BASIC ORDER AGREEMENT
between
DIGITAL EQUIPMENT CORPORATION
("Buyer")
and
OAO CANADA LIMITED / OAO INTERNATIONAL CORPORATION
("Seller")
for
[xxxxxx xxxxxx] Enterprise Services
BOA Number: 23839
Contract Date: April 1, 1997
Contract Expiration Date: March 31, 2000
[Confidential Treatment requested for redacted portions of document. The
entire agreement has been filed separately with the Securities and Exchange
Commission.]
TABLE OF CONTENTS
Section I Scope of the Agreement
Section II Purchase Orders
Section III Purchase Period
Section IV Pricing
Section V Delivery
Section VI Payment
Section VII Warranty
Section VIII Confidential Information and Advertising
Section IX Indemnification
Section X Insurance
Section XI Intellectual Property Interests and Indemnity
Section XII Independent Contractor
Section XIII No Implied License
Section XIV Termination for Cause
Section XV Termination for Convenience
Section XVI Force Majeure
Section XVII Set-off
Section XVIII Notices
Section XIX Flow Down Clauses
Section XX Survival
Section XXI Compliance with Laws
Section XXII General
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Exhibit A Statement of Work/Services Provided by Seller
Exhibit B Flow Down Clauses
3
Section I - Scope of Agreement
A. This Basic Order Agreement Is made by DIGITAL EQUIPMENT
CORPORATION ("Buyer") and OAO CANADA LIMITED and OAO INTERNATIONAL
CORPORATION ("Seller"). Buyer has entered into an Agreement with
[xxxxxx] for the provision of Services to [xxxxxx] and its affiliates
("End Users") known as the [xxxxx] Enterprise Agreement ("[xx]
Agreement"). The terms and conditions stated in this Agreement
exclusively govern the anticipated purchase of services by Buyer from
Seller, for the purpose of having Seller furnish services to Buyer or
End Users, in the event Seller is so requested by Buyer. The services
to be provided by Seller shall be those Services known as described in
the Statement of Work (SOW) attached hereto as Exhibit A. Exhibit A
may be supplemented from time to time by Statements of Work attached
to Purchase Orders for Seller's provision of the services at specific
End Users' sites. The term "Services" as used herein shall include the
services described in Exhibit A as well as the services described in
any supplemental Statements of Work attached to Purchase Orders
hereunder.
The parties hereto understand that the provision of Services may
involve the supply of goods necessary to render Services under this
Agreement, and therefore agree that, except as expressly stated
otherwise, the term "Services" shall be understood to include the
supply of any such service parts. It is further understood that the
cost of any such service parts to the Buyer shall be contained in the
fee charged by Seller for the Services provided hereunder.
THIS AGREEMENT IS NOT A REQUIREMENTS CONTRACT AND NEITHER OBLIGATES
THE BUYER TO PURCHASE NOR THE SELLER TO PROVIDE ANY SERVICES BUT ONLY
ESTABLISHES THE TERMS AND CONDITIONS FOR SUCH PURCHASES IF THEY OCCUR.
B. If any term of this Agreement conflicts with any term relating to the
purchases of Services contained in any issued purchase order, this
Agreement shall take precedence.
Section II - Purchase Orders
A. Buyer will authorize the provision of Services by releasing
telegraphic or telephonic orders or its Purchase Order Form ("Purchase
Order"). Buyer shall use reasonable efforts to send a confirming
purchase order ten (IO) days after issuing such telegraphic or
telephonic orders. Each purchase order shall reference this
Agreement by number and shall include any supplemental Statement
of Work applicable to the PO.
[Confidential Treatment requested for redacted portions of document]
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B. Seller shall sign and return the acknowledgment copy of each
Purchase Order within thirty (30) days after receipt. If Seller
fails to return such copy, Buyer will conclusively presume that Seller
accepts any Purchase Order which conforms to this Agreement.
Acceptance by Seller is limited to Buyer's offer as contained in this
Agreement and the Purchase Order as accepted by the Seller.
C. In the event the first month of coverage of Service is less than a
full month, the charge for that first month shall be calculated on a
pro-rata basis at the rate of one thirtieth (1/30) of the basic
monthly charge for each day of coverage.
Section III - Purchase Period
This Agreement shall commence on April 1, 1997 and shall end upon
completion of all Services covered by Purchase Orders issued and
accepted hereunder. This Agreement shall expire on March 31, 2000.
Notwithstanding any termination of this Agreement, and unless
otherwise agreed to in writing, Seller's obligations shall continue
with respect to any Purchase Orders entered into with Buyer for the
term of those Purchase Orders.
Section IV - Pricing
A. The Seller pricing for Services shall be set forth in the Purchase
Order or related Statements of Work. Prices shall remain fixed for
the period identified therein.
B. Seller expressly acknowledges and agrees that the prices and any
discounts established are lawful.
C. Prices include all taxes except sales, use and other such taxes
imposed upon the sale of Services. Any such sales, use or like
taxes required to be paid by the Buyer shall be specifically listed
in the appropriate invoices. If any purchase by Buyer is exempt from
such taxes, Buyer shall so indicate in their respective purchase order
and advise Seller of the respective tax exemption number.
Section V - Delivery
Seller shall perform all Services in time period as specified in the
Purchase Order or related Statements of Work. TIME AND RATE OF
DELIVERY OF SERVICES ARE OF THE ESSENCE OF ALL PURCHASES MADE UNDER
THIS AGREEMENT.
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Section VI - Payment
Buyer shall pay Seller for performance of all Services on a monthly
basis as set forth in each Purchase Order and payment shall be made
[xxxxxx xxxxx xxxx] after receipt of Seller's correct and conforming
invoice.
Section VII - Warranty
A. For a period of [xxxxx xx xxxx] from the date of the provision of any
Services, Seller hereby warrants that:
1. all Services rendered hereunder shall conform to the service
description stated in the Statements of Work and shall otherwise
be performed in a good, safe, workmanlike manner, and in
accordance with applicable manufacturers practices and procedures
at the time such Services are performed; and
2. all Services rendered hereunder shall be performed by persons who
are adequately trained and skilled such that they are capable of
rendering the Services in a good, safe, and workmanlike manner;
and
3. all such persons shall be fully equipped with the required tools,
systems, spare parts, documentation and diagnostic and test
equipment as is necessary to perform the Services unless
otherwise specified in a SOW; and
4. all service parts furnished by Seller through the provision of
Services shall be free from defects in material, workmanship and
design, and shall conform to the original manufacturer's
specifications in effect at the time of installation; and
5. all service parts furnished by Seller shall be free of all liens
and encumbrances; and
6. Seller has acquired and shall maintain in effect all licenses and
permits necessary for furnishing Services, and the provision of
Services by the Seller shall not violate any other contractual
obligations which Seller may have to any other party.
B. Seller hereby acknowledges that all of the above stated warranties run
to Buyer and to End Users.
[Confidential Treatment requested for redacted portions of document]
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Section VIII - Confidential Information and Advertising
A. Seller shall maintain as confidential and shall not disclose to any
person outside of its employ, or use for purposes other than
performance of its obligations pursuant to this Agreement, any
information which Seller learns by virtue of this Agreement, such as
specifications, technical information, business data, and other
confidential information. Upon termination of this Agreement, Seller
shall promptly return to Buyer all confidential information including
copies thereof Seller further agrees to maintain Buyer or End Users
information in confidence in accordance with the terms of the [xxxxx]
Enterprise Agreement.
B. Buyer shall maintain as confidential any Seller confidential
information that Buyer shall receive as a result of the work carried
out under this agreement. Upon termination of this Agreement, Buyer
shall promptly return to Seller all such confidential information
including copies thereof.
C. Without the other party's prior written consent neither party shall
in any manner advertise, or publish the existence or terms or any
transactions under this Agreement.
Section IX - Indemnification
Seller hereby agrees to release, defend, indemnify, and hold Buyer,
including its officers, directors, agents and employees, harmless from
and against any and all claims, losses, expenses (including reasonable
attorney's fees), demands, or judgments ("Claims") for personal
injury, damage to tangible personal property, or damage to real
property, which arise out of or are directly related to:
1. the acts, errors, omissions or negligence of Seller while on the
property of Buyer or End Users, regardless of whether the loss,
damage or injury resulting from same occurs after the Seller
has left such property; or
2. the presence of the equipment, tools, or goods used or supplied
by Seller in the performance of services under this Agreement on
the property of Buyer or End Users;
3. the negligent use by Seller of Buyer's equipment, tools or
facilities ("Equipment") whether or not any Claims are based
upon the condition of the Equipment or Buyer's alleged
negligence in permitting its use. Permission by Buyer to use
the Equipment shall be gratuitous.
[Confidential Treatment requested for redacted portions of document]
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4. any Claims brought by End Users arising out of Seller's
performance of its obligations under this Agreement.
Section X - Insurance
A. Seller agrees to carry at all times, and with companies acceptable to
Buyer, insurance of the kinds and in the amounts listed below:
1. Worker's Compensation - Statutory limits in each state or country
in which Seller is required to provide Worker's Compensation
coverage.
2. Employer's Liability - not less than $500,000 per employee.
3. Comprehensive General Liability - Including Contractual
Liability, Independent Contractor's Liability, and Personal
Injury/Property Damage Coverages in a combined single limit
of not less than $ 1,000,000.
4. Automobile Liability - For owned, non-owned, and hired vehicles
in a combined single limit of not less than $1,000,000.
5. Umbrella Liability - a combined single limit of not less than
$2,000,000.
B. Seller further agrees to furnish Buyer with Certificates of Insurance
evidencing the specified coverages and stating that:
1. the policies may not be changed or terminated without at least
ten (I 0) days' prior written notice to Buyer.
2. the policies contain waivers of the insurers subrogation rights
against Buyer.
Section XI - Intellectual Property Interests and Indemnity
Seller shall defend, at its expense, any claim against Buyer alleging
that the Services provided under this Agreement infringe any patent,
copyright, trademark, trade secret, mask work, or other intellectual
property right, and shall pay all costs and damages awarded, if Seller
is notified promptly in writing of such a claim. If a final
injunction against Buyer's use of the Services results from such a
claim (or, if Buyer reasonably believes such a claim is likely) Seller
shall, at its expense, and at Buyer requests, obtain for Buyer the
right to continue using the Services, or
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replace or modify the services so that they become noninfringing, but
functionally equivalent. Seller shall further indemnify, defend and
hold harmless from and against any and all damages, losses and
expenses incurred by Buyer as a result of claims brought against Buyer
by End Users or any other third party and arising out of Seller's
performance under this Agreement.
Section XII - Independent Contractor
Seller shall render all Services under this Agreement as an
independent contractor, not as an employee or agent of Buyer. Seller
shall not hold itself out as the agent or employee of Buyer in
connection with the performance of Services under this Agreement, and
Seller shall so instruct and supervise its employees, or agents to
insure that they comply with these provisions.
Section XIII - No Implied License
A. Both parties understand that Buyer owns various patents, copyrights,
trademarks, trade secrets, and other proprietary rights which may
cover, be contained in, or otherwise relate to a portion or ail of the
various computers or peripheral devices which Seller may service
pursuant to this Agreement.
B. The parties understand that neither the terms and conditions of this
Agreement nor the performance or acts of either party arising out of
this Agreement or related to Buyer's request for or use of the
services may be considered in any way as a grant of any license
whatsoever under any of Buyer's present or future patents, copyrights,
trademarks, trade secrets or other proprietary rights; nor is any such
license granted by implication, estoppel or otherwise.
