4, or its obligation to provide
access to computers or files, containing Xxxxxxxx Data in accordance with
SECTION 13.4, Xxxxxxxx and/or the Eligible Recipients may be irreparably
harmed. In such a circumstance, Xxxxxxxx may proceed directly to court. If
a court of competent jurisdiction should find that Provider has materially
breached (or attempted or threatened to materially breach) any such
obligations, Provider agrees that upon any findings of irreparable injury
or other conditions to injunctive relief, it shall comply with the entry
of an appropriate order compelling performance by Provider and restraining
it from any further breaches (or attempted or threatened breaches).
21. GENERAL
21.1 BINDING NATURE AND ASSIGNMENT.
(a) BINDING NATURE. This Agreement will be binding on the Parties and
their respective successors and permitted assigns.
(b) ASSIGNMENT. Neither Party may, or will have the power to, assign
this Agreement without the prior written consent of the other,
except in the following circumstances:
(i) Either Party may assign its rights and obligations under this
Agreement, without the approval of the other Party, to an
Affiliate of such Party which expressly assumes such Party's
obligations and responsibilities hereunder; provided, that (i)
such other Party shall remain fully liable for and shall not
be relieved from the full performance of all obligations under
this Agreement; and (ii) in the case of Provider, such
assignment is subject to Xxxxxxxx'x prior consent, such
consent not to be unreasonably withheld.
(ii) Xxxxxxxx may assign its rights and obligations under this
Agreement without the approval of Provider to an Entity
acquiring, directly or indirectly, Control of Xxxxxxxx, an
Entity into which Xxxxxxxx is merged, or an Entity acquiring
all or substantially all of Xxxxxxxx'x assets, provided that
if such acquisition or merger would result in Provider being
required
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to provide Services that meet the definition of New Services,
then such Services will be treated as New Services under
SECTION 11.5. The acquirer or surviving Entity shall agree in
writing to be bound by the terms and conditions of this
Agreement.
(c) IMPERMISSIBLE ASSIGNMENT. Any attempted assignment that does not
comply with the terms of this Section shall be null and void.
21.2 ENTIRE AGREEMENT; AMENDMENT.
This Agreement, including any Schedules and Exhibits referred to herein
and attached hereto, each of which is incorporated herein for all
purposes, constitutes the entire agreement between the Parties with
respect to the subject matter hereof. There are no agreements,
representations, warranties, promises, covenants, commitments or
undertakings other than those expressly set forth herein. This Agreement
supersedes all prior agreements, representations, warranties, promises,
covenants, commitments or undertaking, whether written or oral, with
respect to the subject matter contained in this Agreement. No amendment,
modification, change, waiver, or discharge hereof shall be valid unless in
writing and signed by an authorized representative of the Party against
which such amendment, modification, change, waiver, or discharge is sought
to be enforced.
21.3 NOTICES.
(a) PRIMARY NOTICES. Any notice, notification, request, demand or
determination provided by a Party pursuant to the following:
(i) SECTION 4.4 (Termination Assistance Services);
(ii) SECTION 4.4(a) (Use of Third Parties - Right of Use);
(iii) SECTION 6.12 (Notice of Default);
(iv) SECTION 7.7 (Notice of Adverse Impact);
(v) SECTION 11.6 (Extraordinary Events);
(vi) SECTION 13.3(d) (Loss of Proprietary Information);
(vii) SECTIONS 17.5 (Indemnification Procedures);
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(viii) SECTION 17.6 (Indemnification Procedures - Government
Claims);
(ix) SECTION 18.2 (Force Majeure);
(x) SECTION 18.3(f) (Waiver of Liability Cap);
(xi) SECTION 19.1 (Informal Dispute Resolution);
(xii) ARTICLE 20 (Termination); and
(xiii) SECTION 21.1 (Binding Nature and Assignment);
shall be in writing and shall be delivered in hard copy using one of
the following methods and shall be deemed delivered upon receipt:
(i) by hand, (ii) by an express courier with a reliable system for
tracking delivery, or (iii) by registered or certified mail, return
receipt requested, postage prepaid. Unless otherwise notified, the
foregoing notices shall be delivered as follows:
In the case of Xxxxxxxx:
The Xxxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxxx, XX 00-0
Xxxxx, XX 00000
Attention: Business Process Outsourcing Executive
Fax: (000) 000-0000
With a copy to:
The Xxxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxxx, XX 00-0
Xxxxx, XX 00000
Attention: General Counsel
and
In the case of Provider:
IBM Project Executive Xxxxxx
Xxx Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Provider Project Executive
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With a copy to:
IBM Global Services General Counsel
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx
(b) OTHER NOTICES. All notices, notifications, requests, demands or
determinations required or provided pursuant to this Agreement,
other than those specified in SECTION 21.3(a), may be sent in hard
copy in the manner specified in SECTION 21.3(a), or by e-mail
transmission (where receipt is acknowledged by the recipient) or
facsimile transmission (with acknowledgment of receipt from the
recipient's facsimile machine) to the addresses set forth below:
In the case of Xxxxxxxx:
The Xxxxxxxx Companies, Inc.
Xxx Xxxxxxxx Xxxxxx, XX 00-0
Xxxxx, XX 00000
Attention: Business Process Outsourcing Executive
Fax: (000) 000-0000
and
In the case of Provider:
IBM Project Executive Xxxxxx
Xxx Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Provider Project Executive
(c) NOTICE OF CHANGE. A Party may from time to time change its address
or designee for notification purposes by giving the other prior
notice of the new address or designee and the date upon which it
shall become effective.
21.4 COUNTERPARTS.
This Agreement may be executed in several counterparts, all of which taken
together shall constitute one single agreement between the Parties hereto.
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21.5 HEADINGS.
The article and section headings and the table of contents used herein are
for reference and convenience only and shall not be considered in the
interpretation of this Agreement.
21.6 RELATIONSHIP OF PARTIES.
Provider, in furnishing services to Xxxxxxxx and the Eligible Recipients
hereunder, is acting as an independent contractor, and Provider has the
sole obligation to supervise, manage, contract, direct, procure, perform
or cause to be performed, all work to be performed by Provider under this
Agreement. Except as expressly provided in this Agreement, Provider is not
an agent of Xxxxxxxx or the Eligible Recipients and has no right, power or
authority, expressly or impliedly, to represent or bind Xxxxxxxx or the
Eligible Recipients as to any matters, except as expressly authorized in
this Agreement. Neither Xxxxxxxx nor the Eligible Recipients are agents of
Provider and none of them has any right, power, or authority, expressly or
impliedly, to represent or bind Provider.
21.7 SEVERABILITY.
In the event that any provision of this Agreement conflicts with the law
under which this Agreement is to be construed or if any such provision is
held invalid or unenforceable by a court with jurisdiction over the
Parties, such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the Parties in accordance
with applicable law. The remaining provisions of this Agreement and the
application of the challenged provision to persons or circumstances other
than those as to which it is invalid or unenforceable shall not be
affected thereby, and each such provision shall be valid and enforceable
to the full extent permitted by law.
21.8 CONSENTS AND APPROVAL.
Except where expressly provided as being in the sole discretion of a
Party, where agreement, approval, acceptance, consent, confirmation,
notice or similar action by either Party is required under this Agreement,
such action shall not be unreasonably delayed or withheld. An approval or
consent given by a Party under this Agreement shall not relieve the other
Party from responsibility for complying with the requirements of this
Agreement, nor shall it be construed as a waiver of any rights under this
Agreement, except as and to the extent otherwise expressly provided in
such approval or consent.
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21.9 WAIVER OF DEFAULT; CUMULATIVE REMEDIES.
(a) WAIVER OF DEFAULT. A delay or omission by either Party hereto to
exercise any right or power under this Agreement shall not be
construed to be a waiver thereof. A waiver by either of the Parties
hereto of any of the covenants to be performed by the other or any
breach thereof shall not be construed to be a waiver of any
succeeding breach thereof or of any other covenant herein contained.
All waivers must be in writing and signed by the Party waiving its
rights.
(b) CUMULATIVE REMEDIES. All remedies provided for in this Agreement
shall be cumulative and in addition to and not in lieu of any other
remedies available to either Party at law, in equity or otherwise.
The election by a Party of any remedy provided for in this Agreement
or otherwise available to such Party shall not preclude such Party
from pursuing any other remedies available to such Party at law, in
equity, by contract or otherwise.
21.10 SURVIVAL.
Any provision of this Agreement which contemplates performance or
observance subsequent to any termination or expiration of this Agreement
shall survive any termination or expiration of this Agreement and continue
in full force and effect. Additionally, all provisions of this Agreement
will survive the expiration or termination of this Agreement to the
fullest extent necessary to give the Parties the full benefit of the
bargain expressed herein.
21.11 PUBLICITY.
Neither Party shall use the other Party's name or xxxx or refer to the
other Party directly or indirectly in any media release, public
announcement, or public disclosure relating to this Agreement, including
in any promotional or marketing materials, customer lists or business
presentations without the prior written consent of the other Party prior
to each such use or release.
21.12 SERVICE MARKS.
Provider and Xxxxxxxx each agrees that it shall not, without the other's
prior consent, use any of the names, service marks or trademarks of the
other Party or its Affiliates in any of its advertising or marketing
materials.
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21.13 EXPORT.
The Parties acknowledge that certain Software and technical data to be
provided hereunder and certain transactions hereunder may be subject to
export controls under the laws and regulations of the United States, the
European Union, the United Nations and other jurisdictions. No Party shall
export or re-export any such items or any direct product thereof or
undertake any transaction or service in violation of any such laws or
regulations. The Parties agree that no Software to be provided by Xxxxxxxx
for use by Provider for the Services is currently located or used outside
of the United States. Subject to the foregoing with respect to any and all
Software used by Provider in the performance of the Services, Provider
shall be responsible for, and shall coordinate and oversee, compliance
with such export laws in respect of such Software exported or imported
hereunder; provided that in the case of any Xxxxxxxx Owned Software for
which export and/or use outside of the United States is contemplated,
Xxxxxxxx will provide reasonable cooperation to Provider in (i)
identifying export restrictions, if any, applicable to such Software and
(ii) obtaining such consents and permits as may be needed for such export
and/or use.