C. The parties agree that both parties reserve all rights to bring suit
for infringement of its patents, copyrights, trademarks, trade
secrets, and other proprietary rights against all manufacturers,
sellers and users including Seller, which infringe their
respective proprietary rights, and that each party intends to enforce
those rights.
D. To the extent that any fiduciary or other similar duties are
established by this Agreement, it is understood and agreed that such
duties are not inconsistent with and will not prevent either party
from bringing said suits for infringement of its patents, copyrights,
trademarks, trade secrets, and other proprietary rights.
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Section XIV - Termination for Cause
A. The occurrence of any of the following constitutes a breach and
is cause for Buyer's termination of this Agreement and/or its
Purchase Orders:
1. Seller fails to perform Services in accordance with this
Agreement.
2. Seller fails to perform any material provision of this Agreement
or Buyer's conforming Purchase Order.
3. Seller assigns this Agreement, or any obligation or right under
it (the word "assign" to include, without limitation, a transfer
of a major interest in Seller) or merges with a third party,
not a parent or subsidiary company, without Buyer's prior
written consent, which Buyer shall not unreasonably withhold.
4. Seller becomes insolvent or makes an assignment for the benefit
of creditors, or a receiver or similar officer is appointed to
take charge of all or part of Seller's assets.
B. Seller must cure any of the above breaches and notify Buyer of such
cure within thirty (30) days from receipt of a written notice to cure
from Buyer. If Seller fails to so cure, Buyer may terminate this
Agreement and/or Purchase Orders under it by giving Seller
written notice. Buyer shall have no liability except for payment
of any balance due for conforming Services delivered before the end
of the cure. Buyer may, at its option, end Seller's ability to cure in
the event of Seller's material breach of any provision(s) of this
Agreement more than two (2) times in any twelve (12) month
period.
Section XV - Termination for Convenience
Buyer may terminate this Agreement or any Purchase Order under it for
convenience [xxxxx xxx xxx] after giving the Seller written notice unless
otherwise specified in a SOW. Buyer's [xxx] liability to Seller for such
termination shall be to pay Seller any [xxxxx xxxx xxx] for conforming
Service:
1. performed before receipt of Buyer's termination notice; and
2. ordered by Buyer and actually performed within [xxx xxx xxx]
after Seller's receipt of the termination notice.
[Confidential Treatment requested for redacted portions of document]
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Section XVI - Force Majeure
Neither party shall be liable for failure to perform any of its
obligations under this Agreement during any period in which such
performance is delayed by fire, flood, or other natural disaster, war,
embargo, riot, or the intervention of any government authority
provided that the party so delayed immediately notifies the other
party of such delay. If Seller's performance is delayed for these
reasons for a cumulative period of thirty (30) days, or more, from the
date of such notice, Buyer may terminate this Agreement, or any
Purchase Order issued under this Agreement by giving Seller written
notice. If Buyer terminates, its sole liability under this Agreement
will be to pay for conforming Services delivered by Seller before the
termination date.
Section XVII - Set-off
Buyer shall have the right at any time to set off any amounts owed by
Buyer to Seller pursuant to this Agreement, against any amounts owed
by Seller, or any of its affiliates, to Buyer.
Section XVIII - Notices
Any notice permitted or required to be given under this Agreement
shall be deemed given upon delivery, if delivered by hand, or upon
posting if sent by registered or certified mail, return receipt
requested, to a party at the address set forth below, or to such other
address as the respective party may designate by notice delivered
pursuant to this Section XIX. Any telegraphic notice shall be deemed
given upon receipt, provided that such notice is followed within three
(3) days by written notice given in accordance with this Section XIX.
If to Seller: X. Xxxxxxx If to Buyer: X. Xxxxxx
OAO Canada Limited Digital Equipment Corporation
Xxxxx 000, 000 Xxxxxxx Xxx X 000 Xxxxx Xxx XX
Xxxxxx, Xxxxxxx X X X 5Z9 Xxxxxxx, Xxxxxxx X0X 0X0
With copies to: X. Xxxxxxx With copies to: X. Xxxxx
OAO Canada Limited Digital Equipment Corporation
Suite 520, 220 Laurier Ave W Suite 900, Two Penn Plaza
Ottawa, Ontario X X X 5Z9 New York, New York
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Section XIX - Flow Down Clauses
Seller agrees that in delivery of all services under this agreement
that it shall comply and be subject to with all contractual
obligations undertaken by Buyer in Agreements with End Users
("Flow-Down Clauses") which are attached hereto as Exhibit B. In the
event of a conflict between the terms and conditions of any FlowDown
Clause and any term of this Agreement, the term of the Flow-Down
Clause shall prevail.
Section XX - Survival
The following provisions of this Agreement, including any related
Exhibits, shall survive expiration or termination of this Agreement:
Warranty, Intellectual Property Interests Indemnity, Confidential
Information and Advertising, Indemnification, Insurance, Compliance
with Laws, General, Notices, and No Implied License.
Section XXI - Compliance with Laws
A. Seller shall use its best effort to insure that all Services performed
under this Agreement shall comply with all applicable United States
and foreign laws and regulations including, but not limited to,
emission and safety standards, OSHA, pricing and discounts, the
Fair Labor Standards Act of 1938 (29 USC 201-219), the
Contract Work Hours and Safety Standards Act (40 USC 327-332),
the Toxic Substance Control Act of 1976 (15 USC 2601), all laws
restraining the use of convict labor, and Workers' Compensation
Laws. Upon request, Seller agrees to certify compliance with any
applicable law or regulations. Seller's failure to comply with any
of the requirements of this Section XXI shall be considered a
material breach of this Agreement.
B. The following statutes and Executive Orders (E.O.'s) together with
regulations issued thereunder are made part of this Agreement if
applicable: E.O. 11246, Equal Employment Opportunity; E.O. 11625,
as amended, Minority Business Enterprises; E.O. 12138 Women-Owned
Business Concerns; Section 503 of the Rehabilitation Act of 1973 as
Amended, (20 USC 793); and Section 402 of the Vietnam Era
Veterans Readjustment Assistance Act of 1974, as Amended, (38 USC
2012).
C. Digital Equipment Corporation is a major defense contractor within the
meaning of ten (10) U.S.C.s.2397b and 2397c. Seller agrees not to
provide compensation to any person in the performance of this
Agreement in violation of this statute, and agrees to report directly
to the Secretary of Defense, the information required for employees,
agents or subcontractors of Seller.
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D. The provisions of the Clean Air Act (42 USC 7401 et seq.) and the
Clean Water Act (33 USC 1251 et seq.) are made a part of this
Agreement if applicable.
E. The provisions of any applicable state Right-to-Know laws and
regulations are made a part of this Agreement. A copy of the
applicable Material Safety Data Sheets, including updates, shall be
provided by Seller as required under such laws and regulations.
Section XXII - General
A. Only the authorized representatives of the parties may amend or waive
provisions of this Agreement. If either party fails to enforce any
term of this Agreement, failure to enforce on that occasion shall not
prevent enforcement on any other occasion, unless otherwise provided
herein.
B. All rights and remedies conferred by this Agreement, by any other
instrument, or by law are cumulative and may be exercised singularly
or concurrently. If any provision of this Agreement is held invalid
by any law or regulation of any government or by any court, such
invalidity shall not affect the enforceability of other provisions
herein. This Agreement and any Purchase Orders issued hereunder shall
be governed by and interpreted in accordance with the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the
__________ day of __________, ______.
OAO CANADA LIMITED/ DIGITAL EQUIPMENT CORPORATION
OAO INTERNATIONAL CORPORATION
By:_____________________________ By:_____________________________
(Duly Authorized) (Duly Authorized)
X. Xxxxxxx
_____________________________ _____________________________
(Typed Name) (Typed Name)
Senior Vice President
_____________________________ _____________________________
(Title) (Title)
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EXHIBIT A
STATEMENT OF WORK
SERVICES PROVIDED
Overview
Digital Equipment Corporation (Digital) has selected OAO Canada
Limited / OAO INTERNATIONAL CORPORATION (OAO/ICOR) as a partner in the
delivery of the [xxxxxxxxxxxxxxxxxxxxxx] contract with [xxxxxxx]. The
contract with [xxxxxxxx] is not only Digital's largest desktop outsourcing
engagement but is also crucial to Digital's long term success in the
desktop-outsourcing marketplace. The arrangement between Digital and
OAO/ICOR is intended to recognize, support and enhance Digital's identity
within [xxxxxxxx] and the outsourcing marketplace.
OAO/ICOR acts as an integral part of Digital's PE Worldwide Operations
organization in many domains of service delivery related to the PE
engagement. These domains include:
- Interim Support Services
- Technology Projects
- Technology Consulting
From time to time, and with the agreement of both parties, additional domains
of service delivery may be added to this statement of work.
Each of these domains of service delivery will have distinct approaches to
the services or work to be performed and the associated pricing methodology
for the work. This document will serve as the master Statement of Work for
each domain, and as such, will define the approach to each. For work to be
performed in any of these domains, Digital will issue a purchase order (PO)
with associated pricing, terms, and conditions relating to the specific work
package or project.
Each of these domains of service will also be subject to the agreements
Digital has with [xxxxxx], including the [xxxxxxxxxxxxxxxxxxxxxxxxxxx], the
PE Statement of Work, and all associated instruments.
Although the actual costs related to the Services provided pursuant to this
agreement are outlined and itemized in the various POs issued the total costs
for these Services is not currently expected to exceed [xxxxxxxxx].
Interim Support Services
In this section, "Customer" refers to Digital's customer, [xxxxxxxxxx], as
defined in the PE Agreement.
Description
The Interim Support Services (ISS) Phase is the period during which Digital
and OAO/ICOR will commence activities to support a non-[xxxxxxxxxxxxxxxx]
LAN environment in its "as-is state" while transitioning the
Customer/Site(s) to a full [xxxxxxxxxxxxxxxxxxxxx] environment. The ISS
Phase consists of two subphases: Conversion Plan Development and As-Is
Operations Support. During the ISS Phase, Digital will immediately start
the Phase 2 through 4 activities as defined in the PE Agreement required to
complete the transition of the Customer/Site(s) to the Phase 5 Services.
The ISS Phase ends with the transition of all End-Users at all
Customer/Site(s) covered by a single Conversion Plan to Phase 5 Operations
Support.
Services or Work to be performed
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OAO/ICOR will be Digital's service delivery an-n for ISS, including both
phases of ISS-1 Conversion Plan Development and As-Is Operations support.
As such, OAO/ICOR will be responsible for all aspects of service delivery
for ISS including but not limited to:
- preparing the Conversion Plan for converting the Customer/Site(s) to
As-Is Operations Support;
- identifying the current Customer Actual Costs associated with the
As-Is state, including staffing, processes, procedures, maintenance,
reports and any other activities performed by the Customer;
- assisting Digital to calculate the xxxx-up percentage of Customer's
Actual Costs that will be used to calculate the monthly fee to the
Customer;
- converting all service delivery responsibilities from the Customer to
OAO/ICOR;
- performing due diligence to verify the Customer Actual Costs; and
- performing all service delivery responsibilities associated with As-Is
Operations support as identified in the Conversion Plan until such
time as the Customer/Site(s) is fully converted to a full Project
Enterprise environment.
- Develop and seek approval from Digital on the components that will be
included in the calculation of OAO/ICORs margin as discussed below.
Pricing Methodology
The ISS fee will be priced on a [xxxxxxxxxxxxxxxxxxxxxx], and will be
subject to and determined by the method described in, Section 2.4 of
Exhibit 2; ISS Pricing of the [xxxxxxxxxxxxxxxx] Agreement (ISS EX2).
Digital will pay, directly or through [xxxxxx], OAO/ICOR, monthly in
advance, a portion of the monthly ISS fee as described in ISS EX2 for the
period that [xxxxx]p is obligated to pay Digital the monthly ISS fee.
The portion payable to OAO/ICOR will be the
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] as outlined in the
associated ISS Conversion Plan. Should [xxxxxx] delay payment to Digital,
such delay resulting from the delivery of ISS services, then Digital will
delay payment to OAO / ICOR accordingly. Should payments be delayed then
Digital and OAO/ICOR will make every effort to resolve the issue related to
the delay in payment.
Digital acknowledges that OAO/ICOR have a target to make a [xxxxxxxx]
through reducing their costs for delivering ISS services through all forms
of cost reduction or delivery efficiency initiatives, and through all
incremental ISS services. Digital will, in the event that OAO/ICOR is not
able to make a [xxxxxxx] under the ISS program, [xxx]to OAO/ICOR
[xxxxxxxxxxxxxxxxxxxxxxxx] up to a maximum of [xx] of the ISS base line
service amount provided the following:
- Should OAO/ICOR make more then their [xxxxxxxxxxxxxxxxxxxx] that they
will [xxxxxxxxxxxx] Digital
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].
- Digital will have full access to audit and review all OAO/ICOR costs
and revenues related to ISS.
- Costs and expenses [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] ISS or
costs not pre approved by Digital will not be included in the
calculation of OAO/ICOR's [xxxxxxxxxxxxxxxxxxxxxxxx] ISS.
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Technology Projects
OAO/ICOR will carry out requested technology projects for Digital in the
domain of Change Management. The Change Management Process is comprised of
five component processes that have been designed to manage changes within the
Project Enterprise environment.
1. The Change Request Process;
2. The Work Order Process,
3. The Move/Add/Change (MAC) Process;
4. The Interim MAC Process; and
5. The Issue Resolution Process.
Technology Projects are conducted in the first 4 components in the Change
Management Process. OAO/ICOR will conduct projects as requested by Digital
in these areas. OAO/ICOR will also provide assistance as required in the 5th
component.
Description
The Change Request Process is designed to manage changes to the
[xxxxxxxxxxxxxxx] global environment as defined in the PE Statement of Work
and its associated Appendices. Such changes would apply to all present
and future [xxxxxxxxxxxxxxxx] Customer/Sites.
The Work Order Process is designed to manage changes to the Customer/Site
Agreement where specific variations of the [xxxxxxxxxxxxxxxx] environment
are specified to meet the business requirements and provide the associated
levels of service for individual sites.
The Move/Add/Change (AL4C) PROCESS organizes the effort associated with the
physical move of equipment (hardware or software), the addition of equipment
(hardware or software) to a location, and/or the modification of equipment's
configuration (hardware or software). In addition, this process tracks all
such activity for the purposes of asset management and billing. The MAC
Process takes effect once a site has completed the Transition phase and the
On-Going Operations phase has begun.
The Interim MAC Process is designed to maintain the accuracy of the data
collected during the Assessment phase's physical inventory until the
Customer/Site begins On-Going Operations. Like the MAC process, it
organizes the effort associated with the physical move of equipment
(hardware or software), the addition of equipment (hardware or software)
to a location, and/or the modification of a piece of equipment's
configuration (hardware or software).
THE ISSUE RESOLUTION PROCESS provides the means to manage differences of
opinion between Digital and the Customer through escalation to a level
sufficient to permit their definitive resolution.
Services or Work to be Performed
OAO/ICOR may carry out activities and projects in this area including but
not limited to the following:
- Evaluation of an approved request (a request being any of the Change
Management forms such as a Work Order or Change Request form).
Evaluation would include the analysis and drafting of the response to
the request as required under the terms and conditions defined within
the PE SOW. The response to a request will contain the impact of the
requested changes on various portions of the PE Agreement including
identifying and quantifying changes in services, service levels,
schedules, and/or price.
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- Delivery of approved/accepted requests through completion, adjust any
baseline documents as necessary, obtain approvals, and provide all
deliverables to Digital. Delivery will be conducted by professional
teams trained in the domains required to carry out the request within
the time frames and cost parameters outlined in the request and with
Quality that will delight the customer.
- Provide a team of people capable of responding to requests quickly and
efficiently. This team will have the flexibility to grow to support
the work anticipated under the scope of this section of Operational
work.
Pricing Methodology
Pricing will be [xxxxxxxxxxxxxxxxxxxxxxxxxx]a given approved request, or
[xxxxxxxxxxxxxxxxxx]. The pricing target will be to allow Digital to
[xxxxxxxxxxxxxxxxxx] on Digital's price to [xxxxxx]. Rates for individuals
in support of projects based on PE pricing will [xxxxxxxxxxx] PE rates which
currently are as follows:
Labor Category PE Rate OAO/ICOR Rate
Project Manager [xxxxx] [xxxx]
[xxxxx] Analyst [xxxxx] [xxxx]
[xxxx] Analyst [xxxxx] [xxxx]
[xxxxx] Analyst [xxxx] [xxxx]
Consultants and special [xxxxxxxxx [xxxxxxxxx
project labor xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxx]
xxx]
Technology Consulting
Digital may provide additional service offerings to the Customer that are
not included in the Baseline Services of the PE SOW. Detailed listings of
some of these additional services can be found in Exhibit 2. 1; Pricing
Schedule of the PE SOW. Services are categorized as "Additional On-Going
Services," "One-Time Services," and "Hardware Products." [xxxxxxxxxxxxxxxx]
is a large and complex undertaking. As the work progresses from time to
time there will arise work which either:
- requires skill sets not currently available within PE Worldwide
Operations; or
- requires skill sets available within PE Worldwide Operations but from
people who do not have the time necessary to undertake the task.
- Description
OAO/ICOR will provide to Digital, as required, and from time to time,
additional resources to assist PE Worldwide Operations In overall technology
management and delivery of the services required pursuant to the PE
agreement and associated SOW.
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- Services or Work to be Performed
The work to be performed will be under the direction of the PE Worldwide
Operations Manager and will be subject to the agreements in place between
Digital and the Customer. OAO/ICOR will recruit and supply consultants
with the necessary skills, training and experience to satisfy the
requirements of the additional services being offered.
Pricing Methodology
Pricing will be a [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] based on the
consultant's skills, training and experience. Pricing will be negotiated
on a case by case basis and shall be competitive with industry norms.
OAO/ICOR will ensure all invoices to Digital will delineate per them costs
and travel expenses and will report these items separately.
19
EXHIBIT B
FLOW DOWN CLAUSES
[xxxxxxxxxxxxxxxxxx]
AGREEMENT
This [xxxxxxxxxxxxxxx]e Agreement (hereinafter "Agreement") is made and
entered into as of the 22nd day of December, 1995 (hereinafter "Effective
Date") by and between Digital Equipment Corporation, having a place of
business at Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, XX 10 121 (hereinafter
"Digital") and
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]
a national banking association organized under the laws of the United States
having its principal place of business at
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]
WITNESSETH
WHEREAS, Digital and [xxx]have entered into the [xxxxxxxxxxxxxxxxxxxxxxxxx],
dated April 20, 1994 (the "pilot Agreement"( pursuant to which Digital has
provided, on a pilot basis, managed desktop computing/network utility
services; and
WHEREAS, the parties desire to replace the Pilot Agreement with
this Agreement for the purpose of expanding their relationship and entering
into a longer term agreement for the services; NOW, therefore, in
consideration of the mutual promises and covenants hereinafter contained, the
parties hereto hereby agree as follows:
1. DEFINITIONS
The following words shall have the following meanings when used in this
Agreement:
- Additional On-Going Services - the Services which are over and above the
Baseline Services, as described in Exhibit 1, and as selected by an End-User
and/or Customer for the Additional On-Going Service Charge.
- Additional One-Time Services - the Services which are over and above the
Baseline Services, as described in Exhibit 1, which are provided on a
one-time basis as selected by an End-User and/or Customer for the Additional
One-Time Service Charge. Such Additional One-Time Services may include
Services and Product components.
- Amortized Charges - Charges for Equipment, Digital Provided Software and
Services for which payment has been spread over time and as identified in
the Schedule of Amortized Charges included in the Customer/Site Agreement.
- Application Software - all Software which is not Operating System Software.
- Baseline Services - the minimum Services to be provided to End-Users and/or
Customers under this Agreement, as described in Exhibit 1 and which are
provided for the Baseline Service Charge as defined in Exhibit 2.
- Cabling - the cable specified in the Design Document for each Site and to be
provided by Digital including installation at the Site during Phase 4.
20
- Cabling Termination Equipment - the items of cabling equipment specified in
the Design Document for each Site and to be provided by Digital including
installation at the Site during Phase 4.
- Citicorp, a U.S. bank holding company, which is the indirect parent of
[xxxxxxxxxxxxxxxxxx].
- Contract Expiration Charges - those charges to be paid by
[xxxxxxxxxxxxxxxxxxxxxxxxxxx] under certain circumstances of contract
termination as described in Section 3 herein and as set forth in Exhibit 2.
- Contract Termination Charges - those charges to be paid by [xxxxxxxxxxxxxx]
under certain circumstances of contract termination as described in
Section 3 herein and as set forth in Exhibit 2.
- Customer - [xxxxxxxxxxxxxxxxxxxxxxxxxxx] and [xxxx] customers, which for
the purposes of this Agreement, shall be limited to [xxxxxxxxxxxx] and
directly or indirectly owned subsidiaries of [xxxxxxxxxxxxxxxxxxx]
customers shall be [xxxxxxxx] subsidiaries in the United States, including
[xxxxxxxxxxxxx] offices in the United States. [xxxxxxxx] customers shall be
its branches and its subsidiaries outside the United States.
- Customer Assets - all items of computing and networking hardware including
Operating System Software owned by Customer at the time of issuance of a
PO for Customer's Site, and to be deployed in Digital's provision of the
Services hereunder.
- Customer Provided Software - the Applications Software and Operating System
Software owned by or licensed to Customer.
- Customer/Site Agreement - an agreement between the parties for delivery of
the Deliverables and Services for a specific Customer or at a specific Site
("Customer/Site"). The Customer/Site Agreement shall include the PO, the
Design Document, the Project Plan, the Service Level Agreement for the
Customer/Site, the Schedule of Amortized Charges and Equipment, Software
and any special terms and conditions agreed upon by the parties for
performance of this Agreement at that Customer/Site, and shall be deemed
to include the terms and conditions of this Agreement.
- Deliverables - Equipment, Digital Provided Software, Cabling, Cabling
Termination Equipment and Document Deliverables to be provided by Digital
under this Agreement and as described in Exhibit I and Design Documents
developed for Sites in accordance with Exhibit 1.
- Digital Provided Software - the Application Software and Operating System
Software that is owned by or licensed to Digital as defined in Appendix B
and which will be provided by Digital to Customer for its use.
- Digital Provided Software Charge - shall be Digitat's charges for the
Digital Provided Software as set forth in Exhibit 2 section entitled
"Products".