21.14 ENFORCEMENT AND THIRD PARTY BENEFICIARIES.
Xxxxxxxx, for itself and on behalf of the other Eligible Recipients, shall
have the right to enforce this Agreement and to assert all rights and
exercise and received the benefits of all remedies, including monetary
damages, on behalf of each Eligible Recipient to the same extent as if
such Eligible Recipient were Xxxxxxxx under this Agreement. Except as
expressly provided herein, this Agreement is entered into solely between,
and may be enforced only by, Xxxxxxxx, on behalf of itself and the other
Eligible Recipients, and Provider, on behalf of itself and Provider's
Affiliates. Except as expressly provided herein, this Agreement shall not
be deemed to create any rights or causes of action in or on behalf of any
third parties, including without limitation employees, suppliers and
customers of a Party, or to create any obligations of a Party to any such
third parties.
21.15 COVENANT AGAINST PLEDGING.
In the event Provider assigns, transfers, pledges, hypothecates or
otherwise encumbers its rights to receive payments from Xxxxxxxx under
this Agreement, Provider shall continue to be Xxxxxxxx'x sole point of
contact with respect to this Agreement, including with respect to payment.
The person or Entity to which such rights are assigned, transferred,
pledged, hypothecated or otherwise encumbered shall not be considered a
third party beneficiary under this Agreement and shall not have any rights
or causes of action against Xxxxxxxx.
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21.16 ORDER OF PRECEDENCE.
In the event of a conflict, this Agreement shall take precedence over the
Schedules attached hereto, and the Schedules shall take precedence over
any attached Exhibits.
21.17 HIRING OF EMPLOYEES.
(a) SOLICITATION AND HIRING. Except as expressly set forth herein,
during the Term and for a period of twelve (12) months thereafter,
Provider will not solicit for employment directly or indirectly, nor
employ, any employees of Xxxxxxxx or an Eligible Recipient or
individuals employed by Xxxxxxxx Third Party Contractors with whom
Provider has had more than incidental contact in the course of
performing its obligations under this Agreement without the prior
approval of Xxxxxxxx. Except as expressly set forth herein in
SECTION 4.3(b)(2) connection with the expiration or termination of
this Agreement, during the Term and for a period of twelve (12)
months thereafter, Xxxxxxxx will not solicit for employment directly
or indirectly, nor employ, any employee of Provider involved in the
performance of Provider's obligations under this Agreement without
the prior consent of Provider. In each case, the prohibition on
solicitation and hiring shall extend ninety (90) days after the
termination of the employee's employment or, in the case of Provider
employees, ninety (90) days after the cessation of his or her
involvement in the performance of Services under this Agreement.
This provision shall not operate or be construed to prevent or limit
any employee's right to practice his or her profession or to utilize
his or her skills for another employer or to restrict any employee's
freedom of movement or association.
(b) PUBLICATIONS. Neither the publication of classified advertisements
in newspapers, periodicals, Internet bulletin boards, or other
publications of general availability or circulation nor the
consideration and hiring of persons responding to such
advertisements shall be deemed a breach of this SECTION 21.17,
unless the advertisement and solicitation is undertaken as a means
to circumvent or conceal a violation of this provision and/or the
hiring party acts with knowledge of this hiring prohibition.
21.18 FURTHER ASSURANCES.
Each Party covenants and agrees that, subsequent to the execution and
delivery of this Agreement and without any additional consideration, each
Party shall execute and deliver any further legal instruments and perform
any acts that are or may become necessary to effectuate the purposes of
this Agreement.
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21.19 LIENS.
Provider will not file, or by its action or inaction permit any Affiliates
or Subcontractors to file, any mechanics or materialman's or similar liens
derived from the performance of Services hereunder to be filed on or
against property or realty of Xxxxxxxx or any Eligible Recipient. In the
event that any such liens arise as a result of Provider's action or
inaction, Provider will obtain a bond to fully satisfy such liens or
otherwise remove such liens at its sole cost and expense within ten (10)
business days.
21.20 COVENANT OF GOOD FAITH.
Each Party agrees that, in its respective dealings with the other Party
under or in connection with this Agreement, it shall act in good faith.
21.21 ACKNOWLEDGMENT.
The Parties each acknowledge that the terms and conditions of this
Agreement have been the subject of active and complete negotiations, and
that such terms and conditions should not be construed in favor of or
against any Party by reason of the extent to which any Party or its
professional advisors participated in the preparation of this Agreement.
[Signature Page Follows]
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PAGE
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized representatives as of the Effective
Date.
THE XXXXXXXX COMPANIES, INC. INTERNATIONAL BUSINESS
MACHINES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
------------------------------------- ----------------------------
Title: Senior Vice President Title: Vice President
Date: 6/1/04 Date: 6/1/04
-i-