- Design Document - the document developed by Digital during Phase 3 at each
Site which describes the Deliverables to be provided at such Site.
- Document Deliverables - those documents developed by Digital during the
term of this Agreement and identified in Appendix O.
- End-User - an individual authorized by Customer and registered with the
Project Enterprise Help Desk, for whom, at a minimum, Baseline Services are
provided.
21
- End-User Desktop Equipment - all items of computing and networking hardware
registered with the Project Enterprise Help Desk to a specific End-User.
The term "End-User Desktop Equipment" also includes the Operating System
Software associated with that Equipment.
- End-User Desktop Equipment Charge - the charge for Equipment which is not
Infrastructure Equipment and as set forth in Exhibit 2 in section entitled
"Products".
- Equipment - all items of computing and networking hardware equipment,
including Third Party Equipment, but which is not Cabling or Cabling
Termination Equipment. Equipment includes Infrastructure Equipment and
End-User Desktop Equipment.
- Equipment Option - shall be the options for payment of the Unpaid Amortized
Charges for Equipment upon the termination or expiration of this Agreement
or any Customer/Site Agreement hereunder, as described in Exhibit 2.
- Implementation Service Charges - the charges for Services rendered during
Phases I through 4 and as set forth in Exhibit 2 in section entitled
"One-Time Services/Charges".
- Implementation Services Option - shall be the termination options for
payment of the Unpaid Amortized Implementation Services Charges upon the
termination or expiration of this Agreement or any Customer/Site Agreement
hereunder, as described in Exhibit 2.
- Infrastructure Equipment - all items of hardware, which is not Cabling,
Cabling Termination Equipment or End Users Desktop Equipment and which is
used by Digital in the delivery of the Services at a Site.
- Infrastructure Equipment Charge - the charge for Equipment which is not
End-User Desktop Equipment and as set forth in Exhibit 2 section entitled
"Products".
- Moves, Adds, Changes ("MACS") - A Move is defied as any physical relocation
of Equipment for Software within a Site or between or among Sites. An Add
is identified as any Equipment or Software asset added to the Project
Enterprise asset management database. A Change is defined as any
modification(s) to Equipment or Software assets.
- Monthly Payment Charge - the monthly payment to be made by Customer for the
Deliverables and includes all Amortized Charges.
- Normal Business Hours - This period is defined as Monday through Friday,
8:00AM - 5:00PM local time, except during scheduled local Customer holidays
and closings.
- One-Time Charges - any payments for Deliverables which Customer agrees to
make on a one-time basis and which are not amortized over the term of the
Agreement.
- Operating System Software - all Software which is necessary to the basic
operation of the Equipment. Operating System Software includes all versions
of, enhancements and upgrades to MS DOS, IBM DOS and MS Windows and such
other system software as may be agreed upon by the parties from time to
time.
- Phase I Services - Engagement: During this phase, subsequent to CICI's
delivery to Digital of a Qualified Purchase Order for each Customer/Site
and based on the availability of required data/documentation, Digital will
estimate the scope of the Assessment effort and prepare an initial draft
Project Plan.
22
- Phase 2 Services - Assessment: During this phase, Digital will conduct
Customer/Site surveys and inventories to gather date/documentation
required to product Design Documents.
- Phase 3 Services - Design: During this phase, based on analysis of
data/information collected during Phase 2, Digital will create the Design
Document for implementation of Project Enterprise Services at the
Customer/Site.
- Phase 4 Services - Transition: Digital will implement the design at the
Customer/Site.
- Phase 5 Services-On-Going Support: Digital will provide On-Going Support
Services at the Customer/Site.
- Products - Equipment, Cabling, Cabling Termination Equipment and Digital
Provided Software.
- Project Enterprise - the name given to the implementation of the Services
and delivery of the Deliverable under this Agreement.
- Project Enterprise Standards - shall mean the standards contained in
Appendix B hereto.
- Project Plan - developed by Digital during Phase 3 Services at each Site
and sets forth the timetable for implementation of Phase 4 Services and
Phase 5 Services as described in Exhibit 1. The Project Plan may be
amended, from time to time, by mutual agreement of the parties.
- Purchase Order or "PO " - a document authorizing Digital to undertake the
Services for a Customer/Site. All POs will be governed by the terms and
conditions stated herein and any other terms mutually agreed upon by the
parties. No preprinted terms on any PO form shall apply.
- Services - all of the services provided by Digital in the implementation
of Project Enterprise and as described in Exhibit 1.
- Service Level Agreements - Contained in Appendix A and in individual
Customer/Site Agreements, these specify -- in measurable terms -- the
level of Services to be supplied, and establish the means by which the
quality of Services delivery can be ascertained.
- Site - the location at which the Services will be implemented as
identified by a PO.
- Software - means Customer Provided Software, Digital Provided Software
and or Third Party Software, as applicable.
- Software License Option - shall be the termination options for payment of
the Unpaid Amortized software license fees upon the termination or
expiration of this Agreement or any Customer/Site Agreement hereunder, as
described in Exhibit 2.
- Standard Termination Charges - those charges to be paid by
[xxxxxxxxxxxxxx] in certain events of termination or cancellation of this
Agreement or any Customer/Site Agreement hereunder as described in
Sections 2 and 3 herein and as set forth in Exhibit 2.
- Statement of Work - shall mean Exhibit 1 including all appendices
thereto, which defines the Deliverables and Services which are to be
provided by Digital during the term of this Agreement.
- SupportedSofiware - Software which will be supported by Digital under the
terms of this Agreement as described in the Statement of Work. Such
Software includes the Software products identified in Appendix B.1
23
as well as all software products for which Digital offers support as a
standard service offering. A current list of Digital's supported
software is included as Appendix G. Appendix G shall be modified from
time to time as Digital modifies its standard service offering.
Supported Software shall also include such other Software as may be
included in a Customer/Site Agreement.
- Term of Use - the continuous time period for which a Customer on behalf
of its End Users, agrees to amortize the charges for certain Equipment,
Software and Services.
- Termination Payment Options - shall be the sum of the Equipment Option,
the Software License Option and Implementation Services Option as
described in Exhibit 2.
- Third Party Equipment - any Equipment, Cabling and Cabling Termination
Equipment manufactured by a party other than Digital.
- Third Party Software - Customer Provided Software or Digital Provided
Software licensed by a third party.
- Unpaid Amortized Charges - the Amortized Charges remaining unpaid at the
time of termination, cancellation or expiration of this Agreement or any
Customer/Site Agreement hereunder and to be paid in accordance with the
options described in Exhibit 2.
- Unsupported Software - Software which is used by Customer on the
Equipment, and which is not Supported Software. Digital's
responsibilities with respect to Unsupported Software are described in
the Statement of Work.
3. TERM AND TERMINATION
a) The term of this Agreement shall commence on the Effective Date
set forth above and shall continue for a period of three (3) year ("Base
Term") (unless sooner terminated pursuant to the termination provisions
herein) but shall be in effect for however long any Customer/Site
Agreements entered into hereunder continue to be in effect. During the
Base Tenn, the parties shall enter into Customer/Site Agreements for each
Customer/Site at which the Deliverables and Services are to be provided.
The term of each Customer/Site Agreement shall continue for a period of
three (3) years from initiation of delivery of Phase 5 Services at that
Customer/Site unless sooner terminated pursuant to the termination
provisions herein. Neither party may terminate this Agreement in its
entirety for convenience before one (1) year from the Effective Date.
4. TITLE TO DELIVERABLES/RISK OF LOSS
a) Customer shall remain the owner of all right, title and
interest in Customer Assets, Cabling and Cabling Termination Equipment
and licenses to Customer Provided Software and Unsupported Software.
b) Digital shall remain the owner of all right, title and interest
in Equipment and licenses to certain Digital Provided Software, as
described in Appendix B.1, unless title is otherwise assigned by Digital
as provided in Section 7 herein or unless Customer, upon
cancellation/termination, elects the Equipment Option V. A.(B) as
described in Exhibit 2.
c) Title to all Document Deliverables shall vest in Customer upon
receipt of payment from [xxxxxxxxxxxxxx] subject to the terms of Sections
14 and 15 herein.
d) [xxxxxxxxxxxxxx] shall assume and bear the entire risk of loss,
theft, damage to or destruction of the Equipment during the term of this
Agreement that is not caused by negligent or willful
24
misconduct of Digital or its employees, agents or subcontractors. Such
risk of loss shall transfer to Customer upon inside delivery at
Customer's Site. Customer will (i) keep the Equipment and Software free
and clear from any claims, liens, encumbrances and legal processes: (ii)
use the Equipment and Software in a good and careful manner, in
compliance with all applicable law, in accordance with manufacturer's
instructions and restrictions: and (iii) not make any alterations or
modifications to or change the location of the Equipment or Software
without Digital's prior written consent.
e) No event of loss shall relieve [xxxxxxxxxxxxxx] from its
obligation to make payments of the Amortized Charges, including the
Monthly Equipment Charges, the Monthly Digital Provided Software Charge
and the Monthly Implementation Services Charges except if the use of the
Equipment is terminated pursuant to Subsection (iii) below.
In the event of loss or damage to any Equipment, not caused by
the negligent or willful misconduct of Digital or its employees, agents
or subcontractors, [xxxxxxxxxxxxxx] shall immediately give notice thereof
to Digital or its Assignee and [xxxxxxxxxxxxxx], shall, at their option:
(i) place such Equipment in good repair, condition and working
order,or
(ii) replace such Equipment with identical Equipment in good
repair, condition and working order, with clear title thereto in
Digital or its Assignee, or
(iii) pay to Digital or its Assignee in cash within thirty (30)
days after demand therefor an amount equal to the total Unpaid
Amortized Equipment Charges remaining and to become due hereunder
plus the amount of all Unpaid Amortized Equipment Charges remaining
and to become due hereunder with respect to the affected Equipment,
discounted to present value at the prime rate in effect at [xxxxxxx]
at the commencement of the Schedule of Amortized Charges set forth
in the Customer/Site Agreement, plus the then fair market value of
the Equipment. Fair market value shall be determined by mutual
agreement of the parties, or absent such mutual agreement, within
thirty (30) days of the initial consultation by an independent
appraiser selected by Digital or its Assignee, at
[xxxxxxxxxxxxxxxxxxxxxxxx] expense.
(iv) In the event of a total loss of all Equipment at a
Customer/Site, [xxxxxxxxxxxxxx] shall pay to Digital or its Assignee
in cash, within thirty (30) days after demand therefor, an amount
equal to the total Unpaid Amortized Charges remaining and to become
due hereunder with respect to such Customer/Site discounted to
present value (as provided above) plus the then fair market value of
the Equipment (determined as set forth above).
In addition to the amounts set forth in (iii) above, where such
loss or damage is not caused by the negligent or willful misconduct of
Digital or its employees, agents or subcontractors. [xxxxxxxxxxxxxxx]
shall pay the amount equal to any increased tax liability to Digital or
its Assignee, including interest and penalties, arising from the loss to
Digital or its assignee of any Federal tax benefits under the Internal
Revenue Code of 1986, as may be amended, with respect to Customer's use
of the affected Equipment.
Upon payment by [xxxxxxxxxxxxxx] as aforesaid, Digital or its
Assignee shall transfer to Customer, WITHOUT RECOURSE OR WARRANTY,
EXPRESS OR IMPLIED (except for usual warranties of title), all of
Digital's or its Assignee's right, title and interest, if any, in such
Equipment on an "AS IS, WHERE IS" basis. The proceeds of any insurance
payable with respect to any loss or damage to the Equipment shall be
applied at the option of [xxxxxxxxxxxxxx] either towards Customer's
replacement, restoration or repair of the Equipment or payment of any of
[xxxxxxxxxxxxxxxx] other obligations under this Agreement.
Where loss or damage is caused by the negligent or willful
misconduct of Digital or its employees, agents or subcontractors Digital
shall immediately perform its obligations under Section 7 and 21 of this
Agreement.
25
6. INVOICING AND PAYMENT
a) Digital will invoice [xxxxxxxxxxxxxx] prospectively on the
first day of the month, for the Service Charges and Equipment Charges to
be rendered in that month. The invoices for Implementation Services
Charges (charges associated with Phases 1 through 4) will be rendered on
the first date of the first month following acceptance of the
Deliverables associated with that Phase. The first invoice for Phase 5
Deliverables at a Site will reflect the projected Service and Equipment
Charges for the first month of Service and will be prorated to capture
charges, if any, for Phase 5 Deliverables provided for any portion of the
previous month. All subsequent invoices will be adjusted to reflect the
Service activity rendered in the previous month as well as any Service
Credits and any amounts in dispute resolved in [xxxxxxxxxxxxxxxx] favor.
b) Upon assignment in accordance with Section 7 below, Digital
will render consolidated invoices for each Customer/Site delineating
payments to be made to Digital and payments to be made to Digital's
Assignee.
c) Payment of all invoices will be due to Digital and to Digital's
Assignee within fifteen (15) days from the date of receipt of the invoice.
d) All invoices and payments will be made in the local currency of
the country in which the Deliverables and Services are provided and will
reflect the country uplifts and currency adjustments in accordance with
Sections 5(g) and (h) above.
e) Digital's invoice will be sent to [xxxxxxxxxxxxxx] at the
invoice address as identified on [xxxx] Purchase Order and will reference
the Purchase Order number.
10. DELIVERY
The parties agree to use their best efforts to insure that the
Deliverables and Services are provided within the time frames set forth in
the Statement of Work and the Project Plans which will be developed for each
Site during the delivery of the Phase 3 Services. Each party further agrees
to use its best efforts to insure that End-Users are implemented and
receiving Phase 5 Services in accordance with the Schedule set forth in
Section 2(b) above. Digital agrees to maintain a project management schedule
which sets forth in detail the milestones associated with meeting the
delivery dates therein for each Site. Each party acknowledges that it has an
obligation to meet milestones for which it has responsibility and that
failure to meet milestones may affect the Project Plan schedule and
[xxxxxxxxxxxxxxx] will use its best efforts to insure that other Customers
perform all obligations undertaken by [xxxxxxxxxxxxxxx] under this Agreement
and any Customer/Site Agreement.
11. ACCEPTANCE
Phases 1 through 4 Services are subject to acceptance procedures as
set forth in Exhibit 1 - Statement of Work.
12. WARRANTY
a) Digital shall provide Services in a professional manner using
qualified individuals and in accordance with generally recognized
commercials practices and standards.
b) Cabling and Cabling Termination Equipment is warranted to be
free from defects in workmanship and material for a period of one (1)
year from the date of installation.
26
c) In the event that title to any Equipment passes to Customer, in
accordance with Section 4 above, the warranty period shall be the same
period as that which is normally provided by the manufacturer of such
Equipment in the country of installation and shall be deemed to have
commenced on the date of installation.
d) Digital Provided Software shall be warranted as to
functionality and infringement to the extent the manufacturer including
Digital offers such warranties. Digital warrants that any Digital
Provided Third Party Software will operate on Digital manufactured
Equipment. Digital shall replace promptly any copy of Digital Provided
Software which in nonfunctioning due to defective media.
e) If Digital receives notice of defects in material and
workmanship during the warranty period, Digital shall repair or replace
the defective Products. Such warranty shall be deemed to have commenced
on the date of installation.
f) Digital further agrees to provide any additional warranties
regarding Products which are available from the manufacturer or
distributor which Digital can pass through to Customer. Documentation of
such warranties will be provided to Customer upon Customer's request.
g) THE WARRANTIES SET FORTH ABOVE ARE EXCLUSIVE AND NO OTHER
WARRANTY, WHETHER WRITTEN OR ORAL, AS EXPRESSED OR IMPLIED. DIGITAL
SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
13. SOFTWARE
a) Digital and Customer shall be respective licensees of record
for Software as indicated in Appendix B.1. Any software not listed on
Appendix B.1, if provided by Digital under this agreement, shall be
licensed to Customer in accordance with the applicable license terms and
conditions. All Digital Provided Third Party Software shall be licensed
in accordance with the third party's software license terms and
conditions.
b) Each party shall be responsible for insuring the Third Party
Software vendors' permission to allow use of its licensed Software by the
other party consistent with each party's obligations under this
Agreement. Each party shall appoint the other as its agent for the
purpose of permitting the use of Third Party Software in order to perform
the obligations hereunder.
c) Each party shall indemnify, defend and hold harmless the other
party against any claims, suits, actions, demands, judgments or damages
and expenses (including reasonable attorneys' fees) resulting from the
indemnifying party's misappropriation, copying or other use (including
any unauthorized use resulting from the other party's failure to obtain
authorization for the other party's use of the Third Party Software as
provided in Section 13(b) above) of the indemnified party's licensed
software which use is in violation of the license terms and conditions
permitting its use.
14. CONFIDENTIAL INFORMATION
a) For the purpose of this Section 14 and Section 15, (1)
"Recipient" refers to the party receiving Confidential Information hereunder,
and (ii) "Discloser" refers to the party disclosing Confidential Information
hereunder.
27
b) Confidential Information of Customer shall mean all information
in any form belonging to Customer which relates to the business operations of
Customer and which is maintained in confidence by Customer. Confidential
Information of Customer includes, but is not limited to marketing plans;
customer information; financial services products; information regarding
information technology products and services; its business practices
including processes and procedures used in running its business operations,
information regarding its network configurations, schematics, designs and
security controls, as well as all information relating to the development of
new systems and products; personal information which may include, but shall
not necessarily be limited to, social security numbers, mothers' maiden
names, addresses, phone numbers and other information of a personal nature.
c) Confidential Information of Digital shall mean all information
in any form belonging to Digital which relates to the business operations of
Digital and which is maintained in confidence by Digital. Confidential
Information of Digital includes, but is not limited to Digital's marketing
plans; customer information; financial services products; information
regarding information technology products and services; its business
practices including processes and procedures used in running its business
operations, information regarding its network configurations, schematics,
designs and security controls, as well as all information relating to the
development of new systems and products. Digital's pricing for the
Deliverables and Services and all background materials relating thereto shall
remain the Confidential Information of Digital.
d) Confidential Information of either party does not include
information:
(i) generally known on a non-confidential basis (through no
fault of Recipient) to companies in Discloser's business;
(ii) lawfully obtained by Recipient without restriction on
disclosure;
(iii) known to Recipient prior to receipt from Discloser without
a duty of confidentiality on the third party; or
(iv) disclosed by Recipient with Discloser's prior written
approval.
e) Recipient shall use the same care and discretion to avoid
disclosure, publication, dissemination or unauthorized use of Confidential
Information as it uses with its own Confidential Information of a similar
nature or importance that it does not wish to disclose, publish or
disseminate, but in no event shall such standard of care be less than what is
reasonable under the circumstances. Recipient will:
(i) limit access to the confidential Information to its
officers, directors, employees and subcontractors who are performing or
supervising the work hereunder and who have a need to know such
Confidential Information for the performance of Services,
(ii) use Confidential Information only in connection with the
delivery or receipt of Deliverables or Services;
(iii) ensure that all persons who may have access to
Confidential Information are advised of the obligations agreed to
hereunder and agree to be bound by such obligations;
(iv) promptly notify Discloser of any unauthorized disclosure
or use; and
(v) only copy Confidential Information to the extent
reasonably necessary in connection with the Services and reproduce all
confidential and other proprietary rights notices appearing on originals
on all such copies.
28
f) Upon termination of this Agreement or upon Discloser's request,
Recipient agrees to surrender and deliver to Discloser all Confidential
Information and all copies of the Confidential Information. Recipient will
execute all documents and at Discloser's expense take all other actions
reasonably requested by Discloser, to assist Discloser in perfecting and
enforcing its rights in its Confidential Information.
g) Discloser understands that Recipient is in the business of
developing and acquiring technology for Recipient's own products and services
and that existing or planned technology independently developed or acquired
by Recipient may contain ideas and concepts similar to those contained in
Confidential Information of Discloser. As Discloser hereunder, each of
Digital and Customer agree that this Agreement shall not prevent Recipient
from developing or acquiring technology similar to Discloser's, or from
providing services similar to services provided by Discloser, without
obligation to Discloser provided Recipient does not use Discloser's
Confidential Information to develop such technology or provide such services.
h) The obligation to protect Confidential Information shall
terminate at the later of three (3) years from expiration or termination of
this Agreement or the applicable Customer/Site Agreement to which such
Confidential Information relates.
15. OWNERSHIP/USE OF DELIVERABLES AND MATERIALS
a) All Document Deliverables as described in Appendix 0 hereto (as may
be amended from time to time upon mutual written agreement of the parties)
shall be the sole and exclusive property of Customer. Customer shall own all
right, title, and interest to and in such Document Deliverable subject to
Digital's right to use all ideas, concepts, methodologies, techniques and
other know-how used therein that are not Customer Confidential Information
(as defined in Section 14 of this Agreement).
b) Digital shall remain the exclusive owner of all rights in all
previously existing or independently developed information, including but not
limited to the documents and materials identified as "Digital Property" in
Appendix O. Nothing herein shall be construed as transferring any rights of
ownership or use in Digital Property to Customer hereunder.
c) All information, including but not limited to processes, reports,
studies, flow charts, diagrams and other tangible or intangible information,
including any of the underlying ideas, concepts, techniques and know-how
related to such information, which are not specifically contained within the
Document Deliverables and which is not Digital Property covered by Section
(b) above, and which are developed in performance under this Agreement,
including, but not limited to the Statement of Work and the Service Level
Agreements (hereinafter collectively referred to as the "Materials") shall be
jointly owned by [xxxxxxxxxxxx] and Digital without restriction on the
parties' rights to use except as follows:
In the event Customer wishes to procure Project Enterprise-like
Services from a third party vendor for Customer's own internal use, and in
doing so wishes to disclose such Materials to such third party vendor(s),
such disclosure shall be subject to the following restrictions:
(i) Customer shall not disclose the Materials to any third party in
a manner that directly or indirectly attributes the Materials to Digital;
(ii) Customer's disclosure of the Materials to such third party
vendor(s) shall be made solely for the purpose of soliciting the services
and products for Customer's own internal use and for entering into
agreements and statements of work for delivery of services and products.
29
(iii) Customer shall identify the Materials as proprietary and
confidential subject to confidentiality restrictions and shall limit the
third party vendor(s)' use of such Materials to respond to RFPs or vendor
solicitations and in delivery and performance of services such as are
contemplated under this Agreement. Customer shall provide reasonable
cooperation (which shall not be deemed to require expending or incurring
any direct expense) in assisting Digital to enforce its and Customer's
rights against any third party vendor's violation of this confidentiality
commitment.
Nothing herein shall be construed to restrict Customer, as joint
owner of the Material, from disclosing the Materials to other third parties
which are not competitors of Digital and/or from entering into agreements
with Customer's own customers for the provision of Project Enterprise-like
Services by Customer and/or from subcontracting the same in connection with
Customer's provision of the Services.
d) Digital understands that Customer has the right to issue RFPs to
other service providers for Project Enterprise-like services. Such RFPs may
result in an award to vendor(s) other than Digital. Digital understands that
Customer, in its sole discretion, may include any or all of the Document
Deliverables and any or all of the Materials in such RFP or other vendor
solicitation subject to Section 15(c) above. Nothing herein shall be
construed as limiting or restricting, in any way, Customer's right to use and
include in such RFP any and all information which Customer learns or acquires
in working with Digital provided Customer does not copy, use or disclose
Digital's Confidential Information (as defined in Sections 14 and 15(b) and
(c) of this Agreement).
e) The term "Invention" shall mean any idea, concept, know-how or
technique that either party first reduces to practice while in performance of
this Agreement and for which a patent application is filed. Inventions will
be treated as follows:
(i) If made solely by personnel of one of the parties, it shall be
the property of such party ("Inventing Party"). The Inventing Party
hereby grants to the other party ("Licensed Party") a nonexclusive,
irrevocable, worldwide and paid-up license under such Invention, patent
application and all patents issued thereon for use by the Licensed Party,
or its subcontractors, in the internal business operations of the
Licensed Party or any of its parents or its parents directly or
indirectly owned subsidiaries.
(ii) If made jointly by Customer and Digital personnel, it shall be
jointly owned and each party shall have an undivided interest in such
Invention, patent application and all patents issued thereon, without
obligation to account to the other party for any use thereof.
All licenses granted to either party under this provision include
the right to make, have made, use, have used, lease, sell and/or otherwise
transfer any apparatus, and/or practice and have practiced any method and
shall include the right to grant, directly or indirectly, revocable or
irrevocable sublicenses to entities controlling, controlled by, or under
common control with such party.
Nothing contained in this provision shall be deemed to grant any
license under any patent applications arising out of any other inventions of
either party.
f) This Agreement does not currently contemplate the development of any
software products by Digital specifically for Customer and therefore
"Materials" and "Inventions" does not include software. Any such development
would require a separate written agreement between the parties, during which
process the parties will address, among other things, the issue of ownership
of such software.
16. INTELLECTUAL PROPERTY INDEMNIFICATION
30
a) The parties hereby warrant to each other that any information,
materials, Equipment, designs, specifications or instructions (collectively
"Information") or the use thereof, provided to the other party by the party
and/or its affiliates does not infringe any patent, utility model, industrial
design, copyright, trade secret or trademark in any country where Digital
provides Deliverables and Services. Digital further warrants to Customer
that any Deliverable or Service or the use thereof provided to Customer does
not infringe any intellectual property right of any third party; including
without limitation any patent, utility model, industrial design, copyright,
trade secret or trademark in any country where Digital provides Deliverables
and Services.
b) Customer warrants that it has the right (through a license or
otherwise) to allow Digital to use Customer Provided Software on Customer's
behalf an/or to permit Digital to perform the Services hereunder. Digital
warrants that it has the right (through license or otherwise) to distribute
to Customer and Customer's affiliates and subsidiaries licenses for Digital
Provided Software.
c) The Indemnitor will defend or settle any claim against the
Indemnitee and/or its affiliated companies that the Information or the
Deliverables or Services or the use thereof infringe a third party's
intellectual property right, including without limitation a patent, utility
model, industrial design, copyright, trade secret or trademark in any country
in which Digital provides Deliverables and Service, except that Digital will
have no responsibility hereunder for claims for infringement based upon:
(i) Customer provided Equipment which may be incorporated into the
Deliverables or Services, or
(ii) any Deliverable or Service provided by Digital where the
claimed infringement results from adherence to any Information including
specifications and standards supplied by Customer, or
(iii) any Third Party Software which is provided as Deliverable
hereunder; and Customer shall have no responsibility for claims for
infringement based upon Customer Provided Software, provided that
Indemnitee:
1) promptly notifies Indemnitor in writing of the claim; and
2) cooperates with Indemnitor in, and grants Indemnitor sole
authority to control the defense and any related settlement.
d) The Indemnitor will pay the cost of such defense and settlement and
any costs, attorney's fees and damages awarded by a court of competent
jurisdiction against the Indemnitee.
e) If a claim is made that any Deliverable or Service provided by
Digital hereunder is infringing, Digital may, at its option,
(i) procure the right (at Digital's sole expense) for Customer or
its affiliate or subsidiary to continue using the Deliverable or Service;
(ii) modify the Deliverable or Service; or
(iii) replace the same.
If the use of the Deliverable or Service is enjoined by a court and
Digital determines that one of these alternatives is not reasonably
available, Digital will take back the Deliverable and refund its depreciated
value as defined by the original invoice based on three year straight line
depreciation; provided, however, that if use of a Service is
31
enjoined, Digital will modify the Service and provide substitute Services
acceptable to Customer that do not infringe, or refund Customer for payments
made for Services which are subject to any injunction.
f) If a claim is made that any Deliverable or Service provided by
Digital hereunder is infringing as a result of the use of, or adherence to,
any Information provided by Customer, Customer may, at its option,
(i) procure that right (at Customer's sole expense) for Digital to
continue providing the Deliverable or Service,
(ii) request Digital to modify the Deliverable or Service, or
(iii) request Digital to replace the same.
In the event of (ii) or (iii), Digital's modification or replacement
shall be treated as a Change Request in accordance with Section 22 - CHANGE
MANAGEMENT PROCESS.
g) These terms state the entire liability of either party for claims of
infringement by the Information supplied by either party and of Digital for
Deliverables or Services supplied by Digital. EACH PARTY DISCLAIMS ALL OTHER
LIABILITY FOR VIOLATION, MISAPPROPRIATION OR INFRINGEMENT OF INTELLECTUAL
PROPERTY RIGHTS, AND FURTHER DISCLAIMS ANY LIABILITY TO THE OTHER PARTY FOR
INCIDENTAL AND CONSEQUENTIAL DAMAGES.
17. EXPORT REGULATIONS
a) Each party agrees that it will comply with all applicable
export/import laws and regulations in performing its obligations under this
agreement.
b) Neither party shall export or re-export Equipment, Software or
technical data provided by the other party in violation of the applicable
export regulations.
c) Either party may suspend Services under this Agreement if the other
party deals with the Equipment, Software or technical data in violation of
the applicable export regulations.
d) Unless prior written authorization is obtained from [xxxx] and the
United States Department of Commerce or other relevant agency of the U.S.
Government, Digital will not export or re-export, directly or indirectly, any
software or technology received from [xxxx] or its parent or any of its
affiliates, or allow the direct product thereof to be exported or
re-exported, directly or indirectly, to:
(i) any country in Country Group s or Z of the Export
Administration Regulations of the Department of Commerce (currently
Libya, Cuba and North Korea); or
(ii) any non-civil (i.e. military) end-users of for any non-civil
end-uses in any country in Country Group Q, W, or Y of the Export
Administration Regulations of the Department of Commerce (currently
Xxxxxxx, Xxxxxxxx, Xxxxxxxx, Xxxxxxx, Xxxx, Xxxxxx, Lithuania, Mongolian
People's Republic, Romania, the geographic area formerly known as the
Union of Soviet Socialist Republics, and Vietnam) or the People's
Republic of China; or
(iii) any country subject to sanctions administered by the office of
Foreign Assets Control (currently Cuba, Iran, Iraq, Libya, North Korea,
and Yugoslavia [Serbia and Montenegro only]; or
32
(iv) Syria.
Digital agrees to indemnify and hold harmless [xxxx] and its parent
and affiliates from any costs, penalties or other losses caused by, or
related to, any violation of this provision.
18. MULTINATIONAL APPLICABILITY
a) The terms and conditions of this Agreement shall govern to the
extent permitted by local country law. In the event said terms and
conditions are not permitted, this Agreement shall be deemed amended to
comply with local law and to have consequences which are substantially the
same a what was intended by the parties had the terms and conditions been
permitted.
b) Additional terms and conditions dealing with specific country
requirements, currency, working hours and other variations will be
incorporated into this Agreement as required.
19. INSURANCE
a) Digital shall obtain and maintain in force, at its own expense,
during the term of the Agreement, insurance coverage against claims,
regardless of when asserted, that may arise out of, or result from, Digital's
operations, the operations of its subcontractors and of any other entity
directly engaged by Digital in connection with its provision of the
Deliverables or Services. All such insurance carried by Digital and their
subcontractors and agents shall be placed with insurers rated "A" or better
by Bests Rating Service. Evidence of such coverage and limitations are set
forth in Exhibit 3, Certificate of Insurance.
This insurance shall include the following coverage with limits no
less than those set forth below with insurers and under forms of policies
satisfactory to Customer whose acceptance of such insurers and forms shall
not be unreasonably withheld:
- General Liability: Combined Single Limit (CSL) providing coverage
against liability for bodily injury, death, and property damages in the
minimum amount of five million ($5000,000) dollars. Such liability
coverage shall include contractual liability coverage.
- Workers Compensation and Employer's Liability: Workers Compensation
coverage must be at the maximum statutory amount and Employer's Liability
coverage must be in the minimum amount of one million ($1,000,000)
dollars.
- Fidelity Coverage: Fidelity coverage for losses incurred as a result of
dishonesty on the part of Digital's employees, agents or subcontractors
in the amount of ten million ($10,000,000) dollars.
b) Digital will be required to submit a certificate of insurance to
Customer within ten (10) days of contract execution. Said certificate shall
further provide that no less than thirty (30) days advance notice will be
given in writing to Customer prior to cancellation, termination, or
alteration of the policies of insurance.
c) Risk of loss or damage to the Equipment will pass to Customer upon
inside delivery at the Site in accordance with Section 4 above. Customer
will be required to submit a Certificate of Insurance to Digital, in the form
attached as Exhibit 4, within ten (10) days of contract execution evidencing
adequate coverage for the full replacement value of the Equipment. The
Certificate of Insurance shall further provide that no less than thirty (30)
days advance notice will be given in writing to Customer prior to
cancellation, termination or alteration of the policies of insurance.
33
20. FORCE MAJEURE
Neither party will be liable or deemed to be in default for any delay or
failure in performance arising out of conditions beyond its reasonable
control and without its fault or negligence. Such causes may include, but
are not limited to, acts of God, acts of the public enemy, fires, floods,
accidents, strikes, embargoes and Digital's suppliers inability to deliver
due to a force majeure event. If any such condition occurs, the party
claiming force majeure excuse will promptly give notice to the other.
Performance by both parties will be suspended for the duration of the
condition and will resume once the condition ceases to exist.
Notwithstanding the foregoing, nothing herein shall relieve
[xxxxxxxxxxxxxxxxxx] from continuing to make their respective monthly
payments of Amortized Charges.
21. INDEMNIFICATION/LIMITATION OF REMEDIES AND LIABILITIES
a) Digital agrees to defend, indemnify, and hold Customer harmless from
and against third party claims for tangible property damage, personal injury
or death to the extent attributable to Digital's or its agents', employees'
or subcontractor'' negligence or willful misconduct in connection with the
Deliverables or Services provided hereunder, provided however, that Digital
will assume any liability for damages which are covered under Digital's
worker's compensation insurance policy, and furthermore that Digital's
liability hereunder for tangible property damage caused by Digital (other
than Digital's gross negligence and willful misconduct) shall not exceed
$5,000,000 in the aggregate.
b) Digital agrees to defend, indemnify, and hold Customer harmless from
and against third party claims for losses incurred by Customer and its
affiliates as a result of dishonesty attributable to Digital or its agents,
employees or subcontractors performance in connection with the Deliverables
and Services provided hereunder- Digital's liability hereunder shall not
exceed $10,000,000 in the aggregate.
c) THE REMEDIES PROVIDED IN ARTICLES 12, 13, 16, 17, 21 AND 25 ARE
CUSTOMER'S SOLE AND EXCLUSIVE REMEDIES. DIGITAL'S LIABILITY FOR ANY CAUSE
WHATSOEVER, INCLUDING BUT NOT LIMITED TO DIGITAL'S FAILURE TO PERFORM ITS
WARRANTY OR SERVICE RESPONSIBILITIES SHALL BE LIMITED TO DIRECT DAMAGES IN
THE AMOUNT OF $5,000,000. THE FOREGOING LIMITATION SHALL NOT APPLY TO
DAMAGES RESULTING FROM DIGITAL'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR
FROM DIGITAL'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR INFRINGEMENT OF
THIRD PARTIES' INTELLECTUAL PROPERTY RIGHTS OR DAMAGES FOR PERSONAL INJURY
INCLUDING DEATH. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES. DIGITAL SHALL NOT BE
LIABLE FOR LOST PROFITS, LOSS OF DATA, LOSS OF SOFTWARE PROGRAMS, LOSS OF USE
OF DATA, OR LOSS OF USE OF SOFTWARE PROGRAMS. THE AFORESAID LIMITATIONS
APPLY REGARDLESS OF THE LEGAL THEORY UPON WHICH DAMAGES ARE BASED.
22. CHANGE MANAGEMENT PROCESS
A change management process is defined in the Statement of Work, Appendix
C. The change management process is comprised of four component processes to
provide a method for effecting changes in scope of the Services and
Deliverables. These processes are the:
- Change Request Process
- Work Order Process
- Move/Add/Change (MAC) Process
34
- Interim MAC Process
23. MISCELLANEOUS
a) Except as provided in Sections 7 and 8 above, neither party may assign
any rights or obligations under this Agreement without the prior
consent of the other which consent shall not be unreasonably withheld.
b) Any disputes arising in connection with this Agreement will be governed
by and construed in accordance with the laws of the [xxxxxxxxxxxxxxx
xx].
c) All components and installation services provided by Digital will
conform to the National Electric Code and/or the applicable codes in
the location where the installation is performed.
d) Whenever Customer has actual knowledge of asbestos and/or any other
hazardous materials in the workplace where Digital is to perform work.
Customer will notify Digital of the known hazardous material. Customer
shall be responsible for all costs associated with any necessary
precautions while working in a hazardous environment and/or necessary
removal of hazardous material, as appropriate.
e) In the event that Customer finds a representative of Digital performing
services hereunder to be conducting himself/herself in an
unprofessional manner or if Customer finds the representative
inadequately performing Services, Customer may request Digital in
writing to remove the representative providing written explanation of
the conduct motivating the request, and upon mutual agreement with
Digital's project manager, said person will be removed from the
project. Additionally, in the event of willful misconduct on the part
of Digital's representative Customer shall have the right to
immediately remove the representative from the job site provided
Customer immediately thereafter provides written explanation for the
removal.
f) The provisions of Articles 1, 0, 00, 00, 00, 00, 00, 00, 00, 00, 00
(x) and (k), and 26 and Exhibit 2.3 Sections V.D and E shall survive
the termination of this Agreement.
g) Any provision of this Agreement which is held to be invalid will be
deleted, but the remainder of the Agreement will not be affected.
h) Digital will ship according to Digital standard commercial practice.
i) Digital agrees that it will comply with all of the Sites' standard
physical security and work policies, procedures and practices in place
at the Sites where Digital is performing work, provided that Digital
has been advised thereof. Additionally, for any employee of Digital or
Digital's subcontractors hereunder who:
(i) is working at Customer premises for a period of more than
fourteen (14) consecutive business days; or
(ii) has direct or remote access to and knowledge of Customer's
passwords, IP addresses or network architecture; or
(iii) has access to such other sensitive Customer information as may
be designated by [xxxxxxxxxxxxxxx] from time-to-time during the
term of this Agreement:
35
such employees or subcontractors shall, prior to beginning his/her
assignment to the delivery of [xxxxxxxxxxxxxxxxxxxxxxxxx] (or at such
time during the assignment that any of the foregoing conditions are
satisfied), be required to undergo fingerprinting in accordance with
Customer's standard policies unless otherwise prohibited by law. In
such event, Digital will use all reasonable efforts to:
a) utilize employees in such assignments who are willing to consent
to such fingerprinting, or, in the event of unavailability of any
such employees,
b) obtain the consent of employees to be utilized in such positions
for [xxxxxxxxxxxxxx] to conduct criminal background checks that
are reasonable under the circumstances. The foregoing requirement
shall not apply to Digital employees or subcontractors solely
engaged in the provision of installation services of Cabling and
Cabling Termination Equipment.
j) Digital agrees that it will comply with Customer's information
security procedures as amended and as defined in Appendix B.3.
Customer acknowledges that security breaches cannot be totally
prevented and therefore Digital shall not be liable for breaches of
security except where such breaches are due to the negligence of
willful misconduct of Digital. In no event shall Digital be relieved
from designing and implementing Customer/Site networks in
conformance with Customer's security requirements standards, as set
forth in Appendix B.3, unless authorized to deviate from such
standards in writing by Customer.
k) Digital will remain fully responsible for any obligations and the
performance of Digital subcontractors and suppliers. Unless
otherwise mutually agreed upon in writing, Digital will be
responsible for payments due subcontractors and suppliers. Digital
will be responsible to ensure that all work effort performed by its
suppliers, affiliates, subcontractors and/or agents is performed in
substantial compliance with all the terms and conditions of this
Agreement. In the event it becomes necessary for Digital to utilize
subcontractors or suppliers other than those approved by Customer in
the Design documentation, Digital will notify Customer of the need
to utilize an alternative subcontractor or supplier and identify
such subcontractor or supplier. Customer shall have the right to
approve such subcontractor or supplier, which approval shall not be
unreasonably withheld. Customer will use best efforts to approve
such subcontractor or supplier within five business days of
notification by Digital.
l) At all times Digital shall perform all Services and provide
Deliverables hereunder as an independent contractor, and nothing
contained herein shall be deemed to create any association,
partnership, joint venture, or relationship of principal and agent
of master and servant, or employer and employee between the parties
hereto or any affiliates or subsidiaries thereof, or to provide
either party with the right, power or authority whether expressed or
implied, to create any such duty or obligation on behalf of the
other party.
m) All public statements, media releases, public announcements, public
disclosures, or use of the other party as a reference, by either
party or its employees or agents relating to this Agreement or its
subject matter, including without limitation promotional or
marketing materials and internal corporate newspapers or similar
publications but not including internal memoranda or internal
electronic messages or any disclosure required be legal, accounting,
or regulatory requirements beyond the reasonable control of either
party, shall be subject to the written approval of the other party,
which approval shall not be unreasonably withheld or delayed.
n) Subject to paragraph o) below, neither party shall directly or
indirectly solicit for employment or hire any employees of the other
party involved in the performance of this Agreement during the term
of this Agreement and for one (1) year after termination of this
Agreement or any Customer/Site Agreement.
36
o) Digital agrees that, if it needs to hire employees to implement the
Services, it will notify Customer as far in advance as reasonably
practicable of fulfilling such need and, with Customer's prior
consent, will consider and interview any Customer employees for such
positions to the extent such employees possess the appropriate
skills and qualifications. In the event a Customer employee applies
for Digital's position, and possesses skills and qualifications at
least equal to or better than any other applicant (other than a
Digital employee applicant) Digital agrees to give preference to the
Customer employee applicant in its decision to hire. In the event
any such employee is hired by Digital, Digital agrees to apply
Digital's then current policies and practices regarding eligibility
for benefits. Under Digital's current policies, employees are
immediately eligible for all medical, dental, disability and life
insurance benefits and participation in employee savings plans
(including employee supplemental retirement savings plans) upon
enrollment. Digital further agrees to recognize the employee's
length of service with Customer for the purpose of establishing
vacation accrual. Digital agrees to advise Customer of the salary
accepted by any such employee provided such employee consents to
such disclosure. Customer hereby agrees to maintain such
information in confidence.
Digital commits that, if it hires any Customer employee pursuant to
the terms of this Agreement, Digital's Program Management team for
[xxxxxxxxxxxxxxxx] will pursue with Digital's senior management
whether Digital will agree to recognize such employees' past service
with Customer for the purposes of eligibility and vesting, if
applicable, under Digital's retirement plan.
p) Digital agrees to provide reasonable cooperation, as may be
required, in working with other vendors for the implementation and
integration of [xxxxxxxxxxxxxxxx] and [xxxxxxxxxxxxxxxx] services as
provided by other vendors. In the event, this Agreement is
terminated for any reason, including breach by Digital, Digital
agrees to use its best efforts to work with the Customer and
Customer's subcontractors for the on-going implementation of
[xxxxxxxxxxxxxxxx] services. Such cooperation may include, but
shall not be limited to temporary on-site technical support, network
designs and addresses, asset lists, assignment or sublicense of
licenses and such other support as may be required to effectively
transition the services from Digital to the Customer and its
subcontractors.
q) The parties have agreed to an Issue Resolution Process as set forth
in Appendix C.6. The parties agree to follow this process as a
first step toward resolution of all disputes arising under this
Agreement and any Customer/Site Agreement hereunder. Nothing herein
shall be construed to relieve [xxxxxxxxxxxxxxx] from making payments
of Amortized Charges to Digital's Assignee during the Issue
Resolution Process.
r) In the event that Customer sells or otherwise transfers its
beneficial ownership interest in a major business unit or line of
business ("Unit") the following is available to Customer: where
[xxxxxxxxxxxxxxxxxxxxxxxxx]designates such Unit as eligible to
continue to receive the benefits of this Agreement, Digital will
extend the pricing and other terms and conditions specified herein
to Unit for the duration of the service term of the applicable
Customer/Site Agreement(s) provided (i) Unit will remain subject to
the terms and conditions, including the non-disclosure obligations,
stated herein as if such entity were still owned by Customer, and
(ii) [xxxxxxxxxxxxxx] will continue to be financially responsible
for the Unit's charges. Unit's usage of Digital's Services will
continue to count toward satisfaction of the PO/End Users schedule
for purposes of this Agreement.
26. AUDIT
During the ten-n of this Agreement and for a period of two (2) years from
expiration or termination of each Customer/Site Agreement hereunder,
Digital shall maintain records verifying the correctness of all Digital
invoices for each Customer/Site Agreement. [xxxxxxxxxxxxxxx] shall have
access to all such records upon
37
reasonable notice, during normal business hours at Digital's premises, in
order to verify the correctness of Digital invoices.
Furthermore, during the term of the Agreement Digital shall give
reasonable access, upon prior notice, to [xxxx] auditors, [xxxxxx]
auditors, [xxxxxx]external auditors and regulators to audit those
procedures and operations of Digital used in the performance of the
Services under this Agreement to ensure Customer's compliance with laws,
regulations and internal [xxxxxx] policies and procedures affecting the
Services hereunder. [xxxxxxxxxxxxxxx] shall insure that such auditors
are bound by the confidentiality terms set forth in Section 15 herein.
Nothing herein shall be construed as obligating Digital to insure
Customer's compliance with any specific laws and regulations unless
specifically advised of such in writing by Customer.
ISS Amendment
This Amendment dated April 1, 1997 to [xxxxxxxxxxxxxxxxx] Agreement dated
December 22, 1995, between [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx] and Digital Equipment Corporation ("Digital")
(the "Agreement") is hereby amended as follows:
1. The definition of "Purchase Order or PO" in Section 1 is deleted in its
entirely.
The following definitions are added to Section 1:
"Customer/Site Order or CSO" - a document authorizing Digital to
undertake the Services (except for those Interim Support Services
described in Section 3 of Exhibit 1) for a Customer/Site in the form
attached hereto as Appendix R to Exhibit 1. [xxxx] will issue CSOs for
Customer/Sites in the United States and [xxxxxxxxx], will issue [x]SOs
for Customer/Sites outside the United States. All CSOs will be governed
by the terms and conditions stated herein and any other terms mutually
agreed upon by the parties. No terms and conditions on any CSO form
shall apply.
"Customer/Site Order for Interim Support Services or COI" - a document
authorizing Digital to undertake Interim Support Services described in
Section 3 of Exhibit I for a Customer/Site in the form attached hereto as
Appendix S to Exhibit 1. [xxxx] will issue COI's for Customer/Sites in
the United States and [xxxxxxxxxxx] will issue COI's for Customer/Sites
outside the United States. All COI's will be governed by the terms and
conditions stated herein (except as specifically stated in Item 5 of this
Amendment # 1) and any other terms mutually a-xxxx upon by the parties.
No terms and conditions on any COI form shall apply.
Except as stated in Item 5 of this Agreement #1, whenever the defined
terms Purchase Order or PO appear in the Agreement, they shall be
replaced with the terms Customer/Site Order or CSO or COI respectively.
2. Section I of the Agreement is amended by adding the following definitions:
"Interim Support Services" - those services described in Section 3 of
Exhibit 1.
[xxxxxxxxxxxxxxxxx] Services" - those services described in Exhibit 1 but
not including Interim Support Services as described in Section 3 of
Exhibit 1.
"Service Level" - a measurable specification of quality and/or quantity of
the Services or services delivered.
38
9. Section 6 shall be amended as follows:
a) In paragraph a) line 5 add the following as a new third sentence:
"Invoicing for Equipment Charges will commence on the first day of
the month following the date of acceptance and shall be prorated for
the number of days between the date of acceptance and the date of
first invoice."
b) Delete paragraph e) in its entirely and replace with,, ""Digital's
invoice will be sent to [xxxx] or [xxxxxxxxxxxxxx] at the address on
the applicable Customer/Site Order and will reference the applicable
Customer/Site Order numbers and will detail the charges by business
unit within each Site."
10. Section 13(b) of the Agreement is deleted and the following is inserted
in its place: "Each of [xxxx]and [xxxxxxxxx], on behalf of itself and its
Customers, on the one hand, and Digital, on behalf of itself, its
subsidiaries and affiliates, on the other hand, shall be responsible for
insuring the Third Party Software vendor's permission to allow use of its
licensed Software by the other and Customers and employees and agents of
the other and Customers, consistent with each party's and Customer's
obligations under this Agreement. Each of [xxxx]and [xxxxxxxx], on the
one had, and Digital, on the other hand, hereby appoint the other as its
agent for the purpose of permitting the use of Third Party Software in
order to perform the obligations hereunder."
11. Section 23(l) is amended as follows: On line 2, after the word "and " and
before the word "nothing", add the following phrase: ", except as
provided in Section 13(b) and Section 3 of Exhibit 1, as amended,".
12. Section 23(o) is amended by deleting the last paragraph in its entirely.
13. Section 3, Interim Support Services, to Exhibit I of the Agreement is
replaced by a new Section 3 attached hereto as Exhibit A.
14. Appendix 0, the Document Deliverables/Digital Property, to Exhibit I of
the Agreement is replaced by a new Appendix 0 attached hereto as Exhibit
B.
15. Appendix Q, the Customer/Site Agreement form to Exhibit I of the
Agreement is replaced by a new Appendix Q attached hereto as Exhibit C.
16. A new Appendix R, the Customer/Site Order form is attached hereto as
Exhibit D.
17. A new Appendix S, the Customer/Site Order for ISS form is attached hereto
as Exhibit E.
18. A new Exhibit 6, ISS Staffing Procedures and Employment Ten-ns, is
attached hereto as Exhibit F.
Exhibit 6 ISS Staffing Procedures and Employment Terms
1.0 Staffing Procedures
During the Conversion Plan Development subphase of ISS, the Customer Team
Leader ("CTL") and Digital will work together to identify which Customer
employees (hereinafter referred to as "Employee" or collectively referred to
as Employees") and contractors engaged by Customer currently providing LAN
management services in the "as- s state", will be required by Digital to
provide As Is Operations Support i.e., Key Employees/Contractors. The
Conversion Plan for the Customer/Site will include the following processes
for facilitating Digital's access to these Key Employees/Contractors:
39
a) Customer will use best efforts to insure that Key Employees/Contractors
are not advised of Customer's decision to order ISS services from Digital
prior to the notification date agreed upon in the Conversion Plan.
b) During the Conversion Plan Development subphase, the CTL will provide
Digital with the names of all Employees and contractors used by Customer
to provide LAN management services in the "as-is state" i.e., for the
period of ninety (90) days immediately preceding Customer's issuance of
the COI. In addition to naming such Employees and contractors, Customer
shall provide the following information regarding such
Employees/contractors:
i) For Employees: Individual and organizational responsibilities,
reporting relationships, salary ranges and job title.
ii) For Contractors: Copy of contract and all amendments and updates
thereto including price and payment obligations, terms regarding
term and termination, individual and organizational
responsibilities, and reporting relationships.
c) Digital will notify Customer which Employees and contractors it considers
Key Employees/Contractors. Customer will notify Digital which Key
Employees/Contractors it will:
i) Not release for service during the ISS Phase;
ii) Second to Digital for the period specified in the Conversion Plan;
iii) Make known and available to Digital or its designated third party
subcontractor in accordance with Section 23 o) of the Agreement, as
amended, those Employees that Digital or its designated third party
subcontractor may consider for an employment opportunity with
Digital or its designated third party subcontractor.
d) For Contractors, Digital and Customer will agree on which Contractors
Digital or its designated third party subcontractor desires to take by
agency. Customer will execute an agency letter effecting the appointment
of Digital or its subcontractor as agent of Customer for the purpose of
Contractor's performance of its obligations.
e) Digital and Customer will agree in the Conversion Plan on a date on which
Customer will:
i) Notify Key Employees/Contractors of the decision to move to ISS;
ii) Notify Employees who will be seconded to Digital,
iii) Notify those Employees who will be made available to Digital for
employment;
iv) Notify Contractors, of Customer's decision to terminate the contract
or appoint Digital or its subcontractor as Customer's agent.
Customer will give such notice on the agreed upon date notifying the
affected Employees/Contractors where and when to meet with Digital and/or
its third party subcontractor.
f) Digital and/or its designated third party subcontractor (collectively
"Employer") will set up a schedule for meeting with Key Employees.
Interviews for employment, as appropriate, will be conducted at such
meetings. It is expressly understood and agreed that Customer shall not
participate in any way whatsoever in the interviewing of any Employee or
Employer's selection for employment or the extension by Employer of any
40
offer of employment to any Employee, but shall cooperate by making
Employees and Contractors available at reasonable times to be interviewed.
g) Employer shall have no obligation, under this Agreement or otherwise, to
offer employment to any Employees. Customer shall make known to the
Employer the Employees salary upon notification to Customer that Employer
is considering offering employment to Employee. Offer letters for
employment will be made to Key Employees whom Employer decides to offer
employment after the interviewing process.
2.0 Employment Terms
If Digital or any of its subcontractors (collectively "Employer") in
performance of its obligations under Section 3, Phase 0: Interim Support
Services (ISS), of the Statement of Work decide to hire any Employees in
accordance with Section 1.0 above ("Hired Employees"), such offers of
employment shall be on an "at will" basis and shall include the following
which terms shall be applicable solely to Employees hired by Employer in the
United States:
a) [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]
b) [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]
c) Saving Incentive Plan (SIP): As of the hiring date, Employer shall cause
each Hired Employee, who was eligible to participate in the Customer's
SIP, [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx] under Employer's 401 (k) or like defined contribution
plan for al I service credited to such Employees under Customer's SIP for
such purposes.
d) Other Benefits: All Hired Employees will be [xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxx] to receive benefits under all of Employer's welfare plans as
defined under section 3(i) of the Employee Retirement Income Security Act
of 1974. Employer shall also cause its medical and dental benefit plans
to grant each such Hired Employee and any eligible dependent [xxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxx] Employee is hired.
e) Vacation: Commencing on the date of hire, Employer shall provide Hired
Employees with vacation time under [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxand shall grant [xxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxx] under such policy(ies) to Hired Employees for
all service credited to Hired Employees as of the hiring date under the
vacation policy of the Customer.
f) Severance: Employer shall recognize [xxxxxxxxxxxxxx] of Hired Employees
with Customer for the purpose of determining [xxxxxxxxxxxxxxx]. With
respect to severance pay benefits, Employer expressly agrees that in the
event a Hired Employee's employment with Employer terminates by reason
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]
Employer policy, such Hired Employees shall be eligible to receive from
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxx] plan in effect on the date of Hired Employees termination by
Customer. In the event such severance pay benefits during
41
[xxxxxxxxxxxxxxxxxxx] the amount the Employer would have paid under the
Employer's plan, the [xxxxxxxxxxxxxxxxxxxxxxxx] severance pay benefits
shall be[xxxxxxxxxxxxxxx].
g) Defined Benefit Retirement Plans: Employer shall grant [xxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxx]o each Hired Employee for [xxxxxxxxxxxxxxxxxxxxx]
purposes under Employers defined benefit retirement plan, [xxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxx]o such Hired Employees under Customers defined benefit
retirement plan for such purposes.
h) Subject to the foregoing obligations and notwithstanding anything to the
contrary, nothing shall prevent Employer from amending or terminating any
employee benefit plan, program, policy, practice or procedure at any time
on or after the date of this Agreement.
3.0 Terms of Seconded Employees
Seconded Employees shall remain employees of Customer and Customer shall be
solely responsible and liable for payment of all compensation and benefits to
such Employees and for payment of all applicable employment withholding taxes
and contributions, including but not limited to, unemployment compensation
and worker's compensation (collectively "Employment Expenses") relating to
the employment of such seconded Employees. Customer agrees to indemnify,
defend and hold Digital harmless from and against any claims arising out of
Customer's failure to pay such Employment Expenses and arising out of any
finding that such seconded Employees are employees of Digital in connection
with such Employment Expenses.
42
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as of
the ____ day of_________________________________________________.
OAO CANADA LIMITED DIGITAL EQUIPMENT CORPORATION
OAO INTERNATIONAL CORPORATION
By: By:
-------------------------- ------------------------------
(Duly Authorized) (Duly Authorized)
-------------------------- ------------------------------
(Typed Name) (Typed Name)
-------------------------- ------------------------------
(Title) (Title)
43
